Exhibit 99.2
Execution Version
SUBSCRIPTION AGREEMENT
AMONG
QATAR INVESTMENT AUTHORITY
AND
BROOKFIELD PROPERTY L.P.
AND
BROOKFIELD PROPERTY PARTNERS L.P.
December 4, 2014
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT
is made effective the 4
th
day of December, 2014 among:
QATAR INVESTMENT AUTHORITY
, an independent arm of the Qatari government established by State of Qatar Emiri Decision No (22) of 2005 (the “
Purchaser
”)
— and —
BROOKFIELD PROPERTY L.P.
, a Bermuda exempted limited partnership with registration number 47286 (the “
Property Partnership
”)
— and —
BROOKFIELD PROPERTY PARTNERS L.P.
, a Bermuda exempted limited partnership with registration number 47277 (“
BPY
”)
WHEREAS:
I.
The Purchaser has agreed to subscribe for and purchase, and the Property Partnership has agreed to issue and sell to the Purchaser, an aggregate of $1,800,000,000 (the “
Subscription Amount
”) of Class A Preferred Limited Partnership Units to be issued in three series at a price per Preferred Unit equal to $25.00 having the rights, privileges, restrictions and conditions set forth in the Second Amended and Restated Limited Partnership Agreement for the Property Partnership (the “
LPA
”), as amended by the First Amendment (the “
LPA Amendment
”) to the LPA (as so amended, the “
Amended LPA
”) made as of the date hereof by Brookfield Property Partners Limited (the “
General Partner
”), in its capacity as the general partner of BPY.
II.
The Class A Preferred Limited Partnership Units (“
Preferred Units
”) will be convertible into non-voting limited partnership units of BPY (“
BPY Units
”).
III.
The Property Partnership intends to use the Subscription Amount to fund an increase in its interest in Songbird Estates plc. and Canary Wharf plc., redeem outstanding preferred shares of Subsidiaries of the Property Partnership, repay debt and for other general corporate purposes.
NOW THEREFORE
, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
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ARTICLE 1
THE SUBSCRIPTION
1.1
Subscription
(a)
Subject to the terms contained in this subscription agreement (this “
Agreement
”), on the date hereof, the Purchaser hereby subscribes for and agrees to purchase from the Property Partnership, and the Property Partnership agrees to issue and sell to the Purchaser, 24,000,000 Class A Preferred Limited Partnership Units, Series 1 (“
Series 1 Preferred Units
”), 24,000,000 Class A Preferred Limited Partnership Units, Series 2 (“
Series 2 Preferred Units
”), and 24,000,000 Class A Preferred Limited Partnership Units, Series 3 (“
Series 3 Preferred Units
” and together with the Series 1 Preferred Units and the Series 2 Preferred Units, the “
Purchased Units
”) at a price of $25.00 per Purchased Unit, for an aggregate purchase price equal to the Subscription Amount.
(b)
At the closing (the “
Closing
”) of the purchase and sale of the Purchased Units, which shall occur simultaneously with the execution and delivery of this Agreement, the Property Partnership shall deliver to the Purchaser three or more certificates representing 24,000,000 Series 1 Preferred Units, 24,000,000 Series 2 Preferred Units and 24,000,000 Series 3 Preferred Units, respectively, registered in the name of the Purchaser, together with a copy of the register of limited partners of the Property Partnership recording the interest of the Purchaser, duly certified as a true copy by the General Partner, against payment to the Property Partnership by wire transfer, in immediately available funds, of the Subscription Amount in accordance with Sections 4.1 and 4.2. The Closing will occur at the offices of Linklaters LLP, One Silk Street, London, EC2Y 8HQ, United Kingdom, on the Closing Date at 11:00 AM London time, or such other time on the Closing Date as may be agreed by the parties.
1.2
The Purchaser’s Acknowledgements
The Purchaser acknowledges that:
(a)
the Purchased Units and the BPY Units issuable thereunder have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under such Act) unless registered under such Act or an exemption from the registration requirements of such Act is available;
(b)
it is not purchasing the Purchased Units or the BPY Units issuable thereunder 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;
(c)
the Property Partnership and BPY have not provided the Purchaser with a prospectus, offering memorandum (each as defined under applicable Canadian
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securities laws) or any similar offering document in connection with the issue of the Purchased Units, and the Purchaser’s decision to execute this Agreement and to subscribe for and purchase the Purchased Units has not been based on any verbal or written representations as to fact or otherwise made by or on behalf of the Property Partnership or BPY, other than such written representations as are expressly contained in this Agreement and the Purchaser may not receive information that would be contained in a prospectus or offering memorandum;
(d)
no 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 TSX and the NYSE (each, a “
Governmental Authority
”), has reviewed or passed on the merits of investing in the Purchased Units;
(e)
there is no government or other insurance covering the Purchased Units or the BPY Units issuable thereunder;
(f)
the Purchased Units will not be listed on any securities exchange;
(g)
the BPY Units issuable upon the redemption, exchange and maturity of the Purchased Units will be non-voting except to the extent the holders of BPY Units are entitled to voting rights with respect thereto in accordance with the terms of the limited partnership agreement of BPY (the “
BPY Limited Partnership Agreement
”); and
(h)
there are risks associated with the purchase of the Purchased Units and the BPY Units issuable thereunder.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER
2.1
The Purchaser’s Representations, Warranties and Covenants
The Purchaser represents, warrants and covenants to the Property Partnership and BPY, and acknowledges that the Property Partnership and BPY are relying thereon, that:
(a)
The Purchaser is an independent arm of the Qatari government established by State of Qatar Emiri Decision No (22) of 2005 and has the requisite power and authority to own, lease and operate its properties and to conduct its business.
(b)
The Purchaser has all requisite legal and corporate power and authority to execute and deliver this Agreement and the Investor Agreement and to perform its obligations hereunder and thereunder.
(c)
The Purchaser has duly authorized, executed and delivered this Agreement and the Investor Agreement, and, upon acceptance by the Property Partnership and BPY of this Agreement and BPY of the Investor Agreement, each of this
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Agreement and the Investor Agreement will constitute a valid and binding agreement of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization or other laws of general application affecting enforcement of creditors’ rights and general principles of equity that restrict the availability of equitable remedies.
(d)
The Purchaser is an “accredited investor” as defined in National Instrument 45-106 of the Canadian Securities Administrators and is purchasing the Purchased Units as principal and not for the benefit of any other person. The Purchaser was formed by and is a wholly-owned Subsidiary of Qatar Investment Authority. The Purchaser has not obtained financing for the acquisition of the Purchased Units from any person other than the Qatar Investment Authority or an affiliate of the Qatar Investment Authority and is not acting jointly or in concert with any other person for the purposes of acquiring the Purchased Units.
(e)
The Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating, negotiating and implementing the transactions contemplated hereby and is able to bear the economic risk of its investment in the Purchased Units (including a complete loss of its investment).
(f)
The Purchaser has evaluated the merits and risks of acquiring the Purchased Units on the terms set forth in this Agreement on its own and without reliance upon BPY or the Property Partnership (other than with respect to BPY and the Property Partnership’s express representations and warranties, as applicable, set forth herein). The Purchaser has been given the opportunity to ask questions of, and receive answers from, BPY and the Property Partnership concerning the terms and conditions of acquiring the Purchased Units and other matters pertaining to an investment in the Purchased Units and has been given the opportunity to obtain from BPY and the Property Partnership all information that it deems necessary regarding BPY and the Property Partnership’s business and prospects; provided that the Purchaser has with BPY and the Property Partnership’s consent relied upon the representations and warranties made by BPY and the Property Partnership, respectively, herein and no failure by the Purchaser 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, the Purchaser has not received, been induced by or relied upon any representations, warranties or statements, whether express or implied, verbal or written, made by or on behalf of BPY, the Property Partnership or any agent, employee or other representative of BPY or the Property Partnership which are not expressly set forth in this Agreement. It is further understood and agreed by the Purchaser that BPY and the Property Partnership are not making any representations or warranties about any information provided (or otherwise made available) to the Purchaser (or any of its representatives or agents) by or on behalf of BPY, the Property Partnership or any of their affiliates unless and to the extent subject to a specific representation or warranty in Sections 3.1 and 3.2 of this Agreement.
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(g)
The Purchaser was not offered the Purchased Units in the United States, the Purchaser is not a U.S. person, the sale and purchase of the Purchased Units, including the execution of this Agreement was, or is being, or will be, as the case may be, executed, outside of the United States, and the sale and purchase of the Purchased Units is not part of a plan or scheme to evade the registration requirements of the United States Securities Act of 1933, as amended. For purposes of this paragraph (g),
“United States”
and
“U.S. person”
have the meanings ascribed thereto in Regulation S under such Act.
(h)
The Purchaser is established in Qatar and is purchasing the Purchased Units in compliance with all applicable securities laws of
Qatar
, and the issuance of the Purchased Units to the Purchaser (i) does not require the registration of the Purchased Units or the preparation, filing or delivery of a prospectus, offering memorandum or any similar offering document with respect to the Purchased Units under the laws of
Qatar
; and (ii) will not cause BPY, the Property Partnership or any of their respective officers or directors (or the equivalent) to become subject to any continuous disclosure or similar reporting requirements under the laws of
Qatar
.
(i)
With the exception of the Purchased Units, the Purchaser and its affiliates do not collectively beneficially own, or have any option or other right to acquire, in the aggregate, 5% or more of securities of BPY or the Property Partnership. The Purchaser and its affiliates, do not collectively, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, have an economic interest in, in the aggregate, 5% or more of securities of BPY or the Property Partnership as a result of any cash-settled total return swap transaction or any other swap, other derivative or “synthetic” ownership arrangement.
(j)
The Purchaser is purchasing the Purchased Units for investment purposes only, and not in a transaction or series of transactions involving a purchase and sale or a repurchase and resale in the course of or incidental to a distribution.
(k)
No consent, approval, authorization, order or agreement of, or registration, filing or qualification with, or any other action by, any Governmental Authority or other person is required for the execution, delivery or performance of this Agreement or the Investor Agreement by the Purchaser or for the completion of the transactions contemplated hereby or thereby.
(l)
Neither the entering into, delivery or performance of this Agreement or the Investor Agreement nor the completion of the transactions contemplated hereby or thereby by the Purchaser will: (i) conflict with or result in the violation or breach of any of the provisions of the constating documents or by-laws of the Purchaser;
(ii)
conflict with, or result in a breach or violation of any of the terms of, or constitute a default under, or result in the creation or imposition of any lien or right of any other person upon any assets of the Purchaser pursuant to any agreement or other instrument to which the Purchaser is a party or by which the Purchaser is bound or to which any of the assets of the Purchaser is subject, or
6
(iii) result in the violation of any law applicable to the Purchaser or any law respecting money-laundering, corruption or terrorism applicable to the Property Partnership, BPY or Brookfield,
with such exceptions, in the case of each of clauses (ii) and (iii) above, as would not have a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated hereby on the Closing Date.
(m)
There is no person acting on the Purchaser’s behalf in connection with the transactions contemplated herein that is entitled to any brokerage or finder’s fee that is to be paid by BPY or the Property Partnership.
(n)
The Purchaser has and will have at the Closing, available funds sufficient to pay the Subscription Amount for the Purchased Units as required pursuant to this Agreement.
2.2
Survival
No investigations made by or on behalf of the Property Partnership or BPY at any time shall have the effect of waiving, diminishing the scope of or otherwise affecting any representation or warranty made by the Purchaser herein or pursuant hereto.
The covenants, representations and warranties of the Purchaser contained in this Agreement shall survive Closing and shall continue in full force and effect for the benefit of BPY and the Property Partnership.
Notwithstanding the foregoing, BPY and the Property Partnership shall not be entitled to bring any action or assert any claim based on any inaccuracy or incorrectness in, or any breach of, any of the representations and warranties of the Purchaser, whether contained in this Article 2 or otherwise made in this Agreement (other than those contained in Sections 2.1(a), 2.1(b), 2.1(c), 2.1(k), 2.1(l) and 2.1(m), which shall survive indefinitely) after the expiration of the one-year period commencing on the Closing Date unless, prior to the expiration of that one-year period, written notice of that claim setting forth the details thereof shall have been delivered by BPY or the Property Partnership to the Purchaser.
BPY and the Property Partnership agree and acknowledge that, except as set forth in this Agreement, neither the Purchaser nor any other persons on behalf of the Purchaser makes any representation or warranty, express or implied, at law or in equity, and any such other representations or warranties are hereby expressly disclaimed.
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ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BPY AND THE PROPERTY PARTNERSHIP
3.1
The Property Partnership’s Representations, Warranties and Covenants
The Property Partnership represents, warrants and covenants to the Purchaser, and acknowledges that the Purchaser is relying thereon, that:
(a)
The Property Partnership is an exempted limited partnership duly organized and validly existing under the laws of Bermuda and has the requisite power and authority to own, lease and operate its properties and to conduct its business.
(b)
The Property Partnership has all requisite power and authority to execute and deliver this Agreement and the LPA Amendment and to perform its obligations hereunder and thereunder, including the execution and delivery of the LPA Amendment and the creation, issuance and delivery to the Purchaser of the Purchased Units.
(c)
The Property Partnership has duly authorized, executed and delivered this Agreement, and, upon acceptance by the Purchaser and BPY, this Agreement will constitute a valid and binding agreement of the Property Partnership, enforceable against the Property Partnership in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization or other laws of general application affecting enforcement of creditors’ rights and general principles of equity that restrict the availability of equitable remedies.
(d)
As of the date hereof, the Property Partnership is authorized to issue an unlimited number of redemption-exchange units (“
Redemption-Exchange Units
”), an unlimited number of managing general partner units (“
Managing General Partner Units
”), and an unlimited number of special limited partner units (“
Special Limited Partner Units
”). As of November 28, 2014, there are 432,649,105 Redemption-Exchange Units, 245,340,942 Managing General Partner Units and 4,759,997 Special Limited Partner Units issued and outstanding. There are no securities convertible into, or exchangeable or exercisable for Redemption-Exchange Units, Managing General Partner Units or Special Limited Partner Units, or other rights to acquire Redemption-Exchange Units, Managing General Partner Units or Special Limited Partner Units. There are no contractual obligations of the Property Partnership to repurchase, redeem or otherwise acquire any outstanding securities or indebtedness of the Property Partnership or any of its Subsidiaries, except as set forth in the Amended LPA, and other than the repayment of any indebtedness of the Property Partnership or any of its Subsidiaries in accordance with the terms thereof.
(e)
The Purchased Units have been duly authorized by all necessary action on the part of the Property Partnership and, when issued and delivered by the Property Partnership pursuant to this Agreement and the Amended LPA, will be validly
8
issued as fully paid and non-assessable Preferred Units. The issuance of the Purchased Units is not subject to any pre-emptive right, right of first refusal or similar right.
(f)
No consent, approval, authorization, order or agreement of, or registration, filing or qualification with, or any other action by, any Governmental Authority is required for the execution, delivery or performance of this Agreement by the Property Partnership or for the completion of the transactions contemplated hereby, including the issuance and sale of the Purchased Units, other than the consent and listing approval of the TSX and the NYSE in respect of the BPY Units issuable upon exchange, redemption or maturity of the Purchased Units, which consent and listing approval has been conditionally obtained subject to satisfaction of the usual conditions imposed by the TSX and NYSE.
(g)
Subject to the matters referred to in Section 3.1(f) above, neither the entering into, delivery or performance of this Agreement nor the completion of the transactions contemplated hereby by the Property Partnership will: (i) conflict with or result in the violation or breach of any of the provisions of the constating documents of the Property Partnership; (ii) conflict with, or result in a breach or violation of any of the terms of, or constitute a default under, or result in the creation or imposition of any lien or right of any other person upon any assets of the Property Partnership or any of its Subsidiaries pursuant to any agreement or other instrument to which the Property Partnership or any of its Subsidiaries is a party or by which the Property Partnership or any of its Subsidiaries is bound or to which any of the assets of the Property Partnership or any of its Subsidiaries is subject, or (iii) result in the violation of any law applicable to the Property Partnership or any of its Subsidiaries, with such exceptions, in the case of each of clauses (ii) and (iii) above, as would not have a Material Adverse Effect.
(h)
None of the Property Partnership, any of its affiliates or any other person acting on its or their behalf has engaged in directed selling efforts within the meaning of Regulation S of the United States Securities Act of 1933, as amended.
(i)
The Property Partnership is not and, after giving effect to the offer and sale of the Purchased Units and the application of the proceeds thereof as described herein, will not be required to be registered as an “investment company” pursuant to the Investment Company Act of 1940, as amended, and the rules and regulations of the United States Securities and Exchange Commission thereunder.
(j)
Assuming the accuracy of the Purchaser’s representations and warranties contained in Section 2.1, no registration under the U.S. Securities Act of 1933, as amended, of the Purchased Units is required for the offer and sale of the Purchased Units by the Property Partnership to the Purchaser.
(k)
There is no person acting on the Property Partnership’s behalf in connection with the transactions contemplated herein that is entitled to any brokerage or finder’s fee
that is to be paid by the Purchaser
.
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3.2
BPY and the Property Partnership’s Representations, Warranties and Covenants
BPY and the Property Partnership represent, warrant and covenant to the Purchaser, and acknowledge that the Purchaser is relying thereon, that:
(a)
BPY is an exempted limited partnership duly organized and validly existing under the laws of Bermuda and has the requisite power and authority to own, lease and operate its properties and to conduct its business.
(b)
BPY has all requisite power and authority to execute and deliver this Agreement and the Investor Agreement and to perform its obligations hereunder and thereunder, including the issuance and delivery of BPY Units issuable upon exchange, redemption or maturity of the Purchased Units.
(c)
BPY has duly authorized, executed and delivered this Agreement and the Investor Agreement, and, upon acceptance by the Purchaser and the Property Partnership of this Agreement and by the Purchaser of the Investor Agreement, each of this Agreement and the Investor Agreement will constitute a valid and binding agreement of BPY, enforceable against BPY in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization or other laws of general application affecting enforcement of creditors’ rights and general principles of equity that restrict the availability of equitable remedies.
(d)
As of the date hereof, BPY is authorized to issue an unlimited number of BPY Units and an unlimited number of general partner units of BPY. As of November 28, 2014, there are 245,202,067 BPY Units issued and outstanding, and 138,875 general partner units of BPY issued and outstanding, and since November 28, 2014, no BPY Units or general partner units have been issued or become issuable other than pursuant to the exchange of exchangeable limited partnership units of Brookfield Office Property Exchange LP (
“BOP Exchange LP Units
”), which are exchangeable for BPY Units on a one-for-one basis and of which 48,125,981 are issued and outstanding on November 28, 2014. There are no securities convertible into, or exchangeable or exercisable for, or other rights to acquire from BPY, BPY Units or general partner units of BPY other than the (i) Redemption-Exchange Units and (ii) BOP Exchange LP Units. There are no other contractual obligations of BPY to repurchase, redeem or otherwise acquire any outstanding securities or indebtedness of BPY other than the repayment of any indebtedness of BPY or any of its Subsidiaries in accordance with the terms thereof.
(e)
The BPY Units issuable upon exchange, redemption or maturity of the Purchased Units have been duly authorized by all necessary action on the part of BPY and, when issued and delivered by BPY pursuant to this Agreement, will be validly issued as fully paid and non-assessable BPY Units, and subject to applicable securities laws and restrictions set out in the Investor Agreement, will be listed on the TSX and NYSE and be freely transferable. The issuance of the BPY Units
10
issuable upon exchange, redemption or maturity of the Purchased Units is not subject to any pre-emptive right, right of first refusal or similar right.
(f)
BPY and its Subsidiaries are and have been in compliance with, and conduct their businesses in conformity with, all applicable laws, except where the failure to be in compliance or conformity would not result in a Material Adverse Effect.
(g)
BPY is not in default under applicable securities laws, and is in compliance with its timely disclosure obligations under applicable securities laws and the requirements of the TSX and the NYSE.
(h)
BPY has, in accordance with applicable laws, filed with securities regulatory authorities, the TSX and the NYSE, as applicable, true and complete copies of all forms, reports, schedules, statements, material change reports, circulars, press releases, disclosures relating to options and other stock-based incentive plans, prospectuses, other offering documents and all other documents required to be filed by it with securities regulatory authorities, the TSX or the NYSE, as applicable, since March 15, 2013 (such forms, reports, schedules, statements and other documents, including any financial statements or other documents, including any schedules included therein, are referred to herein as the “
Public Disclosure Documents
”). The Public Disclosure Documents (i) at the time filed did not, and (ii) as of the date hereof (taken as a whole after giving effect to all filings made after the time of filing and prior to the date hereof) do not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. BPY has not filed any confidential material change report with any of the securities regulatory authorities, the TSX, the NYSE or any other self-regulatory authority that remains confidential.
(i)
No order, ruling or determination having the effect of suspending the sale or ceasing the trading of the BPY Units has been issued or made by the U.S. Securities and Exchange Commission, any securities commission or other securities regulatory authority in each of the provinces and territories of Canada, any other securities commission, stock exchange or other regulatory or administrative authority or other Governmental Authority and no proceedings for that purpose have been instituted or are pending or, to BPY’s knowledge, are contemplated by any such authority. BPY is not on a list of defaulting reporting issuers maintained by any securities commission or other securities regulatory authority in any of the provinces and territories of Canada.
(j)
The BPY Units are listed for trading on the TSX and the NYSE and BPY is in compliance in all material respects with all applicable requirements of the TSX and the NYSE.
(k)
No consent, approval, authorization, order or agreement of, or registration, filing or qualification with, or any other action by, any Governmental Authority is
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required for the execution, delivery or performance of this Agreement or the Investor Agreement by BPY or the completion of the transactions contemplated hereby and thereby, including the issuance and sale of the BPY Units issuable upon exchange, redemption or maturity of the Purchased Units, other than the consent and listing approval of the TSX and the NYSE in respect of the BPY Units issuable upon exchange, redemption or maturity of the Purchased Units, which consent and listing approval has been conditionally obtained subject to satisfaction of the usual conditions imposed by the TSX and NYSE.
(l)
Subject to the matters referred to in Section 3.2(k) above, neither the entering into, delivery or performance of this Agreement or the Investor Agreement nor the completion of the transactions contemplated hereby or thereby by BPY will: (i) conflict with or result in the violation or breach of any of the provisions of the constating documents of BPY; (ii) conflict with, or result in a breach or violation of any of the terms of, or constitute a default under, or result in the creation or imposition of any lien or right of any other person upon any assets of BPY pursuant to any agreement or other instrument to which BPY is a party or by which BPY is bound or to which any of the assets of BPY is subject, or (iii) result in the violation of any law applicable to BPY, with such exceptions, in the case of each of clauses (ii) and (iii) above, as would not have a Material Adverse Effect.
(m)
None of BPY, any of its affiliates or any other person acting on its or their behalf has engaged in directed selling efforts within the meaning of Regulation S of the United States Securities Act of 1933, as amended.
(n)
The financial statements contained in the Public Disclosure Documents present fairly, in all material respects, the consolidated financial position, results of operation and cash flows of BPY as of the dates and for the periods covered thereby, as applicable, and have been prepared in accordance with IFRS in each case consistently applied and in accordance in all material respects with applicable securities laws. None of BPY or its Subsidiaries has any liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise, which are not disclosed or referred to in the financial statements contained in the Public Disclosure Documents, other than liabilities, obligations, or indebtedness or commitments (i) incurred in the normal course of business, (ii) which have been publicly disclosed by BPY, or (iii) which would not reasonably be expected to have a Material Adverse Effect.
(o)
Except as disclosed in the Public Disclosure Documents, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which BPY or any of its Subsidiaries is or may be a party or to which any property of BPY or any of its Subsidiaries is or may be the subject that, individually or in the aggregate, if determined adversely to BPY or any of its Subsidiaries, would or would reasonably be expected to have a Material Adverse Effect, and no such investigations, actions, suits or proceedings are threatened or, to the knowledge of BPY, contemplated by any Governmental Authority or threatened by others.
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(p)
BPY and its Subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that are intended to provide reasonable assurance that information required to be disclosed by BPY in its annual filings, interim filings or other reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to BPY’s management as appropriate to allow timely decisions regarding required disclosure. BPY and its Subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(q)
BPY and its Subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Since the date of the most recent balance sheet of BPY publicly disclosed by BPY, BPY’s auditors and its audit committee have not been advised of: (A) any significant deficiencies in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect BPY’s ability to record, process, summarize and report financial information; and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in BPY’s internal control over financial reporting. Except as publicly disclosed by BPY, there are no material weaknesses in BPY’s internal controls.
(r)
Neither BPY nor any of its Subsidiaries or the General Partner nor, to the knowledge of BPY, any director, officer, agent, employee or other person associated with or acting on behalf of BPY or any of its Subsidiaries or the General Partner has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977 or the
Corruption of Foreign Public Officials Act
(Canada); (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment, except in each case as would not be material to BPY and its Subsidiaries, taken as a whole; or (v) directly or indirectly, obtained or induced and will not attempt to so obtain or induce the procurement of this Agreement or any contract, consent, approval, right, interest, privilege or other obligation or benefit related to this Agreement or the transactions contemplated hereby or BPY’s or the Property Partnership’s other dealings with Purchaser or its Connected Persons through any violation of law or regulation or (vi) other than in respect of fees payable to professional advisors, has not given or agreed to give and shall not give or agree to give to any person, either directly or indirectly, any placement fee, introductory fee, arrangement fee,
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finder’s fee or any other fee, compensation, monetary benefit or any other benefit, gift, commission, gratification, bribe or kickback, whether described as a consultation fee or otherwise, with the object of obtaining or inducing the procurement of the transactions contemplated hereby or any contract, right, interest, privilege or other obligation or benefit related to the transactions contemplated hereby. As used herein, the term “
Connected Persons
” means (a) Purchaser’s affiliates; (b) the advisers, agents, representatives and consultants of Purchaser and its affiliates; and (c) the directors, officers, partners and employees of Purchaser, its affiliates and of its and their advisers, agents, representatives and consultants.
(s)
The operations of BPY and its Subsidiaries and the General Partner are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
Proceeds of Crime (Money Laundering) Act
(Canada), the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency to which BPY and its Subsidiaries are subject (collectively, the “
Money Laundering Laws
”) and no action, suit or proceeding by or before any Governmental Authority or body or any arbitrator involving BPY or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of BPY, threatened.
(t)
There is no person acting on BPY’s behalf in connection with the transactions contemplated herein that is entitled to any brokerage or finder’s fee
that is to be paid by the Purchaser
.
3.3
Survival
No investigations made by or on behalf of the Purchaser at any time shall have the effect of waiving, diminishing the scope of or otherwise affecting any representation or warranty made by the Property Partnership or BPY herein or pursuant hereto.
The covenants, representations and warranties of the Property Partnership and BPY contained in this Agreement shall survive Closing and shall continue in full force and effect for the benefit of the Purchaser.
Notwithstanding the foregoing, the Purchaser shall not be entitled to bring any action or assert any claim based on any inaccuracy or incorrectness in or breach of any of the representations or warranties of BPY or the Property Partnership, as applicable, whether contained in this Article 3 or otherwise made in this Agreement (other than those contained in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(d), 3.1(e), 3.1(f), 3.1(g), 3.1(k), 3.2(a), 3.2(b), 3.2(c), 3.2(d), 3.2(e), 3.2(k), 3.2(l) and 3.2(t) which shall survive indefinitely), after, in the case of Section 3.2(h) only, the expiration of the three-year period commencing on the Closing Date and in the case of all other representations and warranties (other than those that survive indefinitely), the expiration of the one-year period commencing on the Closing Date unless, prior to the
14
expiration of the applicable period, written notice of that claim setting forth the details thereof shall have been delivered by the Purchaser to the Property Partnership or BPY, as applicable.
The Purchaser agrees and acknowledges that, except as set forth in this Agreement, neither the Property Partnership nor BPY nor any other persons on behalf of either the Property Partnership or BPY makes any representation or warranty, express or implied, at law or in equity, and any such other representations or warranties are hereby expressly disclaimed.
ARTICLE 4
CLOSING
4.1
Closing Deliveries by the Purchaser
The Purchaser shall deliver or cause to be delivered to the Property Partnership at or prior to the Closing:
(a)
the Subscription Amount by wire transfer in accordance with the written wire transfer instructions of the Property Partnership as set out in Schedule A; and
(b)
executed copies of the documents listed in Schedule B.
4.2
Closing Deliveries by the Property Partnership
The Property Partnership shall deliver or cause to be delivered to the Purchaser at or prior to the Closing:
(a)
the Purchased Units, delivered in three or more certificates representing 24,000,000 Series 1 Preferred Units, 24,000,000 Series 2 Preferred Units and 24,000,000 Series 3 Preferred Units, respectively, registered in the name of the Purchaser, together with a copy of the register of limited partners of the Property Partnership recording the interest of the Purchaser, duly certified as a true copy by the General Partner, including the Preferred Unit register;
(b)
one or more legal opinions addressed to the Purchaser in form and substance satisfactory to the Purchaser and its counsel, acting reasonably, dated the Closing Date, with respect to the following matters:
(i)
that General Partner is an exempted company duly incorporated with limited liability in Bermuda under the Companies Act 1981, possesses the capacity to sue and be sued in its own name, and is validly existing and in good standing under the laws of Bermuda;
(ii)
that the Property Partnership is a duly organized exempted limited partnership registered in Bermuda under the Limited Partnership Act 1883 and the Exempted Partnerships Act 1992 and is validly existing and in good standing under the laws of Bermuda;
15
(iii)
that BPY is a duly organized exempted limited partnership registered in Bermuda under the Limited Partnership Act 1883 and the Exempted Partnerships Act 1992 and is validly existing and in good standing under the laws of Bermuda;
(iv)
that BPY, acting by the General Partner, has all requisite power and authority to enter into, execute, deliver, and perform its obligations under this Agreement, the Investor Agreement and the Guarantee and to take all action as may be necessary to complete the transactions contemplated herein and therein, including the issuance of BPY Units issuable upon exchange, redemption or maturity of the Purchased Units as contemplated by this Agreement;
(v)
that the Property Partnership, acting by the General Partner (in the General Partner’s capacity as the general partner of BPY and in BPY’s capacity as general partner of the Property Partnership), has all requisite power and authority to enter into, execute, deliver, and perform its obligations under this Agreement and to take all action as may be necessary to complete the transactions contemplated herein, including the issuance of the Purchased Units as contemplated by this Agreement;
(vi)
that the execution, delivery and performance by BPY, acting by the General Partner, of this Agreement, the Investor Agreement and the Guarantee and the transactions contemplated herein and therein have been duly authorized by all necessary corporate action on the part of the General Partner and all necessary actions required by BPY, including, without limitation, under the BPY Limited Partnership Agreement;
(vii)
that the execution, delivery and performance by the Property Partnership, acting by the General Partner (in the General Partner’s capacity as the general partner of BPY and in BPY’s capacity as general partner of the Property Partnership), of this Agreement and the transactions contemplated herein have been duly authorized by all necessary corporate action on the part of the General Partner and BPY and all necessary actions by Property Partnership, including, without limitation, required under the Amended LPA;
(viii)
that this Agreement, the Investor Agreement and the Guarantee have been duly executed by the General Partner on behalf of BPY. Each of this Agreement, the Investor Agreement and the Guarantee constitutes the legal, valid and binding obligations of BPY enforceable against BPY in accordance with its terms;
(ix)
that this Agreement has been duly executed by the General Partner on behalf the Property Partnership, in the General Partner’s capacity as the general partner of BPY and in BPY’s capacity as general partner of the Property Partnership. This Agreement constitutes the legal, valid and
16
binding obligations of the Property Partnership enforceable against the Property Partnership in accordance with its terms;
(x)
that no consent, licence or authorization of, filing with, or other act by or in respect of, or any action by, any Bermuda, United States Federal, State of New York, Canadian Federal or Province of Ontario Governmental Authority is required to be obtained by BPY or the Property Partnership in connection with the execution, delivery or performance by BPY or the Property Partnership of this Agreement or by BPY of the Investor Agreement or the Guarantee or to ensure the legality, validity, admissibility into evidence or enforceability, of this Agreement, the Investor Agreement or the Guarantee other than (i) the consent and listing approval of the TSX and the NYSE in respect of the BPY Units issuable upon exchange, redemption or maturity of the Purchased Units, which consent and listing approval has been conditionally obtained subject to satisfaction of the usual conditions imposed by the TSX and NYSE and (ii) continuous disclosure filings under applicable securities laws;
(xi)
that the execution, delivery and performance by BPY of this Agreement, the Guarantee, and the Investor Agreement (acting by or through the General Partner) and the transactions contemplated herein and therein do not and will not violate, conflict with or constitute a default under (i) any requirement of any law or any regulation of Bermuda, (ii) the BPY Limited Partnership Agreement, (iii) the General Partner’s Certificate of Incorporation, Memorandum of Association and Bye-Laws or (iv) the General Partner’s board and committee resolutions (collectively, the “
Resolutions
”);
(xii)
that the execution, delivery and performance by the Property Partnership of this Agreement (acting by or through the General Partner in the General Partner’s capacity as the general partner of BPY and in BPY’s capacity as general partner of the Property Partnership) and the transactions contemplated herein do not and will not violate, conflict with or constitute a default under (i) any requirement of any law or any regulation of Bermuda, (ii) the LPA and the Amended LPA, (iii) the General Partner’s Certificate of Incorporation, Memorandum of Association and Bye-Laws, (iv) the BPY Limited Partnership Agreement, or (v) the Resolutions;
(xiii)
that no litigation, administrative or other proceeding of or before any governmental authority of Bermuda is pending against or affecting any of the Property Partnership, BPY or the General Partner;
(xiv)
that no petition to wind up or dissolve any of the Property Partnership, BPY or the General Partner or application to reorganize its/their affairs pursuant to a scheme of arrangement or application for the appointment of a receiver has been filed with the Supreme Court, and no notice to the Registrar of Companies of the passing of a resolution of members or
17
creditors to wind up or the appointment of a liquidator or receiver has been given in relation to any of the Property Partnership, BPY or the General Partner;
(xv)
that there are no Bermuda taxes, stamp or documentary taxes, duties or similar charges now due in connection with the execution, delivery, performance or enforcement of this Agreement, the Guarantee or the Investor Agreement or the transactions contemplated herein or therein, including the issuance of BPY Units upon redemption, exchange or maturity of the Purchased Units, or in connection with the admissibility in evidence thereof and none of the Property Partnership, BPY or the General Partner are required by any Bermuda law or regulation to make any deductions or withholdings in Bermuda from any payment they may make thereunder;
(xvi)
that all necessary action pursuant to Bermuda law required to be taken by the Property Partnership in connection with the issue by the Property Partnership of the Purchased Units as contemplated by this Agreement has been taken by or on behalf of the Property Partnership. The Purchased Units, when issued and paid for in accordance with this Agreement, will be validly issued, fully-paid and non-assessable Preferred Units. Any BPY Units issuable upon exchange, redemption or maturity of the Purchased Units, as contemplated by the Subscription Agreement and the Amended LPA, will, when issued, be validly issued, fully-paid and non-assessable BPY Units.
(xvii)
BPY, acting by the General Partner (in its capacity as the general partner of BPY, in BPY’s capacity as the general partner of the Property Partnership), has all requisite power and authority (including, without limitation, under the LPA and the BPY Limited Partnership Agreement) to enter into, execute and deliver the LPA Amendment;
(xviii)
BPY and the Property Partnership (acting by the General Partner in its capacity as the general partner of BPY, on BPY’s own behalf, and in BPY’s capacity as the general partner of the Property Partnership) have all requisite power and authority to perform their obligations under the LPA Amendment and to take all actions as may be necessary to complete the transactions contemplated thereby;
(xix)
the execution and delivery of the LPA Amendment by BPY (acting by or through the General Partner) and performance by BPY and the Property Partnership, acting by the General Partner, as the general partner of BPY, on BPY’s own behalf and on BPY’s capacity as general partner of Property Partnership, of the LPA Amendment and the transactions contemplated thereby have been duly authorized by all necessary corporate action on the part of General Partner and by all necessary
18
actions required under the BPY Limited Partnership Agreement on the part of BPY and the LPA on the part of the Property Partnership;
(xx)
the LPA Amendment has been duly executed by the General Partner on behalf of BPY, on BPY’s own behalf and in BPY’s capacity as the general partner of the Property Partnership. The LPA Amendment (and, for greater certainty, the LPA as amended by the LPA Amendment) constitutes the legal, valid and binding obligations of the General Partner as the general partner of BPY and of BPY as general partner of Property Partnership and of Property Partnership, enforceable against the General Partner, BPY (in such capacities) and Property Partnership, enforceable against Property Partnership in accordance with its terms;
(xxi)
no consent, licence or authorization of, filing with, or other act by or in respect of, any governmental authority, regulatory authority or court of Bermuda is required to be obtained by the General Partner, BPY or the Property Partnership in connection with the execution, delivery or performance by the General Partner, BPY or the Property Partnership, as applicable, of the LPA Amendment or to ensure the legality, validity, admissibility into evidence or enforceability, of the LPA Amendment;
(xxii)
BPY, acting by the General Partner, has all requisite power and authority to enter into, execute and deliver the LPA Amendment and the transactions contemplated thereby do not and will not violate, conflict with or constitute a default under (i) any requirement of any law or any regulation of Bermuda or (ii) the BPY Limited Partnership Agreement, (iii) the LPA or (iv) the General Partner’s Certificate of Incorporation, Memorandum of Association and By-Laws, or (v) the Resolutions;
(xxiii)
all necessary action pursuant to Bermuda law required to be taken by or on behalf of Property Partnership in connection with amending the LPA by way of the LPA Amendment has been taken by or on behalf of Property Partnership;
(xxiv)
that under the BPY Limited Partnership Agreement, there is no limit to the number of BPY Units BPY may issue;
(xxv)
that under the Amended LPA, there will be no limit to the number of Preferred Units the Property Partnership may issue;
(xxvi)
that the Property Partnership is not and, after giving effect to the offer and sale of the Purchased Units and the application of the proceeds as contemplated by this Agreement, will not be required to be registered as an “investment company” pursuant to the Investment Company Act of 1940, as amended, and the rules and regulations of the United States Securities and Exchange Commission thereunder; and
19
(xxvii)
assuming the accuracy of the Purchasers’ representations and warranties contained in Section 2.1, that no registration under the U.S. Securities Act of 1933, as amended, of the Purchased Units is required for the offer and sale of the Purchased Units by the Property Partnership to the Purchaser; and
(c)
such other documentation as may be reasonably requested by the Purchaser.
4.3
Mutual Covenant Regarding Closing
Subject to the terms of this Agreement, the Property Partnership, BPY and the Purchaser shall use their commercially reasonable 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.
4.4
Post-Closing Covenants of the Property Partnership
Within six months following the Closing Date, the Property Partnership shall use its commercially reasonable efforts to make the Purchased Units represented by one or more global units in definitive fully registered form eligible for book-entry settlement, with such notations, legends or endorsements required by law, stock exchange rules, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Property Partnership and the Purchaser). Such global units will be deposited on behalf of the holders represented thereby with the transfer agent for the Purchased Units (or such other agent) (the “
Registrar
”), at its New York office as custodian for The Depositary Trust Company (the “
Depositary
”), and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Property Partnership and countersigned and registered by the Registrar. The Property Partnership shall execute and cause the Registrar to countersign and deliver any global units that (i) shall be registered in the name of Cede & Co. or other nominee of the Depositary and (ii) shall be delivered by the Registrar to Cede & Co. or pursuant to instructions received from Cede & Co. or held by the registrar as custodian for the Depositary pursuant to an agreement between the Depositary and the Registrar. The Property Partnership shall make such changes to the Amended LPA necessary to the effect the foregoing.
ARTICLE 5
GENERAL
5.1
Publicity
The Purchaser, the Property Partnership and BPY agree that no press release, public statement or announcement or other public disclosure (a “
Public Statement
”) with respect to this Agreement or the transactions contemplated hereby may be made except: (a) the release by BPY of a press release substantially in the form attached as Schedule C (the “
Press Release
”), (b) the public filing by BPY of (i) the material change report substantially in the form attached as Schedule C and (ii) this Agreement, (c) with the prior written consent and joint approval of the Purchaser, the Property Partnership and BPY or (d) if required by law or a Governmental Authority, provided that where the Public Statement is required by law or a Governmental Authority, the party required to make the Public Statement will use commercially
20
reasonable efforts to obtain the approval of the other as to the form, nature and extent of the disclosure. Notwithstanding the foregoing, nothing in this Section 5.1 prevents any party from making further or additional public disclosures relating to this Agreement that are consistent with the content of the Press Release.
5.2
Limitation of Liability
The Purchaser acknowledges that BPY and the Property Partnership are limited partnerships, a limited partner of which is liable for any liabilities or losses of the partnership only to the extent of the amount that such limited partner has contributed, or agreed to contribute, to the capital of the partnership and such limited partner’s
pro rata
share of any undistributed income. BPY and the Property Partnership acknowledge that the Purchaser is a limited liability company, a member of which is liable for any liabilities or losses of the company only to the extent of the amount that such member has contributed, or agreed to contribute, to the capital of the company and such member’s
pro rata
share of any undistributed income.
5.3
Notices
Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by personal delivery or by electronic means of communication addressed to the recipient as follows:
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To the Property Partnership:
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|
|
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Brookfield Property L.P.
|
|
73 Front Street
|
|
Hamilton, HM 12, Bermuda
|
|
|
|
Fax No.:
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441 296 4475
|
|
Attention:
|
Corporate Secretary
|
|
|
|
To BPY:
|
|
|
|
Brookfield Property Partners L.P.
|
|
73 Front Street
|
|
Hamilton, HM 12, Bermuda
|
|
|
|
Fax No.:
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441 296 4475
|
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Attention:
|
Corporate Secretary
|
21
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To Qatar Investment Authority
|
|
|
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Qatar Investment Authority
|
|
Q-Tel Tower
|
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Diplomatic Area Street, West Bay
|
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Doha, Qatar
|
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Attention:
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Head, Mergers & Acquisitions Department
|
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Email:
|
notices.m&a@qatarholding.qa
|
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|
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with a copy to:
|
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General Counsel
|
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Legal Department
|
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Qatar Holding LLC
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Q-Tel Tower
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Diplomatic Area Street, West Bay
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Doha, Qatar
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Email:
notices.legal@qatarholding.qa
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or to such other address, individual or electronic communication number as may be designated by notice given by either party to the other. Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by electronic communication, on the day of transmittal thereof if given during the normal business hours of the recipient and on the Business Day during which such normal business hours next occur if not given during such hours on any day.
5.4
Definitions
In this Agreement (including the recitals hereto), unless there is something in the subject matter or context inconsistent therewith:
(a)
“
affiliate
” means, with respect to any person or entity, any other person or entity which directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such person or entity. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person or entity, whether through the ownership of voting securities, by contract or otherwise.
(b)
“
Agreement
” has the meaning given to such term in Section 1.1(a).
(c)
“
Amended LPA
” has the meaning given to such term in the recitals to this Agreement.
22
(d)
“
BPY
” has the meaning given to such term in the recitals to this Agreement.
(e)
“
BPY Limited Partnership Agreement
” has the meaning given to such term in Section 1.2(g).
(f)
“
BPY Units
” has the meaning given to such term in the recitals to this Agreement.
(g)
“
Brookfield
” has the meaning given to such term in the recitals to this Agreement.
(h)
“
Business Day
” means every day except a Saturday or Sunday or a day that is a statutory or civic holiday in Bermuda, the Province of Ontario or the State of New York.
(i)
“
Closing
” has the meaning given to such term in Section 1.1(b).
(j)
“Closing Date”
means December 4, 2014.
(k)
“
General Partner
” has the meaning given to such term in the recitals to this Agreement.
(l)
“
Governmental Authority
” has the meaning given to such term in Section 1.2(d).
(m)
“
Guarantee
” means the guarantee agreement to be entered into between BPY and the Purchaser.
(n)
“
ICC
” has the meaning given to such term in Section 5.11.
(o)
“
IFRS
” means International Financial Reporting Standards.
(p)
“
Investor Agreement
” means the investor agreement to be entered into between BPY and the Purchaser.
(q)
“
LPA
” has the meaning given to such term in the recitals to this Agreement.
(r)
“
LPA Amendment
” has the meaning given to such term in the recitals to this Agreement.
(s)
“
Managing General Partner Units
” has the meaning given to such term in Section 3.1(d).
(t)
“
Material Adverse Effect
” means any fact, circumstance, change, event, occurrence or effect that, individually or in the aggregate is, or would reasonably be expected to be, materially adverse to the (A) business, operations, capital, condition (financial or otherwise), properties or assets of BPY, the Property Partnership and their respective subsidiaries, taken as a whole or (B) the ability of
23
either of BPY or the Property Partnership, as applicable, to consummate the transactions contemplated hereby on the Closing Date.
