Document:

exv4w12

 

DEBT PURCHASE AGREEMENT

B E T W E E N:

	 	 	 
	 

	 	BRASCAN (US) CORPORATION, a corporation incorporated under the
laws of the State of Delaware
	 
	 	 
	 

	 	(hereinafter called “Brascan”)
	 
	 	 
	 

	 	- and -
	 
	 	 
	 

	 	BROOKFIELD INFRASTRUCTURE CORPORATION, a
corporation incorporated under the laws of the State of Delaware
	 
	 	 
	 

	 	(hereinafter called “US Holdco”)

RECITALS:

	A.	 	Brascan is a lender under the $200,000,000 Amended and Restated Credit Agreement among
Longview Timber Holdings, Corp. (“Longview”), Brookfield Longview Holdings LLC, the lenders
from time to time party thereto and Brascan, as administrative agent dated September 14, 2007
(the “Credit Agreement”), and wishes to assign and to transfer to US Holdco $60 million of the
loan provided under the Credit Agreement, including any rights , interests, or obligations
associated with such portion of the loan including accrued interest; and

	B.	 	in connection with the establishment of Brookfield Infrastructure Partners L.P. (“BIP”), a
publicly-traded global infrastructure partnership, and the special dividend of units of BIP to
holders of Class A limited voting shares and Class B limited voting shares of Brookfield Asset
Management Inc. (the “Spin-off”), Brascan wishes to sell and US Holdco wishes to purchase the
Debt.

          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.	 	Purchase and Sale

          Brascan agrees to sell and US Holdco agrees to purchase all of Brascan’s right, title and
interest in and to the Debt on the terms and conditions contained herein on the date of

 

 

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this agreement or such other date and time as the Brascan and US Holdco may agree (the
“Closing Date”).

	2.	 	Purchase Price

          The purchase price of the Debt shall be equal to the value of the Debt, including Brascan’s
entitlement to any accrued interest under the Credit Agreement, which is equal to US$63,900,000.
The purchase price shall be satisfied by the payment of US$63,900,000 million in cash to Brascan
(the “Consideration”).

	3.	 	Representations and Warranties of Brascan

          Brascan represents and warrants to US Holdco that:

3.1 Brascan is duly incorporated and validly existing under the laws of the State of
Delaware;

3.2 Brascan has the corporate power and capacity to enter into, and to perform its
obligations under, this Agreement;

3.3 the execution, delivery and performance of this Agreement and all agreements executed in
connection therewith have been duly authorized by all necessary corporate action on the part
of Brascan ;

3.4 this Agreement and all agreements executed in connection therewith are valid and binding
obligations of Brascan, enforceable in accordance with their terms, subject to the usual
exceptions as to bankruptcy and the availability of equitable remedies; and

3.5 on the Closing Date, Brascan will have good and marketable title to the Debt, and the
full legal right, power and authority to sell and transfer the Debt to US Holdco free and
clear of all liens, charges, encumbrances and adverse claims.

	4.	 	Representations and Warranties of US Holdco

          US Holdco represents and warrants to Brascan that:

 

 

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4.1 US Holdco is duly incorporated and validly existing under the laws of the State of
Delaware;

4.2 US Holdco has the corporate power and capacity to enter into, and to perform its
obligations under, this Agreement;

4.3 the execution, delivery and performance of this Agreement and all agreements executed in
connection therewith have been duly authorized by all necessary corporate action on the part
of US Holdco; and

4.4 this Agreement and all agreements executed in connection therewith are valid and binding
obligations of US Holdco , enforceable in accordance with their terms, subject to the usual
exceptions as to bankruptcy and the availability of equitable remedies.

	5.	 	Survival

          The representations and warranties of Brascan and US Holdco will survive for a period of 18
months from the Spin-off.

	6.	 	Indemnity

          Brascan shall indemnify and save US Holdco harmless for and from any loss, damages or
deficiencies suffered by US Holdco as a result of any breach of any representation or warranty on
the part of Brascan contained in this Agreement or in any certificate or document delivered
pursuant to or contemplated by this Agreement, including all claims, demands, costs and expenses,
including legal fees, in respect of the foregoing.

          US Holdco shall indemnify and save Brascan harmless for and from any loss, damages or
deficiencies suffered by Brascan as a result of any breach of any representation or warranty on the
part of US Holdco contained in this Agreement or in any certificate or document delivered pursuant
to or contemplated by this Agreement, including all claims, demands, costs and expenses, including
legal fees, in respect of the foregoing.

 

 

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	7.	 	Limitation of Liability

          The aggregate maximum liability of Brascan under its representations, warranties and
indemnities under this Agreement will be limited, without duplication, to the amount of the
Consideration.

