FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

Other ServicesBrookfield may provide services to our operating entities which are outside the scope of our MasterServices Agreement under arrangements that are on market terms and conditions and pursuant to whichBrookfield will receive fees. The services that may be provided under these arrangements include financialadvisory, property management, facilities management, development, relocation services, construction activities,marketing or other services.Preferred Shares of Certain Holding EntitiesBrookfield holds $750 million of redeemable and retractable preferred shares of one of our HoldingEntities newly formed under the laws of the Province of Ontario, which it received as partial consideration forcausing the Property Partnership to acquire substantially all of Brookfield Asset Management’s commercialproperty operations. The preferred shares are entitled to receive a cumulative preferential dividend equal to5.75% of their redemption value as and when declared by the board of directors of the Holding Entity until thefifth anniversary of their issuance, after which the preferred shares will be entitled to receive a cumulativepreferential dividend equal to 5.0% plus the prevailing yield for 5-year U.S. Treasury Notes. We are notpermitted to draw on our credit facility with Brookfield in order to fund a redemption or retraction of thepreferred shares. The preferred shares will be entitled to vote with the common shares of the Holding Entity andwill have an aggregate of 1% of the votes to be cast in respect of the Holding EntityIn addition, Brookfield has provided $5 million of working capital to each of the other three HoldingEntities (or wholly-owned subsidiaries thereof), for a total of $15 million, through a subscription for preferredshares of such Holding Entities or subsidiaries, as applicable. These preferred shares are entitled to receive acumulative preferential cash dividend equal to 5% as and when declared by the board of directors of theapplicable Holding Entity or subsidiary and are redeemable at the option of the applicable Holding Entity orsubsidiary, subject to certain limitations, at any time after the twentieth anniversary of their issuance. Thepreferred shares will be entitled to vote with the common shares of the applicable Holding Entity or subsidiaryand will have an aggregate of 1% of the votes to be cast in respect of any applicable Holding Entity or subsidiary.Credit FacilityPrior to the consummation of the spin-off, we expect to enter into a three-year unsecured revolving creditfacility with Brookfield that will provide borrowings on a revolving basis of up to $500 million, which will beused for working capital purposes. The credit facility will be guaranteed by our company, the PropertyPartnership and each of the Holding Entities. We expect that no amounts will be drawn as of the date of the spinoff.The credit facility is expected to bear interest at a rate per annum equal to LIBOR plus 2.75%. The creditfacility will require us to maintain compliance with a ratio of total debt to total capitalization as well as maintaina minimum tangible net worth and will contain other restrictions on the ability of the borrowers and theguarantors to, among other things, incur liens, engage in certain mergers and consolidations, transact withaffiliates, enter into hedging arrangements, and incur guarantees in respect of such hedging arrangements.Brookfield intends to syndicate the commitments under such facility to other lenders and, in connection withthe syndication of such commitments, the terms of such facility may change.Redemption-Exchange MechanismAt any time after two years from the date of the spin-off, the holders of Redemption-Exchange Units ofthe Property Partnership will have the right to require the Property Partnership to redeem all or a portion of theRedemption-Exchange Units for either (a) cash in an amount equal to the market value of one of our unitsmultiplied by the number of units to be redeemed (subject to certain adjustments) or (b) such other amount ofcash may be agreed by the relevant holder and the Property Partnership, subject to our company’s right to acquire125