(u)
“
Money Laundering Laws
” has the meaning given to such term in Section 3.2(s).
(v)
“
NYSE
” means the New York Stock Exchange.
(w)
“
Preferred Units
” has the meaning given to such term in the recitals to this Agreement.
(x)
“
Press Release
” has the meaning given to such term in Section 5.1.
(y)
“
Property Partnership
” has the meaning given to such term in the recitals to this Agreement.
(z)
“
Public Disclosure Documents
” has the meaning given to such term in Section 3.2(h).
(aa)
“
Public Statement
” has the meaning given to such term in Section 5.1.
(bb)
“
Purchased Units
” has the meaning given to such term in Section 1.1(a).
(cc)
“
Purchaser
” has the meaning given to such term in the recitals to this Agreement.
(dd)
“
Redemption-Exchange Units
” has the meaning given to such term in Section 3.1(d).
(ee)
“
Resolutions
” has the meaning given to such term in Section 4.2 (xi).
(ff)
“
Rules
” has the meaning given to such term in Section 5.11.
(gg)
“
Series 1 Preferred Units
” has the meaning given to such term in Section 1.1(a).
(hh)
“
Series 2 Preferred Units
” has the meaning given to such term in Section 1.1(a).
(ii)
“
Series 3 Preferred Units
” has the meaning given to such term in Section 1.1(a).
(jj)
“
Special Limited Partner Units
” has the meaning given to such term in Section 3.1(d).
(kk)
“
Subscription Amount
” has the meaning given to such term in the recitals to this Agreement.
(ll)
“
Subsidiary
” means, with respect to any person, (i) any other person that is directly or indirectly controlled by such person, (ii) any trust in which such Person holds all of the beneficial interests, or (iii) any partnership, limited liability company or similar entity in which such person holds all of the interests other than the interests of any general partner, managing member or similar person.
24
(mm)
“
TSX
” means the Toronto Stock Exchange.
5.5
Interpretation
Unless the context otherwise requires, the following provisions will govern the interpretation of this Agreement:
(a)
the words “hereof”, “herein” and “hereunder” and similar expressions refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule, and other references are to those contained in or attached to this Agreement, in each case unless otherwise specified;
(b)
each reference to “days” in this Agreement means calendar days unless the term “Business Day” or “trading days” is used. Each reference to a time of day in this Agreement means that time in New York, New York, unless otherwise specified. In computation of periods of time in this Agreement from a specified date to a later specified date, the word “from” means “from and excluding” and the words “to” and “until” each means “to and including”;
(c)
the term “person” is to be broadly interpreted and includes a natural person, a firm, a corporation, a partnership, a limited liability company, a trust, an unincorporated organization, a Governmental Authority or any other entity, and the executors, administrators or other legal representatives of an individual in such capacity;
(d)
the words “include”, “including” and similar expressions mean “including but not limited to”;
(e)
the meanings given to terms defined in this Agreement apply to both the singular and plural forms of those terms;
(f)
except as otherwise specified in this Agreement, each reference in this Agreement to a statute, requirement of law or governmental consent shall be deemed to refer to such statute, requirement of law or governmental consent as the same may be amended, supplemented or otherwise modified from time to time;
(g)
except as otherwise specified in this Agreement, each reference in this Agreement to any agreement (including a reference to this Agreement):
(i)
includes all schedules, exhibits, annexes or other attachments thereto; and
(ii)
refers to that agreement as it may be amended, supplemented or otherwise modified from time to time;
(h)
each reference in this Agreement to a party shall be deemed to include that party’s successors and permitted assigns;
25
(i)
all dollar amounts referred to in this Agreement are expressed in U.S. dollars and, for greater certainty, “$” means U.S. dollars, unless otherwise indicated;
(j)
where in this Agreement a term is defined, a derivative of that term shall have a corresponding meaning; and
(k)
the headings of Sections, Articles or Schedules will not be considered in interpreting the text of this Agreement.
5.6
Entire Agreement
This Agreement contains the entire agreement of the parties and supersedes all prior agreements between the parties relating to the subject matter hereof. There are no representations, warranties, covenants or other agreements between the parties relating to the subject matter hereof except as stated or referred to herein.
No amendment to this Agreement will be valid or binding unless set forth in writing and executed by each party hereto. No failure of any party to exercise and no delay by it in exercising any right, power or remedy in connection with this Agreement shall operate as a waiver of that right, nor shall any single or partial exercise of any right preclude any other or further exercise of that right or the exercise of any other right. The rights provided in this Agreement may be exercised as often as necessary, are cumulative and not exclusive of any other rights (whether provided by law or otherwise). Any express waiver of any breach of this Agreement shall not be deemed to be a waiver of any subsequent breach. A waiver of any right must be specific and in writing.
5.7
Assignment
No party may assign its rights or benefits under this Agreement without the prior written consent of the other party. The terms and provisions of this Agreement shall be binding upon and enure to the benefit of BPY, the Property Partnership and the Purchaser and their respective successors and permitted assigns. Notwithstanding the foregoing, the Purchaser shall be entitled to assign its rights under this Agreement without the consent of BPY or the Property Partnership to any affiliates of the Purchaser that agree to be bound by all of the covenants of the Purchaser contained herein and comply with the provisions of this Agreement and deliver to BPY and the Property Partnership a duly executed undertaking to such effect in form and substance satisfactory to BPY and the Property Partnership, acting reasonably, and provided that any such assignment shall not relieve the Purchaser of any of its obligations hereunder and shall not provide subscription rights to such affiliates that are greater in aggregate than those held by the Purchaser. Notwithstanding the foregoing, the Purchaser may not assign this Agreement to an affiliate if (i) such an affiliate is a Canadian resident or U.S. person as defined by the applicable securities laws of Canada and the United States or (ii) such assignment will be executed in the United States or Canada or result in the transfer, purchase or sale of securities, including the Purchased Units or BPY Units, in Canada or the United States.
26
5.8
Further Assurances
Each party will, from time to time at the request of the other party, whether on or after Closing, execute and deliver all such further documents and perform or cause to be performed such further acts or things as may be reasonably required to give full effect to, and carry out or better evidence or perfect the intent of, this Agreement.
5.9
Time
Time is of the essence in this Agreement.
5.10
Costs
All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such costs and expenses, whether or not any of the transactions contemplated hereby are consummated.
5.11
Governing Law; Consent to Arbitration
This Agreement shall be governed by and construed in accordance with the laws of Bermuda. All disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration (the “
Rules
”) of the International Chamber of Commerce (“
ICC
”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three (3) arbitrators. The Purchaser, on the one hand, and BPY and/or the Property Partnership, as applicable, on the other hand, shall each designate one arbitrator. The third arbitrator shall be designated by the two arbitrators designated by the parties. If either the Purchaser, on the one hand, or BPY or the Property Partnership, as applicable, on the other hand, fails to designate an arbitrator within thirty (30) days after the filing of a dispute with the ICC, such arbitrator shall be appointed in the manner prescribed by the Rules. Any arbitration proceeding conducted pursuant to this Agreement shall take place in New York, New York, being the legal seat of the arbitration, and shall be conducted in English. The decision or award of the arbitrators shall be in writing and shall be final and binding on the parties.
5.12
Specific Performance
The parties 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 the Purchaser, BPY and the Property Partnership agree not to plead sufficiency of damages as a defence in such circumstances.
5.13
Severance
If any term of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect the legality, validity or enforceability in that jurisdiction of
27
any other term of this Agreement or the legality, validity or enforceability in other jurisdictions of that or any other provision of this Agreement. The parties shall use all reasonable endeavours to replace any provision held to be illegal, invalid or unenforceable with a legal, valid and enforceable substitute provision the effect of which is as close as possible to the intended effect of the invalid provision.
5.14
Counterparts
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall constitute one and the same document. A party’s transmission by facsimile or electronic mail of this Agreement duly executed by that party shall constitute effective delivery by that party of an executed copy of this Agreement.
[Remainder of Page Intentionally Left Blank]
28
Dated as of the date first written above.
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QATAR INVESTMENT AUTHORITY
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Per:
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/s/ Sheikh Abdullah bin Mohammed bin Saud Al-Thani
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Name: Sheikh Abdullah bin Mohammed bin Saud Al-Thani
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Title: Chief Executive Officer
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This Agreement is accepted by the Property Partnership as of the date first written above.
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BROOKFIELD PROPERTY L.P., by
BROOKFIELD PROPERTY PARTNERS
L.P., its general partner, by BROOKFIELD
PROPERTY PARTNERS LIMITED, its
general partner
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Per:
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/s/
Jane Sheere
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Name:
Jane Sheere
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Title: Secretary
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This Agreement is accepted by BPY as of the date first written above.
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BROOKFIELD PROPERTY PARTNERS
L.P., by BROOKFIELD PROPERTY
PARTNERS LIMITED, its general partner
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Per:
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/s/
Jane Sheere
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Name:
Jane Sheere
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Title: Secretary
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SCHEDULE “A”
WIRE INSTRUCTIONS OF THE PROPERTY PARTNERSHIP
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Correspondent Bank Name:
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HSBC Bank USA
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Correspondent Bank Swift Code:
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MRMDUS33
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Beneficiary Bank Name:
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HSBC Bank Plc
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Beneficiary Bank Swift Code:
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MIDLGB22
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Beneficiary Account Name:
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Brookfield Property LP
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Beneficiary Account Number:
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74863950
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Beneficiary Account IBAN:
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GB89MIDL40051574863950
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30
SCHEDULE “B”
CLOSING DELIVERABLES
1.
Investor Agreement.
2.
Guarantee Agreement between Purchaser and Brookfield Property Partners L.P.
3.
Receipt of Purchaser to the Property Partnership evidencing its receipt of the Purchased Units.
4.
TSX Form 4 — Personal Information Form for the Purchaser.
5.
The TSX Undertaking.
SCHEDULE “C”
PRESS RELEASE AND DRAFT MATERIAL CHANGE REPORT
Exhibit 99.3
Execution Version
INVESTOR AGREEMENT
BETWEEN
QATAR INVESTMENT AUTHORITY
AND
BROOKFIELD PROPERTY PARTNERS L.P.
December 4, 2014
INVESTOR
AGREEMENT
THIS AGREEMENT
made as of the
4
th
day of
December, 2014
BETWEEN:
QATAR INVESTMENT AUTHORITY
, an independent arm of the Qatari government established by State of Qatar Emiri Decision No (22) of 2005
(“
INVESTOR
”)
- and -
BROOKFIELD PROPERTY PARTNERS L.P.,
a Bermuda exempted limited partnership with registration number 47277 (“
BPY
”)
RECITALS:
WHEREAS
, the Investor has agreed to subscribe for and purchase, and Brookfield Property L.P. (the “
Property Partnership
”) has agreed to issue and sell to the Investor, an aggregate of $1,800,000,000 of Class A Preferred Limited Partnership Units (“
Preferred Units
”) of the Property Partnership pursuant to a subscription agreement (the “
Subscription Agreement
”) among the Investor, the Property Partnership and BPY dated December 4, 2014.
WHEREAS
, the Preferred Units consist of three series of Preferred Units, all of which are exchangeable for limited partnership units of BPY (“
Units
”).
WHEREAS
, BPY and the Investor are entering into this Agreement to provide certain rights and obligations among BPY and the Holders (as defined herein) on the terms and subject to the conditions set forth herein.
NOW THEREFORE
in consideration of the premises, mutual covenants and agreements contained in this Agreement
and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged)
, the parties covenant and agree, each with the other, as follows:
ARTICLE 1
INTERPRETATION
1.1
Definitions
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
1.1.1
“Adverse Effect”
has the meaning assigned to such term in Section 2.1.4;
1.1.2
“
Advice
” has the meaning assigned to such term in Section 2.5;
1.1.3
“
Affiliate
” means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls or is Controlled by such Person, or is under common Control of a third Person;
1.1.4
“
Agreement
” means this Investor Agreement;
1.1.5
“
BAM
” means Brookfield Asset Management Inc.;
1.1.6
“
Board
” means the board of directors of the General Partner;
1.1.7
“
Board Observer
” has the meaning assigned to such term in Section 3.1.2;
1.1.8
“
BPY
” has the meaning assigned to such term in the preamble;
1.1.9
“
Business Day
” means every day except a Saturday or Sunday, or a day which is a statutory or civic holiday in Bermuda, the Province of Ontario, or the State of New York;
1.1.10
“
Canadian Commissions
” means the securities commissions or other securities regulatory authorities in each of the provinces and territories of Canada and any successor regulatory authorities having similar powers and, to the extent applicable, in any such province or territory, a federal securities commission or similar regulatory authority;
1.1.11
“
Canadian Securities Laws
” means, collectively, the applicable securities legislation, regulations, rules, policies, blanket rulings, decisions and orders of each of the provinces and territories of Canada and the Canadian Commissions;
1.1.12
“
Change in Tax Law
” has the meaning assigned to such term in Section 4.3.2;
1.1.13
“
Code
” means the Internal Revenue Code of 1986, as amended from time to time;
1.1.14
“
Control
” means the control by one Person of another Person in accordance with the following: a Person (“
A
”) controls another Person (“
B
”) where A has the power to determine the management and policies of B by contract or status (for example, the status of A being the general partner of B) or by virtue of the beneficial ownership of or control over a majority of the voting interests in B; and, for greater certainty and without limitation, if A owns or has control over shares or other securities to which are attached more than 50% of the votes permitted to be cast in the election of directors to the Governing Body of B, or A is the general partner of B, a limited partnership, then in each case A Controls B for this purpose;
and the term “
Controlled
” has the corresponding meaning
;
2
1.1.15
“
Demand Registration
” has the meaning assigned to such term in Section 2.1.1(a);
1.1.16
“
Demanding Unitholders
” has the meaning assigned to such term in Section 2.1.1(a);
1.1.17
“
Demand Request
” has the meaning assigned to such term in Section 2.1.1(a);
1.1.18
“
Director
” has the meaning assigned to such term in Section 3.1.1;
1.1.19
“
Director Designee
” has the meaning assigned to such term in Section 3.1.1;
1.1.20
“
Effective
” means, in the case of a Registration Statement, a declaration by the SEC that such registration statement is effective, and in the case of a Prospectus, the issuance by the applicable Canadian Commission of a receipt for the final prospectus;
1.1.21
“
Effective Date
” means the date a Registration Statement or Prospectus becomes Effective;
1.1.22
“
FATCA
” has the meaning assigned to such term in Section 4.3.3;
1.1.23
“
FINRA
” means Financial Industry Regulatory Authority, Inc. of the United States;
1.1.24
“
General Partner
” has the meaning assigned to such term in Section 3.1.1;
1.1.25
“
Governing Body
” means (i) with respect to a corporation or limited company, the board of directors of such corporation or limited company, (ii) with respect to a limited liability company, the manager(s), director(s) or managing partner(s) of such limited liability company, (iii) with respect to a partnership, the board, committee or other body of each general partner or managing partner of such partnership that serves a similar function (or if any such general partner or managing partner is itself a partnership, the board, committee or other body of such general or managing partner’s general or managing partner that serves a similar function), and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in the case of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such body has delegated any power or authority, including any officer or managing director;
1.1.26
“
Holder
” means, collectively, (i) the Investor and (ii) any Affiliate of the Investor holding Registrable Units who is Transferred Preferred Units or Units and who has become a party to this Agreement in accordance with Section 5.3 and “
Holders
” means one or more of them;
3
1.1.27
“
ICC
” has the meaning assigned to such term in Section 1.7;
1.1.28
“
Inspectors
” has the meaning assigned to such term in Section 2.4(m);
1.1.29
“
Partnership Interest
” has the meaning assigned to such term in Section 4.2;
1.1.30
“
Person
” means any natural person, partnership, limited partnership, limited liability partnership, joint venture, syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability company, unlimited liability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted and pronouns have a similarly extended meaning;
1.1.31
“
POP Issuer
” means an issuer eligible to use the POP System or equivalent system established from time to time by the Canadian Commissions;
1.1.32
“
POP System
” means the prompt offering prospectus qualification system under
National Instrument 44-101
of the Canadian Securities Administrators entitled “Short Form Prospectus Distributions”;
1.1.33
“
Preferred Units
” has the meaning assigned to such term in the preamble;
1.1.34
“
Property Partnership
” has the meaning assigned to such term in the preamble;
1.1.35
“
Prospectus
” means a prospectus (including a Shelf Prospectus), including any amendment or supplement thereto, prepared in accordance with applicable Canadian Securities Laws for the purpose of qualifying securities for distribution to the public in any province or territory of Canada;
1.1.36
“
Property Partnership LPA
” means the Second Amended and Restated Limited Partnership Agreement for the Property Partnership dated August 8, 2013, as amended by the first amendment thereto dated December 4, 2014 (the “
First Amendment
”), as may be subsequently amended or restated;
1.1.37
“
Records
” has the meaning assigned to such term in Section 2.4(m);
1.1.38
“
register
,” “
registered
” and “
registration
” refers to (i) a registration effected by preparing and filing a Registration Statement in compliance with the U.S. Securities Act, and the declaration or ordering of the effectiveness of such registration statement, and (ii) a qualification for distribution under Canadian Securities Laws effected by preparing and filing a Prospectus;
1.1.39
“
Registration Statement
” means a registration statement on Form F-1 or F-3 under the U.S. Securities Act (which includes any preliminary prospectus,
4
prospectus, prospectus supplement or free writing prospectus used in connection therewith);
1.1.40
“
Registrable Units
” means the Units owned by Holders or issued to Holders upon conversion of the Preferred Units, together with any securities issued with respect to such Units by way of dividend or split or in connection with a combination of units, recapitalization, merger, consolidation, amalgamation, arrangement or other reorganization; provided, however, that Units that, pursuant to Section 2.9, no longer have registration rights hereunder shall not be considered Registrable Units;
1.1.41
“
Requesting Holders
” shall mean any Holder(s) requesting to have its (their) Registrable Units included in any Demand Registration or Shelf Registration;
1.1.42
“
Required Filing Date
” has the meaning assigned to such term in Section 2.1.1(b);
1.1.43
“
Rules
” has the meaning assigned to such term in Section 1.7;
1.1.44
“
SEC
” means the Securities and Exchange Commission or any other federal agency at the time administering the U.S. Securities Act;
1.1.45
“
Securities Laws
” means Canadian Securities Laws or U.S. Securities Laws, as applicable;
1.1.46
“
Seller Affiliates
” has the meaning assigned to such term in Section 2.7.1;
1.1.47
“
Shelf Prospectus
” means a shelf prospectus of BPY filed with the Canadian Commissions under Canadian Securities Laws for offers and secondary sales of Registrable Units on a continuous basis;
1.1.48
“
Shelf Registration
” means a registration of the Registrable Units under a registration statement pursuant to Rule 415 under the U.S. Securities Act;
1.1.49
“
Specified Interest
” means the lesser of (x) a number of Units representing at least five percent (5%) of the issued and outstanding Units (assuming, in each case, conversion of all securities convertible, exchangeable or exercisable into Units (and using the then-applicable Exchange Number (as such term is defined in the Property Partnership LPA) in order to determine the number of Units issuable upon exchange or redemption of the Preferred Units)) or (y) Preferred Units and Units with an aggregate value of not less than $600,000,000 where the Preferred Units are valued based on the aggregate Redemption Price (as defined in the Property Partnership LPA) and the Units are valued based on the Fair Market Value (as defined in the Property Partnership LPA);
1.1.50
“
Subscription Agreement
” has the meaning assigned to such term in the preamble;
5
1.1.51
“
Suspension Notice
” has the meaning assigned to such term in Section 2.5;
1.1.52
“
Transfer
” means (i) any direct or indirect offer, sale, lease, assignment, encumbrance, pledge, grant of a security interest, hypothecation, disposition or other transfer (by operation of law or otherwise), either voluntary or involuntary, or entry into any contract, option or other arrangement or understanding with respect to any offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any capital stock or interest in any capital stock or (ii) in respect of any capital stock or interest in any capital stock, to enter into any swap or any other agreement, transaction or series of transactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequences of ownership of such capital stock or interest in capital stock, whether any such swap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise. “
Transferred
”, “
Transferor
” and “
Transferee
” and similar expressions have corresponding meanings
;
1.1.53
“
Treasury Regulations
” means the income tax regulations promulgated under the Code, as amended from time to time;
1.1.54
“
Units
” means limited partnership units of BPY;
1.1.55
“
U.S. Exchange Act
” means the United States
Securities Exchange Act of 1934
, as amended, or any similar federal statute, and the rules and regulations promulgated by the SEC thereunder;
1.1.56
“
U.S. Securities Act
” means the United States
Securities Act of 1933
, as amended, or any similar federal statute and the rules and regulations promulgated by the SEC thereunder; and
1.1.57
“
U.S. Securities Laws
” means, collectively, the securities laws of the United States, including the U.S. Exchange Act, the U.S. Securities Act, state securities or “blue sky” laws within the United States, and all rules, regulations and ordinances promulgated thereunder.
1.2
Headings and Table of Contents
The inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will not affect the construction or interpretation hereof.
1.3
Interpretation
In this Agreement, unless the context otherwise requires:
6
1.3.1
words importing the singular shall include the plural and vice versa, words importing gender shall include all genders or the neuter, and words importing the neuter shall include all genders;
1.3.2
the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, are not to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;
1.3.3
references to any Person include such Person’s successors and permitted assigns;
1.3.4
except as otherwise provided in this Agreement, any reference in this Agreement to a statute, regulation, policy, rule or instrument shall include, and shall be deemed to be a reference also to, all rules and regulations made under such statute, in the case of a statute, all amendments made to such statute, regulation, policy, rule or instrument and to any statute, regulation, policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation, policy, rule or instrument so referred to;
1.3.5
any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to this Agreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from time to time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;
1.3.6
in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not a Business Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day; and
1.3.7
except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in U.S. currency.
1.4
Invalidity of Provisions
Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces.
7
1.5
Entire Agreement
This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement. There are no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements in connection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on any warranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into this Agreement, or any amendment or supplement hereto, by any party to this Agreement or its directors, officers, employees or agents, to any other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of this Agreement, and none of the parties to this Agreement has been induced to enter into this Agreement or any amendment or supplement by reason of any such warranty, representation, opinion, advice or assertion of fact. Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, except to the extent contemplated above.
1.6
Waiver, Amendment
Except as expressly provided in this Agreement, no waiver of this Agreement will be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.
A party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a party from any other or further exercise of that right or the exercise of any other right. This Agreement may not be amended or modified in any respect except by a written agreement signed by BPY, the Investor (so long as the Investor owns any Units) and the Holders of a majority of the then outstanding Registrable Units.
1.7
Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of New York. All disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration (the “
Rules
”) of the International Chamber of Commerce (“
ICC
”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three (3) arbitrators. The Holder, on the one hand, and BPY and/or the Property Partnership, as applicable, on the other hand, shall each designate one arbitrator. The third arbitrator shall be designated by the two arbitrators designated by the parties. If either the Holder, on the one hand, or BPY or the Property Partnership, as applicable, on the other hand, fails to designate an arbitrator within thirty (30) days after the filing of a dispute with the ICC, such arbitrator shall be appointed in the manner prescribed by the Rules. Any arbitration proceeding conducted pursuant to this Agreement shall take place in New York, New York, being the legal seat of the arbitration, and shall be conducted in
8
English. The decision or award of the arbitrators shall be in writing and shall be final and binding on the parties.
1.8
Specific Performance
The parties 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 the Investor and BPY agree not to plead sufficiency of damages as a defense in such circumstances.
ARTICLE 2
REGISTRATION RIGHTS
2.1
Demand Registration
2.1.1
Request for Registration
(a)
At any time and from time to time commencing on the date hereof, any Holder shall have the right to make up to four (4) demands to BPY to require BPY to file a Registration Statement and/or a Prospectus for a public offering of all or part of its Registrable Units (each demand, a “
Demand Registration
”), by delivering to BPY written notice stating that such right is being exercised, naming the Holders whose Registrable Units are to be included in such registration (collectively, the “
Demanding Unitholders
”), specifying the number of each such Demanding Unitholder’s Registrable Units to be included in such registration, and, subject to Section 2.1.3 hereof, describing the intended method of distribution thereof (a “
Demand Request
”).
(b)
Each Demand Request shall specify the aggregate number of Registrable Units proposed to be sold. Subject to Section 2.1.5, BPY shall file a Registration Statement and/or Prospectus in respect of a Demand Registration as soon as practicable and, in any event, within forty-five (45) days after receiving a Demand Request (the “
Required Filing Date
”) and shall use reasonable best efforts to cause the same to be declared Effective as promptly as practicable after such filing; provided, however, that:
(i)
BPY shall not be obligated to file a Registration Statement or a Prospectus in respect of a Demand Registration pursuant to Section 2.1.1(a) within sixty (60) days after the Effective Date of a previous Demand Registration, other than a Shelf Registration pursuant to this Article 2; and
9
(ii)
BPY shall not be obligated to file a Registration Statement or a Prospectus in respect of a Demand Registration pursuant to Section 2.1.1(a) unless the Demand Request is for a number of Registrable Units with a market value that is equal to at least $50,000,000 as of the date of such Demand Request.
2.1.2
Shelf Registration
. With respect to any Demand Registration, the Requesting Holders may request BPY to file a Shelf Prospectus or effect a Shelf Registration.
2.1.3
Selection of Underwriters
. At the request of a Requesting Holder, the offering of Registrable Units pursuant to a Demand Registration shall be in the form of a “firm commitment” underwritten offering. The Requesting Holder shall select, from a list of three (3) underwriters which shall be provided by BPY promptly following such request, the investment banking firm or firms to manage the underwritten offering; provided that such selection shall be subject to the consent of BPY, which consent shall not be unreasonably withheld or delayed. No Holder may participate in any registration pursuant to Section 2.1.1 unless such Holder (a) agrees to sell such Holder’s Registrable Units on the basis provided in any underwriting arrangements described above and (b) completes, executes and delivers, or causes such completion, execution and delivery of, all questionnaires, powers of attorney, indemnities, lock-ups, opinions, underwriting agreements and other documents as requested by the underwriters and reasonably required under the terms of such underwriting arrangements; provided, however, that BPY shall not require the Holder to make any representations or warranties in connection with any such registration other than representations and warranties as to (i) such Holder’s ownership of Registrable Units to be transferred free and clear of all liens, claims, and encumbrances, (ii) such Holder’s power and authority to effect such transfer, and (iii) such matters pertaining to compliance with Securities Laws as may be reasonably requested; provided, further, however, that the obligation of such Holder to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several, among such Holders selling Registrable Units, and the liability of each such Holder will be in proportion thereto, and provided, further, that such liability will be limited to the net amount received by such Holder from the sale of its Registrable Units pursuant to such registration.
2.1.4
Priority on Demand Registrations
. No securities to be sold for the account of any Person (including BPY) other than a Requesting Holder shall be included in a Demand Registration unless the managing underwriter or underwriters shall advise the Requesting Holders in writing that the inclusion of such securities will not adversely affect the price, timing or distribution of the offering or otherwise adversely affect its success (an “
Adverse Effect
”). Furthermore, if the managing underwriter or underwriters shall advise the Requesting Holders that, even after exclusion of all securities of other Persons (including BPY) pursuant to the immediately preceding sentence, the amount of Registrable Units proposed to be included in such Demand Registration by Requesting Holders is sufficiently large to cause an Adverse Effect, the Registrable Units of the Requesting Holders to be
10
included in such Demand Registration shall equal the number of Registrable Units which the Requesting Holders are so advised can be sold in such offering without an Adverse Effect and such Registrable Units shall be allocated pro rata among the Requesting Holders on the basis of the number of Registrable Units requested to be included in such registration by each such Requesting Holder.
2.1.5
Deferral of Filing
. BPY may defer the filing (but not the preparation) of a Registration Statement or Prospectus, as applicable, required by Section 2.1 until a date not later than ninety (90) days after the Required Filing Date if (a) at the time BPY receives the Demand Request, BPY is engaged in confidential negotiations or other confidential activities, disclosure of which would be required in such Registration Statement or Prospectus, as applicable (but would not be required if such Registration Statement or Prospectus, as applicable, were not filed), and the Board of the General Partner determines in good faith that such disclosure would be materially detrimental to BPY and its unitholders, (b) prior to receiving the Demand Request, BPY had determined to effect a registered underwritten public offering of BPY’s securities for BPY’s account and BPY had taken substantial steps (including selecting a managing underwriter for such offering) and is proceeding with reasonable diligence to effect such offering, or (c) at the time BPY receives the Demand Request, BPY is currently engaged in a self-tender or exchange offer and the filing of a Registration Statement or Prospectus, as applicable, would cause a violation of applicable Securities Laws. A deferral of the filing of a Registration Statement or Prospectus, as applicable, pursuant to this Section 2.1.5 shall be lifted, and the requested Registration Statement or Prospectus, as applicable, shall be filed forthwith, if, in the case of a deferral pursuant to clause (a) of the preceding sentence, the negotiations or other activities are disclosed, otherwise become publicly known, or are terminated, or, in the case of a deferral pursuant to clause (b) of the preceding sentence, the proposed registration for BPY’s account is abandoned. In order to defer the filing of a Registration Statement or Prospectus, as applicable, pursuant to this Section 2.1.5, BPY shall promptly (but in any event within ten (10) days), upon determining to seek such deferral, deliver to the Requesting Holders a certificate signed by an officer or the Board of the General Partner stating that BPY is deferring such filing pursuant to this Section 2.1.5 and a general statement of the reason for such deferral and an approximation of the anticipated delay. Within twenty (20) days after receiving such certificate, the Requesting Holder may withdraw such Demand Request by giving notice to BPY; if withdrawn, the Demand Request shall be deemed not to have been made for all purposes of this Agreement. BPY may defer the filing of a particular Registration Statement or Prospectus, as applicable, pursuant to this Section 2.1.5 no more than once during any three hundred sixty (360) day period.
2.2
Short-Form Filings
(a)
SEC Form F-3
. BPY shall use its reasonable best efforts to cause Demand Registrations in the United States to be registered on Form F-3, and if BPY is not then eligible under U.S. Securities Laws to use Form F-3,
11
Demand Registrations shall be registered on the form for which BPY then qualifies. BPY shall use its reasonable best efforts to remain eligible to use Form F-3.
(b)
Short-Form Prospectus
. BPY shall use its reasonable best efforts to cause Demand Registrations in Canada to be qualified by way of a short-form Prospectus prepared pursuant to the POP System if, at the time of such Demand Registration, BPY is a POP Issuer and is able to do so in all of the provinces and territories in which the Demand Registration is to be effected. For greater certainty, it is acknowledged that in the event that BPY is not a POP Issuer or is unable to utilize the POP System in one or more Canadian provinces or territories in which the Demand Registration is to be effected, BPY shall proceed by way of long-form Prospectus.
2.3
Holdback Agreements
(a)
BPY shall not effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the seven (7) days prior to and during the ninety (90)-day period beginning on the Effective Date of a Demand Registration (other than a Shelf Registration or Shelf Prospectus, as applicable), except pursuant to registrations on Form S-8 or registrations to effect the acquisition of, or combination with, another Person, or unless the underwriters managing any such public offering otherwise agree.
(b)
If any Holders of Registrable Units notify BPY in writing that they intend to effect an underwritten sale of Units on a specified date registered pursuant to a Shelf Registration or Shelf Prospectus, as applicable, pursuant to Article 2 hereof, BPY shall not effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for its equity securities, during the seven (7) days prior to and during the ninety (90)-day period beginning on the date specified in such notice, except pursuant to registrations on Form S-8 or registrations to effect the acquisition of, or combination with, another Person, or unless the underwriters managing any such public offering otherwise agree.
(c)
Each Holder agrees, in the event of an underwritten offering by BPY (whether for the account of BPY or otherwise), not to offer, sell, contract to sell or otherwise dispose of any Registrable Units, or any securities convertible into or exchangeable or exercisable for such securities, including any sale pursuant to Rule 144 under the U.S. Securities Act (except as part of such underwritten offering), during the seven (7) days prior to, and during the ninety (90)-day period (or such lesser period as the lead or managing underwriters may require) beginning on, the Effective Date for such underwritten offering (or, in the case of an offering pursuant
12
to an effective Shelf Registration or Shelf Prospectus, the pricing date for such underwritten offering).
2.4
Registration Procedures
Whenever any Holder has requested that any Registrable Units be registered pursuant to this Agreement, BPY will use its reasonable best efforts to effect the registration and the sale of such Registrable Units in accordance with the intended method of disposition thereof as promptly as is practicable, and pursuant thereto BPY will as expeditiously as possible:
(a)
prepare and file, pursuant to Section 2.1.1(b) with respect to any Demand Registration, subject to Section 2.2, a Registration Statement or Prospectus, as applicable, with respect to such Registrable Units and use its reasonable best efforts to cause such Registration Statement or Prospectus, as applicable, to become Effective; provided that as far in advance as practicable before filing such Registration Statement or Prospectus, as applicable, or any amendment or supplement thereto, BPY will furnish to the selling Holders copies of reasonably complete drafts of all such documents prepared to be filed (including exhibits), and any such Holder shall have the opportunity to object to any information contained therein and BPY will make corrections reasonably requested by such Holder with respect to such information prior to filing any such Registration Statement or Prospectus, as applicable, or any amendment or supplement thereto;
(b)
except in the case of a Shelf Registration or Shelf Prospectus, prepare and file with the SEC or the applicable Canadian Commissions, such amendments, post-effective amendments and supplements to such Registration Statement or Prospectus, as applicable, as may be necessary to keep such Registration Statement or Prospectus, as applicable, effective for a period of not less than one hundred eighty (180) days (or such lesser period as is necessary for the underwriters in an underwritten offering to sell unsold allotments) and comply with the provisions of the applicable Securities Laws with respect to the disposition of all securities covered by such Registration Statement or Prospectus, as applicable, during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement or Prospectus, as applicable;
(c)
in the case of a Shelf Registration or Shelf Prospectus, prepare and file with the SEC or the applicable Canadian Commissions, as applicable, such amendments and supplements to such Shelf Registration or Shelf Prospectus, as applicable, as may be necessary to keep such Shelf Registration or Shelf Prospectus, as applicable, effective and to comply with the provisions of the applicable Securities Laws with respect to the disposition of all Registrable Units subject thereto for a period ending on
13
the earlier of (i) twenty four (24) months after the Effective Date and (ii) the date on which all the Registrable Units subject thereto have been sold pursuant to such Shelf Registration or Shelf Prospectus, as applicable;
(d)
furnish to each seller of Registrable Units and the underwriters of the securities being registered such number of copies of such Registration Statement, Shelf Registration, or Prospectus, as applicable (in the English language and, if required, the French language), each amendment and supplement thereto, any documents incorporated by reference therein and such other documents as such seller or underwriters may reasonably request in order to facilitate the disposition of the Registrable Units owned by such seller or the sale of such securities by such underwriters (it being understood that, subject to Section 2.5 and the requirements of the applicable Securities Laws, BPY consents to the use of the Registration Statement, Shelf Registration and Prospectus, as applicable, and any amendment or supplement thereto by each seller and the underwriters in connection with the offering and sale of the Registrable Units covered by the Registration Statement, Shelf Registration or Prospectus, as applicable;
(e)
use its reasonable best efforts to register or qualify such Registrable Units under such other securities or “blue sky” laws of such jurisdictions as the managing underwriter reasonably requests (or, in the event the Registration Statement, Shelf Registration or Prospectus, as applicable, does not relate to an underwritten offering, as the holders of a majority of such Registrable Units may reasonably request); use its reasonable best efforts to keep each such registration or qualification (or exemption therefrom) effective during the period in which such Registration Statement, Shelf Registration or Prospectus, as applicable, is required to be kept effective; and do any and all other acts and things which may be reasonably necessary or advisable to enable each seller to consummate the disposition of the Registrable Units owned by such seller in such jurisdictions (provided, however, that BPY will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction);
(f)
notify each seller and each underwriter and (if requested by any such Person) confirm such notice in writing (i) when any supplement or amendment to the Registration Statement, Shelf Registration or Prospectus, as applicable, has been filed following the Effective Date, and when the same has become effective, (ii) of the issuance by any state securities or other regulatory authority of any order suspending the qualification or exemption from qualification of any of the Registrable Units under state securities or “blue sky” laws or the initiation of any proceedings for that purpose, and (iii) of the happening of any event which makes any statement made in the Registration Statement, Shelf
14
Registration or Prospectus, as applicable, untrue or which requires the making of any changes in such Registration Statement, Shelf Registration or Prospectus, as applicable, or documents so that they will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, as promptly as practicable thereafter, prepare and file with the SEC and the applicable Canadian Commissions (as applicable) and furnish a supplement or amendment to such Registration Statement, Shelf Registration or Prospectus, as applicable, so that, as thereafter deliverable to the purchasers of such Registrable Units, such Registration Statement, Shelf Registration or Prospectus, as applicable, will not contain any untrue statement of a material fact or omit a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(g)
permit any selling Holder, which in such Holder’s sole and exclusive judgment, might reasonably be deemed to be an underwriter or a controlling person of BPY, to participate in the preparation of such Registration Statement, Shelf Registration or Prospectus, as applicable, and to require the insertion therein of material, furnished to BPY in writing, which in the reasonable judgment of such Holder and its counsel should be included;
(h)
make reasonably available personnel, as selected by the Holders of a majority of the Registrable Units included in such registration, for assistance in the selling effort relating to the Registrable Units covered by such registration, including, but not limited to, the participation of such members of BPY’s management in road show presentations;
(i)
otherwise use its reasonable best efforts to comply with all applicable Securities Laws, and make generally available to BPY’s unitholders an earnings statement satisfying the provisions of Section 11(a) of the U.S. Securities Act no later than thirty (30) days after the end of the twelve (12) month period beginning with the first day of BPY’s first fiscal quarter commencing after the Effective Date, which earnings statement shall cover said twelve (12) month period, and which requirement will be deemed to be satisfied if BPY timely files complete and accurate information on Forms 20-F and 6-K under the Exchange Act which otherwise complies with Rule 158 under the U.S. Securities Act;
(j)
if requested by the managing underwriter or any seller, promptly incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or any seller reasonably requests to be included therein, including, without limitation, with respect to the Registrable Units being sold by such seller, the purchase price being paid therefor by the underwriters and with respect to any other terms of the underwritten offering of the Registrable Units to be sold in such offering,
15
and promptly make all required filings of such prospectus supplement or post-effective amendment;
(k)
after filing of any document which is incorporated by reference into the Registration Statement or Prospectus, as applicable (in the form in which it was incorporated), deliver a copy of each such document to each seller;
(l)
cooperate with the sellers and the managing underwriter to facilitate the timely preparation and delivery of certificates (which shall not bear any restrictive legends unless required under applicable law) representing securities sold under any Registration Statement or Prospectus, as applicable, and enable such securities to be in such denominations and registered in such names as the managing underwriter or such sellers may request and keep available and make available to BPY’s transfer agent prior to the Effective Date a supply of such certificates;
(m)
make available for inspection by any seller, any underwriter participating in any disposition pursuant to any Registration Statement or Prospectus, as applicable, and any attorney, accountant or other agent or representative retained by any such seller or underwriter (collectively, the “
Inspectors
”), all financial and other records, pertinent corporate documents and properties of BPY (collectively, the “
Records
”), as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause BPY’s officers, directors and employees to supply all information requested by any such Inspector in connection with such Registration Statement or Prospectus, as applicable; provided, however, that, unless the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the Registration Statement or Prospectus, as applicable, or the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, BPY shall not be required to provide any information under this subparagraph (m) if (i) BPY believes, after consultation with counsel for BPY, that to do so would cause BPY to forfeit an attorney-client privilege that was applicable to such information or (ii) if either (x) BPY has requested and been granted from the SEC or a Canadian Commission confidential treatment of such information contained in any filing with the SEC or a Canadian Commission or documents provided supplementally or otherwise or (y) BPY reasonably determines in good faith that such Records are confidential and so notifies the Inspectors in writing, unless prior to furnishing any such information with respect to clause (ii) such Holder of Registrable Units requesting such information agrees to enter into a confidentiality agreement in customary form and subject to customary exceptions; and provided, further, that each Holder of Registrable Units agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to BPY and allow BPY, at its expense, to undertake appropriate action and to prevent disclosure of the Records deemed confidential;
16
(n)
furnish to each seller and underwriter a signed counterpart of (i) an opinion or opinions of counsel to BPY, (ii) a comfort letter or comfort letters from BPY’s independent auditors, addressed to the underwriters, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the managing underwriter reasonably requests, and (iii) if a Prospectus is filed in Quebec, opinions of Quebec counsel to BPY and the auditors of BPY addressed to the Holder and the underwriter or underwriters of such distribution relating to the translation of the Prospectus;
(o)
cause the Registrable Units included in any Prospectus or Registration Statement, as applicable, to be listed on the Toronto Stock Exchange and on the New York Stock Exchange;
(p)
provide and cause to be maintained a transfer agent and registrar for all Registrable Units registered hereunder;
(q)
cooperate with each seller and each underwriter participating in the disposition of such Registrable Units and their respective counsel in connection with any filings required to be made with FINRA;
(r)
during the period when the Registration Statement or Prospectus, as applicable, is required to be delivered under applicable Securities Laws, promptly file all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act or with the Canadian Commissions pursuant to Canadian Securities Laws;
(s)
notify each seller of Registrable Units promptly of any request by the SEC or a Canadian Commission for the amending or supplementing of such Registration Statement or Prospectus, as applicable, or for additional information;
(t)
enter into such agreements (including underwriting agreements in the managing underwriter’s customary form) as are customary in connection with an underwritten registration; and
(u)
advise each seller of such Registrable Units, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order or ruling by the SEC or a Canadian Commission suspending the effectiveness of such Registration Statement or Prospectus, as applicable, or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued.
17
2.5
Suspension of Dispositions
Each Holder agrees by acquisition of any Registrable Units that, upon receipt of any notice (a “
Suspension Notice
”) from BPY of the happening of any event of the kind described in Section 2.4(f)(iii) such Holder will forthwith discontinue disposition of Registrable Units until such Holder’s receipt of the copies of the supplemented or amended Registration Statement or Prospectus, as applicable, or until it is advised in writing (the “
Advice
”) by BPY that the use of the Registration Statement or Prospectus, as applicable, may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the Registration Statement or Prospectus, as applicable, and, if so directed by BPY, such Holder will deliver to BPY all copies, other than permanent file copies then in such Holder’s possession, of the Registration Statement or Prospectus, as applicable, covering such Registrable Units current at the time of receipt of such notice. In the event BPY shall give any such notice, the time period regarding the effectiveness of Registration Statements or Prospectuses, as applicable, set forth in Sections 2.4(b) and 2.4(c) hereof shall be extended by the number of days during the period from and including the date of the giving of the Suspension Notice to and including the date when each seller of Registrable Units covered by such Registration Statement or Prospectus, as applicable, shall have received the copies of the supplemented or amended Registration Statement or Prospectus, as applicable, or the Advice. BPY shall use its reasonable best efforts and take such actions as are reasonably necessary to render the Advice as promptly as practicable.
2.6
Registration Expenses
All fees and expenses incident to any registration including, without limitation, BPY’s performance of or compliance with this Article 2, all registration and filing fees, all fees and expenses associated with filings required to be made with FINRA (including, if applicable, the reasonable fees and expenses of any “qualified independent underwriter” and of its counsel), as may be required by the rules and regulations of FINRA, fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the Registrable Units), rating agency fees, printing expenses (including expenses of printing certificates for the Registrable Units and of printing prospectuses), messenger and delivery expenses, the fees and expenses incurred in connection with any listing or quotation of the Registrable Units, fees and expenses of counsel for BPY and its independent auditors (including the expenses of any special audit or “cold comfort” letters required by or incident to such performance), the fees and expenses of any special experts retained by BPY in connection with such registration, and the fees and expenses of other persons retained by BPY, will be borne by BPY (unless paid by a security holder that is not a Holder for whose account the registration is being effected) whether or not any Registration Statement or Prospectus becomes Effective; provided, however, that any underwriting discounts, commissions, or fees attributable to the sale of the Registrable Units will be borne by the Holders pro rata on the basis of the number of Units so registered and the reasonable fees and expenses of any counsel, accountants, or other persons retained or employed by any Holder will be borne by such Holder.
