exv4w1



 





BROOKFIELD INFRASTRUCTURE GP L.P.




- and -




BROOKFIELD ASSET MANAGEMENT INC.




- and -




BROOKFIELD INFRASTRUCTURE PARTNERS L.P.




- and -




BROOKFIELD CANADA INFRASTRUCTURE HOLDINGS INC.




- and -




TRILON BANCORP INC.




 





SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

OF BROOKFIELD INFRASTRUCTURE L.P.




 





December 4, 2007










 




TABLE OF CONTENTS



 


	 	 	 	 	 
	ARTICLE 1
	 	 	 	 
	INTERPRETATION
	 	 	2	 
	1.1 Definitions
	 	 	2	 
	1.2 Headings and Table of Contents
	 	 	12	 
	1.3 Gender and Number
	 	 	12	 
	1.4 Currency
	 	 	12	 
	1.5 Invalidity of Provisions
	 	 	12	 
	1.6 Entire Agreement
	 	 	13	 
	1.7 Waiver, Amendment
	 	 	13	 
	1.8 Governing Law; Submission to Jurisdiction
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 2
	 	 	 	 
	ORGANIZATIONAL MATTERS
	 	 	14	 
	2.1 Formation
	 	 	14	 
	2.2 Purpose
	 	 	14	 
	2.3 Powers
	 	 	14	 
	2.4 Name
	 	 	14	 
	2.5 Registered Office; Principal Office
	 	 	15	 
	2.6 Power of Attorney
	 	 	15	 
	2.7 Term
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 3
	 	 	 	 
	CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
	 	 	17	 
	3.1 Formation of the Partnership
	 	 	17	 
	3.2 Initial Capital Contributions by the Initial General Partner
	 	 	17	 
	3.3 The Reorganization and Spin-Off
	 	 	17	 
	3.4 Interest and Withdrawal
	 	 	18	 
	3.5 Issuances of Additional Partnership Interests
	 	 	18	 
	3.6 Pre-emptive Rights
	 	 	19	 
	3.7 Splits and Combinations
	 	 	19	 
	3.8 Fully Paid and Non-Assessable Nature of Units
	 	 	20	 
	3.9 Issuance of Units to BIP
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 4
	 	 	 	 
	ALLOCATIONS
	 	 	20	 
	4.1 Maintenance of Capital Accounts
	 	 	20	 
	4.2 Allocations – Overview
	 	 	21	 
	4.3 General Allocations
	 	 	21	 
	4.4 Special Allocations
	 	 	22	 
	4.5 Allocation of Nonrecourse Liabilities
	 	 	23	 
	4.6 Transfer of Interest
	 	 	23	 
	4.7 Allocations for U.S. Tax Purposes
	 	 	23	 
	4.8 Allocations for Canadian Federal Income Tax Purposes
	 	 	24	 
	4.9 Currency Translation
	 	 	25	 
	4.10 Authority of General Partner
	 	 	25	 












 



- ii -


	 	 	 	 	 
	ARTICLE 5
	 	 	 	 
	DISTRIBUTIONS
	 	 	25	 
	5.1 In General
	 	 	25	 
	5.2 Distributions Prior to Dissolution
	 	 	25	 
	5.3 Distributions on or After Dissolution
	 	 	26	 
	5.4 Adjustment to Incentive Distributions Payable to General Partner
	 	 	26	 
	5.5 Incentive Distributions Paid in the Form of Redemption — Exchange Units
	 	 	27	 
	5.6 Prohibition on Distributions
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 6
	 	 	 	 
	REDEMPTION-EXCHANGE RIGHTS
	 	 	27	 
	6.1 Redemption-Exchange Rights
	 	 	27	 
	6.2 Redemption and Exchange Procedures
	 	 	28	 
	6.3 Redemption-Exchange Date
	 	 	29	 
	6.4 Withdrawal of Exercise
	 	 	29	 
	6.5 Effect of Exercise of the Redemption-Exchange Right
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 7
	 	 	 	 
	REDEMPTION AMOUNT AND EXCHANGE RATIO
	 	 	30	 
	7.1 Redemption Amount
	 	 	30	 
	7.2 Exchange Ratio and Adjustments
	 	 	30	 
	 
	 	 	 	 
	ARTICLE 8
	 	 	 	 
	ADJUSTMENTS
	 	 	30	 
	8.1 Unit Reorganization
	 	 	30	 
	8.2 Unit Reclassification
	 	 	30	 
	8.3 Adjustments Cumulative
	 	 	31	 
	 
	 	 	 	 
	ARTICLE 9
	 	 	 	 
	MANAGEMENT AND OPERATION OF PARTNERSHIP
	 	 	31	 
	9.1 Management
	 	 	31	 
	9.2 Restrictions on General Partner’s Authority
	 	 	32	 
	9.3 Reimbursement of Partnership Expenses
	 	 	32	 
	9.4 Outside Activities
	 	 	32	 
	9.5 Disclosure of Interests
	 	 	33	 
	9.6 Indemnification
	 	 	34	 
	9.7 Resolution of Conflicts of Interest
	 	 	36	 
	9.8 Other Matters Concerning the General Partner
	 	 	36	 
	9.9 Title to Partnership Assets
	 	 	37	 
	9.10 Purchase or Sale of Units
	 	 	37	 
	9.11 Reliance by Third Parties
	 	 	37	 
	9.12 Services
	 	 	38	 
	 
	 	 	 	 
	ARTICLE 10
	 	 	 	 
	RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
	 	 	38	 
	10.1 Limitation of Liability
	 	 	38	 
	10.2 Management of Partnership Affairs
	 	 	38	 












 



- iii -


	 	 	 	 	 
	10.3 Outside Activities
	 	 	39	 
	 
	 	 	 	 
	ARTICLE 11
	 	 	 	 
	BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	39	 
	11.1 Books, Records and Accounting
	 	 	39	 
	11.2 Fiscal Year
	 	 	39	 
	11.3 Approval of Financial Statements
	 	 	39	 
	11.4 Reports
	 	 	39	 
	 
	 	 	 	 
	ARTICLE 12
	 	 	 	 
	TAX MATTERS
	 	 	40	 
	12.1 Tax Information
	 	 	40	 
	12.2 Preparation of Tax Returns
	 	 	40	 
	12.3 Tax Elections
	 	 	40	 
	12.4 Tax Controversies
	 	 	41	 
	12.5 Withholding
	 	 	41	 
	12.6 Election to be Treated as a Corporation
	 	 	41	 
	12.7 U.S. Tax Classification of the Partnership
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 13
	 	 	 	 
	CERTIFICATES; RECORD HOLDERS; TRANSFERS OF PARTNERSHIP INTERESTS
	 	 	42	 
	13.1 Certificates
	 	 	42	 
	13.2 Mutilated, Destroyed, Lost or Stolen Certificates
	 	 	42	 
	13.3 Record Holder
	 	 	43	 
	13.4 Transfer Generally
	 	 	43	 
	13.5 Registration and Transfer of Units
	 	 	43	 
	13.6 Transfer of General Partner Units
	 	 	44	 
	13.7 Restrictions on Transfers
	 	 	45	 
	 
	 	 	 	 
	ARTICLE 14
	 	 	 	 
	ADMISSION OF ADDITIONAL OR SUCCESSOR PARTNERS
	 	 	45	 
	14.1 Admission of Additional Limited Partners
	 	 	45	 
	14.2 Admission of Successor General Partner
	 	 	46	 
	 
	 	 	 	 
	ARTICLE 15
	 	 	 	 
	WITHDRAWAL OR REMOVAL OF PARTNERS
	 	 	46	 
	15.1 Withdrawal of the General Partner
	 	 	46	 
	15.2 Removal of the General Partner
	 	 	47	 
	15.3 Interest of Departing General Partner and Successor General Partner
	 	 	48	 
	15.4 Withdrawal of Limited Partners
	 	 	48	 
	 
	 	 	 	 
	ARTICLE 16
	 	 	 	 
	TERMINATION OF THE PARTNERSHIP
	 	 	49	 
	16.1 Dissolution
	 	 	49	 
	16.2 Reconstitution of Partnership
	 	 	49	 
	16.3 Liquidation
	 	 	49	 
	16.4 Distributions in Kind
	 	 	52	 












 



- iv -


	 	 	 	 	 
	16.5 Cancellation of Certificate of Limited Partnership
	 	 	52	 
	16.6 Reasonable Time for Winding Up
	 	 	52	 
	16.7 Return of Capital
	 	 	52	 
	16.8 No Capital Account Restoration
	 	 	52	 
	16.9 Waiver of Partition
	 	 	53	 
	 
	 	 	 	 
	ARTICLE 17
	 	 	 	 
	AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
	 	 	53	 
	17.1 Amendment to be Adopted Solely by General Partner
	 	 	53	 
	17.2 Amendment Procedures
	 	 	54	 
	17.3 Amendment Requirements
	 	 	55	 
	17.4 Meetings
	 	 	56	 
	17.5 Notice of Meeting
	 	 	56	 
	17.6 Record Date
	 	 	56	 
	17.7 Adjournment
	 	 	57	 
	17.8 Quorum
	 	 	57	 
	17.9 Conduct of Meeting
	 	 	57	 
	17.10 Action Without a Meeting
	 	 	58	 
	17.11 Voting and Other Rights
	 	 	58	 
	 
	 	 	 	 
	ARTICLE 18
	 	 	 	 
	MERGER
	 	 	59	 
	18.1 Authority
	 	 	59	 
	18.2 Procedure for Merger, Consolidation or Other Combination
	 	 	59	 
	18.3 Approval by Limited Partners of Merger or Consolidation
	 	 	60	 
	18.4 No Dissenters’ Rights
	 	 	61	 
	18.5 Effect of Merger
	 	 	61	 
	 
	 	 	 	 
	ARTICLE 19
	 	 	 	 
	GENERAL PROVISIONS
	 	 	62	 
	19.1 Enurement
	 	 	62	 
	19.2 Notices
	 	 	62	 
	19.3 Further Assurances
	 	 	63	 
	19.4 Counterparts
	 	 	63	 












 



 


SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

OF BROOKFIELD INFRASTRUCTURE L.P.




     THIS AGREEMENT is made as of the 4th day of December, 2007 among BROOKFIELD INFRASTRUCTURE GP
L.P. (the “General Partner”), an exempted partnership existing under the laws of Bermuda, as the
General Partner, BROOKFIELD ASSET MANAGEMENT INC., a corporation existing under the laws of the
Province of Ontario, as a limited partner, TRILON BANCORP INC. (the “Initial Limited Partner”), a
corporation existing under the laws of the Province of Ontario, as a limited partner, BROOKFIELD
INFRASTRUCTURE PARTNERS L.P. (“BIP”), an exempted partnership existing under the laws of Bermuda,
as a limited partner, and BROOKFIELD CANADA INFRASTRUCTURE HOLDINGS INC. (“CancoSub Holdco”), as a
limited partner.



     WHEREAS BILP General Partner Inc., a corporation existing under the laws of the Province of
Ontario, as the initial general partner (the “Initial General Partner”) and the Initial Limited
Partner formed a limited partnership under the laws of Bermuda upon the entering into of a limited
partnership agreement between the Initial General Partner and the Initial Limited Partner dated as
of August 17, 2007 (the “Initial Limited Partnership Agreement”) and a Certificate of Registration
for the Partnership confirming the registration of the Partnership as an Exempted Partnership
pursuant to the Exempted Partnerships Act 1992 (Bermuda) and as a Limited Partnership pursuant to
the Limited Partnership Act 1883 (Bermuda) was issued by the Bermuda Registrar of Companies on
August 28, 2007 (the “Certificate of Limited Partnership”);



     AND WHEREAS the Initial General Partner and the Initial Limited Partner agreed to amend and
restate the Initial Limited Partnership Agreement by entering into an amended and restated limited
partnership agreement between the Initial General Partner and the Initial Limited Partner dated as
of November 16, 2007 (the “First Amended and Restated Limited Partnership Agreement”);



     AND WHEREAS the Initial General Partner has transferred its Partnership Interests (as defined
below) to the General Partner;



     AND WHEREAS the parties wish to amend the First Amended and Restated Limited Partnership
Agreement by making the modifications reflected herein and to restate the First Amended and
Restated Limited Partnership Agreement as so amended;



     AND WHEREAS this Second Amended and Restated Limited Partnership Agreement shall replace the
First Amended and Restated Limited Partnership Agreement in its entirety;



     AND WHEREAS Class A Units and Redemption-Exchange Units have been issued to BAM in connection
with the Reorganization and, in connection with the distribution by BAM of its interests in BIP to
the shareholders of BAM (the “Spin-Off”), following the execution of this Agreement, BAM will
transfer all of its Class A Units to BIP and all of its Redemption-Exchange Units to CancoSub
Holdco;









 



2


     AND WHEREAS the Partners (as hereinafter defined) desire to set forth herein the rights,
powers and duties of the Partners, the affairs of the Partnership and the conduct of its
activities, all upon the terms and conditions provided in this Amended and Restated Limited
Partnership Agreement;



     NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the premises, mutual
covenants and agreements contained in this Agreement, the parties covenant and agree, each with the
others, 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. “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Capital Account as of the end of the relevant fiscal year,
after giving effect to the following adjustments:




1.1.1.1 Credit to such Capital Account any amounts which such Partner is obligated
to restore pursuant to any provision of this Agreement or is deemed obligated to
restore pursuant to the penultimate sentences of Treasury Regulations Section
1.704-2(g)(1) and 1.704-2(i)(5); and




1.1.1.2 Debit to such Capital Account the items described in Treasury Regulations
Sections 1.704-l(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6).




The foregoing definition of “Adjusted Capital Account Deficit” is intended to comply with the
provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted
consistently therewith;




1.1.2. “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. “Agreement” means this Amended and Restated Agreement of Limited Partnership of
Brookfield Infrastructure L.P.;




1.1.4. “Applicable Number of BIP Units” means the product of the number of Redemption-Exchange
Units specified in an Exchange Notice multiplied by the Exchange Ratio;




1.1.5. “Applied Incentive Amount” has the meaning assigned to such term in Section 5.4;









 



3



1.1.6. “Assets” means all assets, whether tangible or intangible and whether real, personal or
mixed, at any time owned by the Partnership or acquired by the General Partner for the account
of the Partnership in the course of carrying on the activities of the Partnership;




1.1.7. “Available Cash” means an amount of cash available for distribution by the Partnership
determined at the sole discretion of the General Partner, subject to Section 5.5, which, for
greater certainty, shall not in all cases equal an amount of cash held by the Partnership after
the payment of expenses, debt service obligations on any indebtedness and any other expense or
reserve for any liability, working capital or capital expenditure;




1.1.8. “BAM” means Brookfield Asset Management Inc.;




1.1.9. “BAM Group” means BAM and any Affiliates of BAM, other than any member of the BIP Group;




1.1.10. “BIP” has the meaning assigned to such term in the recitals;




1.1.11. “BIP Group” means BIP, the Partnership, the Holding Entities, the Operating Entities
and any other direct or indirect Subsidiary of a Holding Entity;




1.1.12. “BIP Partnership Agreement” means the limited partnership agreement of BIP, as amended
and restated from time to time;




1.1.13. “BIP Unit” is a Unit (as that term is defined in the BIP Partnership Agreement) in BIP;




1.1.14. “Book Item” has the means assigned to such term in Section 4.7;




1.1.15. “Business Day” means Monday through Friday of each week, except that a legal holiday
recognized as such by the government of Bermuda shall not be regarded as a Business Day;




1.1.16. “Capital Account” means, in relation to each Partner, the account maintained in the
books of the Partnership for each Partner in accordance with Section 4.1;




1.1.17. “Capital Amount” means, as of the date hereof and with respect to each Unit and General
Partner Unit, $27.9477; provided, however, that the Capital Amount with respect to each Unit
and General Partner Unit shall hereafter be adjusted as provided in Section 3.5.3;




1.1.18. “Capital Contribution” means the amount of capital contributed to the Partnership by
each Record Holder (or a Person from which the Record Holder purchased or acquired the
Partnership Interests) in respect of the Partnership Interests purchased or acquired by or
issued to that Record Holder;




1.1.19. “Capital Surplus” has the meaning assigned to such term in Section 5.2.3;









 



4



1.1.20. “Cause” means a court of competent jurisdiction has entered a final, non-appealable
judgment finding the General Partner liable for actual fraud, gross negligence or willful or
wanton misconduct in its capacity as General Partner of the Partnership;




1.1.21. “Certificate” means a certificate issued by the Partnership evidencing ownership of one
or more Units or any other Partnership Interests, in such form as may be adopted by the General
Partner from time to time;




1.1.22. “Certificate of Limited Partnership” has the meaning assigned to such term in the
recitals;




1.1.23. “Class A Units” means the limited partner interests in the Partnership having the
rights and obligations specified in this Agreement and that are designated as Class A Units;




1.1.24. “Closing Date” means the date of the Spin-Off;




1.1.25. “Code” means the Internal Revenue Code of 1986, as amended and in effect from time to
time, as interpreted by the applicable regulations thereunder, and any reference herein to a
specific section or sections of the Code shall be deemed to include a reference to any
corresponding provisions of future law;




1.1.26. “Conflicts Guidelines” has the meaning assigned to such term in Section 9.7.2.




