EXHIBIT 1
SHAREHOLDERS' AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 31st day of July, 1995.
A M O N G:
BRE/CF EQUITY ACQUISITION L.P.,
BLACKSTONE REAL ESTATE
PARTNERS II L.P., BLACKSTONE REAL
ESTATE PARTNERS IV L.P., and
BLACKSTONE RE CAPITAL PARTNERS II L.P.,
limited partnerships constituted under the
laws of the State of Delaware, and BLACKSTONE
CF EQUITY ACQUISITION L.P., a limited
partnership constituted under the laws of the
Cayman Islands,
(collectively hereinafter referred to as
"Blackstone"),
OF THE FIRST PART,
- and -
ONTARIO TEACHERS' PENSION PLAN BOARD, a
corporation continued under the Teachers'
Pension Act (Ontario),
(hereinafter referred to as "Teachers"),
OF THE SECOND PART,
- and -
WHCF REAL ESTATE LIMITED PARTNERSHIP, a
limited partnership constituted under the
laws of the State of Delaware
(hereinafter referred to as "Whitehall"),
OF THE THIRD PART.
WHEREAS the authorized capital of the Corporation (as defined below)
consists of an unlimited number of Common Shares;
AND WHEREAS, immediately following the implementation of the Cadillac
Fairview Plan (as defined below), the issued capital of the Corporation will
consist of 61,458,495 Common Shares;
AND WHEREAS Blackstone, Teachers and Whitehall upon the implementation
of the Cadillac Fairview Plan, will be the registered and beneficial owners of
Common Shares as set out beside their respective names on the signature pages
hereof and, in the case of Blackstone, additional Common Shares to be acquired
in respect of debt held by it;
AND WHEREAS in accordance with the Cadillac Fairview Plan the parties
wish to establish their respective rights and obligations in respect of the
composition of the Board of Directors and certain other matters on the terms and
conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
respective covenants and agreements of the parties contained herein and for
other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged by each of the parties hereto), it is hereby agreed as
follows:
ARTICLE I
INTERPRETATION
1.1 Definitions
Where used in this Agreement and the recitals hereto, unless there is
something in the context or the subject matter inconsistent therewith, the
following terms shall have the following meanings, respectively:
(a) "Act" means the Business Corporations Act (Ontario), as amended from
time to time;
(b) "Affiliate" of a Person means another Person which directly or
indirectly controls, is controlled by or is under common control with,
such Person; and, in the case of limited partnerships, if the general
partner of a limited partnership is the same as, is controlled by or
is under common control with the general partner of another limited
partnership, the limited partnerships shall be deemed to be
Affiliates;
(c) "Board of Directors" means the board of directors of the Corporation;
(d) "Business Day" shall mean a day on which banks are required to be open
for business in Toronto, Ontario and New York, New York but does not
include a Saturday, Sunday or statutory holiday in Toronto, Ontario;
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(e) "Cadillac Fairview Plan" means the amended and restated plan of
compromise and arrangement under the Companies' Creditors Arrangement
Act (Canada) and the Act of Cadillac Fairview Inc. and the other
companies named therein, as filed in the Ontario Court of Justice
(General Division) February 8, 1995, as amended March 20, 1995, April
18, 1995, April 20, 1995, June 28, 1995 and July 20, 1995 as
sanctioned by the Ontario Court of Justice (General Division) by order
dated May 17, 1995 and as amended thereafter in accordance with its
terms;
(f) "Common Shares" means common shares in the capital of the Corporation;
(g) "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise, and "controlling" and "controlled" shall have
meanings correlative thereto; and, in the case of a limited
partnership, it shall be deemed to be controlled by its general
partner;
(h) "Corporation" means Cadillac Fairview Corporation, a corporation
incorporated under the laws of the Province of Ontario or any
successor thereof;
(i) "First Elected Term" has the meaning ascribed thereto in section 3.4;
(j) "First Meeting" means the first meeting or written resolution of
shareholders of the Corporation at or pursuant to which directors are
elected to the Board of Directors as provided for in section 3.1 to
replace the first directors of the Corporation or, if the Board of
Directors provided for in section 3.1 is constituted by filling
vacancies resulting from the resignation of each of the first
directors and the appointment in their place of directors in
accordance with section 3.1, the meeting or written resolution of
directors at or pursuant to which such directors are appointed to
replace the first directors;
(k) "Independent Director" means an individual nominated for election to
the Board of Directors pursuant to section 3.1(e) or appointed to fill
a vacancy in the Board of Directors pursuant to section 3.2, provided
that such individual is not disqualified from acting under applicable
law and is qualified under the Corporation's by-laws and is acceptable
