Document:

Exhibit 4.2

 

Second
Amended and Restated Master Services Agreement, dated February 26, 2015, by and
among Brookfield Asset Management Inc., Brookfield Renewable Energy Partners
L.P., Brookfield Renewable Energy L.P., and others

 

BROOKFIELD
ASSET MANAGEMENT INC.

‐and
‐

BROOKFIELD
RENEWABLE ENERGY PARTNERS L.P.

‐and
‐

BROOKFIELD
RENEWABLE
ENERGY L.P.

‐and
‐

BROOKFIELD
BRP HOLDINGS (CANADA) INC.

‐and
–

BRP
BERMUDA HOLDINGS I LIMITED

‐and
‐

BROOKFIELD
BRP CANADA CORP.

‐and
‐

BROOKFIELD
BRP HOLDINGS (US) INC.

‐and
‐

BROOKFIELD
BRP EUROPE HOLDINGS (BERMUDA) LIMITED

‐and
‐

BROOKFIELD
RENEWABLE INVESTMENTS LIMITED 

‐and
‐

BROOKFIELD
RENEWABLE POWER PREFERRED EQUITY INC.

‐and
‐

BROOKFIELD
RENEWABLE ENERGY PARTNERS ULC

‐and
‐

BRP
ENERGY GROUP L.P.

- and -

BROOKFIELD
ASSET MANAGEMENT PRIVATE INSTITUTIONAL CAPITAL ADVISER (CANADA), L.P.

‐and
‐

- 1 - 

 

BROOKFIELD RENEWABLE ENERGY GROUP
(BERMUDA) LIMITED

‐and 
-

BROOKFIELD
GLOBAL RENEWABLE ENERGY ADVISOR LIMITED

	
  SECONd AMENDED AND RESTATED master services
  AGREEMENT

  

 

February 26, 2015

- 2 - 

 

Article 1INTERPRETATION................................................................................................. 3

1.1         Definitions.............................................................................................................. 3

1.2         Headings
and Table of Contents.......................................................................... 10

1.3         Interpretation........................................................................................................ 10

1.4         Actions by
the Service Providers or the Service Recipients................................. 11

1.5         Generally
Accepted Accounting Principles.......................................................... 11

1.6         Invalidity
of Provisions........................................................................................ 11

1.7         Entire
Agreement................................................................................................. 11

1.8         Waiver,
Amendment............................................................................................ 12

1.9         Governing
Law..................................................................................................... 12

Article 2APPOINTMENT
OF THE service providers............................................ 12

2.1         Appointment
and Acceptance.............................................................................. 12

2.2         Other
Holding Entities......................................................................................... 12

2.3         Subcontracting
and Other Arrangements............................................................. 13

Article 3SERVICES
AND POWERS OF THE service providers......................... 13

3.1         Services................................................................................................................. 13

3.2         Responsibility
for Certain Services...................................................................... 15

3.3         Supervision
of Service Providers’ Activities........................................................ 15

3.4         Restrictions on the Service
Providers................................................................... 15

3.5         Errors and Omissions
Insurance........................................................................... 16

Article 4RELATIONSHIP
BETWEEN THE Service providerS AND THE SERVICE RECIPIENTS................................................................................................. 16

4.1         Other Activities.................................................................................................... 16

4.2         Exclusivity............................................................................................................ 16

4.3         Independent
Contractor, No Partnership or Joint Venture.................................. 16

Article 5MANAGEMENT AND
EMPLOYEES................................................................. 17

5.1         Management
and Employees................................................................................ 17

Article 6INFORMATION
and records....................................................................... 17

6.1         Books and Records.............................................................................................. 17

6.2         Examination of Records by
the Service Recipients............................................. 18

6.3         Access to Information by
Service Provider Group.............................................. 18

6.4         Additional Information........................................................................................ 18

Article 7FEES
AND EXPENSES......................................................................................... 19

7.1         Net Base
Management Fee and Base Management Fee Adjustment.................. 19

7.2         Maximum
Fees Payable by Service Recipients.................................................... 19

7.3         Currency............................................................................................................... 19

7.4         Computation
and Payment of Net Base Management Fee.................................. 20

- !Undefined
Bookmark, I - 

 

7.5         Expenses............................................................................................................... 20

7.6         Governmental Charges......................................................................................... 21

7.7         Computation
and Payment of Expenses and Governmental Charges.................. 22

Article 8Brookfield’s
Obligation......................................................................... 22

Article 9REPRESENTATIONS
and WARRANTIES

OF THE Service providerS AND THE SERVICE RECIPIENTS.. 22

9.1         Representations
and Warranties of the Service Providers.................................... 22

9.2         Representations
and Warranties of the Service Recipients.................................. 23

Article 10LIABILITY
AND INDEMNIFICATION........................................................... 24

10.1       Indemnity............................................................................................................. 24

10.2       Limitation
of Liability.......................................................................................... 25

10.3       Benefit to
all Indemnified Parties........................................................................ 26

10.4       No Waiver............................................................................................................ 26

Article 11TERM
AND TERMINATION............................................................................. 26

11.1       Term...................................................................................................................... 26

11.2       Termination
by the Service Recipients................................................................. 26

11.3       Termination by the Service
Providers................................................................... 27

11.4       Survival Upon Termination.................................................................................. 28

11.5       Action Upon Termination..................................................................................... 28

11.6       Release of Money or other
Property Upon Written Request............................... 28

Article 12Arbitration.................................................................................................... 29

12.1       Dispute................................................................................................................. 29

12.2       Arbitration............................................................................................................ 29

12.3       Continued Performance........................................................................................ 30

Article 13GENERAL
PROVISIONS................................................................................... 30

13.1       Limited
Liability of Limited Partners of BREP and BRELP.............................. 30

13.2       Assignment........................................................................................................... 30

13.3       Failure to
Pay When Due..................................................................................... 31

13.4       Enurement............................................................................................................ 31

13.5       Notices.................................................................................................................. 31

13.6       Further
Assurances............................................................................................... 35

13.7       Counterparts......................................................................................................... 35

 

- !Undefined
Bookmark, II - 

 

SECOND AMENDED AND RESTATED MASTER SERVICES
AGREEMENT

THIS AGREEMENT made as of the 26th day of February, 2015. 

A M O N G:

BROOKFIELD
ASSET MANAGEMENT INC. (“Brookfield”),
a corporation existing under the laws of the Province of Ontario

‐and ‐

BROOKFIELD RENEWABLE ENERGY PARTNERS L.P.

(“BREP”),
an exempted partnership existing under the laws of Bermuda

‐and ‐

BROOKFIELD RENEWABLE ENERGY L.P. (“BRELP”), an exempted partnership existing under the laws of Bermuda

‐and ‐

BROOKFIELD BRP HOLDINGS
(CANADA) INC. (“CanHoldco”), a corporation existing under the laws of
the Province of Ontario

‐and ‐

BRP BERMUDA HOLDINGS I
LIMITED (“Bermuda Holdco”), an exempted company existing under the laws
of Bermuda

‐and ‐

BROOKFIELD
BRP CANADA CORP. (“BBCC”), a
corporation existing under the laws of the Province of Alberta

‐and ‐

BROOKFIELD BRP HOLDINGS
(US) INC. (“CanUSHoldco”), a
corporation existing under the laws of Province of Ontario

‐and ‐

BROOKFIELD BRP EUROPE
HOLDINGS (BERMUDA) LIMITED (“Euro
Holdco”), an exempted
company existing under the laws of Bermuda

‐and ‐

BROOKFIELD RENEWABLE
INVESTMENTS LIMITED (“InvestCo”),
an exempted company existing
under the laws of Bermuda

‐and ‐

BROOKFIELD RENEWABLE
POWER PREFERRED EQUITY INC. (“BRPPE”),
a corporation existing under the laws of Canada

‐and ‐

- 1 - 

 

BROOKFIELD
RENEWABLE ENERGY PARTNERS ULC (formerly
BRP Finance ULC) (“FinanceCo”), an unlimited liability company existing
under the laws of the Province of Alberta

‐and ‐

BRP ENERGY GROUP L.P. (the
“Canadian Service Provider”), a
limited partnership existing under the laws of the Province of Manitoba 

‐and ‐

BROOKFIELD
ASSET MANAGEMENT PRIVATE INSTITUTIONAL CAPITAL ADVISER (CANADA), L.P. (the “Canadian Service Provider II”),
a limited partnership existing under the laws of the Province of Manitoba

‐and ‐

BROOKFIELD
RENEWABLE ENERGY GROUP (BERMUDA) LIMITED (the “International Service Provider”), an
exempt company existing under the laws of Bermuda 

‐and ‐

BROOKFIELD
GLOBAL RENEWABLE ENERGY ADVISOR LIMITED (the “UK Service Provider”), a company
existing under the laws of England

RECITALS:

A.        The Service Recipients (as
defined below) indirectly hold interests in the Power Operations.

B.        BREP, BRELP and the Holding
Entities (as defined below) entered into an amended and restated master
services agreement dated January 20, 2014 (the “Current Agreement”)
pursuant to which certain Affiliates (as defined below) of Brookfield agreed to
provide to the Service Recipients certain services, subject to the terms and
conditions of the Current Agreement.

C.        BREP, BRELP and the Holding
Entities wish to amend and restate the Current Agreement to reflect the removal
of Brookfield Renewable Energy Group LLC as a Service Provider (as defined
below), the addition of the Canadian Service Provider II as a Service Provider
and to make certain other amendments to the terms and conditions of the Current
Agreement.