1.1.27. “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 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;




1.1.28. “Departing General Partner” means a former General Partner, from and after the
effective date of any withdrawal or removal of such former General Partner pursuant to
Section 15.1 or 15.2;




1.1.29. “Depreciation” means, for each fiscal year, an amount equal to the depreciation,
amortization, or other cost recovery deduction allowable for U.S. federal income tax purposes
with respect to an asset for such fiscal year, except that (a) with respect to any asset the
Gross Asset Value of which differs from its adjusted tax basis for U.S. federal income tax
purposes at the beginning of such fiscal year and which difference is being eliminated by use
of the “remedial method” as defined by Section 1.704-3(d) of the Treasury Regulations,
Depreciation for such fiscal year shall be the amount of book basis recovered for such fiscal
year under the rules prescribed by Section 1.704-3(d)(2) of the Treasury Regulations, and (b)
with respect to any other asset the Gross Asset Value of which differs from its adjusted tax
basis for U.S. federal income tax purposes at the beginning of such fiscal year, Depreciation
shall be an amount which bears the same ratio to such beginning









 



5



Gross Asset Value as the U.S. federal income tax depreciation, amortization, or other cost
recovery deduction for such fiscal year bears to such beginning adjusted tax basis; provided,
however, that in the case of clause (b) above, if the adjusted tax basis for U.S. federal
income tax purposes of an asset at the beginning of such fiscal year is zero, Depreciation
shall be determined with reference to such beginning Gross Asset Value using any reasonable
method selected by the General Partner;




1.1.30. “Equity Commitment” means the equity commitment agreement between BAM, the Partnership
and BIP dated as of the Closing Date;




1.1.31. “Event of Withdrawal” has the meaning assigned to such term in Section 15.1.1;




1.1.32. “Exchange Notice” has the meaning assigned to such term in Section 6.2.2;




1.1.33. “Exchange Ratio” has the meaning assigned to such term in Section 7.2;




1.1.34. “Exchange Right” has the meaning assigned to such term in Section 6.1.3;




1.1.35. “Exempted Partnerships Act” means the Exempted Partnerships Act 1992 (Bermuda);




1.1.36. “First Amended and Restated Limited Partnership Agreement” has the meaning assigned to
such term in the recitals;




1.1.37. “First Distribution Threshold” means $0.305 per Unit per Quarter (pro rated for any
Quarter in which (i) a Unit is not Outstanding for the entire Quarter or (ii) the Capital
Amount in respect of a Unit is adjusted pursuant to Section 3.5.3);




1.1.38. “fiscal year” as such term relates to the Partnership shall be determined in accordance
with Section 11.2;




1.1.39. “General Partner” has the meaning assigned to such term in the recitals;




1.1.40. “General Partner Units” means the interests in the Partnership owned by the General
Partner, having the rights and obligations specified in this Agreement, and which are
designated as General Partner Units;




1.1.41. “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) or managing partner(s) of such limited liability company, (iii) with
respect to a partnership, the board, committee or other body of the general partner of such
partnership that serves a similar function (or if any such general partner is itself a
partnership, the board, committee or other body of such general partner’s general partner that
serves a similar function) and (iv) with respect to any other Person, the body of such Person
that serves a similar function;




1.1.42. “Governing Instruments” means (i) the Memorandum of Association and Bye-laws in the
case of the general partner of BIP or the general partner of the General Partner,









 



6



(ii) the certificate of incorporation and bylaws in the case of a corporation, (iii) the
memorandum and articles of association in the case of a limited company, (iv) the partnership
agreement in the case of a partnership, (v) the articles of formation and operating agreement
in the case of a limited liability company, (vi) the trust instrument in the case of a trust
and (vii) any other similar governing document under which an entity was organized, formed or
created and operates, in each case as amended, supplemented or otherwise modified from time to
time;




1.1.43. “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for
U.S. federal income tax purposes, except as follows:




1.1.43.1 The Gross Asset Value of any asset contributed by a Partner to the
Partnership is the gross fair market value of such asset as determined by the
General Partner at the time of contribution;




1.1.43.2 The Gross Asset Value of all Partnership assets (i) shall be adjusted to
equal their respective gross fair market values, as determined by the General
Partner, effective as of the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de minimis
Capital Contribution, unless the General Partner reasonably determines that such
adjustment is not necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership; and (ii) may be so adjusted, as
determined by the General Partner, as of the following times: (a) the distribution
by the Partnership to the Partner of more than a de minimis amount of property as
consideration for an interest in the Partnership; (b) the grant of an interest in
the Partnership (other than a de minimis interest) as consideration for the
provision of services to or for the benefit of the Partnership by an existing
Partner acting in a Partner capacity, or by a new Partner acting in a Partner
capacity or in anticipation of becoming a Partner; and (c) the liquidation of the
Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);
provided, however, that the adjustments pursuant to clauses (ii)(a) and (ii)(b)
above shall be made only if the General Partner reasonably determines that such
adjustments are necessary or appropriate to reflect the relative economic interests
of the Partners in the Partnership; and




1.1.43.3 The Gross Asset Value of any Partnership asset distributed to any Partner
shall be adjusted to equal the gross fair market value of such asset on the date of
distribution as determined by the General Partner;




1.1.43.4 If the Gross Asset Value of a Partnership asset has been determined or
adjusted pursuant to 1.1.43.1 or 1.1.43.2 above, such Gross Asset Value shall
thereafter be adjusted by Depreciation taken into account with respect to such asset
for purposes of computing Net Income or Net Loss;




1.1.44. “Gross Proceeds” has the meaning assigned to such term in Section 3.9;









 



7



1.1.45. “Holding Entities” means Brookfield Infrastructure Holdings (Canada) Inc., Brookfield
Infrastructure Corporation, Pineworld Limited, BIP Bermuda Holdings I Limited and any direct
wholly-owned Subsidiary of the Partnership created or acquired after the date of this
Agreement;




1.1.46. “Incentive Distribution” means any performance-based carried interest, dividend,
distribution or other profit entitlement but, for greater certainty, does not include Service
Agreement Fees or Creditable Operating Entity Payment (as such terms are defined in the Master
Services Agreement);




1.1.47. “Incentive Distribution Account” has the meaning assigned to such term in Section 5.4;




1.1.48. “Income Tax Act” means the Income Tax Act (Canada);




1.1.49. “Indemnified Party” has the meaning assigned to such term in Section 9.6;




1.1.50. “Independent Committee” means a committee of the board of directors of the General
Partner’s general partner made up of directors that are “independent” of BAM and its
Affiliates, in accordance with the Governing Instruments of the General Partner’s general
partner;




1.1.51. “Infrastructure Holdings” means indirect interests in Transelec Chile S.A., the
Transmissions Brasilerias De Energica companies, Great Lakes Power Transmission LP, Island
Timberlands Limited Partnership and Longview Holdings, Corp.




1.1.52. “Infrastructure Operations” means electricity transmission, timber operations and
similar infrastructure operations directly or indirectly held or acquired by members of the BIP
Group from time to time;




1.1.53. “Initial General Partner” has the meaning assigned to such term in the recitals;




1.1.54. “Initial GP Capital Contribution” has the meaning assigned to such term in Section 3.2;




1.1.55. “Initial Limited Partner” has the meaning assigned to such term in the recitals;




1.1.56. “Initial Limited Partnership Agreement” has the meaning assigned to such term in the
recitals;




1.1.57. “Initial LP Capital Contribution” has the meaning assigned to such term in Section 3.2;




1.1.58. “Interested Party” has the meaning assigned to such term in Section 9.5.1;




1.1.59. “Interim Capital Transactions” means sales or other voluntary or involuntary
dispositions of any Assets (other than cash, cash equivalents, marketable securities and the
like) prior to the commencement of the dissolution and liquidation of the Partnership.









 



8



1.1.60. “Invested Capital” means, on any particular date, the amount of capital contributed
(directly or indirectly and either as debt or equity) to an Operating Entity prior to such
date;




1.1.61. “Liabilities” has the meaning assigned to such term in Section 9.6.1;




1.1.62. “Limited Partner” means a Person beneficially owning a Unit, without regard to the
Record Holder (unless the Record Holder is such Person), and includes holders of Class A Units
and Redemption-Exchange Unitholders;




1.1.63. “Limited Partnership Act” means the Limited Partnership Act 1883 (Bermuda);




1.1.64. “Liquidator” means the General Partner or other Person approved pursuant to
Section 16.3 who performs the functions described therein;




1.1.65. “Managers” means Brookfield Infrastructure Manager Inc. and Brookfield Asset Management
Barbados Inc.;




1.1.66. “Market Value” means, at any time, the volume-weighted average of the closing price of
a security traded on a stock exchange for each of the last five trading days;




1.1.67. “Master Services Agreement” means the master management and administration agreement
among certain members of the BAM Group, the Partnership, BIP, the Holding Entities and others
dated as of the Closing Date;




1.1.68. “Merger Agreement” has the meaning assigned to such term in Section 18.1;




1.1.69. “Net Income” and “Net Loss” means, for each fiscal year or other period, an amount
equal to the Partnership’s taxable income or loss for such fiscal year or period, determined in
accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or
deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included
in taxable income or loss) with the following adjustments:




1.1.69.1 any income of the Partnership that is exempt from U.S. federal income tax,
and to the extent not otherwise taken into account in computing Net Income or Net
Loss pursuant to this paragraph, shall be added to such taxable income or loss;




1.1.69.2 any expenditures of the Partnership described in Code Section 705(a)(2)(B)
or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i), and to the extent not otherwise taken into
account in computing Net Income or Net Loss pursuant to this paragraph, shall be
subtracted from such taxable income or loss;









 



9



1.1.69.3 in the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to subdivisions 1.1.43.2 or 1.1.43.3 of the definition of Gross Asset Value
herein, the amount of such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing Net Income or Net Loss;




1.1.69.4 gain or loss resulting from any disposition of Partnership property with
respect to which gain or loss is recognized for U.S. federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its Gross
Asset Value;




1.1.69.5 in lieu of depreciation, amortization, and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be taken
into account Depreciation for such fiscal year; and




1.1.69.6 any items which are specially allocated pursuant to the provisions of
Section 4.4 shall not be taken into account in computing Net Income or Net Loss;




1.1.70. “Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Section
1.704-2(b)(1) and 1.704-2(c).




1.1.71. “Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section
1.752-1(a)(2).




1.1.72. “Notice” has the meaning assigned to such term in Section 19.2;




1.1.73. “Operating Entities” means, from time to time, the Persons that (i) directly hold the
Infrastructure Operations, or (ii) indirectly hold the Infrastructure Operations but all of the
interests of which are not held by a Service Recipient including, in the case of each of (i)
and (ii), any joint ventures, partnerships and consortium arrangements;




1.1.74. “Opinion of Counsel” means a written opinion of counsel acceptable to the General
Partner;




1.1.75. “Outstanding” means, with respect to Partnership Interests, all Partnership Interests
that are issued by the Partnership and reflected as outstanding on the Partnership’s books and
records as of the date of determination;




1.1.76. “Partner” means the General Partner and any Limited Partner;




1.1.77. “Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulations Section
1.704-2(b)(4);




1.1.78. “Partner Nonrecourse Debt Minimum Gain” means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if the Partner
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with
Treasury Regulations Section 1.704-2(i)(3);









 



10



1.1.79. “Partner Nonrecourse Deductions” has the meaning set forth in Treasury Regulations
Sections 1.704-2(i)(1) and 1.704-2(i)(2);




1.1.80. “Partnership” means Brookfield Infrastructure L.P., the limited partnership heretofore
formed and continued pursuant to this Agreement;




1.1.81. “Partnership Interest” means any partnership interest, including any General Partner
Unit, Class A Unit or Redemption-Exchange Unit;




1.1.82. “Partnership Minimum Gain” has the meaning set forth in Treasury Regulations Sections
1.704-2(b)(2) and 1.704-2(d);




1.1.83. “Percentage Interest” means, as of the date of such determination, as to any Partner,
the quotient of the number of Partnership Interests held by such Partner divided by the total
number of all Partnership Interests then Outstanding;




1.1.84. “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;




1.1.85. “Quarter” means a calendar quarter ending on the last day of March, June, September or
December;




1.1.86. “Record Date” means the date established by the General Partner for determining (a) the
identity of the Record Holder entitled to notice of a meeting of Limited Partners or entitled
to consent to Partnership action in writing without a meeting or entitled to exercise rights in
respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled
to receive any report or distribution;




1.1.87. “Record Holder” means the Person in whose name a Unit is registered on the books of the
Partnership as of the opening of business on a particular Business Day, or with respect to
other Partnership Interests, the Person in whose name any such other Partnership Interest is
registered on the books which the General Partner has caused to be kept as of the opening of
Business on such Business Day;




1.1.88. “Redemption Amount” has the meaning assigned to such term in Section 7.1;




1.1.89. “Redemption-Exchange Date” has the meaning assigned to such term in Section 6.3;




1.1.90. “Redemption-Exchange Unitholder” means a holder of Redemption-Exchange Units;




1.1.91. “Redemption-Exchange Units” means the limited partner interests in the Partnership
having the rights and obligations specified in this Agreement and that are designated as
Redemption-Exchange Units;









 



11



1.1.92. “Redemption Notice” has the meaning assigned to such term in Section 6.2.1;




1.1.93. “Redemption Right” has the meaning assigned to such term in Section 6.1.2;




1.1.94. “Registration Statement” means the final registration statement and prospectus of BIP
filed with securities regulators in connection with the Spin-Off;




1.1.95. “Relationship Agreement” means the relationship agreement between certain members of
the BAM Group, the Partnership, BIP, the Holding Entities and others dated as of the Closing
Date;




1.1.96. “Reorganization” means the transactions relating to the indirect acquisition of the
Infrastructure Operations by the Holding Entities;



1.1.97. “Second Distribution
Threshold” means $0.33 per Unit per Quarter (pro rated for any Quarter in which (i) a Unit is not
Outstanding for the entire Quarter or (ii) the Capital Amount in respect of a Unit is adjusted pursuant to
Section 3.5.3);



1.1.98. “Service Recipient” means BIP, the Partnership, Brookfield Infrastructure Holdings
(Canada) Inc., Brookfield Infrastructure Corporation, Pineworld Limited, BIP Bermuda Holdings I
Limited, Brookfield Brasil TBE Participações Ltda. and any entity in which any of the foregoing
or any combination of the foregoing holds all of the common equity or equivalent interests,
excluding, for greater certainty, any Operating Entities;




1.1.99. “Spin-Off” has the meaning assigned to such term in the recitals;




1.1.100. “Subscription Number” has the meaning assigned to such term in Section 3.9;




1.1.101. “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;




1.1.102. “Surviving Entity” has the meaning assigned to such term in Section 18.2.2;




1.1.103. “Tax” means all forms of taxation, whether direct or indirect and whether levied by
reference to income, profits, gains, net wealth, asset values, turnover, added value or other
reference and statutory, governmental, national, federal, state, provincial, local governmental
or municipal impositions, duties, contributions and levies (including social security
contributions, national insurance contributions and any other payroll taxes), whenever and
wherever imposed (whether imposed by way of a withholding or deduction for or on account of tax
or otherwise) and in respect of any Person, and all penalties, charges, costs and interest
relating thereto;




1.1.104. “transfer” has the meaning assigned to such term in Section 13.4.1;




1.1.105. “Treasury Regulations” means the Income Tax Regulations promulgated under the Code, as
amended from time to time.




1.1.106. “Underlying Incentive Distribution” has the meaning assigned to such term in
Section 5.4.1;









 



12



1.1.107. “Unit” means any Class A Unit or Redemption-Exchange Unit;




1.1.108. “Unit Reclassification” has the meaning assigned to such term in Section 8.2;




1.1.109. “Unit Reorganization” has the meaning assigned to such term in Section 8.1;




1.1.110. “Unrecovered Capital Amount” means, as of the relevant date of determination and with
respect to any Unit or General Partner Unit, an amount equal to the excess of (i) the Capital
Amount then applicable to such Unit or General Partner Unit over (ii) the amount of
distributions made in respect of such Unit or General Partner Unit pursuant to Section 5.2.3 or
Section 16.3.3.3.2 during the period of time beginning on the date the Capital Amount in
respect of each Unit and General Partner Unit was last adjusted pursuant to Section 3.5.3 and
ending on such date of determination;




1.1.111. “U.S. GAAP” means U.S. generally accepted accounting principles consistently applied;
and




1.1.112. “Withdrawal Opinion of Counsel” an Opinion of Counsel that withdrawal of the General
Partner (following the selection of the successor general partner) would not (i) result in the
loss of the limited liability of any Limited Partner; (ii) cause the Partnership or any BIP
Group member to be treated as an association taxable as a corporation or otherwise to be taxed
as an entity for tax purposes (to the extent not previously treated as such); or (iii) cause
the Partnership or BIP to become an “investment company” under the U.S. Investment Company Act
of 1940, as amended, or similar legislation in other jurisdictions.



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 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 Currency




     Except where otherwise expressly provided, all amounts in this Agreement are stated and will
be paid in U.S. currency.



1.5 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









 



13



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.



1.6 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
thereto, 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.



1.7 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.



1.8 Governing Law; Submission to Jurisdiction




     This Agreement will be governed by and construed in accordance with the laws of Bermuda. Each
of the Partners (other than governmental entities prohibited from submitting to the jurisdiction of
a particular jurisdiction) will submit to the non-exclusive jurisdiction of any court in Bermuda in
any dispute, suit, action or proceeding arising out of or relating to this Agreement. Each Partner
waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or
from any legal process therein and further waives, to the fullest extent permitted by law, any
claim of inconvenient forum, improper venue or that any such court does not have jurisdiction over
the partner. Any final judgment against a partner in any proceedings brought in any court in
Bermuda will be conclusive and binding upon the partner and may be enforced in the courts of any
other jurisdiction of which the partner is or may be subject, by suit upon such judgment. The
foregoing submission to jurisdiction and waivers will survive the dissolution, liquidation, winding
up and termination of our partnership.









 



14


ARTICLE 2

ORGANIZATIONAL MATTERS




2.1 Formation




     The Partnership has been formed as an exempted limited partnership on August 17, 2007,
pursuant to the provisions of the Limited Partnership Act and the Exempted Partnerships Act.
Except as expressly provided to the contrary in this Agreement, the rights, duties (including
fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution
and termination of the Partnership shall be governed by the Limited Partnership Act and the
Exempted Partnerships Act. All Partnership Interests shall constitute personal property of the
owner thereof for all purposes and a Partner has no interest in specific Partnership property.



2.2 Purpose




     The purpose of the Partnership shall be to (i) establish, acquire and/or hold interests in the
Holding Entities and, subject to the approval of the General Partner, in Subsidiaries of the
Partnership; (ii) engage in any activity related to the capitalization and financing of the
Partnership’s interests in those Holding Entities and such Subsidiaries; and (iii) engage in any
activity that is incidental to or in furtherance of the foregoing and that is approved by the
General Partner and that lawfully may be conducted by a limited partnership organized under the
Limited Partnership Act and this Agreement. To the fullest extent permitted by law, the General
Partner shall have no duty or obligation to propose or approve, and may decline to propose or
approve, the conduct by the Partnership of any activity free of any duty (including any fiduciary
duty) or obligation whatsoever to the Partnership or any Limited Partner or Record Holder and, in
declining to so propose or approve, shall not be deemed to have breached this Agreement, any other
agreement contemplated hereby, the Limited Partnership Act, the Exempted Partnerships Act or any
other provision of law.



2.3 Powers




     The Partnership shall be empowered to do any and all acts and things necessary, appropriate,
proper, advisable, incidental to or convenient for the furtherance and accomplishment of the
purposes and activities described in Section 2.2 and for the protection and benefit of the
Partnership.