to Blackstone, Teachers and Whitehall, each acting reasonably, and is:
(A) qualified by skill, knowledge and experience to serve as a
director of a real estate company; and
(B) free from any:
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(i) material personal direct or indirect ownership interest
in; and
(ii) direct or indirect business or other relationship
(including, without limitation, any employment
relationship, but excluding any business dealings which
are not material or which occurred more than three
years before) with;
any of:
(1) the Corporation;
(2) any shareholder of the Corporation holding more
than (x) 1% of the Common Shares or (y) if each of
Blackstone, Teachers and Whitehall consents in
writing, 3% of the Common Shares (and any such
interest or relationship shall be fully disclosed
in writing to each of the Corporation, Teachers,
Blackstone and Whitehall at the time of the
nomination of any such nominee); or
(3) any Affiliate or associate (as defined in the Act)
of the Corporation or of any shareholder referred
to in clause (2) above;
(l) "National Exchange" means a national securities exchange (which may
include NASDAQ) in Canada or the United States;
(m) "Person" includes an individual, a firm, a corporation, a syndicate, a
partnership, a limited partnership, a trust, an association, a joint
venture, an incorporated organization, a government, a governmental
authority or any other entity;
(n) "Public Offering" means the offering or sale of Common Shares of the
Corporation pursuant to a prospectus in Canada or a registration
statement effective under the United States Securities Act of 1933, as
amended, in the United States or the listing of Common Shares on a
National Exchange;
(o) "Shareholders" means, collectively, Blackstone, Teachers, Whitehall
and any other Person who shall acquire an interest in the Common
Shares currently held by a Shareholder and who agrees in writing or is
deemed hereunder to be bound by the terms and conditions of this
Agreement pursuant to section 4.2 or 4.3 so long as such Person
continues to have an interest in Common Shares; and "Shareholder"
means any one of the Shareholders for the time being;
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(p) "Subordinated Debt Steering Committee" means the steering committee
representing, in connection with the Cadillac Fairview Plan, the
holders of the debentures designated as "Series A Subordinated
Debentures Due 2012" and as "Series B Subordinated Debentures Due
2012", issued by Cadillac Fairview Inc. pursuant to a trust indenture
dated October 31,1987 between Cadillac Fairview Inc. and The Royal
Trust Company and maturing October 31, 2012; and
(q) "Syndicated Creditors" means those Syndicated Creditors (as such term
is defined in the Cadillac Fairview Plan) who did not have claims
against Cadillac Fairview Inc. or the other companies named in the
Cadillac Fairview Plan in other creditor classes and who will receive
Common Shares of the Corporation in respect of their syndicated debt
claims under the Cadillac Fairview Plan (other than Blackstone,
Teachers and Whitehall).
1.2 Gender/Numbers
Words importing the singular number only shall include the plural and
vice versa and words importing the use of any gender shall include all genders.
1.3 Headings
The Article and section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
1.4 Proper Law
This Agreement and all documents ancillary hereto shall be governed by
and interpreted in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable therein. Each of the parties hereby
irrevocably agrees to attorn to the non-exclusive jurisdiction of the courts of
the Province of Ontario with respect to this Agreement.
1.5 Business Days
If any act is required hereunder to be done, any notice is required
hereunder to be given or any period of time is to expire hereunder on any day
that is not a Business Day, such act shall be required to be done or notice
shall be required to be given or time shall expire on the next succeeding
Business Day.
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1.6 Reclassification of Shares
The provisions of this Agreement shall apply, mutatis mutandis, to any
shares or securities of any nature into which the Common Shares or any of them
may be converted, exchanged, reclassified, redivided, redesignated, subdivided
or consolidated, to any shares or securities of any nature that are received by
a Shareholder as a stock dividend or distribution payable in shares, securities,
warrants, rights or options of any nature of the Corporation, to any shares,
securities, warrants, rights or options of any nature of the Corporation or any
successor, continuing company or corporation of the Corporation that may be
received by a Shareholder on a reorganization, amalgamation, arrangement,
consolidation or merger, statutory or otherwise, and to any shares, securities,
warrants, rights or options hereafter issued or allotted by the Corporation to a
Shareholder, all of which shares, securities, warrants, rights or options shall
be deemed to be Common Shares for all purposes of this Agreement.