NOW THEREFORE
in consideration of the mutual covenants and agreements contained in this
Agreement and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto agree as
follows:

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Article 1

INTERPRETATION

1.1                                     
Definitions 

In this Agreement, except where the context
otherwise requires, the following terms will have the following meanings:

1.1.1            
“Advisers Act” means the U.S. Investment Advisers Act of
1940, as amended;

1.1.2            
“Act” has the meaning assigned thereto in
Section 12.2.1;

1.1.3            
“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;

1.1.4            
“Agreement” means this Second Amended and
Restated Master Services Agreement, and “herein”, “hereof”, “hereby”,
“hereunder” and similar expressions refer to this Agreement and include every
instrument supplemental or ancillary to this Agreement and, except where the
context otherwise requires, not to any particular article or section thereof;

1.1.5            
“Arbitration” has the meaning assigned
thereto in Section 12.2.1;

1.1.6            
“Arbitrator” has the meaning assigned
thereto in Section 12.2.3; 

1.1.7            
“Base Management Fee” means the base management fee, calculated
quarterly in arrears, in an aggregate amount equal to the sum of (i) 25% per Quarter
of the Fee Amount, plus (ii) 0.3125% of the Total Capitalization Value
Increase for the preceding Quarter;

1.1.8            
“Base Management Fee Adjustment” has the meaning
assigned thereto in Section 7.1.2; 

1.1.9            
“BBCC” has the meaning assigned thereto in the
preamble;

1.1.10        
“Bermuda Holdco” has the meaning assigned thereto in the
preamble;

1.1.11        
“BRELP” has the meaning assigned thereto in the
preamble;

1.1.12        
“BRELP General Partner” means BRP Bermuda
GP Limited (successor to 2288508 Ontario Inc.), which
is the general partner of the BRELP GP LP;

1.1.13        
“BRELP GP LP” means BREP
Holding L.P., which is the general partner of BRELP;

1.1.14        
“BRELP Units” means the limited partnership
units of BRELP;

- 3 - 

 

1.1.15        
“BREP” has the meaning assigned thereto in the preamble;

1.1.16        
“BREP Group” means BREP, BRELP, the Holding Entities, the
Operating Entities and any other direct or indirect Subsidiary of a Holding
Entity;

1.1.17        
“BREP Indemnified Party” has the meaning assigned thereto in
Section 10.1.2;

1.1.18        
“Brookfield” has the meaning assigned thereto in
the preamble;

1.1.19        
“Brookfield Group” means Brookfield and its Affiliates, other than
any member of the BREP Group;

1.1.20        
“BRPPE” has the meaning assigned thereto in the preamble;

1.1.21        
“Business” means the business carried on
from time to time by the BREP Group;

1.1.22        
“Business Day” means every day except a
Saturday or Sunday, or a day which is a statutory or civic holiday in Bermuda,
the Province of Ontario, or the State of New York;

1.1.23        
“Canadian Service Provider” has the
meaning assigned thereto in the preamble;

1.1.24        
“Canadian Service Provider II” has the
meaning assigned thereto in the preamble;

1.1.25        
“CanHoldco” has the meaning assigned
thereto in the preamble;

1.1.26        
“CanUSHoldco” has the meaning assigned
thereto in the preamble;

1.1.27        
“Capital Commitment” means, with respect
to any Operating Entity, at any time, the amount that a Service Recipient has
committed at such time to contribute (either as debt or equity) to such
Operating Entity as set forth in the terms of the subscription agreement or
other underlying documentation with respect to such Operating Entity at or
prior to such time;

1.1.28        
“Capital Contribution” means, with respect
to any Operating Entity, at any time, the amount of capital that a Service
Recipient has contributed (either as debt or equity) to such Operating Entity
at or prior to such time;

1.1.29        
“Capital Expenditure Plan” means a plan
setting out the plan, schedule and budget for Capital Maintenance and
Improvements for the Power Operations;

1.1.30        
“Capital Maintenance and Improvement”
means any material change, enhancement, addition or modification to the Power
Operations, which is intended to maintain or improve the performance of the
Power Operations, including to increase the production of energy, capacity or
ancillary services from the Power Operations;

1.1.31        
“Claims” has the meaning assigned thereto
in Section 10.1.1;

- 4 - 

 

1.1.32        
“Control” means the control by 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 or control over a
majority of the voting interests in B; and, for certainty and without
limitation, if A owns or has control over shares to which are attached 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, and the term “Controlled” has
the corresponding meaning;

1.1.33        
“Creditable Operating Entity Payment”
means the proportion of each cash payment made by an Operating Entity to any
member of the Brookfield Group, including any payment made in the form of
a dividend, distribution or other profit entitlement, which the Service
Providers determine to be comparable to the Base Management Fee that is
attributable to the Partnership Capital invested in or committed to that
Operating Entity, as applicable; provided that the aggregate amount of any
Creditable Operating Entity Payments made by such Operating Entity in any
Quarter shall not exceed an amount equal to 0.3125% of the amount of
Partnership Capital invested in such Operating Entity;

1.1.34        
“Current Agreement” has the meaning
assigned thereto in the recitals;

1.1.35        
“delegatee” has the meaning assigned
thereto in Section 2.3;

1.1.36        
“Dispute” has the meaning assigned thereto in
Section 12.1;

1.1.37        
“Euro Holdco” has the meaning assigned
thereto in the preamble;

1.1.38        
“Expenses”  has the meaning assigned
thereto in Section 7.5.2;

1.1.39        
“Fair Market Value” means, with respect
to any Unit or Security, (i) if such Unit or Security is listed on a stock
exchange or public quotation system, the Trading Price of such Unit or
Security, as applicable, or (ii) if such Unit or Security is not listed on a
stock exchange or public quotation system, the fair market value of such Unit
or Security, as applicable, determined by the Governing Body of the Managing General
Partner; provided that if the Units are listed on a stock exchange or public
quotation system, the Fair Market Value of any BRELP Unit shall be
deemed to be the Trading Price of a Unit; 

1.1.40        
“Fee Amount” means an amount equal to $20 million,
which amount shall be adjusted for inflation annually at the Inflation Factor; 

1.1.41        
“FinanceCo” has the meaning assigned
thereto in the preamble;

1.1.42        
“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 limited 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 limited partnership, the board,
committee or other body of such general 

- 5 - 

 

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, and
in the case of each of (i) through (iv) includes any committee or
other subdivision of such body and any Person to whom such body has delegated
any power or authority, including any officer and managing director;

1.1.43        
“Governing Instruments” means
(i) the memorandum of association and bye‐laws in the case of the
Managing General Partner and BRELP General Partner; (ii) the certificate
of incorporation, amalgamation or continuance, as applicable, 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/or operates, including any
conflict guidelines or protocols in place from time to time;

1.1.44        
“Governmental Authority” means any
(i) international, national, multinational, federal, provincial, state,
regional, municipal, local or other government, governmental or public
department, central bank, court, tribunal, arbitral body, commission, board,
bureau, agency or instrumentality, domestic or foreign, including ISO/RTOs,
(ii) self‐regulatory organization or stock exchange,
(iii) subdivision, agent, commission, board, or authority of any of the
foregoing, or (iv) quasi‐governmental or private body exercising any
regulatory, expropriation or taxing authority under or for the account of any
of the foregoing;

1.1.45        
“Governmental Charges” has the meaning
assigned thereto in Section 7.6;

1.1.46        
“Holding Entities” means CanHoldco,
Bermuda Holdco, BBCC, CanUSHoldco, Euro Holdco, InvestCo,
BRPPE and FinanceCo and any direct wholly‐owned Subsidiary of BRELP
created or acquired on or after the date of this Agreement, excluding, for
greater certainty, any Operating Entities;

1.1.47        
“Incentive Distribution” means any
performance‐based dividend, distribution or other profit entitlement but,
for greater certainty, does not include Service Agreement Fees or Creditable
Operating Entity Payments;

1.1.48        
“Indemnified Party” means a Person making
a claim for indemnification pursuant to Article 10; 

1.1.49        
“Indemnifying Party” means a Person
against whom a claim for indemnification is asserted pursuant to Article 10; 

1.1.50        
“Independent Committee” means a committee of the Governing Body
of the Managing General Partner made up of directors that are “independent” of
Brookfield and its Affiliates, in accordance with the Managing General
Partner’s Governing Instruments;

1.1.51        
“Inflation Factor” means, at any time, the
fraction obtained where the numerator is the Consumer Price Index for the
United States of America (all items) for the then current year and the
denominator is the Consumer Price Index for the United States of 

- 6 - 

 

America (all items) for the year immediately preceding
the then current year, with appropriate mathematical adjustment made to ensure
that both the numerator and the denominator have been prepared on the same
basis;

1.1.52        
“Interest Rate” means, for any day, the rate of
interest equal to the overnight U.S. dollar London interbank offered rate on
such day;

1.1.53        
“International Service Provider” has the
meaning assigned thereto in the preamble;

1.1.54        
“Investment Advisory Services” means any
recommendation to buy, sell, vote or take any similar action with respect to a
“Security” (which, for purposes of this definition only, shall have the meaning
assigned thereto in the Advisers Act);

1.1.55        
“ISO/RTO” means an independent
electricity system operator, a regional transmission organization, national
system operator or any other similar organization overseeing the transmission
of electricity in any jurisdiction in which the BREP Group owns assets or
operates;

1.1.56        
“Laws” means any and all applicable (i)
laws, constitutions, treaties, statutes, codes, ordinances, principles of
common and civil law and equity, rules, regulations and municipal by-laws
whether domestic, foreign or international, (ii) judicial, arbitral,
administrative, ministerial, departmental and regulatory judgments, orders,
writs, injunctions, decisions, and awards of any Governmental Authority, and
(iii) policies, practices and guidelines of any Governmental Authority which,
although not actually having the force or law, are considered by such
Governmental Authority as requiring compliance as if having the force of law,
and the term “applicable”, with respect to such Laws and in the context that
refers to one or more Persons, means such Laws that apply to such Person or
Persons or its or their business, undertaking, property or securities at the
relevant time and that emanate from a Governmental Authority having
jurisdiction over the Person or Persons or its or their business, undertaking,
property or securities;

1.1.57        
“Liabilities” has the meaning assigned
thereto in Section 10.1.1;

1.1.58        
“Licensing Agreement” means the licensing
agreement between Brookfield Global Asset Management Inc., BREP and BRELP dated
as of November 28, 2011 pursuant to which BREP and BRELP have been granted
a non‐exclusive, royalty‐free license to use the “Brookfield” name
and the Brookfield logo;

1.1.59        
“Managing General Partner” means
Brookfield Renewable Partners Limited (successor to 2288509 Ontario
Inc.), which is BREP’s general partner;

1.1.60        
“Marketing Plan” means a generation and
marketing plan and related budget for the Power Operations;

1.1.61        
“Net Base Management Fee” means the Base
Management Fee, as adjusted pursuant to Section 7.1.2;

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1.1.62        
“InvestCo” has the meaning assigned
thereto in the preamble;

1.1.63        
“Opening Total Capitalization Value”
means $8,093,033,167;