	8.	 	Conditions to Closing

          The completion of the closing of the transactions contemplated herein will be subject to the
satisfaction or waiver by the parties of the following conditions:

8.1 all consents and approvals having been obtained with respect to the transactions
contemplated hereby; and

8.2 all documentation, including the Assignment and Assumption Agreement attached as Exhibit
A to the Credit Agreement, having been entered into in respect of the transactions
contemplated hereby.

	9.	 	Closing Procedure

          On the Closing Date, Brascan shall execute and deliver to US Holdco all such documents,
certificates and instruments and do all such other acts and things as US Holdco may consider
necessary or desirable, acting reasonably, to effectively transfer and assign the Debt to US Holdco
and to deliver possession thereof to US Holdco and US Holdco shall issue the Consideration to
Brascan.

	10.	 	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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	11.	 	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 permitted
assigns.

	12.	 	Governing Law

          This agreement shall be governed by and construed in accordance with the laws of the State of
New York and the laws of the United States applicable therein.

	13.	 	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.

          DATED: November 20, 2007.

	 	 	 	 	 	 	 
	 	 	BRASCAN (US) CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	by:	 	 	 	 
	 

	 	 	 	 

Name: Christopher P. Parker
	 	 
	 

	 	 	 	Title: Treasurer	 	 

	 	 	 	 	 	 	 
	 	 	BROOKFIELD INFRASTRUCTURE

CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	by:	 	 	 	 
	 

	 	 	 	 

Name: Christopher P. Parker
	 	 
	 

	 	 	 	Title: Treasurerexv4w13

 

SUMMARY OF PRINCIPAL TERMS OF THE PAYMENT IN KIND AGREEMENT

	 	 	 
	1.   Parties

	 	Brookfield Brasil TBE Participações Ltda., a company incorporated under
the laws of Brazil, with registered office at Praça Floriano, No. 19, suite
1101 — part, Rio de Janeiro/RJ, taxpayer roll No. 08.900.077/0001-20 (“Brookfield
TBE”); and
	 
	 	 
	 

	 	Brascan Brasil Ltda., a company incorporated under the laws of Brazil,
with registered office at Av. Almirante Barroso, No. 52, suite 1301, Rio de
Janeiro/RJ, taxpayer roll No. 34.268.326/0001-16 (“Brascan”).
	 
	 	 
	2.   Date of Execution

	 	November 5, 2007.
	 
	 	 
	3.   Whereas

	 	(i)   In August 14, 2006, Brascan and
Brascan Brazil Ltd., a company duly
organized under the laws of Cayman
Islands, executed a loan agreement
pursuant which Brascan received a sum of
US$164.000.000,00 (“Loan Agreement”);
and

	 
	 	 
	 

	 	(ii)  On November 5, 2007 Brascan Brazil
Ltd. assigned its credits deriving from
the Loan Agreement to Brookfield TBE, as
payment of the capital increase made by
BBL in Brookfield TBE.

	 
	 	 
	4.   Scope

	 	As a payment in kind of the Loan Agreement, Brascan transfers to
Brookfield TBE the total amount of shares
that Brascan owns in the following
companies: Empresa Catarinense de
Transmissão de Energia S.A. (“ECTE”),
Empresa Amazonense de Transmissão de
Energia S.A. (“EATE”), Empresa Paraense
de Transmissão de Energia S.A (“ETEP”),
Empresa Norte de Transmissão de Energia
S.A (“ENTE”) and Empresa Regional de
Transmissão de Energia S.A. (“ERTE”)
(severally referred as “TBE Shares”), in
accordance with the proportion below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Companies	 	Number of	 	Amount	 	Number	 	Amount
	 	 	Common	 	correspondent	 	of	 	correspondent to
	 	 	Shares	 	to the debt paid	 	Preferred	 	the debt paid in
	 	 	 	 	in R$ (A)	 	Shares	 	R$ (B)
	 
	ECTE
	 	 	3.156.974	 	 	 	14.445.464,15	 	 	 	 	 	 	 	 	 
	EATE
	 	 	22.999.850	 	 	 	105.241.129,19	 	 	 	5.437.828	 	 	 	24.882.038,75	 
	ETEP
	 	 	6.749.850	 	 	 	30.885.498,65	 	 	 	1.436.614	 	 	 	6.573.559,38	 
	ENTE
	 	 	18.503.988	 	 	 	84.669.273,57	 	 	 	 	 	 	 	 	 
	ERTE
	 	 	4.293.748	 	 	 	19.647.036,30	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	55.704.410.410	 	 	 	254.888.401,86	 	 	 	6.874.442	 	 	 	6.573.559,38	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	286.343.999,99	 
	(A) + (B)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

	 	 	 
	5.   Representations and

Warranties

	 	5.1 Representations and Warranties of Brascan. Brascan represents and warrants to Brookfield TBE as follows:
	 
	 	 
	 

	 	a.       Organization and Corporate Power.
Brascan is a corporation duly organized,
validly existing and in good standing
under the laws of the jurisdiction of its
formation. Brascan has all requisite
legal power to execute and deliver this
Agreement and to carry out and perform
its obligations under the terms of this
Agreement.
	 