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2.7
Indemnification
2.7.1
BPY agrees to indemnify and reimburse, to the fullest extent permitted by law, each seller of Registrable Units, and each of its employees, advisors, agents, representatives, partners, officers, and directors and each Person who Controls such seller and any agent or investment advisor thereof (collectively, the “
Seller Affiliates
”) (a) against any and all losses, claims, damages, liabilities, and expenses, joint or several (including, without limitation, reasonable attorneys’ fees and disbursements except as limited by Section 2.7.3) based upon, arising out of, related to or resulting from any untrue or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or any amendment thereof or supplement thereto, or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, (b) against any and all loss, liability, claim, damage, and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon, arising out of, related to or resulting from any such untrue statement or omission or alleged untrue statement or omission, and (c) against any and all costs and expenses (including reasonable fees and disbursements of counsel) as may be reasonably incurred in investigating, preparing, or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon, arising out of, related to or resulting from any such untrue statement or omission or alleged untrue statement or omission, or violation of Securities Laws, to the extent that any such expense or cost is not paid under subparagraph (a) or (b) above; except insofar as any such statements are made in reliance upon and in strict conformity with information furnished in writing to BPY by such seller or any Seller Affiliate for use therein or arise from such seller’s or any Seller Affiliate’s failure to deliver a copy of the Registration Statement or Prospectus or any amendments or supplements thereto after BPY has furnished such seller or Seller Affiliate with a sufficient number of copies of the same. The reimbursements required by this Section 2.7.1 will be made by periodic payments during the course of the investigation or defense, as and when bills are received or expenses incurred.
2.7.2
In connection with any Registration Statement or Prospectus in which a seller of Registrable Units is participating, each such seller will furnish to BPY in writing such information and affidavits as BPY reasonably requests for use in connection with any such Registration Statement or Prospectus, as applicable, and, to the fullest extent permitted by law, each such seller will indemnify BPY and each of its employees, advisors, agents, representatives, partners, officers and directors and each Person who Controls BPY (excluding such seller or any Seller Affiliate) and any agent or investment advisor thereof against any and all losses, claims, damages, liabilities, and expenses (including, without limitation, reasonable attorneys’ fees and disbursements except as limited by Section 2.7.3) resulting from any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or Prospectus, as applicable, or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required
19
to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission is contained in any information or affidavit so furnished in writing by such seller or any of its Seller Affiliates specifically for inclusion in the Registration Statement or Prospectus, as applicable; provided that the obligation to indemnify will be several, not joint and several, among such sellers of Registrable Units, and the liability of each such seller of Registrable Units will be in proportion to, and will be limited to, the net amount received by such seller from the sale of Registrable Units pursuant to such Registration Statement or Prospectus, as applicable; provided, however, that such seller of Registrable Units shall not be liable in any such case to the extent that prior to the filing of any such Registration Statement or Prospectus, as applicable, or amendment thereof or supplement thereto, such seller has furnished in writing to BPY information expressly for use in such Registration Statement or Prospectus, as applicable, or any amendment thereof or supplement thereto which corrected or made not misleading information previously furnished to BPY.
2.7.3
Any Person entitled to indemnification hereunder will (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give such notice shall not limit the rights of such Person) and (b) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (i) the indemnifying party has agreed to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person, or (iii) such counsel has been retained due to a conflict as described below. If such defense is not assumed by the indemnifying party as permitted hereunder, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld or delayed). If such defense is assumed by the indemnifying party pursuant to the provisions hereof, such indemnifying party shall not settle or otherwise compromise the applicable claim unless (A) such settlement or compromise contains a full and unconditional release of the indemnified party without any admission of liability on the part of such indemnified party or (B) the indemnified party otherwise consents in writing. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim (together with appropriate local counsel), unless in the reasonable judgment of any indemnified party, a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying
20
party shall be obligated to pay the reasonable fees and disbursements of such additional counsel or counsels.
2.7.4
Each party hereto agrees that, if for any reason the indemnification provisions contemplated by Section 2.7.1 or Section 2.7.2 are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities, or expenses (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, liabilities, or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the actions which resulted in the losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.7.4 were determined by pro rata allocation (even if the Holders or any underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 2.7.4. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities, or expenses (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or, except as provided in Section 2.7.3, defending any such action or claim. Notwithstanding the provisions of this Section 2.7.4, no Holder shall be required to contribute an amount greater than the dollar amount by which the net proceeds received by such Holder with respect to the sale of any Registrable Units exceeds the amount of damages which such Holder has otherwise been required to pay by reason of any and all untrue or alleged untrue statements of material fact or omissions or alleged omissions of material fact made in any Registration Statement or Prospectus, as applicable, or any amendment thereof or supplement thereto related to such sale of Registrable Units. No person guilty of fraudulent misrepresentation shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations in this Section 2.7.4 to contribute shall be several in proportion to the amount of Registrable Units registered by them and not joint.
2.7.5
If indemnification is available under this Section 2.7, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Section 2.7.1 and Section 2.7.2 without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in Section 2.7.4 subject, in the case of the Holders, to the limited dollar amounts set forth in Section 2.7.2.
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2.7.6
The indemnification and contribution provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, or controlling Person of such indemnified party and will survive the transfer of securities.
2.8
Current Public Information
BPY will file the reports required to be filed by it under applicable Securities Laws (or, if BPY is not required to file such reports, will, upon the request of the Holders, make publicly available other information) and will take such further action as any of the Holders may reasonably request, all to the extent required from time to time to enable the Holders to sell Registrable Securities without registration under, and subject to the limitations of, applicable Securities Laws. Upon the reasonable request of any Holder, BPY will deliver to such parties a written statement as to whether it has complied with such requirements and will, at its expense, forthwith upon the request of any such Holder, deliver to such Holder a certificate, signed by an officer, stating (a) BPY’s name, address and telephone number (including area code), (b) BPY’s Internal Revenue Service identification number and Business Number issued by the Canada Revenue Agency, (c) BPY’s SEC and SEDAR file numbers, (d) the number of Units outstanding as shown by the most recent report or statement published by BPY, and (e) whether BPY has filed the reports required to be filed under applicable Securities Laws for a period or at least ninety (90) days prior to the date of such certificate and in addition has filed the most recent annual report required to be filed thereunder.
2.9
Termination of Registration Rights
The Holders may exercise the registration rights granted hereunder in such manner and proportions as they shall agree among themselves. The registration rights hereunder shall cease to apply to any particular Registrable Unit when: (a) a Registration Statement or Prospectus, as applicable, with respect to the sale of such Units shall have become Effective and such Units shall have been disposed of in accordance with such Registration Statement or Prospectus, as applicable; (b) such Units shall have been sold to the public pursuant to an exemption under applicable Securities Laws; (c) such Units shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by BPY and subsequent public distribution of them shall not require registration under applicable Securities Laws; (d) such Units shall have ceased to be outstanding; (e) the Holder of such Units ceases to be Controlled by the Qatar Investment Authority; or (f) such Units are eligible for sale pursuant to Rule 144(b)(1) (without the requirement for BPY to be in compliance with the current public information required under Rule 144) under the U.S. Securities Act, provided that, in case of (f), the registration rights hereunder shall continue to apply so long as the anticipated gross proceeds from the sale of the Registrable Units, as reasonably determined by the Requesting Holder acting in good faith, proposed to be sold under a Demand Registration exceeds $100,000,000 determined as of the date of such Demand Request. BPY shall promptly upon the request of any Holder furnish to such Holder evidence of the number of Registrable Units then outstanding.
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2.10
Preservation of Rights
BPY will not directly or indirectly (a) grant any registration rights to third parties which are more favorable than or inconsistent with the rights granted hereunder unless BPY provides such more favorable rights to the Holders or (b) enter into any agreement, take any action, or permit any change to occur, with respect to its securities that violates or subordinates the rights expressly granted to the Holders in this Agreement.
2.11
Transfer of Registration Rights
The registration rights of each Holder under this Agreement in connection with all or any portion of such Holder’s Registrable Units may be assigned, in whole or in part, to any Affiliate of the Holder who agrees in writing to be subject to and bound by all the terms and conditions of this Agreement in connection with the Transfer of Units or Preferred Units by such Holder to such Affiliate in accordance with Section 5.3. For greater certainty, all such Affiliates are included under the definition of “Holder” under this Agreement. For greater certainty, in the case of a transfer of less than all of such Holder’s Registrable Units, no such assignment will limit or otherwise impair the transferor’s rights under this Agreement.
ARTICLE 3
CORPORATE GOVERNANCE
3.1
Directors
3.1.1
For so long as the Investor holds (directly or indirectly through one or more Holders) a number of Units representing at least five percent (5%) of the issued and outstanding Units (assuming, in each case, conversion of all securities convertible, exchangeable or exercisable into Units (and using the then-applicable Exchange Number (as such term is defined in the Property Partnership LPA) in order to determine the number of Units issuable upon exchange, maturity or redemption of the Preferred Units)), but subject to Section 3.1.2, BPY covenants and agrees that (a) the Investor shall be entitled to designate and have appointed one (1) individual for appointment to the board of directors (the “
Board
”, and such directors, the “
Directors
”; and such designated Director, a “
Director Designee
”) of the sole general partner of BPY, presently Brookfield Property Partners Limited (the “
General Partner
”), (b) the Investor
shall have the right to designate that any such Director Designee be removed or replaced at the request of the Investor at any time and from time to time in accordance with this Section 3.1,
(c) such Director Designee shall have less than ten percent (10%) of the aggregate number of votes that may be cast by all Directors of the Board taken together, and (d) as soon as practicable and in any event prior to or on the next regularly scheduled meeting of the Board, the bye-laws of the General Partner shall be amended to reflect (c) above.
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3.1.2
On the closing date of the issuance of the Preferred Units contemplated by the Subscription Agreement, the Investor’s initial designee shall be appointed as a non-voting observer to the Board (the “
Board Observer
”). Such appointment shall be effective upon written notice from the Investor to BPY of the name and contact information of the individual to be so appointed. Subject to any related person, conflict of interest, recusal or similar policy or practice of the General Partner, BPY will cause the Board Observer to be provided with all communications and materials that are provided by BPY or its consultants to the Directors of the Board generally, at the same time and in the same manner that such communications and materials are provided to such Directors, including all notices, board packages, reports, presentations, minutes and consents. The Board Observer shall hold in confidence and trust and not use or disclose any confidential information provided to or learned by him or her in connection with the Board Observer’s rights hereunder for any purpose other than the observation and participation rights contemplated hereby, unless otherwise required by law. As soon as practicable after the Investor’s initial designee has satisfied all of the requirements set forth in Section 3.1.3 of this Agreement, as determined by BPY, and in any event prior to or on the next regularly scheduled meeting of the Board after such determination, such designee’s appointment as the Board Observer shall be terminated, and such designee shall be appointed as a Director pursuant to Section 3.1.1.
3.1.3
The Director Designee from time to time must (i) meet the standards of independence established by the New York Stock Exchange, the Toronto Stock Exchange and applicable securities regulatory authorities from time to time applicable to the General Partner, (ii) be reasonably acceptable to the Board and (iii) provide all information and sign all documents required to be provided and signed pursuant to applicable securities laws (including the rules of the Toronto Stock Exchange and the New York Stock Exchange).
3.1.4
If (i) the Investor ceases to have a right to designate an individual for appointment as a Director in accordance with Section 3.1.1 above, (ii) the Director Designee ceases to meet the standards of independence established by the New York Stock Exchange, the Toronto Stock Exchange and applicable securities regulatory authorities from time to time applicable to the General Partner in accordance with Section 3.1.3 above, (iii) the Director Designee ceases to be reasonably acceptable to the Board, or (iv) the Investor ceases to be Controlled by the Qatar Investment Authority, then, in any such case, the Investor will request that such Director Designee resign as a Director and, in the case of (i), (ii) and (iii), the Investor shall have the right to designate another individual for appointment to the Board in accordance with Section 3.1.1 above.
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ARTICLE 4
ADDITIONAL RIGHTS
4.1
Anti-Dilution
During the period commencing on the date hereof and ending on the day that is 180 days thereafter, BPY shall not (and shall cause its subsidiaries not to), without the prior written consent of the Investor, directly or indirectly, offer to sell, grant any option for sale of, or otherwise dispose of, or announce any intention to do so, in a public offering or by way of private placement, any Units (or any securities that are convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire Units) at a price that is less than the Exchange Price (as such term is defined in the Property Partnership LPA). Notwithstanding the foregoing, this Section 4.1 shall not apply to (i) Units or other securities issuable pursuant to the Preferred Units; (ii) Units or other securities convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire Units (x) upon conversion of previously issued securities or (y) pursuant to BPY’s distribution reinvestment plan; or (iii) options, warrants, securities or similar rights convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire Units issued to directors, officers or employees of BPY or its Affiliates as compensation.
4.2
Notification of Partnership Interest Ownership Change
4.2.1
BPY shall, on its own behalf and on behalf of the Property Partnership, notify a Holder in writing at least thirty (30) days prior to any event that would cause such Holder to own either (i) ten percent (10%) or more of the “
Partnership Interest
” in BPY, as defined in the Second Amended and Restated Limited Partnership Agreement of BPY dated August 8, 2013, as may be subsequently amended or restated, or (ii) ten percent (10%) or more of the Partnership Interest in the Property Partnership, as defined in the Property Partnership LPA. For purposes of item (i) in the preceding sentence, (x) Units held by a Holder shall only be taken into account if acquired by such Holder from BPY upon the exchange of Preferred Units for Units, (y) Preferred Units not exchanged for Units shall be treated as exchanged for Units (based on the expected Exchange Number (as such term is defined in the Property Partnership LPA) immediately following such event), and (z) any other instruments issued by the Property Partnership or any of its Affiliates, not described in the foregoing clauses (x) and (y), and which are convertible into or exchangeable for Units (including without limitation by reason of a redemption of any Partnership Interest in BPY or any Partnership Interest in the Property Partnership, as defined above) shall be treated as converted into or exchanged for Units, as the case may be. The foregoing determinations shall be made by BPY in good faith, acting reasonably.
4.2.2
Upon request by BPY, the Holder shall notify BPY in writing of its beneficial ownership of Partnership Interests within five (5) business days of such request by BPY. The Investor also shall notify BPY in writing promptly after the
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Investor owns (directly or indirectly through one or more Holders) less than five percent (5%) of the issued and outstanding Units (assuming, in each case, conversion of all securities convertible, exchangeable or exercisable into Units (and using the then-applicable Exchange Number (as such term is defined in the Property Partnership LPA) in order to determine the number of Units issuable upon exchange or redemption of the Preferred Units)).
4.3
Tax Undertakings
4.3.1
For so long as the Investor holds (directly or indirectly through one or more Holders) the Specified Interest, BPY shall use commercially reasonable efforts (including in its capacity as managing general partner of the Property Partnership) to avoid the realization by any Holder, solely as a result of holding Preferred Units or Units received in exchange for such Preferred Units, of income derived from the conduct of commercial activity within the meaning of Section 892 of the Code, and the current, temporary and proposed Treasury Regulations as in effect on the date hereof. For the avoidance of doubt, BPY shall have no obligation under this Section 4.3 with regard to any Person that is not a Holder of Preferred Units or Units received in exchange for such Preferred Units.
4.3.2
For so long as the Investor holds (directly or indirectly through one or more Holders) the Specified Interest, BPY (including in its capacity as managing general partner of the Property Partnership) agrees that (i) BPY and the Property Partnership will be classified as partnerships for U.S. federal income tax purposes unless BPY determines in good faith that, based on a change in U.S. federal tax law or administrative practice (including the issuance of Treasury Regulations in temporary or final form, revenue rulings, notices and announcements, but in the case of a notice or announcement, only to the extent such notice or announcement indicates an intention to issue Treasury Regulations or a revenue ruling that would result in a change of Law, but excluding private letter rulings, technical advice memoranda or other non-binding or non-precedential authorities) or a judicial decision (a “
Change in Tax Law
”), that, based on the advice of nationally-recognized counsel experienced as to such matters, it is in the best interests of its partners or the Property Partnership’s partners (including the Investor and BAM), as applicable, to be treated otherwise, and BPY (including in its capacity as managing general partner of the Property Partnership) will not take any action inconsistent with such treatment, and (ii) it will use commercially reasonable efforts to ensure that neither BPY nor the Property Partnership will be centrally managed and controlled in Canada or otherwise be a “Canadian resident partnership” within the meaning of that term for Canadian tax purposes.
4.3.3
For so long as the Investor holds (directly or indirectly through one or more Holders) the Specified Interest, BPY (including in its capacity as managing general partner of the Property Partnership) shall use its best efforts to comply with any requirements of Sections 1471 or 1472 of the Code (including those set forth in Section 1471(b)(1) of the Code) that are necessary to avoid the imposition of withholding taxes on BPY or the Property Partnership, as applicable, pursuant to
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Section 1471(a) of the Code. For the purpose of complying with FATCA, each Holder shall provide such forms, certifications, and other documentation as may reasonably be required or requested by BPY or the Property Partnership (i) to determine the status of such Holder for purposes of FATCA, (ii) to determine whether any payments made to such Holder are subject to withholding tax under Section 1471(a) of the Code, and (iii) otherwise to assist BPY and the Property Partnership in complying with any reporting, due diligence, or withholding obligations under FATCA. Notwithstanding the foregoing, in no event shall any Holder be required to provide any forms, certifications or other documentation or information that the Holder determines in its sole discretion would materially prejudice the Holder’s legal or commercial position (including, without limitation, any financial statements of the Holder or any information regarding any assets or investments of the Holder). Absent a Change in Tax Law, BPY and the Property Partnership currently expect that the provision of an applicable IRS Form W-8 shall satisfy any certification requirements of the Holder under FATCA with respect to its ownership of Units. For purposes of this Section 4.3.3, “
FATCA
” means Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, and any fiscal or regulatory legislation, rules, or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of Sections 1471 through 1474 of the Code.
4.4
Joint Appointment
Notwithstanding the terms of the Preferred Units, as set forth in Schedule A of the Property Partnership LPA, or so long as the Investor holds (directly or indirectly through one or more Holders) a number of Preferred Units representing a majority of the Preferred Units, the General Partner agrees to jointly select and appoint any such qualified independent financial advisor with the Investor.
ARTICLE 5
RESTRICTIONS ON TRANSFER
5.1
Restrictions on Transfer
Each Holder agrees that it shall not, subject to Sections 5.2 and 5.3, Transfer any Preferred Units or Units into which such Preferred Units are exchanged.
5.2
Release of Transfer Restrictions
The restriction on Transfer in Section 5.1 will be lifted in respect of one-third of the Preferred Units of each series and of each Holder (or the Units into which they are exchangeable) on each of the first, second and third anniversaries of the date hereof.
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5.3
Transfers to Affiliates
A Holder is permitted to Transfer all or a portion of its Preferred Units or Units into which such Preferred Units are exchanged to an Affiliate without complying with the provisions of Section 5.1, provided that no such Transfer will be effective until such Holder and the Transferee have entered into an agreement with BPY whereby such Holder and Transferee agree that:
(a)
such Transferee thereby assumes and is bound by all the obligations of the Holder relating to the Preferred Units or Units into which such Preferred Units are exchanged and is subject to all the restrictions to which the Holder is subject under the terms of this Agreement; and
(b)
such transferee will re-Transfer the Preferred Units or Units into which such Preferred Units are exchanged, or such part thereof, which was Transferred to it by the Holder to such Holder if the Transferee will cease to be an Affiliate of such Holder;
and upon Transfer to an Affiliate in accordance with this Section 5.3, unless BPY agrees to release the Holder from its obligations, the Holder will be jointly and severally liable with the Transferee for such obligations.
5.4
No Amendment to Terms of Preferred Units.
As long as the Holder beneficially owns at least 25% of the outstanding Preferred Units, BPY (including in its capacity as managing general partner of the Property Partnership) shall ensure that no amendment is made to the terms of the Preferred Units without the prior written consent of the Holder.
ARTICLE 6
MISCELLANEOUS
6.1
Termination
This Agreement will terminate with respect to any Holder when such Holder ceases to own any Preferred Units or Units, except as to the obligation to indemnify given pursuant to Section 2.7 of this Agreement.
6.2
Assignment and Transfer of Rights and Obligations
This Agreement and all rights and obligations hereunder cannot be assigned or transferred by either party without the other party’s prior written consent (other than in connection with Transfers to Affiliates as contemplated by Section 2.11 or Section 5.3). The provisions of this Section 6.2 do not restrict Transfers of Preferred Units or Units in accordance with Sections 5.2 or 5.3.
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6.3
Enurement
This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
6.4
Limitation of Liability
The Holder acknowledges that BPY is a limited partnership, a limited partner of which is liable for any liabilities or losses of the partnership only to the extent of the amount that such limited partner has contributed, or agreed to contribute, to the capital of the partnership and such limited partner’s pro rata share of any undistributed income. BPY acknowledges that the Holder is a limited liability company, a member of which is liable for any liabilities or losses of the company only to the extent of the amount that such member has contributed, or agreed to contribute, to the capital of the company and such member’s
pro rata
share of any undistributed income.
6.5
Notices
Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by personal delivery or by electronic means of communication addressed to the recipient as follows:
6.5.1
if to the Investor:
Qatar Investment Authority
Q-Tel Tower
Diplomatic Area Street, West Bay
Doha, Qatar
Attention:
Head, Mergers & Acquisitions Department
Email: notices.m&a@qatarholding.qa
with a copy to:
General Counsel
Legal Department
Qatar Holding LLC
Q-Tel Tower
Diplomatic Area Street, West Bay
Doha, Qatar
Email: notices.legal@qatarholding.qa
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6.5.2
if to BPY:
Brookfield Property Partners Limited
73 Front Street
Hamilton HM 12
Bermuda
Attention:
Secretary
or to such other address, individual or electronic communication number as may be designated by notice given by either party to the other. Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by electronic communication, on the day of transmittal thereof if given during the normal business hours of the recipient and on the business day during which such normal business hours next occur if not given during such hours on any day.
If to any other Holder, the address indicated for such Holder in BPY’s or the Property Partnership’s stock transfer records, as applicable, with copies, so long as the Investor owns any Registrable Units, to the Investor as provided above.
6.6
Authority
Each of the parties hereto and the General Partner represents to the other that (a) it has the corporate or partnership power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it has been duly authorized by all necessary corporate or partnership action and no such further action is required, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.
6.7
Further Assurances
Each of the parties hereto will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of giving effect to this Agreement and will use commercially reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.
6.8
Counterparts
This Agreement may be signed in counterparts and each of such counterparts will constitute an original document and such counterparts, taken together, will constitute one and the same instrument.
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[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF
the parties have executed this Agreement as of the day and year first above written.
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QATAR INVESTMENT AUTHORITY
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By:
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/s/ Sheikh Abdullah bin Mohammed bin Saud Al-Thani
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Name: Sheikh Abdullah bin Mohammed bin Saud Al-Thani
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Title: Chief Executive Officer
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BROOKFIELD PROPERTY PARTNERS L.P.
, by its
general partner,
BROOKFIELD PROPERTY
PARTNERS LIMITED
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By:
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/s/
Jane Sheere
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Name:
Jane Sheere
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Title: Secretary
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[Signature page to Investor Agreement]
Exhibit 99.4
Execution Version
BROOKFIELD PROPERTY L.P.
FIRST AMENDMENT TO THE
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
THIS AMENDMENT
(the “
Amendment
”) to the Second Amended and Restated Limited Partnership Agreement dated as of August 8, 2013 (the “
Agreement
”) of Brookfield Property L.P. (the “
Partnership
”) is made as of the 4th day of December, 2014, by the undersigned. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement.
WHEREAS
, the Managing General Partner desires to amend the Agreement to allow for preferred limited partnership interests in the Partnership and to create a class of such preferred limited partnership interests having the rights and restrictions set out in Schedule A to this Amendment;
AND WHEREAS
, pursuant to Section 17.1 of the Agreement, subject to compliance with the requirements of the Limited Partnership Act and the Exempted Partnerships Act, the General Partner (pursuant to its power of attorney from the Limited Partners), without the approval of any Limited Partner, may amend any provision of the Agreement to reflect certain changes, including, as provided for in Section 17.1.6 of the Agreement, an amendment that the Managing General Partner determines in its sole discretion to be necessary or appropriate for the creation, authorization or issuance of any class or series of Partnership Interests;
AND WHEREAS
, the Managing General Partner desires to amend the Agreement as set out herein;
NOW THEREFORE
,
1.
Amendments to Article 1
(a)
Section 1.1.3 is hereby deleted in its entirety and replaced with the following:
“
Agreement
” means this Second Amended and Restated Limited Partnership Agreement of Brookfield Property L.P., as amended by the First Amendment to the Second Amended and Restated Limited Partnership Agreement of Brookfield Property L.P. dated as of December 4, 2014;
(b)
Section 1.1.46 is hereby deleted in its entirety and replaced with the following:
“
First Distribution Threshold
” means $0.275 per Equity Unit per Quarter (pro rated for any Quarter in which (i) an Equity Unit is not
Outstanding for the entire Quarter, or (ii) the Capital Amount in respect of an Equity Unit is adjusted pursuant to Section 3.6.3);
(c)
Section 1.1.74 is hereby deleted in its entirety and replaced with the following:
“
Limited Partner
” means a Person who is the direct beneficial owner of a Unit, without regard to the Record Holder (unless the Record Holder is such Person), and includes holders of Special Limited Partner Units, Redemption-Exchange Units and Preferred Units;
(d)
Section 1.1.95 is hereby deleted in its entirety and replaced with the following:
“
Partnership Interest
” means any partnership interest, including any Managing General Partner Unit, Special Limited Partner Unit, Redemption-Exchange Unit or Preferred Unit;
(e)
Section 1.1.97 is hereby deleted in its entirety and replaced with the following:
“
Percentage Interest
” means, as of the date of such determination, (i) as to any Partner other than a Preferred Unitholder, the quotient of the number of Partnership Interests other than Preferred Units held by such Partner divided by the total number of all Partnership Interests other than Preferred Units then Outstanding, expressed as a percentage, and (ii) as to any Preferred Unitholder, the Percentage Interest shall at all times be zero;
(f)
Section 1.1.112 is hereby deleted in its entirety and replaced with the following:
“
Second Distribution Threshold
” means $0.30 per Equity Unit per Quarter (pro rated for any Quarter in which (i) an Equity Unit is not Outstanding for the entire Quarter, or (ii) the Capital Amount in respect of an Equity Unit is adjusted pursuant to Section 3.6.3);
(g)
Section 1.1.123 is hereby deleted in its entirety and replaced with the following:
“
Unit
” means any Equity Unit or Preferred Unit;
(h)
Section 1.1.126 is hereby deleted in its entirety and replaced with the following:
“Unrecovered Capital Amount”
means, as of the relevant date of determination and with respect to any Equity Unit or Managing General Partner Unit, an amount equal to the excess of (i) the Capital Amount then applicable to such Equity Unit or Managing General Partner Unit over (ii)
2
the amount of distributions made in respect of such Equity Unit or Managing General Partner Unit pursuant to Section 5.2.4 or Section 16.3.3.4.6 during the period of time beginning on the date the Capital Amount in respect of each Equity Unit and Managing General Partner Unit was last adjusted pursuant to Section 3.6.3 and ending on such date of determination; and
(i)
Section 1.1 is hereby amended by adding the following definitions:
1.1.39.1
“
Equity Unit
” means any Special Limited Partner Unit or Redemption-Exchange Unit;
1.1.98.1
“
Preferred Unit
” means the limited partner interests in the Partnership having the rights and obligations specified in this Agreement and that are designated as Preferred Units from time to time, with the specific terms of each class of Preferred Units to be set out in a Schedule to this Agreement, including the Class A Preferred Limited Partnership Units the terms of which are set out in Schedule A to this Agreement;
1.1.98.2
“
Preferred Unitholder
” means a holder of Preferred Units;
2.
Amendments to Article 3
(a)
Section 3.6.1 is hereby deleted in its entirety and replaced with the following:
Subject to the terms of any Preferred Units then Outstanding, the Partnership may issue additional Partnership Interests (including new classes of Partnership Interests) and options, rights, warrants and appreciation rights relating to such Partnership Interests or class of Partnership Interests for any Partnership purpose (including in connection with any distribution reinvestment plan and any payment of an Incentive Distribution pursuant to Section 5.5) at any time and from time to time to such Persons for such consideration and on such terms and conditions as the Managing General Partner shall determine in its sole discretion, all without the approval of any Limited Partners.
(b)
Section 3.6.3 is hereby deleted in its entirety and replaced with the following:
If the Managing General Partner deems it necessary or advisable so as to preserve the economic preferences and rights of the Partners, upon or with respect to any issuance of additional Units or Managing General Partner Units (whether in connection with the issuance of Managing General Partner Units pursuant to Section 3.10 or otherwise), the Managing General Partner may (subject to Section 11 of the Limited Partnership Act) adjust (which adjustment may be upward or downward) the Capital
3
Amount attributable to each Equity Unit and Managing General Partner Unit Outstanding prior to such issuance of new Units or Managing General Partner Units to equal the amount that would be distributed pursuant to Section 16.3.3 in respect of such Equity Unit or Managing General Partner Unit (as applicable) assuming the Partnership were liquidated at the end of the day immediately prior to such issuance of new Units or Managing General Partners Units.
3.
Amendments to Article 4
(a)
Section 4.8.2 is hereby deleted in its entirety and replaced with the following:
If, with respect to a given fiscal year, no distribution is made by the Partnership or the Partnership has a Loss for Canadian Tax Purposes, one quarter of the income, or loss, as the case may be, for purposes of the Income Tax Act of the Partnership for such fiscal year, will be allocated to the Partners of record at the end of each Quarter ending in such fiscal year
pro rata
to their respective Percentage Interests at each such date. To such end, any Person who was a Partner at any time during such fiscal year but who has disposed of all of such Person’s Partnership Interests before the last day of that fiscal year may be deemed to be a Partner on the last day of such fiscal year for the purposes of subsection 96(1) of the Income Tax Act. Generally, the source and character of such income or losses so allocated to a Partner at the end of each Quarter will be the same source and character as the income or loss earned or incurred by the Partnership in such Quarter.
4.
Amendments to Article 5
(a)
Section 5.1 is hereby deleted in its entirety and replaced with the following:
Subject to this Article 5 and Section 16.3.3, the Managing General Partner may in its sole discretion make distributions at any time or from time to time to the Partners in accordance with this Agreement. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise. For the avoidance of doubt, BPY, the Partnership or one or more of the Holding Entities may (but none is obligated to) borrow money in order to obtain sufficient cash in order to make a distribution. The amount of Taxes withheld or paid by the Partnership or another member of the BPY Group in respect of taxable income allocated to a Partner shall be treated as a distribution to such Partner.
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(b)
Section 5.2.2 is hereby deleted in its entirety and replaced with the following:
5.2.2.
Subject to Section 5.2.3 and Section 5.2.4, any distributions of Available Cash made by the Partnership with respect to any Quarter shall be distributed:
5.2.2.1
first, 100% to BPY until there has been distributed pursuant to this Section 5.2.2.1 an amount equal to the amount of BPY’s outlays and expenses for the Quarter properly incurred;
5.2.2.2
second, but only at such times as there are no Preferred Units Outstanding, 100% to all Redemption-Exchange Unitholders
pro rata
in proportion to their respective Percentage Interests (which, for purposes of this Section 5.2.2.2, will be calculated using Redemption-Exchange Units only) (which distribution will be treated as having been made pursuant to Sections 5.2.2.6 or 5.2.2.7, as applicable) all amounts that have been deferred in previous Quarters pursuant to Section 5.2.3 and not yet recovered;
5.2.2.3
third, 100% to the Special Limited Partner until an amount equal to the Equity Enhancement Distribution has been distributed pursuant to this Section 5.2.2.3;
5.2.2.4 fourth, 100% to all Preferred Unitholders
pro rata
in proportion to their respective relative percentage of Preferred Units held (determined by reference to the aggregate value of the issue price of the Preferred Units held by each Preferred Unitholder relative to the aggregate value of the issue price of all Preferred Units Oustanding) until there has been distributed pursuant to this Section 5.2.2.4 in respect of each Preferred Unit Outstanding as of the last day of such Quarter an amount equal to all preferential distributions to which the Preferred Unitholders are entitled under the terms of the Preferred Units then Outstanding (including any Excess Distribution (within the meaning of Schedule A) and any outstanding accrued and unpaid preferential distributions from prior periods);
5.2.2.5 fifth, at any time that Preferred Units are Outstanding, 100% to all Redemption-Exchange Unitholders
pro rata
in proportion to their respective Percentage Interests (which, for purposes of this Section 5.2.2.5, will be calculated using Redemption-Exchange Units only) (which distribution will be treated as having been made pursuant to Sections 5.2.2.6 or 5.2.2.7, as applicable) all amounts that have been deferred in previous Quarters pursuant to Section 5.2.3 and not yet recovered;
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5.2.2.6
sixth, 100% to all Partners other than Preferred Unitholders
pro rata
in proportion to their respective Percentage Interests until there has been distributed pursuant to this Section 5.2.2.6 in respect of each Equity Unit Outstanding as of the last day of such Quarter an amount equal to the First Distribution Threshold;
5.2.2.7
seventh, (i) 85% to all the Partners other than Preferred Unitholders
pro rata
in proportion to their respective Percentage Interests and (ii) 15% to the Special Limited Partner until there has been distributed pursuant to this Section 5.2.2.7 in respect of each Equity Unit Outstanding as of the last day of such Quarter an amount equal to the excess of (a) the Second Distribution Threshold over (b) the First Distribution Threshold; and
5.2.2.8
thereafter, (i) 75% to all Partners other than Preferred Unitholders
pro rata
in proportion to their respective Percentage Interests and (ii) 25% to the Special Limited Partner.
(c)
5.2.3 is hereby deleted in its entirety and replaced with the following:
5.2.3.
Notwithstanding Section 5.2.2:
5.2.3.1
for any Quarter in which the Managing General Partner determines, in its sole discretion, there is insufficient Available Cash to pay the Equity Enhancement Distribution pursuant to Section 5.2.2.3, the Managing General Partner may elect to pay all or a portion of the distribution pursuant to Section 5.2.2.3 in Redemption-Exchange Units equal to the amount in cash that the Special Limited Partner has elected to be paid in respect of Section 5.2.2.3 in Redemption-Exchange Units divided by the Market Value of a BPY Unit on the date that the Special Limited Partner makes such election, provided that (A) any such election shall be made within 45 days following the end of the applicable Quarter and (B) no fractional Redemption-Exchange Units will be issued, and such number will be rounded down to the nearest whole number with the remainder payable to the Special Limited Partner in cash;
5.2.3.2
except at any time that Preferred Units are Outstanding, if the Managing General Partner determines in its sole discretion that, with respect to any Quarter, there is insufficient Available Cash to distribute in respect of each Unit Outstanding as of the last day of such Quarter an amount equal to the then current distribution level, then the Managing General Partner may elect to defer all or a portion of the amounts distributable pursuant to such level in respect of each Redemption-Exchange Unit and instead distribute (A) first, up to an amount not to exceed the then current
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distribution level to all Partners holding Managing General Partner Units
pro rata
in proportion to their respective Percentage Interest (which, for purposes of this Section 5.2.3.2, will be calculated using Managing General Partner Units only) which distribution will be treated as having been made to holders of Managing General Partner Units pursuant to Sections 5.2.2.6 or 5.2.2.7, as applicable, and (B) second, the difference, if any, between the amounts distributable pursuant to such then current distribution level in respect of each Redemption-Exchange Unit (after giving effect to clause (A) above) and the amount the Managing General Partner elects to defer pursuant to such level in respect of each Redemption-Exchange Unit, to all Partners holding Redemption-Exchange Units
pro rata
in proportion to their respective Percentage Interest (which, for purposes of this Section 5.2.3.2, will be calculated using Redemption-Exchange Units only) which distribution will be treated as having been made to holders of Redemption-Exchange Units pursuant to Sections 5.2.2.6 or 5.2.2.7, as applicable; and
5.2.3.3
in any Quarter the Special Limited Partner may, in its sole discretion, waive the requirement to make distributions of Available Cash to the Special Limited Partner pursuant to clause (ii) in Sections 5.2.2.7 and 5.2.2.8.
(d)
5.2.4 is hereby deleted in its entirety and replaced with the following:
5.2.4.
Subject to the terms of any Preferred Units then Outstanding, Available Cash that is deemed by the Managing General Partner to be cash from Interim Capital Transactions and representative of unrecovered capital (“
Capital Surplus
”) shall be distributed:
5.2.4.1
first, to Partners other than Preferred Unitholders
pro rata
in proportion to the Unrecovered Capital Amounts attributable to the Equity Units and Managing General Partner Units held by such Partners until the Unrecovered Capital Amount attributable to each Equity Unit and Managing General Partner Unit is equal to zero; and
5.2.4.2
thereafter, in accordance with Section 5.2.2.
(e)
Sections 5.4.2 and 5.5 are hereby amended by replacing the references to Section 5.2.2.5 and Section 5.2.2.6 with references to Section 5.2.2.7 and 5.2.2.8, respectively.
5.
Amendments to Article 8
(a)
The heading to Section 8.1 is hereby deleted in its entirety and replaced with the following:
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BPY Unit Reorganization
(b)
The heading to Section 8.2 is hereby deleted in its entirety and replaced with the following:
BPY Unit Reclassification
6.
Amendments to Article 9
(a)
Section 9.2 is hereby deleted in its entirety and replaced with the following:
Except as provided in Article 16, the Managing General Partner may not cause the Partnership to sell, exchange or otherwise dispose of all or substantially all of the BPY Group’s assets or the Assets, taken as a whole, in a single transaction or a series of related transactions without the prior approval of the holders of a majority of the voting power of Outstanding Equity Units; provided however that this provision shall not preclude or limit the Managing General Partner’s ability, in its sole discretion, to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the assets of the BPY Group or the Assets (including for the benefit of Persons who are not members of the BPY Group and Affiliates of the Managing General Partner) and shall not apply to any forced sale of any or all of the assets of the BPY Group or the Assets pursuant to the foreclosure of, or other realization upon, any such encumbrance. The Managing General Partner shall not, on behalf of the Partnership, except as permitted under Section 13.6, Section 15.1 and Section 15.1.4, elect or cause the Partnership to elect a successor general partner of the Partnership.
7.
Amendments to Article 15
(a)
Section 15.1.4 is hereby deleted in its entirety and replaced with the following:
If the Managing General Partner gives a notice of withdrawal pursuant to Sections 15.1.1.1 or 15.1.2, holders of at least a majority of the voting power of the Special Limited Partner Units may, prior to the effective date of such withdrawal, elect a successor general partner. If, prior to the effective date of the Managing General Partner’s withdrawal, a successor is not selected by the holders of Special Limited Partner Units as provided herein or the Partnership does not receive a Withdrawal Opinion of Counsel in accordance with Section 13.6.1, the Partnership shall be dissolved in accordance with Article 16. Any such successor general partner shall be subject to the provisions of Section 14.2.
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8.
Amendments to Article 16
(a)
Section 16.3.3 is hereby deleted in its entirety and replaced with the following:
16.3.3.
by the end of the taxable year in which the liquidation of the Partnership occurs (or, if later, within 90 days after the date of such liquidation), all property and all cash in excess of that required to discharge liabilities of the Partnership pursuant to Section 16.3.2 shall be distributed to the Partners as provided in this Section 16.3.3:
16.3.3.1
an amount equal to the amount of cash or property held by the Partnership at such time, that is attributable to a realization event occurring prior to the date of an event specified in Section 16.1 and that has not been deemed by the Managing General Partner as Capital Surplus shall be distributed in accordance with Section 5.2.2 as if such distribution were a distribution occurring prior to dissolution;
16.3.3.2
only if there are no Preferred Units Outstanding, an amount equal to the amount of cash or property held by the Partnership at such time, that is attributable to a realization event occurring prior to the date of an event specified in Section 16.1 and that has been deemed by the Managing General Partner as Capital Surplus shall be distributed in accordance with Section 5.2.4 as if such distribution were a distribution occurring prior to dissolution;
16.3.3.3
only if there are no Preferred Units Outstanding, to the Partners holding Redemption-Exchange Units
pro rata
in proportion to their respective Percentage Interests (which, for purposes of this Section 16.3.3.3, will be calculated using Redemption-Exchange Units only), the aggregate amount of distributions previously deferred pursuant to Section 5.2.3.2 and not previously recovered; and
16.3.3.4
all other cash and property of the Partnership shall be distributed to the Partners as follows:
16.3.3.4.1
first, 100% to BPY until BPY has received pursuant to this Section 16.3.3.4.1 an amount equal to the excess of (1) the amount of BPY’s outlays and expenses incurred during the term of the Partnership, over (2) the aggregate amount of distributions received by BPY pursuant to Section 5.2.2.1;
16.3.3.4.2
second, 100% to the Special Limited Partner until the Special Limited Partner has received pursuant to this Section 16.3.3.4.2 an amount equal to the fair market
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value of the Equity Enhancement Distribution as determined in good faith by a third party independent valuator engaged by the Managing General Partner; provided that, such third party independent valuator shall be a nationally recognized investment banking, accounting or valuation firm which is independent of the Managing General Partner; provided further that, such amount shall not exceed 2.5 times the aggregate Equity Enhancement Distribution payments made to the Special Limited Partner during the immediately prior 24 months;
16.3.3.4.3
third, 100% to the Preferred Unitholders
pro rata
in proportion to their respective relative percentage of Preferred Units held (determined by reference to the aggregate value of the issue price of the Preferred Units held by each Preferred Unitholder relative to the aggregate value of the issue price of all Preferred Units Oustanding) until there has been distributed pursuant to this Section 16.3.3.4.3 in respect of each Preferred Unit Outstanding an amount equal to any preferential distributions to which the Preferred Unitholders are entitled in the event of dissolution, liquidation, or winding-up of the Partnership under the terms of the Preferred Units then Outstanding (including any outstanding accrued and unpaid preferential distributions from prior periods);
16.3.3.4.4
fourth, if there are Preferred Units Outstanding, an amount equal to the amount of cash or property held by the Partnership at such time, that is attributable to a realization event occurring prior to the date of an event specified in Section 16.1 and that has been deemed by the Managing General Partner as Capital Surplus shall be distributed in accordance with Section 5.2.4 as if such distribution were a distribution occurring prior to dissolution;
16.3.3.4.5
fifth, if there are Preferred Units Outstanding, to the Partners holding Redemption-Exchange Units
pro rata
in proportion to their respective Percentage Interests (which, for purposes of this Section 16.3.3.4.5 will be calculated using Redemption-Exchange Units only), the aggregate amount of distributions previously deferred pursuant to Section 5.2.3.2 and not previously recovered;
16.3.3.4.6
sixth, 100% to the Partners other than Preferred Unitholders
pro rata
in proportion to the Unrecovered Capital Amounts attributable to the Equity
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Units and Managing General Partner Units held by the Partners until the Unrecovered Capital Amount attributable to each Equity Unit and Managing General Partner Unit is equal to zero;
16.3.3.4.7
seventh, 100% to the Partners other than Preferred Unitholders
pro rata
in proportion to their respective Percentage Interests until there has been distributed pursuant to this Section 16.3.3.4.7 in respect of each Equity Unit Outstanding an amount equal to the excess of (1) the First Distribution Threshold for each Quarter during the period beginning on the date the Capital Amount in respect of each Equity Unit and Managing General Partner Unit was last adjusted pursuant to Section 3.6.3 and ending on the date of distribution pursuant to this Section 16.3.3.4.7, over (2) the aggregate amount of distributions (if any) made in respect of an Equity Unit pursuant to Section 5.2.2.6 during such period of time;
16.3.3.4.8
eighth, 15% to the Special Limited Partner and 85% to the Partners other than Preferred Unitholders,
pro rata
in proportion to their respective Percentage Interests, until there has been distributed pursuant to this Section 16.3.3.4.8 in respect of each Equity Unit Outstanding an amount equal to the excess of (1) the Second Distribution Threshold less the First Distribution Threshold for each Quarter during the period beginning on the date the Capital Amount in respect of each Equity Unit and Managing General Partner Unit was last adjusted pursuant to Section 3.6.3 and ending on the date of distribution pursuant to this Section 16.3.3.4.8, over (2) the aggregate amount of distributions (if any) made in respect of an Equity Unit pursuant to Section 5.2.2.7 during such period of time; and
16.3.3.4.9
thereafter, 25% to the Special Limited Partner and 75% to the Partners other than Preferred Unitholders,
pro rata
in proportion to their respective Percentage Interests.
Any distribution to the Special Limited Partner pursuant to Sections 16.3.3.4.8-16.3.3.4.9 shall be made to the Special Limited Partner in its capacity as a Special Limited Partner and without regard to the number of Special Limited Partner Units held by the Special Limited Partner.
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9.
Amendments to Article 17
(a)
Section 17.1.6 is hereby deleted in its entirety and replaced with the following:
subject to the terms of any Preferred Units then Outstanding, an amendment that the Managing General Partner determines in its sole discretion to be necessary or appropriate for the creation, authorization or issuance of any class or series of Partnership Interests or options, rights, warrants or appreciation rights relating to Partnership Interests pursuant to Section 3.6;
(b)
Section 17.2.2 is hereby deleted in its entirety and replaced with the following:
subject to the terms of any Preferred Units then Outstanding, a proposed amendment shall be effective upon its approval by the Managing General Partner and, where required under this Agreement or by the Limited Partnership Act, on the consent, vote or approval of the amendment by the holders of a majority of the voting power of the Outstanding Equity Units.