1.1.64        
“Operating Entities” means, from time to time, the Persons that
(i) directly hold the Power Operations, or (ii) indirectly hold the
Power Operations but all of the interests of which are not held by the Service
Recipients including, in the case of each of (i) and (ii), any joint
ventures, partnerships and consortium arrangements;

1.1.65        
“Operational and Other Services” means any services provided by
any member of the Brookfield Group to the Operating Entities, including
financial advisory, operations and maintenance, energy marketing, agency,
development, operating management and other services;

1.1.66        
“Operating Plan” means a plan setting out the
operating costs and budget for the Power Operations and shall include
incorporation of the Marketing Plan and scheduled maintenance outages;

1.1.67        
“Partnership Capital” means any Capital Commitment and/or (as the
context requires) any Capital Contribution;

1.1.68        
“Permit” means any consent, license, approval, registration,
permit or other authorization granted by any Governmental Authority;

1.1.69        
“Person” means any natural person,
partnership, limited partnership, limited liability partnership, joint venture,
syndicate, sole proprietorship, company or corporation (with or without share
capital), limited liability corporation, unlimited liability company, joint
stock company, 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 and pronouns have a similarly extended meaning;

1.1.70        
“Power Operations” means the operations
or developments directly or indirectly held or
acquired by members of the BREP Group from time to time; 

1.1.71        
“Principal Exchange” means the
principal stock exchange or public quotation system (determined
on the basis of aggregate trading volume for the prior four months) on which
the Units or such Security, as applicable, are listed;

1.1.72        
“Quarter” means a calendar quarter ending
on the last day of March, June, September or December;

1.1.73        
“Relationship Agreement” means the
agreement dated as of November 28, 2011 entered into among BREP, BRELP, the
Holding Entities, Brookfield and certain Affiliates of Brookfield that governs
aspects of the relationship among them;

1.1.74        
“SEC” means the U.S. Securities and
Exchange Commission;

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1.1.75        
“Security” means, with respect to each
Service Recipient, any issued and outstanding security of such Service
Recipient (other than, in the case of BREP, the Units) that is not held by any
member of the BREP Group;

1.1.76        
“Service Agreement” means any agreement
or arrangement entered into pursuant to Section 2.3 between any Service Recipient and any
member of the Service Provider Group pursuant to which Services are provided;

1.1.77        
“Service Agreement Fee” means any cash
payment, including any such payment made in the form of a dividend,
distribution or other profit entitlement, which the Service Providers determine
to be comparable to the Base Management Fee, and which is payable by a Service
Recipient to a member of the Brookfield Group;

1.1.78        
“Service Provider Group” means the
Service Providers and any member of the Brookfield Group that any Service
Provider has arranged to provide the Services to any Service Recipient;

1.1.79        
“Service Provider Indemnified Parties” 
has the meaning assigned thereto in Section 10.1.1;

1.1.80        
“Service Providers” means the Canadian
Service Provider, the Canadian Service Provider II, the International Service Provider
and the UK Service Provider;

1.1.81        
“Service Recipient” means BREP, BRELP,
the Holding Entities and, at the option of the Holding Entities, the Operating
Entities;

1.1.82        
“Services” has the meaning assigned
thereto in Section 3.1;

1.1.83        
“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;

1.1.84        
“Third Party Claim”  has the meaning
assigned thereto in Section 10.1.3;

1.1.85        
“Total Capitalization Value” means, in
any Quarter, the sum of (i) the Fair Market Value of a Unit multiplied by
the number of Units issued and outstanding on the last trading day of the
Quarter (assuming full conversion of any limited partnership interests held by
any member of the Brookfield Group in BRELP into Units), plus (ii) for each
class or series of Security, the Fair Market Value of a Security of such class
or series multiplied by the number of Securities of such class or series issued
and outstanding on the last trading day of the Quarter (calculated on a
fully-diluted basis), plus (iii) the principal amount of all debt not
captured by paragraph (ii) of this Section 1.1.85 owed by each Service Recipient
(excluding for this purpose any Operating Entity) on the last trading day of
the Quarter to any Person that is not a member of the BREP Group, which debt
has recourse to any Service Recipient, less any amount of cash held by all
Service Recipients (excluding for this purpose any Operating Entity) on such
day;

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1.1.86        
“Total Capitalization Value Increase”
means, in any Quarter, an amount equal to the difference between (i) the Total
Capitalization Value for such Quarter, and (ii) the Opening Total
Capitalization Value; provided, however, that if the difference between
(i) and (ii) in any Quarter is a negative number, the Total Capitalization
Value Increase in such Quarter shall be deemed to be nil;

1.1.87        
“Trading Price” means, in any Quarter, with respect to any
Unit or Security (other than a BRELP Unit) that is listed on a stock exchange
or public quotation system, the volume-weighted average trading price of such
Unit or Security on the Principal Exchange for the five trading days ending on the last trading day of such Quarter; provided that where the
Trading Price of any Unit or Security is calculated in any
currency other than U.S. dollars, such amount shall be converted to U.S.
dollars for purposes of this Agreement in accordance with the applicable
exchange rate, as determined by the Service Providers acting reasonably;

1.1.88        
“Transaction Fees” means fees paid or
payable by the Service Recipients, which are on market terms, with respect to
financial advisory services ordinarily carried out by investment banks in the
context of mergers and acquisitions transactions;

1.1.89        
“Units” means the limited partnership
units of BREP; and

1.1.90        
“UK Service Provider” has the meaning
assigned thereto in the preamble.

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                                     
Interpretation 

In this Agreement, unless the context
otherwise requires:

1.3.1            
words importing the singular shall include the
plural and vice versa, words importing gender shall include all genders or the
neuter, and words importing the neuter shall include all genders;

1.3.2            
the words “include”, “includes”, “including”, or
any variations thereof, when following any general term or statement, are not
to be construed as limiting the general term or statement to the specific items
or matters set forth or to similar items or matters, but rather as referring to
all other items or matters that could reasonably fall within the broadest
possible scope of the general term or statement;

1.3.3            
references to any Person include such Person’s
successors and permitted assigns;

1.3.4            
any reference to a statute, regulation, policy,
rule or instrument shall include, and shall be deemed to be a reference also
to, all amendments made to such statute, regulation, policy, rule or instrument
and to any statute, regulation, policy, rule or instrument that may 

- 10 - 

 

be passed which has the effect of supplementing or
superseding the statute, regulation, policy, rule or instrument so referred to;

1.3.5            
any reference to this Agreement or any other
agreement, document or instrument shall be construed as a reference to this
Agreement or, as the case may be, such other agreement, document or instrument
as the same may have been, or may from time to time be, amended, varied,
replaced, amended and restated, supplemented or otherwise modified;

1.3.6            
in the event that any day on which any amount is
to be determined or any action is required to be taken hereunder is not a
Business Day, then such amount shall be determined or such action shall be
required to be taken at or before the requisite time on the next succeeding day
that is a Business Day; and

1.3.7            
except where otherwise expressly provided, all
amounts in this Agreement are stated and shall be paid in U.S. currency.

1.4                                     
Actions by the Service Providers or the Service
Recipients

Unless the context requires otherwise, where
the consent of or a determination is required by any Service Provider or
Service Recipient hereunder, the parties shall be entitled to conclusively rely
upon it having been given or taken, as applicable, if, such Service Provider or
Service Recipient, as applicable, has communicated the same in writing.

1.5                                     
Generally Accepted Accounting Principles

In this Agreement, references to “generally
accepted accounting principles” mean the generally accepted accounting
principles used by BREP in preparing its financial statements from time to
time.

1.6                                     
Invalidity of Provisions

Each of the provisions contained in this
Agreement is distinct and severable and a declaration of invalidity or
unenforceability of any such provision or part thereof by a court of competent
jurisdiction will not affect the validity or enforceability of any other
provision hereof. To the extent permitted by applicable law, the parties waive
any provision of law which renders any provision of this Agreement invalid or
unenforceable in any respect. The parties will engage in good faith
negotiations to replace any provision which is declared invalid or
unenforceable with a valid and enforceable provision, the economic effect of
which comes as close as possible to that of the invalid or unenforceable
provision which it replaces.

1.7                                     
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, by any party to this Agreement 

- 11 - 

 

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 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.

1.8                                     
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. A party’s failure or delay in
exercising any right under this Agreement will not operate as a waiver of that
right.  A single or partial exercise of any right will not preclude a party
from any other or further exercise of that right or the exercise of any other
right.

1.9                                     
Governing Law

This Agreement will be governed by and
interpreted and enforced in accordance with the laws of the Province of Ontario
and the federal laws of Canada applicable therein.

Article 2

APPOINTMENT
OF THE service providers

2.1                                     
Appointment and Acceptance

2.1.1            
Subject to and in accordance with the terms,
conditions and limitations in this Agreement, the Service Recipients hereby
appoint the Service Providers to provide or arrange for other members of the
Service Provider Group to provide the Services to the Service Recipients. This
appointment will be subject to each Service Recipient’s Governing Body’s supervision
of the Service Providers and obligation to manage and control the affairs of
such Service Recipient.

2.1.2            
The Service Providers hereby accept the
appointment provided for in Section 2.1.1 and agree to act in such capacity and
to provide or arrange for other members of the Service Provider Group to
provide the Services to the Service Recipients upon the terms, conditions and
limitations in this Agreement.

2.2                                     
Other Holding Entities

The parties acknowledge that any Holding
Entity that is not a party to this Agreement will execute a counterpart of this
Agreement agreeing to be bound by the terms of this Agreement.

- 12 - 

 

2.3                                     
Subcontracting and Other Arrangements

Any Service Provider may subcontract to any
other member of the Service Provider Group or any of its other Affiliates, or
arrange for the provision of any or all of the Services to be provided by it
under this Agreement by any other member of the Service Provider Group or any
other of its Affiliates, and the Service Recipients hereby consent to any such
subcontracting or arrangement; provided that the Service Providers shall remain
responsible to the Service Recipients for any Services provided by such other
member of the Service Provider Group or Affiliate.