2.4 Name




     The name of the Partnership shall be “Brookfield Infrastructure L.P.” The Partnership’s
activities and affairs may be conducted under any other name or names deemed necessary or
appropriate by the General Partner, including the name of the General Partner or any Affiliate
thereof. The words “Limited Partnership”, “L.P.”, “Ltd.” or similar words or letters shall be
included in the Partnership’s name where necessary for the purposes of complying with the laws of
any jurisdiction that so requires. Subject to compliance with the requirements of the Limited
Partnership Act and the Exempted Partnerships Act, the General Partner in its sole discretion may
change the name of the Partnership at any time and from time









 



15

to time and shall notify the Record Holders of such change in the next regular communication
to Record Holders.




     If the General Partner ceases to be the General Partner of the Partnership and the new general
partner is not an Affiliate of BAM, the Partnership shall change its name so that it does not
include “Brookfield” and could not be capable of confusion in any way with such name. This
obligation shall be enforceable and waivable by the General Partner notwithstanding that it may
have ceased to be the General Partner of the Partnership.



2.5 Registered Office; Principal Office




     Unless and until changed by the General Partner, the registered office of the Partnership
shall be located at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda, and the resident
representative in Bermuda shall be Appleby Corporate Services (Bermuda) Limited, Canon’s Court, 22
Victoria Street, Hamilton, HM 12. The head office of the Partnership and the General Partner shall
be 7 Reid Street, 4th Floor, Hamilton HM 11, Bermuda, or such other place as the General Partner
may from time to time designate by notice to the Record Holders. The Partnership may maintain
offices at such other place or places within Bermuda as the General Partner deems necessary or
appropriate.



2.6 Power of Attorney





2.6.1. Each Limited Partner hereby constitutes and appoints each of the General Partner and, if
a Liquidator shall have been selected pursuant to Section 16.3, the Liquidator severally (and
any successor to either thereof by merger, transfer, assignment, election or otherwise) and
each of their authorized officers and attorneys-in-fact, with full power of substitution, as
his true and lawful agent and attorney-in-fact, with full power and authority in his name,
place and stead, to:




2.6.1.1 execute, swear to, acknowledge, deliver, file and record in the appropriate
public offices (A) all certificates, documents and other instruments (including this
Agreement and the Certificate of Limited Partnership and all amendments or
restatements thereof) that the General Partner or the Liquidator deems necessary or
appropriate to form, qualify or continue the existence or qualification of the
Partnership as an exempted limited partnership (or a partnership in which the
limited partners have limited liability) in Bermuda and in all other jurisdictions
in which the Partnership may conduct activities or own property; (B) all
certificates, documents and other instruments that the General Partner or the
Liquidator deems necessary or appropriate to reflect, in accordance with its terms,
any amendment, change, modification or restatement of this Agreement; (C) all
certificates, documents and other instruments (including conveyances and a
certificate of cancellation) that the General Partner or the Liquidator deems
necessary or appropriate to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement; (D) all certificates, documents
and other instruments relating to the admission, withdrawal or removal of any
Partner pursuant to, or other events described in, Article 14, Article 15 or the
Capital Contribution of any Partner; (E) all









 



16



certificates, documents and other instruments relating to the determination of the
rights, preferences and privileges of any class or series of Units or other
Partnership Interests issued pursuant to Section 3.5; and (F) all certificates,
documents and other instruments (including any Merger Agreement) relating to a
merger or consolidation of the Partnership pursuant to Article 18; and




2.6.1.2 execute, swear to, acknowledge, deliver, file and record all ballots,
consents, approvals, waivers, certificates, documents and other instruments
necessary or appropriate, in the sole discretion of the General Partner or the
Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval,
agreement or other action that is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or is necessary or appropriate, in the
sole discretion of the General Partner or the Liquidator, to effectuate the terms or
intent of this Agreement; provided, that when required by any other provision of
this Agreement that establishes a percentage of the Limited Partners or of the
Limited Partners of any class or series required to take any action, the General
Partner or the Liquidator may exercise the power of attorney made in this
Section 2.6.1.2 only after the necessary vote, consent or approval of the Limited
Partners or of the Limited Partners of such class or series, as applicable.




Nothing contained in this Section 2.6.1 shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with Article 17 or as
may be otherwise expressly provided for in this Agreement.




2.6.2. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled
with an interest, and it shall survive and not be affected by the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Limited
Partner and the transfer of all or any portion of such Limited Partner’s Partnership Interest
and shall extend to such Limited Partner’s heirs, successors, assigns and personal
representatives. Each such Limited Partner hereby agrees to be bound by any representation
made by the General Partner or the Liquidator acting in good faith pursuant to such power of
attorney; and each such Limited Partner hereby waives any and all defenses that may be
available to contest, negate or disaffirm the action of the General Partner or the Liquidator
taken in good faith under such power of attorney. Each Limited Partner shall execute and
deliver to the General Partner or the Liquidator, within 15 days after receipt of the General
Partner’s or the Liquidator’s request therefor, such further designation, powers of attorney
and other instruments as the General Partner or the Liquidator deems necessary to effectuate
this Agreement and the purposes of the Partnership.



2.7 Term




     The Partnership commenced upon the formation of the Partnership on August 17, 2007, pursuant
to the Initial Limited Partnership Agreement and the Certificate of Limited Partnership and shall
continue in perpetual existence until the termination of the Partnership in accordance with the
provisions of Section 16.1.









 



17


ARTICLE 3

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS




3.1 Formation of the Partnership




          In connection with the formation of the Partnership, the Initial General Partner has been
admitted as the Initial General Partner of the Partnership and the Initial Limited Partner has been
admitted as a Limited Partner as of the date of the Initial Limited Partnership Agreement.




3.2 Initial Capital Contributions by the Initial General Partner




          The Initial General Partner has made a Capital Contribution of $1 to the Partnership (“Initial
GP Capital Contribution”). The Initial Limited Partner has made a Capital Contribution of $1
(“Initial LP Capital Contribution”).




3.3 The Reorganization and Spin-Off




     3.3.1. In connection with the transactions involved in the Reorganization:




3.3.1.1 the Initial General Partner has made an additional Capital Contribution of
an amount of cash, which together with the Initial GP Capital Contribution,
represents 1% of the capital of the Partnership as of the date hereof, and in
exchange for such Capital Contributions, the Initial General Partner has received
General Partner Units;




3.3.1.2 the Initial Limited Partner has made an additional Capital Contribution of
all its equity securities of Brookfield Infrastructure Holdings (Canada) Inc. to the
Partnership, and BAM has made Capital Contributions by transferring all of its
equity and debt securities of Brookfield Infrastructure Corporation and all of its
equity securities of Brookfield Infrastructure Holdings (Canada) Inc., Pineworld
Limited and BIP Bermuda Holdings I Limited to the Partnership, which together with
the Initial LP Capital Contribution, represents 99% of the capital of the
Partnership as of the date hereof, and in exchange for such Capital Contributions,
the Initial Limited Partner has received a cash payment and has been issued
Redemption-Exchange Units and BAM has been issued Redemption-Exchange Units and
Class A Units;




3.3.1.3 BAM has transferred all of its Redemption-Exchange Units to Cancosub Holdco
and thereupon Cancosub Holdco was admitted as a Limited Partner subject to and in
accordance with Section 14.1; and




3.3.1.4 the Initial General Partner has transferred all of its General Partner Units
to the General Partner. As a result of this transfer, the Initial General Partner
ceased to be the general partner of the Partnership and the General Partner became
the general partner of the Partnership, and for greater certainty, the Initial
General Partner ceased immediately after the transfer to have any management powers
and authority over the activities and affairs of the Partnership which









 



18



management powers and authority became vested immediately after the transfer in the
General Partner.




3.3.2. In connection with the Spin-Off and following the execution of this Agreement, on the
Closing Date, BAM will transfer all of its Class A Units to BIP whereupon (i) BIP shall be
admitted as a Limited Partner subject to and in accordance with Section 14.1 and (ii) BAM shall
cease to be a Limited Partner of the Partnership.



3.4 Interest and Withdrawal




          No interest on Capital Contributions shall be paid by the Partnership. No Partner shall be
entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any,
that distributions made pursuant to this Agreement or upon dissolution of the Partnership may be
considered as such by law and then only to the extent provided for in this Agreement. Except to
the extent expressly provided in this Agreement, no Partner shall have priority over any other
Partner either as to the return of Capital Contributions or as to profits, losses or distributions.




3.5 Issuances of Additional Partnership Interests





3.5.1. The Partnership may issue additional Partnership Interests (including new classes of
Partnership Interests) and options, rights, warrants and appreciation rights relating to
Partnership Interests for any Partnership purpose (including in connection with any
distribution reinvestment plan, the Equity Commitment 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 General Partner shall determine in
its sole discretion, all without the approval of any Limited Partners.




3.5.2. Upon the issuance of any Class A Units to BIP pursuant to Section 3.9 hereof, the
Capital Amount attributable to each such newly issued Class A Unit shall equal the amount paid
or contributed to the Partnership in respect of such Class A Unit.




3.5.3. If the 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 General Partner Units (whether in connection with the issuance of Class A Units
pursuant to Section 3.9 or otherwise), the General Partner may adjust (which adjustment may be
upward or downward) the Capital Amount attributable to each Unit and General Partner Unit
Outstanding prior to such issuance of new Units or General Partner Units to equal the amount
that would be distributed pursuant to Section 16.3.3 in respect of such Unit or 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 General Partners Units.




3.5.4. Except with respect to Class A Units issued to BIP pursuant to Section 3.9, and except
as provided in Section 3.5.2 or Section 3.5.3, each additional Partnership Interest authorized
to be issued by the Partnership pursuant to Section 3.5.1 may be issued in one or more classes,
or one or more series of any such classes, with such designations, preferences, rights, powers
and duties (which may be senior to existing classes and series of Partnership









 



19



Interests), as shall be fixed by the General Partner in its sole discretion, including (i) the
right to share in Partnership profits and losses or items thereof; (ii) the right to share in
Partnership distributions; (iii) the rights upon dissolution and liquidation of the
Partnership; (iv) whether, and the terms and conditions upon which, the Partnership may or
shall be required to redeem the Partnership Interest (including sinking fund provisions);
(v) whether such Partnership Interest is issued with the privilege of conversion or exchange
and, if so, the terms and conditions of such conversion or exchange; (vi) the terms and
conditions upon which each Partnership Interest will be issued, evidenced by certificates and
assigned or transferred; and (viii) the requirement, if any, of each such Partnership Interest
to consent to certain partnership matters.




3.5.5. The General Partner is hereby authorized to take all actions that it determines to be
necessary or advisable in connection with each issuance of Partnership Interests and options,
rights, warrants and appreciation rights relating to Partnership Interests pursuant to this
Section 3.5, including the admission of additional Limited Partners in connection therewith and
any related amendment of this Agreement, and all additional issuances of Partnership Interests
and options, rights, warrants and appreciation rights relating to Partnership Interests. The
General Partner is authorized to do all things that it determines to be necessary or
appropriate in connection with any future issuance of Partnership Interests or options, rights,
warrants or appreciation rights relating to Partnership Interests, including compliance with
any statute, rule, regulation or guideline of any governmental agency.



3.6 Pre-emptive Rights




          Unless otherwise determined by the General Partner, in its sole discretion, no Person shall
have any pre-emptive, preferential or other similar right with respect to the issuance of any
Partnership Interest, whether unissued, held in the treasury or hereafter created.




3.7 Splits and Combinations





3.7.1. Subject to Section 3.7.4, the Partnership may make a distribution of Partnership
Interests to all Record Holders pro rata to their Percentage Interest or may effect a
subdivision or combination of Partnership Interests so long as, after any such event, each
Partner shall have the same Percentage Interest in the Partnership as before such event.




3.7.2. Whenever such a distribution, subdivision or combination of Partnership Interests or
options, rights, warrants or appreciation rights relating to Partnership Interests is declared,
the General Partner shall select a Record Date as of which the distribution, subdivision or
combination shall be effective and shall send notice thereof at least 20 days prior to such
Record Date to each Record Holder as of a date not less than 10 days prior to the date of such
notice. The General Partner also may cause independent public accountants of international
standing selected by it to calculate the number of Partnership Interests to be held by each
Record Holder after giving effect to such distribution, subdivision or combination. The
General Partner shall be entitled to rely on any certificate provided by such firm as
conclusive evidence of the accuracy of such calculation.









 



20



3.7.3. Promptly following any such distribution, subdivision or combination, the Partnership
may issue Certificates to the Record Holders of Partnership Interests or options, rights,
warrants or appreciation rights relating to Partnership Interests as of the applicable Record
Date representing the new number of Partnership Interests or options, rights, warrants or
appreciation rights relating to Partnership Interests held by such Record Holders, or the
General Partner may adopt such other procedures that it determines to be necessary or
appropriate to reflect such changes. If any such combination results in a smaller total number
of Partnership Interests Outstanding or outstanding options, rights, warrants or appreciation
rights relating to Partnership Interests, the Partnership shall require, as a condition to the
delivery to a Record Holder of any such new Certificate, the surrender of any Certificate held
by such Record Holder immediately prior to such Record Date.




3.7.4. The Partnership shall not be required to issue fractional Units upon any distribution,
subdivision or combination of Units. If a distribution, subdivision or combination of Units
would result in the issuance of fractional Units but for the provisions of this Section 3.7.4,
each fractional Unit shall be rounded to the nearest whole Unit, with each half Partnership
Interest being rounded to the next higher Partnership Interest.



3.8 Fully Paid and Non-Assessable Nature of Units




          All Units issued pursuant to, and in accordance with the requirements of this Article 3 shall
be fully paid and non-assessable Units in the Partnership.




3.9 Issuance of Units to BIP




          If, and to the extent that, BIP raises funds by way of the issuance of equity or debt
securities, or otherwise, and is required under the BIP Partnership Agreement to use the proceeds
of such issuance of securities to subscribe for Class A Units, BIP shall invest an amount equal to
the gross proceeds of such issuance (the “Gross Proceeds”) for a number of Class A Units (the
“Subscription Number”) equal to the (i) the quotient of the amount of the Gross Proceeds divided by
the issue price of one BIP Unit (in the case of an issuance of BIP Units) or the Market Value of
one BIP Unit (in the case of an issuance of another security) (ii) multiplied by the inverse of the
Exchange Ratio.




ARTICLE 4

ALLOCATIONS




4.1 Maintenance of Capital Accounts




          The General Partner will maintain a separate capital account (a “Capital Account”) for each
Partner in accordance with the following provisions:





4.1.1. to each Partner’s Capital Account there shall be credited such Partner’s Capital
Contribution, such Partner’s distributive share of Net Income or any item in the nature of
income or gain which is specially allocated pursuant to Section 4.4, and the amount of any
Partnership liabilities assumed by such Partner or which are secured by any property
distributed to such Partner;









 



21



4.1.2. to each Partner’s Capital Account there shall be debited the amount of cash and the
Gross Asset Value of any property distributed to such Partner pursuant to any provision of this
Agreement, such Partner’s distributive share of Net Loss and any item in the nature of expense
or loss which is specially allocated pursuant to Section 4.4, and the amount of any liabilities
of such Partner assumed by the Partnership or which are secured by any property contributed by
such Partner to the Partnership;




4.1.3. in the event all or a portion of an interest in the Partnership is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent that it relates to the transferred interest; and




4.1.4. in determining the amount of any liability for purposes of Sections 4.1.1 and 4.1.2
there shall be taken into account Code Section 752(c) and any other applicable provisions of
the Code and Treasury Regulations.



          The provisions of this Section 4.1 and other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b)
and shall be interpreted and applied in a manner consistent with such Treasury Regulations.




4.2 Allocations – Overview




          The rules set forth below in this Article 4 shall apply for the purpose of determining each
Partner’s allocable share of the items of income, gain, loss and expense of the Partnership
comprising Net Income or Net Loss of the Partnership for each fiscal year, determining special
allocations of other items of income, gain, loss and expense, and adjusting the balance of each
Partner’s Capital Account to reflect the aforementioned general and special allocations. For each
fiscal year, the special allocations in Section 4.4 shall be made immediately prior to the general
allocations of Section 4.3.




4.3 General Allocations





4.3.1. The items of income, gain, loss and expense of the Partnership comprising Net Income or
Net Loss for a fiscal year shall be allocated among the Persons who were Partners during such
fiscal year in a manner that will, as nearly as possible, cause the Capital Account balance of
each Partner at the end of such fiscal year to equal the excess (which may be negative) of:




4.3.1.1 the amount of the hypothetical distribution (if any) that such Partner would
receive if, on the last day of the fiscal year, (x) all Partnership assets,
including cash and any amount required to be contributed to the Partnership by the
General Partner, were sold for cash in an amount equal to their Gross Asset Values,
taking into account any adjustments thereto for such fiscal year, (y) all
Partnership liabilities were satisfied in cash according to their terms (limited,
with respect to each Nonrecourse Liability or any Partner Nonrecourse Debt in
respect of such Partner, to the Gross Asset Values of the assets securing such
liability), and (z) the net proceeds thereof (after satisfaction of such
liabilities) were distributed in full pursuant to Section 16.3.3 over









 



22



4.3.1.2 the sum of (x) the amount, if any, without duplication, that such Partner
would be obligated to contribute to the capital of the Partnership, (y) such
Partner’s share of Partnership Minimum Gain determined pursuant to Treasury
Regulations Section 1.704-2(g) and (z) such Partner’s share of Partner Nonrecourse
Debt Minimum Gain determined pursuant to Treasury Regulations Section 1.704-2(i)(5),
all computed as of the hypothetical sale described in Section 4.3.1.1 above.




4.3.2. Notwithstanding anything to the contrary in this Article 4, the amount of items of
Partnership expense and loss allocated pursuant to Section 4.3.1 to any Limited Partner shall
not exceed the maximum amount of such items that can be so allocated without causing such
Limited Partner to have an Adjusted Capital Account Deficit at the end of any fiscal year. All
such items in excess of the limitation set forth in this Section 4.3.2 shall be allocated
first, to Partners who would not have an Adjusted Capital Account Deficit, pro rata, in
proportion to their Capital Account balances, adjusted as provided in Sections 1.1.1.1 and
1.1.1.2, until no Partner would be entitled to any further allocation, and thereafter to the
General Partner.



4.4 Special Allocations




          The following special allocations shall be made in the following order:





4.4.1. In the event that there is a net decrease during a fiscal year in either Partnership
Minimum Gain or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any other provision
of this Article 4, each Partner shall receive such special allocations of items of Partnership
income and gain as are required in order to conform to Treasury Regulations Section 1.704-2.




4.4.2. Subject to Section 4.4.1, but notwithstanding any other provision of this Article 4,
items of income and gain shall be specially allocated to the Partners in a manner that complies
with the “qualified income offset” requirement of Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(3).