(c)
Section 17.8 is hereby deleted in its entirety and replaced with the following:
A majority of the Outstanding Units of the class or classes for which a meeting has been called (including Units held by the Managing General Partner) represented in person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class or classes unless any such action by the Limited Partners requires approval by Limited Partners holding a greater percentage of the voting power of such Units, in which case the quorum shall be such greater percentage. At any meeting of the Limited Partners, or any class or series thereof, duly called and held in accordance with this Agreement at which a quorum is present, the act of Limited Partners holding Outstanding Units that in the aggregate represent a majority of the Outstanding Units entitled to vote and be present in person or by proxy at such meeting shall be deemed to constitute the act of all Limited Partners or any class or series thereof, unless a greater or different percentage is required with respect to such action under the provisions of this Agreement, in which case the act of the Limited Partners holding Outstanding Units that in the aggregate represent at least such greater or different percentage shall be required. The Limited Partners present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough Limited Partners to leave less than a quorum, if any action taken (other than adjournment) is approved by the required percentage of the voting power of Outstanding Units specified in this Agreement (including Outstanding Units deemed owned by the Managing General Partner). In
12
the absence of a quorum, any meeting of Limited Partners may be adjourned from time to time by the affirmative vote of Limited Partners holding at least a majority of the voting power of the Outstanding Units entitled to vote at such meeting (including Outstanding Units deemed owned by the Managing General Partner) represented either in person or by proxy, but no other business may be transacted, except as provided in Section 17.7.
(d)
Section 17.11.1 is hereby deleted in its entirety and replaced with the following:
Only those holders of Units of the class or series for which a meeting has been called who are Record Holders on the Record Date set pursuant to Section 17.6 (and also subject to the limitations contained in the definition of “
Outstanding
”) shall be entitled to notice of, and to vote at, a meeting of Partners or to act with respect to matters as to which the holders of the Outstanding Units have the right to vote or to act. Notwithstanding the definition of “Limited Partner,” all references in this Agreement to votes, consents or approvals of, or other acts that may be taken by, the Outstanding Units shall be deemed to be references to the votes, consents, approvals or acts of the Record Holders of such Outstanding Units.
10.
Schedule A to this Amendment is hereby added in its entirety as Schedule A to the Agreement.
11.
This amendment shall be effective upon the date first written above.
12.
This amendment shall be governed by and construed in accordance with the laws of Bermuda.
13.
Except as modified herein, all terms and conditions of the Agreement shall remain in full force and effect.
14.
This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall be construed together as one agreement.
[Remainder of this page left blank intentionally.]
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IN WITNESS WHEREOF
, the Managing General Partner has executed this Amendment as of the date first above written.
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MANAGING GENERAL PARTNER:
BROOKFIELD PROPERTY
PARTNERS L.P., by its general partner,
BROOKFIELD PROPERTY
PARTNERS LIMITED
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By:
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/s/ Jane Sheere
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Name:
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Jane Sheere
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Title:
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Chief Executive Officer
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SCHEDULE A
PART I
CLASS A PREFERRED UNITS
1.
DESIGNATION
The Class A Preferred Units (as defined below), as a class, shall be designated as Class A Preferred Units. The Class A Preferred Units shall have attached thereto the following rights, privileges, restrictions and conditions.
2.
DEFINITIONS
All terms used but not otherwise defined in this Schedule A shall have the meanings assigned to those terms in the Second Amended and Restated Limited Partnership Agreement of Brookfield Property L.P., as amended by the First Amendment to the Second Amended and Restated Limited Partnership Agreement of Brookfield Property L.P. dated as of December 3, 2014. In addition, the following definitions shall be for the purpose of all parts of this Schedule A:
2.1
“
Class A Preferred Unit
” means a limited partnership interest in the Partnership having the rights, privileges, restrictions and conditions set forth in this Schedule A.
2.2
“
Junior Securities
” means the Redemption-Exchange Units, the Managing General Partner Units, the Special Limited Partner Units (other than with respect to the Equity Enhancement Distribution) and any Partnership Interest hereafter authorized that pursuant to a written agreement with the Partnership ranks junior to the Class A Preferred Units in the payment of distributions and in the distribution of assets upon the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary.
2.3
“
Outstanding Class A Preferred Units
” does not include any Outstanding Class A Preferred Unit whose voting power is controlled, directly or indirectly, by BPY, the Partnership, or any Subsidiary of either of them.
15
2.4
“
Parity Securities
” means any Partnership Interest or partnership interest in BPY, in each case, hereafter authorized that pursuant to a written agreement with the Partnership ranks equally with the Class A Preferred Units in the payment of distributions and in the distribution of assets upon the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary.
2.5
“
Senior Securities
” means the Special Limited Partner Units (but only with respect to the Equity Enhancement Distributions) and, subject to Section 4.4, any Partnership Interest hereafter authorized that pursuant to a written agreement with the Partnership ranks senior to the Class A Preferred Units in the payment of distributions and/or in the distribution of assets upon the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary.
3.
MANAGING GENERAL PARTNER’S RIGHT TO ISSUE IN ONE OR MORE SERIES
The Class A Preferred Units may be issued at any time or from time to time in one or more series. Before any units of a series are issued, the Managing General Partner shall, subject to Section 4.1, fix the number of units that will form such series and shall determine the designation, rights, privileges, restrictions and conditions to be attached to the Class A Preferred Units of such series.
4.
RANKING
4.1
The Class A Preferred Units of each series shall rank on parity with the Class A Preferred Units of every other series with respect to the payment of distributions and in the distribution of the assets in the event of the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary.
4.2
The Class A Preferred Units as a class shall rank, with respect to the payment of distributions and in the distribution of the assets in the event of the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary:
4.2.1
senior to the Junior Securities;
16
4.2.2
on parity with any Parity Securities; and
4.2.3
junior to all indebtedness of the Partnership and any Senior Securities.
4.3
The Partnership may issue Junior Securities and Parity Securities, from time to time, without the consent of the holders of Class A Preferred Units.
4.4
The Partnership may issue Senior Securities, from time to time, only with the approval of the holders of a majority of the Outstanding Class A Preferred Units, given as hereinafter specified.
5.
VOTING RIGHTS
Except as required by Law or as otherwise provided herein, the holders of the Class A Preferred Units shall not be entitled as such to receive notice of, to attend or to vote at any meetings of the Partnership or have any right or authority to act for or bind the Partnership or to take part or in any way to interfere in the conduct or management of the Partnership.
6.
AMENDMENT WITH APPROVAL OF HOLDERS OF THE CLASS A PREFERRED UNITS
The rights, privileges, restrictions and conditions attached to the Class A Preferred Units as a class may be added to, changed or removed but only with the approval of the holders of a majority of the Outstanding Class A Preferred Units, given as hereinafter specified.
7.
APPROVAL OF HOLDERS OF THE CLASS A PREFERRED UNITS
7.1
The approval of the holders of the Class A Preferred Units as a class in respect of any matter requiring the consent of the holders of the Class A Preferred Units as a class may be given in such manner as may then be permitted by Law, subject to a minimum requirement that such approval be passed by the requisite affirmative vote of the votes cast at a meeting of the holders of Class A Preferred Units as a class duly called and held for that purpose in accordance with Article 17 or given
17
by resolution signed by holders of Class A Preferred Units as a class in accordance with Article 17.
7.2
Each Class A Preferred Unit shall entitle the holder thereof to one vote for the purposes of any approval at a meeting of the holders of the Class A Preferred Units or by written consent.
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PART II
CLASS A PREFERRED UNITS - SERIES 1
1.
DESIGNATION
The first series of Class A Preferred Units shall consist of 24,000,000 preferred limited partnership interests which shall be designated as Class A Preferred Units, Series 1 (hereinafter referred to as the “Series 1 Units”) and shall have attached thereto the rights, privileges, restrictions and conditions set out herein.
2.
DEFINITIONS
The following definitions shall be for the purpose of Part II of this Schedule A:
2.1
“
Base Distribution
” has the meaning ascribed thereto in Section 4.1.1.
2.2
“
Capital Reorganization
” has the meaning ascribed thereto in Section 9.1.5.
2.3
“
Change in Tax Law
” means a change in U.S. tax Law or administrative practice (including the issuance of Treasury Regulations in temporary or final form, revenue rulings, notices, and announcements, but in the case of a notice or announcement, only to the extent such notice or announcement indicates an intention to issue Treasury Regulations or a revenue ruling that would result in a change in Law, but excluding any private letter rulings, technical advice memoranda or other non-precedential or non-binding authorities) or a judicial decision.
2.4
“
Closing Price
” means the closing sale price or, if no closing sale price is reported, the last reported sale price of the BPY Units on the Securities Exchange on the date of determination, or, if the BPY Units are not then listed on a Securities Exchange, the Closing Price will be determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate, and
19
provided further that any such selection, opinion or determination by the Managing General Partner will be conclusive and binding, absent manifest error.
2.5
“
Current Market Price
” means:
2.5.1
the volume-weighted average trading price of a BPY Unit on the Securities Exchange during the previous 20 consecutive trading days ending on the fifth trading day prior to the date of determination; or
2.5.2
if the BPY Units are not then listed on a Securities Exchange, the Current Market Price will be determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate, and provided further that any such selection, opinion or determination by the Managing General Partner will be conclusive and binding, absent manifest error.
2.6
“
Distribution Payment Dates
” has the meaning ascribed thereto in Section 4.1.1.
2.7
“
Equity Securities
” means securities carrying the right to participate in earnings to an unlimited degree.
2.8
“
Excess Distribution
” means the amount, if any, by which (x) the greater of (i) the aggregate distributions (including any ordinary and extraordinary distributions) declared in any Quarter on the Exchange Number of BPY Units and (ii) the aggregate distributions (including any ordinary and extraordinary distributions) paid in any Quarter on the Exchange Number of Redemption-Exchange Units divided by the Exchange Ratio, exceeds (y) the Base Distribution in such Quarter with respect to one Series 1 Unit; provided that the Base Distribution for the period from the Issue Date to December 31, 2014 shall be deemed to be, for the purposes of calculating the Excess Distribution only, $0.39063 per Series 1 Unit.
2.9
“
Excess Distribution Payment
” has the meaning ascribed thereto in Section 4.1.2.
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2.10
“
Exchange Consideration
” has the meaning ascribed thereto in Section 7.2.1.
2.11
“
Exchange Date
” has the meaning ascribed thereto in Section 7.2.1.
2.12
“
Exchange Notice
” has the meaning ascribed thereto in Section 7.1.
2.13
“
Exchange Number
” means 0.97276, subject to adjustment from time to time in accordance with Section 9.
2.14
“
Exchange Preferred Units
” has the meaning ascribed thereto in Section 7.1.
2.15
“
Exchange Price
” means, for each Series 1 Unit, an amount equal to the Issue Price divided by the Exchange Number, which on the Issue Date is $25.70.
2.16
“
Fair Market Value
” means, as at any date:
2.16.1
for a BPY Unit, the Current Market Price; or
2.16.2
for a security listed and posted on a stock exchange (other than a BPY Unit), the volume-weighted average trading price during the previous 20 consecutive trading days ending on the fifth trading day prior to the date of determination, according to the official price quotations of the stock exchange, provided that, for a security listed and posted on more than one stock exchange, the price quotations used shall be those of the stock exchange on which the greatest volume of trading in the security occurs as determined by the Managing General Partner; or
2.16.3
for any other security or property that is not cash, the fair market value thereof at such date as, determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate; or
2.16.4
for any property that is cash, the amount thereof.
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each such determination by the Managing General Partner will be conclusive and binding, absent manifest error.
2.17
“
Freely Tradable
” means, in respect of shares of capital of any class of any corporation or limited partnership units of any class of any limited partnership, shares or limited partnership units, as the case may be, which can be traded by the holder thereof without any restriction other than pursuant to applicable securities laws.
2.18
“
Initial Holder
” means the holder to which all of the Series 1 Units are initially issued on the Issue Date and any Affiliate of such holder who holds Series 1 Units from time to time.
2.19
“
Initial Redemption Date
” means December 31, 2017.
2.20
“
Issue Date
” has the meaning ascribed thereto in Section 3.1.
2.21
“
Issue Price
” means $25.00.
2.22
“
Maturity Date
” has the meaning ascribed thereto in Section 5.3.
2.23
“
NYSE
” has the meaning ascribed thereto in Section 2.35.
2.24
“
Ordinary BPY Distribution
” means a regularly scheduled quarterly distribution, declared and paid on the BPY Units that is not a “special” or “extraordinary” distribution or exceeds a level which is reasonably expected to continue in subsequent Quarters.
2.25
“
Post-Distribution Price
” has the meaning ascribed thereto in Section 9.1.3.
2.26
“
Preferred Call Notice
” has the meaning ascribed thereto in Section 8.2.1.
2.27
“
Preferred Call Right
” has the meaning ascribed thereto in Section 8.1.
2.28
“
Redemption Consideration
” has the meaning ascribed thereto in Section 5.1.
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2.29
“
Redemption Date
” has the meaning ascribed thereto in Section 5.4.1.
2.30
“
Redemption Notice
” has the meaning ascribed thereto in Section 5.1.
2.31
“
Redemption Price
” means for each Series 1 Unit, an amount equal to the aggregate of:
2.31.1
$25.00 per Series 1 Unit; plus
2.31.2
an amount equal to the full amount of all distributions accrued (whether or not declared) and unpaid on such Series 1 Unit up to (but excluding) the date of payment.
2.32
“
Regulation D
” means Regulation D as promulgated by the SEC under the U.S. Securities Act.
2.33
“
Regulation S
” means Regulation S as promulgated by the SEC under the U.S. Securities Act.
2.34
“
Reorganization Event
” has the meaning ascribed thereto in Section 9.2.1.
2.35
“
Right to Exchange
” has the meaning ascribed thereto in Section 7.1.
2.36
“
Right to Redeem
” has the meaning ascribed thereto in Section 5.1.
2.37
“
SEC
” means the United States Securities and Exchange Commission.
2.38
“
Section 9.1.1 Transaction
” has the meaning ascribed thereto in Section 9.1.1.
2.39
“
Securities Exchange
” means the New York Stock Exchange (“
NYSE
”) or, if the BPY Units are not then listed on the NYSE, the stock exchange that the BPY Units are then listed on, provided that, if the BPY Units are listed on more than one stock exchange (neither of which are the NYSE), the “Securities Exchange” shall be the stock exchange on which the greatest volume of trading in the BPY Units occurs.
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2.40
“
Series 1 Units
” has the meaning ascribed thereto in Section 1.
2.41
“
Specified Fraction
” has the meaning ascribed thereto in Section 4.1.3.
2.42
“
Substantial Issuer Bid
” has the meaning ascribed thereto in Section 9.1.4.
2.43
“
Transaction Value
” has the meaning ascribed thereto in Section 9.2.1.
2.44
“
Transfer Agent
” means the Partnership or any transfer agent appointed from time to time to act as registrar and transfer agent for the Series 1 Units.
2.45
“United States”
means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.
2.46
“U.S. Exchange Act”
means the United States Securities Exchange Act of 1934, as amended.
2.47
“U.S. Legend”
has the meaning ascribed thereto in Section 16.1.
2.48
“U.S. Person”
means a “U.S. person” as such term is defined in Regulation S under the U.S. Securities Act.
2.49
“U.S. Purchaser Certification”
means the U.S. Purchaser Certification in substantially the form of Schedule B to this Part II.
2.50
“U.S. Securities Act”
means the United States Securities Act of 1933, as amended.
2.51
“
Valuation Period
” has the meaning ascribed thereto in Section 9.1.3.
Unless otherwise stated, all references in Part II of this Schedule A to Sections or subsections refer to Sections or subsections of Part II of Schedule A.
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3.
ISSUE DATE AND CONSIDERATION FOR ISSUE
3.1
The Series 1 Units shall be dated as of December 3, 2014 (the “
Issue Date
”); provided however, that distributions on the Series 1 Units shall only accrue from and after January 1, 2015.
3.2
The consideration for the issue of each Series 1 Unit shall be $25.00.
4.
DISTRIBUTIONS
4.1
Payment of Distributions
4.1.1
The holders of the Series 1 Units shall be entitled to receive, and the Partnership shall pay thereon, if, as and when declared by the Managing General Partner, out of moneys of the Partnership properly applicable to the payment of distributions and without regard to the income of the Partnership, a fixed cumulative preferential cash distribution equal to $1.5625 per Series 1 Unit per annum (the “
Base Distribution
”) less any tax required to be deducted and withheld, payable in lawful money of the United States in equal quarterly amounts on the last day of each of the months of March, June, September and December in each year (the “
Distribution Payment Dates
”) up to but excluding the applicable Maturity Date. The record date for the payment of the Base Distribution will be the first day of the calendar month during which a Distribution Payment Date falls or such other record date, if any, as may be fixed by the Managing General Partner that is not more than 30 nor less than 10 days prior to such Distribution Payment Date. Any such day will be the record date whether or not such day is a Business Day.
4.1.2
Subject to Section 4.1.3, if in any Quarter the Excess Distribution is a positive number, the holders of Series 1 Units shall be entitled to receive on the Distribution Payment Date for that Quarter, and the Partnership shall pay thereon, out of moneys of the Partnership properly applicable to the payment of distributions and without regard to the income of the Partnership, a further
25
cumulative preferential cash distribution in an amount per Series 1 Unit equal to the Excess Distribution (the “
Excess Distribution Payment
”) less any tax required to be deducted and withheld. For example, if, in a particular Quarter and assuming no anti-dilution adjustments have occurred, BPY declared a distribution of $0.50 per Unit on the BPY Units, then a holder of Series 1 Units would receive an additional $0.095755 being: ($0.50 multiplied by the Exchange Number (0.97276)) less the quarterly Base Distribution ($1.5625/4) for each Series 1 Unit held.
4.1.3
Subject to Section 4.1.1, for any period that is less than a full Quarter with respect to any Series 1 Unit (i) that is issued, redeemed, exchanged or purchased during such Quarter or (ii) in respect of which assets of the Partnership are distributed to the holders thereof pursuant to Section 14 during such Quarter, the Base Distribution shall be deemed to accrue on a daily basis and shall be equal to the amount calculated by multiplying the amount that would otherwise be payable for a full Quarter by the Specified Fraction. “
Specified Fraction
” means a fraction of which the numerator is the number of days in such period (including the day at the beginning of such period and excluding the day at the end of such period) during which the Series 1 Unit is in issue and the denominator is the number of days in such Quarter (including the day at the beginning thereof and excluding the Distribution Payment Date at the end thereof).
4.1.4
The first Distribution Payment Date will be March 31, 2015, and the amount payable on such date will be $0.390625 per Series 1 Unit, being the Base Distribution for the period from January 1, 2015 to March 31, 2015. No Base Distribution shall accrue during the period from the Issue Date to December 31, 2014.
4.1.5
For so long as Series 1 Units remain issued and outstanding, if the distributions are not paid in full (or declared and a sum sufficient for the full payment is not so set apart) on any Distribution Payment Date on the Series 1
26
Units and any Parity Securities, distributions declared on the Series 1 Units and such Parity Securities shall only be declared
pro rata
based upon the respective amounts that would have been paid on the Series 1 Units and such Parity Securities had dividends been declared and paid in full.
4.1.6
The holders of the Series 1 Units shall not be entitled to any distributions other than or in excess of the Base Distribution and the Excess Distribution Payment. For greater certainty, nothing in this Section 4.1.6 shall prevent holders of Series 1 Units from participating in any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4, solely at the discretion of the Partnership and subject to TSX approval, as if they had exchanged their Series 1 Units immediately prior to the effective date or record date of the event.
4.2
Cumulative Payment of Distributions
If on any Distribution Payment Date, the Base Distribution or the Excess Distribution Payment accrued to such date is not paid in full on all of the Series 1 Units then Outstanding, such distributions, or the unpaid part thereof, shall be paid on a subsequent date or dates determined by the Managing General Partner.
4.3
Method of Payment
All Base Distributions and Excess Distribution Payments shall be paid by the Partnership directly or through the Transfer Agent or through any other Person or agent to the holders of Series 1 Units according to their holdings as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of assignment or otherwise.
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5.
REDEMPTION
5.1
Optional Redemption
Subject to the right of the holders of the Series 1 Units to require the Partnership to exchange any or all of the Series 1 Units in accordance with Section 7 and subject to Section 7.3, the Partnership may, upon giving notice in writing as hereinafter provided (the “
Redemption Notice
”) at its option at any time commencing on the Initial Redemption Date and prior to the Maturity Date provided that the Current Market Price determined on the Business Day preceding the date on which the Redemption Notice is given is not less than 125% of the Exchange Price, redeem all, or from time to time any part, of the then Outstanding Series 1 Units (the “
Right to Redeem
”) by payment to the holders of such Series 1 Units an amount for each Series 1 Unit so redeemed equal to the Redemption Price (less any tax required to be deducted and withheld). Payment of the Redemption Price will be satisfied in full by the Partnership causing to be delivered, for each Series 1 Unit being redeemed, (x) such number of Freely Tradable BPY Units obtained by dividing the Issue Price by the Current Market Price determined on the Business Day preceding the date of the Redemption Notice, such units to be duly issued, fully paid and non-assessable and free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, and, (y) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions, less any tax required to be deducted and withheld, on such Series 1 Unit (together, the “
Redemption Consideration
”; provided that for purposes of Section 5.3 the Current Market Price will be determined on the Business Day preceding the Maturity Date). Notwithstanding anything contained herein to the contrary, the Partnership shall not redeem any of the Series 1 Units under this Section 5.1 at any time that the BPY Units are not listed on the NYSE, TSX or other national securities exchange in the United States or Canada.
5.2
Partial Redemption
In case only a part of the Series 1 Units is to be redeemed at any time, the Series 1 Units to be redeemed shall be selected
pro rata
from the holders of the Series 1 Units in proportion to the number of Series 1 Units held by such holders, by lot or some other method as
28
the Managing General Partner in its sole discretion determines to be fair and equitable.
5.3
Mandatory Redemption
Subject to 7.3, on December 31, 2021 (the
“Maturity Date
”), if such Series 1 Units have not been exchanged, redeemed or purchased by the Partnership, the Partnership shall redeem the then Outstanding Series 1 Units by payment to each applicable holder of the Series 1 Units, of the Redemption Price (less any tax required to be deducted and withheld) in the form of the Redemption Consideration.
5.4
Method of Redemption
5.4.1
The Partnership shall, at least 30 days and not more than 60 days before the Maturity Date or any other date fixed for redemption (the “
Redemption Date
”), send or cause to be sent to the holders of the Series 1 Units to be redeemed a Redemption Notice setting out: (i) that the Partnership’s Right to Redeem has been exercised or that the Maturity Date is up-coming; (ii) the number of the Series 1 Units held by the holder to whom it is addressed which are to be redeemed; (iii) the Redemption Price; (iv) the Redemption Date; (v) the formula for determining the Redemption Price; (vi) that upon presentation and surrender of the certificates or book-entry shares for the Series 1 Units to be redeemed, the holders of such Series 1 Units will obtain payment as specified in Section 5 in respect of the Series 1 Units being redeemed, specifying where the payment (in the form of the Redemption Consideration) will be available for pick up, and that, if requested in writing by a holder of Series 1 Units and provided that commercial courier service is available in respect of the relevant destination, such payment will be delivered to such holders by courier at the holder’s expense; and (vii) any other matters the Partnership may deem appropriate.
5.4.2
On the Redemption Date, subject to Section 7.3, the Partnership shall make available or, if requested by the holder, cause to be delivered to each holder of Series 1 Units to be redeemed the Redemption Price (in the form of the Redemption Consideration) upon presentation and surrender of the certificate or
29
certificates or book-entry share or shares for such Series 1 Units at the registered office of the Partnership or at any office of the Transfer Agent as may be specified by the Partnership in the Redemption Notice, together with such other documents and instruments as may be required to effect a transfer of Series 1 Units under the Limited Partnership Act and the Agreement. The Partnership will: (i) make the aggregate Redemption Price for Series 1 Units held by a holder available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified by the Partnership in the Redemption Notice, on the Redemption Date; or (ii) at the written request of such holder and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, deliver or cause to be delivered, by courier, the aggregate Redemption Price payable to such holder at the address of such holder recorded in the register of the Partnership or at a different address as such holder may direct in writing in a manner satisfactory to the Transfer Agent, as soon as practicable on or after the Redemption Date or such later date as the holder may request. On and after the Redemption Date, the holders of the Series 1 Units called for redemption will cease to be holders of the Preferred Units to be redeemed and will not be entitled to exercise any of the rights of holders in respect thereof, other than the right to receive their proportionate part of the total Redemption Price, and will not be entitled to receive any distributions in respect thereon (including to avoid double payment distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Series 1 Units on a record date for the payment of a distribution), unless payment of the aggregate Redemption Price deliverable to a holder for Series 1 Units is not be made upon presentation and surrender of the holder’s Series 1 Units in accordance with the foregoing provisions, in which case the rights of the holder will remain unaffected until the aggregate Redemption Price deliverable to such holder has been paid in the manner hereinbefore provided. In the case of a redemption pursuant to Section 5.1, if only a part of the Series 1 Units represented by any certificate or book-entry share is redeemed, a new certificate will be issued to the
30
holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 1 Units at the expense of the Partnership.
5.4.3
No fractional BPY Units shall be delivered in connection with the delivery of the Redemption Consideration on the Redemption Date in accordance with this Section 5, but in lieu thereof, the Partnership shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the date of the Redemption Notice, if the redemption is pursuant to Section 5.1 or the Business Day preceding the Maturity Date, if the redemption is pursuant to Section 5.3).
5.4.4
The Partnership will have the right at any time after the sending of the Redemption Notice to deposit or cause to be deposited any cash portion of the Redemption Consideration in a custodial account with any chartered bank or trust company in Canada named in the Redemption Notice and any interest allowed on such deposit will belong to the Partnership. Provided that the cash portion of the Redemption Consideration has been so deposited prior to the Redemption Date and that the remaining portion of the total Redemption Consideration has otherwise been paid in accordance with Section 5.4.2, on and after the Redemption Date, the Series 1 Units will be redeemed and the rights of the holders thereof after the Redemption Date will be limited to receiving their proportionate part of the total Redemption Price for such Series 1 Units so deposited, against presentation and surrender of the said certificates or book-entry shares held by them, respectively, in accordance with the foregoing provisions. Upon such payment or deposit of the total Redemption Price, the holders of the Series 1 Units will thereafter be considered and deemed for all purposes to be holders of the BPY Units delivered to them. Any funds so deposited which remain unclaimed on the date which is two years from the Redemption Date shall be forfeited to the Partnership and paid over to or as directed by the Partnership and the former holders of the Series 1 Units shall thereafter have no right to receive their respective entitlement to the Redemption Price.
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6.
PURCHASE FOR CANCELLATION
Subject to the provisions of Section 10, the Partnership may purchase for cancellation at any time all or from time to time the whole or any part of the Outstanding Series 1 Units. Series 1 Units so purchased shall be cancelled.
7.
EXCHANGE OF SERIES 1 UNITS
7.1
Exchange at Option of Holder
Notwithstanding the delivery of a Redemption Notice and subject to applicable Laws, a holder of the Series 1 Units shall have the right (“
Right to Exchange
”), exercisable at any time and from time to time, to require the Partnership to exchange any or all of the Series 1 Units registered in the name of such holder for consideration per Series 1 Unit equal to the Exchange Number of Freely Tradable BPY Units plus all accrued (whether or not declared) and unpaid cash distributions on such Series 1 Units (less any tax required to be deducted and withheld), which will be satisfied by the Partnership causing to be delivered to such holder the Exchange Consideration on the Exchange Date. The holder must give notice of a requirement to exchange by presenting and surrendering at the registered office of the Partnership or at any office of the Transfer Agent as may be specified by the Partnership by notice to the holders of Series 1 Units from time to time the certificate or certificates or book-entry share or shares representing the Series 1 Units that the holder desires to have the Partnership exchange, free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, together with such other documents and instruments as may be required to effect a transfer of Series 1 Units under the Limited Partnership Act, the Agreement, together with a duly executed statement (the “
Exchange Notice
”) in the form of Schedule A to this Part II or in such other form as may be acceptable to the Partnership specifying that the holder desires to have all or any number specified therein of the Series 1 Units represented by such certificate or certificates or book-entry shares or shares (the “
Exchange Preferred Units
”) exchanged by the Partnership; provided that the Exchange Notice must be delivered prior to the close of business on the earlier of: (i) the Maturity Date; and (ii) the Business Day preceding any applicable Redemption Date.
32
7.2
Method of Exchange
7.2.1
In the case of an exchange of Series 1 Units under this Section 7, upon receipt by the Partnership or the Transfer Agent in the manner specified in Section 7.1 of a certificate or book-entry share representing the number of Series 1 Units which the holder desires to have the Partnership exchange, together with an Exchange Notice, the Partnership will exchange the Exchange Preferred Units effective at the close of business on the fifth Business Day following the date of the Exchange Notice (the “
Exchange Date
”). Payment for the Exchange Preferred Shares will be satisfied in full by the delivery of, for each Exchange Preferred Unit, (x) the Exchange Number of Freely Tradable BPY Units, such units to be duly issued, fully paid and non-assessable and free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, and, (y) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions, less any tax required to be deducted and withheld, on such Exchange Preferred Unit (together, the “
Exchange Consideration
”). The Partnership shall satisfy its obligation to deliver the Exchange Consideration by, on the Exchange Date, (i) making the aggregate Exchange Consideration available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified in the Maturity Notice, Redemption Notice or Exchange Notice, as applicable; or (ii) at the written request of such holder pursuant to the Exchange Notice and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, delivering or causing to be delivered the Exchange Consideration to the relevant holder at the address specified in the holder’s Exchange Notice. If only a part of the Series 1 Units represented by any certificate or book-entry share is exchanged a new certificate will be issued to the holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 1 Units at the expense of the Partnership.
7.2.2
On and after the close of business on the Exchange Date, the holder of the Exchange Preferred Units will cease to be a holder of such Exchange Preferred Units and will not be entitled to exercise any of the rights of a holder in
33
respect thereof, other than the right to receive its proportionate part of the total Exchange Consideration, and will not be entitled to receive any distributions in respect thereon (including distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Exchange Preferred Units on a record date for the payment of a distribution), unless upon presentation and surrender of the holder’s Series 1 Units in accordance with the foregoing provisions, payment of the aggregate Exchange Consideration to such holder will not have been made, in which case the rights of such holder will remain unaffected until such aggregate Exchange Consideration has been delivered in the manner hereinbefore provided. On and after the close of business on the Exchange Date, provided that presentation and surrender of the holder’s Series 1 Units and payment of such aggregate Exchange Consideration has been made in accordance with the foregoing provisions, the holder of the Exchange Preferred Units so exchanged by the Partnership will thereafter be considered and deemed for all purposes to be a holder of the BPY Units delivered to such holder.
7.2.3
Notwithstanding any other provision of this Section 7 if:
(i)
the exercise of the rights of the holders of the Series 1 Units to require the Partnership to exchange any Series 1 Units pursuant to this Section 7 on any Exchange Date would require listing approval or any similar document to be issued in order to obtain the approval of the TSX and/or the NYSE to the listing and trading (subject to official notice of issuance) of the BPY Units that would be required to be delivered to such holders of Series 1 in connection with the exercise of such rights; and
(ii)
as a result of (i) above, it would not be practicable (notwithstanding the reasonable endeavours of BPY) to obtain such approvals in time to enable all or any of such Units to be admitted to listing and trading by the TSX and/or the NYSE (subject to official notice of issuance) when so delivered, the Exchange Date will, notwithstanding any other date specified or otherwise deemed to be specified in any relevant Exchange Notice, be
34
deemed for all purposes to be the earlier of (i) the second Business Day immediately following the date the approvals referred to in Section 7.2.3(i) are obtained, and (ii) the date which is 30 Business Days after the date on which the relevant Exchange Notice is received by the Partnership, and references in this Section 7 to such Exchange Date will be construed accordingly.
7.2.4
No fractional BPY Units shall be delivered in connection with the delivery of the Exchange Consideration on the Exchange Date in accordance with this Section 7, but in lieu thereof, the Partnership shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the Exchange Date).
7.3
Automatic Exchange
If on the Business Day preceding any Redemption Date the value of the Exchange Number of BPY Units to be received by a holder of the Series 1 Units upon exercise of the Right to Exchange for one Series 1 Unit (which value shall be determined using the Current Market Price determined on the Business Day preceding the Redemption Date) exceeds the Issue Price, the holder shall be deemed to have exercised the Right to Exchange with respect to all of such holder’s Series 1 Units to be redeemed on the Redemption Date, unless the holder provides written notice to the Partnership prior to such Business Day specifying that the Series 1 Units are not to be so exchanged.
8.
PREFERRED CALL RIGHT
8.1
Preferred Call Right
At any time the Partnership is required to make available or deliver BPY Units to the holder of Series 1 Units, BPY shall have the right (the “
Preferred Call Right
”) to acquire all (but not less than all) the Series 1 Units (and all rights in respect thereof, including rights to declared but unpaid distributions) to be redeemed, pursuant to Section 5, or exchanged, pursuant
35
to Section 7, in consideration for the aggregate Redemption Consideration or the aggregate Exchange Consideration, as applicable.
8.2
Exchange of Series 1 Units for BPY Units
8.2.1
The Partnership shall notify BPY of each Redemption Date and Exchange Date, at least four Business Days prior to such date. At any time within two Business Days from the date of BPY’s receipt of such notice, BPY may elect to exercise the Preferred Call Right and shall give written notice to the Partnership and to the holder of the Series 1 Units of such election (the “
Preferred Call Notice
”). The Preferred Call Notice shall contain all relevant information, and shall be presented together with all related certificates, book-entry shares and documents that the Partnership may reasonably require or as may be required by applicable Law to effect the Preferred Call Right.
8.2.2
If BPY exercises its Preferred Call Right, on the Redemption Date or Exchange Date, as applicable, the holder will deliver to BPY the certificate or certificates or book-entry share or shares representing the Series 1 Units being sold pursuant to the Preferred Call Right on such date, together with such other documents and instruments as may be required to effect a transfer of Series 1 Units under the Limited Partnership Act, the Agreement and such additional documents and instruments as the Transfer Agent, the Partnership and BPY may reasonably require. Concurrently with such delivery, BPY shall (i) make the aggregate Redemption Consideration or the aggregate Exchange Consideration, as applicable, available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified in the Redemption Notice or Exchange Notice, as applicable, or (ii) at the written request of such holder and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, deliver or cause to be delivered, by courier, the consideration payable to such holder at the address of such holder recorded in the register of the Partnership or at a different address as such holder may direct in writing in a manner satisfactory to the Transfer Agent, as soon as
36
practicable after the Redemption Date or Exchange Date, as applicable, or such later date as the holder may request. The BPY Units issued to the holder of the Series 1 Units shall be duly issued, fully paid and non-assessable, free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest. Other than as specifically contemplated in the Agreement, the BPY Units issued to any holder of Series 1 Units pursuant to Section 8.2.1 will be issued in accordance with the BPY Partnership Agreement.
8.2.3
On and after the close of business on the Redemption Date or Exchange Date, as applicable, the holder of the Series 1 Units acquired by BPY will cease to be a holder of such Series 1 Units and will not be entitled to exercise any of the rights of a holder in respect thereof, other than the right to receive its proportionate part of the total Redemption Consideration or Exchange Consideration, as applicable, and will not be entitled to receive any distributions in respect thereon (including distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Series 1 Units on a record date for the payment of a distribution), unless upon presentation and surrender of the holder’s Series 1 Units in accordance with the foregoing provisions, payment of the aggregate Redemption Consideration or aggregate Exchange Consideration, as applicable, to such holder will not have been made, in which case the rights of such holder will remain unaffected until such aggregate Redemption Consideration or aggregate Exchange Consideration, as applicable, has been delivered in the manner hereinbefore provided. On and after the close of business on the Redemption Date or Exchange Date, as applicable, provided that presentation and surrender of the holder’s Series 1 Units and payment of such aggregate Redemption Consideration or aggregate Exchange Consideration has been made in accordance with the foregoing provisions, the holder of the Series 1 Units acquired by BPY will thereafter be considered and deemed for all purposes to be a holder of the BPY Units delivered to such holder, and BPY shall thereafter be considered and deemed for all purposes to be a holder of the Series 1 Units and
37
shall receive the full amount of any distributions declared but unpaid as of such date.
8.2.4
The Managing General Partner and the Partnership shall take all steps necessary under this Agreement to effect the transfer of such Series 1 Units, including the registration of such transfer in the Partnership’s register of Limited Partners and by issuing such Series 1 Units in the name of BPY representing the Series 1 Units transferred to BPY in accordance with this Section 8.2, without expense to BPY.
8.2.5
If only a part of the Series 1 Units represented by any certificate or book-entry share is purchased by BPY pursuant to its Preferred Call Right a new certificate will be issued to the holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 1 Units at the expense of the Partnership.
8.2.6
No fractional BPY Units shall be delivered in connection with the exercise of the Preferred Call Right, but in lieu thereof, BPY shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the Redemption Date or Exchange Date, as applicable).
8.3
Exchange of Series 1 Units for Managing General Partner Units
Immediately following BPY’s purchase of Series 1 Units, BPY shall exchange such Series 1 Units for (i) that number of Managing General Partner Units equal to the number of BPY Units included in the Redemption Consideration or the Exchange Consideration, as applicable, and (ii) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions on such Series 1 Units, less any tax required to be deducted and withheld. In addition to any other Units previously held by BPY, BPY will be considered and deemed for all purposes to be the holder of the number of Managing General Partner Units equal to the number of Series 1 Units exchanged pursuant to the Preferred Call Right.
38
8.4
Delegation of Rights and Obligations
BPY may designate another member of the BPY Group to exercise its rights (to deliver the Exchange Consideration or the Redemption Consideration, as applicable) in this Section 8.
39
9.
ADJUSTMENTS
9.1
Adjustment upon Consolidation, Subdivision, Distributions or Repurchases
9.1.1
If BPY shall, after the Issue Date (i) fix a record date for the payment of a stock distribution or the making of a distribution with respect to BPY Units in BPY Units to all or substantially all of the holders of the BPY Units, (ii) subdivide or redivide the BPY Units into a greater number of units, or (iii) reduce, combine or consolidate the BPY Units into a smaller number of units (any of such events in clauses (i), (ii) and (iii) being herein called a “
Section 9.1.1 Transaction
”), then, in any such event, the Exchange Number shall be adjusted, effective immediately after the record date in the case of clause (i) or the effective date in the case of clauses (ii) and (iii), so that each holder of the Series 1 Units shall thereafter be entitled to receive upon exchange of Series 1 Units pursuant to the Right to Exchange, the number of the Freely Tradable BPY Units which such holder would have owned or been entitled to receive immediately following any Section 9.1.1 Transaction had such Series 1 Units been exchanged immediately prior to the record date in the case of clause (i) or the effective date in the case of clauses (ii) or (iii), such adjustment to be made such that the applicable number will equal the number determined by multiplying the Exchange Number in effect immediately prior to the record date or the effective date, as the case may be, by a fraction, the numerator of which shall be the number of BPY Units outstanding immediately after giving effect to, and solely as a result of, such Section 9.1.1 Transaction and the denominator of which shall be the number of BPY Units outstanding immediately prior to the effectiveness of the Section 9.1.1 Transaction.
9.1.2
If BPY shall, after the Issue Date, fix a record date for the issue of options, rights or warrants to all or substantially all of the holders of the BPY Units entitling them for a period up to 45 days from the date of issuance of such options, rights or warrants to subscribe for or purchase BPY Units or securities convertible or exchangeable into BPY Units at a price per unit (or having a
40
conversion or exchange price per unit) less than the Current Market Price on the earlier of such record date and the date on which BPY publicly announces its intention to make such issuance, then in each such case the Exchange Number shall be adjusted effective immediately after such record date so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the number of BPY Units outstanding at 4:59 p.m. (Toronto time) on such record date, plus such number of additional BPY Units offered for subscription or purchase pursuant to such options, rights or warrants and the denominator of which shall be the number of BPY Units outstanding at 4:59 p.m. (Toronto time) on such record date, plus such number of additional BPY Units which the aggregate offering price of the total number of BPY Units so offered for subscription or purchase pursuant to such options, rights or warrants would purchase at such Current Market Price, which shall be determined by multiplying such total number of units by the exercise price of such options, rights or warrants and dividing the product so obtained by such Current Market Price. To the extent that such options, rights or warrants expire without being exercised (or such convertible or exchangeable securities expire without being converted or exchanged), the Exchange Number shall be readjusted to the number which would then be in effect had such adjustments for the issuance of such options, rights or warrants been made upon the basis of only the number of BPY Units actually delivered.
9.1.3
If BPY shall, after the Issue Date, fix a record date for the making of a distribution to all or substantially all of the holders of the BPY Units of (i) Partnership Interests other than the BPY Units; (ii) rights, options or warrants to subscribe for or purchase any of its securities (other than those referred to in Section 9.1.2); or (iii) cash, evidence of indebtedness, securities, non-cash dividends not otherwise made the subject of adjustments pursuant to this Section 9 or other property or assets (other than cash distributions that constitute Ordinary BPY Distributions, distributions paid in lieu of Ordinary BPY
41
Distributions or that portion of cash distributions to holders of BPY Units resulting in holders of the Series 1 Units receiving an Excess Distribution Payment), then in each such case the Exchange Number shall be adjusted effective immediately after such record date so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the Current Market Price as at the earlier of such record date and the date on which BPY publicly announces its intention to make such distribution and the denominator of which shall be such Current Market Price less the Fair Market Value, as of such record date of the portion of the shares, cash, evidence of indebtedness, securities or other property or assets so distributed or of such rights, options or warrants which are applicable to one BPY Unit.
If the transaction that gives rise to an adjustment pursuant to this Section 9.1.3 is one pursuant to which the distribution or the making of a distribution with respect to the BPY Units consists of units, shares or other similar equity interests in, a Subsidiary or other business unit of BPY (
e.g.
a spin-off) or consists of any other securities, that are, or when issued, will be, traded on a securities exchange or quoted on a quotation facility in Canada, the United States or elsewhere, then, in any such event, the Exchange Number shall be adjusted, effective immediately after such record date, so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the volume-weighted average trading price of the shares, similar equity interests or other securities distributed to holders of BPY Units applicable to one BPY Unit over each of the 20 consecutive trading days commencing on and including the trading day after the date on which “ex-distribution trading” commences for such units, shares, similar equity interests or other securities on the principal exchange or other market on which they are listed, quoted or traded (the “
Valuation Period
”) plus the volume-weighted average trading price of the BPY Units over the Valuation Period (the
42
“
Post-Distribution Price
”), and the denominator of which shall be the Post-Distribution Price.
To the extent that such distribution is not so made or to the extent that any such rights, options or warrants so distributed expire without being exercised, the Exchange Number shall be readjusted to the number which would then be in effect if such record date had not been fixed or to the number which would then be in effect based upon such shares, cash, evidence of indebtedness, securities or other property or assets actually distributed or based upon the number of securities actually delivered upon the exercise of such rights, options or warrants, as the case may be.
9.1.4
If BPY or any of its Subsidiaries shall, after the Issue Date, successfully complete a tender or exchange offer or substantial issuer bid (collectively, “
Substantial Issuer Bid
”) for the BPY Units where the cash and the value of any other consideration included in the payment per BPY Unit exceeds the volume-weighted average trading price of a BPY Unit on the Securities Exchange during the ten trading day period following the expiration of the Substantial Issuer Bid, then the Exchange Number shall be adjusted effective immediately after the expiration of the Substantial Issuer Bid so that it will equal the number determined by multiplying the Exchange Number in effect immediately prior to the expiration of the Substantial Issuer Bid by a fraction, the numerator of which shall be the aggregate Fair Market Value payable in the Substantial Issuer Bid, plus the product of the volume-weighted average trading price of the BPY Units over each of the 20 consecutive trading days commencing on and including the fifth trading day after the expiration of the Substantial Issuer Bid by the number of BPY Units outstanding immediately after the expiration of the Substantial Issuer Bid (after giving effect to the purchase of all BPY Units accepted for purchase or exchange in the Substantial Issuer Bid), and the denominator of which shall be the Closing Price on the trading day immediately succeeding the expiration of the Substantial Issuer Bid multiplied by the number of BPY Units outstanding immediately prior to the expiration of the Substantial
43
Issuer Bid, including any BPY Units purchased. In the event that BPY, or one of its Subsidiaries, is obligated to purchase BPY Units pursuant to any such Substantial Issuer Bid, but BPY, or such Subsidiary, is permanently prevented by applicable Law from effecting any such purchases, or all such purchases are rescinded, then the Exchange Number shall be readjusted to be such Exchange Number that would then be in effect if such Substantial Issuer Bid had not been made.