Article 3

SERVICES
AND POWERS OF THE service providers

3.1                                     
Services 

The Service Providers will provide or
arrange for the provision by other members of the Service Provider Group of,
and will have the exclusive power and authority to provide or arrange for the
provision by other members of the Service Provider Group of, the following
services (the “Services”) to the Service Recipients:

3.1.1            
causing or supervising the carrying out of all
day to day management, secretarial, accounting, banking, treasury,
administrative, liaison, representative, regulatory and reporting functions and
obligations;

3.1.2            
providing overall strategic advice to the
Holding Entities in relation to the Business, including advising with respect
to the expansion of the Business into new markets;

3.1.3            
establishing and maintaining or supervising the
establishment and maintenance of books and records;

3.1.4            
identifying, evaluating and recommending to the
Holding Entities acquisitions or dispositions from time to time and, where
requested to do so, assisting in negotiating the terms of such acquisitions or
dispositions;

3.1.5            
recommending and, where requested to do so,
assisting in the raising of funds whether by way of debt, equity or otherwise,
including the preparation, review or distribution of any prospectus or offering
memorandum in respect thereof and assisting with communications support in
connection therewith;

3.1.6            
causing or supervising the preparation and
implementation of any Operating Plan, Capital Expenditure Plan or Marketing
Plan;

3.1.7            
recommending to the Holding Entities suitable
candidates to serve on the Governing Bodies of the Operating Entities;

- 13 - 

 

3.1.8            
making recommendations with respect to the
exercise of any voting rights to which the Holding Entities are entitled in
respect of the Operating Entities;

3.1.9            
making recommendations with respect to the
payment of dividends by the Holding Entities or any other distributions by the
Service Recipients, including distributions by BREP to its unitholders;

3.1.10        
monitoring and/or oversight of the applicable
Service Recipient’s accountants, legal counsel and other accounting, financial
or legal advisors and technical, commercial, marketing and other independent
experts and managing litigation in which a Service Recipient is sued or
commencing litigation after consulting with, and subject to the approval of,
the relevant Governing Body;

3.1.11        
attending to all matters necessary for any
reorganization, bankruptcy proceedings, dissolution or winding up of a Service
Recipient, subject to approval by the relevant Governing Body;

3.1.12        
supervising the timely calculation and payment
of taxes payable, and the filing of all tax returns due, by each Service
Recipient;

3.1.13        
causing or supervising the preparation of the
Service Recipients’ annual consolidated financial statements, quarterly interim
financial statements and other public disclosure;

3.1.14        
making recommendations in relation to and
effecting the entry into insurance of each Service Recipient’s assets, together
with other insurances against other risks, including directors and officers
insurance, as the relevant member of the Service Provider Group and the
relevant Governing Body may from time to time agree;

3.1.15        
arranging for individuals to carry out the
functions of the principal executive, accounting and financial officers for BREP
only for purposes of applicable securities laws;

3.1.16        
providing individuals to act as senior officers
of Holding Entities as agreed from time to time, subject to the approval of the
relevant Governing Body;

3.1.17        
advising the Service Recipients regarding the
maintenance of compliance with applicable Laws and other obligations; and

3.1.18        
providing all such other services as may from
time to time be agreed with the Service Recipients that are reasonably related
to the Service Recipient’s day to day operations.

Notwithstanding any provision herein to the
contrary, all Investment Advisory Services shall (i) be provided solely to
BRELP and (ii) be provided by a Service Provider that is registered with the
SEC as an investment adviser (or through such a Service Provider by
participating affiliates thereof relying on the SEC’s Uniao de Bancos de
Brasileiros S.A. no action letter dated July 28, 1992 and the subsequent
letters related thereto).

- 14 - 

 

3.2                                     
Responsibility for Certain Services

Notwithstanding any
provision herein to the contrary:

3.2.1            
the International Service Provider and, subject
to the remainder of this section 3.2, the UK Service Provider shall be
responsible for the provision of Services to BREP and BRELP and no entity
resident in Canada shall be responsible for the provision of, nor shall it
provide, any Services to BREP and BRELP;

3.2.2            
the International Service Provider shall be
responsible for the provision of the Services described in Sections 3.1.1, 3.1.3, 3.1.5, 3.1.9-3.1.13 and 3.1.18 to BREP and BRELP and the UK Service
Provider shall not be responsible for the provision of, nor shall it provide,
any such Services; 

3.2.3            
the International Service Provider shall be
responsible for the provision of the Services to any Service Recipient that is
not (i) an Affiliate of the UK Service Provider, or (ii) acting as principal,
and the UK Service Provider shall not be responsible for the provision of, nor
shall it provide, any such Services; and

3.2.4            
any Services provided to BRELP in connection
with any securities, whether equity or debt, of CanHoldco that are held by
BRELP shall be provided by the International Service Provider or an Affiliate
of the International Service Provider that is not resident in Canada with whom
the International Service Provider has made arrangements for the provision of
such Services or to whom the International Service Provider has subcontracted
the provision of such Services;

provided, however, that nothing in this
Section 3.2 shall restrict the
provision of Investment Advisory Services to BRELP in accordance with Section 3.1.

3.3                                     
Supervision of Service Providers’ Activities

The Service Providers shall, at all times,
be subject to the supervision of the relevant Service Recipient’s Governing
Body and shall only provide or arrange for the provision of such Services as
such Governing Body may request from time to time and provided that the
relevant Governing Body shall remain responsible for all investment and
divestment decisions made by the Service Recipient.

3.4                                     
Restrictions on the Service Providers

3.4.1            
The Service Providers shall, and shall cause any other member of the
Service Provider Group to, refrain from taking any action that is not in
compliance with or would violate any Laws or that otherwise would not be
permitted by the Governing Instruments of the Service Recipients. If any
Service Provider or any member of the Service Provider Group is instructed to
take any action that is not in such compliance by a Service Recipient’s
Governing Body, such person will promptly notify such Governing Body of its
judgment that such action would not comply with or violate any such Laws or
otherwise would not be permitted by such Governing Instrument.

- 15 - 

 

3.4.2            
In performing its duties under this Agreement, each member of the
Service Provider Group shall be entitled to rely in good faith on qualified
experts, professionals and other agents (including on accountants, appraisers,
consultants, legal counsel and other, professional advisors) and shall be
permitted to rely in good faith upon the direction of a Service Recipient’s
Governing Body to evidence any approvals or authorizations that are required
under this Agreement. All references in this Agreement to the
Service Recipients or Governing Body for the purposes of instructions,
approvals and requests to the Service Providers will refer to the Governing
Body.

3.5                                     
Errors and Omissions Insurance

Each of the Service Providers shall, and shall cause any
other member of the Service Provider Group to, at all times during the term of
this Agreement maintain “errors and omissions” insurance coverage and other
insurance coverage which is customarily carried by Persons performing functions
that are similar to those performed by the members of the Service Provider
Group under this Agreement and in an amount which is comparable to that which
is customarily maintained by such other Persons.

Article 4

RELATIONSHIP
BETWEEN THE Service providerS AND THE SERVICE RECIPIENTS

4.1                                     
Other Activities

Subject to the terms of the Relationship Agreement, no member
of the Service Provider Group (and no Affiliate, director, officer, member,
partner, shareholder or employee of any member of the Service Provider Group)
shall be prohibited from engaging in other business activities or sponsoring,
or providing services to, third parties that compete directly or indirectly
with the Service Recipients.

4.2                                     
Exclusivity 

Except as expressly provided for herein, the
Service Recipients shall not, during the term of this Agreement, engage any other
Person to provide any services comparable to the Services without the
prior written consent of the Service Providers, which may be withheld in the
absolute discretion of the Service Providers.

4.3                                     
Independent Contractor, No Partnership or Joint
Venture

The parties acknowledge that the Service
Providers are providing or arranging for the provision of the Services
hereunder as independent contractors and that the Service Recipients and the
Service Providers are not partners or joint venturers with or agents of each
other, and nothing herein will be construed so as to make them partners, joint
venturers or agents or impose any liability as such on any of them as a result
of this Agreement; provided however that nothing herein will be construed so as
to prohibit the Service Recipients and the Service 

- 16 - 

 

Providers
from embarking upon an investment together as partners, joint venturers or in
any other manner whatsoever.

Article 5

MANAGEMENT
AND EMPLOYEES

5.1                                     
Management and Employees

5.1.1            
The Service Providers shall arrange, or shall arrange
for another member of the Service Provider Group to arrange, for such qualified
personnel and support staff to be available to carry out the Services. Such
personnel and support staff shall devote such of their time to the provision of
the Services to the Service Recipients as the relevant member of the Service
Provider Group reasonably deems necessary and appropriate in order to fulfill
its obligations hereunder. Such personnel and support staff need not have as
their primary responsibility the provision of the Services to the Service
Recipients or be dedicated exclusively to the provision of the Services to the
Service Recipients.

5.1.2            
Each of the Service Recipients shall do all
things reasonably necessary on its part as requested by any member of the Service
Provider Group consistent with the terms of this Agreement to enable the
members of the Service Provider Group to fulfill their obligations, covenants
and responsibilities and to exercise their rights pursuant to this Agreement,
including making available to the Service Provider Group, and granting the
Service Provider Group access to, the employees and contractors of the Service
Recipients as any member of the Service Provider Group may from time to time
request.

5.1.3            
The Service Providers covenant and agree to
exercise the power and discharge the duties conferred under this Agreement
honestly and in good faith, and shall exercise the degree of care, diligence
and skill that a reasonably prudent person would exercise in comparable
circumstances, subject to, and after taking into account, the terms and
conditions of the Relationship Agreement.

Article 6

INFORMATION
and records

6.1                                     
Books and Records

6.1.1            
The Service Providers shall, or shall cause any other member of the
Service Provider Group to, as applicable, maintain proper books, records and
documents in which complete, true and correct entries, in conformity in all
material respects with generally accepted accounting principles and all
requirements of applicable Laws, will be made.

6.1.2            
The Service Recipients shall maintain proper books, records and
documents in which complete, true and correct entries, in conformity in all
material respects with generally accepted accounting principles and all
requirements of applicable Laws, will be made.

- 17 - 

 

6.2                                     
Examination of Records by the Service Recipients

Upon reasonable prior notice by the Service Recipients to the
relevant member of the Service Provider Group, the relevant member of the
Service Provider Group will make available to the Service Recipients and their
authorized representatives, for examination during normal business hours on any
Business Day, all books, records and documents required to be maintained under
Section 6.1.1.  In addition, the Service Provider Group will make
available to the Service Recipients or their authorized representatives such
financial and operating data in respect of the performance of the Services
under this Agreement as may be in existence and as the Service Recipients or
their authorized representatives will from time to time reasonably request,
including for the purposes of conducting any audit in respect of expenses of
the Service Recipients or other matters necessary or advisable to be audited in
order to conduct an audit of the financial affairs of the Service Recipients.
Any examination of records will be conducted in a manner which will not unduly
interfere with the conduct of the Service Recipients’ activities or of the
Service Provider Group’s business in the ordinary course.