1.7 Blackstone to Act as a Single Person
Each of BRE/CF Equity Acquisition L.P., Blackstone Real Estate
Partners II L.P., Blackstone Real Estate Partners IV L.P., Blackstone RE Capital
Partners II L.P. and Blackstone CF Equity Acquisition L.P. hereby acknowledges
that they are under common control. Each of them hereby appoints BREA as its
sole and exclusive agent, attorney and representative for all matters relating
to or arising under this Agreement and agrees that BREA may act on its behalf in
respect of all matters arising hereunder and that all other parties hereto and
the Corporation shall be entitled to rely on all acts, matters, documents,
proxies, agreements and instruments of BREA as conclusively binding on each of
the entities constituting Blackstone with respect thereto. Blackstone may
appoint a successor agent to replace BREA by written notice to the other
parties. BREA hereby agrees to act as agent for and on behalf of each of the
entities constituting Blackstone.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties
Each party hereto hereby represents and warrants to each of the other
parties as follows and acknowledges that such other parties are relying upon
such representations and warranties in connection with the entering into of this
Agreement:
(a) the party has all necessary power and authority to enter into this
Agreement and perform its obligations hereunder;
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(b) all necessary action has been taken by the party to authorize the
execution and delivery of this Agreement by it and the performance by
it of its obligations hereunder, and this Agreement has been duly
executed and delivered by the party and constitutes a legal, valid and
binding obligation of the party, enforceable against it in accordance
with its terms; and
(c) neither the execution and delivery of this Agreement by the party nor
the performance by it of its obligations hereunder will conflict with
or result in the violation of any of the terms and provisions of the
constating documents or by-laws of the party or of any agreement,
obligation, contract, commitment, law or regulation to which it is a
party or by which it is bound.
ARTICLE III
BOARD OF DIRECTORS OF THE CORPORATION
3.1 Nomination of Directors
At all times while this Agreement is in effect, the Shareholders shall
vote their Common Shares and use their reasonable efforts to cause the following
to occur:
(a) the Board of Directors shall consist of nine (9) directors;
(b) subject to sections 3.4 and 3.5, for so long as Whitehall is a
Shareholder, Whitehall shall be entitled to nominate for election to
the Board of Directors from time to time three (3) directors (who need
not be "resident Canadians" within the meaning of the Act);
(c) subject to sections 3.4 and 3.5, for so long as Teachers is a
Shareholder, Teachers shall be entitled to nominate for election to
the Board of Directors from time to time two (2) directors;
(d) subject to sections 3.4 and 3.5, for so long as Blackstone is a
Shareholder, Blackstone shall be entitled to nominate for election to
the Board of Directors from time to time one (1) director (who need
not be a "resident Canadian" within the meaning of the Act);
(e) at the First Meeting, the Subordinated Debt Steering Committee and the
Syndicated Creditors shall each be entitled to nominate for election
to the Board of Directors one (1) director, who shall in each case be
an Independent Director. The Shareholders shall be entitled to rely on
▇▇▇▇▇ ▇▇▇▇▇ and The Toronto-Dominion Bank to identify the Independent
Directors nominated by the Subordinated Debt Steering Committee and
the Syndicated Creditors, respectively. The parties agree to the
appointment of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as Independent
Directors;
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(f) the chief executive officer of the Corporation from time to time shall
be nominated by the Board of Directors and elected a director of the
Corporation (and, for greater certainty, shall not be one of the
nominees referred to in sections 3.1(b), (c), (d) or (e) above); and
(g) subject to applicable law, any director designated hereunder, shall be
removed from the Board of Directors, whether or not for cause, at the
written request of the Person or Persons who previously designated
such director; and
(h) subject to applicable law, the parties will not vote their Common
Shares to remove any director appointed pursuant to this Agreement
except for cause.
3.2 Filling of Vacancies
(a) If a vacancy in the Board of Directors arises, and the vacating director
was a nominee of one of the Shareholders referred to in sections 3.1(b),
(c) or (d), the Shareholder who nominated such vacating director shall be
entitled to nominate an individual to be appointed by the Board of
Directors as a director to replace such vacating director, subject to and
in accordance with the provisions of section 3.1.