9.1.5
If there is any reclassification of the BPY Units at any time outstanding or any change of the BPY Units, in either case, solely into other Equity Securities of BPY or a successor to BPY (including as a result of an amalgamation, arrangement, merger or similar transaction) (any such reclassification or change being called a “
Capital Reorganization
”), then each holder of a Series 1 Unit in respect of which the Right to Exchange or Right to Redeem is exercised or in respect of which payment is due on the Maturity Date, in any case following the effective date of such Capital Reorganization, will be entitled to receive, and shall accept, in lieu of the BPY Units to which such holder was theretofore entitled upon such exercise, the kind of Freely Tradable Equity Securities which such holder would have been entitled to receive immediately following such Capital Reorganization had such holder been the registered holder of the BPY Units to which such holder was entitled immediately prior to such Capital Reorganization. For the purpose of determining the number of such Equity Securities resulting from such Capital Reorganization to which each such holder is entitled, and must accept, and for all other purposes of Part II of this Schedule A, each reference to BPY Units shall be deemed to be a reference to Equity Securities of the kind and number into which the BPY Units have been reclassified or changed resulting from such Capital Reorganization.
9.1.6
For purposes of this Section 9.1 all distributions of BPY Units (or securities convertible into or exchangeable for BPY Units), other securities, or other assets or property shall be deemed to occur at 5:00 p.m. (Toronto time) on the record date.
44
9.1.7
All adjustments to the Exchange Number shall be calculated to the nearest 1/10,000th of a BPY Unit (or if there is not a nearest 1/10,000th of a unit, to the next lower 1/10,000th of a unit).
9.1.8
No adjustment in the Exchange Number shall be made in respect of any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4 if the holders of the Series 1 Units are entitled to participate in the event on the same terms,
mutatis mutandis
, as if they had exchanged their Series 1 Units immediately prior to the effective date or record date of the event, as applicable, or, in the case of an event described in Section 9.1.3, to the extent that the holders of the Series 1 Units received an Excess Distribution Payment in respect of such event. For greater certainty, the holders of the Series 1 Units shall be entitled to participate in any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4 as if they had exchanged their Series 1 Units immediately prior to the effective date or record date of the event solely at the discretion of the Partnership and subject to TSX approval, provided that if the holders of Series 1 Units do not participate in any such event, the Exchange Number shall be adjusted as set forth in in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4.
9.1.9
No adjustment in the Exchange Number shall be required: (i) upon the issuance of BPY Units, other securities, property or assets by way of distribution in lieu of an Ordinary BPY Distribution to all or substantially all of the holders of the BPY Units; (ii) upon the issuance of any BPY Units pursuant to any present or future customary plan providing for the reinvestment of distributions or interest payable on interests of BPY and the investment, at market prices, of additional optional amounts in the BPY Units under any such plan; (iii) upon the repurchase of BPY Units pursuant to a normal course issuer bid; (iv) upon the issuance of any BPY Units or options or rights to purchase those BPY Units pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by BPY or any of its Subsidiaries or other Affiliates; (v) upon the issuance of any BPY Units pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as
45
of the Issue Date; and (vi) upon the issuance of any BPY Units or any other security of BPY in connection with acquisitions of assets or securities of another person, including with respect to any consolidation, amalgamation, arrangement, merger or similar transaction.
9.1.10
Notwithstanding any other provision herein, no adjustment shall be made in respect of an event otherwise requiring an adjustment under this Section 9.1 except to the extent such event is actually consummated.
9.1.11
If any event occurs that would trigger an adjustment in the Exchange Number pursuant to this Section 9 under more than one subsection hereof, such event, to the extent taken into account in any adjustment, shall not result in any other adjustment hereunder.
9.1.12
After adjustment in the Exchange Number pursuant to this Section 9, any subsequent event requiring an adjustment under this Section 9 shall cause an adjustment to such Exchange Number as so adjusted.
9.2
Adjustment upon Reorganization Event
9.2.1
In the event of (i) any consolidation, amalgamation, arrangement, merger or similar transaction of BPY, or of a successor to BPY, which does not result in holders of the BPY Units receiving solely Equity Securities of BPY or one or more successors to BPY, (ii) a take-over bid or similar transaction which results in not less than 90% of the outstanding BPY Units being owned by a single Person or group of Persons acting jointly or in concert, or (iii) any sale, lease or other disposition involving all or substantially all of the assets of BPY (any such event being herein referred to as a “
Reorganization Event
”), each Series 1 Unit Outstanding immediately prior to the Reorganization Event shall, without the consent of the holders of the Series 1 Units, remain outstanding, but the definition of “
Exchange Consideration
” will be adjusted to provide that each holder of the Series 1 Unit, upon exchange of the Series 1 Units pursuant to the Right to Exchange, will receive, with respect to each Series 1 Unit held, cash in
46
an amount equal to the product of the Exchange Number and the Transaction Value. For this purpose, “
Transaction Value
” means (x) for any cash received in any such Reorganization Event, the amount of cash received per BPY Unit, (y) for any property other than cash or securities received in any such Reorganization Event, an amount equal to the Fair Market Value of such property received per BPY Unit, and (z) for any securities received in any such Reorganization Event, an amount equal to the Fair Market Value of such securities received per BPY Unit, determined, in the case of each of clauses (y) and (z) as of the Exchange Date. Notwithstanding the foregoing, in lieu of delivering cash as provided above, the Partnership may at its option deliver an equivalent value of securities or other property received in such Reorganization Event, determined in accordance with clause (y) or (z) above, as applicable. The kind and amount of securities into which the Series 1 Units shall be so exchangeable at the election of the Partnership after a Reorganization Event shall be subject to adjustment as described in Section 9.1
mutatis mutandis
following the date of completion of such Reorganization Event.
9.2.2
The foregoing adjustments will be made successively whenever any Reorganization Event may occur.
9.3
Notice of Adjustments and Certain Other Events
9.3.1
Whenever the Exchange Number is adjusted as herein provided, the Partnership shall, as soon as practicable, compute the new Exchange Number and give notice to the holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Exchange Number was calculated.
9.3.2
As soon as practicable after BPY publicly announces that any of the events which could result in an adjustment pursuant to Section 9.1 or 9.2 has occurred, or will occur, then the Partnership shall as soon as practicable deliver to the holders of the Series 1 Units a notice stating (x) the record date as of which
47
the holders of the BPY Units to be entitled to such dividend, issue or distribution are to be determined, or (y) the date on which such Section 9.1.1 Transaction, Capital Reorganization, Reorganization Event, or other action is expected to become effective.
10.
CERTAIN RESTRICTIONS
So long as any of the Series 1 Units are outstanding, the Partnership shall not, without the approval of the holders of the Series 1 Units as a series, given as specified in Section 13:
(i)
declare, pay or set aside for payment any distributions in respect of the Junior Securities;
(ii)
call for redemption, redeem, purchase or otherwise pay off or retire for value any Junior Securities; or
(iii)
make any payments pursuant to Section 5.2.4 of the Agreement;
provided that the restrictions set out in Sections 10(i), (ii) and (iii) will not apply if (x) all accrued and unpaid Base Distributions and Excess Distributions on the Outstanding Series 1 Units have been declared and paid or set aside for payment in full for all periods prior to the existing Quarter and (y) the regular record date for the existing Quarter has passed, the Base Distribution and any Excess Distributions on the Outstanding Series 1 Units have been declared in full for the existing Quarter; and provided, further, the restrictions set out in Section 10(ii) will not apply to the purchase of fractional interests in Junior Securities pursuant to the conversion or exchange provisions of such Junior Securities or the security being converted or exchanged.
11.
VOTING RIGHTS
Except as required by Law or as otherwise provided herein, the holders of the Series 1 Units shall not be entitled as such to receive notice of, to attend or to vote at any meetings of the Partnership or have any right or authority to act for or bind the Partnership or to take part or in any way to interfere in the conduct or management of the Partnership.
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12.
AMENDMENT WITH APPROVAL OF HOLDERS OF THE SERIES 1 UNITS
The rights, privileges, restrictions and conditions attached to the Series 1 Units may be added to, changed or removed but only with the approval of the holders of a majority of the Outstanding Series 1 Units, given as hereinafter specified.
13.
APPROVAL OF HOLDERS OF THE SERIES 1 UNITS
13.1
The approval of the holders of the Series 1 Units as a series in respect of any matter requiring the consent of the holders of the Series 1 Units as a series may be given in such manner as may then be required by Law, subject to a minimum requirement that such approval be passed by the requisite affirmative vote of the votes cast at a meeting of the holders of Series 1 Units as a series duly called and held for that purpose in accordance with Article 17 of the Agreement or given by resolution signed by holders of Series 1 Units as a series in accordance with Article 17 of the Agreement.
13.2
Each Series 1 Unit shall entitle the holder thereof to one vote for the purposes of any approval at a meeting of the holders of the Series 1 Units or by written consent.
14.
LIQUIDATION, DISSOLUTION OR WINDING-UP
14.1
In the event of the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary, unless the Partnership is continued under an election to reconstitute and continue the Partnership pursuant to Section 13.2.2 of the Agreement, the holders of the Series 1 Units shall be entitled to receive, from the assets of the Partnership, a sum equal to the Issue Price for each Series 1 Unit held by them respectively, plus an amount equal to all distributions accrued (whether or not declared) and unpaid thereon up to (but excluding) the date of payment, less any tax required to be deducted and withheld, the whole before any distribution of any part of the assets of the Partnership among the holders of any
49
Junior Securities. After payment to the holders of the Series 1 Units of the amounts so payable to them, they shall not be entitled to share in any further distribution of the assets of the Partnership. Notwithstanding anything contained herein to the contrary, the Partnership shall, to the extent practicable, provide 30 days’ prior written notice to allow any holders of the Series 1 Units to exercise such holders’ Right to Exchange prior to liquidation.
14.2
In the event the assets of the Partnership available for distribution to holders of Partnership Interests upon any dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary, shall be insufficient to pay in full the amounts payable with respect to all of the Outstanding Series 1 Units and the corresponding amounts payable on any Parity Securities, the holders of the Series 1 Units and the holders of such Parity Securities shall share ratably in any distribution of assets of the Partnership in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.
15.
TAX MATTERS
15.1
Guaranteed Payments
15.1.1
Each of the Base Distribution and the Excess Distribution, whether paid or accrued, shall be treated as a guaranteed payment within the meaning of Section 707(c) of the Code, including for the purpose of determining Net Income and Net Loss and otherwise maintaining Capital Accounts, unless there is a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires treatment other than as a guaranteed payment for U.S. federal income tax purposes. The Managing General Partner shall notify the holders of the Series 1 Units of any such intention to change such treatment and shall cooperate in good faith with the holders of the Series 1 Units to resolve any disputes regarding such change in treatment.
15.1.2
For U.S. federal income tax purposes, the deduction attributable to any amount treated as a guaranteed payment under Section 15.1.1 shall be
50
specially allocated to the Partners in a manner determined by the Managing General Partner in its sole discretion that is not inconsistent with the applicable provisions of the Code and Treasury Regulations.
15.2
U.S. Withholding Tax
Notwithstanding anything to the contrary herein, the Partnership shall withhold no U.S. federal income tax (including under Chapter 3, Chapter 4 or Chapter 61 of the Code) nor any U.S. state or local tax in respect of any Base Distribution or Excess Distribution, whether paid or accrued, or any other distribution on Series 1 Units (including in redemption), except for tax required to be withheld as a result of (i) a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires such withholding or (ii) the failure of any holder of Series 1 Units to timely deliver to the Partnership a valid, properly executed IRS Form W-8BEN-E, IRS Form W-9, or such other form as may be required under applicable Law as a precondition to exemption or reduction from such withholding; provided, however, that the Managing General Partner shall have no liability to the Partnership or any holder of Series 1 Units for any failure to request or obtain such form from any holder of Series 1 Units or for withholding or failing to withhold in respect of any holder of Series 1 Units who has not furnished such form to the Managing General Partner. Notwithstanding the foregoing, in no event shall the Managing General Partner withhold pursuant to clause (ii) of this Section 15.2 any such amounts in respect of any Base Distribution or Excess Distribution to the Initial Holder, unless the Managing General Partner has given advance written notice (at least 10 days prior to withholding any amounts) to the Initial Holder that such certificate is required to be provided.
15.3
Classification of Series 1 Units as Equity
Each of the Managing General Partner, the Partnership, and the holders of the Series 1 Units shall treat the Series 1 Units as equity for all U.S. federal, state, and
51
local income tax purposes, and neither the Managing General Partner, the Partnership, nor any holder of Series 1 Units shall take any position on any U.S. federal, state, or local income or franchise tax return that is inconsistent with such treatment, unless there is a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires different reporting and treatment.
16.
LEGENDS AND CERTIFICATIONS
16.1
The Series 1 Units and BPY Units have not been, and will not be, registered under the U.S. Securities Act or applicable securities laws of any state of the United States. Each certificate representing BPY Units originally issued to, or for the account or benefit of, a U.S. Person or a person in the United States, and each certificate representing the BPY Units issued in exchange therefor or in substitution thereof, shall bear the following legend (the “
U.S. Legend
”) until such time as the U.S. Legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state securities laws:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF BROOKFIELD PROPERTY PARTNERS L.P. (THE “COMPANY”) THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S (“REGULATION S”) UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN ACCORDANCE WITH RULE 144 UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND IN EACH CASE IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO (C) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE COMPANY MUST FIRST BE PROVIDED TO THE COMPANY’S TRANSFER AGENT.
52
THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES. A NEW CERTIFICATE, BEARING NO LEGEND, MAY BE OBTAINED FROM THE COMPANY’S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE COMPANY’S TRANSFER AGENT AND THE COMPANY AND, IF SO REQUIRED BY THE COMPANY’S TRANSFER AGENT, AN OPINION OF COUNSEL, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.”,
provided that if BPY is a “foreign issuer” as defined in Regulation S under the U.S. Securities Act at the time such BPY Units are being sold, and such BPY Units are being sold outside of the United States in compliance with the requirements of Rule 904 of Regulation S, the U.S. Legend may be removed by providing a declaration to the transfer agent for the BPY Units in the form set out in Schedule C to this Part II (or as BPY may reasonably prescribe from time to time) and, if requested by BPY, the Property Partnership, the Transfer Agent or the transfer agent for the BPY Units, an opinion of counsel of recognized standing in form and substance reasonably satisfactory to such requesting party, as applicable, to the effect that such sale is being made in compliance with Rule 904 of Regulation S under the U.S. Securities Act; and provided, further, that, if any BPY Units are being sold otherwise than in accordance with Rule 904 of Regulation S under the U.S. Securities Act and other than to BPY, the legend may be removed by delivery to the transfer agent for the BPY Units and BPY of an opinion of counsel, of recognized standing reasonably satisfactory to the BPY and the transfer agent for the BPY Units, that such legend is no longer required under applicable requirements of the U.S. Securities Act or any applicable state securities laws.
The transfer agent for the BPY Units shall be entitled to request any other document that it may require in accordance with its internal policies for removal of the legend set forth above.
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16.2
In connection with any redemption or exchange of Series 1 Units, in each case as set forth herein, a holder of Series 1 Units subject to such redemption or exchange who is a person in the United States, a U.S. Person, or a person requesting delivery of the BPY Units issuable upon such redemption or exchange in the United States must provide (a) a completed and executed U.S. Purchaser Certification or (b) an opinion of counsel of recognized standing in form and substance reasonably satisfactory to BPY and BPY’s transfer agent that the issuance of BPY Units pursuant to such redemption or exchange is exempt from the registration requirements of applicable securities laws of any state of the United States and the U.S. Securities Act.
17.
UNISSUED OR REACQUIRED UNITS
Series 1 Units not issued or that have been issued and exchanged, redeemed or otherwise purchased or acquired by the Partnership shall be restored to the status of authorized but unissued Class A Preferred Units without designation as to series, until such units are once more designated as part of a particular series by the Managing General Partner.
18.
NO SINKING FUND
Series 1 Units are not subject to the operation of a sinking fund.
19.
PREEMPTION
Holders of Series 1 Units shall not have any rights of preemption with regard to any Partnership Interests.
54
SCHEDULE A
EXCHANGE NOTICE
To:
Brookfield Property L.P. (the “
Partnership
”)
This notice is given pursuant to Section 7.1 of Part II of Schedule A (the “
Unit
Provisions
”) to that certain Second Amended and Restated Limited Partnership Agreement for Brookfield Property L.P. dated August 8, 2013, as amended (the “
Limited Partnership Agreement
”) and all capitalized terms used in this notice but not herein defined have the meanings ascribed to them in the Unit Provisions.
The undersigned hereby notifies the Partnership that, the undersigned irrevocably elects to exchange:
o
all Series 1 Unit(s) represented by the certificate or book-entry share attached to this Exchange Notice; or
o
of the Series 1 Units(s) represented by the certificate or book-entry share attached to this Exchange Notice,
for BPY Units in the manner specified in, and in accordance with, Section 7 of the Unit Provisions.
In accordance with Section 7 of the Unit Provisions, the undersigned herewith surrenders the certificate or book-entry share attached to this Exchange Notice and directs that the BPY Units issuable and deliverable upon the exchange be issued to the Person indicated below. (If BPY Units are to be issued in the name of a Person other than the holder, all requisite transfer taxes must be tendered by the undersigned.)
Certificates representing the BPY Units will be available, on and after the Exchange Date, to be picked up at [
address to be inserted]
.
The undersigned hereby acknowledges that the undersigned is aware that the BPY Units received upon exchange may be subject to restrictions on resale under applicable securities law.
The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):
o
(A) the undersigned holder at the time of exchange of the Series 1 Unit(s) (i) is not in the United States, (ii) is not exchanging the Series 1 Unit(s) for the account or benefit of a person in the United States, (iii) is not a U.S. person, (iv) did not execute or deliver this exchange notice in the United States and (v) delivery of the BPY Unit(s) to be exchanged for the Series 1 Unit(s) will not be made to an address in the United States; or
o
(B) the undersigned holder is either (i) a holder in the United States, (ii) executing or delivering this exchange notice in the United States, (iii) a U.S. person, or (iv) requesting delivery of the BPY Unit(s) to be exchanged for the Series 1 Unit(s) in the United States,
55
and the undersigned holder has delivered to Brookfield Property Partners L.P. (the “
Company
”) and the Company’s transfer agent, CST Trust Company, (a) a completed and executed U.S. Purchaser Certification in substantially the form attached to as Schedule B to Part II of Schedule A to the Limited Partnership Agreement or (b) an opinion of counsel (which will not be sufficient unless it is in form and substance reasonably satisfactory to the Company to the effect that with respect to the BPY Unit(s) to be delivered upon exchange, the issuance of such securities has been registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration requirements is available.
It is understood that the Company and CST Trust Company may require evidence to verify the foregoing representations.
The undersigned hereby represents and warrants to the Partnership that the undersigned is the sole registered and beneficial owner of the Series 1 Unit(s) to be acquired by the Partnership, free and clear of all liens, claims, encumbrances, security interests and adverse claims or interests.
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(Date)
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(Signature of Registered Unitholder)
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(Guarantee of Signature)
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NOTE:
This panel must be completed and the certificate or book-entry share attached to this Exchange Notice, together with such additional documents as the Transfer Agent and the Partnership may require, must be deposited at [
address to be inserted]
.
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(Name of Person in Whose Name Securities and/or Cheque(s)
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Are to be Registered, Issued or Delivered (please print))
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(Street Address or P.O. Box)
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(City, Province/State, Country and Postal/Zip Code)
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(Signature of Registered Unitholder)
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Guarantor’s signature
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NOTE:
If this Exchange Notice is for less than all of the Series 1 Unit(s) represented by this certificate or book-entry share, a certificate representing the balance of the Series 1 Units will be issued and registered in the name of the unitholder as it appears on the register of the Partnership.
57
SCHEDULE B
U.S. PURCHASER CERTIFICATION
TO:
Brookfield Property Partners L.P. (the “
Company
”)
Brookfield Property L.P. (the “
Partnership
”)
AND TO:
CST Trust Company as Transfer Agent
We are delivering this letter in connection with the exchange of Series 1 Units of the Partnership for BPY Units of the Company pursuant to Section 7.1 of Part II of Schedule A (the “
Unit
Provisions
”) to that certain Second Amended and Restated Limited Partnership Agreement for Brookfield Property L.P. dated August 8, 2013, as amended (the “
Limited Partnership Agreement
”). All capitalized terms used herein but not herein defined have the meanings ascribed to them in the Unit Provisions.
We hereby confirm that
(a)
we are an “accredited person” defined under Rule 501(a) of the U.S. Securities Act;
(b)
we are acquiring the BPY Units for our own account;
(c)
we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of acquiring the BPY Units;
(d)
we are not acquiring the BPY Units with a view to distribution thereof or with any present intention of offering or selling any of the BPY Units, except (A) to the Company, (B) outside the United States in accordance with Rule 904 under the U.S. Securities Act or (C) inside the United States pursuant to the exemption from the registration requirements of the U.S. Securities Act provided by Rule 144, if available, and in accordance with any applicable U.S. state securities or “blue sky” laws;
(e)
we acknowledge that we have had access to such financial and other information as we deem necessary in connection with our decision to exchange the Series 1 Units for BPY Units; and
(f)
we acknowledge that we are not acquiring the BPY Units 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, television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.
We understand that the BPY Units are being offered in a transaction not involving any public offering within the United States within the meaning of the U.S. Securities Act and have not
58
been and will not be registered under the U.S. Securities Act, or the securities laws of any state of the United States. We further understand that any BPY Units acquired by us will bear a legend reflecting the fact that we will not offer, sell or otherwise transfer any of the BPY Units, directly or indirectly, unless the sale is (A) to the Company; (B) made outside the United States in compliance with the requirements of Rule 904 of Regulation S under the U.S. Securities Act, (C) in accordance with Rule 144 under the U.S. Securities Act, if available, and in compliance with any applicable U.S. state securities laws, (D) in another transaction that does not require registration under the U.S. Securities Act, and, in each case, in accordance with applicable U.S. state securities laws; provided that, in the case of transfers pursuant to (C) or (D) above, a legal opinion in form and substance reasonably satisfactory to the Company must first be provided that the sale of such securities is not required to be registered under the U.S. Securities Act.
We acknowledge that you will rely upon our confirmations, acknowledgements and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate or complete.
DATED this day of , 20 .
(NAME OF U.S. PURCHASER)
59
SCHEDULE C
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO:
Brookfield Property Partners L.P. (the “
Company
”)
AND TO:
CST Trust Company, as Transfer Agent
The undersigned (a) acknowledges that the sale of the securities of Brookfield Property Partners L.P. (the “
Company
”) to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “
U.S. Securities Act
”), and (b) certifies that (1) the undersigned is not an affiliate (as that term is defined in Rule 405 under the U.S. Securities Act) of the Company, (2) the offer of such securities was not made to a person in the United States and either (A) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (B) the transaction was executed in, on or through the facilities of the TSX Venture Exchange, the Toronto Stock Exchange or another designated offshore securities market (as that term is defined in Regulation S under the U.S. Securities Act) and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as such term is defined in Rule 144(a)(3) under the U.S. Securities Act), (5) the seller does not intend to replace such securities with fungible unrestricted securities, and (6) the contemplated sale is not a transaction, or part of a series of transactions which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.
Signature
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PART III
CLASS A PREFERRED UNITS - SERIES 2
1.
DESIGNATION
The second series of Class A Preferred Units shall consist of 24,000,000 preferred limited partnership interests which shall be designated as Class A Preferred Units, Series 2 (hereinafter referred to as the “Series 2 Units”) and shall have attached thereto the rights, privileges, restrictions and conditions set out herein.
2.
DEFINITIONS
The following definitions shall be for the purpose of Part III of this Schedule A:
2.1
“
Base Distribution
” has the meaning ascribed thereto in Section 4.1.1.
2.2
“
Capital Reorganization
” has the meaning ascribed thereto in Section 9.1.5.
2.3
“
Change in Tax Law
” means a change in U.S. tax Law or administrative practice (including the issuance of Treasury Regulations in temporary or final form, revenue rulings, notices, and announcements, but in the case of a notice or announcement, only to the extent such notice or announcement indicates an intention to issue Treasury Regulations or a revenue ruling that would result in a change in Law, but excluding any private letter rulings, technical advice memoranda or other non-precedential or non-binding authorities) or a judicial decision.
2.4
“
Closing Price
” means the closing sale price or, if no closing sale price is reported, the last reported sale price of the BPY Units on the Securities Exchange on the date of determination, or, if the BPY Units are not then listed on a Securities Exchange, the Closing Price will be determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate, and
61
provided further that any such selection, opinion or determination by the Managing General Partner will be conclusive and binding, absent manifest error.
2.5
“
Current Market Price
” means:
2.5.1
the volume-weighted average trading price of a BPY Unit on the Securities Exchange during the previous 20 consecutive trading days ending on the fifth trading day prior to the date of determination; or
2.5.2
if the BPY Units are not then listed on a Securities Exchange, the Current Market Price will be determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate, and provided further that any such selection, opinion or determination by the Managing General Partner will be conclusive and binding, absent manifest error.
2.6
“
Distribution Payment Dates
” has the meaning ascribed thereto in Section 4.1.1.
2.7
“
Equity Securities
” means securities carrying the right to participate in earnings to an unlimited degree.
2.8
“
Excess Distribution
” means the amount, if any, by which (x) the greater of (i) the aggregate distributions (including any ordinary and extraordinary distributions) declared in any Quarter on the Exchange Number of BPY Units and (ii) the aggregate distributions (including any ordinary and extraordinary distributions) paid in any Quarter on the Exchange Number of Redemption-Exchange Units divided by the Exchange Ratio, exceeds (y) the Base Distribution in such Quarter with respect to one Series 2 Unit; provided that the Base Distribution for the period from the Issue Date to December 31, 2014 shall be deemed to be, for the purposes of calculating the Excess Distribution only, $0.40625 per Series 2 Unit.
2.9
“
Excess Distribution Payment
” has the meaning ascribed thereto in Section 4.1.2.
62
2.10
“
Exchange Consideration
” has the meaning ascribed thereto in Section 7.2.1.
2.11
“
Exchange Date
” has the meaning ascribed thereto in Section 7.2.1.
2.12
“
Exchange Notice
” has the meaning ascribed thereto in Section 7.1.
2.13
“
Exchange Number
” means 0.97276, subject to adjustment from time to time in accordance with Section 9.
2.14
“
Exchange Preferred Units
” has the meaning ascribed thereto in Section 7.1.
2.15
“
Exchange Price
” means, for each Series 2 Unit, an amount equal to the Issue Price divided by the Exchange Number, which on the Issue Date is $25.70.
2.16
“
Fair Market Value
” means, as at any date:
2.16.1
for a BPY Unit, the Current Market Price; or
2.16.2
for a security listed and posted on a stock exchange (other than a BPY Unit), the volume-weighted average trading price during the previous 20 consecutive trading days ending on the fifth trading day prior to the date of determination, according to the official price quotations of the stock exchange, provided that, for a security listed and posted on more than one stock exchange, the price quotations used shall be those of the stock exchange on which the greatest volume of trading in the security occurs as determined by the Managing General Partner; or
2.16.3
for any other security or property that is not cash, the fair market value thereof at such date as, determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate; or
2.16.4
for any property that is cash, the amount thereof.
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each such determination by the Managing General Partner will be conclusive and binding, absent manifest error.
2.17
“
Freely Tradable
” means, in respect of shares of capital of any class of any corporation or limited partnership units of any class of any limited partnership, shares or limited partnership units, as the case may be, which can be traded by the holder thereof without any restriction other than pursuant to applicable securities laws.
2.18
“
Initial Holder
” means the holder to which all of the Series 2 Units are initially issued on the Issue Date and any Affiliate of such holder who holds Series 2 Units from time to time.
2.19
“
Initial Redemption Date
” means December 31, 2018.
2.20
“
Issue Date
” has the meaning ascribed thereto in Section 3.1.
2.21
“
Issue Price
” means $25.00.
2.22
“
Maturity Date
” has the meaning ascribed thereto in Section 5.3.
2.23
“
NYSE
” has the meaning ascribed thereto in Section 2.35.
2.24
“
Ordinary BPY Distribution
” means a regularly scheduled quarterly distribution, declared and paid on the BPY Units that is not a “special” or “extraordinary” distribution or exceeds a level which is reasonably expected to continue in subsequent Quarters.
2.25
“
Post-Distribution Price
” has the meaning ascribed thereto in Section 9.1.3.
2.26
“
Preferred Call Notice
” has the meaning ascribed thereto in Section 8.2.1.
2.27
“
Preferred Call Right
” has the meaning ascribed thereto in Section 8.1.
2.28
“
Redemption Consideration
” has the meaning ascribed thereto in Section 5.1.
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2.29
“
Redemption Date
” has the meaning ascribed thereto in Section 5.4.1.
2.30
“
Redemption Notice
” has the meaning ascribed thereto in Section 5.1.
2.31
“
Redemption Price
” means for each Series 2 Unit, an amount equal to the aggregate of:
2.31.1
$25.00 per Series 2 Unit; plus
2.31.2
an amount equal to the full amount of all distributions accrued (whether or not declared) and unpaid on such Series 2 Unit up to (but excluding) the date of payment.
2.32
“
Regulation D
” means Regulation D as promulgated by the SEC under the U.S. Securities Act.
2.33
“
Regulation S
” means Regulation S as promulgated by the SEC under the U.S. Securities Act.
2.34
“
Reorganization Event
” has the meaning ascribed thereto in Section 9.2.1.
2.35
“
Right to Exchange
” has the meaning ascribed thereto in Section 7.1.
2.36
“
Right to Redeem
” has the meaning ascribed thereto in Section 5.1.
2.37
“
SEC
” means the United States Securities and Exchange Commission.
2.38
“
Section 9.1.1 Transaction
” has the meaning ascribed thereto in Section 9.1.1.
2.39
“
Securities Exchange
” means the New York Stock Exchange (“
NYSE
”) or, if the BPY Units are not then listed on the NYSE, the stock exchange that the BPY Units are then listed on, provided that, if the BPY Units are listed on more than one stock exchange (neither of which are the NYSE), the “Securities Exchange” shall be the stock exchange on which the greatest volume of trading in the BPY Units occurs.
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2.40
“
Series 2 Units
” has the meaning ascribed thereto in Section 1.
2.41
“
Specified Fraction
” has the meaning ascribed thereto in Section 4.1.3.
2.42
“
Substantial Issuer Bid
” has the meaning ascribed thereto in Section 9.1.4.
2.43
“
Transaction Value
” has the meaning ascribed thereto in Section 9.2.1.
2.44
“
Transfer Agent
” means the Partnership or any transfer agent appointed from time to time to act as registrar and transfer agent for the Series 2 Units.
2.45
“United States”
means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.
2.46
“U.S. Exchange Act”
means the United States Securities Exchange Act of 1934, as amended.
2.47
“U.S. Legend”
has the meaning ascribed thereto in Section 16.1.
2.48
“U.S. Person”
means a “U.S. person” as such term is defined in Regulation S under the U.S. Securities Act.
2.49
“U.S. Purchaser Certification”
means the U.S. Purchaser Certification in substantially the form of Schedule B to this Part III.
2.50
“U.S. Securities Act”
means the United States Securities Act of 1933, as amended.
2.51
“
Valuation Period
” has the meaning ascribed thereto in Section 9.1.3.
Unless otherwise stated, all references in Part III of this Schedule A to Sections or subsections refer to Sections or subsections of Part III of Schedule A.
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3.
ISSUE DATE AND CONSIDERATION FOR ISSUE
3.1
The Series 2 Units shall be dated as of December 3, 2014 (the “
Issue Date
”); provided however, that distributions on the Series 2 Units shall only accrue from and after January 1, 2015.
3.2
The consideration for the issue of each Series 2 Unit shall be $25.00.
4.
DISTRIBUTIONS
4.1
Payment of Distributions
4.1.1
The holders of the Series 2 Units shall be entitled to receive, and the Partnership shall pay thereon, if, as and when declared by the Managing General Partner, out of moneys of the Partnership properly applicable to the payment of distributions and without regard to the income of the Partnership, a fixed cumulative preferential cash distribution equal to $1.6250 per Series 2 Unit per annum (the “
Base Distribution
”) less any tax required to be deducted and withheld, payable in lawful money of the United States in equal quarterly amounts on the last day of each of the months of March, June, September and December in each year (the “
Distribution Payment Dates
”) up to but excluding the applicable Maturity Date. The record date for the payment of the Base Distribution will be the first day of the calendar month during which a Distribution Payment Date falls or such other record date, if any, as may be fixed by the Managing General Partner that is not more than 30 nor less than 10 days prior to such Distribution Payment Date. Any such day will be the record date whether or not such day is a Business Day.
4.1.2
Subject to Section 4.1.3, if in any Quarter the Excess Distribution is a positive number, the holders of Series 2 Units shall be entitled to receive on the Distribution Payment Date for that Quarter, and the Partnership shall pay thereon, out of moneys of the Partnership properly applicable to the payment of distributions and without regard to the income of the Partnership, a further
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cumulative preferential cash distribution in an amount per Series 2 Unit equal to the Excess Distribution (the “
Excess Distribution Payment
”) less any tax required to be deducted and withheld. For example, if, in a particular Quarter and assuming no anti-dilution adjustments have occurred, BPY declared a distribution of $0.50 per Unit on the BPY Units, then a holder of Series 2 Units would receive an additional $0.08013 being: ($0.50 multiplied by the Exchange Number (0.97276)) less the quarterly Base Distribution ($1.6250/4) for each Series 2 Unit held.
4.1.3
Subject to Section 4.1.1, for any period that is less than a full Quarter with respect to any Series 2 Unit (i) that is issued, redeemed, exchanged or purchased during such Quarter or (ii) in respect of which assets of the Partnership are distributed to the holders thereof pursuant to Section 14 during such Quarter, the Base Distribution shall be deemed to accrue on a daily basis and shall be equal to the amount calculated by multiplying the amount that would otherwise be payable for a full Quarter by the Specified Fraction. “
Specified Fraction
” means a fraction of which the numerator is the number of days in such period (including the day at the beginning of such period and excluding the day at the end of such period) during which the Series 2 Unit is in issue and the denominator is the number of days in such Quarter (including the day at the beginning thereof and excluding the Distribution Payment Date at the end thereof).
4.1.4
The first Distribution Payment Date will be March 31, 2015, and the amount payable on such date will be $0.390625 per Series 2 Unit, being the Base Distribution for the period from January 1, 2015 to March 31, 2015. No Base Distribution shall accrue during the period from the Issue Date to December 31, 2014.
4.1.5
For so long as Series 2 Units remain issued and outstanding, if the distributions are not paid in full (or declared and a sum sufficient for the full payment is not so set apart) on any Distribution Payment Date on the Series 2
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Units and any Parity Securities, distributions declared on the Series 2 Units and such Parity Securities shall only be declared
pro rata
based upon the respective amounts that would have been paid on the Series 2 Units and such Parity Securities had dividends been declared and paid in full.
4.1.6
The holders of the Series 2 Units shall not be entitled to any distributions other than or in excess of the Base Distribution and the Excess Distribution Payment. For greater certainty, nothing in this Section 4.1.6 shall prevent holders of Series 2 Units from participating in any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4, solely at the discretion of the Partnership and subject to TSX approval, as if they had exchanged their Series 2 Units immediately prior to the effective date or record date of the event.
4.2
Cumulative Payment of Distributions
If on any Distribution Payment Date, the Base Distribution or the Excess Distribution Payment accrued to such date is not paid in full on all of the Series 2 Units then Outstanding, such distributions, or the unpaid part thereof, shall be paid on a subsequent date or dates determined by the Managing General Partner.
4.3
Method of Payment
All Base Distributions and Excess Distribution Payments shall be paid by the Partnership directly or through the Transfer Agent or through any other Person or agent to the holders of Series 2 Units according to their holdings as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of assignment or otherwise.
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5.
REDEMPTION
5.1
Optional Redemption
Subject to the right of the holders of the Series 2 Units to require the Partnership to exchange any or all of the Series 2 Units in accordance with Section 7 and subject to Section 7.3, the Partnership may, upon giving notice in writing as hereinafter provided (the “
Redemption Notice
”) at its option at any time commencing on the Initial Redemption Date and prior to the Maturity Date provided that the Current Market Price determined on the Business Day preceding the date on which the Redemption Notice is given is not less than 130% of the Exchange Price, redeem all, or from time to time any part, of the then Outstanding Series 2 Units (the “
Right to Redeem
”) by payment to the holders of such Series 2 Units an amount for each Series 2 Unit so redeemed equal to the Redemption Price (less any tax required to be deducted and withheld). Payment of the Redemption Price will be satisfied in full by the Partnership causing to be delivered, for each Series 2 Unit being redeemed, (x) such number of Freely Tradable BPY Units obtained by dividing the Issue Price by the Current Market Price determined on the Business Day preceding the date of the Redemption Notice, such units to be duly issued, fully paid and non-assessable and free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, and, (y) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions, less any tax required to be deducted and withheld, on such Series 2 Unit (together, the “
Redemption Consideration
”; provided that for purposes of Section 5.3 the Current Market Price will be determined on the Business Day preceding the Maturity Date). Notwithstanding anything contained herein to the contrary, the Partnership shall not redeem any of the Series 2 Units under this Section 5.1 at any time that the BPY Units are not listed on the NYSE, TSX or other national securities exchange in the United States or Canada.
5.2
Partial Redemption
In case only a part of the Series 2 Units is to be redeemed at any time, the Series 2 Units to be redeemed shall be selected
pro rata
from the holders of the Series 2 Units in proportion to the number of Series 2 Units held by such holders, by lot or some other method as
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the Managing General Partner in its sole discretion determines to be fair and equitable.
5.3
Mandatory Redemption
Subject to 7.3, on December 31, 2024 (the
“Maturity Date
”), if such Series 2 Units have not been exchanged, redeemed or purchased by the Partnership, the Partnership shall redeem the then Outstanding Series 2 Units by payment to each applicable holder of the Series 2 Units, of the Redemption Price (less any tax required to be deducted and withheld) in the form of the Redemption Consideration.
5.4
Method of Redemption
5.4.1
The Partnership shall, at least 30 days and not more than 60 days before the Maturity Date or any other date fixed for redemption (the “
Redemption Date
”), send or cause to be sent to the holders of the Series 2 Units to be redeemed a Redemption Notice setting out: (i) that the Partnership’s Right to Redeem has been exercised or that the Maturity Date is up-coming; (ii) the number of the Series 2 Units held by the holder to whom it is addressed which are to be redeemed; (iii) the Redemption Price; (iv) the Redemption Date; (v) the formula for determining the Redemption Price; (vi) that upon presentation and surrender of the certificates or book-entry shares for the Series 2 Units to be redeemed, the holders of such Series 2 Units will obtain payment as specified in Section 5 in respect of the Series 2 Units being redeemed, specifying where the payment (in the form of the Redemption Consideration) will be available for pick up, and that, if requested in writing by a holder of Series 2 Units and provided that commercial courier service is available in respect of the relevant destination, such payment will be delivered to such holders by courier at the holder’s expense; and (vii) any other matters the Partnership may deem appropriate.
5.4.2
On the Redemption Date, subject to Section 7.3, the Partnership shall make available or, if requested by the holder, cause to be delivered to each holder of Series 2 Units to be redeemed the Redemption Price (in the form of the Redemption Consideration) upon presentation and surrender of the certificate or
71
certificates or book-entry share or shares for such Series 2 Units at the registered office of the Partnership or at any office of the Transfer Agent as may be specified by the Partnership in the Redemption Notice, together with such other documents and instruments as may be required to effect a transfer of Series 2 Units under the Limited Partnership Act and the Agreement. The Partnership will: (i) make the aggregate Redemption Price for Series 2 Units held by a holder available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified by the Partnership in the Redemption Notice, on the Redemption Date; or (ii) at the written request of such holder and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, deliver or cause to be delivered, by courier, the aggregate Redemption Price payable to such holder at the address of such holder recorded in the register of the Partnership or at a different address as such holder may direct in writing in a manner satisfactory to the Transfer Agent, as soon as practicable on or after the Redemption Date or such later date as the holder may request. On and after the Redemption Date, the holders of the Series 2 Units called for redemption will cease to be holders of the Preferred Units to be redeemed and will not be entitled to exercise any of the rights of holders in respect thereof, other than the right to receive their proportionate part of the total Redemption Price, and will not be entitled to receive any distributions in respect thereon (including to avoid double payment distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Series 2 Units on a record date for the payment of a distribution), unless payment of the aggregate Redemption Price deliverable to a holder for Series 2 Units is not be made upon presentation and surrender of the holder’s Series 2 Units in accordance with the foregoing provisions, in which case the rights of the holder will remain unaffected until the aggregate Redemption Price deliverable to such holder has been paid in the manner hereinbefore provided. In the case of a redemption pursuant to Section 5.1, if only a part of the Series 2 Units represented by any certificate or book-entry share is redeemed, a new certificate will be issued to the
72
holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 2 Units at the expense of the Partnership.
5.4.3
No fractional BPY Units shall be delivered in connection with the delivery of the Redemption Consideration on the Redemption Date in accordance with this Section 5, but in lieu thereof, the Partnership shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the date of the Redemption Notice, if the redemption is pursuant to Section 5.1 or the Business Day preceding the Maturity Date, if the redemption is pursuant to Section 5.3).
5.4.4
The Partnership will have the right at any time after the sending of the Redemption Notice to deposit or cause to be deposited any cash portion of the Redemption Consideration in a custodial account with any chartered bank or trust company in Canada named in the Redemption Notice and any interest allowed on such deposit will belong to the Partnership. Provided that the cash portion of the Redemption Consideration has been so deposited prior to the Redemption Date and that the remaining portion of the total Redemption Consideration has otherwise been paid in accordance with Section 5.4.2, on and after the Redemption Date, the Series 2 Units will be redeemed and the rights of the holders thereof after the Redemption Date will be limited to receiving their proportionate part of the total Redemption Price for such Series 2 Units so deposited, against presentation and surrender of the said certificates or book-entry shares held by them, respectively, in accordance with the foregoing provisions. Upon such payment or deposit of the total Redemption Price, the holders of the Series 2 Units will thereafter be considered and deemed for all purposes to be holders of the BPY Units delivered to them. Any funds so deposited which remain unclaimed on the date which is two years from the Redemption Date shall be forfeited to the Partnership and paid over to or as directed by the Partnership and the former holders of the Series 2 Units shall thereafter have no right to receive their respective entitlement to the Redemption Price.
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6.
PURCHASE FOR CANCELLATION
Subject to the provisions of Section 10, the Partnership may purchase for cancellation at any time all or from time to time the whole or any part of the Outstanding Series 2 Units. Series 2 Units so purchased shall be cancelled.
7.
EXCHANGE OF SERIES 2 UNITS
7.1
Exchange at Option of Holder
Notwithstanding the delivery of a Redemption Notice and subject to applicable Laws, a holder of the Series 2 Units shall have the right (“
Right to Exchange
”), exercisable at any time and from time to time, to require the Partnership to exchange any or all of the Series 2 Units registered in the name of such holder for consideration per Series 2 Unit equal to the Exchange Number of Freely Tradable BPY Units plus all accrued (whether or not declared) and unpaid cash distributions on such Series 2 Units (less any tax required to be deducted and withheld), which will be satisfied by the Partnership causing to be delivered to such holder the Exchange Consideration on the Exchange Date. The holder must give notice of a requirement to exchange by presenting and surrendering at the registered office of the Partnership or at any office of the Transfer Agent as may be specified by the Partnership by notice to the holders of Series 2 Units from time to time the certificate or certificates or book-entry share or shares representing the Series 2 Units that the holder desires to have the Partnership exchange, free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, together with such other documents and instruments as may be required to effect a transfer of Series 2 Units under the Limited Partnership Act, the Agreement, together with a duly executed statement (the “
Exchange Notice
”) in the form of Schedule A to this Part III or in such other form as may be acceptable to the Partnership specifying that the holder desires to have all or any number specified therein of the Series 2 Units represented by such certificate or certificates or book-entry shares or shares (the “
Exchange Preferred Units
”) exchanged by the Partnership; provided that the Exchange Notice must be delivered prior to the close of business on the earlier of: (i) the Maturity Date; and (ii) the Business Day preceding any applicable Redemption Date.