	 	 
	 

	 	b.        Authorization. All actions on the
part of Brascan necessary for the
authorization, execution, delivery and
performance of this Agreement and any
other documents and agreements deriving
from or in connection with this Agreement
and the authorization, transfer and
delivery of the Shares have been taken.
This Agreement has been duly and validly
executed and delivered by Brascan, and
constitutes a valid and binding agreement
of Brascan, enforceable against Brascan
in accordance with its terms except that
such enforcement may be limited by (i)
bankruptcy, insolvency, reorganization,
moratorium or other similar laws
affecting or relating to the enforcement
of creditors’ rights generally and (ii)
general equitable principles.
	 
	 	 
	 

	 	c.        Title and Related Matters.
	 
	 	 
	 

	 	(i) Ownership of Shares. Brascan legally
and validly owns the issued and
outstanding TBE Shares.
	 
	 	 
	 

	 	(ii) Transfer. Brascan hereby transfers
to Brookfield TBE good title to the TBE
Shares, free and clear of all options,
pledges, security interests, liens or
other encumbrances.
	 
	 	 
	 

	 	5.2 Representations and Agreements of
Brookfield TBE. Brookfield TBE
represents and warrants to Brascan as
follows:
	 
	 	 
	 

	 	a.        Organization and Power. Brookfield
TBE is a corporation duly organized,
validly existing and in good standing
under the laws of the jurisdiction of its
formation. Brookfield TBE has all
requisite legal power to execute and
deliver this Agreement and to carry out
and perform its obligations under the
terms of this Agreement.
	 
	 	 
	 

	 	b.        Authorization. All actions on the
part of Brookfield TBE necessary for the
authorization, execution, delivery, and
performance of this Agreement and any
other documents and agreements deriving
from or in connection with this Agreement
have been taken. This Agreement has been
duly and validly executed and delivered
by Brookfield TBE and constitutes a valid
and binding agreement of Brookfield TBE,
enforceable against Brookfield TBE in
accordance with its terms except that
such enforcement may be limited by (i)
bankruptcy, insolvency, reorganization,
moratorium or other similar laws
affecting or relating to the enforcement
of creditors’ rights generally and (ii)
general equitable principles.

 

	 	 	 
	6.   Survival

	 	6.1 Survival. The representations, warranties, covenants and agreements of
the parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive for a
period of eighteen (18) months after the date that Brookfield Asset Management
Inc., a company organized under Canadian law, with head-offices at BCE Place,
Suite 300, 181 Bay Street, Toronto, ON M5J 2T3, Canada, issues units of
Brookfield Infrastructure Partners L.P., as dividends to its shareholders.
	 
	 	 
	7.   Indemnification

	 	7.1 Indemnification. From and after this Date, Brascan agrees to pay and to
indemnify fully, hold harmless and defend Brookfield TBE and its Affiliates,
respective agents, directors, officers, employees, consultants, representatives,
successors and assigns, from and against any and all claims and/or liabilities,
damages, penalties, judgments, assessments, losses, liens, costs and
expenses, including attorneys’ fees, resulting from acts, facts or omissions
(collectively, “Damages”) arising out of:
	 
	 	 
	 

	 	a.        any inaccuracy or breach of any representation or warranty of any of
Brascan contained in this Agreement; and/or
	 
	 	 
	 

	 	b.        any breach of any covenant or agreement of any of Brascan contained in
this Agreement.
	 
	 	 
	 

	 	7.2 Maximum Liability. The aggregate maximum liability of Brascan deriving
from or arising out of Damages, as provided for in Section 7.1, is limited
to the TBE Shares transfer price, equivalent to R$286.343.999,99.
	 
	 	 
	8.   Discharge

	 	8.1 Discharge. Pursuant to this Agreement and in consideration for the transfer of
the TBE Shares herein provided for, and the transfer of TBE Shares in the
corporate books of TBE, Brookfield TBE hereby fully and irrevocably releases and
discharges Brascan from any and all of its obligation in connection with the Debt.
	 
	 	 
	9.   Disputes

	 	9.1 The courts of City of Rio de Janeiro, Estado do Rio de Janeiro shall have
jurisdiction to hear and determine any suit, action or proceedings, and to
settle any disputes, which arise out of or in connection with this Agreement, and
for such purposes, the Parties irrevocably submit to the jurisdiction of such courts.

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