(b) If a vacancy in the Board of Directors arises, and the vacating director
was an Independent Director appointed pursuant to section 3.1(e) or a
successor thereof, the Board of Directors shall appoint a director to
replace such vacating director, who shall be an Independent Director.
Notwithstanding the preceding sentence if, during the First Elected Term,
there is a vacancy created by the resignation of an Independent Director,
such resigning director may nominate an Independent Director or, in the
event of the death or disability of an Independent Director, the other
Independent Director may nominate an Independent Director and, in either
such case, such nominee shall be appointed to till the vacancy if he or she
is acceptable to each of Whitehall, Blackstone and Teachers, acting
reasonably.
(c) The parties agree to use their reasonable efforts (including by exercising
voting rights) to cause any such vacancy to be filled in accordance with
this section 3.2 as soon as practicable after it arises and to use their
reasonable efforts to cause any director nominated by them to vote to fill
the vacancies in such manner, provided that nothing herein shall in any way
be interpreted to cause any director to fail to fulfill his fiduciary
duties to the Corporation.
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3.3 Initial Nominees
The initial nominees of Blackstone, Teachers and Whitehall shall be:
Name Nominee of
---- ----------
▇▇▇▇▇▇ ▇▇▇▇▇▇ Blackstone
▇▇▇▇▇▇ ▇▇▇▇▇ Teachers
▇▇▇▇▇ ▇▇▇▇▇ Teachers
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Whitehall
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Whitehall
▇▇▇▇ ▇. ▇▇▇▇▇▇ Whitehall
3.4 First Elected Term
(a) As soon as possible after the execution of this Agreement, the First
Meeting shall be held at which directors of the Corporation shall be elected in
accordance with the provisions of section 3.1. The directors to be elected at
the First Meeting shall be elected for a term (the "First Elected Term")
expiring on July 31, 1998.
(b) If the Corporation proposes to effect a Public Offering prior to July
31, 1998 and if the underwriters, in good faith, advise the Corporation and the
Shareholders that the then current composition of the Board of Directors will
likely have a material adverse effect on the pricing or number of the Common
Shares to be sold pursuant to the Public Offering, then the Shareholders will
consider, in good faith, altering the composition of the Board of Directors and
modifying the terms of this Agreement in a manner consistent with the
recommendations of the underwriters as well as the intent of this Agreement. The
implementation will be conditional upon completion of the Public Offering.
Nothing in this paragraph 3.4(b) shall impose any obligations or liabilities on
the parties or shall result in any fiduciary duties being imposed or implied;
this paragraph is intended merely to reflect an understanding that the parties
will consider the implications of this Agreement on the likely success of an
underwriting.
(c) Following the expiry of the First Elected Term, directors of the
Corporation shall be elected in accordance with the provisions of section 3.1 to
hold office until the next annual meeting of shareholders of the Corporation or
until their successors are elected or appointed.
3.5 Reduction of Nomination Rights
(a) If prior to July 31, 1998, any of Whitehall, Teachers or Blackstone,
together with its Affiliates, ceases to hold at least 3% of the Common Shares
outstanding as of the date hereof, then it shall cease to be entitled to
nominate any directors.
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(b) If, after July 31, 1998, any of Whitehall, Teachers or Blackstone
ceases to hold the percentage of Common Shares referred to below, then its
rights to nominate directors pursuant to section 3.1 of to fill vacancies
pursuant to section 3.2 shall be modified as follows:
(i) if Whitehall together with its Affiliates continues to hold at
least 15% of the Common Shares outstanding as of the date hereof,
then it shall continue to be entitled to nominate three (3)
directors;
(ii) if either of Whitehall or Teachers together with their respective
Affiliates continues to hold at least 10% of the Common Shares
outstanding as of the date hereof, then, subject to clause (i) in
the case of Whitehall, it shall continue to be entitled to
nominate two (2) directors;
(iii) if any Shareholder together with its Affiliates continues to
hold at least 3% of the Common Shares outstanding as of the date
hereof, then subject to clauses (i) and (ii) in the case of
Whitehall or Teachers, it shall continue to be entitled to
nominate one (1) director; and
(iv) if any Shareholder together with its Affiliates shall cease to
hold at least 3% of the Common Shares outstanding as of the date
hereof, then it shall cease to be entitled to nominate any
directors.