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7.2
Method of Exchange
7.2.1
In the case of an exchange of Series 2 Units under this Section 7, upon receipt by the Partnership or the Transfer Agent in the manner specified in Section 7.1 of a certificate or book-entry share representing the number of Series 2 Units which the holder desires to have the Partnership exchange, together with an Exchange Notice, the Partnership will exchange the Exchange Preferred Units effective at the close of business on the fifth Business Day following the date of the Exchange Notice (the “
Exchange Date
”). Payment for the Exchange Preferred Shares will be satisfied in full by the delivery of, for each Exchange Preferred Unit, (x) the Exchange Number of Freely Tradable BPY Units, such units to be duly issued, fully paid and non-assessable and free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, and, (y) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions, less any tax required to be deducted and withheld, on such Exchange Preferred Unit (together, the “
Exchange Consideration
”). The Partnership shall satisfy its obligation to deliver the Exchange Consideration by, on the Exchange Date, (i) making the aggregate Exchange Consideration available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified in the Maturity Notice, Redemption Notice or Exchange Notice, as applicable; or (ii) at the written request of such holder pursuant to the Exchange Notice and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, delivering or causing to be delivered the Exchange Consideration to the relevant holder at the address specified in the holder’s Exchange Notice. If only a part of the Series 2 Units represented by any certificate or book-entry share is exchanged a new certificate will be issued to the holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 2 Units at the expense of the Partnership.
7.2.2
On and after the close of business on the Exchange Date, the holder of the Exchange Preferred Units will cease to be a holder of such Exchange Preferred Units and will not be entitled to exercise any of the rights of a holder in
75
respect thereof, other than the right to receive its proportionate part of the total Exchange Consideration, and will not be entitled to receive any distributions in respect thereon (including distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Exchange Preferred Units on a record date for the payment of a distribution), unless upon presentation and surrender of the holder’s Series 2 Units in accordance with the foregoing provisions, payment of the aggregate Exchange Consideration to such holder will not have been made, in which case the rights of such holder will remain unaffected until such aggregate Exchange Consideration has been delivered in the manner hereinbefore provided. On and after the close of business on the Exchange Date, provided that presentation and surrender of the holder’s Series 2 Units and payment of such aggregate Exchange Consideration has been made in accordance with the foregoing provisions, the holder of the Exchange Preferred Units so exchanged by the Partnership will thereafter be considered and deemed for all purposes to be a holder of the BPY Units delivered to such holder.
7.2.3
Notwithstanding any other provision of this Section 7 if:
(i)
the exercise of the rights of the holders of the Series 2 Units to require the Partnership to exchange any Series 2 Units pursuant to this Section 7 on any Exchange Date would require listing approval or any similar document to be issued in order to obtain the approval of the TSX and/or the NYSE to the listing and trading (subject to official notice of issuance) of the BPY Units that would be required to be delivered to such holders of Series 2 in connection with the exercise of such rights; and
(ii)
as a result of (i) above, it would not be practicable (notwithstanding the reasonable endeavours of BPY) to obtain such approvals in time to enable all or any of such Units to be admitted to listing and trading by the TSX and/or the NYSE (subject to official notice of issuance) when so delivered, the Exchange Date will, notwithstanding any other date specified or otherwise deemed to be specified in any relevant Exchange Notice, be
76
deemed for all purposes to be the earlier of (i) the second Business Day immediately following the date the approvals referred to in Section 7.2.3(i) are obtained, and (ii) the date which is 30 Business Days after the date on which the relevant Exchange Notice is received by the Partnership, and references in this Section 7 to such Exchange Date will be construed accordingly.
7.2.4
No fractional BPY Units shall be delivered in connection with the delivery of the Exchange Consideration on the Exchange Date in accordance with this Section 7, but in lieu thereof, the Partnership shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the Exchange Date).
7.3
Automatic Exchange
If on the Business Day preceding any Redemption Date the value of the Exchange Number of BPY Units to be received by a holder of the Series 2 Units upon exercise of the Right to Exchange for one Series 2 Unit (which value shall be determined using the Current Market Price determined on the Business Day preceding the Redemption Date) exceeds the Issue Price, the holder shall be deemed to have exercised the Right to Exchange with respect to all of such holder’s Series 2 Units to be redeemed on the Redemption Date, unless the holder provides written notice to the Partnership prior to such Business Day specifying that the Series 2 Units are not to be so exchanged.
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8.
PREFERRED CALL RIGHT
8.1
Preferred Call Right
At any time the Partnership is required to make available or deliver BPY Units to the holder of Series 2 Units, BPY shall have the right (the “
Preferred Call Right
”) to acquire all (but not less than all) the Series 2 Units (and all rights in respect thereof, including rights to declared but unpaid distributions) to be redeemed, pursuant to Section 5, or exchanged, pursuant to Section 7, in consideration for the aggregate Redemption Consideration or the aggregate Exchange Consideration, as applicable.
8.2
Exchange of Series 2 Units for BPY Units
8.2.1
The Partnership shall notify BPY of each Redemption Date and Exchange Date, at least four Business Days prior to such date. At any time within two Business Days from the date of BPY’s receipt of such notice, BPY may elect to exercise the Preferred Call Right and shall give written notice to the Partnership and to the holder of the Series 2 Units of such election (the “
Preferred Call Notice
”). The Preferred Call Notice shall contain all relevant information, and shall be presented together with all related certificates, book-entry shares and documents that the Partnership may reasonably require or as may be required by applicable Law to effect the Preferred Call Right.
8.2.2
If BPY exercises its Preferred Call Right, on the Redemption Date or Exchange Date, as applicable, the holder will deliver to BPY the certificate or certificates or book-entry share or shares representing the Series 2 Units being sold pursuant to the Preferred Call Right on such date, together with such other documents and instruments as may be required to effect a transfer of Series 2 Units under the Limited Partnership Act, the Agreement and such additional documents and instruments as the Transfer Agent, the Partnership and BPY may reasonably require. Concurrently with such delivery, BPY shall (i) make the aggregate Redemption Consideration or the aggregate Exchange Consideration, as applicable, available to be picked up at the registered office of the Partnership or
78
at any office of the Transfer Agent, as may be specified in the Redemption Notice or Exchange Notice, as applicable, or (ii) at the written request of such holder and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, deliver or cause to be delivered, by courier, the consideration payable to such holder at the address of such holder recorded in the register of the Partnership or at a different address as such holder may direct in writing in a manner satisfactory to the Transfer Agent, as soon as practicable after the Redemption Date or Exchange Date, as applicable, or such later date as the holder may request. The BPY Units issued to the holder of the Series 2 Units shall be duly issued, fully paid and non-assessable, free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest. Other than as specifically contemplated in the Agreement, the BPY Units issued to any holder of Series 2 Units pursuant to Section 8.2.1 will be issued in accordance with the BPY Partnership Agreement.
8.2.3
On and after the close of business on the Redemption Date or Exchange Date, as applicable, the holder of the Series 2 Units acquired by BPY will cease to be a holder of such Series 2 Units and will not be entitled to exercise any of the rights of a holder in respect thereof, other than the right to receive its proportionate part of the total Redemption Consideration or Exchange Consideration, as applicable, and will not be entitled to receive any distributions in respect thereon (including distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Series 2 Units on a record date for the payment of a distribution), unless upon presentation and surrender of the holder’s Series 2 Units in accordance with the foregoing provisions, payment of the aggregate Redemption Consideration or aggregate Exchange Consideration, as applicable, to such holder will not have been made, in which case the rights of such holder will remain unaffected until such aggregate Redemption Consideration or aggregate Exchange Consideration, as applicable, has been delivered in the manner hereinbefore provided. On and after the close of business on the Redemption Date or Exchange Date, as applicable, provided that
79
presentation and surrender of the holder’s Series 2 Units and payment of such aggregate Redemption Consideration or aggregate Exchange Consideration has been made in accordance with the foregoing provisions, the holder of the Series 2 Units acquired by BPY will thereafter be considered and deemed for all purposes to be a holder of the BPY Units delivered to such holder, and BPY shall thereafter be considered and deemed for all purposes to be a holder of the Series 2 Units and shall receive the full amount of any distributions declared but unpaid as of such date.
8.2.4
The Managing General Partner and the Partnership shall take all steps necessary under this Agreement to effect the transfer of such Series 2 Units, including the registration of such transfer in the Partnership’s register of Limited Partners and by issuing such Series 2 Units in the name of BPY representing the Series 2 Units transferred to BPY in accordance with this Section 8.2, without expense to BPY.
8.2.5
If only a part of the Series 2 Units represented by any certificate or book-entry share is purchased by BPY pursuant to its Preferred Call Right a new certificate will be issued to the holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 2 Units at the expense of the Partnership.
8.2.6
No fractional BPY Units shall be delivered in connection with the exercise of the Preferred Call Right, but in lieu thereof, BPY shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the Redemption Date or Exchange Date, as applicable).
8.3
Exchange of Series 2 Units for Managing General Partner Units
Immediately following BPY’s purchase of Series 2 Units, BPY shall exchange such Series 2 Units for (i) that number of Managing General Partner Units equal to the number of BPY Units included in the Redemption Consideration or the Exchange Consideration, as
80
applicable, and (ii) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions on such Series 2 Units, less any tax required to be deducted and withheld. In addition to any other Units previously held by BPY, BPY will be considered and deemed for all purposes to be the holder of the number of Managing General Partner Units equal to the number of Series 2 Units exchanged pursuant to the Preferred Call Right.
8.4
Delegation of Rights and Obligations
BPY may designate another member of the BPY Group to exercise its rights (to deliver the Exchange Consideration or the Redemption Consideration, as applicable) in this Section 8.
9.
ADJUSTMENTS
9.1
Adjustment upon Consolidation, Subdivision, Distributions or Repurchases
9.1.1
If BPY shall, after the Issue Date (i) fix a record date for the payment of a stock distribution or the making of a distribution with respect to BPY Units in BPY Units to all or substantially all of the holders of the BPY Units, (ii) subdivide or redivide the BPY Units into a greater number of units, or (iii) reduce, combine or consolidate the BPY Units into a smaller number of units (any of such events in clauses (i), (ii) and (iii) being herein called a “
Section 9.1.1 Transaction
”), then, in any such event, the Exchange Number shall be adjusted, effective immediately after the record date in the case of clause (i) or the effective date in the case of clauses (ii) and (iii), so that each holder of the Series 2 Units shall thereafter be entitled to receive upon exchange of Series 2 Units pursuant to the Right to Exchange, the number of the Freely Tradable BPY Units which such holder would have owned or been entitled to receive immediately following any Section 9.1.1 Transaction had such Series 2 Units been exchanged immediately prior to the record date in the case of clause (i) or the effective date in the case of clauses (ii) or (iii), such adjustment to be made such that the applicable number will equal the number determined by multiplying the Exchange Number in effect immediately prior to the record date or the effective date, as the case may be, by a
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fraction, the numerator of which shall be the number of BPY Units outstanding immediately after giving effect to, and solely as a result of, such Section 9.1.1 Transaction and the denominator of which shall be the number of BPY Units outstanding immediately prior to the effectiveness of the Section 9.1.1 Transaction.
9.1.2
If BPY shall, after the Issue Date, fix a record date for the issue of options, rights or warrants to all or substantially all of the holders of the BPY Units entitling them for a period up to 45 days from the date of issuance of such options, rights or warrants to subscribe for or purchase BPY Units or securities convertible or exchangeable into BPY Units at a price per unit (or having a conversion or exchange price per unit) less than the Current Market Price on the earlier of such record date and the date on which BPY publicly announces its intention to make such issuance, then in each such case the Exchange Number shall be adjusted effective immediately after such record date so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the number of BPY Units outstanding at 4:59 p.m. (Toronto time) on such record date, plus such number of additional BPY Units offered for subscription or purchase pursuant to such options, rights or warrants and the denominator of which shall be the number of BPY Units outstanding at 4:59 p.m. (Toronto time) on such record date, plus such number of additional BPY Units which the aggregate offering price of the total number of BPY Units so offered for subscription or purchase pursuant to such options, rights or warrants would purchase at such Current Market Price, which shall be determined by multiplying such total number of units by the exercise price of such options, rights or warrants and dividing the product so obtained by such Current Market Price. To the extent that such options, rights or warrants expire without being exercised (or such convertible or exchangeable securities expire without being converted or exchanged), the Exchange Number shall be readjusted to the number which would then be in effect had such adjustments for the issuance of such options, rights or
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warrants been made upon the basis of only the number of BPY Units actually delivered.
9.1.3
If BPY shall, after the Issue Date, fix a record date for the making of a distribution to all or substantially all of the holders of the BPY Units of (i) Partnership Interests other than the BPY Units; (ii) rights, options or warrants to subscribe for or purchase any of its securities (other than those referred to in Section 9.1.2); or (iii) cash, evidence of indebtedness, securities, non-cash dividends not otherwise made the subject of adjustments pursuant to this Section 9 or other property or assets (other than cash distributions that constitute Ordinary BPY Distributions, distributions paid in lieu of Ordinary BPY Distributions or that portion of cash distributions to holders of BPY Units resulting in holders of the Series 2 Units receiving an Excess Distribution Payment), then in each such case the Exchange Number shall be adjusted effective immediately after such record date so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the Current Market Price as at the earlier of such record date and the date on which BPY publicly announces its intention to make such distribution and the denominator of which shall be such Current Market Price less the Fair Market Value, as of such record date of the portion of the shares, cash, evidence of indebtedness, securities or other property or assets so distributed or of such rights, options or warrants which are applicable to one BPY Unit.
If the transaction that gives rise to an adjustment pursuant to this Section 9.1.3 is one pursuant to which the distribution or the making of a distribution with respect to the BPY Units consists of units, shares or other similar equity interests in, a Subsidiary or other business unit of BPY (
e.g.
a spin-off) or consists of any other securities, that are, or when issued, will be, traded on a securities exchange or quoted on a quotation facility in Canada, the United States or elsewhere, then, in any such event, the Exchange Number shall be adjusted, effective immediately after such record date, so that it will equal the number determined by multiplying
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the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the volume-weighted average trading price of the shares, similar equity interests or other securities distributed to holders of BPY Units applicable to one BPY Unit over each of the 20 consecutive trading days commencing on and including the trading day after the date on which “ex-distribution trading” commences for such units, shares, similar equity interests or other securities on the principal exchange or other market on which they are listed, quoted or traded (the “
Valuation Period
”) plus the volume-weighted average trading price of the BPY Units over the Valuation Period (the “
Post-Distribution Price
”), and the denominator of which shall be the Post-Distribution Price.
To the extent that such distribution is not so made or to the extent that any such rights, options or warrants so distributed expire without being exercised, the Exchange Number shall be readjusted to the number which would then be in effect if such record date had not been fixed or to the number which would then be in effect based upon such shares, cash, evidence of indebtedness, securities or other property or assets actually distributed or based upon the number of securities actually delivered upon the exercise of such rights, options or warrants, as the case may be.
9.1.4
If BPY or any of its Subsidiaries shall, after the Issue Date, successfully complete a tender or exchange offer or substantial issuer bid (collectively, “
Substantial Issuer Bid
”) for the BPY Units where the cash and the value of any other consideration included in the payment per BPY Unit exceeds the volume-weighted average trading price of a BPY Unit on the Securities Exchange during the ten trading day period following the expiration of the Substantial Issuer Bid, then the Exchange Number shall be adjusted effective immediately after the expiration of the Substantial Issuer Bid so that it will equal the number determined by multiplying the Exchange Number in effect immediately prior to the expiration of the Substantial Issuer Bid by a fraction, the numerator of which shall be the aggregate Fair Market Value payable in the
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Substantial Issuer Bid, plus the product of the volume-weighted average trading price of the BPY Units over each of the 20 consecutive trading days commencing on and including the fifth trading day after the expiration of the Substantial Issuer Bid by the number of BPY Units outstanding immediately after the expiration of the Substantial Issuer Bid (after giving effect to the purchase of all BPY Units accepted for purchase or exchange in the Substantial Issuer Bid), and the denominator of which shall be the Closing Price on the trading day immediately succeeding the expiration of the Substantial Issuer Bid multiplied by the number of BPY Units outstanding immediately prior to the expiration of the Substantial Issuer Bid, including any BPY Units purchased. In the event that BPY, or one of its Subsidiaries, is obligated to purchase BPY Units pursuant to any such Substantial Issuer Bid, but BPY, or such Subsidiary, is permanently prevented by applicable Law from effecting any such purchases, or all such purchases are rescinded, then the Exchange Number shall be readjusted to be such Exchange Number that would then be in effect if such Substantial Issuer Bid had not been made.
9.1.5
If there is any reclassification of the BPY Units at any time outstanding or any change of the BPY Units, in either case, solely into other Equity Securities of BPY or a successor to BPY (including as a result of an amalgamation, arrangement, merger or similar transaction) (any such reclassification or change being called a “
Capital Reorganization
”), then each holder of a Series 2 Unit in respect of which the Right to Exchange or Right to Redeem is exercised or in respect of which payment is due on the Maturity Date, in any case following the effective date of such Capital Reorganization, will be entitled to receive, and shall accept, in lieu of the BPY Units to which such holder was theretofore entitled upon such exercise, the kind of Freely Tradable Equity Securities which such holder would have been entitled to receive immediately following such Capital Reorganization had such holder been the registered holder of the BPY Units to which such holder was entitled immediately prior to such Capital Reorganization. For the purpose of determining the number of such
85
Equity Securities resulting from such Capital Reorganization to which each such holder is entitled, and must accept, and for all other purposes of Part III of this Schedule A, each reference to BPY Units shall be deemed to be a reference to Equity Securities of the kind and number into which the BPY Units have been reclassified or changed resulting from such Capital Reorganization.
9.1.6
For purposes of this Section 9.1 all distributions of BPY Units (or securities convertible into or exchangeable for BPY Units), other securities, or other assets or property shall be deemed to occur at 5:00 p.m. (Toronto time) on the record date.
9.1.7
All adjustments to the Exchange Number shall be calculated to the nearest 1/10,000th of a BPY Unit (or if there is not a nearest 1/10,000th of a unit, to the next lower 1/10,000th of a unit).
9.1.8
No adjustment in the Exchange Number shall be made in respect of any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4 if the holders of the Series 2 Units are entitled to participate in the event on the same terms,
mutatis mutandis
, as if they had exchanged their Series 2 Units immediately prior to the effective date or record date of the event, as applicable, or, in the case of an event described in Section 9.1.3, to the extent that the holders of the Series 2 Units received an Excess Distribution Payment in respect of such event. For greater certainty, the holders of the Series 2 Units shall be entitled to participate in any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4 as if they had exchanged their Series 2 Units immediately prior to the effective date or record date of the event solely at the discretion of the Partnership and subject to TSX approval, provided that if the holders of Series 2 Units do not participate in any such event, the Exchange Number shall be adjusted as set forth in in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4.
9.1.9
No adjustment in the Exchange Number shall be required: (i) upon the issuance of BPY Units, other securities, property or assets by way of
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distribution in lieu of an Ordinary BPY Distribution to all or substantially all of the holders of the BPY Units; (ii) upon the issuance of any BPY Units pursuant to any present or future customary plan providing for the reinvestment of distributions or interest payable on interests of BPY and the investment, at market prices, of additional optional amounts in the BPY Units under any such plan; (iii) upon the repurchase of BPY Units pursuant to a normal course issuer bid; (iv) upon the issuance of any BPY Units or options or rights to purchase those BPY Units pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by BPY or any of its Subsidiaries or other Affiliates; (v) upon the issuance of any BPY Units pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the Issue Date; and (vi) upon the issuance of any BPY Units or any other security of BPY in connection with acquisitions of assets or securities of another person, including with respect to any consolidation, amalgamation, arrangement, merger or similar transaction.
9.1.10
Notwithstanding any other provision herein, no adjustment shall be made in respect of an event otherwise requiring an adjustment under this Section 9.1 except to the extent such event is actually consummated.
9.1.11
If any event occurs that would trigger an adjustment in the Exchange Number pursuant to this Section 9 under more than one subsection hereof, such event, to the extent taken into account in any adjustment, shall not result in any other adjustment hereunder.
9.1.12
After adjustment in the Exchange Number pursuant to this Section 9, any subsequent event requiring an adjustment under this Section 9 shall cause an adjustment to such Exchange Number as so adjusted.
9.2
Adjustment upon Reorganization Event
9.2.1
In the event of (i) any consolidation, amalgamation, arrangement, merger or similar transaction of BPY, or of a successor to BPY, which does not
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result in holders of the BPY Units receiving solely Equity Securities of BPY or one or more successors to BPY, (ii) a take-over bid or similar transaction which results in not less than 90% of the outstanding BPY Units being owned by a single Person or group of Persons acting jointly or in concert, or (iii) any sale, lease or other disposition involving all or substantially all of the assets of BPY (any such event being herein referred to as a “
Reorganization Event
”), each Series 2 Unit Outstanding immediately prior to the Reorganization Event shall, without the consent of the holders of the Series 2 Units, remain outstanding, but the definition of “
Exchange Consideration
” will be adjusted to provide that each holder of the Series 2 Unit, upon exchange of the Series 2 Units pursuant to the Right to Exchange, will receive, with respect to each Series 2 Unit held, cash in an amount equal to the product of the Exchange Number and the Transaction Value. For this purpose, “
Transaction Value
” means (x) for any cash received in any such Reorganization Event, the amount of cash received per BPY Unit, (y) for any property other than cash or securities received in any such Reorganization Event, an amount equal to the Fair Market Value of such property received per BPY Unit, and (z) for any securities received in any such Reorganization Event, an amount equal to the Fair Market Value of such securities received per BPY Unit, determined, in the case of each of clauses (y) and (z) as of the Exchange Date. Notwithstanding the foregoing, in lieu of delivering cash as provided above, the Partnership may at its option deliver an equivalent value of securities or other property received in such Reorganization Event, determined in accordance with clause (y) or (z) above, as applicable. The kind and amount of securities into which the Series 2 Units shall be so exchangeable at the election of the Partnership after a Reorganization Event shall be subject to adjustment as described in Section 9.1
mutatis mutandis
following the date of completion of such Reorganization Event.
9.2.2
The foregoing adjustments will be made successively whenever any Reorganization Event may occur.
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9.3
Notice of Adjustments and Certain Other Events
9.3.1
Whenever the Exchange Number is adjusted as herein provided, the Partnership shall, as soon as practicable, compute the new Exchange Number and give notice to the holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Exchange Number was calculated.
9.3.2
As soon as practicable after BPY publicly announces that any of the events which could result in an adjustment pursuant to Section 9.1 or 9.2 has occurred, or will occur, then the Partnership shall as soon as practicable deliver to the holders of the Series 2 Units a notice stating (x) the record date as of which the holders of the BPY Units to be entitled to such dividend, issue or distribution are to be determined, or (y) the date on which such Section 9.1.1 Transaction, Capital Reorganization, Reorganization Event, or other action is expected to become effective.
10.
CERTAIN RESTRICTIONS
So long as any of the Series 2 Units are outstanding, the Partnership shall not, without the approval of the holders of the Series 2 Units as a series, given as specified in Section 13:
(i)
declare, pay or set aside for payment any distributions in respect of the Junior Securities;
(ii)
call for redemption, redeem, purchase or otherwise pay off or retire for value any Junior Securities; or
(iii)
make any payments pursuant to Section 5.2.4 of the Agreement;
provided that the restrictions set out in Sections 10(i), (ii) and (iii) will not apply if (x) all accrued and unpaid Base Distributions and Excess Distributions on the Outstanding Series 2 Units have been declared and paid or set aside for payment in full for all periods prior to the
89
existing Quarter and (y) the regular record date for the existing Quarter has passed, the Base Distribution and any Excess Distributions on the Outstanding Series 2 Units have been declared in full for the existing Quarter; and provided, further, the restrictions set out in Section 10(ii) will not apply to the purchase of fractional interests in Junior Securities pursuant to the conversion or exchange provisions of such Junior Securities or the security being converted or exchanged.
11.
VOTING RIGHTS
Except as required by Law or as otherwise provided herein, the holders of the Series 2 Units shall not be entitled as such to receive notice of, to attend or to vote at any meetings of the Partnership or have any right or authority to act for or bind the Partnership or to take part or in any way to interfere in the conduct or management of the Partnership.
12.
AMENDMENT WITH APPROVAL OF HOLDERS OF THE SERIES 2 UNITS
The rights, privileges, restrictions and conditions attached to the Series 2 Units may be added to, changed or removed but only with the approval of the holders of a majority of the Outstanding Series 2 Units, given as hereinafter specified.
13.
APPROVAL OF HOLDERS OF THE SERIES 2 UNITS
13.1
The approval of the holders of the Series 2 Units as a series in respect of any matter requiring the consent of the holders of the Series 2 Units as a series may be given in such manner as may then be required by Law, subject to a minimum requirement that such approval be passed by the requisite affirmative vote of the votes cast at a meeting of the holders of Series 2 Units as a series duly called and held for that purpose in accordance with Article 17 of the Agreement or given by resolution signed by holders of Series 2 Units as a series in accordance with Article 17 of the Agreement.
13.2
Each Series 2 Unit shall entitle the holder thereof to one vote for the purposes of any approval at a meeting of the holders of the Series 2 Units or by written consent.
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14.
LIQUIDATION, DISSOLUTION OR WINDING-UP
14.1
In the event of the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary, unless the Partnership is continued under an election to reconstitute and continue the Partnership pursuant to Section 13.2.2 of the Agreement, the holders of the Series 2 Units shall be entitled to receive, from the assets of the Partnership, a sum equal to the Issue Price for each Series 2 Unit held by them respectively, plus an amount equal to all distributions accrued (whether or not declared) and unpaid thereon up to (but excluding) the date of payment, less any tax required to be deducted and withheld, the whole before any distribution of any part of the assets of the Partnership among the holders of any Junior Securities. After payment to the holders of the Series 2 Units of the amounts so payable to them, they shall not be entitled to share in any further distribution of the assets of the Partnership. Notwithstanding anything contained herein to the contrary, the Partnership shall, to the extent practicable, provide 30 days’ prior written notice to allow any holders of the Series 2 Units to exercise such holders’ Right to Exchange prior to liquidation.
14.2
In the event the assets of the Partnership available for distribution to holders of Partnership Interests upon any dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary, shall be insufficient to pay in full the amounts payable with respect to all of the Outstanding Series 2 Units and the corresponding amounts payable on any Parity Securities, the holders of the Series 2 Units and the holders of such Parity Securities shall share ratably in any distribution of assets of the Partnership in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.
15.
TAX MATTERS
15.1
Guaranteed Payments
15.1.1
Each of the Base Distribution and the Excess Distribution, whether paid or accrued, shall be treated as a guaranteed payment within the meaning of
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Section 707(c) of the Code, including for the purpose of determining Net Income and Net Loss and otherwise maintaining Capital Accounts, unless there is a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires treatment other than as a guaranteed payment for U.S. federal income tax purposes. The Managing General Partner shall notify the holders of the Series 2 Units of any such intention to change such treatment and shall cooperate in good faith with the holders of the Series 2 Units to resolve any disputes regarding such change in treatment.
15.1.2
For U.S. federal income tax purposes, the deduction attributable to any amount treated as a guaranteed payment under Section 15.1.1 shall be specially allocated to the Partners in a manner determined by the Managing General Partner in its sole discretion that is not inconsistent with the applicable provisions of the Code and Treasury Regulations.
15.2
U.S. Withholding Tax
Notwithstanding anything to the contrary herein, the Partnership shall withhold no U.S. federal income tax (including under Chapter 3, Chapter 4 or Chapter 61 of the Code) nor any U.S. state or local tax in respect of any Base Distribution or Excess Distribution, whether paid or accrued, or any other distribution on Series 2 Units (including in redemption), except for tax required to be withheld as a result of (i) a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires such withholding or (ii) the failure of any holder of Series 2 Units to timely deliver to the Partnership a valid, properly executed IRS Form W-8BEN-E, IRS Form W-9, or such other form as may be required under applicable Law as a precondition to exemption or reduction from such withholding; provided, however, that the Managing General Partner shall have no liability to the Partnership or any holder of Series 2 Units for any failure to request or obtain such form from any holder of Series 2 Units or for withholding or failing to withhold in respect of any holder of Series 2 Units who has not furnished such form to the Managing General Partner.
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Notwithstanding the foregoing, in no event shall the Managing General Partner withhold pursuant to clause (ii) of this Section 15.2 any such amounts in respect of any Base Distribution or Excess Distribution to the Initial Holder, unless the Managing General Partner has given advance written notice (at least 10 days prior to withholding any amounts) to the Initial Holder that such certificate is required to be provided.
15.3
Classification of Series 2 Units as Equity
Each of the Managing General Partner, the Partnership, and the holders of the Series 2 Units shall treat the Series 2 Units as equity for all U.S. federal, state, and local income tax purposes, and neither the Managing General Partner, the Partnership, nor any holder of Series 2 Units shall take any position on any U.S. federal, state, or local income or franchise tax return that is inconsistent with such treatment, unless there is a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires different reporting and treatment.
16.
LEGENDS AND CERTIFICATIONS
16.1
The Series 2 Units and BPY Units have not been, and will not be, registered under the U.S. Securities Act or applicable securities laws of any state of the United States. Each certificate representing BPY Units originally issued to, or for the account or benefit of, a U.S. Person or a person in the United States, and each certificate representing the BPY Units issued in exchange therefor or in substitution thereof, shall bear the following legend (the “
U.S. Legend
”) until such time as the U.S. Legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state securities laws:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF BROOKFIELD PROPERTY
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PARTNERS L.P. (THE “COMPANY”) THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S (“REGULATION S”) UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN ACCORDANCE WITH RULE 144 UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND IN EACH CASE IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO (C) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE COMPANY MUST FIRST BE PROVIDED TO THE COMPANY’S TRANSFER AGENT.
THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES. A NEW CERTIFICATE, BEARING NO LEGEND, MAY BE OBTAINED FROM THE COMPANY’S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE COMPANY’S TRANSFER AGENT AND THE COMPANY AND, IF SO REQUIRED BY THE COMPANY’S TRANSFER AGENT, AN OPINION OF COUNSEL, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.”,
provided that if BPY is a “foreign issuer” as defined in Regulation S under the U.S. Securities Act at the time such BPY Units are being sold, and such BPY Units are being sold outside of the United States in compliance with the requirements of Rule 904 of Regulation S, the U.S. Legend may be removed by providing a declaration to the transfer agent for the BPY Units in the form set out in Schedule C to this Part III (or as BPY may reasonably prescribe from time to time) and, if requested by BPY, the Property Partnership, the Transfer Agent or the transfer agent for the BPY Units, an opinion of counsel of recognized standing in form and substance reasonably satisfactory to such requesting party, as applicable, to the effect that such sale is being made in compliance with Rule 904 of Regulation S under the U.S. Securities Act; and provided, further, that, if any BPY Units are being sold otherwise than in accordance with Rule 904 of
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Regulation S under the U.S. Securities Act and other than to BPY, the legend may be removed by delivery to the transfer agent for the BPY Units and BPY of an opinion of counsel, of recognized standing reasonably satisfactory to the BPY and the transfer agent for the BPY Units, that such legend is no longer required under applicable requirements of the U.S. Securities Act or any applicable state securities laws.
The transfer agent for the BPY Units shall be entitled to request any other document that it may require in accordance with its internal policies for removal of the legend set forth above.
16.2
In connection with any redemption or exchange of Series 2 Units, in each case as set forth herein, a holder of Series 2 Units subject to such redemption or exchange who is a person in the United States, a U.S. Person, or a person requesting delivery of the BPY Units issuable upon such redemption or exchange in the United States must provide (a) a completed and executed U.S. Purchaser Certification or (b) an opinion of counsel of recognized standing in form and substance reasonably satisfactory to BPY and BPY’s transfer agent that the issuance of BPY Units pursuant to such redemption or exchange is exempt from the registration requirements of applicable securities laws of any state of the United States and the U.S. Securities Act.
17.
UNISSUED OR REACQUIRED UNITS
Series 2 Units not issued or that have been issued and exchanged, redeemed or otherwise purchased or acquired by the Partnership shall be restored to the status of authorized but unissued Class A Preferred Units without designation as to series, until such units are once more designated as part of a particular series by the Managing General Partner.
18.
NO SINKING FUND
Series 2 Units are not subject to the operation of a sinking fund.
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19.
PREEMPTION
Holders of Series 2 Units shall not have any rights of preemption with regard to any Partnership Interests.
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SCHEDULE A
EXCHANGE NOTICE
To:
Brookfield Property L.P. (the “
Partnership
”)
This notice is given pursuant to Section 7.1 of Part III of Schedule A (the “
Unit
Provisions
”) to that certain Second Amended and Restated Limited Partnership Agreement for Brookfield Property L.P. dated August 8, 2013, as amended (the “
Limited Partnership Agreement
”) and all capitalized terms used in this notice but not herein defined have the meanings ascribed to them in the Unit Provisions.
The undersigned hereby notifies the Partnership that, the undersigned irrevocably elects to exchange:
o
all Series 2 Unit(s) represented by the certificate or book-entry share attached to this Exchange Notice; or
o
of the Series 2 Units(s) represented by the certificate or book-entry share attached to this Exchange Notice,
for BPY Units in the manner specified in, and in accordance with, Section 7 of the Unit Provisions.
In accordance with Section 7 of the Unit Provisions, the undersigned herewith surrenders the certificate or book-entry share attached to this Exchange Notice and directs that the BPY Units issuable and deliverable upon the exchange be issued to the Person indicated below. (If BPY Units are to be issued in the name of a Person other than the holder, all requisite transfer taxes must be tendered by the undersigned.)
Certificates representing the BPY Units will be available, on and after the Exchange Date, to be picked up at [
address to be inserted]
.
The undersigned hereby acknowledges that the undersigned is aware that the BPY Units received upon exchange may be subject to restrictions on resale under applicable securities law.
The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):
o
(A) the undersigned holder at the time of exchange of the Series 2 Unit(s) (i) is not in the United States, (ii) is not exchanging the Series 2 Unit(s) for the account or benefit of a person in the United States, (iii) is not a U.S. person, (iv) did not execute or deliver this exchange notice in the United States and (v) delivery of the BPY Unit(s) to be exchanged for the Series 2 Unit(s) will not be made to an address in the United States; or
o
(B) the undersigned holder is either (i) a holder in the United States, (ii) executing or delivering this exchange notice in the United States, (iii) a U.S. person, or (iv) requesting delivery of the BPY Unit(s) to be exchanged for the Series 2 Unit(s) in the United States,
97
and the undersigned holder has delivered to Brookfield Property Partners L.P. (the “
Company
”) and the Company’s transfer agent, CST Trust Company, (a) a completed and executed U.S. Purchaser Certification in substantially the form attached to as Schedule B to Part III of Schedule A to the Limited Partnership Agreement or (b) an opinion of counsel (which will not be sufficient unless it is in form and substance reasonably satisfactory to the Company to the effect that with respect to the BPY Unit(s) to be delivered upon exchange, the issuance of such securities has been registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration requirements is available.
It is understood that the Company and CST Trust Company may require evidence to verify the foregoing representations.
The undersigned hereby represents and warrants to the Partnership that the undersigned is the sole registered and beneficial owner of the Series 2 Unit(s) to be acquired by the Partnership, free and clear of all liens, claims, encumbrances, security interests and adverse claims or interests.
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(Signature of Registered Unitholder)
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(Guarantee of Signature)
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NOTE:
This panel must be completed and the certificate or book-entry share attached to this Exchange Notice, together with such additional documents as the Transfer Agent and the Partnership may require, must be deposited at [
address to be inserted]
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(Name of Person in Whose Name Securities and/or Cheque(s) Are to be Registered, Issued or Delivered (please print))
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(Street Address or P.O. Box)
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Guarantor’s signature
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NOTE:
If this Exchange Notice is for less than all of the Series 2 Unit(s) represented by this certificate or book-entry share, a certificate representing the balance of the Series 2 Units will be issued and registered in the name of the unitholder as it appears on the register of the Partnership.
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SCHEDULE B
U.S. PURCHASER CERTIFICATION
TO:
Brookfield Property Partners L.P. (the “
Company
”)
Brookfield Property L.P. (the “
Partnership
”)
AND TO:
CST Trust Company as Transfer Agent
We are delivering this letter in connection with the exchange of Series 2 Units of the Partnership for BPY Units of the Company pursuant to Section 7.1 of Part III of Schedule A (the “
Unit
Provisions
”) to that certain Second Amended and Restated Limited Partnership Agreement for Brookfield Property L.P. dated August 8, 2013, as amended (the “
Limited Partnership Agreement
”). All capitalized terms used herein but not herein defined have the meanings ascribed to them in the Unit Provisions.
We hereby confirm that
(a)
we are an “accredited person” defined under Rule 501(a) of the U.S. Securities Act;
(b)
we are acquiring the BPY Units for our own account;
(c)
we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of acquiring the BPY Units;
(d)
we are not acquiring the BPY Units with a view to distribution thereof or with any present intention of offering or selling any of the BPY Units, except (A) to the Company, (B) outside the United States in accordance with Rule 904 under the U.S. Securities Act or (C) inside the United States pursuant to the exemption from the registration requirements of the U.S. Securities Act provided by Rule 144, if available, and in accordance with any applicable U.S. state securities or “blue sky” laws;
(e)
we acknowledge that we have had access to such financial and other information as we deem necessary in connection with our decision to exchange the Series 2 Units for BPY Units; and
(f)
we acknowledge that we are not acquiring the BPY Units 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, television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.
We understand that the BPY Units are being offered in a transaction not involving any public offering within the United States within the meaning of the U.S. Securities Act and have not
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been and will not be registered under the U.S. Securities Act, or the securities laws of any state of the United States. We further understand that any BPY Units acquired by us will bear a legend reflecting the fact that we will not offer, sell or otherwise transfer any of the BPY Units, directly or indirectly, unless the sale is (A) to the Company; (B) made outside the United States in compliance with the requirements of Rule 904 of Regulation S under the U.S. Securities Act, (C) in accordance with Rule 144 under the U.S. Securities Act, if available, and in compliance with any applicable U.S. state securities laws, (D) in another transaction that does not require registration under the U.S. Securities Act, and, in each case, in accordance with applicable U.S. state securities laws; provided that, in the case of transfers pursuant to (C) or (D) above, a legal opinion in form and substance reasonably satisfactory to the Company must first be provided that the sale of such securities is not required to be registered under the U.S. Securities Act.
We acknowledge that you will rely upon our confirmations, acknowledgements and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate or complete.
DATED this day of , 20 .
(NAME OF U.S. PURCHASER)
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SCHEDULE C
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO:
Brookfield Property Partners L.P. (the “
Company
”)
AND TO:
CST Trust Company, as Transfer Agent
The undersigned (a) acknowledges that the sale of the securities of Brookfield Property Partners L.P. (the “
Company
”) to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “
U.S. Securities Act
”), and (b) certifies that (1) the undersigned is not an affiliate (as that term is defined in Rule 405 under the U.S. Securities Act) of the Company, (2) the offer of such securities was not made to a person in the United States and either (A) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (B) the transaction was executed in, on or through the facilities of the TSX Venture Exchange, the Toronto Stock Exchange or another designated offshore securities market (as that term is defined in Regulation S under the U.S. Securities Act) and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as such term is defined in Rule 144(a)(3) under the U.S. Securities Act), (5) the seller does not intend to replace such securities with fungible unrestricted securities, and (6) the contemplated sale is not a transaction, or part of a series of transactions which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.
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102
PART IV
CLASS A PREFERRED UNITS - SERIES 3
1.
DESIGNATION
The third series of Class A Preferred Units shall consist of 24,000,000 preferred limited partnership interests which shall be designated as Class A Preferred Units, Series 3 (hereinafter referred to as the “Series 3 Units”) and shall have attached thereto the rights, privileges, restrictions and conditions set out herein.
2.
DEFINITIONS
The following definitions shall be for the purpose of Part IV of this Schedule A:
2.1
“
Base Distribution
” has the meaning ascribed thereto in Section 4.1.1.
2.2
“
Capital Reorganization
” has the meaning ascribed thereto in Section 9.1.5.
2.3
“
Change in Tax Law
” means a change in U.S. tax Law or administrative practice (including the issuance of Treasury Regulations in temporary or final form, revenue rulings, notices, and announcements, but in the case of a notice or announcement, only to the extent such notice or announcement indicates an intention to issue Treasury Regulations or a revenue ruling that would result in a change in Law, but excluding any private letter rulings, technical advice memoranda or other non-precedential or non-binding authorities) or a judicial decision.
2.4
“
Closing Price
” means the closing sale price or, if no closing sale price is reported, the last reported sale price of the BPY Units on the Securities Exchange on the date of determination, or, if the BPY Units are not then listed on a Securities Exchange, the Closing Price will be determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate, and provided further that any such selection, opinion or determination by the Managing General Partner will be conclusive and binding, absent manifest error.
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2.5
“
Current Market Price
” means:
2.5.1
the volume-weighted average trading price of a BPY Unit on the Securities Exchange during the previous 20 consecutive trading days ending on the fifth trading day prior to the date of determination; or
2.5.2
if the BPY Units are not then listed on a Securities Exchange, the Current Market Price will be determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate, and provided further that any such selection, opinion or determination by the Managing General Partner will be conclusive and binding, absent manifest error.
2.6
“
Distribution Payment Dates
” has the meaning ascribed thereto in Section 4.1.1.
2.7
“
Equity Securities
” means securities carrying the right to participate in earnings to an unlimited degree.
2.8
“
Excess Distribution
” means the amount, if any, by which (x) the greater of (i) the aggregate distributions (including any ordinary and extraordinary distributions) declared in any Quarter on the Exchange Number of BPY Units and (ii) the aggregate distributions (including any ordinary and extraordinary distributions) paid in any Quarter on the Exchange Number of Redemption-Exchange Units divided by the Exchange Ratio, exceeds (y) the Base Distribution in such Quarter with respect to one Series 3 Unit; provided that the Base Distribution for the period from the Issue Date to December 31, 2014 shall be deemed to be, for the purposes of calculating the Excess Distribution only, $0.42188 per Series 3 Unit.
2.9
“
Excess Distribution Payment
” has the meaning ascribed thereto in Section 4.1.2.
2.10
“
Exchange Consideration
” has the meaning ascribed thereto in Section 7.2.1.
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2.11
“
Exchange Date
” has the meaning ascribed thereto in Section 7.2.1.
2.12
“
Exchange Notice
” has the meaning ascribed thereto in Section 7.1.
2.13
“
Exchange Number
” means 0.97276, subject to adjustment from time to time in accordance with Section 9.
2.14
“
Exchange Preferred Units
” has the meaning ascribed thereto in Section 7.1.
2.15
“
Exchange Price
” means, for each Series 3 Unit, an amount equal to the Issue Price divided by the Exchange Number, which on the Issue Date is $25.70.
2.16
“
Fair Market Value
” means, as at any date:
2.16.1
for a BPY Unit, the Current Market Price; or
2.16.2
for a security listed and posted on a stock exchange (other than a BPY Unit), the volume-weighted average trading price during the previous 20 consecutive trading days ending on the fifth trading day prior to the date of determination, according to the official price quotations of the stock exchange, provided that, for a security listed and posted on more than one stock exchange, the price quotations used shall be those of the stock exchange on which the greatest volume of trading in the security occurs as determined by the Managing General Partner; or
2.16.3
for any other security or property that is not cash, the fair market value thereof at such date as, determined by the Managing General Partner, based upon the advice of such qualified independent financial advisors as the Managing General Partner may deem to be appropriate; or
2.16.4
for any property that is cash, the amount thereof.
each such determination by the Managing General Partner will be conclusive and binding, absent manifest error.
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2.17
“
Freely Tradable
” means, in respect of shares of capital of any class of any corporation or limited partnership units of any class of any limited partnership, shares or limited partnership units, as the case may be, which can be traded by the holder thereof without any restriction other than pursuant to applicable securities laws.
2.18
“
Initial Holder
” means the holder to which all of the Series 3 Units are initially issued on the Issue Date and any Affiliate of such holder who holds Series 3 Units from time to time.
2.19
“
Initial Redemption Date
” means December 31, 2018.
2.20
“
Issue Date
” has the meaning ascribed thereto in Section 3.1.
2.21
“
Issue Price
” means $25.00.
2.22
“
Maturity Date
” has the meaning ascribed thereto in Section 5.3.
2.23
“
NYSE
” has the meaning ascribed thereto in Section 2.35.
2.24
“
Ordinary BPY Distribution
” means a regularly scheduled quarterly distribution, declared and paid on the BPY Units that is not a “special” or “extraordinary” distribution or exceeds a level which is reasonably expected to continue in subsequent Quarters.
2.25
“
Post-Distribution Price
” has the meaning ascribed thereto in Section 9.1.3.