4.4.3. In the event that a Partner has a deficit Capital Account balance at the end of any
fiscal year which is in excess of the sum of (i) the amount such Partner is then obligated to
restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be
obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5), respectively, such Partner shall be specially allocated items
of Partnership income and gain (consisting of a pro rata portion of each item of income and
gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section
1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however,
that any allocation under this Section 4.4.3 shall be made only if and to the extent that a
Partner would have a deficit Capital Account balance in excess of such sum after all
allocations provided for in this Article 4 have been tentatively made as if this Section 4.4.3
were not in this Agreement.









 



23



4.4.4. Partner Nonrecourse Deductions shall be specially allocated to the Partners in the
manner in which they share the economic risk of loss (as defined in Treasury Regulations
Section 1.752-2) for such Partner Nonrecourse Debt.




4.4.5. Each Nonrecourse Deduction of the Partnership shall be specially allocated to the
Partners, pro rata, in proportion to their respective Percentage Interests.




4.4.6. The amounts of any Partnership income, gain, loss or expense available to be specially
allocated pursuant to this Section 4.4 shall be determined by applying rules analogous to those
set forth in Section 1.1.69 as modified by Sections 1.1.69.1 through 1.1.69.5.



4.5 Allocation of Nonrecourse Liabilities




          For purposes of determining each Partner’s share of Nonrecourse Liabilities, if any, of the
Partnership in accordance with Treasury Regulations Section 1.752-3(a)(3), the Partners’ interest
in Partnership profits shall be determined in the same manner as prescribed by Section 4.4.5.




4.6 Transfer of Interest




          In the event of a transfer of all or part of any Partnership Interest (in accordance with the
provisions of this Agreement) at any time other than the end of a fiscal year, or the admission of
an additional Limited Partner in connection with the issuance of additional Partnership Interests
pursuant to Section 3.5, the shares of items of Net Income or Net Loss and specially allocated
items allocable to the interest transferred shall be allocated between the transferor and the
transferee in a manner determined by the General Partner in its sole discretion that is not
inconsistent with the applicable provisions of the Code and Treasury Regulations.




4.7 Allocations for U.S. Tax Purposes





4.7.1. Each item of income, gain, loss, or deduction for U.S. federal income tax purposes that
corresponds to an item of income, gain, loss or expense that is either taken into account in
computing Net Income or Net Loss or is specially allocated pursuant to Section 4.4 (a “Book
Item”) shall be allocated among the Partners in the same proportion as the corresponding Book
Item is allocated among them pursuant to Section 4.3 or Section 4.4 hereof.




4.7.2. In the event any property of the Partnership is credited to the Capital Account of a
Partner at a value other than its tax basis (whether as a result of a contribution of such
property or a revaluation of such property pursuant to Section 1.1.43.2, then allocations of
taxable income, gain, loss and deductions with respect to such property shall be made in a
manner which will comply with Section 704(b) and Section 704(c) of the Code and the Treasury
Regulations thereunder. The Partnership, in the discretion of the General Partner, may make, or
not make, “curative” or “remedial” allocations (within the meaning of the Treasury Regulations
under Section 704(c) of the Code) including, but not limited to:









 



24



4.7.2.1 “curative” allocations which offset the effect of the “ceiling rule” for a
prior fiscal year (within the meaning of Treasury Regulations Section
1.704-3(c)(3)(ii)); and




4.7.2.2 “curative” allocations from dispositions of contributed property (within the
meaning of Treasury Regulations Section 1.704-3(c)(3)(iii)(B)).




4.7.3. All tax credits shall be allocated among the Partners as determined by the General
Partner in its sole and absolute discretion, consistent with applicable law.



4.8 Allocations for Canadian Federal Income Tax Purposes.





4.8.1. The income for Canadian federal income tax purposes of the Partnership for a given
fiscal year of the Partnership will be allocated to each Partner in an amount calculated by
multiplying such income by a fraction, the numerator of which is the sum of the distributions
received by such Partner with respect to such fiscal year and the denominator of which is the
aggregate amount of the distributions made by the Partnership to Partners with respect to such
fiscal year. Generally, the source and character of items of income so allocated to a Partner
with respect to a fiscal year of the Partnership will be the same source and character as the
distributions received by such Partner with respect to such fiscal year.




4.8.2. If, with respect to a given fiscal year, no distribution is made by the Partnership or
the Partnership has a loss for Canadian federal income tax purposes, one quarter of the income,
or loss, as the case may be, for Canadian federal income tax purposes 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.
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.




4.8.3. Notwithstanding Sections 4.8.1 and 4.8.2, the gain(s) for Canadian federal income tax
purposes realized by the Partnership on the disposition of the common shares of Brookfield
Infrastructure Holdings (Canada) Inc. (the “CanHoldco Shares”) for any given fiscal year of the
Partnership, in an aggregate amount equal to the amount of accrued gain on the CanHoldco Shares
on the date of the transfer of the CanHoldco Shares to the Partnership in connection with the
Reorganization computed in accordance with the Income Tax Act, will be allocated to the Initial
Limited Partner (or to the Initial Limited Partner and any member of the BAM Group to which the
Initial Limited Partner assigns any Partnership Interests in proportion to their respective
holdings of the aggregate Partnership Interests held by them at the time of the disposition of
the CanHoldco Shares or to the general partner of the Partnership if the general partner is a
member of the BAM Group at the time of allocation and no other members of the BAM Group hold
any Partnership Interests of the Partnership at such time); provided, however, that any such
gain(s) that exceed in the aggregate the amount of accrued gain on the CanHoldco Shares on the
date of the transfer of the CanHoldco Shares to the Partnership in connection with the
Reorganization will be allocated in accordance with Sections 4.8.1 and 4.8.2.









 



25


4.9 Currency Translation




          Allocations of amounts other than in U.S. Dollars shall be undertaken following translation
into U.S. Dollars by the General Partner on such date as the General Partner deems appropriate,
using rates quoted by appropriate financial institutions of repute or by internationally recognized
financial publications or news services to fix the rate of translation.




4.10 Authority of General Partner




          All decisions and other matters concerning (i) the computation and allocation of specific
items of income, gain, expense or loss among the Partners and (ii) accounting procedures to be
employed by the Partnership shall be determined in good faith by the General Partner, which
determination shall be final and conclusive as to all Partners. In furtherance of the foregoing,
the General Partner may adjust allocations of items that would otherwise be made pursuant to the
terms of this Agreement to the extent necessary to (A) comply with the requirements of the Code and
Treasury Regulations (including the requirements of Section 704(b) and Section 704(c) of the Code
and the Treasury Regulations promulgated thereunder), (B) the requirements of the Income Tax Act,
(C) reflect the Partners’ interests in the Partnership or (D) consistently reflect the
distributions made by the Partnership to the Partners pursuant to the terms of this Agreement. The
General Partner may make, but shall not be obligated to make, any tax election provided for under
the Code, or any provision of state, local or non-U.S. tax law or under the Income Tax Act.




ARTICLE 5

DISTRIBUTIONS




5.1 In General




          Subject to this Article 5 and Section 16.3.3, the General Partner may in its sole discretion
make distributions at any time or from time to time to the Partners in accordance with their
Percentage Interests. 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. The amount of Taxes
withheld or paid by the Partnership or another member of the BIP Group in respect of taxable income
allocated to a Partner shall be treated as a distribution to such Partner.




5.2 Distributions Prior to Dissolution





5.2.1. Prior to the dissolution of the Partnership pursuant to Section 16.1, distributions of
Available Cash shall be made pursuant to this Section 5.2.




5.2.2. Subject to Section 5.2.3, any distributions of Available Cash made by the Partnership
with respect to any Quarter shall be distributed:




5.2.2.1 first, 100% to BIP until there has been distributed pursuant to this
Section 5.2.2.1 an amount equal to the amount of BIP’s outlays and expenses for the
Quarter properly incurred;









 



26



5.2.2.2 second, 100% to all Partners pro rata in proportion to their respective
Percentage Interests until there has been distributed pursuant to this
Section 5.2.2.2 in respect of each Unit Outstanding as of the last day of such
Quarter an amount equal to the First Distribution Threshold;




5.2.2.3 third, (i) 85% to all the Partners pro rata in proportion to their
respective Percentage Interests and, (ii) 15% to the General Partner until there has
been distributed pursuant to this Section 5.2.2.3 in respect of each Unit
Outstanding as of the last day of such Quarter an amount equal to the excess of
(x) the Second Distribution Threshold over (y) the First Distribution Threshold;
and




5.2.2.4 thereafter, (i) 75% to all Partners pro rata in proportion to their
respective Percentage Interests and, (ii) 25% to the General Partner.




5.2.3. Available Cash that is deemed by the General Partner to be cash from Interim Capital
Transactions and representative of unrecovered capital (“Capital Surplus”) shall be
distributed:




5.2.3.1 first, to Partners pro rata in proportion to the Unrecovered Capital Amounts
attributable to the Units and General Partner Units held by the Partners until the
Unrecovered Capital Amount attributable to each Unit and General Partner Unit is
equal to zero; and




5.2.3.2 thereafter, in accordance with Section 5.2.2.



5.3 Distributions on or After Dissolution




          Upon a dissolution of the Partnership pursuant to Section 16.1, distributions shall be made in
the manner prescribed in Section 16.3.3 hereof.




5.4 Adjustment to Incentive Distributions Payable to General Partner





5.4.1. The General Partner shall maintain a notional account (as adjusted pursuant to this
Section 5.4, the “Incentive Distribution Account”) that will track the amount of Incentive
Distributions that have been paid or are payable in respect of any period following the Closing
Date by any Operating Entity to any member of the BAM Group with respect to the Partnership’s
Invested Capital in such Operating Entity (“Underlying Incentive Distributions”).




5.4.2. Notwithstanding anything to the contrary in this Article 5, any amounts otherwise
payable to the General Partner pursuant to clause (ii) of either Section 5.2.2.3 or
Section 5.2.2.4 shall, subject to Section 5.4.3, be reduced by (but will not be less than zero)
any amount in the Incentive Distribution Account at the time of the distribution (any such
amount, once applied to reduce amounts otherwise payable, is referred to as an “Applied
Incentive Amount”).









 



27



5.4.3. The amount of any reduction pursuant to Section 5.4.2 in the amounts otherwise payable
to the General Partner shall be adjusted on an equitable basis as necessary in order to take
into account the benefit that Limited Partners would have received had the Underlying Incentive
Distributions not been paid or payable.




5.4.4. The Incentive Distribution Account shall be adjusted from time to time to deduct the
amount of any Applied Incentive Amount or any clawback or similar amount paid or contributed to
an Operating Entity in respect of an Underlying Incentive Distribution. For greater certainty,
it is acknowledged that the Incentive Distribution Account may be negative as a result of the
adjustment for such clawback or similar amount. In no event will a negative balance in the
Incentive Distribution Account require a payment to the General Partner.




5.4.5. Any amounts in the Incentive Distribution Account shall be taken into account in a
similar manner to the foregoing in effecting distributions pursuant to Section 16.3.3.



5.5 Incentive Distributions Paid in the Form of Redemption — Exchange Units




          The General Partner may elect, at its sole discretion, to reinvest the distribution amounts
paid or payable by the Partnership to the General Partner, as contemplated by clause (ii) of either
Section 5.2.2.3 or Section 5.2.2.4, in exchange for a number of Redemption-Exchange Units issued by
the Partnership to the General Partner equal to the amount of cash that would otherwise be paid to
the General Partner divided by the Market Value of a BIP Unit on the date that the distribution is
declared.




5.6 Prohibition on Distributions




          The General Partner shall not cause the Partnership to make any distribution pursuant to this
Article 5:





5.6.1. unless there is sufficient cash available therefor;




5.6.2. which would render the Partnership unable to pay its debts as and when they fall due; or




5.6.3. which, in the opinion of the General Partner, would or might leave the Partnership with
insufficient funds to meet any future or contingent obligations.



ARTICLE 6

REDEMPTION-EXCHANGE RIGHTS




6.1 Redemption-Exchange Rights





6.1.1. Subject to Section 6.1.3, the Redemption-Exchange Units entitle the Redemption-Exchange
Unitholder to redeem all or any portion of its Redemption-Exchange Units in accordance with
this Article 6 at any time after the second anniversary of the Closing Date.









 



28



6.1.2. Subject to the provisions of this Agreement, the Redemption-Exchange Unitholders may
require the Partnership to redeem all or any portion of the Redemption-Exchange Units (the
“Redemption Right”) for an amount of cash equal to the Redemption Amount. Each
Redemption-Exchange Unit to be redeemed by the Redemption-Exchange Unitholder must be tendered
in accordance with the procedures set out in Section 6.2.




6.1.3. Subject to the provisions of this Agreement, BIP shall have the right (the “Exchange
Right”), which shall be exercisable after presentation of the Redemption Notice in accordance
with Section 6.2, to elect to acquire all (but not less than all) the Redemption-Exchange Units
to be redeemed under the Redemption Notice in consideration for the Applicable Number of BIP
Units.



6.2 Redemption and Exchange Procedures





6.2.1. In order to exercise its Redemption Right, the Redemption-Exchange Unitholder shall
deliver to the Partnership and BIP a notice (the “Redemption Notice”) of its intention to
redeem the Redemption-Exchange Units that contains all relevant information (including the
Redemption-Exchange Date), and that is presented together with all related certificates and
documents that the Partnership or BIP may reasonably require or as may be required by
applicable law to effect the Redemption Right, including the certificates representing the
Redemption-Exchange Units being redeemed.




6.2.2. At any time within 2 Business Days from the date of BIP’s receipt of the Redemption
Notice, BIP may elect to exercise the Exchange Right with respect to all (but not less than
all) of the Redemption-Exchange Units to be redeemed pursuant to the Redemption Notice and
shall give written notice to the Partnership and to the Redemption-Exchange Unitholder of such
election (the “Exchange Notice”). The Exchange Notice shall contain all relevant information,
and shall be presented together with all related certificates and documents that the
Partnership and Redemption-Exchange Unitholder may reasonably require or as may be required by
applicable law to effect the Exchange Right.




6.2.3. If BIP exercises its Exchange Right, on the Redemption-Exchange Date, BIP will acquire
the number of Redemption-Exchange Units specified in the Redemption Notice in exchange for the
Applicable Number of BIP Units. BIP shall take all steps necessary under the BIP Partnership
Agreement to effect the issuance of the Applicable Number of BIP Units to the
Redemption-Exchange Unitholder, including by issuing a certificate in the name of the
Redemption-Exchange Unitholder upon request and subject to the terms of the BIP Partnership
Agreement. The General Partner and the Partnership shall take all steps necessary under this
Agreement to effect the transfer of the Redemption-Exchange Units specified in the Redemption
Notice to BIP, including the register of such transfer in the Partnership’s register of Limited
Partners and, upon request, by issuing a new certificate in the name of BIP representing the
Redemption-Exchange Units transferred to BIP in accordance with this Article 6, without expense
to BIP.




6.2.4. If BIP does not exercise its Exchange Right, on the Redemption-Exchange Date, for each
Redemption-Exchange Unit that is presented by the Redemption-Exchange Unitholder for
redemption, the Partnership will pay to the Redemption-Exchange Unitholder









 



29



cash in an amount equal to the Redemption Amount. Upon the surrender of certificates
representing more Redemption-Exchange Units than the number of Redemption-Exchange Units to be
redeemed under the Redemption Notice, the holder thereof will be entitled, upon request, to
receive from the Partnership forthwith, without expense to such holder, a new certificate
representing the Redemption-Exchange Units not being redeemed at that time.



6.3 Redemption-Exchange Date




          The date specified in any Redemption Notice (the “Redemption-Exchange Date”) must be a
Business Day and must not be less than five Business Days nor more than ten Business Days after the
date upon which the Redemption Notice is received by the Partnership and BIP. If no such Business
Day is specified in the Redemption Notice, the Redemption-Exchange Date shall be deemed to be the
fifth Business Day after the date on which the Redemption Notice is received by the Partnership and
BIP.




6.4 Withdrawal of Exercise




          At any time prior to the applicable Redemption-Exchange Date, any Redemption-Exchange
Unitholder who delivers a Redemption Notice to the Partnership will be entitled to withdraw such
Redemption Notice.




6.5 Effect of Exercise of the Redemption-Exchange Right





6.5.1. If the Redemption Right has been exercised, at 8:30 a.m. (Bermuda time) on the
Redemption-Exchange Date:




6.5.1.1 the closing of the redemption contemplated by the Redemption Notice or, if
applicable, the closing of the exchange contemplated by the Exchange Notice will be
deemed to have occurred;




6.5.1.2 any Redemption-Exchange Unitholder who exercised the Redemption Right will
cease to be a holder of such Redemption-Exchange Units and will not be entitled to
exercise any of the rights in respect of such Redemption-Exchange Units, other than
the right to receive the Redemption Amount or the Applicable Number of BIP Units
deliverable hereunder and any right to receive distributions payable in respect of
such Redemption-Exchange Units for any Quarter ending prior to the
Redemption-Exchange Date;




6.5.1.3 immediately following the closing of the exchange contemplated by Section
6.5.1.1, BIP shall exchange the Redemption-Exchange Units for Class A Units on a one
for one basis and, in addition to any other Units previously held by BIP, BIP will
be considered and deemed for all purposes to be the holder of the number of Class A
Units equal to the number of Redemption-Exchange Units exchanged pursuant to the
Exchange Right; and




6.5.1.4 other than as specifically contemplated herein, the BIP Units issued to any
Redemption-Exchange Unitholder pursuant to Section 6.2.2 will be issued in
accordance with the BIP Partnership Agreement.









 



30


ARTICLE 7

REDEMPTION AMOUNT AND EXCHANGE RATIO




7.1 Redemption Amount




          Subject to Section 8.2, the “Redemption Amount” shall be the product of (i) the Market Value
of one BIP Unit multiplied by the number of Redemption-Exchange Units specified in a Redemption
Notice to be redeemed and (ii) the Exchange Ratio.




7.2 Exchange Ratio and Adjustments




          The “Exchange Ratio” shall initially be one and shall be adjusted from time to time pursuant
to Sections 8.1 or 8.2.




ARTICLE 8

ADJUSTMENTS




8.1 Unit Reorganization




          In the event that there is any change in the number of Redemption-Exchange Units or BIP Units
Outstanding from time to time as a result of a subdivision, consolidation, reclassification,
capital reorganization or similar change in the Redemption-Exchange Units or the BIP Units, as the
case may be, (each such event, a “Unit Reorganization”), the Exchange Ratio shall be adjusted to be
the number of BIP Units that would be received in respect of one Redemption-Exchange Unit
immediately following the Unit Reorganization as if the Redemption Right and the Exchange Right had
been exercised in respect of such Redemption-Exchange Unit immediately before the Unit
Reorganization.