(c) If any Shareholder ceases to be entitled to nominate that number of
directors which it has nominated to the Board of Directors and who continue to
act as directors, then, at the request of any of Blackstone, Teachers or
Whitehall, such Shareholder shall cause one or more of its nominees to resign
from the Board of Directors so that the number of remaining nominees is equal to
its entitlement. If a Shareholder fails to cause such resignation within 21 days
of such request, then the Shareholders shall vote their Common Shares to cause
the removal of such nominee or nominees. Subject to paragraph 3.5(d), any
vacancy created by the resignation or removal of a director pursuant to this
section 3.5 shall be filled with an Independent Director nominated by the Board
of Directors.
(d) If Blackstone ceases to have a nominee on the Board of Directors as a
result of the provisions in paragraphs 3.5(a) or 3.5(b)(iv) and if at such time
Teachers and its Affiliates hold at least as many Common Shares as Whitehall and
its Affiliates, then Teachers shall be entitled to increase the number of
directors which it is otherwise entitled to nominate by one (1).
(e) The provisions of this section 3.5 shall override any provisions of
sections 3.1, 3.2 and 3.6 to the contrary.
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3.6 Exercise of Votes
Each of the Shareholders agrees that it will at all times during the
term of this Agreement: (i) exercise any and all voting rights attaching to the
Common Shares owned by it and to otherwise exercise its influence and to do or
cause to be done all such other acts, matters and things as may from time to
time be necessary or conducive to the carrying out of the terms and intent of
this Agreement, including, without limitation but subject to section 3.5, voting
for the election to the Board of Directors of the nominees nominated in
accordance with section 3.1 and for the terms specified in section 3.4; (ii)
take no action (including by nominating any person that would prevent the
election of non-resident Canadians as contemplated by sections 3.1(b) and (d))
which would constitute a contravention of any of the terms and provisions
hereof; and (iii) take no action during the First Elected Term to change the
articles or by-laws of the Corporation in a manner which would result in the
Corporation no longer being required to nominate and elect two Independent
Directors.
ARTICLE IV
TRANSFERS OF COMMON SHARES
4.1 No Restrictions
Subject to sections 4.2 and 4.3, nothing in this Agreement shall
restrict a Shareholder in its ability to sell, assign, transfer or otherwise
dispose of its interest in any Common Shares; provided that this in no way
limits any Shareholder's obligations under applicable securities law.
4.2 Affiliate Transferees Bound
As a condition to any sale, assignment, transfer or other disposition
by a Shareholder of its interest in any Common Shares to an Affiliate (the
"Affiliate Transferee"), the Affiliate Transferee shall agree in writing to be
bound, and shall be deemed to be bound, by the terms and conditions of this
Agreement. In the event that a Shareholder who has a right to nominate directors
pursuant to section 3.1 transfers all of its interest in the Common Shares held
by it to an Affiliate Transferee, the Affiliate Transferee shall thereafter be
deemed to have such right to nominate directors pursuant to section 3.1 and
shall be entitled to exercise such right as if such right were originally
granted to the Affiliate Transferee hereunder.
4.3 Third Party Transferees May Be Bound
(a) A Shareholder (the "Transferor") may, subject to paragraph (b), but
shall not be obliged to, require, as a condition to any sale, assignment,
transfer or other disposition by it of its interest in any Common Shares to a
third party (the "Third Party
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Transferee"), that the Third Party Transferee agree in writing to be bound by
the terms and conditions of this Agreement. Upon the execution by a Third Party
Transferee of an agreement to be bound by the terms and conditions hereof, the
Third Party Transferee shall be bound by this Agreement and shall be deemed to
be a Shareholder for the purposes hereof; provided that, notwithstanding any
other provision hereof, a Third Party Transferee of Common Shares from a
Transferor who has a right to nominate directors pursuant to Article III shall
not be entitled to such right as the transferee of such Common Shares unless the
assignment of such right to the Third Party Transferee is specifically provided
by the Transferor to the Third Party Transferee in writing and is consented to
by each Shareholder who is at such time the holder of not less than 7% of the
then outstanding Common Shares.
