AGREEMENT RELATING TO THE INDIRECT ACQUISITION OF LONGVIEW THIS AGREEMENT is made the 4th day of December, 2007
AGREEMENT RELATING TO THE INDIRECT ACQUISITION OF LONGVIEW
THIS AGREEMENT is made the 4th day of December, 0000
X X X X X X X:
Brookfield Infrastructure Corporation, a corporation existing under the laws
of the State of Delaware
(hereinafter called “BIC”)
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Brookfield Asset Management Inc., a corporation incorporated under the laws
of the Province of Ontario
(hereinafter called “BAM”)
RECITALS:
| A. | Pursuant to agreements (collectively, the “Initial Agreement”) between Brascan (US) Corporation and BIC and Brookfield Longview Holdings LLC dated as of November 20, 2007, BIC will acquire common stock and an interest in the indebtedness of Longview Timber Holdings Corp., which together represent a 30% (the “Initial Percentage”) interest in Longview Timber Holdings Corp. as of the date hereof; and | |
| B. | In the event that BAM contributes, directly or indirectly, all or a portion of its interest in Longview Timber Holdings Corp. that is not transferred pursuant to the Initial Agreement (the “Remaining Longview Interest”) to the Timberlands Partnership (as defined below), BIC intends to participate in the Timberlands Partnership and thereby indirectly acquire a portion of the Remaining Longview Interest, as contemplated in the prospectus and registration statement of Brookfield Infrastructure Partners L.P. (“BIP”); |
NOW THEREFORE in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
1. Interpretation
1.1 Definitions
In this Agreement, the following terms shall have the following meanings:
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1.1.1 “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;
1.1.3 “BAM Group” has the meaning assigned thereto in the Master Services Agreement;
1.1.4 “BIP Group” has the meaning assigned thereto in the Master Services Agreement;
1.1.5 “Control” means the control of 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 beneficial ownership of
a majority of the voting interests in B; and for certainty and without limitation,
if A owns shares to which more than 50% of the votes permitted to be cast in the
election of directors to the board of directors (or its equivalent) of B or A is the
General Partner of B, a limited partnership, then in each case A Controls B for this
purpose;
1.1.6 “Effective Date” means the date of the distribution by BAM of its interests in
BIP to the shareholders of BAM;
1.1.7 “Infrastructure Partnership” means Brookfield Infrastructure L.P.;
1.1.8 “Master Services Agreement” means the master management and administration
agreement dated as of the Effective Date among BAM, BIP, the Infrastructure
Partnership and others;
1.1.9 “Person” means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with or without
share capital, 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;
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1.1.10 “Relationship Agreement” means the relationship agreement dated as of the
Effective Date among BAM, BIP, the Infrastructure Partnership and others; and
1.1.11 “Timberlands Partnership” means a timberlands focused partnership or other
acquisition vehicle or vehicles that would provide for the limited liability of the
investors or a series of contractual arrangements to be formed with BIC, on the one
hand, and institutional investors, on the other hand, to pursue the acquisition of
timberlands and timberlands related investments.
1.2 Headings
The inclusion of headings in this Agreement are for convenience of reference only and will not
affect the construction or interpretation hereof.
1.3 Gender and Number
In this Agreement, unless the context otherwise requires, words importing the singular include
the plural and vice versa, words importing gender include all genders or the neuter, and words
importing the neuter include all genders.
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.
1.5 Currency
Except where otherwise expressly provided, all amounts in this Agreement are stated and shall
be paid in United States dollars.
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1.6 Waiver, Amendment
Except as expressly provided in this Agreement, no amendment or 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.
1.7 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York.
2. Commitment to Timberlands Partnership
2.1 Subject to the terms and conditions of this Agreement, in the event that BAM, directly
or indirectly, agrees to contribute or transfer all or a portion of the Remaining Longview
Interest to the Timberlands Partnership, BIC will make a capital commitment of up to $600
million to the Timberlands Partnership (the “Commitment”).
2.2 The exact amount of the Commitment shall be determined upon the formation of the
Timberlands Partnership and shall in any event be no less than $400 million and, subject to
Section 2.1, may be increased to an amount that is equal to 30% of the aggregate commitments
to the Timberlands Partnership.
2.3 BAM will use reasonable commercial efforts to ensure that the structure of the
investment into the Timberlands Partnership shall contain typical provisions for
partnerships of this type including the establishment of parallel investment vehicles and
alternative investment vehicles where appropriate and flexibility for other members of the
BIP Group to provide the capital necessary to fulfill the Commitment.
3. Conditions in Favour of BIC
3.1 BIC’s obligations under Section 1.2 of this Agreement are subject to the satisfaction of
the following conditions:
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3.1.1 one or more institutional investors that are not Affiliates of, and are
otherwise acting at arm’s length from, BAM and BIC shall have entered into binding
agreements to participate in, and to make capital commitments of an aggregate amount
of at least $400 million to, Timberlands Partnership on terms and conditions that
are no more favorable to the investors than the terms and conditions of BIC’s
Commitment to and participation in Timberlands Partnership;
3.1.2 the purchase price payable to BAM by Timberlands Partnership for the Remaining
Longview Interest shall be equal to an amount that is no greater than the appraised
value (the “Appraised Value”) of the timberlands, and other real estate held by
Longview Timber Holdings Corp. plus working capital, less long term debt, at the
time of the completion of the acquisition of the Remaining Longview Interest
multiplied by one minus the Initial Percentage;
3.1.3 BIC shall be able to satisfy its commitment pursuant to Section 1.2 with
financing that is sufficient and suitable (including with respect to the composition
of equity versus debt) to maintain an appropriate liquidity position for BIC and the
Infrastructure Partnership following any contribution being made by BIC pursuant to
this commitment; and
3.1.4 the completion of the acquisition of the Remaining Longview Interest by
Timberlands Partnership shall be completed within 18 months from the Effective Date.