2.26
“
Preferred Call Notice
” has the meaning ascribed thereto in Section 8.2.1.
2.27
“
Preferred Call Right
” has the meaning ascribed thereto in Section 8.1.
2.28
“
Redemption Consideration
” has the meaning ascribed thereto in Section 5.1.
2.29
“
Redemption Date
” has the meaning ascribed thereto in Section 5.4.1.
2.30
“
Redemption Notice
” has the meaning ascribed thereto in Section 5.1.
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2.31
“
Redemption Price
” means for each Series 3 Unit, an amount equal to the aggregate of:
2.31.1
$25.00 per Series 3 Unit; plus
2.31.2
an amount equal to the full amount of all distributions accrued (whether or not declared) and unpaid on such Series 3 Unit up to (but excluding) the date of payment.
2.32
“
Regulation D
” means Regulation D as promulgated by the SEC under the U.S. Securities Act.
2.33
“
Regulation S
” means Regulation S as promulgated by the SEC under the U.S. Securities Act.
2.34
“
Reorganization Event
” has the meaning ascribed thereto in Section 9.2.1.
2.35
“
Right to Exchange
” has the meaning ascribed thereto in Section 7.1.
2.36
“
Right to Redeem
” has the meaning ascribed thereto in Section 5.1.
2.37
“
SEC
” means the United States Securities and Exchange Commission.
2.38
“
Section 9.1.1 Transaction
” has the meaning ascribed thereto in Section 9.1.1.
2.39
“
Securities Exchange
” means the New York Stock Exchange (“
NYSE
”) or, if the BPY Units are not then listed on the NYSE, the stock exchange that the BPY Units are then listed on, provided that, if the BPY Units are listed on more than one stock exchange (neither of which are the NYSE), the “Securities Exchange” shall be the stock exchange on which the greatest volume of trading in the BPY Units occurs.
2.40
“
Series 3 Units
” has the meaning ascribed thereto in Section 1.
2.41
“
Specified Fraction
” has the meaning ascribed thereto in Section 4.1.3.
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2.42
“
Substantial Issuer Bid
” has the meaning ascribed thereto in Section 9.1.4.
2.43
“
Transaction Value
” has the meaning ascribed thereto in Section 9.2.1.
2.44
“
Transfer Agent
” means the Partnership or any transfer agent appointed from time to time to act as registrar and transfer agent for the Series 3 Units.
2.45
“United States”
means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.
2.46
“U.S. Exchange Act”
means the United States Securities Exchange Act of 1934, as amended.
2.47
“U.S. Legend”
has the meaning ascribed thereto in Section 16.1.
2.48
“U.S. Person”
means a “U.S. person” as such term is defined in Regulation S under the U.S. Securities Act.
2.49
“U.S. Purchaser Certification”
means the U.S. Purchaser Certification in substantially the form of Schedule B to this Part IV.
2.50
“U.S. Securities Act”
means the United States Securities Act of 1933, as amended.
2.51
“
Valuation Period
” has the meaning ascribed thereto in Section 9.1.3.
Unless otherwise stated, all references in Part IV of this Schedule A to Sections or subsections refer to Sections or subsections of Part IV of Schedule A.
3.
ISSUE DATE AND CONSIDERATION FOR ISSUE
3.1
The Series 3 Units shall be dated as of December 3, 2014 (the “
Issue Date
”); provided however, that distributions on the Series 3 Units shall only accrue from and after January 1, 2015.
3.2
The consideration for the issue of each Series 3 Unit shall be $25.00.
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4.
DISTRIBUTIONS
4.1
Payment of Distributions
4.1.1
The holders of the Series 3 Units shall be entitled to receive, and the Partnership shall pay thereon, if, as and when declared by the Managing General Partner, out of moneys of the Partnership properly applicable to the payment of distributions and without regard to the income of the Partnership, a fixed cumulative preferential cash distribution equal to $1.6875 per Series 3 Unit per annum (the “
Base Distribution
”) less any tax required to be deducted and withheld, payable in lawful money of the United States in equal quarterly amounts on the last day of each of the months of March, June, September and December in each year (the “
Distribution Payment Dates
”) up to but excluding the applicable Maturity Date. The record date for the payment of the Base Distribution will be the first day of the calendar month during which a Distribution Payment Date falls or such other record date, if any, as may be fixed by the Managing General Partner that is not more than 30 nor less than 10 days prior to such Distribution Payment Date. Any such day will be the record date whether or not such day is a Business Day.
4.1.2
Subject to Section 4.1.3, if in any Quarter the Excess Distribution is a positive number, the holders of Series 3 Units shall be entitled to receive on the Distribution Payment Date for that Quarter, and the Partnership shall pay thereon, out of moneys of the Partnership properly applicable to the payment of distributions and without regard to the income of the Partnership, a further cumulative preferential cash distribution in an amount per Series 3 Unit equal to the Excess Distribution (the “
Excess Distribution Payment
”) less any tax required to be deducted and withheld. For example, if, in a particular Quarter and assuming no anti-dilution adjustments have occurred, BPY declared a distribution of $0.50 per Unit on the BPY Units, then a holder of Series 3 Units would receive an additional $0.064505 being: ($0.50 multiplied by the Exchange Number
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(0.97276)) less the quarterly Base Distribution ($1.6875/4) for each Series 3 Unit held.
4.1.3
Subject to Section 4.1.1, for any period that is less than a full Quarter with respect to any Series 3 Unit (i) that is issued, redeemed, exchanged or purchased during such Quarter or (ii) in respect of which assets of the Partnership are distributed to the holders thereof pursuant to Section 14 during such Quarter, the Base Distribution shall be deemed to accrue on a daily basis and shall be equal to the amount calculated by multiplying the amount that would otherwise be payable for a full Quarter by the Specified Fraction. “
Specified Fraction
” means a fraction of which the numerator is the number of days in such period (including the day at the beginning of such period and excluding the day at the end of such period) during which the Series 3 Unit is in issue and the denominator is the number of days in such Quarter (including the day at the beginning thereof and excluding the Distribution Payment Date at the end thereof).
4.1.4
The first Distribution Payment Date will be March 31, 2015, and the amount payable on such date will be $0.390625 per Series 3 Unit, being the Base Distribution for the period from January 1, 2015 to March 31, 2015. No Base Distribution shall accrue during the period from the Issue Date to December 31, 2014.
4.1.5
For so long as Series 3 Units remain issued and outstanding, if the distributions are not paid in full (or declared and a sum sufficient for the full payment is not so set apart) on any Distribution Payment Date on the Series 3 Units and any Parity Securities, distributions declared on the Series 3 Units and such Parity Securities shall only be declared
pro rata
based upon the respective amounts that would have been paid on the Series 3 Units and such Parity Securities had dividends been declared and paid in full.
4.1.6
The holders of the Series 3 Units shall not be entitled to any
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distributions other than or in excess of the Base Distribution and the Excess Distribution Payment. For greater certainty, nothing in this Section 4.1.6 shall prevent holders of Series 3 Units from participating in any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4, solely at the discretion of the Partnership and subject to TSX approval, as if they had exchanged their Series 3 Units immediately prior to the effective date or record date of the event.
4.2
Cumulative Payment of Distributions
If on any Distribution Payment Date, the Base Distribution or the Excess Distribution Payment accrued to such date is not paid in full on all of the Series 3 Units then Outstanding, such distributions, or the unpaid part thereof, shall be paid on a subsequent date or dates determined by the Managing General Partner.
4.3
Method of Payment
All Base Distributions and Excess Distribution Payments shall be paid by the Partnership directly or through the Transfer Agent or through any other Person or agent to the holders of Series 3 Units according to their holdings as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of assignment or otherwise.
5.
REDEMPTION
5.1
Optional Redemption
Subject to the right of the holders of the Series 3 Units to require the Partnership to exchange any or all of the Series 3 Units in accordance with Section 7 and subject to Section 7.3, the Partnership may, upon giving notice in writing as hereinafter provided (the “
Redemption Notice
”) at its option at any time commencing on the Initial Redemption Date and prior to the Maturity Date provided that the Current Market Price determined on the Business Day preceding the date on which the Redemption Notice is given is not less than 135% of the Exchange Price, redeem all, or from time to time any part, of the then Outstanding Series 3 Units
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(the “
Right to Redeem
”) by payment to the holders of such Series 3 Units an amount for each Series 3 Unit so redeemed equal to the Redemption Price (less any tax required to be deducted and withheld). Payment of the Redemption Price will be satisfied in full by the Partnership causing to be delivered, for each Series 3 Unit being redeemed, (x) such number of Freely Tradable BPY Units obtained by dividing the Issue Price by the Current Market Price determined on the Business Day preceding the date of the Redemption Notice, such units to be duly issued, fully paid and non-assessable and free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, and, (y) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions, less any tax required to be deducted and withheld, on such Series 3 Unit (together, the “
Redemption Consideration
”; provided that for purposes of Section 5.3 the Current Market Price will be determined on the Business Day preceding the Maturity Date). Notwithstanding anything contained herein to the contrary, the Partnership shall not redeem any of the Series 3 Units under this Section 5.1 at any time that the BPY Units are not listed on the NYSE, TSX or other national securities exchange in the United States or Canada.
5.2
Partial Redemption
In case only a part of the Series 3 Units is to be redeemed at any time, the Series 3 Units to be redeemed shall be selected
pro rata
from the holders of the Series 3 Units in proportion to the number of Series 3 Units held by such holders, by lot or some other method as the Managing General Partner in its sole discretion determines to be fair and equitable.
5.3
Mandatory Redemption
Subject to 7.3, on December 31, 2026 (the
“Maturity Date
”), if such Series 3 Units have not been exchanged, redeemed or purchased by the Partnership, the Partnership shall redeem the then Outstanding Series 3 Units by payment to each applicable holder of the Series 3 Units, of the Redemption Price (less any tax required to be deducted and withheld) in the form of the Redemption Consideration.
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5.4
Method of Redemption
5.4.1 The Partnership shall, at least 30 days and not more than 60 days before the Maturity Date or any other date fixed for redemption (the “
Redemption Date
”), send or cause to be sent to the holders of the Series 3 Units to be redeemed a Redemption Notice setting out: (i) that the Partnership’s Right to Redeem has been exercised or that the Maturity Date is up-coming; (ii) the number of the Series 3 Units held by the holder to whom it is addressed which are to be redeemed; (iii) the Redemption Price; (iv) the Redemption Date; (v) the formula for determining the Redemption Price; (vi) that upon presentation and surrender of the certificates or book-entry shares for the Series 3 Units to be redeemed, the holders of such Series 3 Units will obtain payment as specified in Section 5 in respect of the Series 3 Units being redeemed, specifying where the payment (in the form of the Redemption Consideration) will be available for pick up, and that, if requested in writing by a holder of Series 3 Units and provided that commercial courier service is available in respect of the relevant destination, such payment will be delivered to such holders by courier at the holder’s expense; and (vii) any other matters the Partnership may deem appropriate.
5.4.2 On the Redemption Date, subject to Section 7.3, the Partnership shall make available or, if requested by the holder, cause to be delivered to each holder of Series 3 Units to be redeemed the Redemption Price (in the form of the Redemption Consideration) upon presentation and surrender of the certificate or certificates or book-entry share or shares for such Series 3 Units at the registered office of the Partnership or at any office of the Transfer Agent as may be specified by the Partnership in the Redemption Notice, together with such other documents and instruments as may be required to effect a transfer of Series 3 Units under the Limited Partnership Act and the Agreement. The Partnership will: (i) make the aggregate Redemption Price for Series 3 Units held by a holder available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified by the Partnership in the Redemption Notice, on the Redemption Date; or (ii) at the written request of such holder and at the expense of such holder, provided that commercial courier service is
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available in respect of the relevant destination, deliver or cause to be delivered, by courier, the aggregate Redemption Price payable to such holder at the address of such holder recorded in the register of the Partnership or at a different address as such holder may direct in writing in a manner satisfactory to the Transfer Agent, as soon as practicable on or after the Redemption Date or such later date as the holder may request. On and after the Redemption Date, the holders of the Series 3 Units called for redemption will cease to be holders of the Preferred Units to be redeemed and will not be entitled to exercise any of the rights of holders in respect thereof, other than the right to receive their proportionate part of the total Redemption Price, and will not be entitled to receive any distributions in respect thereon (including to avoid double payment distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Series 3 Units on a record date for the payment of a distribution), unless payment of the aggregate Redemption Price deliverable to a holder for Series 3 Units is not be made upon presentation and surrender of the holder’s Series 3 Units in accordance with the foregoing provisions, in which case the rights of the holder will remain unaffected until the aggregate Redemption Price deliverable to such holder has been paid in the manner hereinbefore provided. In the case of a redemption pursuant to Section 5.1, if only a part of the Series 3 Units represented by any certificate or book-entry share is redeemed, a new certificate will be issued to the holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 3 Units at the expense of the Partnership.
5.4.3 No fractional BPY Units shall be delivered in connection with the delivery of the Redemption Consideration on the Redemption Date in accordance with this Section 5, but in lieu thereof, the Partnership shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the date of the Redemption Notice, if the redemption is pursuant to Section 5.1 or the Business Day preceding the Maturity Date, if the redemption is pursuant to Section 5.3).
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5.4.4 The Partnership will have the right at any time after the sending of the Redemption Notice to deposit or cause to be deposited any cash portion of the Redemption Consideration in a custodial account with any chartered bank or trust company in Canada named in the Redemption Notice and any interest allowed on such deposit will belong to the Partnership. Provided that the cash portion of the Redemption Consideration has been so deposited prior to the Redemption Date and that the remaining portion of the total Redemption Consideration has otherwise been paid in accordance with Section 5.4.2, on and after the Redemption Date, the Series 3 Units will be redeemed and the rights of the holders thereof after the Redemption Date will be limited to receiving their proportionate part of the total Redemption Price for such Series 3 Units so deposited, against presentation and surrender of the said certificates or book-entry shares held by them, respectively, in accordance with the foregoing provisions. Upon such payment or deposit of the total Redemption Price, the holders of the Series 3 Units will thereafter be considered and deemed for all purposes to be holders of the BPY Units delivered to them. Any funds so deposited which remain unclaimed on the date which is two years from the Redemption Date shall be forfeited to the Partnership and paid over to or as directed by the Partnership and the former holders of the Series 3 Units shall thereafter have no right to receive their respective entitlement to the Redemption Price.
6.
PURCHASE FOR CANCELLATION
Subject to the provisions of Section 10, the Partnership may purchase for cancellation at any time all or from time to time the whole or any part of the Outstanding Series 3 Units. Series 3 Units so purchased shall be cancelled.
7.
EXCHANGE OF SERIES 3 UNITS
7.1
Exchange at Option of Holder
Notwithstanding the delivery of a Redemption Notice and subject to applicable Laws, a holder of the Series 3 Units shall have the right (“
Right to Exchange
”), exercisable at
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any time and from time to time, to require the Partnership to exchange any or all of the Series 3 Units registered in the name of such holder for consideration per Series 3 Unit equal to the Exchange Number of Freely Tradable BPY Units plus all accrued (whether or not declared) and unpaid cash distributions on such Series 3 Units (less any tax required to be deducted and withheld), which will be satisfied by the Partnership causing to be delivered to such holder the Exchange Consideration on the Exchange Date. The holder must give notice of a requirement to exchange by presenting and surrendering at the registered office of the Partnership or at any office of the Transfer Agent as may be specified by the Partnership by notice to the holders of Series 3 Units from time to time the certificate or certificates or book-entry share or shares representing the Series 3 Units that the holder desires to have the Partnership exchange, free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest, together with such other documents and instruments as may be required to effect a transfer of Series 3 Units under the Limited Partnership Act, the Agreement, together with a duly executed statement (the “
Exchange Notice
”) in the form of Schedule A to this Part IV or in such other form as may be acceptable to the Partnership specifying that the holder desires to have all or any number specified therein of the Series 3 Units represented by such certificate or certificates or book-entry shares or shares (the “
Exchange Preferred Units
”) exchanged by the Partnership; provided that the Exchange Notice must be delivered prior to the close of business on the earlier of: (i) the Maturity Date; and (ii) the Business Day preceding any applicable Redemption Date.
7.2
Method of Exchange
7.2.1 In the case of an exchange of Series 3 Units under this Section 7, upon receipt by the Partnership or the Transfer Agent in the manner specified in Section 7.1 of a certificate or book-entry share representing the number of Series 3 Units which the holder desires to have the Partnership exchange, together with an Exchange Notice, the Partnership will exchange the Exchange Preferred Units effective at the close of business on the fifth Business Day following the date of the Exchange Notice (the “
Exchange Date
”). Payment for the Exchange Preferred Shares will be satisfied in full by the delivery of, for each Exchange Preferred Unit, (x) the Exchange Number of Freely Tradable BPY Units, such units to be duly issued, fully paid and non-assessable and free and clear of any
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lien, claim, encumbrance, security interest or adverse claim or interest, and, (y) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions, less any tax required to be deducted and withheld, on such Exchange Preferred Unit (together, the “
Exchange Consideration
”). The Partnership shall satisfy its obligation to deliver the Exchange Consideration by, on the Exchange Date, (i) making the aggregate Exchange Consideration available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified in the Maturity Notice, Redemption Notice or Exchange Notice, as applicable; or (ii) at the written request of such holder pursuant to the Exchange Notice and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, delivering or causing to be delivered the Exchange Consideration to the relevant holder at the address specified in the holder’s Exchange Notice. If only a part of the Series 3 Units represented by any certificate or book-entry share is exchanged a new certificate will be issued to the holder, or an adjustment will be made to the applicable book-entry account, for the balance of such Series 3 Units at the expense of the Partnership.
7.2.2 On and after the close of business on the Exchange Date, the holder of the Exchange Preferred Units will cease to be a holder of such Exchange Preferred Units and will not be entitled to exercise any of the rights of a holder in respect thereof, other than the right to receive its proportionate part of the total Exchange Consideration, and will not be entitled to receive any distributions in respect thereon (including distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Exchange Preferred Units on a record date for the payment of a distribution), unless upon presentation and surrender of the holder’s Series 3 Units in accordance with the foregoing provisions, payment of the aggregate Exchange Consideration to such holder will not have been made, in which case the rights of such holder will remain unaffected until such aggregate Exchange Consideration has been delivered in the manner hereinbefore provided. On and after the close of business on the
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Exchange Date, provided that presentation and surrender of the holder’s Series 3 Units and payment of such aggregate Exchange Consideration has been made in accordance with the foregoing provisions, the holder of the Exchange Preferred Units so exchanged by the Partnership will thereafter be considered and deemed for all purposes to be a holder of the BPY Units delivered to such holder.
7.2.3 Notwithstanding any other provision of this Section 7 if:
(i)
the exercise of the rights of the holders of the Series 3 Units to require the Partnership to exchange any Series 3 Units pursuant to this Section 7 on any Exchange Date would require listing approval or any similar document to be issued in order to obtain the approval of the TSX and/or the NYSE to the listing and trading (subject to official notice of issuance) of the BPY Units that would be required to be delivered to such holders of Series 3 in connection with the exercise of such rights; and
(ii)
as a result of (i) above, it would not be practicable (notwithstanding the reasonable endeavours of BPY) to obtain such approvals in time to enable all or any of such Units to be admitted to listing and trading by the TSX and/or the NYSE (subject to official notice of issuance) when so delivered, the Exchange Date will, notwithstanding any other date specified or otherwise deemed to be specified in any relevant Exchange Notice, be deemed for all purposes to be the earlier of (i) the second Business Day immediately following the date the approvals referred to in Section 7.2.3(i) are obtained, and (ii) the date which is 30 Business Days after the date on which the relevant Exchange Notice is received by the Partnership, and references in this Section 7 to such Exchange Date will be construed accordingly.
7.2.4 No fractional BPY Units shall be delivered in connection with the delivery of the Exchange Consideration on the Exchange Date in accordance with this Section 7, but in lieu thereof, the Partnership shall pay the cash equivalent of
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such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the Exchange Date).
7.3
Automatic Exchange
If on the Business Day preceding any Redemption Date the value of the Exchange Number of BPY Units to be received by a holder of the Series 3 Units upon exercise of the Right to Exchange for one Series 3 Unit (which value shall be determined using the Current Market Price determined on the Business Day preceding the Redemption Date) exceeds the Issue Price, the holder shall be deemed to have exercised the Right to Exchange with respect to all of such holder’s Series 3 Units to be redeemed on the Redemption Date, unless the holder provides written notice to the Partnership prior to such Business Day specifying that the Series 3 Units are not to be so exchanged.
8.
PREFERRED CALL RIGHT
8.1
Preferred Call Right
At any time the Partnership is required to make available or deliver BPY Units to the holder of Series 3 Units, BPY shall have the right (the “
Preferred Call Right
”) to acquire all (but not less than all) the Series 3 Units (and all rights in respect thereof, including rights to declared but unpaid distributions) to be redeemed, pursuant to Section 5, or exchanged, pursuant to Section 7, in consideration for the aggregate Redemption Consideration or the aggregate Exchange Consideration, as applicable.
8.2
Exchange of Series 3 Units for BPY Units
8.2.1 The Partnership shall notify BPY of each Redemption Date and Exchange Date, at least four Business Days prior to such date. At any time within two Business Days from the date of BPY’s receipt of such notice, BPY may elect to exercise the Preferred Call Right and shall give written notice to the Partnership and to the holder of the Series 3 Units of such election (the “
Preferred Call Notice
”). The Preferred Call Notice shall contain all relevant
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information, and shall be presented together with all related certificates, book-entry shares and documents that the Partnership may reasonably require or as may be required by applicable Law to effect the Preferred Call Right.
8.2.2 If BPY exercises its Preferred Call Right, on the Redemption Date or Exchange Date, as applicable, the holder will deliver to BPY the certificate or certificates or book-entry share or shares representing the Series 3 Units being sold pursuant to the Preferred Call Right on such date, together with such other documents and instruments as may be required to effect a transfer of Series 3 Units under the Limited Partnership Act, the Agreement and such additional documents and instruments as the Transfer Agent, the Partnership and BPY may reasonably require. Concurrently with such delivery, BPY shall (i) make the aggregate Redemption Consideration or the aggregate Exchange Consideration, as applicable, available to be picked up at the registered office of the Partnership or at any office of the Transfer Agent, as may be specified in the Redemption Notice or Exchange Notice, as applicable, or (ii) at the written request of such holder and at the expense of such holder, provided that commercial courier service is available in respect of the relevant destination, deliver or cause to be delivered, by courier, the consideration payable to such holder at the address of such holder recorded in the register of the Partnership or at a different address as such holder may direct in writing in a manner satisfactory to the Transfer Agent, as soon as practicable after the Redemption Date or Exchange Date, as applicable, or such later date as the holder may request. The BPY Units issued to the holder of the Series 3 Units shall be duly issued, fully paid and non-assessable, free and clear of any lien, claim, encumbrance, security interest or adverse claim or interest. Other than as specifically contemplated in the Agreement, the BPY Units issued to any holder of Series 3 Units pursuant to Section 8.2.1 will be issued in accordance with the BPY Partnership Agreement.
8.2.3 On and after the close of business on the Redemption Date or Exchange Date, as applicable, the holder of the Series 3 Units acquired by BPY will cease to be a holder of such Series 3 Units and will not be entitled to exercise
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any of the rights of a holder in respect thereof, other than the right to receive its proportionate part of the total Redemption Consideration or Exchange Consideration, as applicable, and will not be entitled to receive any distributions in respect thereon (including distributions that the holder would otherwise be entitled to receive by virtue of being the holder of the Series 3 Units on a record date for the payment of a distribution), unless upon presentation and surrender of the holder’s Series 3 Units in accordance with the foregoing provisions, payment of the aggregate Redemption Consideration or aggregate Exchange Consideration, as applicable, to such holder will not have been made, in which case the rights of such holder will remain unaffected until such aggregate Redemption Consideration or aggregate Exchange Consideration, as applicable, has been delivered in the manner hereinbefore provided. On and after the close of business on the Redemption Date or Exchange Date, as applicable, provided that presentation and surrender of the holder’s Series 3 Units and payment of such aggregate Redemption Consideration or aggregate Exchange Consideration has been made in accordance with the foregoing provisions, the holder of the Series 3 Units acquired by BPY will thereafter be considered and deemed for all purposes to be a holder of the BPY Units delivered to such holder, and BPY shall thereafter be considered and deemed for all purposes to be a holder of the Series 3 Units and shall receive the full amount of any distributions declared but unpaid as of such date.
8.2.4
The Managing General Partner and the Partnership shall take all steps necessary under this Agreement to effect the transfer of such Series 3 Units, including the registration of such transfer in the Partnership’s register of Limited Partners and by issuing such Series 3 Units in the name of BPY representing the Series 3 Units transferred to BPY in accordance with this Section 8.2, without expense to BPY.
8.2.5
If only a part of the Series 3 Units represented by any certificate or book-entry share is purchased by BPY pursuant to its Preferred Call Right a new certificate will be issued to the holder, or an adjustment will be made to the
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applicable book-entry account, for the balance of such Series 3 Units at the expense of the Partnership.
8.2.6
No fractional BPY Units shall be delivered in connection with the exercise of the Preferred Call Right, but in lieu thereof, BPY shall pay the cash equivalent of such fraction (which amount shall be determined by multiplying the relevant fraction of a BPY Unit by the Current Market Price determined on the Business Day preceding the Redemption Date or Exchange Date, as applicable).
8.3
Exchange of Series 3 Units for Managing General Partner Units
Immediately following BPY’s purchase of Series 3 Units, BPY shall exchange such Series 3 Units for (i) that number of Managing General Partner Units equal to the number of BPY Units included in the Redemption Consideration or the Exchange Consideration, as applicable, and (ii) if applicable, a cheque in the amount of all accrued (whether or not declared) and unpaid cash distributions on such Series 3 Units, less any tax required to be deducted and withheld. In addition to any other Units previously held by BPY, BPY will be considered and deemed for all purposes to be the holder of the number of Managing General Partner Units equal to the number of Series 3 Units exchanged pursuant to the Preferred Call Right.
8.4
Delegation of Rights and Obligations
BPY may designate another member of the BPY Group to exercise its rights (to deliver the Exchange Consideration or the Redemption Consideration, as applicable) in this Section 8.
9.
ADJUSTMENTS
9.1
Adjustment upon Consolidation, Subdivision, Distributions or Repurchases
9.1.1
If BPY shall, after the Issue Date (i) fix a record date for the payment of a stock distribution or the making of a distribution with respect to BPY Units in BPY Units to all or substantially all of the holders of the BPY Units, (ii) subdivide or redivide the BPY Units into a greater number of units, or
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(iii) reduce, combine or consolidate the BPY Units into a smaller number of units (any of such events in clauses (i), (ii) and (iii) being herein called a “
Section 9.1.1 Transaction
”), then, in any such event, the Exchange Number shall be adjusted, effective immediately after the record date in the case of clause (i) or the effective date in the case of clauses (ii) and (iii), so that each holder of the Series 3 Units shall thereafter be entitled to receive upon exchange of Series 3 Units pursuant to the Right to Exchange, the number of the Freely Tradable BPY Units which such holder would have owned or been entitled to receive immediately following any Section 9.1.1 Transaction had such Series 3 Units been exchanged immediately prior to the record date in the case of clause (i) or the effective date in the case of clauses (ii) or (iii), such adjustment to be made such that the applicable number will equal the number determined by multiplying the Exchange Number in effect immediately prior to the record date or the effective date, as the case may be, by a fraction, the numerator of which shall be the number of BPY Units outstanding immediately after giving effect to, and solely as a result of, such Section 9.1.1 Transaction and the denominator of which shall be the number of BPY Units outstanding immediately prior to the effectiveness of the Section 9.1.1 Transaction.
9.1.2
If BPY shall, after the Issue Date, fix a record date for the issue of options, rights or warrants to all or substantially all of the holders of the BPY Units entitling them for a period up to 45 days from the date of issuance of such options, rights or warrants to subscribe for or purchase BPY Units or securities convertible or exchangeable into BPY Units at a price per unit (or having a conversion or exchange price per unit) less than the Current Market Price on the earlier of such record date and the date on which BPY publicly announces its intention to make such issuance, then in each such case the Exchange Number shall be adjusted effective immediately after such record date so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the number of BPY Units outstanding at 4:59 p.m. (Toronto time) on such record date, plus such number of additional BPY Units offered for subscription or purchase pursuant to such options, rights or warrants and the denominator of which shall be the number of BPY Units outstanding at 4:59 p.m. (Toronto time) on such
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record date, plus such number of additional BPY Units which the aggregate offering price of the total number of BPY Units so offered for subscription or purchase pursuant to such options, rights or warrants would purchase at such Current Market Price, which shall be determined by multiplying such total number of units by the exercise price of such options, rights or warrants and dividing the product so obtained by such Current Market Price. To the extent that such options, rights or warrants expire without being exercised (or such convertible or exchangeable securities expire without being converted or exchanged), the Exchange Number shall be readjusted to the number which would then be in effect had such adjustments for the issuance of such options, rights or warrants been made upon the basis of only the number of BPY Units actually delivered.
9.1.3
If BPY shall, after the Issue Date, fix a record date for the making of a distribution to all or substantially all of the holders of the BPY Units of (i) Partnership Interests other than the BPY Units; (ii) rights, options or warrants to subscribe for or purchase any of its securities (other than those referred to in Section 9.1.2); or (iii) cash, evidence of indebtedness, securities, non-cash dividends not otherwise made the subject of adjustments pursuant to this Section 9 or other property or assets (other than cash distributions that constitute Ordinary BPY Distributions, distributions paid in lieu of Ordinary BPY Distributions or that portion of cash distributions to holders of BPY Units resulting in holders of the Series 3 Units receiving an Excess Distribution Payment), then in each such case the Exchange Number shall be adjusted effective immediately after such record date so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the Current Market Price as at the earlier of such record date and the date on which
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BPY publicly announces its intention to make such distribution and the denominator of which shall be such Current Market Price less the Fair Market Value, as of such record date of the portion of the shares, cash, evidence of indebtedness, securities or other property or assets so distributed or of such rights, options or warrants which are applicable to one BPY Unit.
If the transaction that gives rise to an adjustment pursuant to this Section 9.1.3 is one pursuant to which the distribution or the making of a distribution with respect to the BPY Units consists of units, shares or other similar equity interests in, a Subsidiary or other business unit of BPY (
e.g.
a spin-off) or consists of any other securities, that are, or when issued, will be, traded on a securities exchange or quoted on a quotation facility in Canada, the United States or elsewhere, then, in any such event, the Exchange Number shall be adjusted, effective immediately after such record date, so that it will equal the number determined by multiplying the Exchange Number in effect at 4:59 p.m. (Toronto time) on such record date by a fraction, the numerator of which shall be the volume-weighted average trading price of the shares, similar equity interests or other securities distributed to holders of BPY Units applicable to one BPY Unit over each of the 20 consecutive trading days commencing on and including the trading day after the date on which “ex-distribution trading” commences for such units, shares, similar equity interests or other securities on the principal exchange or other market on which they are listed, quoted or traded (the “
Valuation Period
”) plus the volume-weighted average trading price of the BPY Units over the Valuation Period (the “
Post-Distribution Price
”), and the denominator of which shall be the Post-Distribution Price.
To the extent that such distribution is not so made or to the extent that any such rights, options or warrants so distributed expire without being exercised, the Exchange Number shall be readjusted to the number which would then be in effect if such record date had not been fixed or to the number which would then be in effect based upon such shares, cash, evidence of indebtedness, securities or other property or assets actually distributed or based upon the number of
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securities actually delivered upon the exercise of such rights, options or warrants, as the case may be.
9.1.4
If BPY or any of its Subsidiaries shall, after the Issue Date, successfully complete a tender or exchange offer or substantial issuer bid (collectively, “
Substantial Issuer Bid
”) for the BPY Units where the cash and the value of any other consideration included in the payment per BPY Unit exceeds the volume-weighted average trading price of a BPY Unit on the Securities Exchange during the ten trading day period following the expiration of the Substantial Issuer Bid, then the Exchange Number shall be adjusted effective immediately after the expiration of the Substantial Issuer Bid so that it will equal the number determined by multiplying the Exchange Number in effect immediately prior to the expiration of the Substantial Issuer Bid by a fraction, the numerator of which shall be the aggregate Fair Market Value payable in the Substantial Issuer Bid, plus the product of the volume-weighted average trading price of the BPY Units over each of the 20 consecutive trading days commencing on and including the fifth trading day after the expiration of the Substantial Issuer Bid by the number of BPY Units outstanding immediately after the expiration of the Substantial Issuer Bid (after giving effect to the purchase of all BPY Units accepted for purchase or exchange in the Substantial Issuer Bid), and the denominator of which shall be the Closing Price on the trading day immediately succeeding the expiration of the Substantial Issuer Bid multiplied by the number of BPY Units outstanding immediately prior to the expiration of the Substantial Issuer Bid, including any BPY Units purchased. In the event that BPY, or one of its Subsidiaries, is obligated to purchase BPY Units pursuant to any such Substantial Issuer Bid, but BPY, or such Subsidiary, is permanently prevented by applicable Law from effecting any such purchases, or all such purchases are rescinded, then the Exchange Number shall be readjusted to be such Exchange Number that would then be in effect if such Substantial Issuer Bid had not been made.
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9.1.5
If there is any reclassification of the BPY Units at any time outstanding or any change of the BPY Units, in either case, solely into other Equity Securities of BPY or a successor to BPY (including as a result of an amalgamation, arrangement, merger or similar transaction) (any such reclassification or change being called a “
Capital Reorganization
”), then each holder of a Series 3 Unit in respect of which the Right to Exchange or Right to Redeem is exercised or in respect of which payment is due on the Maturity Date, in any case following the effective date of such Capital Reorganization, will be entitled to receive, and shall accept, in lieu of the BPY Units to which such holder was theretofore entitled upon such exercise, the kind of Freely Tradable Equity Securities which such holder would have been entitled to receive immediately following such Capital Reorganization had such holder been the registered holder of the BPY Units to which such holder was entitled immediately prior to such Capital Reorganization. For the purpose of determining the number of such Equity Securities resulting from such Capital Reorganization to which each such holder is entitled, and must accept, and for all other purposes of Part IV of this Schedule A, each reference to BPY Units shall be deemed to be a reference to Equity Securities of the kind and number into which the BPY Units have been reclassified or changed resulting from such Capital Reorganization.
9.1.6
For purposes of this Section 9.1 all distributions of BPY Units (or securities convertible into or exchangeable for BPY Units), other securities, or other assets or property shall be deemed to occur at 5:00 p.m. (Toronto time) on the record date.
9.1.7
All adjustments to the Exchange Number shall be calculated to the nearest 1/10,000th of a BPY Unit (or if there is not a nearest 1/10,000th of a unit, to the next lower 1/10,000th of a unit).
9.1.8
No adjustment in the Exchange Number shall be made in respect of any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4 if the holders of the Series 3 Units are entitled to participate in the event on the same terms,
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mutatis mutandis
, as if they had exchanged their Series 3 Units immediately prior to the effective date or record date of the event, as applicable, or, in the case of an event described in Section 9.1.3, to the extent that the holders of the Series 3 Units received an Excess Distribution Payment in respect of such event. For greater certainty, the holders of the Series 3 Units shall be entitled to participate in any event described in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4 as if they had exchanged their Series 3 Units immediately prior to the effective date or record date of the event solely at the discretion of the Partnership and subject to TSX approval, provided that if the holders of Series 3 Units do not participate in any such event, the Exchange Number shall be adjusted as set forth in in Sections 9.1.1(i), 9.1.2, 9.1.3 and 9.1.4.
9.1.9
No adjustment in the Exchange Number shall be required: (i) upon the issuance of BPY Units, other securities, property or assets by way of distribution in lieu of an Ordinary BPY Distribution to all or substantially all of the holders of the BPY Units; (ii) upon the issuance of any BPY Units pursuant to any present or future customary plan providing for the reinvestment of distributions or interest payable on interests of BPY and the investment, at market prices, of additional optional amounts in the BPY Units under any such plan; (iii) upon the repurchase of BPY Units pursuant to a normal course issuer bid; (iv) upon the issuance of any BPY Units or options or rights to purchase those BPY Units pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by BPY or any of its Subsidiaries or other Affiliates; (v) upon the issuance of any BPY Units pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the Issue Date; and (vi) upon the issuance of any BPY Units or any other security of BPY in connection with acquisitions of assets or securities of another person, including with respect to any consolidation, amalgamation, arrangement, merger or similar transaction.
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9.1.10
Notwithstanding any other provision herein, no adjustment shall be made in respect of an event otherwise requiring an adjustment under this Section 9.1 except to the extent such event is actually consummated.
9.1.11
If any event occurs that would trigger an adjustment in the Exchange Number pursuant to this Section 9 under more than one subsection hereof, such event, to the extent taken into account in any adjustment, shall not result in any other adjustment hereunder.
9.1.12
After adjustment in the Exchange Number pursuant to this Section 9, any subsequent event requiring an adjustment under this Section 9 shall cause an adjustment to such Exchange Number as so adjusted.
9.2
Adjustment upon Reorganization Event
9.2.1
In the event of (i) any consolidation, amalgamation, arrangement, merger or similar transaction of BPY, or of a successor to BPY, which does not result in holders of the BPY Units receiving solely Equity Securities of BPY or one or more successors to BPY, (ii) a take-over bid or similar transaction which results in not less than 90% of the outstanding BPY Units being owned by a single Person or group of Persons acting jointly or in concert, or (iii) any sale, lease or other disposition involving all or substantially all of the assets of BPY (any such event being herein referred to as a “
Reorganization Event
”), each Series 3 Unit Outstanding immediately prior to the Reorganization Event shall, without the consent of the holders of the Series 3 Units, remain outstanding, but the definition of “
Exchange Consideration
” will be adjusted to provide that each holder of the Series 3 Unit, upon exchange of the Series 3 Units pursuant to the Right to Exchange, will receive, with respect to each Series 3 Unit held, cash in an amount equal to the product of the Exchange Number and the Transaction Value. For this purpose, “
Transaction Value
” means (x) for any cash received in any such Reorganization Event, the amount of cash received per BPY Unit, (y) for any property other than cash or securities received in any such
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Reorganization Event, an amount equal to the Fair Market Value of such property received per BPY Unit, and (z) for any securities received in any such Reorganization Event, an amount equal to the Fair Market Value of such securities received per BPY Unit, determined, in the case of each of clauses (y) and (z) as of the Exchange Date. Notwithstanding the foregoing, in lieu of delivering cash as provided above, the Partnership may at its option deliver an equivalent value of securities or other property received in such Reorganization Event, determined in accordance with clause (y) or (z) above, as applicable. The kind and amount of securities into which the Series 3 Units shall be so exchangeable at the election of the Partnership after a Reorganization Event shall be subject to adjustment as described in Section 9.1
mutatis mutandis
following the date of completion of such Reorganization Event.
9.2.2
The foregoing adjustments will be made successively whenever any Reorganization Event may occur.
9.3
Notice of Adjustments and Certain Other Events
9.3.1
Whenever the Exchange Number is adjusted as herein provided, the Partnership shall, as soon as practicable, compute the new Exchange Number and give notice to the holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Exchange Number was calculated.
9.3.2
As soon as practicable after BPY publicly announces that any of the events which could result in an adjustment pursuant to Section 9.1 or 9.2 has occurred, or will occur, then the Partnership shall as soon as practicable deliver to the holders of the Series 3 Units a notice stating (x) the record date as of which the holders of the BPY Units to be entitled to such dividend, issue or distribution are to be determined, or (y) the date on which such Section 9.1.1 Transaction, Capital Reorganization, Reorganization Event, or other action is expected to become effective.
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10.
CERTAIN RESTRICTIONS
So long as any of the Series 3 Units are outstanding, the Partnership shall not, without the approval of the holders of the Series 3 Units as a series, given as specified in Section 13:
(i)
declare, pay or set aside for payment any distributions in respect of the Junior Securities;
(ii)
call for redemption, redeem, purchase or otherwise pay off or retire for value any Junior Securities; or
(iii)
make any payments pursuant to Section 5.2.4 of the Agreement;
provided that the restrictions set out in Sections 10(i), (ii) and (iii) will not apply if (x) all accrued and unpaid Base Distributions and Excess Distributions on the Outstanding Series 3 Units have been declared and paid or set aside for payment in full for all periods prior to the existing Quarter and (y) the regular record date for the existing Quarter has passed, the Base Distribution and any Excess Distributions on the Outstanding Series 3 Units have been declared in full for the existing Quarter; and provided, further, the restrictions set out in Section 10(ii) will not apply to the purchase of fractional interests in Junior Securities pursuant to the conversion or exchange provisions of such Junior Securities or the security being converted or exchanged.
11.
VOTING RIGHTS
Except as required by Law or as otherwise provided herein, the holders of the Series 3 Units shall not be entitled as such to receive notice of, to attend or to vote at any meetings of the Partnership or have any right or authority to act for or bind the Partnership or to take part or in any way to interfere in the conduct or management of the Partnership.
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12.
AMENDMENT WITH APPROVAL OF HOLDERS OF THE SERIES 3 UNITS
The rights, privileges, restrictions and conditions attached to the Series 3 Units may be added to, changed or removed but only with the approval of the holders of a majority of the Outstanding Series 3 Units, given as hereinafter specified.
13.
APPROVAL OF HOLDERS OF THE SERIES 3 UNITS
13.1
The approval of the holders of the Series 3 Units as a series in respect of any matter requiring the consent of the holders of the Series 3 Units as a series may be given in such manner as may then be required by Law, subject to a minimum requirement that such approval be passed by the requisite affirmative vote of the votes cast at a meeting of the holders of Series 3 Units as a series duly called and held for that purpose in accordance with Article 17 of the Agreement or given by resolution signed by holders of Series 3 Units as a series in accordance with Article 17 of the Agreement.
13.2
Each Series 3 Unit shall entitle the holder thereof to one vote for the purposes of any approval at a meeting of the holders of the Series 3 Units or by written consent.
14.
LIQUIDATION, DISSOLUTION OR WINDING-UP
14.1
In the event of the dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary, unless the Partnership is continued under an election to reconstitute and continue the Partnership pursuant to Section 13.2.2 of the Agreement, the holders of the Series 3 Units shall be entitled to receive, from the assets of the Partnership, a sum equal to the Issue Price for each Series 3 Unit held by them respectively, plus an amount equal to all distributions accrued (whether or not declared) and unpaid thereon up to (but excluding) the date of payment, less any tax required to be deducted and withheld, the whole before any distribution of any part of the assets of the Partnership among the holders of any
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Junior Securities. After payment to the holders of the Series 3 Units of the amounts so payable to them, they shall not be entitled to share in any further distribution of the assets of the Partnership. Notwithstanding anything contained herein to the contrary, the Partnership shall, to the extent practicable, provide 30 days’ prior written notice to allow any holders of the Series 3 Units to exercise such holders’ Right to Exchange prior to liquidation.
14.2
In the event the assets of the Partnership available for distribution to holders of Partnership Interests upon any dissolution, liquidation or winding-up of the Partnership, whether voluntary or involuntary, shall be insufficient to pay in full the amounts payable with respect to all of the Outstanding Series 3 Units and the corresponding amounts payable on any Parity Securities, the holders of the Series 3 Units and the holders of such Parity Securities shall share ratably in any distribution of assets of the Partnership in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.
15.
TAX MATTERS
15.1
Guaranteed Payments
15.1.1
Each of the Base Distribution and the Excess Distribution, whether paid or accrued, shall be treated as a guaranteed payment within the meaning of Section 707(c) of the Code, including for the purpose of determining Net Income and Net Loss and otherwise maintaining Capital Accounts, unless there is a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires treatment other than as a guaranteed payment for U.S. federal income tax purposes. The Managing General Partner shall notify the holders of the Series 3 Units of any such intention to change such treatment and shall cooperate in good faith with the holders of the Series 3 Units to resolve any disputes regarding such change in treatment.
15.1.2
For U.S. federal income tax purposes, the deduction attributable to any amount treated as a guaranteed payment under Section 15.1.1 shall be
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specially allocated to the Partners in a manner determined by the Managing General Partner in its sole discretion that is not inconsistent with the applicable provisions of the Code and Treasury Regulations.