6.3                                     
Access to Information by Service Provider Group

6.3.1            
The Service Recipients shall:

6.3.1.1           
grant, or cause to be granted, to the Service Provider Group full access
to all documentation and information, including all of the books, records, and
documents required to be maintained under Section 6.1.2, necessary in order for the Service Provider Group to perform its obligations, covenants and
responsibilities pursuant to the terms hereof and to enable the Service
Provider Group to provide the Services; and

6.3.1.2           
provide, or cause to be provided, all documentation and information as
may be reasonably requested by any member of the Service Provider Group, and
promptly notify the appropriate member of the Service Provider Group of any
material facts or information of which the Service Recipients is aware,
including any known, pending or threatened suits, actions, claims, proceedings
or orders by or against any member of the BREP Group before any Governmental
Authority, that may affect the performance of the obligations, covenants or
responsibilities of the Service Provider Group pursuant to this Agreement,
including maintenance of proper financial records.

6.4                                     
Additional Information

The parties acknowledge and agree that conducting the
activities and providing the Services contemplated herein may have the
incidental effect of providing additional information which may be utilized
with respect to, or may augment the value of, business interests and related
assets in which any of member of the Service Provider Group or any of its
Affiliates has an interest and that, subject to compliance with this Agreement,
none of the members of the Service Provider Group or any of their respective
Affiliates will be liable to account to the Service Recipients with respect to
such activities or results; provided, however, that the relevant member of the
Service Provider Group will not (and will cause its Affiliates not 

- 18 - 

 

to), in making any use of such additional information, do
so in any manner that the relevant member of the Service Provider Group or its
Affiliates knows, or ought reasonably to know, would cause or result in a
breach of any confidentiality provision of agreements to which any Service
Recipient is a party or is bound.

Article 7

FEES AND EXPENSES

7.1                                     
Net Base Management Fee and Base Management Fee
Adjustment

7.1.1            
BRELP hereby agrees to pay as provided by this Article 7, during the term of this
Agreement, the Net Base Management Fee, quarterly in arrears.

7.1.2            
The amount of the Net Base Management Fee
payable hereunder for any Quarter will be equal to the amount of the Base Management
Fee reduced (the “Base Management Fee Adjustment”) by the following
amounts, to the extent that such amounts have not previously reduced the amount
of the Base Management Fee as a result of the application of the Base
Management Fee Adjustment in a previous Quarter:

7.1.2.1           
any Service Agreement Fees paid in or payable
for that Quarter; and

7.1.2.2           
any Creditable Operating Entity Payments paid in
or payable for that Quarter.

7.1.3            
For greater certainty, the Base Management Fee
will not be reduced by operation of this Agreement by the amount of any
(i) Incentive Distribution paid or payable by any Service Recipient or
Operating Entity to any member of the Brookfield Group; (ii) any fees for
Operational and Other Services that are paid or payable by any Operating Entity
to any member of the Brookfield Group; or (iii) any Transaction Fees.

7.2                                     
Maximum Fees Payable by Service Recipients

In no event shall BRELP, or any of the
Service Recipients, be obligated under this Agreement and the Service
Agreements to pay, in the aggregate in respect of any Quarter, any amount
exceeding the Base Management Fee payable for that Quarter, after giving effect
to any reductions for Creditable Operating Entity Payments contemplated by
Section 7.1.2. 

7.3                                     
Currency 

For the purposes of Section 7.1.2 hereof, if a payment giving rise to a
Base Management Fee Adjustment was denominated in a currency other than the
U.S. dollar, the amount of such payment will be deemed to be equal to the
amount in U.S. dollars into which such payment could have been converted
on the last day of the relevant Quarter using the exchange rate between such
other currency and the U.S. dollars published in the “Exchange Rates”
table of the Wall Street Journal on such date or, in the event that the
“Exchange Rates” table of the Wall Street Journal was not published on such
date, the closest date immediately 

- 19 - 

 

preceding the date
of such payment on which the “Exchange Rates” table of the Wall Street Journal
was published.

7.4                                     
Computation and Payment of Net Base Management
Fee

7.4.1            
The Service Providers or another member of the
Service Provider Group will compute each instalment and allocation of the Net
Base Management Fee (including computation of the Base Management Fee Adjustment)
as soon as practicable following the end of the Quarter with respect to which
such instalment is payable, but in any event no later than five Business days
following the end of such Quarter.  A copy of the computations and allocations
made will thereafter, for informational purposes only, promptly be delivered to
each Service Recipient by the relevant member of the Service Provider Group
upon request. Payment of the Net Base Management Fee
for any Quarter (whether in cash, Units, BRELP Units or any combination of the
forgoing) shall be due and payable promptly after the 45th day following the
end of such Quarter.  For greater certainty, any Dispute relating to the
computation of the Net Base Management Fee shall be resolved in accordance with
Article 12.

7.4.2            
For any Quarter in which the Governing Body of
the Managing General Partner determines that the BREP Group has insufficient
cash (taking into account any availability under any hydrology reserve
facility) to pay the Net Base Management Fee as well as the next regular
distribution on Units, BRELP may elect to pay all or a portion of the
Net Base Management Fee payable in such Quarter in Units or BRELP Units,
provided that (i) any such election shall be made within 45 days following the
end of the applicable Quarter, (ii) no such payment shall be made in Units
without the written consent of BREP, and (iii) no such payment shall be made in
BRELP Units without the written consent of the Service Providers.  If BRELP elects
to pay all or a portion of the Net Base Management Fee in Units or BRELP Units,
BREP or BRELP, as applicable, shall issue, and the applicable Service Provider
hereby agrees to acquire, Units or BRELP Units, as applicable, equal to the
portion of the Net Base Management Fee elected to be paid in Units or BRELP
Units divided by the Fair Market Value of a Unit on the date BRELP makes such
election (provided that no fractional Units or BRELP Units shall be issued, and
such number shall be rounded down to the nearest whole number with the
remainder payable to the Service Providers in cash).  In such case, BREP or
BRELP, as applicable, is directed to apply such payment against the
subscription price for such Units or BRELP Units, as applicable. 

7.4.3            
If BRELP elects to pay all or any portion of the
Net Base Management Fee for any Quarter in Units or BRELP Units, the Service
Recipients shall take or cause to be taken all appropriate action to issue such
Units or BRELP Units, as applicable, including any action required to ensure
that such Units or BRELP Units, as applicable, are issued in accordance with
applicable Laws and listed on any applicable stock exchanges and public
quotation systems.

7.5                                     
Expenses 

7.5.1            
The Service Providers acknowledge and agree that
the Service Recipients will not be required to reimburse any member of the
Service Provider Group for the salaries and 

- 20 - 

 

other remuneration of the management, personnel or support staff who
provide the Services to such Service Recipients or overhead for such persons.

7.5.2            
Each of the Service Recipients shall reimburse
the relevant member of the Service Provider Group for all out‐of‐pocket
fees, costs and expenses, including those of any third party (other than those contemplated
by Section 7.5.1) (“Expenses”), incurred by the
relevant member of the Service Provider Group in connection with the provision
of the Services. Such Expenses are expected to include, among other things: 

7.5.2.1           
fees, costs and expenses relating to any debt or
equity financing;

7.5.2.2           
fees, costs and expenses incurred in connection
with the general administration of any Service Recipient;

7.5.2.3           
taxes, licenses and other statutory fees or
penalties levied against or in respect of a Service Recipient in respect of
Services;

7.5.2.4           
amounts paid by the relevant member of the
Service Provider Group under indemnification, contribution or similar
arrangements;

7.5.2.5           
fees, costs and expenses relating to financial
reporting, regulatory filings and investor relations and the fees, costs and
expenses of agents, advisors and other Persons who provide Services to a
Service Recipient;

7.5.2.6           
any other fees, costs and expenses incurred by
the relevant member of the Service Provider Group that are reasonably necessary
for the performance by the relevant member of the Service Provider Group of its
duties and functions under this Agreement or any Service Agreement; and

7.5.2.7           
fees, expenses and costs incurred in connection
with the investigation, acquisition, holding or disposal of any asset or
business that is made or that is proposed to be made.

7.6                                     
Governmental Charges

Without limiting Section 7.5, the Service Recipients shall pay or reimburse the relevant member of the Service Provider Group for all
sales taxes, use taxes, value added taxes, goods and services taxes, harmonized
sales taxes, withholding taxes or other similar taxes, customs duties or other
governmental charges (“Governmental Charges”) that are levied or imposed
by any Governmental Authority by reason of this Agreement, any Service
Agreement or any other agreement contemplated by this Agreement, or the fees or
other amounts payable hereunder or thereunder, except for any income taxes,
corporation taxes, capital taxes or other similar taxes payable by any member
of the Service Provider Group which are personal to such member of the Service
Provider Group. Any failure by the Service Provider Group to collect monies on
account of these Governmental Charges shall not constitute a waiver of the
right to do so. 

- 21 - 

 

7.7                                     
Computation and Payment of Expenses and
Governmental Charges

From time to time the Service Providers shall, or shall cause
the other members of the Service Provider Group to, prepare statements (each an
“Expense Statement”) documenting the Expenses and Governmental Charges
to be reimbursed pursuant to this Article 7 and shall deliver such
statements to the relevant Service Recipient. All Expenses and Governmental
Charges reimbursable pursuant to this Article 7 shall be reimbursed by the
relevant Service Recipient no later than the date which is 30 days after
receipt of an Expense Statement. The provisions of this Section 7.7 shall survive the termination of this Agreement.

Article 8

Brookfield’s
Obligation

Brookfield’s sole obligation pursuant to
this Agreement shall be to cause the members of the Service Provider Group to
provide Services to the Service Recipients in accordance with the terms of this
Agreement.