8.2 Unit Reclassification




          In the event that there is any consolidation, amalgamation, arrangement, merger or other form
of combination of BIP with or into any other entity resulting in a reclassification of the
Outstanding BIP Units (“Unit Reclassification”), then the Exchange Ratio will be adjusted in a
manner approved by the General Partner, acting reasonably, to ensure that:





8.2.1. the Redemption-Exchange Unitholders would receive the amount of cash equal to the Market
Value (or, if no Market Value is available, the fair market value) of the securities that such
Redemption-Exchange Unitholder would have been entitled to receive pursuant to the Unit
Reclassification if, on the effective date of such Unit Reclassification, the holders had been
the registered holders of the number of BIP Units that they would have received had such
Redemption-Exchange Units been exchanged for the Applicable Number of BIP Units pursuant to the
Exchange Right immediately before the effective date of the Unit Reclassification; and




8.2.2. the Redemption-Exchange Unitholders would receive the securities that such
Redemption-Exchange Unitholders would have been entitled to receive pursuant to the Unit
Reclassification if, on the effective date of the Unit Reclassification, the holders had been
the registered holders of the number of BIP Units that they would have received had such




 











 





31





Redemption-Exchange Units been exchanged for the Applicable Number of BIP Units pursuant to the
Exchange Right immediately before the effective date of the Unit Reclassification.



8.3 Adjustments Cumulative




     The adjustments to the Exchange Ratio provided for in Section 8.1 and 8.2 shall be cumulative.



ARTICLE 9

MANAGEMENT AND OPERATION OF PARTNERSHIP




9.1 Management





9.1.1. The General Partner shall conduct, direct and manage all activities of the Partnership.
Except as otherwise expressly provided in this Agreement, all management powers over the
activities and affairs of the Partnership shall be exclusively vested in the General Partner,
and no Limited Partner shall have any management power over the activities and affairs of the
Partnership. In addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or that are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to Section 9.2, shall have full power
and authority to do all things and on such terms as it determines, in its sole discretion, to
be necessary or appropriate to conduct the activities and affairs of the Partnership, to
exercise all powers set forth in Section 2.3 and to effectuate the purposes set forth in
Section 2.2.




9.1.2. In exercising its authority under this Agreement, the General Partner may, but shall be
under no obligation to, take into account the tax consequences to any Partner (including the
General Partner) of any action taken (or not taken) by it. The General Partner and the
Partnership shall not have any liability to a Limited Partner for monetary damages or otherwise
for losses sustained, liabilities incurred or benefits not derived by such Limited Partner in
connection with such decisions so long as the General Partner has acted pursuant to its
authority under this Agreement.




9.1.3. Notwithstanding any other provision of this Agreement, the Limited Partnership Act, the
Exempted Partnerships Act or any applicable law, rule or regulation, each of the Partners and
each other Person who may acquire a Partnership Interest hereby (i) approves, ratifies and
confirms the execution, delivery and performance by the parties thereto of the Master Services
Agreement, the Relationship Agreement, the Equity Commitment and the other agreements described
in or filed as exhibits to the Registration Statement that are related to the transactions
contemplated by the Registration Statement; (ii) agrees that the General Partner (on its own or
through any officer of the Partnership) is authorized to execute, deliver and perform the
agreements referred to in clause (i) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Registration Statement on behalf
of the Partnership without any further act, approval, or vote of the Partners or the other
Persons who may acquire a Partnership Interest; and (iii) agrees that the execution, delivery
or performance by the General Partner, the Managers or any









 



32



Affiliate of any of them, of this Agreement or any agreement authorized or permitted under this
Agreement, shall not constitute a breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Limited Partners or any other Persons under this
Agreement (or any other agreements) or of any duty existing at law, in equity or otherwise.



9.2 Restrictions on General Partner’s Authority





Except as provided in Article 16 and Article 18, the General Partner may not sell, exchange or
otherwise dispose of all or substantially all of the BIP Group’s assets, taken as a whole, in a
single transaction or a series of related transactions without the approval of holders of a
majority of the voting power of Outstanding Units; provided however that this provision shall not
preclude or limit the 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
Partnership (including for the benefit of Persons other than members of the BIP Group, including
Affiliates of the General Partner) and shall not apply to any forced sale of any or all of the
assets of the BIP Group pursuant to the foreclosure of, or other realization upon, any such
encumbrance. The General Partner shall not, on behalf of the Partnership, except as permitted
under Section 13.6, Section 15.1 and Section 15.2, elect or cause the Partnership to elect a
successor general partner of the Partnership.



9.3 Reimbursement of Partnership Expenses





9.3.1. Except as provided in this Section 9.3 and elsewhere in this Agreement, the General
Partner shall not be compensated for its services as General Partner of the Partnership.




9.3.2. The General Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine in its sole discretion, for (i) all direct and indirect expenses
it incurs or payments it makes on behalf of the Partnership (including amounts paid to any
Person to perform services for the Partnership or for the General Partner in the discharge of
its duties to the Partnership), and (ii) all other necessary or appropriate expenses allocable
to the Partnership or otherwise reasonably incurred by the General Partner in connection with
conducting the Partnership’s affairs (including expenses allocated to the General Partner by
its Affiliates). The General Partner shall determine the fees and expenses that are allocable
to the Partnership in any reasonable manner determined by the General Partner in its sole
discretion. Reimbursements pursuant to this Section 9.3 shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to Section 9.6.



9.4 Outside Activities





9.4.1. With effect from the Closing Date, the General Partner shall, for so long as it is the
general partner of the Partnership, (i) maintain as its sole activity the activity of acting as
the general partner of the Partnership and undertaking activities that are ancillary or related
thereto and (ii) not engage in any business or activity or incur any debts or liabilities
except in connection with or incidental to its performance as general partner as described
above or









 



33



acquiring, owning or disposing of debt or equity securities of any other member of the BIP
Group.




9.4.2. Each Indemnified Party (other than the General Partner) shall have the right to engage
in businesses of every type and description and other activities for profit, and to engage in
and possess interests in business ventures of any and every type or description, whether in
activities similar to those of the General Partner, the Partnership or any other member of the
BIP Group, in direct competition to, and/or in preference to, or to the exclusion of, the
Partnership, the General Partner or any other member of the BIP Group. Such business
interests, activities and engagements shall not constitute a breach of this Agreement or any
duties stated or implied by law or equity, including fiduciary duties, to any of the General
Partner, the Partnership (or any of their respective investors) or any other member of the BIP
Group (or any of their respective investors) and shall be deemed not to be a breach of the
General Partner’s fiduciary duties or any other obligation of any type whatsoever of the
General Partner. None of the General Partner, the Partnership or any other member of the BIP
Group or any other Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby or otherwise in any business ventures of an Indemnified Party.




9.4.3. The General Partner and the Indemnified Parties shall have no obligation hereunder or as
a result of any duties stated or implied by law or equity, including fiduciary duties, to
present business or investment opportunities to the Partnership, the Limited Partners or any
member of the BIP Group.




9.4.4. The General Partner and its Affiliates shall have no obligation to (i) permit the
Partnership or any other member of the BIP Group to use any facilities or assets of the General
Partner or its Affiliates, except as may be provided in contracts, agreements or of the
arrangements entered into from time to time specifically dealing with such use, or (ii) to
enter into such contracts, agreements or other arrangements.




9.4.5. Notwithstanding anything to the contrary in this Section 9.4, nothing in this Section
9.4 shall affect any obligation of an Indemnified Party to present a business or investment
opportunity to the Partnership, the General Partner or any other member of the BIP Group
pursuant to a separate written agreement between such Indemnified Party and the Partnership,
the General Partner or any other member of the BIP Group.



9.5 Disclosure of Interests





9.5.1. The General Partner, its Affiliates and their respective partners, members,
shareholders, directors, officers, employees and shareholders (each hereinafter referred to as
an “Interested Party”) may become Limited Partners or beneficially interested in Limited
Partners in the Partnership and may hold, dispose of or otherwise deal with Units with the same
rights they would have if the General Partner were not party to this Agreement.




9.5.2. An Interested Party shall not be liable to account either to other Interested Parties or
to the Partnership, the Partners or any other Persons for any profits or benefits made or
derived by or in connection with any transaction contemplated by Section 9.4.2.









 



34



9.5.3. An Interested Party may sell investments to, purchase Assets from, vest Assets in and
contract or enter into any contract, arrangement or transaction with the Partnership, any other
member of the BIP Group or any other Person whose securities are held directly or indirectly by
or on behalf of the Partnership or another member of the BIP Group, including any contract,
arrangement or transaction relating to any financial, banking, investment banking, insurance,
secretarial or other services, and may be interested in any such contract, transaction or
arrangement and shall not be liable to account either to the Partnership, any other member of
the BIP Group or any other Person in respect of any such contract, transaction, arrangement or
interest, or any benefits or profits made or derived therefrom, by virtue only of the
relationship between the parties concerned, provided that nothing herein contained shall permit
an Interested Party or Limited Partner to enter into any such contract, transaction or
arrangement as aforesaid, subject to any approval requirements contained in the Conflicts
Guidelines.



9.5.4. Without limiting the generality of the foregoing, an Interested Party or Limited Partner
may enter into any contract, transaction or arrangement with any member of the BIP Group to
provide advice or services, including investment management, monitoring or oversight services,
services with respect to corporate finance matters and valuations, services relating to the
arrangement of new financing, mergers and acquisitions, services relating to the provision of
directors or other manager of a Person and other investment banking services, including
introduction and transaction organization services.



9.6 Indemnification





9.6.1. The General Partner and any of its Affiliates, and their respective officers, directors,
agents, shareholders, partners, members and employees, any Person who serves on the board of
directors or other governing body of any member of the BIP Group and any Person the General
Partner designates as an indemnified person (each, an “Indemnified Party”) shall, to the
fullest extent permitted by law, be indemnified on an after Tax basis out of the Assets (and
the General Partner shall be entitled to grant indemnities on behalf of the Partnership, and to
make payments out of the Assets, to any Indemnified Party in each case in accordance with this
Section 9.6) against any and all losses, claims, damages, liabilities, costs and expenses
(including legal fees and expenses), judgments, fines, penalties, interest, settlements and
other amounts (collectively, “Liabilities”) arising from any and all claims, demands, actions,
suits and proceedings, whether civil, criminal, administrative or investigative, in which any
Indemnified Party is or may be involved, or is threatened to be involved, as a party or
otherwise, in connection with the investments and activities of the Partnership or by reason of
such Person being the General Partner, or an Affiliate of the General Partner, or an officer,
director, agent, shareholder or employee of the General Partner, or an Affiliate of the General
Partner, or a Person who serves on the board of directors or other governing body of any member
of the BIP Group, provided that no such Indemnified Party shall be so indemnified, with respect
to any matter for which indemnification is sought, to the extent that a court of competent
jurisdiction determines pursuant to a final and non-appealable judgment that, in respect of
such matter, the Indemnified Party acted in bad faith or engaged in fraud or willful
misconduct, or in the case of a criminal matter, acted with knowledge that the Indemnified
Party’s conduct was unlawful. An Indemnified Party shall not be denied indemnification in
whole or in part









 



35



under this Section 9.6 because the Indemnified Party had an interest in the transaction with
respect to which indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.



9.6.2. To the fullest extent permitted by law, amounts incurred in respect of Liabilities
incurred by an Indemnified Party in defending any claim, demand, action, suit or proceeding,
whether civil, criminal, administrative or investigative, shall from time to time be advanced
by the Partnership prior to a determination that the Indemnified Party is not entitled to be
indemnified, upon receipt by the Partnership of an undertaking by or on behalf of the
Indemnified Party to repay such amount if it shall be determined that the Indemnified Party is
not entitled to be indemnified as provided by the proviso of Section 9.6.1.



9.6.3. The indemnification provided by this Section 9.6 shall be in addition to any other
rights to which an Indemnified Party may be entitled under any agreement (including the Master
Services Agreement), as a matter of the law or otherwise, both as to actions in the Indemnified
Party’s capacity as an Indemnified Party and as to actions in any other capacity, and shall
continue as to any Indemnified Party who has ceased to serve in the capacity in which such
Indemnified Party became entitled to indemnification under this Section 9.6, and shall inure to
the benefit of such Person’s heirs, successors, assigns and administrators. The
indemnification provisions of this Section 9.6 are for the benefit of the Indemnified Party,
its heirs, successors, assigns and administrators and shall not be deemed to create any rights
for the benefit of any other Person.




9.6.4. No amendment, modification or repeal of this provision or any other provision of this
Agreement shall in any manner terminate, reduce or impair the right of any past, present or
future Indemnified Party to be indemnified by the Partnership or the obligations of the
Partnership to indemnify any such Indemnified Party under and in accordance with the provisions
of this Agreement as in effect immediately prior to such amendment, modification or repeal with
respect to any claim, demand, action, suit or proceeding, whether civil, criminal,
administrative or investigative, arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such claim, demand,
action, suit or proceeding may arise or be asserted.




9.6.5. Notwithstanding anything to the contrary in this Agreement, (i) no Indemnified Party
shall be liable to the Partnership, any Partner or any other Person who has acquired an
interest in a Partnership Interest for any Liabilities sustained or incurred by such Person as
a result of any act or omission of the Indemnified Party, except to the extent there has been a
final and non-appealable judgment entered by a court of competent jurisdiction determining that
such Liabilities resulted from the Indemnified Party’s bad faith, fraud, wilful misconduct, or
in the case of a criminal matter, actions with knowledge that the conduct was unlawful and (ii)
any matter that is approved by a majority of the members of the Independent Committee shall not
constitute a breach of this Agreement or any duties to the Partnership or to the Partners
stated or implied by law or equity, including fiduciary duties.




9.6.6. To the extent that an Indemnified Party has any duties to the Partnership or to the
Partners, including fiduciary duties, such Indemnified Party acting in connection with the









 



36



Partnership’s activities or affairs shall not be liable to the Partnership or to any Partner
for its good faith reliance on the provisions of this Agreement.




9.6.7. Any amendment, modification or repeal of this Section 9.6 (or that otherwise affects
Section 9.6) that limits its scope shall be prospective only and shall not in any way affect
the limitations on the liability of the Indemnified Parties under this Section 9.6 as in effect
immediately prior to such amendment, modification or repeal with respect to any claim, demand,
action, suit or proceeding, whether civil, criminal, administrative or investigative, arising
from or relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claim, demand, action, suit or proceeding may
arise or be asserted, provided that the Indemnified Party became an Indemnified Party hereunder
prior to such amendment, modification or repeal.




9.6.8. The provisions of this Section 9.6 shall survive the dissolution of the Partnership.



9.7 Resolution of Conflicts of Interest





9.7.1. Notwithstanding anything to the contrary in this Agreement, conflicts of interest and
potential conflicts of interest that are approved by a majority of the members of the
Independent Committee from time to time are hereby approved by all Partners.




9.7.2. The parties acknowledge and agree that the Independent Committee may grant approvals for
any matters that may give rise to a conflict of interest or potential conflict of interest
pursuant to guidelines, policies or procedures that are approved by the Independent Committee
from time to time (the “Conflicts Guidelines”), and if and to the extent that such matters are
permitted by the Conflicts Guidelines, no further special approval will be required in
connection with such matter permitted thereby.



9.8 Other Matters Concerning the General Partner





9.8.1. The General Partner may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties.




9.8.2. The General Partner may consult with legal counsel, accountants, appraisers, management
consultants, investment bankers and other consultants and advisers selected by it, and any act
taken or omitted to be taken in reliance upon the opinion (including an Opinion of Counsel) of
such Persons as to matters that such General Partner reasonably believes to be within such
Person’s professional or expert competence shall be conclusively presumed to have been done or
omitted in good faith and in accordance with such opinion.




9.8.3. The General Partner shall have the right, in respect of any of its powers or obligations
hereunder, to act through any of the duly authorized officers of its general partner and a duly
appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by
the General Partner in the power of attorney, have full power and authority to do and perform
each and every act and duty that is permitted or required to be done by the General Partner
hereunder.









 



37



9.8.4. Any standard of care or duty imposed by this Agreement or under any applicable law, rule
or regulation shall be modified, waived or limited as required to permit the General Partner to
act under this Agreement or any other agreement contemplated by this Agreement and to make any
decision pursuant to the authority prescribed in this Agreement so long as such action is
reasonably believed by the General Partner to be in, or not inconsistent with, the best
interests of the Partnership.



9.9 Title to Partnership Assets




     Title to Assets, whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively,
shall have any ownership interest in such Partnership assets or any portion thereof. Title to any
or all of the Partnership assets may be held in the name of the Partnership, the General Partner,
the general partner of the General Partner, one or more of its Affiliates or one or more nominees,
as the General Partner may determine. The General Partner hereby declares and warrants that any
Assets for which record title is held in the name of the General Partner, its general partner or
one or more of its Affiliates or one or more nominees shall be held by the General Partner, its
general partner or such Affiliate or nominee for the use and benefit of the Partnership in
accordance with the provisions of this Agreement; provided, however, that the General Partner shall
use its reasonable efforts to cause record title to such Assets (other than those assets in respect
of which the General Partner determines that the expense and difficulty of conveyancing makes
transfer of record title to the Partnership impracticable) to be vested in the Partnership as soon
as reasonably practicable; provided that, prior to the withdrawal or removal of the General Partner
or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect
the transfer of record title to the Partnership and prior to any such transfer, will provide for
the use of such Assets in a manner satisfactory to the Partnership. All Assets shall be recorded
as the property of the Partnership in its books and records, irrespective of the name in which
record title to such Partnership assets is held.



9.10 Purchase or Sale of Units




     The General Partner may cause the Partnership to purchase or otherwise acquire Units. As long
as Units are held by the Partnership, such Units shall not be considered Outstanding for any
purpose, except as otherwise provided herein. The General Partner or any Affiliate of the General
Partner may also purchase or otherwise acquire and sell or otherwise dispose of Units for its own
account, subject to the provisions of Article 13 and Article 14.



9.11 Reliance by Third Parties




     Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter
into any contracts on behalf of the Partnership, and such Person shall be entitled to deal with the
General Partner as if it were the Partnership’s sole party in interest, both legally and
beneficially. Each Limited Partner hereby waives any and all defenses or other remedies that may
be available against such Person to contest, negate or disaffirm any action of the General Partner
in connection with any such dealing. In no event shall any Person dealing with the









 



38



General Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or expedience of any act or
action of the General Partner or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (a) at the time of the execution and delivery of such certificate,
document or instrument, this Agreement was in full force and effect, (b) the Person executing and
delivering such certificate, document or instrument was duly authorized and empowered to do so for
and on behalf of the Partnership and (c) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and is binding upon the
Partnership.