4. Conditions in Favour of BIC and BAM
The obligations of each of BIC and BAM to complete the transactions contemplated by this
Agreement are subject to all applicable board approvals being obtained (including approval by the
board of directors of the general partner of the Infrastructure Partnership) and the appropriate
entities entering into (a) a definitive agreement (the “Partnership Agreement”) with respect to the
formation of Timberlands Partnership and (b) a definitive agreement (the “Acquisition Agreement”)
with respect to the acquisition of the Remaining Longview Interest by Timberlands Partnership, as
described more fully below.
4.1 The Partnership Agreement will contain the covenants, indemnifications and other
provisions which are customarily found in agreements of this nature, including the
following:
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4.1.1 Investment Objective: Timberlands Partnership will invest in
timberlands and timberlands related assets and operations.
4.1.2 Management: The general partner, managing partner, managing member or
similar Person that has the ability to manage and direct the affairs of the
Timberlands Partnership shall be a member of the BAM Group and shall, if requested,
acknowledge that it is subject to the Relationship Agreement.
4.1.3 Commitment Period: Provisions in the Partnership Agreement with
respect to the commitment period and any early termination of the commitment period
will be consistent with market practice, provided that BIC will be released from any
obligation with respect to unfunded commitments if the acquisition by Timberlands
Partnership of the Remaining Longview Interest is not completed within 18 months
from the Effective Date.
4.1.4 Management Fees and Carried Interest: The Timberlands Partnership
will be obligated, pursuant to the terms of the Partnership Agreement or any other
management or services agreement contemplated by the Partnership Agreement, to pay
management fees for services rendered to the Timberlands Partnership or any carried
interest or similar fees to a Person, which may be an Affiliate of BAM or BIC,
provided that (i) any such management fees, carried interest or similar fees are on
terms substantially consistent with market practice; (ii) BIC’s proportionate share
of such fees is no greater than any other investor’s in Timberlands Partnership; and
(iii) such fees are subject to the netting provisions contained in the Master
Services Agreement and the Agreement of Limited Partnership, as amended and restated
from time to time, of the Infrastructure Partnership.
4.2 The Acquisition Agreement will contain the representations and warranties described
below and other provisions such as covenants and indemnification that are acceptable to the
parties and are customarily found in agreements of this nature, including the following:
4.2.1 Purchase Price: The purchase price for the Remaining Longview
Interest will be as provided for under Section 3.1.2.
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4.2.2 Representations and warranties. The Acquisition Agreement will
contain representations and warranties concerning (i) organization and good
standing, (ii) the authorization, execution, delivery and enforceability of the
agreement and all agreements executed in connection therewith, and (iii) title to
the securities or assets being transferred to Timberlands Partnership.
4.2.3 Conditions to Closing. The completion of the closing of the
acquisition of the Remaining Longview Interest will be subject to, inter alia, the
satisfaction or waiver by the parties of the following conditions:
4.2.3.1 all consents and regulatory approvals having been obtained and
documentation entered into with respect to the transactions contemplated
hereby and thereby; and
4.2.3.2 there not having been threatened, instituted or pending any action
or proceeding by any governmental entity, or by any other person in any
jurisdiction before any governmental entity, challenging or seeking to make
illegal, or delay or otherwise directly or indirectly restrain or prohibit
the closing of the acquisition of the Remaining Longview Interest.
5. Appraisal
The Appraised Value will be determined by one or more appraisers that are not Affiliates of,
and are otherwise acting at arm’s length from, BAM and BIC and are qualified to appraise the
timberlands, and, if applicable, real estate that has a higher and better use and working capital
held by Longview Timber Holdings Corp., as applicable, in the case of each appraiser.
6. Further Assurances
Each of the parties hereto shall 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
shall use 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.
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7. Successors and Assigns
No party may assign its right or benefits under this Agreement without the prior written
consent of the other party hereto. This provisions of this Agreement shall enure to the benefit of
and be binding on the parties to this Agreement and their respective successors and assigns.
8. Counterparts
This Agreement may be signed in counterparts and each of such counterparts shall constitute an
original document and such counterparts, taken together, shall constitute one and the same
instrument.
[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF the parties hereto have executed this agreement.
| BROOKFIELD INFRASTRUCTURE CORPORATION |
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| By: | ||||
| Name: | Xxxxxxxxxxx Xxxxxx | |||
| Title: | Treasurer | |||
| BROOKFIELD ASSET MANAGEMENT INC. |
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| By: | ||||
| Name: | Xxxx Xxxx | |||
| Title: | Senior Vice President and Secretary | |||