Article 9

REPRESENTATIONS
and WARRANTIES

OF THE Service providerS AND THE SERVICE RECIPIENTS

9.1                                     
Representations and Warranties of the Service
Providers

Each of the Service Providers hereby
represents and warrants to the Service Recipients that:

9.1.1            
it is validly organized and existing under the
Laws governing its formation and existence;

9.1.2            
it, or another member of the Service Provider
Group, holds such Permits necessary to perform its obligations hereunder and is
not aware of any reason why such Permits might be cancelled;

9.1.3            
it has the power, capacity and authority to
enter into this Agreement and to perform its obligations hereunder;

9.1.4            
it has taken all necessary action to authorize
the execution, delivery and performance of this Agreement;

9.1.5            
the execution and delivery of this Agreement by
it and the performance by it of its obligations hereunder do not and will not
contravene, breach or result in any default under its Governing Instruments, or
under any mortgage, lease, agreement or other legally binding instrument,
Permit or applicable Law to which it is a party or by which it or any of its
properties or assets may be bound;

- 22 - 

 

9.1.6            
no authorization, consent or approval, or filing
with or notice to any Person is required in connection with the execution,
delivery or performance by it of this Agreement; and

9.1.7            
this Agreement constitutes a valid and legally
binding obligation of it enforceable against it in accordance with its terms,
subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and other laws of general application limiting the
enforcement of creditors’ rights and remedies generally and (ii) general
principles of equity, including standards of materiality, good faith, fair
dealing and reasonableness, equitable defenses and limits as to the
availability of equitable remedies, whether such principles are considered in a
proceeding at law or in equity.

9.2                                     
Representations and Warranties of the Service
Recipients

Each of the Service Recipients hereby
represents and warrants to the Service Providers that:

9.2.1            
it (and, if applicable, its general partner) is
validly organized and existing under the Laws governing its formation and
existence;

9.2.2            
it, or the relevant Operating Entity, holds such
Permits necessary to own and operate the Power Operations that it directly or
indirectly owns or operates from time to time and is not aware of any reason
why such Permits might be cancelled;

9.2.3            
it (or, as applicable, its general partner on
its behalf) has the power, capacity and authority to enter into this Agreement
and to perform its duties and obligations hereunder;

9.2.4            
it (or, as applicable, its general partner) has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement;

9.2.5            
the execution and delivery of this Agreement by
it (or, as applicable, its general partner on its behalf) and the performance
by it of its obligations hereunder do not and will not contravene, breach or result
in any default under its Governing Instruments (or, if applicable, the
Governing Instruments of its general partner), or under any mortgage, lease,
agreement or other legally binding instrument, Permit or applicable Law to
which it is a party or by which any of its properties or assets may be bound;

9.2.6            
no authorization, consent or approval, or filing
with or notice to any Person is required in connection with the execution,
delivery or performance by it (or, as applicable, its general partner on its
behalf) of this Agreement; and

9.2.7            
this Agreement constitutes a valid and legally
binding obligation of it enforceable against it in accordance with its terms,
subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and other laws of general application limiting the
enforcement of creditors’ rights and remedies generally; and (ii) general
principles of equity, including standards of materiality, good faith, fair
dealing and reasonableness, equitable defenses and limits as to the
availability of equitable remedies, whether such principles are considered in a
proceeding at law or in equity.

- 23 - 

 

Article 10

LIABILITY AND
INDEMNIFICATION

10.1                                 
Indemnity 

10.1.1        
The Service Recipients hereby jointly and
severally agree, to the fullest extent permitted by applicable Laws, to
indemnify and hold harmless each member of the Service Provider Group, any of
its Affiliates (other than any member of the BREP Group) and any directors,
officers, agents, subcontractors, delegatees, members, partners, shareholders,
employees and other representatives of each of the foregoing (each, a “Service
Provider Indemnified Party”) from and against any claims, liabilities,
losses, damages, costs or expenses (including legal fees) (“Liabilities”)
incurred by them or threatened in connection with any and all actions, suits,
investigations, proceedings or claims of any kind whatsoever, whether arising
under statute or action of a Governmental Authority or otherwise or in
connection with the business, investments and activities of the Service
Recipients or in respect of or arising from this Agreement or the Services
provided hereunder (“Claims”), including any Claims arising on account
of the Governmental Charges contemplated by Section 7.6; provided that no Service Provider
Indemnified Party shall be so indemnified with respect to any Claim to the
extent that such Claim is finally determined by a final and non‐appealable
judgment entered by a court of competent jurisdiction, or pursuant to a
settlement agreement agreed to by such Service Provider Indemnified Party, to
have resulted from such Service Provider Indemnified Party’s bad faith, fraud,
wilful misconduct, gross negligence or, in the case of a criminal matter,
conduct undertaken with knowledge that the conduct was unlawful.

10.1.2        
The Service Providers hereby jointly and
severally agree, to the fullest extent permitted by applicable Laws, to
indemnify and hold harmless each of the Service Recipients, any of its
Affiliates (other than any member of the Service Provider Group), and any
directors, officers, agents, members, partners, shareholders, employees and
other representatives of each of the foregoing (each, a “BREP Indemnified Party”)
from and against any Liabilities resulting from any member of the Service
Provider Group’s bad faith, fraud, wilful misconduct, gross negligence and, in
the case of a criminal matter, conduct undertaken with the knowledge that the
conduct was unlawful.

10.1.3        
If any action, suit, investigation, proceeding
or claim is made or brought by any third party with respect to which an
Indemnifying Party is obligated to provide indemnification under this Agreement
(a “Third Party Claim”), the Indemnified Party will have the right to
employ its own counsel in connection therewith, and the reasonable fees and
expenses of such counsel, as well as the reasonable costs (excluding an amount
reimbursed to such Indemnified Party for the time spent in connection
therewith) and out‐of‐pocket expenses incurred in connection
therewith will be paid by the Indemnifying Party in such case, as incurred but
subject to recoupment by the Indemnifying Party if ultimately it is not liable
to pay indemnification hereunder.

10.1.4        
The Indemnified Party and the Indemnifying Party
agree that, promptly after the receipt of notice of the commencement of any
Third Party Claim, the Indemnified Party in 

- 24 - 

 

such case
will notify the Indemnifying Party in writing of the commencement of such Third
Party Claim (provided that any accidental failure to provide any such notice
will not prejudice the right of any such Indemnified Party hereunder) and,
throughout the course of such Third Party Claim, such Indemnified Party will
use its best efforts to provide copies of all relevant documentation to such
Indemnifying Party and will keep the Indemnifying Party apprised of the
progress thereof and will discuss with the Indemnifying Party all significant
actions proposed.

10.1.5        
The parties hereto expressly acknowledge and
agree that the right to indemnity provided in this Section 10.1 shall be in addition to and not in
derogation of any other liability which the Indemnifying Party in any
particular case may have or of any other right to indemnity or contribution
which any Indemnified Party may have by statute or otherwise at law.

10.1.6        
The indemnity provided in this Section 10.1 shall survive the completion of Services
rendered under, or any termination or purported termination of, this Agreement.

10.2                                 
Limitation of Liability

10.2.1        
The Service Providers assume no responsibility
under this Agreement other than to render the Services in good faith and will
not be responsible for any action of a Service Recipient’s Governing Body in
following or declining to follow any advice or recommendations of the relevant
member of the Service Provider Group, including as set forth in Section 3.3 hereof.

10.2.2        
The Service Recipients hereby agree that no
Service Provider Indemnified Party will be liable to a Service Recipient, a
Service Recipient’s Governing Body (including, for greater certainty, a
director or officer of a Service Recipient or another individual with similar
function or capacity) or any security holder or partner of a Service Recipient for
any Liabilities that may occur as a result of any acts or omissions by the
Service Provider Indemnified Party pursuant to or in accordance with this
Agreement, except to the extent that such Liabilities are finally determined by
a final and non-appealable judgment entered by a court of competent
jurisdiction to have resulted from the Service Provider Indemnified Party’s bad
faith, fraud, wilful misconduct, gross negligence, or in the case of a criminal
matter, conduct undertaken with knowledge that the conduct was unlawful.

10.2.3        
The maximum amount of the aggregate liability of
the Service Provider Indemnified Parties pursuant to this Agreement will be
equal to the amounts previously paid in respect of Services pursuant to this
Agreement or any agreement or arrangement contemplated by this Agreement in the
two most recent calendar years by the Service Recipients pursuant to Article 7. 

10.2.4        
For the avoidance of doubt, the provisions of
this Section 10.2 shall survive the completion of the
Services rendered under, or any termination or purported termination of, this
Agreement.

- 25 - 

 

10.3                                 
Benefit to all Indemnified Parties

10.3.1        
The Service Recipients hereby constitute the Service Providers as
trustees for each of the Service Provider Indemnified Parties of the covenants
of the Service Recipients under this Article 10 with respect to such
Service Provider Indemnified Parties and the Service Providers hereby accept
such trust and agree to hold and enforce such covenants on behalf of the
Indemnified Parties.

10.3.2        
The Service Providers hereby constitute the Service Recipients as
trustees for each of the BREP Indemnified Parties of the covenants of the
Service Providers under this Article 10 with respect to such BREP
Indemnified Parties and the Service Recipients hereby accept such trust and
agree to hold and enforce such covenants on behalf of the BREP Indemnified
Parties.

10.4                                 
No Waiver

U.S. federal and state securities laws
impose liabilities under certain circumstances on Persons who act in good
faith; nothing herein shall constitute a waiver or limitation of any rights
which the Service Recipients may have, if any, under any applicable U.S.
federal and state securities laws.

Article 11

TERM AND TERMINATION

11.1                                 
Term 

This Agreement shall continue in full force
and effect, in perpetuity, until terminated in accordance with
Section 11.2 or Section 11.3.

11.2                                 
Termination by the Service Recipients

11.2.1        
The Service Recipients may, subject to Section 11.2.2, terminate this Agreement effective
upon written notice of termination to the Service Providers without payment of
any termination fee if:

11.2.1.1       
any of the Service Providers defaults in the performance or
observance of any material term, condition or agreement contained in this
Agreement in a manner that results in material harm to the Service Recipients
and such default continues for a period of 60 days after written notice
thereof specifying such default and requesting that the same be remedied in
such 60‐day period; provided, however, that if the fact, circumstance or
condition that is the subject of such obligation cannot reasonably be remedied
within such 60‐day period and if, within such period, the Service
Providers provide reasonable evidence to the Service Recipients that they have
commenced, and thereafter proceed with all due diligence, to remedy the fact,
circumstance or condition that is the subject of such obligation, such period
shall be extended for a reasonable period satisfactory to 

- 26 - 

 

the
Service Recipients, acting reasonably, for the Service Providers to remedy the
same;

11.2.1.2       
any of the Service Providers engages in any act of fraud,
misappropriation of funds or embezzlement against any Service Recipient that
results in material harm to the Service Recipients;

11.2.1.3       
there is an event of any gross negligence on the part of any of
the Service Providers in the performance of its obligations under this
Agreement and such gross negligence results in material harm to the Service
Recipients; or

11.2.1.4       
each of the Service Providers makes a general assignment for the benefit
of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt,
consents to the filing of a petition of bankruptcy against it, is adjudicated
by a court of competent jurisdiction as being bankrupt or insolvent, seeks
reorganization under any bankruptcy law or consents to the filing of a petition
seeking such reorganization or has a decree entered against it by a court of
competent jurisdiction appointing a receiver liquidator, trustee or assignee in
bankruptcy or in insolvency.