9.12 Services




     The General Partner may cause the Partnership to appoint any Person (including any Affiliate
of the General Partner) to manage the affairs of the Partnership, in accordance with the Conflicts
Guidelines. Any services rendered pursuant to such appointment shall be on terms that are fair and
reasonable to the Partnership, provided that the requirements of this Section 9.12 shall be deemed
satisfied as to (i) any services provided under the Master Services Agreement and any agreement
contemplated thereby, (ii) any transaction approved by a majority of the members of the Independent
Committee, or (iv) any transaction entered into in accordance with the Conflicts Guidelines. The
provisions of Section 9.3 shall apply to the rendering of services described in this Section 9.12.



ARTICLE 10

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS




10.1 Limitation of Liability




     The Limited Partners shall have no liability under this Agreement except as expressly provided
in this Agreement or the Limited Partnership Act or the Exempted Partnerships Act.



     If it were determined that a Limited Partner was participating in the control or management of
the Partnership or conducting the affairs of, signing or executing documents for or otherwise
binding the Partnership (or purporting to do any of the foregoing) within the meaning of the
Limited Partnership Act or the Exempted Partnerships Act, such Limited Partner would be liable as
if it were a general partner of the Partnership in respect of all debts of the Partnership incurred
while that Limited Partner was so acting or purporting to act.



10.2 Management of Partnership Affairs




     No Limited Partner (other than the General Partner or any officer, director, employee,
partner, agent or trustee of the General Partner, in its capacity as such, if such Person shall
also be a Limited Partner) shall take part in the management or control of the activities and
affairs 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 or to vote on
matters relating to the Partnership, to have access to the books and records of the Partnership or
any other member of the BIP Group or than as required by applicable law or as set forth in this









 



39



Agreement. The transaction of any such activities or affairs by the General Partner or any
officer, director, employee, partner, agent or trustee of the General Partner, in its capacity as
such, shall not affect, impair or eliminate the limitations on the liability of the Limited
Partners under this Agreement.



10.3 Outside Activities




     Subject to the provisions of Section 9.4, which shall continue to be applicable to the Persons
referred to therein, regardless of whether such Persons shall also be Limited Partners, any Limited
Partner shall be entitled to and may have interests and engage in activities in addition to
activities relating to the Partnership, including interests and activities in direct competition
with the Partnership or BIP. Neither the Partnership nor any of the other Partners shall have any
rights by virtue of this Agreement in any ventures of any Limited Partner.



ARTICLE 11

BOOKS, RECORDS, ACCOUNTING AND REPORTS




11.1 Books, Records and Accounting




     The General Partner shall keep or cause to be kept at the principal office of the Partnership
appropriate books and records with respect to the Partnership’s activities and affairs. Any books
and records maintained by or on behalf of the Partnership in the regular course of its activities
and undertakings, including the record of the Record Holders, books of account and records of
Partnership proceedings, may be kept on information storage device, provided, that the books and
records so maintained are convertible into clearly legible written form within a reasonable period
of time. The books of the Partnership shall be maintained, for financial reporting purposes, on an
accrual basis in accordance with U.S. GAAP.



11.2 Fiscal Year




     Subject to Section 17.1.10, the first fiscal year of the Partnership shall end on December 31,
2007 and subsequent fiscal years of the Partnership shall be the calendar year; provided, however,
that if the Code requires the Partnership to use a taxable year other than a calendar year then,
for U.S. tax purposes, the fiscal year of the Partnership shall be such taxable year.



11.3 Delivery of Financial Statements




     The General Partner shall deliver to BIP (i) the annual financial statements of the
Partnership and (ii) the accounts and financial statements of any Holding Entity or any other
holding vehicle established by the Partnership.



11.4 Reports





11.4.1. Within the period of time required by applicable law, regulation or any rule of any
stock exchange on which the BIP Units or other partnership interests of BIP are or will be
listed for trading, the General Partner shall prepare in accordance with U.S. GAAP and make
publicly available as of a date selected by the General Partner in its sole discretion









 



40



financial statements of the Partnership for such fiscal year of the Partnership audited by a
firm of independent public accountants of international standing selected by the General
Partner as well as a statement of the accounting policies used in their preparation, such
information as may be required by applicable laws and regulations and such information as the
General Partner deems appropriate.




11.4.2. As and within the period of time required by any applicable law, regulation or any rule
of any Securities Exchange, the General Partner shall prepare in accordance with U.S. GAAP and
make publicly available quarterly financial statements of the Partnership, which may be
unaudited, as may be required by applicable law, regulation or rule of any stock exchange on
which the BIP Units or other partnership interests of BIP are or will be listed for trading.



ARTICLE 12

TAX MATTERS




12.1 Tax Information




     Following each taxable year of the Partnership, the General Partner shall use commercially
reasonable efforts to supply each Person that was a Partner at any time during such taxable year
with a Schedule K-1 (or equivalent) within ninety (90) days after the close of such taxable year
and information related to the passive foreign investment company status of any non-U.S.
corporation that the Partnership controls. The General Partner shall also, where reasonably
possible and applicable, prepare and send such Persons (i) such other information required by any
non-U.S. Limited Partner for U.S. federal income tax reporting purposes and (ii) such information
as may be necessary for such Persons to file their own Canadian federal income tax returns.



12.2 Preparation of Tax Returns




     The General Partner shall arrange for the preparation and timely filing of all returns of
Partnership income, gains, deductions, losses and other items required of the Partnership for U.S.
federal and state income tax purposes and, where applicable, Canadian federal income tax purposes.
The classification, realization and recognition of income, gain, losses and deductions and other
items shall be completed on the accrual method of accounting for U.S. federal income tax purposes
and in accordance with the Income Tax Act for Canadian tax purposes.



12.3 Tax Elections




     The General Partner shall determine whether to make or refrain from making the election
provided for in Section 754 of the Code, and any and all other elections permitted by the tax laws
of the United States, the several states, Canada and other relevant jurisdictions, in its sole
discretion.









 



41


12.4 Tax Controversies




     Subject to the provisions hereof, the General Partner is designated the Tax Matters Partner
(as defined in Section 6231 of the Code), and is authorized and required to represent the
Partnership (at the Partnership’s expense) in connection with all examinations of the Partnership’s
affairs by tax authorities, including resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and costs associated therewith. Each Partner
agrees to cooperate with the General Partner and to do or refrain from doing any or all things
reasonably required by the General Partner to conduct such proceedings.



12.5 Withholding




     Notwithstanding any other provision of this Agreement, the General Partner is authorized to
take any action that it determines in its sole discretion to be necessary or appropriate to cause
the Partnership to comply with any withholding requirements established under the Code, the Income
Tax Act or any other national, federal, state or local law including pursuant to Sections 1441,
1442, 1445 and 1446 of the Code. To the extent that the Partnership is required to withhold and
pay over to any taxing authority any amount resulting from the allocation or distribution of income
to any Partner, the amount withheld shall be treated as a distribution of cash pursuant to Section
5.2 or Section 16.3 (as applicable) in the amount of such withholding from such Partner. To the
extent an amount otherwise payable to a member of the BIP Group is required to be withheld and paid
over to any taxing authority, and such withheld amount is attributable to a Partner’s ownership of
Units, then such withheld amount shall be treated as a distribution of cash to such Partner
pursuant to Section 5.2 or Section 16.3 (as applicable) in the amount of such withholding.



12.6 Election to be Treated as a Corporation




     Notwithstanding anything to the contrary contained herein, if the General Partner determines
in its sole discretion that it is no longer in the best interests of the Partnership to continue as
a partnership for U.S. federal income tax purposes, the General Partner may elect to treat the
Partnership as an association or as a publicly traded partnership taxable as a corporation for U.S.
federal (and applicable state) income tax purposes.



12.7 U.S. Tax Classification of the Partnership




     Prior to the General Partner making an election described in Section 12.7 hereof, it is
intended that the Partnership be classified as a partnership for U.S. federal income tax purposes.
In furtherance of the foregoing, and prior to the General Partner making an election described in
Section 12.7, to ensure that interests in the Partnership are not traded on an established
securities market within the meaning of Treasury Regulations Section 1.7704-1(b) or readily
tradable on a secondary market or the substantial equivalent thereof within the meaning of Treasury
Regulations Section 1.7704-1(c), notwithstanding anything to the contrary contained in this
Agreement, (i) the Partnership shall not participate in the establishment of a market or the
inclusion of its interests thereon, and (ii) the Partnership shall not recognize any transfer made
on any market by (x) redeeming the transferor Partner (in the case of a redemption or repurchase by
the Partnership) or (y) admitting the transferee as a Partner or otherwise recognizing any rights









 



42



of the transferee, such as a right of the transferee to receive Partnership distributions
(directly or indirectly) or to acquire an interest in the capital or profits of the Partnership.



ARTICLE 13

CERTIFICATES; RECORD HOLDERS; TRANSFERS OF PARTNERSHIP INTERESTS




13.1 Certificates





13.1.1. Upon the Partnership’s issuance of Partnership Interests of all or any classes to any
Person and the request of such Person, the Partnership shall issue one or more Certificates in
the name of such Person evidencing the number of such Partnership Interests being so issued.
Certificates shall be executed on behalf of the Partnership by the General Partner. No
Certificate evidencing the issuance of Partnership Interests shall be valid for any purpose
until it has been countersigned by the General Partner.




13.1.2. Certificates may bear any legends required by applicable law or otherwise determined to
be appropriate by the General Partner.



13.2 Mutilated, Destroyed, Lost or Stolen Certificates





13.2.1. If any mutilated Certificate is surrendered to the General Partner, the General Partner
on behalf of the Partnership shall execute, countersign and deliver in exchange therefor, a new
Certificate evidencing the same number of Partnership Interests as the Certificate so
surrendered.




13.2.2. The General Partner on behalf of the Partnership shall execute, countersign and deliver
a new Certificate in place of any Certificate previously issued if the Record Holder of the
Certificate:




13.2.2.1 makes proof by affidavit, in form and substance satisfactory to the General
Partner, that a previously issued Certificate has been lost, destroyed or stolen;




13.2.2.2 requests the issuance of a new Certificate before the Partnership has
notice that the Certificate has been acquired by a purchaser for value in good faith
and without notice of an adverse claim;




13.2.2.3 if requested by the General Partner, delivers to the Partnership a bond, in
form and substance satisfactory to the General Partner, with surety or sureties and
with fixed or open penalty as the General Partner may reasonably direct, in its sole
discretion, to indemnify the Partnership, and the General Partner against any claim
that may be made on account of the alleged loss, destruction or theft of the
Certificate; and




13.2.2.4 satisfies any other reasonable requirements imposed by the General Partner.









 



43



13.2.3. If a Record Holder fails to notify the Partnership within a reasonable time after he
has notice of the loss, destruction or theft of a Certificate, and a transfer of the
Partnership Interests represented by the Certificate is registered before the Partnership or
the General Partner receives such notification, the Record Holder shall be precluded from
making any claim against the Partnership or the General Partner for such transfer or for a new
Certificate.




13.2.4. As a condition to the issuance of any new Certificate under this Section 13.2, the
General Partner may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other expenses reasonably
connected therewith.



13.3 Record Holder




     In accordance with Section 13.5.2, the Partnership shall be entitled to recognize the Record
Holder as the Limited Partner with respect to any Units and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Units on the part of any other
Person, whether or not the Partnership shall have actual or other notice thereof, except as
otherwise provided by applicable law or regulation. Without limiting the foregoing, when a Person
(such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the
foregoing) is acting as nominee, agent or in some other representative capacity for another Person
in acquiring and/or holding Units, as between the Partnership on the one hand and such other Person
on the other hand, such representative Person shall be the Record Holder of such Partnership
Interest. A Person may become a Record Holder without the consent or approval of any Partner.



13.4 Transfer Generally





13.4.1. The term “transfer”, when used in this Agreement with respect to a Partnership
Interest, shall be deemed to refer to a transaction by (i) which the General Partner assigns
its General Partner Units to another Person or (ii) by which the holder of a Unit assigns such
Unit to another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.




13.4.2. No Partnership Interest shall be transferred, in whole or in part, except in accordance
with the terms and conditions set forth in this Article 13. Any transfer or purported transfer
of a Partnership Interest not made in accordance with this Article 13 shall be null and void.




13.4.3. Nothing contained in this Agreement shall be construed to prevent the parent entity of
the General Partner from disposing of all of the issued and outstanding capital stock of the
General Partner.



13.5 Registration and Transfer of Units





13.5.1. The General Partner shall cause to be kept at its registered office in Bermuda on
behalf of the Partnership a register in which, subject to such reasonable regulations as it may
prescribe and subject to the provisions of Section 13.5.2, the General Partner will provide









 



44



for the registration and transfer of Units. The Partnership shall not recognize transfers of
Certificates representing Units unless such transfers are effected in the manner described in
this Section 13.5. Upon surrender for registration of transfer of any Units evidenced by a
Certificate, and subject to the provisions of Section 13.5.2, the General Partner on behalf of
the Partnership shall execute, countersign and deliver, in the name of the holder or the
designated transferee or transferees, as required pursuant to the holder’s instructions, one or
more new Certificates evidencing the same aggregate number of Units as was evidenced by the
Certificate so surrendered.




13.5.2. Except as otherwise provided in Article 14, the Partnership shall not recognize any
transfer of Units until the Certificates evidencing such Units are surrendered for registration
of transfer.




13.5.3. Subject to (i) the foregoing provisions of this Section 13.5; (ii) Section 13.3; (iii)
Section 13.7; (iv) with respect to any class or series of Units, the provisions of any
statement of designations or amendment to this Agreement establishing such class or series; (v)
any contractual provisions binding on any Limited Partner; (vi) Section 12.7; and (vii)
provisions of applicable law including the Limited Partnership Act and the Exempted
Partnerships Act, Units shall be freely transferable.




13.5.4. The General Partner may, in its sole discretion and without giving a reason, refuse to
register a transfer of any Unit in Certificated form which is not fully paid or on which the
Partnership has a lien.



13.6 Transfer of General Partner Units





13.6.1. The General Partner may transfer its General Partner Units as the General Partner to a
single transferee (including upon its merger, consolidation or other combination into any other
Person or the transfer by it of all or substantially all of its assets to another Person) if,
but only if, (i) the transferee agrees to assume and be bound by the provisions of this
Agreement and (ii) the Partnership receives an Opinion of Counsel that such transfer (or
merger, consolidation or combination) would not result in the loss of limited liability of any
Limited Partner or of any limited partner of BIP or cause the Partnership or BIP to be treated
as an association taxable as a corporation or otherwise to be taxed as an entity for tax
purposes (to the extent not previously treated as such).




13.6.2. In the case of a transfer pursuant to this Section 13.6, the transferee or successor
(as the case may be) shall be admitted to the Partnership as the General Partner immediately
after the transfer of the Partnership Interests, and the Partnership shall continue without
dissolution.




13.6.3. The Parties agree that no transfer under this Section 13.6 will occur without the
notification to and approval of the relevant Bermuda regulatory authorities in accordance with
Bermuda law.









 



45


13.7 Restrictions on Transfers




     Notwithstanding the other provisions of this Article 13, no transfer of any Partnership
Interest shall be made if such transfer would (a) violate the then applicable securities laws or
rules and regulations of any securities commission of any jurisdiction or any other governmental
authorities with jurisdiction over such transfer, (b) result in the taxation of the Partnership as
an association taxable as a corporation or otherwise subject the Partnership to entity-level
taxation for tax purposes (in either case, for U.S. tax purposes, to the extent not otherwise
elected by the General Partner pursuant to Section 12.6 to be treated as such) or (c) affect the
Partnership’s existence or qualification as an exempted limited partnership under the Limited
Partnership Act or Exempted Partnerships Act.



ARTICLE 14

ADMISSION OF ADDITIONAL OR SUCCESSOR PARTNERS




14.1 Admission of Additional Limited Partners





14.1.1. By acceptance of the transfer of any Units or the issuance of any Units in accordance
with this Agreement, each Person to whom a Unit is transferred or issued (including any nominee
holder or an agent or representative acquiring such Units for the account of another Person)
shall:




14.1.1.1 be admitted to the Partnership as a Limited Partner with respect to the
Units so transferred or issued to such Person when any such transfer or issuance is
reflected in the books and records of the Partnership, with or without execution of
this Agreement;




14.1.1.2 become bound by, and shall be deemed to have agreed to be bound by, the
terms of this Agreement;




14.1.1.3 shall become the Record Holder of the Units so transferred or issued;




14.1.1.4 represents that the transferee or other recipient has the capacity, power
and authority to enter into this Agreement;




14.1.1.5 be deemed to grant the powers of attorney set forth in this Agreement; and




14.1.1.6 be deemed to make the consents and waivers contained in the Agreement,
including with respect to the approval of the transactions and agreements entered
into in connection with the formation of the Partnership and the Spin-Off.




14.1.2. The transfer of any Unit and/or the admission of any new Limited Partner to the
Partnership will not constitute any amendment to this Agreement. A Person may become a Record
Holder without the consent or approval of any of the Partners. A Person may not become a
Limited Partner without acquiring a Unit.









 



46



14.1.3. Any transfer of a Unit shall not entitle the transferee to share in the profits and
losses, to receive distributions, to receive allocations of income, gain, loss, deduction or
credit or any similar item or to any other rights to which the transferor was entitled until
the transferee becomes a Limited Partner and a party to this Agreement pursuant to this Article
14.



14.2 Admission of Successor General Partner




     A successor general partner approved pursuant to Sections 15.1 or 15.2 or the transferee of or
successor to the General Partner Units pursuant to Section 13.6 shall be admitted to the
Partnership as the general partner, subject to the requirements of the Limited Partnership Act and
the Exempted Partnerships Act, effective immediately prior to the withdrawal or removal of the
General Partner pursuant to Sections 15.1 or 15.2 or immediately after the transfer of the General
Partner’s General Partner Units pursuant to Section 13.6. Any such successor shall conduct the
affairs of the Partnership without dissolution. In each case, the admission shall be subject to
the successor general partner executing and delivering to the Partnership an acceptance of all of
the terms and conditions of this Agreement and such other documents or instruments as may be
required to effect the admission. Any such successor is hereby authorized to and shall, subject to
the terms hereof conduct the affairs of the Partnership without dissolution.