(b) If any Transferee enters into an agreement with a Transferor pursuant
to which the Transferee agrees to vote any or all of the Common Shares
transferred to it in favour of the nominees of the Transferor to the Board of
Directors, then the Transferor shall require the Third Party Transferee to agree
in writing with or in favour of the remaining parties hereto to be bound by the
terms and conditions of this Agreement, provided that the Transferee need only
agree to be bound by this Agreement until July 31, 1998.
ARTICLE V
NO AMENDMENT TO ARTICLES OR BY-LAWS
5.1 No Amendments to Articles or By-laws
The parties agree that unless and until a Public Offering is
completed, they shall use their reasonable efforts to ensure that no amendment
shall be made to the articles or by-laws of the Corporation that would impose
any share transfer restrictions that would (if not removed) prevent listing of
the Common Shares (or of any warrants to purchase Common Shares) on at least one
National Exchange or that would otherwise be inconsistent with the provisions or
intent of this Agreement.
ARTICLE VI
PRE-EMPTIVE RIGHT
6.1 Pre-emptive Right
(a) If the Corporation proposes to issue any securities of the Corporation
to any one or more of Blackstone, Whitehall or Teachers (any one or more of whom
are referred to in this section as the "Purchaser") other than pursuant to a
Public Offering, the Shareholders shall use their reasonable best efforts to
make such securities available on a pro rata basis to Blackstone, Whitehall or
Teachers, as the case may be, on the same terms and conditions.
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(b) If the Corporation does not offer such securities to each of
Blackstone, Whitehall and Teachers on a pro rata basis, then any Purchaser shall
offer to sell a portion of any securities acquired by it to those of Blackstone,
Whitehall or Teachers who have not had the opportunity to purchase their pro
rata share of such securities from the Corporation (the "Offerees") so that
after such sale each of the Offerees that wishes to acquire such securities
shall have had the opportunity to purchase its pro rata share of the securities
issued by the Corporation either directly from the Corporation or failing
availability from the Corporation, from the Purchaser. Any offer to sell by a
Purchaser shall be on the same terms and conditions as the Purchaser acquired
such offered securities from the Corporation and shall be open for acceptance
for at least 21 days, provided that if the offer is made at least 10 days before
the securities are issued, then the offer will expire on the date of issuance
thereof or such later date as may be specified by the Purchaser in the offer.
The offer can be made prior to the issuance of the securities by the Corporation
or, in any event, within 10 days thereafter. To the extent possible, the
Purchaser shall sell, transfer and assign to any purchasing Offeree all of the
rights associated with the securities so purchased including, without
limitation, any registration rights associated with such securities.
Notwithstanding anything contained herein, no party shall be obligated to sell
any securities to any other party if such sale would result in a material tax
liability to the seller or the Shareholders or impose any liability or
obligation whatsoever on the seller; for the purposes of this paragraph,
materiality shall be determined having regard for the fact that the seller of
the securities will obtain no benefit whatsoever from the sale of the securities
and is effecting such transaction solely as an accommodation to the other
parties.
(c) For the purposes of this section 6.1, the pro rata share of any party
of any distribution will be determined by reference to the number of Common
shares held by it and its Affiliates at the date of such offering.
ARTICLE VII
GENERAL
7.1 Term and Termination
This Agreement shall come into force and effect as at and from the
date hereof and shall continue in force until the earliest of:
(a) the date upon which none of Blackstone, Teachers or Whitehall owns 5%
or more of the then outstanding Common Shares of the Corporation;
(b) the date upon which this Agreement is terminated by written agreement
among each Shareholder who is at such time the holder of not less than
7% of the then outstanding Common Shares;
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(c) the fifth anniversary of the date of this Agreement; and
(d) the date upon which this Agreement is terminated by written agreement
among each of the parties hereto.
7.2 Notice
Any demand, notice or other document required or permitted to be given
hereunder shall be in writing and shall be given by delivery or by telecopy to
the respective parties as follows:
(a) if to Blackstone:
c/o BREA L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Teachers:
Ontario Teachers' Pension Plan Board
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to Whitehall:
WHCF Real Estate Limited Partnership
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any such demand, notice or other document, if delivered personally, shall be
deemed to have been received by and given on the date of delivery (provided that
such day is a Business Day and, if not on the next following Business Day) and,
if sent by telecopier, shall be deemed to have been received by and given on the
date sent (provided that it
14
is sent prior to 2:00 p.m. (local time of the recipient) on a Business Day and,
if not, on the next following Business Day). Any party may at any time give
notice to the other parties of any change of address in accordance with the
foregoing provisions hereof.