11.2.2        
This Agreement may only be terminated pursuant to Section 11.2.1 by the Managing General Partner on behalf of BREP with the prior unanimous
approval of the members of the Independent Committee.

11.2.3        
Each of the Service Recipients hereby agrees and confirms that this
Agreement may not be terminated due solely to the poor performance or
underperformance of any of the Power Operations or the Business or any
investment made by any member of the BREP Group on the recommendation of any
member of the Service Provider Group.

11.3                                 
Termination by the Service Providers

11.3.1        
The Service Providers may terminate this Agreement effective upon
written notice of termination to the Service Recipients without payment of any
termination fee if:

11.3.1.1       
any Service Recipient defaults in the performance or observance of any
material term, condition or agreement contained in this Agreement in a manner
that results in material harm to the Service Providers and such default
continues for a period of 60 days after written notice thereof specifying
such default and requesting that the same be remedied in such 60‐day
period; provided, however, that if the fact, circumstance or condition that is
the subject of such obligation cannot reasonably be remedied within such 60‐day
period and if, within such period, the Service Recipients provide reasonable
evidence to the Service Providers that they have commenced, and thereafter
proceed with all due diligence, to remedy the fact, circumstance or condition
that is the subject of such obligation, such period shall be extended for a
reasonable period satisfactory to the Service Providers, acting reasonably, for
the Service Recipients to remedy the same; or

- 27 - 

 

11.3.1.2       
any Service Recipient makes a general assignment for the benefit of its
creditors, institutes proceedings to be adjudicated voluntarily bankrupt,
consents to the filing of a petition of bankruptcy against it, is adjudicated
by a court of competent jurisdiction as being bankrupt or insolvent, seeks
reorganization under any bankruptcy law or consents to the filing of a petition
seeking such reorganization or has a decree entered against it by a court of
competent jurisdiction appointing a receiver liquidator, trustee or assignee in
bankruptcy or in insolvency.

11.4                                 
Survival Upon Termination

If this Agreement is terminated pursuant to this Article 11, such termination will be without any further liability or obligation
of any party hereto, except as provided in Section 6.4, Section 11.5, Section 11.6 and Section 13.3.

11.5                                 
Action Upon Termination

11.5.1        
From and after the effective date of the termination of this Agreement,
the Service Providers shall not be entitled to receive the Base Management Fee
for further Services under this Agreement, but will be paid all compensation
accruing to and including the date of termination (including such day).

11.5.2        
Upon any termination of this Agreement, the Service Providers shall
forthwith:

11.5.2.1       
after deducting any accrued compensation and reimbursements for any
Expenses to which it is then entitled, pay over to the Service Recipients all
money collected and held for the account of the Service Recipients pursuant to
this Agreement;

11.5.2.2       
deliver to the Service Recipients’ Governing Bodies a full accounting,
including a statement showing all payments collected by it and a statement of
all money held by it, covering the period following the date of the last
accounting furnished to the Governing Bodies with respect to the Service
Recipients; and

11.5.2.3       
deliver to the Service Recipients’ Governing Bodies all property and
documents of the Service Recipients then in the custody of the Service Provider
Group.

11.6                                 
Release of Money or other Property Upon Written Request

The Service Providers hereby agree that any money or other
property of the Service Recipients or their Subsidiaries held by the Service
Provider Group under this Agreement shall be held by the relevant member of the
Service Provider Group as custodian for such Person, and the relevant member of
the Service Provider Group’s records shall be appropriately marked clearly to reflect
the ownership of such money or other property by such Person. Upon the receipt
by the relevant member of the Service Provider Group of a written request
signed by a duly authorized representative of a Service Recipient requesting
the relevant member of the Service Provider Group to release to the Service
Recipient any money or other 

- 28 - 

 

property then held by the
relevant member of the Service Provider Group for the account of such Service
Recipient under this Agreement, the relevant member of the Service Provider
Group shall release such money or other property to the Service Recipient
within a reasonable period of time, but in no event later than 60 days
following such request. The relevant member of the Service Provider Group shall
not be liable to any Service Recipient, a Service Recipient’s Governing Body or
any other Person for any acts performed or omissions to act by a Service
Recipient in connection with the money or other property released to the
Service Recipient in accordance with the second sentence of this Section 11.6. Each Service Recipient shall indemnify and hold harmless the relevant
member of the Service Provider Group, any of its Affiliates (other than any
member of the BREP Group) and any directors, officers, agents, subcontractors,
delegatees, members, partners, shareholders and employees and other
representatives of each of the foregoing from and against any and all
Liabilities which arise in connection with the relevant member of the Service
Provider Group’s release of such money or other property to the Service
Recipient in accordance with the terms of this Section 11.6. Indemnification pursuant to this provision shall be in addition to any right of such Persons
to indemnification under Section 10.1 hereof. For the avoidance of doubt,
the provisions of this Section 11.6 shall survive termination of this
Agreement. The Service Recipients hereby constitute the Service Providers as
trustees for each Person entitled to indemnification pursuant to this
Section 11.6 of the covenants of the Service Recipients under this
Section 11.6 with respect to such Persons and the Service Providers hereby
accept such trust and agree to hold and enforce such covenants on behalf of
such Persons.

Article 12

Arbitration

12.1                                 
Dispute 

Any dispute or disagreement of any kind or nature between the
parties arising out of or in connection with this Agreement (a “Dispute”)
shall be resolved in accordance with this Article 12, to the extent permitted by applicable Laws.

12.2                                 
Arbitration 

12.2.1        
Any Dispute shall be submitted to arbitration (the “Arbitration”)
by one Arbitrator pursuant to the procedure set forth in this Section 12.2 and pursuant to the arbitration rules set forth in the Arbitration Act, 1991
(Ontario) (the “Act”).  If the provisions of this Section 12.2 are inconsistent with the provisions of the Act and to the extent of such
inconsistency, the provisions of this Section 12.2 shall prevail in any Arbitration.

12.2.2        
Any party may make a demand for Arbitration by sending a notice in
writing to another party, setting forth the nature of the Dispute, the amount
involved and the name of the Arbitrator it proposes to be appointed.  The
demand for Arbitration shall be made no later than thirty (30) days after the
event giving rise to the Dispute.

- 29 - 

 

12.2.3        
Within thirty (30) days after any demand for Arbitration under
Section 12.2.2, the parties shall have agreed on the designation of the
Arbitrator or should the parties fail to do so, the Arbitrator may be appointed
by a judge of the Ontario Superior Court of Justice upon motion of either party
(in either case, the “Arbitrator”). 

12.2.4        
The Arbitration hearings shall be held in a location in Ontario
specified in the demand for Arbitration and shall commence no later than thirty
(30) days after the determination of the Arbitrator under Section 12.2.3.  The decision of the Arbitrator shall be made not later than sixty (60) days
after its appointment.  The decision of the Arbitrator, shall be final without
appeal and binding on the parties.

12.2.5        
Each party shall bear the costs and expenses of all lawyers,
consultants, advisors, witnesses and employees retained by it in any
Arbitration.  The expenses of the Arbitrator shall be paid equally by the
parties unless the Arbitrator otherwise provides in its award.

12.3                                 
Continued Performance

During the conduct of Dispute resolution procedures pursuant
to this Article 12, the parties shall continue to perform their respective
obligations under this Agreement and neither party shall exercise any other
remedies to resolve a Dispute.

Article 13

GENERAL PROVISIONS

13.1                                 
Limited Liability of Limited Partners of BREP
and BRELP

13.1.1        
Each of the parties acknowledges that (i) each
of BREP and BRELP is a limited partnership formed under the laws of Bermuda, a
limited partner of which is liable for any liabilities or losses of the
relevant partnership only to the extent of the amount that such limited partner
has contributed, or agreed to contribute, to the capital of the relevant
partnership and such limited partner’s pro rata share of any undistributed
income; (ii) BRELP General Partner is the sole general partner of
BRELP GP LP; BRELP GP LP is the sole general partner of BRELP;
and the Managing General Partner is the sole general partner of BREP; and (iii)
the only Person with whom such party has had dealings on behalf of BRELP is
BRELP GP LP; the only Person with whom such party has had dealings on behalf of
the BRELP GP LP is BRELP General Partner; and the only Person with whom such
party has had dealings on behalf of BREP is the Managing General Partner.

13.2                                 
Assignment 

13.2.1        
This Agreement shall not be assigned by the
Service Providers without the prior written consent of BREP, except
(i) pursuant to Section 2.3, or (ii) in the case of assignment
by any of the Service Providers to an Affiliate or a Person that is, in the
reasonable and good faith determination of the Independent Committee, an
experienced and reputable manager, in which case the Affiliate or assignee
shall be bound under this Agreement and by the terms of the assignment in the
same manner as such Service 

- 30 - 

 

Provider is bound under
this Agreement. In addition, provided that the Service Providers provide prior
written notice to the Service Recipients for informational purposes only,
nothing contained in this Agreement shall preclude any pledge, hypothecation or
other transfer or assignment of any of the Service Providers’ rights under this
Agreement, including any amounts payable to the Service Providers under this
Agreement, to a bona fide  lender as security.

13.2.2        
Notwithstanding Section 13.2.1, this Agreement will not be assigned
(within the meaning of the Advisers Act) by any Service Provider that is
registered with the SEC as an investment adviser without the prior written
consent of BREP.

13.2.3        
This Agreement shall not be assigned by any of
the Service Recipients without the prior written consent of the Service
Providers, except in the case of assignment by any such Service Recipient to a
Person that is its successor by merger, consolidation or purchase of assets, in
which case the successor shall be bound under this Agreement and by the terms
of the assignment in the same manner as such Service Recipient is bound under
this Agreement.