ARTICLE 15

WITHDRAWAL OR REMOVAL OF PARTNERS




15.1 Withdrawal of the General Partner





15.1.1. The General Partner shall be deemed to have withdrawn from the Partnership upon the
occurrence of any one of the following events (each such event herein referred to as an “Event
of Withdrawal”):




15.1.1.1 the General Partner voluntarily withdraws from the Partnership by giving 90
days advance written notice to the other Partners;




15.1.1.2 the General Partner transfers all of its rights as General Partner pursuant
to Section 13.6;




15.1.1.3 the General Partner is removed pursuant to Section 15.2;




15.1.1.4 the General Partner (a) makes a general assignment for the benefit of
creditors; (b) files a voluntary bankruptcy petition; (c) files a petition or answer
seeking for itself a reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any law; (d) files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against the General Partner in a proceeding of the type described in
Sections (a)-(c) of this Section 15.1.1.4; or (e) seeks, consents to or acquiesces
in the appointment of a trustee, receiver or liquidator of the General Partner or of
all or any substantial part of its properties;









 



47



15.1.1.5 a final and non-appealable judgment is entered by a court with appropriate
jurisdiction ruling that the General Partner is bankrupt or insolvent, or a final
and non-appealable order for relief is entered by a court with appropriate
jurisdiction against the General Partner, in each case under any federal or state
bankruptcy or insolvency laws as now or hereafter in effect; or




15.1.1.6 a certificate of dissolution or its equivalent is filed for the General
Partner, or 90 days expire after the date of notice to the General Partner of
revocation of its charter without a reinstatement of its charter, under the laws of
its state of incorporation.




15.1.2. If an Event of Withdrawal specified in Sections 15.1.1.4, 15.1.1.5 or 15.1.1.6 occurs
or is expected, the withdrawing General Partner shall give notice as soon as reasonably
practicable to the Limited Partners. The Partners hereby agree that only the Events of
Withdrawal described in this Section 15.1 shall result in the withdrawal of the General Partner
from the Partnership.




15.1.3. Withdrawal of the General Partner from the Partnership upon the occurrence of an Event
of Withdrawal shall not constitute a breach of this Agreement under the following
circumstances: (i) the General Partner voluntarily withdraws by giving at least 90 days’
advance notice to the Limited Partners, such withdrawal to take effect on the date specified in
such notice; or (ii) at any time that the General Partner ceases to be a general partner
pursuant to Section 15.1.1.2 or is removed pursuant to Section 15.2.




15.1.4. If the 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 Outstanding Units (excluding
for purposes of such determination Units owned by the General Partner or any other member of
the BAM Group) may, prior to the effective date of such withdrawal, elect a successor general
partner. If, prior to the effective date of the General Partner’s withdrawal, a successor is
not selected by the Limited Partners as provided herein or the Partnership does not receive a
Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with Section
16.2. Any such successor general partner shall be subject to the provisions of Section 14.2.



15.2 Removal of the General Partner




     The General Partner may be removed if (i) such removal is approved by holders of at least
two-thirds of the voting power of the Outstanding Class A Units; and (ii) the Partnership receives
a Withdrawal Opinion of Counsel. Any such action by such holders of Class A Units for removal of
the General Partner must also provide for the election and succession of a new general partner.
Such removal shall be effective immediately following the admission of the successor general
partner pursuant to Article 14. The removal of the General Partner is subject to the approval of
the successor general partner by holders of a majority of the voting power of the Outstanding Class
A Units. Any such successor general partner shall be subject to the provisions of Section 14.2.









 



48


15.3 Interest of Departing General Partner and Successor General Partner





15.3.1. In the event of (i) withdrawal of the General Partner under circumstances where such
withdrawal does not violate this Agreement or (ii) removal of the General Partner by the
Limited Partners under circumstances where Cause does not exist, the Departing General Partner
shall, at its option exercisable prior to the effective date of the departure of such Departing
General Partner, promptly receive from its successor in exchange for its General Partner Units
an amount in cash equal to the fair market value of the General Partner Units, such amount to
be determined and payable as of the effective date of its departure. If the General Partner is
removed by the Limited Partners under circumstances where Cause exists or if the General
Partner withdraws under circumstances where such withdrawal violates this Agreement, its
successor shall have the option described in the immediately preceding sentence, and the
Departing General Partner shall not have such option.




15.3.2. For purposes of this Section 15.3.2, the fair market value of the Departing General
Partner’s General Partner Units shall be determined by agreement between the Departing General
Partner and its successor or, failing agreement within 30 days after the effective date of such
Departing General Partner’s departure, by an independent investment banking firm or other
independent expert selected by the Departing General Partner and its successor, which, in turn,
may rely on other experts and the determination of which shall be conclusive as to such matter.
If such parties cannot agree upon one independent investment banking firm or other independent
expert within 45 days after the effective date of such departure, then the Departing General
Partner shall designate an independent investment banking firm or other independent expert, the
Departing General Partner’s successor shall designate an independent investment banking firm or
other independent expert, and such firms or experts shall mutually select a third independent
investment banking firm or independent expert, which shall determine the fair market value of
the Units. In making its determination, such independent investment banking firm or other
independent expert shall consider the Partnership’s assets, the rights and obligations of the
General Partner and other factors it may deem relevant.




15.3.3. If the General Partner Units are not acquired in the manner set forth in Section
15.3.1, the Departing General Partner shall become a Limited Partner and the General Partner
Units shall be converted into Units pursuant to a valuation made by an investment banking firm
or other independent expert selected pursuant to Section 15.3.1, without reduction in such
Partnership Interest (but subject to proportionate dilution by reason of the admission of its
successor).



15.4 Withdrawal of Limited Partners




     No Limited Partner shall have any right to withdraw from the Partnership; provided, however,
that when a transferee of a Limited Partner’s Units becomes a Record Holder, such transferring
Limited Partner shall cease to be a Limited Partner with respect to the Units so transferred.









 



49


ARTICLE 16

TERMINATION OF THE PARTNERSHIP




16.1 Dissolution




     Subject to Section 16.2, the Partnership shall dissolve and its affairs shall be wound up,
upon:




16.1.1. the service of notice by the General Partner, with the approval of a majority of the
members of the Independent Committee, that in the opinion of the General Partner the coming
into force of any law, regulation or binding authority renders illegal or impracticable the
continuation of the Partnership;




16.1.2. the election of the General Partner, if the Partnership, as determined by the General
Partner, is required to register as an “investment company” under the U.S. Investment Company
Act of 1940, as amended, or similar legislation in other jurisdictions;




16.1.3. the date that the General Partner withdraws from the Partnership without satisfying
Section 15.1;




16.1.4. the date on which any court of competent jurisdiction enters a decree of judicial
dissolution of the Partnership or an order to wind up or liquidate the General Partner; and




16.1.5. the date on which the General Partner decides to dispose of, or otherwise realize
proceeds in respect of, all or substantially all of the Assets in a single transaction or
series of transactions.



16.2 Reconstitution of Partnership




     The Partnership shall not dissolve pursuant to Section 16.1.3 or Section 16.1.4, and the
Partnership shall be reconstituted and continue without dissolution, if within 30 days of the date
of dissolution (and provided that a notice of dissolution with respect to the Partnership has not
been provided to the Bermuda Monetary Authority), a new general partner which is a member of the
BAM Group executes a transfer deed pursuant to which the new general partner assumes the rights and
undertakes the obligations of the original general partner, but only if the Partnership receives an
Opinion of Counsel that the admission of the new general partner will not result in the loss of
limited liability of any Limited Partner.



16.3 Liquidation




     Upon dissolution of the Partnership, unless the Partnership is continued under an election to
reconstitute and continue the Partnership pursuant to Section 16.2, the General Partner shall act,
or cause one or more Persons to act, as the Liquidator. The Liquidator (if other than the General
Partner) shall be entitled to receive such compensation for its services as may be approved by a
majority of the members of the Independent Committee. If the General Partner is acting as the
Liquidator, it shall not be entitled to receive any additional compensation for acting in such
capacity. The Liquidator shall agree not to resign at any time without 15 days’ prior notice and
(if other than the General Partner) may be removed at any time, with or without









 



50



cause, by notice of removal approved by a majority of the members of the Independent
Committee. Upon dissolution, removal or resignation of the Liquidator, a successor and substitute
Liquidator (who shall have and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by a majority of the members of the Independent
Committee. The right to approve a successor or substitute Liquidator in the manner provided herein
shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner
herein provided. Except as expressly provided in this Section 16.3, the Liquidator approved in the
manner provided herein shall have and may exercise, without further authorization or consent of any
of the parties hereto, all of the powers conferred upon the General Partner under the terms of this
Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the
exercise of such powers) to the extent necessary or desirable in the good faith judgment of the
Liquidator to carry out the duties and functions of the Liquidator hereunder for and during such
period of time as shall be reasonably required in the good faith judgment of the Liquidator to
complete the winding-up and liquidation of the Partnership as provided for herein. The Liquidator
shall proceed to dispose of the Assets, discharge its liabilities, and otherwise wind up its
affairs in such manner and over such period as the Liquidator determines to be in the best interest
of the Partners, subject to applicable laws and the following:




16.3.1. the Assets may be disposed of by public or private sale or by distribution in kind to
one or more Partners on such terms as the Liquidators and such Partners or Partners may agree;
if any property is distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 16.3.3 to have received cash equal to its fair market value; and
contemporaneously therewith, appropriate cash distributions must be made to the other Partners;
the Liquidator may distribute the Assets, in whole or in part, in kind if it determines that a
sale would be impractical or would cause undue loss to the Partners; the Liquidator may defer
liquidation of the Assets for a reasonable time it determines that an immediate sale or
distribution of all or some of the Assets would be impractical or would cause undue loss to the
Partners;




16.3.2. liabilities of the Partnership, including amounts owed to the Liquidator as
compensation for serving in such capacity (subject to the terms of Section 16.3) and amounts to
Partners otherwise than in respect of their distribution rights under Section 5.2, shall be
discharged; with respect to any liability that is contingent, conditional or unmatured or is
otherwise not yet due and payable, the Liquidator shall either settle such claim for such
amount as it thinks appropriate or establish a reserve of cash or other assets to provide for
its payment; when paid, any unused portion of the reserve shall be distributed as additional
liquidation proceeds; and




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 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









 



51



the 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 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 General
Partner as Capital Surplus shall be distributed in accordance with Section 5.2.3 as
if such distribution were a distribution occurring prior to dissolution; and




16.3.3.3 all other cash and property of the Partnership shall be distributed to the
Partners as follows:




16.3.3.3.1 first, 100% to BIP until BIP has received pursuant to this
Section 16.3.3.3.1 an amount equal to the excess of (1) the amount of BIP’s
outlays and expenses incurred during the term of the Partnership, over (2) the
aggregate amount of distributions received by BIP pursuant to Section
5.2.2.1;




16.3.3.3.2 second, to the Partners pro rata in proportion to the Unrecovered
Capital Amounts attributable to the Units and General Partner Units held by
the Partners until the Unrecovered Capital Amount attributable to each Unit
and General Partner Unit is equal to zero;




16.3.3.3.3 third, to the Partners pro rata in proportion to their respective
Percentage Interests until there has been distributed pursuant to this
Section 16.3.3.3.3 in respect of each 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 Unit
and General Partner Unit was last adjusted pursuant to Section 3.5.3 and
ending on the date of distribution pursuant to this Section 16.3.3.3.3, over
(2) the aggregate amount of distributions (if any) made in respect of a Unit
pursuant to Section 5.2.2.2 during such period of time;




16.3.3.3.4 fourth, 15% to the General Partner and 85% to the Partners, pro
rata in proportion to their respective Percentage Interests, until there has
been distributed pursuant to this Section 16.3.3.3.4 in respect of each 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 Unit
and General Partner Unit was last adjusted pursuant to Section 3.5.3 and
ending on the date of distribution pursuant to this Section 16.3.3.3.4, over
(2) the aggregate amount of distributions (if any) made in respect of a Unit
pursuant to Section 5.2.2.3 during such period of time; and









 



52



16.3.3.3.5 thereafter, 25% to the General Partner and 75% to the Partners,
pro rata in proportion to their respective Percentage Interests.



16.4 Distributions in Kind




     Notwithstanding the provisions of Section 16.3, which require the liquidation of the Assets,
but subject to the order of priorities set forth therein, if prior to or upon dissolution of the
Partnership, the Liquidator determines that an immediate sale of part or all of the Assets would be
impractical or would cause undue loss to the Partners, the Liquidator may, in its absolute
discretion, defer for a reasonable time the liquidation of any assets except those necessary to
satisfy liabilities of the Partnership (including those to Partners as creditors) and/or distribute
to the Partners or to specific classes of Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 16.3, undivided interests in such Assets as the
Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only
if, in the good faith judgment of the Liquidator, such distributions in kind are in the best
interest of the Limited Partners, and shall be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems reasonable and equitable and
to any agreements governing the operation of such properties at such time. The Liquidator shall
determine the fair market value of any property distributed in kind using such reasonable method of
valuation as it may adopt.



16.5 Cancellation of Certificate of Limited Partnership




     Upon the completion of the distribution of Partnership cash and property as provided in
Sections 16.3 and 16.4, the Partnership shall be terminated and the Certificate of Limited
Partnership and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than Bermuda shall be cancelled and such other actions as may be necessary to
terminate the Partnership shall be taken.



16.6 Reasonable Time for Winding Up




     A reasonable time shall be allowed for the orderly winding up of the activities and affairs of
the Partnership and the liquidation of its assets pursuant to Section 16.3 in order to minimize any
losses otherwise attendant upon such winding up, and the provisions of this Agreement shall remain
in effect between the Partners during the period of liquidation.



16.7 Return of Capital




     The General Partner shall not be personally liable for, and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to effectuate, the return
of the Capital Contributions of the Limited Partners, or any portion thereof, it being expressly
understood that any such return shall be made solely from Assets.



16.8 No Capital Account Restoration




     No Partner shall have any obligation to restore any negative balance in its Capital Account
upon liquidation of the Partnership.









 



53


16.9 Waiver of Partition




     Each Partner hereby waives any right to partition of the Partnership property.



ARTICLE 17

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE




17.1 Amendment to be Adopted Solely by General Partner




     Subject to compliance with the requirements of the Limited Partnership Act and the Exempted
Partnerships Act, each Limited Partner agrees that the General Partner (pursuant to its powers of
attorney from the Limited Partners), without the approval of any Limited Partner, may amend any
provision of this Agreement, and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:




17.1.1. a change in the name of the Partnership, the location of the registered office of the
Partnership, the registered agent of the Partnership or the registered office of the
Partnership;




17.1.2. admission, substitution, withdrawal or removal of Partners in accordance with this
Agreement;




17.1.3. a change that the General Partner determines is reasonable and necessary or appropriate
to qualify or continue the qualification of the Partnership as an exempted limited partnership
under Bermuda law or a partnership in which the limited partners have limited liability under
the laws of any jurisdiction or that is necessary or advisable in the opinion of the General
Partner to ensure that the Partnership will not be treated as an association taxable as a
corporation or otherwise taxed as an entity for tax purposes;




17.1.4. an amendment that the General Partner determines to be necessary or appropriate to
address changes in tax regulations, legislation or interpretation;




17.1.5. an amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership
or the General Partner or its directors or officers from in any manner being subjected to the
provisions of the U.S. Investment Company Act of 1940, as amended, or similar legislation in
other jurisdictions;




17.1.6. an amendment that the General Partner determines in its sole discretion to be necessary
or appropriate in connection with 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 3.5;




17.1.7. any amendment expressly permitted in this Agreement to be made by the General Partner
acting alone;




17.1.8. an amendment effected, necessitated or contemplated by a Merger Agreement approved in
accordance with Section 18.3;









 



54



17.1.9. any amendment that in the sole discretion of the General Partner is necessary or
appropriate to reflect and account for the formation of the Partnership of, or its investment
in, any corporation, partnership, joint venture, limited liability company or other entity, as
otherwise permitted by the Agreement;




17.1.10. a change in the Partnership’s fiscal year and related changes;




17.1.11. any amendment concerning the computation or allocation of specific items of income,
gain, expense or loss among the Partners that, in the sole discretion of the General Partner,
is necessary or appropriate to (w) comply with the requirements of the Code and Treasury
Regulations (including the requirements of Section 704(b) and Section 704(c) of the Code and
the Treasury Regulations promulgated thereunder), (x) comply with the requirements of the
Income Tax Act, (y) reflect the Partners’ interests in the Partnership or (z) consistently
reflect the distributions made by the Partnership to the Partners pursuant to the terms of this
Agreement; or




17.1.12. any other amendments substantially similar to matters described in Section 17.1.1
through 17.1.11.



     In addition, the General Partner may make amendments to this Agreement without the approval of
any Limited Partner if those amendments, in the discretion of the General Partner:




17.1.13. do not adversely affect the Limited Partners considered as a whole (including any
particular class of Partnership Interests as compared to other classes of Partnership
Interests) in any material respect;




17.1.14. are necessary or appropriate to satisfy any requirements, conditions or guidelines
contained in any opinion, directive, order, ruling or regulation of any governmental agency or
judicial authority;




17.1.15. are necessary or appropriate for any action taken by the General Partner relating to
splits or combinations of Units under the provisions of the Agreement; or




17.1.16. are required to effect the intent expressed in the Registration Statement or the
intent of the provisions of this Agreement or are otherwise contemplated by this Agreement.



17.2 Amendment Procedures




     Except as provided in Sections 17.1 and 17.3, all amendments to this Agreement shall be made
in accordance with the following procedures:




	 	17.2.1.	 	amendments to this Agreement may only be proposed by or with the consent of the
General Partner, provided that the General Partner shall have no duty or obligation to
propose any amendment to this Agreement and may decline to do so free of any fiduciary
duty or obligation whatsoever to the Partnership or any Limited Partner and, in
declining to propose an amendment to the fullest extent permitted by law, shall not be
required to act in good faith or pursuant to any










 



55


	 	 	 	other standard imposed by this Agreement, any other agreement contemplated hereby or
under the Limited Partnership Act or any other law, rule or regulation or at equity;
	 
	 	17.2.2.	 	a proposed amendment shall be effective upon its approval by the 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
Outstanding Units.





17.3 Amendment Requirements





17.3.1. Notwithstanding the provisions of Sections 17.1 and 17.2, no provision of this
Agreement that establishes a percentage of the voting power of the Outstanding Units required
to take any action shall be amended, altered, changed, repealed or rescinded in any respect
that would have the effect of reducing such voting requirement unless such amendment is
approved by the written consent or the affirmative vote of the voting power of Outstanding
Units whose aggregate Outstanding Units constitute voting power not less than the voting
requirement sought to be reduced.