15.2
U.S. Withholding Tax
Notwithstanding anything to the contrary herein, the Partnership shall withhold no U.S. federal income tax (including under Chapter 3, Chapter 4 or Chapter 61 of the Code) nor any U.S. state or local tax in respect of any Base Distribution or Excess Distribution, whether paid or accrued, or any other distribution on Series 3 Units (including in redemption), except for tax required to be withheld as a result of (i) a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires such withholding or (ii) the failure of any holder of Series 3 Units to timely deliver to the Partnership a valid, properly executed IRS Form W-8BEN-E, IRS Form W-9, or such other form as may be required under applicable Law as a precondition to exemption or reduction from such withholding; provided, however, that the Managing General Partner shall have no liability to the Partnership or any holder of Series 3 Units for any failure to request or obtain such form from any holder of Series 3 Units or for withholding or failing to withhold in respect of any holder of Series 3 Units who has not furnished such form to the Managing General Partner. Notwithstanding the foregoing, in no event shall the Managing General Partner withhold pursuant to clause (ii) of this Section 15.2 any such amounts in respect of any Base Distribution or Excess Distribution to the Initial Holder, unless the Managing General Partner has given advance written notice (at least 10 days prior to withholding any amounts) to the Initial Holder that such certificate is required to be provided.
15.3
Classification of Series 3 Units as Equity
Each of the Managing General Partner, the Partnership, and the holders of the Series 3 Units shall treat the Series 3 Units as equity for all U.S. federal, state, and
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local income tax purposes, and neither the Managing General Partner, the Partnership, nor any holder of Series 3 Units shall take any position on any U.S. federal, state, or local income or franchise tax return that is inconsistent with such treatment, unless there is a Change in Tax Law that, based on the advice of nationally-recognized counsel experienced as to such matters, requires different reporting and treatment.
16.
LEGENDS AND CERTIFICATIONS
16.1
The Series 3 Units and BPY Units have not been, and will not be, registered under the U.S. Securities Act or applicable securities laws of any state of the United States. Each certificate representing BPY Units originally issued to, or for the account or benefit of, a U.S. Person or a person in the United States, and each certificate representing the BPY Units issued in exchange therefor or in substitution thereof, shall bear the following legend (the “
U.S. Legend
”) until such time as the U.S. Legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state securities laws:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF BROOKFIELD PROPERTY PARTNERS L.P. (THE “COMPANY”) THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S (“REGULATION S”) UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN ACCORDANCE WITH RULE 144 UNDER THE U.S. SECURITIES ACT, IF AVAILABLE, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND IN EACH CASE IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO (C) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE COMPANY MUST FIRST BE PROVIDED TO THE COMPANY’S TRANSFER AGENT.
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THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES. A NEW CERTIFICATE, BEARING NO LEGEND, MAY BE OBTAINED FROM THE COMPANY’S TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE COMPANY’S TRANSFER AGENT AND THE COMPANY AND, IF SO REQUIRED BY THE COMPANY’S TRANSFER AGENT, AN OPINION OF COUNSEL, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.”,
provided that if BPY is a “foreign issuer” as defined in Regulation S under the U.S. Securities Act at the time such BPY Units are being sold, and such BPY Units are being sold outside of the United States in compliance with the requirements of Rule 904 of Regulation S, the U.S. Legend may be removed by providing a declaration to the transfer agent for the BPY Units in the form set out in Schedule C to this Part IV (or as BPY may reasonably prescribe from time to time) and, if requested by BPY, the Property Partnership, the Transfer Agent or the transfer agent for the BPY Units, an opinion of counsel of recognized standing in form and substance reasonably satisfactory to such requesting party, as applicable, to the effect that such sale is being made in compliance with Rule 904 of Regulation S under the U.S. Securities Act; and provided, further, that, if any BPY Units are being sold otherwise than in accordance with Rule 904 of Regulation S under the U.S. Securities Act and other than to BPY, the legend may be removed by delivery to the transfer agent for the BPY Units and BPY of an opinion of counsel, of recognized standing reasonably satisfactory to the BPY and the transfer agent for the BPY Units, that such legend is no longer required under applicable requirements of the U.S. Securities Act or any applicable state securities laws.
The transfer agent for the BPY Units shall be entitled to request any other document that it may require in accordance with its internal policies for removal of the legend set forth above.
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16.2
In connection with any redemption or exchange of Series 3 Units, in each case as set forth herein, a holder of Series 3 Units subject to such redemption or exchange who is a person in the United States, a U.S. Person, or a person requesting delivery of the BPY Units issuable upon such redemption or exchange in the United States must provide (a) a completed and executed U.S. Purchaser Certification or (b) an opinion of counsel of recognized standing in form and substance reasonably satisfactory to BPY and BPY’s transfer agent that the issuance of BPY Units pursuant to such redemption or exchange is exempt from the registration requirements of applicable securities laws of any state of the United States and the U.S. Securities Act.
17.
UNISSUED OR REACQUIRED UNITS
Series 3 Units not issued or that have been issued and exchanged, redeemed or otherwise purchased or acquired by the Partnership shall be restored to the status of authorized but unissued Class A Preferred Units without designation as to series, until such units are once more designated as part of a particular series by the Managing General Partner.
18.
NO SINKING FUND
Series 3 Units are not subject to the operation of a sinking fund.
19.
PREEMPTION
Holders of Series 3 Units shall not have any rights of preemption with regard to any Partnership Interests.
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SCHEDULE A
EXCHANGE NOTICE
To:
Brookfield Property L.P. (the “
Partnership
”)
This notice is given pursuant to Section 7.1 of Part IV of Schedule A (the “
Unit
Provisions
”) to that certain Second Amended and Restated Limited Partnership Agreement for Brookfield Property L.P. dated August 8, 2013, as amended (the “
Limited Partnership Agreement
”) and all capitalized terms used in this notice but not herein defined have the meanings ascribed to them in the Unit Provisions.
The undersigned hereby notifies the Partnership that, the undersigned irrevocably elects to exchange:
o
all Series 3 Unit(s) represented by the certificate or book-entry share attached to this Exchange Notice; or
o
of the Series 3 Units(s) represented by the certificate or book-entry share attached to this Exchange Notice,
for BPY Units in the manner specified in, and in accordance with, Section 7 of the Unit Provisions.
In accordance with Section 7 of the Unit Provisions, the undersigned herewith surrenders the certificate or book-entry share attached to this Exchange Notice and directs that the BPY Units issuable and deliverable upon the exchange be issued to the Person indicated below. (If BPY Units are to be issued in the name of a Person other than the holder, all requisite transfer taxes must be tendered by the undersigned.)
Certificates representing the BPY Units will be available, on and after the Exchange Date, to be picked up at [
address to be inserted]
.
The undersigned hereby acknowledges that the undersigned is aware that the BPY Units received upon exchange may be subject to restrictions on resale under applicable securities law.
The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):
o
(A) the undersigned holder at the time of exchange of the Series 3 Unit(s) (i) is not in the United States, (ii) is not exchanging the Series 3 Unit(s) for the account or benefit of a person in the United States, (iii) is not a U.S. person, (iv) did not execute or deliver this exchange notice in the United States and (v) delivery of the BPY Unit(s) to be exchanged for the Series 3 Unit(s) will not be made to an address in the United States; or
o
(B) the undersigned holder is either (i) a holder in the United States, (ii) executing or delivering this exchange notice in the United States, (iii) a U.S. person, or (iv) requesting delivery of the BPY Unit(s) to be exchanged for the Series 3 Unit(s) in the United States,
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and the undersigned holder has delivered to Brookfield Property Partners L.P. (the “
Company
”) and the Company’s transfer agent, CST Trust Company, (a) a completed and executed U.S. Purchaser Certification in substantially the form attached to as Schedule B to Part IV of Schedule A to the Limited Partnership Agreement or (b) an opinion of counsel (which will not be sufficient unless it is in form and substance reasonably satisfactory to the Company to the effect that with respect to the BPY Unit(s) to be delivered upon exchange, the issuance of such securities has been registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration requirements is available.
It is understood that the Company and CST Trust Company may require evidence to verify the foregoing representations.
The undersigned hereby represents and warrants to the Partnership that the undersigned is the sole registered and beneficial owner of the Series 3 Unit(s) to be acquired by the Partnership, free and clear of all liens, claims, encumbrances, security interests and adverse claims or interests.
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(Signature of Registered Unitholder)
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NOTE: This panel must be completed and the certificate or book-entry share attached to this Exchange Notice, together with such additional documents as the Transfer Agent and the Partnership may require, must be deposited at [
address to be inserted]
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(Name of Person in Whose Name Securities and/or Cheque(s)
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Are to be Registered, Issued or Delivered (please print))
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(Street Address or P.O. Box)
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(City, Province/State, Country and Postal/Zip Code)
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(Signature of Registered Unitholder)
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Guarantor’s signature
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NOTE: If this Exchange Notice is for less than all of the Series 3 Unit(s) represented by this certificate or book-entry share, a certificate representing the balance of the Series 3 Units will be issued and registered in the name of the unitholder as it appears on the register of the Partnership.
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SCHEDULE B
U.S. PURCHASER CERTIFICATION
TO:
Brookfield Property Partners L.P. (the “
Company
”)
Brookfield Property L.P. (the “
Partnership
”)
AND TO:
CST Trust Company as Transfer Agent
We are delivering this letter in connection with the exchange of Series 3 Units of the Partnership for BPY Units of the Company pursuant to Section 7.1 of Part IV of Schedule A (the “
Unit
Provisions
”) to that certain Second Amended and Restated Limited Partnership Agreement for Brookfield Property L.P. dated August 8, 2013, as amended (the “
Limited Partnership Agreement
”). All capitalized terms used herein but not herein defined have the meanings ascribed to them in the Unit Provisions.
We hereby confirm that
(a)
we are an “accredited person” defined under Rule 501(a) of the U.S. Securities Act;
(b)
we are acquiring the BPY Units for our own account;
(c)
we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of acquiring the BPY Units;
(d)
we are not acquiring the BPY Units with a view to distribution thereof or with any present intention of offering or selling any of the BPY Units, except (A) to the Company, (B) outside the United States in accordance with Rule 904 under the U.S. Securities Act or (C) inside the United States pursuant to the exemption from the registration requirements of the U.S. Securities Act provided by Rule 144, if available, and in accordance with any applicable U.S. state securities or “blue sky” laws;
(e)
we acknowledge that we have had access to such financial and other information as we deem necessary in connection with our decision to exchange the Series 3 Units for BPY Units; and
(f)
we acknowledge that we are not acquiring the BPY Units 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, television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.
We understand that the BPY Units are being offered in a transaction not involving any public offering within the United States within the meaning of the U.S. Securities Act and have not
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been and will not be registered under the U.S. Securities Act, or the securities laws of any state of the United States. We further understand that any BPY Units acquired by us will bear a legend reflecting the fact that we will not offer, sell or otherwise transfer any of the BPY Units, directly or indirectly, unless the sale is (A) to the Company; (B) made outside the United States in compliance with the requirements of Rule 904 of Regulation S under the U.S. Securities Act, (C) in accordance with Rule 144 under the U.S. Securities Act, if available, and in compliance with any applicable U.S. state securities laws, (D) in another transaction that does not require registration under the U.S. Securities Act, and, in each case, in accordance with applicable U.S. state securities laws; provided that, in the case of transfers pursuant to (C) or (D) above, a legal opinion in form and substance reasonably satisfactory to the Company must first be provided that the sale of such securities is not required to be registered under the U.S. Securities Act.
We acknowledge that you will rely upon our confirmations, acknowledgements and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate or complete.
DATED this day of , 20 .
(NAME OF U.S. PURCHASER)
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SCHEDULE C
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO:
Brookfield Property Partners L.P. (the “
Company
”)
AND TO:
CST Trust Company, as Transfer Agent
The undersigned (a) acknowledges that the sale of the securities of Brookfield Property Partners L.P. (the “
Company
”) to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “
U.S. Securities Act
”), and (b) certifies that (1) the undersigned is not an affiliate (as that term is defined in Rule 405 under the U.S. Securities Act) of the Company, (2) the offer of such securities was not made to a person in the United States and either (A) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (B) the transaction was executed in, on or through the facilities of the TSX Venture Exchange, the Toronto Stock Exchange or another designated offshore securities market (as that term is defined in Regulation S under the U.S. Securities Act) and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as such term is defined in Rule 144(a)(3) under the U.S. Securities Act), (5) the seller does not intend to replace such securities with fungible unrestricted securities, and (6) the contemplated sale is not a transaction, or part of a series of transactions which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.
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Signature
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143
Exhibit 99.5
Execution Version
GUARANTEE AGREEMENT
BETWEEN
BROOKFIELD PROPERTY PARTNERS L.P.
AND
QATAR INVESTMENT AUTHORITY
December 4, 2014
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT
is made effective the 4th day of December, 2014 between:
BROOKFIELD PROPERTY PARTNERS L.P.
, a Bermuda exempted limited partnership with registration number 47277 (the “
Guarantor
”)
— and —
QATAR INVESTMENT AUTHORITY
, an independent arm of the Qatari government established by State of Qatar Emiri Decision No (22) of 2005 (“
QIA
”)
WHEREAS:
I.
The Guarantor is the managing general partner of Brookfield Property L.P. (“
Property Partnership
”), a Bermuda exempted limited partnership.
II.
Property Partnership has agreed to issue and sell to QIA, and QIA has agreed to subscribe for and purchase, an aggregate of US$1,800,000,000 of Class A Preferred Limited Partnership Units (such units outstanding from time to time, “
Preferred Units
”) to be issued in three series at a price per Preferred Unit equal to US$25.00 having the rights, privileges, restrictions and conditions set forth in the Second Amended and Restated Limited Partnership Agreement for Brookfield Property L.P. (the “
LPA
”) as amended by the First Amendment to the LPA (the “
Amended LPA
”).
III.
QIA has agreed to subscribe for the Preferred Units on condition that the Guarantor guarantees the obligation of Property Partnership to pay, irrespective of whether Property Partnership has sufficient net assets to do so, to the holder or holders of Preferred Units the issue price per Preferred Unit together with all dividends accrued and unpaid up to but excluding the date of payment (the “
Liquidation Amount
”) in the event of a liquidation, dissolution or winding-up of Property Partnership (the “
Guaranteed Obligations
”), which guarantee will rank junior to any indebtedness of the Guarantor,
pari passu
with all obligations of the Guarantor in respect of any preferred partnership interests issued by the Guarantor from time to time (the “
Guarantor Preferred Unit Obligations
”), and senior to all obligations of the Guarantor in respect of all other non-preferred partnership units issued by the Guarantor from time to time (the “
Guarantor Partnership Unit Obligations
”).
NOW THEREFORE
in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto hereby covenant and agree as follows:
ARTICLE 1
DEFINITIONS
1.1
Definitions
(a)
“
Amended LPA
” has the meaning assigned to that term in the recitals.
(b)
“
Brookfield
” means Brookfield Asset Management Inc.
(c)
“
General Partner
” means Brookfield Property Partnership Limited.
(d)
“
Guaranteed Obligations
” has the meaning assigned to that term in the recitals, and, provided that, for greater certainty, the Guaranteed Obligations shall be determined assuming that Property Partnership has sufficient assets available on a liquidation, dissolution or winding-up to pay the Liquidation Amount in full.
(e)
“
Guarantor
” has the meaning assigned to that term in the recitals.
(f)
“
Guarantor Partnership Unit Obligations
” has the meaning assigned to that term in the recitals.
(g)
“
Guarantor Preferred Unit Obligations
” has the meaning assigned to that term in the recitals.
(h)
“
ICC
” has the meaning ascribed to that term in Section 6.8.
(i)
“
Indebtedness
” means the principal of and the interest and premium (or any other amounts payable thereunder), if any, on:
(i)
all indebtedness (including any indebtedness to trade creditors), liabilities and obligations of the Guarantor (other than the Guaranteed Obligations), whether outstanding on the date of this Guarantee or thereafter created, incurred, assumed or guaranteed; and
(ii)
all renewals, extensions, restructurings, refinancings and refundings of any such indebtedness, liabilities or obligations.
(j)
“
Investor
” means QIA or any person or persons to whom Investor’s rights under this Guarantee have been assigned or transferred in whole or in part in accordance with Section 6.4.
(k)
“
Liquidation Amount
” has the meaning assigned to that term in the recitals.
(l)
“
LPA
” has the meaning assigned to that term in the recitals.
(m)
“
Officer’s Certificate
” means a certificate signed by any officer or director (or the equivalent) of the general partner of the Guarantor.
(n)
“
Preferred Units
” has the meaning assigned to that term in the recitals.
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(o)
“
Property Partnership
” has the meaning assigned to that term in the recitals.
(p)
“
QIA
” has the meaning assigned to that term in the recitals.
(q)
“
Rules
” has the meaning ascribed to that term in Section 6.8.
ARTICLE 2
GUARANTEE
2.1
Guarantee
The Guarantor absolutely, irrevocably and unconditionally, as primary obligor and not merely as surety, guarantees in favour of Investor the due and punctual payment of the Guaranteed Obligations, regardless of any defense (except for the defense of payment by Property Partnership), right of set-off or counterclaim which the Guarantor may now or hereafter have or assert.
2.2
Waiver of Notice
The Guarantor hereby waives notice of acceptance of this Guarantee and irrevocably waives and agrees not to assert any claims for defense, set-off or counterclaim based on promptness, diligence, presentment, demand, protest and notice of any kind, all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect.
2.3
Guarantee Absolute
The Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with their terms, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any such terms or the rights of Investor with respect thereto. The liability of the Guarantor under this Guarantee shall be absolute and unconditional irrespective of:
(a)
any sale, transfer or assignment by Investor of any Preferred Unit or any right, title, benefit or interest of Investor therein or thereto;
(b)
any amendment or change in or to, or any waiver of, any of the terms of the LPA or the Preferred Units;
(c)
any change in the name, partners, objects, constitution, capacity, capital or the constating documents of the Guarantor;
(d)
any change in the name, partners, objects, status, control, ownership, constitution, capacity, capital or the constating documents of Property Partnership;
(e)
any partial payment by Property Partnership, or any release or waiver, by operation of law or otherwise, of the performance or observance by Property Partnership of any express or implied agreement, covenant, term or condition
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relating to the Preferred Units to be performed or observed by Property Partnership;
(f)
the extension of time for the payment by Property Partnership of all or any portion of the Guaranteed Obligations or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Units;
(g)
any failure, omission, delay or lack of diligence on the part of Investor to enforce, assert or exercise any right, privilege, power or remedy conferred on Investor pursuant to the terms of the LPA or the Preferred Units, or any action on the part of Investor granting indulgence or extension of any kind;
(h)
subject to Section 4.1.2, the recovery of any judgment against Property Partnership, any voluntary or involuntary liquidation, dissolution, sale of any collateral, winding up, merger or amalgamation of Property Partnership or the Guarantor, any sale or other disposition of all or substantially all of the assets of Property Partnership, or any judicial or extrajudicial receivership, insolvency, bankruptcy, assignment for the benefit of, or proposal to, creditors, reorganization, moratorium, arrangement, composition with creditors, or readjustment of debt of, or other proceedings affecting Property Partnership, the Guarantor or any of the assets of Property Partnership or the Guarantor;
(i)
any circumstance, act or omission that would prevent subrogation operating in favour of the Guarantor;
(j)
any illegality, invalidity of, or defect or deficiency or unenforceability in, the Preferred Units;
(k)
the settlement or compromise of any obligation guaranteed hereby or hereby incurred;
(l)
any defense by Property Partnership to immunity from suit or any suretyship defense that might be available to the Guarantor; or
(m)
any other circumstance, act or omission that might otherwise constitute a defence available to, or a discharge of, Property Partnership in respect of any of the Guaranteed Obligations, or the Guarantor in respect of any of the Guaranteed Obligations (other than, and to the extent of, the payment or satisfaction thereof),
it being the intent of the Guarantor that its obligations in respect of the Guaranteed Obligations shall be absolute and unconditional under all circumstances and shall not be discharged except by payment in full of the Guaranteed Obligations. Investor shall not be bound or obliged to exhaust its recourse against Property Partnership or any other persons or to take any other action against Property Partnership or any other persons before being entitled to demand payment from the Guarantor hereunder. This Guarantee is one of payment not collection.
There shall be no obligation of Investor to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing.
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2.4
Continuing Guarantee
This Guarantee shall apply to and secure any ultimate balance due or remaining due to Investor in respect of the Guaranteed Obligations and shall be binding as an absolute and continuing obligation of the Guarantor. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment of any of the Guaranteed Obligations must or may be rescinded, is declared or may become voidable, annulled, invalidated, declared to be fraudulent or preferential or must or may otherwise be returned, refunded or repaid by Investor for any reason, including the insolvency, bankruptcy, dissolution or reorganization of Property Partnership or the General Partner or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to Property Partnership or the General Partner or any substantial part of its property, all as though such payment had not been made. If at any time Property Partnership or the General Partner is precluded from making payment when due in respect of any Guaranteed Obligations, such amounts shall nonetheless be deemed to be due and payable by Property Partnership to Investor for all purposes of this Guarantee and the Guaranteed Obligations shall be immediately due and payable to Investor. This is a guarantee of payment, and not merely a deficiency or collection guarantee.
2.5
Guarantee of Payment
If Property Partnership fails to pay any of the Guaranteed Obligations when due, the Guarantor shall pay to Investor the Guaranteed Obligations immediately after demand made in writing, but in any event within 15 days of any failure by Property Partnership to pay the Guaranteed Obligations when due, without any evidence that Investor has demanded that Property Partnership or the Guarantor pay any of the Guaranteed Obligations or that Property Partnership has failed to do so.
2.6
Subrogation; Set-Off
The Guarantor shall have no right of subrogation in respect of any payment made to Investor hereunder until such time as the Guaranteed Obligations have been fully satisfied. In the case of the liquidation, dissolution, winding-up or bankruptcy of Property Partnership (whether voluntary or involuntary), or if Property Partnership makes an arrangement or compromise or proposal with its creditors, Investor shall have the right to rank for its full claim and to receive all distributions or other payments in respect thereof until its claims have been paid in full, and the Guarantor shall continue to be liable to Investor for all and any balance which may be owing to Investor by Property Partnership. The Guaranteed Obligations shall not, however, be released, discharged, limited or affected by the failure or omission of Investor to prove the whole or part of any claim against Property Partnership. If any amount is paid to the Guarantor on account of any subrogation arising hereunder at any time when the Guaranteed Obligations have not been fully satisfied, such amount shall be held in trust by the Guarantor for the benefit of Investor and shall forthwith be paid to Investor to be credited and applied against the Guaranteed Obligations. From and after a demand has been made by Investor for payment of the Guaranteed Obligations, until the Guaranteed Obligations have been paid in full, the Guarantor shall have no right of set-off or counterclaim against Property Partnership.
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2.7
Independent Obligations
The Guarantor acknowledges that its obligations hereunder are independent of the obligations of Property Partnership with respect to the Preferred Units and that the Guarantor shall be liable to make payment of the Guaranteed Obligations pursuant to the terms of this Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (m), inclusive, of Section 2.3 and regardless of whether Investor makes a demand upon the Guarantor or Property Partnership. The Guarantor will pay the Guaranteed Obligations without regard to any equities between it and Property Partnership or any defence or right of set-off, compensation, abatement, combination of accounts or cross-claim that it or Property Partnership may have.
ARTICLE 3
PRIORITY OF GUARANTEE
3.1
Applicability of Article
The obligations of the Guarantor hereunder shall be subordinate and subject in right of payment to the prior payment in full of all Indebtedness, shall rank
pari passu
with all Guarantor Preferred Unit Obligations (and the obligations of the Guarantor hereunder are hereby subordinated so as to rank
pari passu
with such Guarantor Preferred Unit Obligations), and shall rank senior to all Guarantor Partnership Unit Obligations. Investor, as a condition to and by acceptance of the benefits conferred hereby, agrees to and shall be bound by the provisions of this Article 3.
3.2
Order of Payment
Upon any distribution of the assets of the Guarantor on any dissolution, winding up, liquidation or reorganization of the Guarantor (whether in bankruptcy, insolvency or receivership proceedings, or upon an “assignment for the benefit of creditors” or any other marshalling of the assets and liabilities of the Guarantor, or otherwise):
(a)
all Indebtedness shall first be paid in full, or provision made for such payment, before any payment is made on account of the Guaranteed Obligations;
(b)
all Guaranteed Obligations shall be paid on a
pari passu
and
pro rata
basis with all Guarantor Preferred Unit Obligations; and
(c)
any payment or distribution of assets of the Guarantor, whether in cash, property or securities, to which Investor would be entitled except for the provisions of this Article 3, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors, or other liquidating agent making such payment or distribution, directly to the holders of Indebtedness or Guarantor Preferred Unit Obligations (as applicable) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any of such Indebtedness or Guarantor Preferred Unit Obligations may have been issued, to the extent necessary, in the case of Indebtedness, to pay all Indebtedness in full after giving effect to any concurrent payment or distribution, or provision therefor, to the holders of such Indebtedness.
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3.3
Ranking with Respect to Units of Guarantor
Notwithstanding anything herein contained to the contrary, the obligations of the Guarantor hereunder will rank (i) on a
pro rata
and
pari passu
basis with all other Guarantor Preferred Unit Obligations; and (ii) senior to all Guarantor Partnership Unit Obligations.
3.4
Obligation to Pay Not Impaired
Nothing contained in this Article 3 or elsewhere in this Guarantee or in the terms of the Preferred Units is intended to or shall impair, as between the Guarantor, its creditors (other than the holders of Indebtedness), and Investor, the obligation of the Guarantor, which is absolute and unconditional, to pay to Investor the Guaranteed Obligations in accordance herewith, as and when the same shall become due and payable in accordance with this Guarantee, or affect the relative rights of Investor and creditors of the Guarantor other than the holders of the Indebtedness and Guarantor Preferred Unit Obligations; nor shall anything herein or therein prevent Investor from exercising all remedies otherwise permitted by applicable law upon default under this Guarantee, subject to the rights, if any, under this Article 3 of the holders of Indebtedness and Guarantor Preferred Unit Obligations in respect of cash, property or securities of the Guarantor that are received upon the exercise of any such remedy.
3.5
No Payment if Indebtedness in Default
Upon the maturity of any Indebtedness by lapse of time, acceleration, demand or otherwise, then, except as provided in Section 3.6, all principal of and interest on all such matured Indebtedness shall first be paid in full, or shall first have been duly provided for, before any payment by the Guarantor is made on account of the Guaranteed Obligations.
In case of default with respect to any Indebtedness permitting the holder thereof to accelerate the maturity thereof, unless and until such default shall have been cured or waived or shall have ceased to exist, no payment shall be made by the Guarantor with respect to the Guaranteed Obligations, and Investor shall not be entitled to demand, institute proceedings for the collection of, or receive any payment or benefit from the Guarantor (including without limitation by set-off, combination of accounts or otherwise in any manner whatsoever) on account of the Guaranteed Obligations after the happening of such a default (except as provided in Section 3.7), and unless and until such default shall have been cured or waived or shall have ceased to exist, such payments received from the Guarantor shall be held in trust for the benefit of, and, if and when the Indebtedness shall have become due and payable, shall be paid over to, the holder of such Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing an amount of such Indebtedness remaining unpaid, until all such Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of such Indebtedness.
The fact that any payment hereunder is prohibited by this Section 3.5 shall not prevent the failure to make such payment from being an Event of Default hereunder.
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3.6
Payment on Preferred Units Permitted
Nothing contained in this Article 3 or elsewhere in this Guarantee, or in the terms of the Preferred Units, shall affect the obligation of the Guarantor to make, or prevent the Guarantor from making, at any time except during the pendency of any dissolution, winding up or liquidation of the Guarantor or reorganization proceedings specified in Section 3.2 affecting the affairs of the Guarantor, any payment on account of the Guaranteed Obligations, except that the Guarantor shall not make any such payment other than as contemplated by this Article 3, if it is in default in payment of any of its Indebtedness. The fact that any such payment is prohibited by this Section 3.6 shall not prevent the failure to make such payment from being an Event of Default hereunder.
3.7
Confirmation of Subordination
As a condition to the benefits conferred hereby on Investor, Investor by acceptance thereof agrees to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 3. Upon request of and at the cost and expense of the Guarantor, and upon being furnished with an Officer’s Certificate stating that one or more named persons are holders of Indebtedness or Guarantor Preferred Unit Obligations, or the representative or representatives of such holders, or the trustee or trustees under which any instrument evidencing such Indebtedness or Guarantor Preferred Unit Obligations may have been issued, and specifying the amount and nature of such Indebtedness or Guarantor Preferred Unit Obligations, Investor shall enter into a written agreement or agreements with the Guarantor and the person or persons named in such Officer’s Certificate providing that such person or persons are entitled to all the rights and benefits of this Article 3 as the holder or holders, representative or representatives, or trustee or trustees of such Indebtedness or Guarantor Preferred Unit Obligations specified in such Officer’s Certificate and in such agreement. Such agreement shall be conclusive evidence that the indebtedness specified therein is Indebtedness or Guarantor Preferred Unit Obligations, as applicable, however, nothing herein shall impair the rights of any holder of Indebtedness or Guarantor Preferred Unit Obligations who has not entered into such an agreement.
3.8
Investor May Hold Indebtedness
Investor is entitled to all the rights set forth in this Article 3 with respect to any Indebtedness at the time held by it, to the same extent as any other holder of Indebtedness or Guarantor Preferred Unit Obligations, and nothing in this Guarantee deprives such holder of any of its rights as such holder.
3.9
Rights of Holders of Indebtedness or Guarantor Preferred Obligations Not Impaired
No right of any present or future holder of any Indebtedness or Guarantor Preferred Unit Obligations to enforce the subordination herein will at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Guarantor or by any non-compliance by the Guarantor with the terms, provisions and covenants of this Guarantee, regardless of any knowledge thereof which any such holder may have or be otherwise charged with.
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3.10
Altering Indebtedness or Guarantor Preferred Obligations
A holder of Indebtedness or Guarantor Preferred Unit Obligations has the right to extend, renew, modify or amend the terms of such Indebtedness or Guarantor Preferred Unit Obligations or any security therefor and to release, sell or exchange such security and otherwise to deal freely with the Guarantor or any other person, all without notice to or consent of Investor and without affecting the subordination herein, the liabilities and obligations of the parties to this Guarantee.
3.11
Additional Indebtedness and Securities
This Guarantee does not restrict the Guarantor from incurring any indebtedness for borrowed money or otherwise or mortgaging, pledging or charging its properties to secure any indebtedness or from issuing any securities.
ARTICLE 4
TERMINATION AND REMEDIES
4.1
Termination of Guarantee
4.1.1
This Guarantee and all obligations hereunder will terminate and be of no further force and effect on the earlier of:
(a)
the date that no person other than the Guarantor or one of its affiliates holds any Preferred Units; and
(b)
all sums payable by Property Partnership in respect of the Guaranteed Obligations have been paid.
4.1.2
Subject to Section 6.4, all of the rights, obligations and liabilities of the Guarantor pursuant to this Guarantee shall terminate, and the Guarantor shall be discharged of all obligations and covenants under this Guarantee, upon the conveyance, distribution or transfer (including pursuant to a reorganization, consolidation, liquidation, dissolution, sale of any collateral, winding up, merger, amalgamation, arrangement or otherwise) of all or substantially all of the Guarantor’s properties, securities and assets to a person that has assumed the obligations of the Guarantor pursuant to Section 6.4.
4.2
Suits for Enforcement by Investor
In the event that the Guarantor fails to pay the Guaranteed Obligations as required (an “
Event of Default
”) pursuant to the terms of this Guarantee, Investor may institute judicial proceedings for the collection of the moneys so due and unpaid, may prosecute such proceedings to judgment or final decree and may enforce the same against Property Partnership and/or the Guarantor and may collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Guarantor.
If an Event of Default occurs and is continuing, Investor may in its discretion proceed to protect and enforce its rights by such appropriate judicial proceedings as Investor shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any
9
covenant or agreement in this Guarantee or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
4.3
Investor May File Proofs of Claim
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Guarantor or the property of the Guarantor, Investor shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a)
to file and prove a claim for any Guaranteed Obligation then due and payable and to file such other papers or documents as may be necessary or advisable in order to have the claims of Investor allowed in such judicial proceeding; and
(b)
to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same.
4.4
Application of Money Collected
Any money collected by Investor pursuant to this Article shall be applied in the following order:
(a)
FIRST
, To the payment of all amounts due to Investor in respect of the costs, charges, expenses and advances incurred in connection with enforcing its rights hereunder;
(b)
SECOND
, Subject to the
pro rata
and
pari passu
payment of any Guarantor Preferred Unit Obligations then due, to the payment of any Guaranteed Obligation then due and unpaid on a
pro rata
basis; and
(c)
THIRD
, The balance, if any, to the Person or Persons entitled thereto.
4.5
Restoration of Rights and Remedies
If Investor has instituted any proceeding to enforce any right or remedy under this Guarantee and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to Investor, then and in every such case, subject to any determination in such proceeding, the Guarantor and Investor shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of Investor shall continue as though no such proceeding had been instituted.
4.6
Rights and Remedies Cumulative
No right or remedy herein conferred upon or reserved to Investor is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
10
4.7
Delay or Omission Not Waiver
No delay or omission of Investor to exercise any right or remedy accruing upon an Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to Investor may be exercised from time to time, and as often as may be deemed expedient, by Investor.
4.8
Waiver of Stay or Extension Laws
The Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Guarantee; and the Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to Investor, but will suffer and permit the execution of every such power as though no such law had been enacted.
4.9
Undertaking for Costs
Both parties to this Guarantee agree that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Guarantee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable lawyers’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this section shall not apply to (i) any suit instituted by the Guarantor, or (ii) any suit instituted in accordance with this Guarantee by Investor for the enforcement of the payment of the Guaranteed Obligations.
4.10
Withholding
All payments to be made by the Guarantor to the Investor under this Guarantee shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges in the nature of a tax imposed by the jurisdiction in which the Guarantor is organized or any other jurisdiction from or through which payments under this Guarantee are made, including any interest, additions to taxes or penalties applicable thereto, unless, based on the advice of nationally-recognized counsel experienced as to such matters, such withholding or deduction is required by law or by the interpretation or administration thereof, including by reason of Investor’s failure to comply with any certification, identification, documentation or other reporting requirements if such compliance is required by law or an applicable tax treaty as a condition to exemption from, or a reduction in the rate of deduction or withholding of, any such tax.
11
ARTICLE 5
REPRESENTATIONS
5.1
Guarantor Representations
The Guarantor represents, warrants and covenants to Investor, and acknowledges that Investor is relying thereon, that:
(a)
The Guarantor is an exempted limited partnership duly organized and validly existing under the laws of Bermuda and has the requisite power and authority to own, lease and operate its properties and to conduct its business.
(b)
The Guarantor has all requisite legal and corporate power and authority to execute and deliver the Guarantee and to perform its obligations hereunder.
(c)
The Guarantor has duly authorized, executed and delivered the Guarantee, and, upon acceptance by Investor, the Guarantee will constitute a valid and binding agreement of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization or other laws of general application affecting enforcement of creditors’ rights and general principles of equity that restrict the availability of equitable remedies.
(d)
No consent, approval, authorization, order or agreement of, or registration, filing or qualification with, or any other action by, 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 TSX and the NYSE (each, a “
Governmental Authority
”)
or other person is required for the execution,
delivery
or performance of the Guarantee by the Guarantor.
(e)
Neither the entering into, delivery or performance of the Guarantee nor the completion of the transactions contemplated hereby by the Guarantor will: (i) conflict with or result in the violation or breach of any of the provisions of the constating documents or bye-laws of the Guarantor; (ii) conflict with, or result in a breach or violation of any of the terms of, or constitute a default under, or result in the creation or imposition of any lien or right of any other person upon any assets of the Guarantor pursuant to any agreement or other instrument to which the Guarantor is a party or by which the Guarantor is bound or to which any of the assets of the Guarantor is subject, or (iii) result in the violation of any law in respect of which the Guarantor must comply, with such exceptions, in the case of each of clauses (ii) and (iii) above, as would not have a material adverse effect on the Guarantor’s ability to perform its obligations hereunder.
(f)
The Guarantor (i) has not directly or indirectly, obtained or induced and will not attempt to so obtain or induce the procurement of the Guarantee or any contract, consent, approval, right, interest, privilege or other obligation or benefit related to the Guarantee or the transactions contemplated hereby or the Guarantor’s other dealings with Investor or its Connected Persons through any violation of law or
12
regulation and (ii) other than in respect of fees payable to professional advisors, has not given or agreed to give and shall not give or agree to give to any person, either directly or indirectly, any placement fee, introductory fee, arrangement fee, finder’s fee or any other fee, compensation, monetary benefit or any other benefit, gift, commission, gratification, bribe or kickback, whether described as a consultation fee or otherwise, with the object of obtaining or inducing the procurement of the transactions contemplated hereby or any contract, right, interest, privilege or other obligation or benefit related to the transactions contemplated hereby. As used herein, the term “Connected Persons” means (a) Investor’s affiliates; (b) the advisers, agents, representatives and consultants of Investor and its affiliates; and (c) the directors, officers, partners and employees of Investor, its affiliates and of its and their advisers, agents, representatives and consultants.
The representations and warranties of the Guarantor contained in the Guarantee shall survive until the termination of the Guarantee.
5.2
Investor Representations
Investor represents, warrants and covenants to the Guarantor, and acknowledges that the Guarantor is relying thereon, that:
(a)
Investor is an independent arm of the Qatari government established by State of Qatar Emiri Decision No (22) of 2005 and has the power and authority to own, lease and operate its properties and to conduct its business.
(b)
Investor has all requisite legal and corporate power and authority to execute and deliver the Guarantee and to perform its obligations hereunder.
(c)
Investor has duly authorized, executed and delivered the Guarantee, and, upon acceptance by the Guarantor, the Guarantee will constitute a valid and binding agreement of Investor, enforceable against Investor in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization or other laws of general application affecting enforcement of creditors’ rights and general principles of equity that restrict the availability of equitable remedies.
(d)
No consent, approval, authorization, order or agreement of, or registration, filing or qualification with, or any other action by, any Governmental Authority or other person is required for the execution, delivery or performance of the Guarantee by Investor.
(e)
Neither the entering into, delivery or performance of the Guarantee nor the completion of the transactions contemplated hereby by Investor will: (i) conflict with or result in the violation or breach of any of the provisions of the constating documents or by-laws of Investor;
(ii)
conflict with, or result in a breach or violation of any of the terms of, or constitute a default under, or result in the creation or imposition of any lien or right of any other person upon any assets of Investor pursuant to any agreement or other instrument to which Investor is a
13
party or by which Investor is bound or to which any of the assets of Investor is subject; or (iii) result in the violation of any law applicable to Investor or any law respecting money-laundering, corruption or terrorism applicable to the Guarantor,
with such exceptions, in the case of each of clauses (ii) and (iii) above, as would not have a material adverse effect on the ability of
Investor
to perform its obligations hereunder.
(f)
Investor
(i) has not directly or indirectly, obtained or induced and will not attempt to so obtain or induce the procurement of the Guarantee or any contract, consent, approval, right, interest, privilege or other obligation or benefit related to the Guarantee or the transactions contemplated hereby or the Guarantor’s other dealings with Investor or its Connected Persons through any violation of law or regulation and (ii) other than in respect of fees payable to professional advisors, has not given or agreed to give and shall not give or agree to give to any person, either directly or indirectly, any placement fee, introductory fee, arrangement fee, finder’s fee or any other fee, compensation, monetary benefit or any other benefit, gift, commission, gratification, bribe or kickback, whether described as a consultation fee or otherwise, with the object of obtaining or inducing the procurement of the transactions contemplated hereby or any contract, right, interest, privilege or other obligation or benefit related to the transactions contemplated hereby.
The representations and warranties of Investor contained in the Guarantee shall survive until the termination of the Guarantee.
ARTICLE 6
GENERAL
6.1
No Recourse Against Certain Persons
A director, officer, employee, limited partner or securityholder, as such, of the Guarantor or the general partner of the Guarantor shall not have any liability for any obligations of the Guarantor under this Guarantee beyond the partnership assets of the Guarantor or for any claim based on, in respect of or by reason of such obligations or its creation. Each of the parties hereto acknowledges that the Guarantor and Property Partnership are limited partnerships and that there is no recourse to the limited partners of the Guarantor or Property Partnership.
6.2
Notices
Any demand, notice or other communication to be given in connection with this Guarantee must be given in writing and will be given by personal delivery or by electronic means of communication addressed to the recipient as follows:
To the Guarantor:
Brookfield Property Partners L.P.
73 Front Street
Hamilton, HM 12, Bermuda
14
Fax No.: 441 296 4475
Attention: Corporate Secretary
Email:
To Investor:
Qatar Investment Authority
Q-Tel Tower
Diplomatic Area Street, West Bay
Doha, Qatar
Attention: Head, Mergers & Acquisitions Department
Email: notices.m&a@qatarholding.qa
with a copy to:
General Counsel
Legal Department
Qatar Holding LLC
Q-Tel Tower
Diplomatic Area Street, West Bay
Doha, Qatar
Email: notices.legal@qatarholding.qa
or to such other address, individual or electronic communication number as may be designated by notice given by either party to the other. Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by electronic communication, on the day of transmittal thereof if given during the normal business hours of the recipient and on the business day during which such normal business hours next occur if not given during such hours on any day.
6.3
Entire Agreement/Amendment
This Guarantee contains the entire agreement of the parties and supersedes all prior agreements between the parties relating to the subject matter hereof. There are no representations, warranties, covenants or other agreements between the parties relating to the subject matter hereof except as stated or referred to herein.
No amendment to this Guarantee will be valid or binding unless set forth in writing and executed by both parties. No failure of any party to exercise and no delay by it in exercising any right, power or remedy in connection with this Guarantee shall operate as a waiver of that right, nor shall any single or partial exercise of any right preclude any other or further exercise of that right or the exercise of any other right.
6.4
Assignment
No party may assign, transfer or delegate its rights, benefits or obligations under this Guarantee without the prior written consent of the other parties; except that the rights and obligations of Investor hereunder may be assigned, transferred or otherwise granted without the prior written
15
consent of Guarantor by Investor to any transferee of a Preferred Unit; provided, further however, the rights and obligations of the Guarantor hereunder shall be assigned, transferred or otherwise granted without the prior written consent of Investor by the Guarantor to any purchaser or transferee of all or substantially all of the Guarantor’s properties, securities and assets. Any other purported assignment, transfer or delegation other than in accordance with this Section 6.4 shall be null and void. The terms and provisions of this Guarantee shall be binding upon and enure to the benefit of the Guarantor and Investor and their respective successors and permitted assigns.
6.5
Further Assurances
Each party will, from time to time at the request of the other party, execute and deliver all such further documents and perform or cause to be performed such further acts or things as may be reasonably required to give full effect to, and carry out or better evidence or perfect the intent of, this Guarantee.
6.6
Time
Time is of the essence in this Guarantee.
6.7
Costs
Except as provided in Section 3.7 and Section 4.9, all costs and expenses incurred in connection with this Guarantee and the transactions contemplated hereby will be paid by the party incurring such costs and expenses, whether or not any of the transactions contemplated hereby are consummated.
6.8
Governing Law; Consent to Arbitration
This Guarantee shall be governed by and construed in accordance with the laws of the State of New York. All disputes arising out of or in connection with this Guarantee shall be finally settled under the Rules of Arbitration (the “
Rules
”) of the International Chamber of Commerce (“
ICC
”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three (3) arbitrators. The Guarantor and Investor shall each designate one arbitrator. The third arbitrator shall be designated by the two arbitrators designated by the parties. If either the Guarantor or Investor fails to designate an arbitrator within thirty (30) days after the filing of a dispute with the ICC, such arbitrator shall be appointed in the manner prescribed by the Rules. Any arbitration proceeding conducted pursuant to this Guarantee shall take place in New York, being the legal seat of the arbitration, and shall be conducted in English. The decision or award of the arbitrators shall be in writing and shall be final and binding on the parties.
6.9
Severance
If any term of this Guarantee is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect the legality, validity or enforceability in that jurisdiction of any other term of this Guarantee or the legality, validity or enforceability in other jurisdictions of that or any other provision of this Guarantee. The parties shall use all reasonable endeavours to replace any provision held to be illegal, invalid or unenforceable with a legal, valid and enforceable
16
substitute provision the effect of which is as close as possible to the intended effect of the invalid provision.
6.10
Counterparts
This Guarantee may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall constitute one and the same document. A party’s transmission by facsimile or electronic mail of this Guarantee duly executed by that party shall constitute effective delivery by that party of an executed copy of this Guarantee.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF
the parties have duly executed this Guarantee as of the date first written above.
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BROOKFIELD PROPERTY
PARTNERS L.P.,
by its general partner,
BROOKFIELD PROPERTY
PARTNERS LIMITED
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Per:
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/s/ Jane Sheere
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Name:
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Jane Sheere
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Title:
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Secretary
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QATAR INVESTMENT AUTHORITY
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Per:
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/s/ Sheikh Abdullah bin Mohammed bin Saud Al-Thani
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Name:
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Sheikh Abdullah bin Mohammed bin Saud Al-Thani
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Title:
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Chief Executive Officer
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