7.3 Entire Agreement
This Agreement sets forth the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions of the parties, whether oral or
written, and there are no warranties, representations or other agreements
between all of the parties hereto in connection with the subject matter hereof
except as specifically set forth herein.
7.4 Amendment
No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by all of the parties hereto. Any amendment
to paragraphs 3.1(e), 3.1(h), 3.2(b) or 3.6 (iii) shall not be effective unless
approved in writing by the Independent Directors.
7.5 Waiver
No waiver of any of the provisions of this Agreement shall be deemed
to be or shall constitute a waiver of any other provision, nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
7.6 Benefit of the Agreement
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. No
Shareholder shall assign the rights or benefits under this Agreement without the
prior written consent of the other Shareholders except as specifically provided
for herein.
7.7 Counterparts
This Agreement may be executed in any number of counterparts by any
one or more of the parties to be bound hereby. Each executed counterpart shall
be deemed to be an original and such counterparts shall together constitute one
and the same agreement.
7.8 Severability
The invalidity or unenforceability of any provision or part of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision or part thereof, and any such invalid or unenforceable
provision or part thereof shall be deemed to be separate, severable and
distinct, and no provision or part thereof shall be
15
deemed dependent upon any other provision or part thereof unless expressly
provided for herein.
7.9 No Partnership
Nothing contained in this Agreement shall be deemed in any way or for
any purpose to constitute any party a partner or agent or legal representative
of any other party in the conduct of any business or otherwise, or a member of a
joint venture or joint enterprise with any other party, or to create any
fiduciary relationship among them, except as provided in section 1.7.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
Number of Shares BRE/CF EQUITY ACQUISITION L.P.
Held on the date hereof
4,455,689 by--------------------------------------
BLACKSTONE REAL ESTATE
PARTNERS II L.P.
126,500 by--------------------------------------
BLACKSTONE REAL ESTATE
PARTNERS IV L.P.
37,950 by--------------------------------------
BLACKSTONE RE CAPITAL PARTNERS
II L.P.
23,909 by--------------------------------------
BLACKSTONE CF EQUITY
ACQUISITION L.P.
1,605,952 by--------------------------------------
ONTARIO TEACHERS' PENSION PLAN
BOARD
12,500,000 by--------------------------------------
WHCF REAL ESTATE LIMITED PARTNERSHIP by its
General Partner, Whitehall Street Real Estate
Limited Partnership V
13,735,471 by--------------------------------------
by its General Partner,
WH Advisors, L.P. V
by--------------------------------------
by its General Partner,
WH Advisors, Inc. V
by--------------------------------------
BREA L.L.C. hereby accepts its appointment as agent pursuant to
section 1.7.
BREA L.L.C.
by--------------------------------------
AMENDMENT TO SHAREHOLDERS' AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 26th day of August, 1997.
B E T W E E N:
BRE/CF EQUITY ACQUISITION L.P.,
BLACKSTONE REAL ESTATE PARTNERS II L.P.,
BLACKSTONE REAL ESTATE PARTNERS IV L.P., and
BLACKSTONE RE CAPITAL PARTNERS II L.P.,
limited partnerships constituted under the
laws of the Stare of Delaware, and BLACKSTONE
CF EQUITY ACQUISITION L.P., a limited
partnership constituted under the laws of the
Cayman Islands,
(collectively hereinafter referred to as
"Blackstone"),
OF THE FIRST PART,
- and -
ONTARIO TEACHERS' PENSION PLAN BOARD, a
corporation continued under the Teachers'
Pension Act (Ontario),
(hereinafter referred to as "Teachers"),
OF THE SECOND PART,
- and -
WHCF REAL ESTATE LIMITED PARTNERSHIP, a
limited partnership constituted under the
laws of the State of Delaware,
(hereinafter referred to as "Whitehall"),
OF THE THIRD PART.