17.3.2. Notwithstanding the provisions of Sections 17.1 and 17.2, no amendment to this
Agreement may (i) enlarge the obligations of any Limited Partner without its consent unless
such shall be deemed to have occurred as a result of any amendment approved pursuant to Section
17.3.3, or (ii) enlarge the obligations, restrict in any way any action by or rights of or
reduce in any way the amounts distributable, reimbursable or otherwise payable by the
Partnership to the General Partner or any of its Affiliates without its consent, which may be
given or withheld in its sole discretion.




17.3.3. Except as otherwise provided, and without limitation of the General Partner’s authority
to adopt amendments to this Agreement as contemplated in Section 17.1, the General Partner may
amend the Partnership Agreement without the approval of holders of Outstanding Partnership
Interests, except that any amendment that would have a material adverse effect on the rights or
preferences of any class of Outstanding Units in relation to other classes of Partnership
Interests must be consented to or approved by the holders of at least a majority of the
Outstanding Partnership Interests of the class affected.




17.3.4. Notwithstanding any other provision of this Agreement, except for amendments pursuant
to Section 17.1, no amendments shall become effective without the approval of at least 90% of
the voting power of the Outstanding Units unless the Partnership obtains an Opinion of Counsel
to the effect that (a) such amendment will not cause the Partnership to be treated as an
association taxable as a corporation or otherwise taxable as an entity for tax purposes
(provided that for U.S. tax purposes the General Partner has not made the election contemplated
by Section 12.6) and (b) such amendment will not affect the limited liability of any Limited
Partner or any limited partner of BIP under applicable law; however, that no such opinion shall
be required in connection with an election described in Section 12.6 made by the General
Partner or in connection with a transfer following such election.









 



56



17.3.5. This Section 17.3 shall only be amended with the approval of not less than 90% of the
Outstanding Units.



17.4 Meetings




     All acts of Limited Partners to be taken hereunder shall be taken in the manner provided in
this Article 17. Special meetings of the Limited Partners may be called by the General Partner or
by Limited Partners owning 50% or more of the voting power of the Outstanding Partnership Interests
of the class or classes for which a meeting is proposed, provided that, for this purpose, the
Partnership Interests Outstanding shall not include Partnership Interests owned by the General
Partner or any other member of the BAM Group. (For the avoidance of doubt, the Class A Units and
the Redemption-Exchange Units shall not constitute separate classes for this purpose.) Limited
Partners shall call a special meeting by delivering to the General Partner one or more requests in
writing stating that the signing Limited Partners wish to call a special meeting and indicating the
general or specific purposes for which the special meeting is to be called. Within 60 days after
receipt of such a call from Limited Partners or within such greater time as may be reasonably
necessary for the Partnership to comply with any statutes, rules, regulations, listing, agreements
or similar requirements governing the holding of a meeting or the solicitation of proxies for use
at such a meeting, the General Partner shall send a notice of the meeting to the Limited Partners.
A meeting shall be held at a time and place (outside of Canada) determined by the General Partner
on a date not less than 10 days and not more than 60 days after the mailing of notice of the
meeting. Limited Partners shall not vote on matters that would cause the Limited Partners to be
deemed to be taking part in the management and control of the affairs of the Partnership so as to
jeopardize the Limited Partners’ limited liability under the Limited Partnership Act or the law of
any other jurisdiction in which the Partnership is qualified to conduct activities and affairs.



17.5 Notice of Meeting




     Notice of a meeting called pursuant to Section 17.4 shall be given to the Record Holders of
the class or classes of Partnership Interests in writing by mail or other means of written
communication in accordance with Section 19.2. The notice shall be deemed to have been given at
the time when deposited in the mail or sent by other means of written communication. In addition,
notices of meetings pursuant to Section 17.4 shall be delivered, announced and/or published to the
extent required for the Partnership to comply with applicable law and regulations.



17.6 Record Date




     For purposes of determining the Limited Partners entitled to notice of and participation in or
to vote at a meeting of the Limited Partners or to provide consents or give approvals to any action
by the Partnership as provided in Section 17.11 without a meeting as provided in Section 17.10, the
General Partner may set a Record Date, which shall not be less than 10 nor more than 60 days before
(a) the date of the meeting (unless such requirement conflicts with any applicable law, rule or
regulation, in which case the applicable law, rule or regulation shall govern) or (b) in the event
that approvals to any action by the Partnership are









 



57



sought without a meeting, the date by which Limited Partners are requested in writing by the
General Partner to provide such approvals.



17.7 Adjournment




     When a meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting and a new Record Date need not be fixed if the time and place thereof are
announced at the meeting at which the adjournment is taken, unless such adjournment shall be for
more than 45 days. At the adjourned meeting, the Partnership may transact any business which might
have been transacted at the original meeting. If the adjournment is for more than 45 days or if a
new Record Date is fixed for the adjourned meeting, a notice of the adjourned meeting and/or the
new Record Date, as applicable, shall be given in accordance with this Article 17.



17.8 Quorum




     A majority of the Outstanding Units of the class or classes for which a meeting has been
called (including Units held by the 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 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, 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 General Partner). In the absence of a quorum, any meeting of
Limited Partners may be adjourned from time to time by the affirmative vote of Units 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 General Partner) represented either in person or
by proxy, but no other business may be transacted, except as provided in Section 17.7.



17.9 Conduct of Meeting




     The General Partner shall have full power and authority concerning the manner of conducting
any meeting of the Limited Partners or solicitation of consents or approvals in writing, including
the determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the
requirements of Section 17.4, the conduct of voting, the validity and effect of any proxies and the
determination of any controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as









 



58



chairman of any meeting and shall further designate a Person to take the minutes of any
meeting, in either case including a Partner or a director or officer of the General Partner. All
minutes shall be kept with the records of the Partnership maintained by the General Partner. The
General Partner may make such other regulations consistent with applicable law and this Agreement
as it may deem advisable concerning the conduct of any meeting of the Limited Partners or
solicitation of approvals in writing, including regulations in regard to the appointment of
proxies, the appointment and duties of inspectors of votes and approvals, the submission and
examination of proxies and other evidence of the right to vote, and the revocation of consents or
approvals in writing.



17.10 Action Without a Meeting




     If authorized by the General Partner, any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if (i) written consent to such action is solicited by or on
behalf of the General Partner and (ii) an approval in writing setting forth the action to be taken
is signed by Limited Partners owning not less than the minimum percentage of the Outstanding Units
that would be necessary to authorize or take such action at a meeting at which all the Limited
Partners were present and voted. Prompt notice of the taking of action by written consent or
without a meeting shall be given to the Limited Partners who have not approved in writing. The
General Partner may specify that any written ballot from Limited Partners for the purpose of taking
any action without a meeting shall be returned to the Partnership within the time period, which
shall be not less than 20 days, specified by the General Partner. If a ballot returned to the
Partnership does not vote all of the Units held by the Limited Partner, the Partnership shall be
deemed to have failed to receive a ballot for the Units that were not voted.



17.11 Voting and Other Rights





17.11.1. Only those Record Holders of Units 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. 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.




17.11.2. Each Outstanding Unit shall entitle the holder thereof to one vote for the purposes of
any approval at a meeting of Limited Partners or by written consent, provided that
Redemption-Exchange Unitholders will only be entitled to a maximum number of votes equal to 49%
of the total voting power of all Outstanding Units.




17.11.3. With respect to Units that are held for a Person’s account by another Person, in whose
name such Units are registered, such other Person shall, in exercising the voting or consent
rights in respect of such Units on any matter, and unless the arrangement between such Persons
provides otherwise, vote such Units in favor of, and at the direction of, the Person who is the
beneficial owner, and the Partnership shall be entitled to assume it is so









 



59



acting without further inquiry. The provisions of this Section 17.11.3 (as well as all other
provisions of this Agreement) are subject to the provisions of Section 13.3.



ARTICLE 18

MERGER




18.1 Authority




     The Partnership may merge or consolidate with one or more corporations, business trusts or
associations, real estate investment trusts, common law trusts or unincorporated businesses,
including a general partnership or limited partnership, formed under the laws of any jurisdiction,
pursuant to a written agreement of merger or consolidation (“Merger Agreement”) in accordance with
this Article 18.



18.2 Procedure for Merger, Consolidation or Other Combination




     Merger, consolidation or other combination of the Partnership pursuant to this Article 18
requires the prior approval of the General Partner; provided, however, that, to the fullest extent
permitted by law, the General Partner shall have no duty or obligation to consent to any merger,
consolidation or other combination of the Partnership and, to the fullest extent permitted by law,
may decline to do so free of any duty (including any fiduciary duty) or obligation whatsoever to
the Partnership, any Limited Partner or any other Person bound by this Agreement and, in declining
to consent to a merger, consolidation or other combination, shall not be required to act pursuant
to any other standard imposed by this Agreement, any other Agreement contemplated hereby or under
the Limited Partnership Act or the Exempted Partnerships Act or any other law, rule or regulation
or at equity. If the General Partner shall determine, in the exercise of its sole discretion, to
consent to the merger or consolidation, the General Partner shall approve the Merger Agreement,
which shall set forth:




	 	18.2.1.	 	the names and jurisdictions of formation or organization of each of the entities
proposing to merge or consolidate;
	 
	 	18.2.2.	 	the names and jurisdictions of formation or organization of the entity that is to
survive the proposed merger or consolidation (the “Surviving Entity”);
	 
	 	18.2.3.	 	the terms and conditions of the proposed merger or consolidation;
	 
	 	18.2.4.	 	the manner and basis of exchanging or converting the equity securities of each
constituent entity for, or into, cash, property or general or limited partnership
interests, rights, securities or obligations of the Surviving Entity;
	 
	 	18.2.5.	 	(i) if any general or limited partnership interests, securities or rights of any
constituent entity are not to be exchanged or converted solely for, or into, cash,
property or general or limited partnership interests, rights, securities or
obligations of the Surviving Entity, the cash, property or general or limited
partnership interests, rights, securities or obligations of any limited partnership,
corporation, trust or other entity (other than the Surviving Entity) which the holders
of such general or limited partnership interest are to receive in exchange










 



60


	 	 	 	for, or upon conversion of, their securities or rights, and (ii) in the case of
securities represented by certificates, upon the surrender of such certificates,
which cash, property or general or limited partnership interests, rights, securities
or obligations of the Surviving Entity or any limited partnership, corporation,
trust or other entity (other than the Surviving Entity), or evidences thereof, are
to be delivered;
	 
	 	18.2.6.	 	a statement of any changes in the Governing Instruments or the adoption of new
Governing Instruments of the Surviving Entity to be effected by such merger or
consolidation;
	 
	 	18.2.7.	 	the effective time of the merger, as specified in or determinable in accordance
with the Merger Agreement; and
	 
	 	18.2.8.	 	such other provisions with respect to the proposed merger or consolidation as are
deemed necessary or appropriate by the General Partner.





18.3 Approval by Limited Partners of Merger or Consolidation





	 	18.3.1.	 	Except as provided in Section 18.3.4, the General Partner of the Partnership, upon
its approval of the Merger Agreement, shall direct that the Merger Agreement be
submitted to a vote of Limited Partners whether at a meeting or by written consent, in
either case in accordance with the requirements of Article 17. A copy or a summary of
the Merger Agreement shall be included in or enclosed with the notice of a meeting or
the written consent.
	 
	 	18.3.2.	 	Except as provided in Section 18.3.4, the Merger Agreement and the merger,
consolidation or other combination contemplated thereby shall be approved upon
receiving the affirmative vote or consent of the holders of a majority of the voting
power of Outstanding Units unless the Merger Agreement contains any provision which,
if contained in an amendment to this Agreement, the provisions of this Agreement or
applicable law would require the vote or consent of a greater percentage of the
Outstanding Units or of any class of Limited Partners, in which case such greater
percentage vote or consent shall be required for approval of the Merger Agreement.
	 
	 	18.3.3.	 	Except as provided in Section 18.3.4, after such approval by vote or consent of the
Limited Partners, and at any time prior to the effective time of the Merger Agreement,
the merger or consolidation may be abandoned pursuant to provisions therefor, if any,
set forth in the Merger Agreement.
	 
	 	18.3.4.	 	Notwithstanding anything else contained in this Article 18 or in this Agreement,
and, in addition to the provisions of Section 9.2 the General Partner is permitted,
without Limited Partner approval, to convert the Partnership into a new limited
liability entity, to merge the Partnership into, or convey all of the Partnership’s
Assets to, another limited liability entity, which shall be newly formed and shall
have no assets, liabilities or operations at the time of such conversion, merger or
conveyance other than those it receives from the Partnership; provided that (A)










 



61


	 	 	 	the General Partner has received an Opinion of Counsel that the merger or
conveyance, as the case may be, would not result in the loss of the limited
liability of any Limited Partner; (B) the sole purpose of such conversion, merger or
conveyance is to effect a mere change in the legal form of the Partnership into
another limited liability entity; and (C) the Governing Instruments of the new
entity provide the Limited Partners and the General Partner with substantially the
same rights and obligations as are herein contained.





18.4 No Dissenters’ Rights




     The parties acknowledge that holders of Partnership Interests are not entitled to dissenters’
rights of appraisal under this Agreement or the Limited Partnership Act or the Exempted
Partnerships Act in the event of a merger or consolidation, a sale of substantially all of our
assets or any other transaction or event.



18.5 Effect of Merger





	 	18.5.1.	 	Upon the effective date of the Merger Agreement:






	 	18.5.1.1	 	all of the rights, privileges and powers of each of the entities that has
merged or consolidated, and all property, real, personal and mixed, and all
debts due to any of those entities and all other things and causes of action
belonging to each of those entities shall be vested in the Surviving Entity
and after the merger or consolidation shall be the property of the Surviving
Entity to the extent they were of each constituent entity.
	 
	 	18.5.1.2	 	the title to any real property vested by deed or otherwise in any of
those constituent entities shall not revert and is not in any way impaired
because of the merger or consolidation;
	 
	 	18.5.1.3	 	all rights of creditors and all liens on or security interest in property
of any of those constituent entities shall be preserved unimpaired; and
	 
	 	18.5.1.4	 	all debts, liabilities and duties of those constituent entities shall
attach to the Surviving Entity, and may be enforced against it to the same
extent as if the debts, liabilities and duties had been incurred or
contracted by it.






	 	18.5.2.	 	A merger or consolidation effected pursuant to this Article 18 shall not be deemed
to result in a transfer or assignment of assets or liabilities from one entity to
another having occurred.










 



62







ARTICLE 19

GENERAL PROVISIONS




19.1 Enurement




     This Agreement will enure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.



19.2 Notices





	 	19.2.1.	 	To the Partnership and General Partner






19.2.1.1 Any notice, payment demand, request, report or other document required or
permitted to be given or made under this Agreement (“Notice”) by a Limited Partner
to the Partnership or General Partner shall be given or sent by fax or letter post
or by other means of written communication to the address of the General Partner
specified below, or at such other address as the General Partner may notify to the
Record Holders, in compliance with applicable laws and regulations:



	 	 	 	 	 
	 

	 	Brookfield Infrastructure GP L.P.	 	 
	 

	 	Canon’s Court	 	 
	 

	 	22 Victoria Street	 	 
	 

	 	Hamilton HM 12, Bermuda	 	 
	 
	 	 	 	 
	 

	 	Attention:
	 	Secretary
	 

	 	Telecopier number:
	 	441-298-3433







	 	19.2.2.	 	To the Limited Partners
	 
	 	 	 	19.2.2.1 Any Notice by the General Partner or Partnership to a Limited Partner
shall, unless otherwise required by applicable laws and regulations, be deemed given
or made to the Limited Partner when delivered in person or when sent to the relevant
Record Holder by fax, letter post or by other means of written communication at the
address described in Section 19.2.2.2 or when provided as set forth in Section
19.2.2.3.
	 
	 	 	 	19.2.2.2 Any Notice to be given or made to a Limited Partner hereunder shall be
deemed conclusively to have been given or made, and the obligation to give any
Notice shall, unless otherwise required by applicable laws and regulations, be
deemed conclusively to have been fully satisfied, upon sending of such Notice to the
Record Holder of the Partnership Interests, at such Person’s address as shown on the
records of the Partnership, or as otherwise shown on the records of the Partnership,
regardless of any claim of any Person who may have an interest in such Partnership
Interests by reason of any transfer or otherwise. An affidavit or certificate of
making of any Notice in Section 19.2 executed by the General Partner, Partnership or
the mailing organization shall be prima facie evidence of the giving or making of
such Notice. If any Notice addressed to a Record Holder










 



63


	 	 	 	at the address of such Record Holder appearing on the books and records of the
Partnership or the Partnership is returned by letter post marked to indicate that
the relevant postal service is unable to deliver it, such Notice and any subsequent
Notices shall be deemed to have been duly given or made without further mailing
(until such time as such Record Holder or another Person notifies the Partnership of
a change in his address) if they are available for the Limited Partner at the
principal office of the Partnership for a period of one year from the date of the
giving or making of such Notice to the other Limited Partners.
	 
	 	 	 	19.2.2.3 Any Notice to be given or made to a Limited Partner hereunder shall be
deemed conclusively to have been given or made, and the obligation to give any
Notice shall, unless otherwise required by applicable laws and regulations, be
deemed conclusively to have been fully satisfied, upon issuing a press release
complying with applicable laws and regulations, if deemed by the General Partner in
its sole discretion to be a reasonable or appropriate means of providing such
Notice.





19.3 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 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.



19.4 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.



[NEXT PAGE IS SIGNATURE PAGE]










 



64




     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of December 4, 2007.



	 	 	 	 	 
	 	GENERAL PARTNER:



BROOKFIELD INFRASTRUCTURE GP L.P.,

by its general partner,

BROOKFIELD INFRASTRUCTURE 

GENERAL PARTNER LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	Derek Pannell 	 
	 	 	Title:  	Director 	 
	 
	 	LIMITED PARTNER:



BROOKFIELD ASSET MANAGEMENT INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Alan Dean 	 
	 	 	Title:  	Senior Vice President and Secretary 	 
	 



	 	 	 	 	 
	 	LIMITED PARTNER:



BROOKFIELD INFRASTRUCTURE 

PARTNERS L.P.,

by its general partner,

BROOKFIELD INFRASTRUCTURE 
PARTNERS
LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	Danesh Varma 	 
	 	 	Title:  	Director 	 
	 









 



65

	 	 	 	 	 
	 	LIMITED PARTNER:



BROOKFIELD CANADA 
INFRASTRUCTURE HOLDINGS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Jack Sidhu 	 
	 	 	Title:  	Vice President 	 
	 
	 	INITIAL LIMITED PARTNER:



TRILON BANCORP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Alan Dean 	 
	 	 	Title:  	Vice President and Secretary