WHEREAS the parties entered into a shareholders' agreement dated as of
July 31, 1995 (the "Shareholders' Agreement") relating to Cadillac Fairview
Corporation (the "Corporation") and their respective interests therein as
shareholders;
AND WHEREAS the Corporation is proposing to make a Public Offering of
its Common Shares pursuant to a prospectus which will be filed with securities
commissions in Canada and possibly with the Securities and Exchange Commission
in the United States;
AND WHEREAS the parties wish to amend the Shareholders' Agreement,
which amendment will be effective upon the earlier of (i) the issuance of Common
Shares of the Corporation to the public pursuant to the prospectus offering or
(ii) immediately prior to a shareholders' meeting at which the amendments to the
Corporation's articles and by-laws described in paragraph 2 hereof are to be
considered;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
respective covenants and agreements of the parties contained herein and for
other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged by each of the parties hereto), it is hereby agreed as
follows:
1. INTERPRETATION. Where used herein, unless there is something in the
context or the subject matter inconsistent therewith, the terms and words which
are defined in the Shareholders' Agreement shall have the same meanings in this
agreement.
2. AMENDMENT TO THE CORPORATION'S ARTICLES AND BY-LAWS. At any meeting
called by the Board of Directors of the Corporation for such purpose, the
parties shall vote their Common Shares in favour of amendments to the articles
and by-laws of the Corporation which will provide for the following:
(a) the Corporation shall have a minimum of seven and a maximum of 13
Directors;
(b) an amendment to delete parts (1) and (2) of section 10 of the
Corporation's articles;
(c) an amendment to the Corporation's by-laws to delete paragraph 20 of
By-law No. 1 and the definitions of "First Meeting", "Independent
Director", "Nominators" and "Plan"; and
(d) to amend By-law No. 1 of the Corporation to provide that directors
shall be elected for a term of one year or until their successors are
elected or appointed.
The covenant in this section is intended to benefit the Corporation and may be
specifically enforced by the Corporation.
2
3. INDEPENDENT DIRECTORS. Paragraph 3.1(e) of the Shareholders' Agreement
shall be deleted and the following shall be substituted therefor:
"(e) At the first meeting of shareholders after the date of
this agreement, the Board of Directors shall be
entitled to nominate not less than seven directors who
are, in the opinion of the Board of Directors,
independent of Blackstone, Teachers and Whitehall, and
any Affiliate or associate thereof. Such directors may
include ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
shall include ▇▇▇▇▇ ▇▇▇▇▇▇."
4. VACANCIES. Paragraph 3.2(b) of the Shareholders' Agreement is deleted
and the following is substituted therefor;
"(b) if a vacancy in the Board of Directors arises and the
vacating director was appointed pursuant to section
3.1(e) or any successor of such a director, the Board
of Directors shall appoint a director to replace such
vacating director."
5. DELETION OF PORTIONS OF SHAREHOLDERS' AGREEMENT. Sections 3.1(a), 3.4,
3.6(iii), 5.1 and 6.1 of the Shareholders' Agreement are hereby deleted.
6. BALANCE OF SHAREHOLDERS' AGREEMENT. In all other respects, the
Shareholders' Agreement shall remain in full force and effect unamended.
7. COUNTERPARTS. This Agreement may be executed in counterpart and when
each of the parties has executed and delivered a counterpart to the Corporation
shall constitute a binding agreement.
IN WITNESS WHEREOF the parties hereto have executed this amending
agreement.
BRE/CF EQUITY ACQUISITION L.P.
by-----------------------------------
BLACKSTONE REAL ESTATE
PARTNERS II L.P.
by-----------------------------------
BLACKSTONE REAL ESTATE
PARTNERS IV L.P.
by-----------------------------------
BLACKSTONE RE CAPITAL
PARTNERS II L.P.
by-----------------------------------
BLACKSTONE CF EQUITY
ACQUISITION L.P.
by-----------------------------------
ONTARIO TEACHERS' PENSION PLAN
BOARD
by-----------------------------------
WHCF REAL ESTATE LIMITED PARTNERSHIP by its
General Partner, Whitehall Street Real
Estate Limited Partnership V
by-----------------------------------
by its General Partner,
WH Advisors, L.P. V
by-----------------------------------
by its General Partner,
WH Advisors, Inc. V
by-----------------------------------
Pursuant to section 7.4 of the Shareholders' Agreement, the
undersigned, being the Independent Directors of the Corporation, hereby consent
to the amendment of the Shareholders' Agreement in the manner described above
and to the corresponding amendments to the Corporation's articles and by-laws.
---------------------------- ----------------------------
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