13.2.4        
Any purported assignment of this Agreement in violation
of this Article 13 shall
be null and void.

13.3                                 
Failure to Pay When Due

Any amount payable by any Service Recipient
to any member of the Service Provider Group hereunder which is not remitted
when so due will remain due (whether on demand or otherwise) and interest will
accrue on such overdue amounts (both before and after judgment) at a rate per
annum equal to the Interest Rate.

13.4                                 
Enurement 

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

13.5                                 
Notices 

Any notice or other communication required
or permitted to be given hereunder will be in writing and will be given by
prepaid first class mail, by facsimile or other means of electronic
communication or by hand delivery as hereinafter provided. Any such notice or
other communication, if mailed by prepaid first class mail at any time other
than during a general discontinuance of postal service due to strike, lockout
or otherwise, will be deemed to have been received on the fourth Business Day
after the post marked date thereof, or if sent by facsimile or other means of
electronic communication, will be deemed to have been received on the Business
Day following the sending, or if delivered by hand will be deemed to have been
received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an individual at such address
having apparent authority to accept deliveries on behalf of the addressee.
Notice of change of address will also be governed by this section. In the event
of a general discontinuance of postal service due to strike, lock out or
otherwise, notices or other communications will be delivered by hand or sent by
facsimile or other means of electronic 

- 31 - 

 

communication
and will be deemed to have been received in accordance with this section.
Notices and other communications will be addressed as follows:

13.5.1        
if to BREP:

Brookfield
Renewable Partners Limited

73 Front Street

Hamilton HM 12

Bermuda

Attention:        Secretary 

Telecopier
number:      441-298-3304 

13.5.2        
if to BRELP:

BRP Bermuda GP
Limited

73 Front Street

Hamilton HM 12

Bermuda

Attention:        Secretary 

Telecopier
number:      441-298-3304 

13.5.3        
if to Brookfield:

Brookfield Asset
Management Inc.

Suite 300,
Brookfield Place

181 Bay Street,
Box 762

Toronto, Ontario

M5J 2T3

Attention:        General
Counsel

Telecopier
number:      416-365-9642

13.5.4        
if to CanHoldco:

Brookfield BRP Holdings
(Canada) Inc.

480 Boulevard de
la Cité

Gatineau, Québec

J8T 8R3

Attention:        Secretary 

Telecopier
number:      819-561-7188

13.5.5        
if to Bermuda Holdco:

- 32 - 

 

BRP
Bermuda Holdings I Limited 

73 Front Street

Hamilton HM 12

Bermuda

Attention:        Secretary

Telecopier
number:      441-298-3304

13.5.6        
if to BBCC:

Brookfield BRP Canada
Corp.

480 Boulevard de la
Cité

Gatineau, Québec 

J8T 8R3

Attention:        Secretary 

Telecopier
number:      819-561-7188

13.5.7        
if to CanUSHoldco:

Brookfield BRP Holdings
(US) Inc.

480 Boulevard de
la Cité

Gatineau, Québec

J8T 8R3

Attention:        Secretary

Telecopier
number:      819-561-7188

13.5.8        
if to Euro Holdco

Brookfield BRP Europe
Holdings (Bermuda) Limited

73 Front Street

Hamilton HM 12

Bermuda

 

Attention:        Secretary

Telecopier number:      441-298-3304

 

13.5.9        
if to InvestCo

Brookfield
Renewable Investments Limited

73 Front Street

Hamilton HM 12

Bermuda  

- 33 - 

 

Attention:        Secretary 

Telecopier number:      441-298-3304

13.5.10    
if to the Canadian Service Provider:

BRP Energy Group L.P.

Suite 300, Brookfield
Place

181 Bay Street, Box 762

Toronto, Ontario

M5J 2T3

Attention:        Chief
Executive Officer

Telecopier
number:      416-363-2856

13.5.11    
if to the Canadian Service Provider II:

Brookfield Asset
Management Private Institutional Capital Adviser (Canada), L.P.

Suite 300, Brookfield
Place

181 Bay Street, Box 762

Toronto, Ontario

M5J 2T3

 

Attention:        Chief
Executive Officer

Telecopier number:      416-363-2856

 

13.5.12    
if to the International Service Provider:

Brookfield Renewable
Energy Group (Bermuda) Limited

73 Front Street

Hamilton HM 12

Bermuda

Attention:        Secretary 

Telecopier
number:      441-298-3304

13.5.13    
if to the UK Service Provider:

Brookfield Global Renewable Energy Advisor Limited

23 Hanover Square

London, England

W1S 1JB

 

Attention:        Secretary

- 34 - 

 

Telecopier number:      +44 (0) 20 7659 3501

or to such other
addresses or facsimile numbers as a party may from time to time notify the
other in accordance with this Section 13.5.

13.6                                 
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.

13.7                                 
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]

- 35 - 

 

IN WITNESS WHEREOF the
parties have executed this Agreement as of the date first above written.

	
   

  	
   

  	
  BROOKFIELD
  ASSET MANAGEMENT INC.

  
	
  By:

  	
  /s/ “Dinaz Dadyburjor” 

  
	
   

  	
  Name:  Dinaz
  Dadyburjor

  Title:    Managing
  Partner

  

 

	
   

  	
   

  	
  BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P., by its general partner, BROOKFIELD RENEWABLE
  PARTNERS LIMITED

  
	
  By:

  	
  /s/ “Jane Sheere” 

  
	
   

  	
  Name: Jane
  Sheere

  Title:   Secretary

  

 

	
   

  	
   

  	
  BROOKFIELD
  RENEWABLE ENERGY L.P., by its general partner, BREP HOLDING L.P., by its
  general partner, BRP BERMUDA GP LIMITED

  
	
  By:

  	
  /s/ “Jane Sheere” 

  
	
   

  	
  Name:  Jane
  Sheere

  Title:    Secretary

  

 

- 36 - 

 

	
   

  	
   

  	
  BROOKFIELD
  BRP HOLDINGS (CANADA) INC.

  
	
  By:

  	
  /s/ “Jennifer Mazin” 

  
	
   

  	
  Name: Jennifer
  Mazin

  Title:    Authorized
  Signatory

  

 

	
   

  	
   

  	
  BRP
  BERMUDA HOLDINGS I LIMITED

  
	
  By:

  	
  /s/ “Jane Sheere” 

  
	
   

  	
  Name: Jane
  Sheere

  Title:   Secretary

  

 

	
   

  	
   

  	
  BROOKFIELD
  BRP CANADA CORP.

  
	
  By:

  	
  /s/ “Jennifer Mazin” 

  
	
   

  	
  Name: Jennifer
  Mazin

  Title:   Authorized
  Signatory

  

 

	
   

  	
   

  	
  BROOKFIELD
  BRP HOLDINGS (US) INC.

  
	
  By:

  	
  /s/ “Jennifer Mazin” 

  
	
   

  	
  Name: Jennifer
  Mazin

  Title:   Authorized
  Signatory

  

 

- 37 - 

 

	
   

  	
   

  	
  BROOKFIELD
  BRP EUROPE HOLDINGS (BERMUDA) LIMITED

  
	
  By:

  	
  /s/ “Jane Sheere” 

  
	
   

  	
  Name: Jane
  Sheere

  Title:   Secretary

  

 

	
   

  	
   

  	
  BROOKFIELD
  RENEWABLE INVESTMENTS LIMITED

  
	
  By:

  	
  /s/ “Jane Sheere” 

  
	
   

  	
  Name: Jane
  Sheere 

  Title:   Secretary

  

 

	
   

  	
   

  	
  BROOKFIELD
  RENEWABLE POWER PREFERRED EQUITY INC.

  
	
  By:

  	
  /s/ “Jennifer Mazin” 

  
	
   

  	
  Name: Jennifer
  Mazin

  Title:   Authorized
  Signatory

  

 

	
   

  	
   

  	
  BROOKFIELD
  RENEWABLE ENERGY PARTNERS ULC

  
	
  By:

  	
  /s/ “Jennifer Mazin” 

  
	
   

  	
  Name: Jennifer
  Mazin

  Title:   Authorized
  Signatory

  

 

- 38 - 

 

	
   

  	
   

  	
  BRP
  ENERGY GROUP L.P., by its general partner, BROOKFIELD RENEWABLE ENERGY GROUP
  G.P. INC.

  
	
  By:

  	
  /s/ “Jennifer Mazin” 

  
	
   

  	
  Name: Jennifer
  Mazin

  Title:   Authorized
  Signatory

  

 

	
   

  	
   

  	
  BROOKFIELD
  ASSET MANAGEMENT PRIVATE INSTITUTIONAL CAPITAL ADVISER (CANADA), L.P., by its
  general partner, BROOKFIELD PRIVATE FUNDS HOLDINGS INC.

  
	
  By:

  	
  /s/ “Dinaz Dadyburjor” 

  
	
   

  	
  Name: Dinaz
  Dadyburjor

  Title:   Director

  

 

	
   

  	
   

  	
  BROOKFIELD
  RENEWABLE ENERGY GROUP (BERMUDA) LIMITED

  
	
  By:

  	
  /s/ “Jane Sheere” 

  
	
   

  	
  Name: Jane
  Sheere

  Title:   Secretary

  

 

- 39 - 

 

	
   

  	
   

  	
  BROOKFIELD
  GLOBAL RENEWABLE ENERGY ADVISOR LIMITED

  
	
  By:

  	
  /s/ “Ralf Rank” 

  
	
   

  	
  Name: Ralf
  Rank

  Title:   Director

  

 

 

 

- 40 -Exhibit
4.19

 

GUARANTEE, DATED OCTOBER 7, 2014, BY BROOKFIELD BRP
EUROPE HOLDINGS (BERMUDA) LIMITED AND BNY TRUST COMPANY OF CANADA. 

 

GUARANTEE

THIS GUARANTEE is made as of the 7th day of October, 2014,

BY:                                                      BROOKFIELD BRP EUROPE HOLDINGS (Bermuda) Limited, a
company incorporated under the laws of Bermuda 

(the “Guarantor” or the “Corporation”) 

 

IN FAVOUR OF:                              BNY
TRUST COMPANY OF CANADA,
a trust company existing under the laws of Canada

(the “Trustee”) 

RECITALS:

A.               
The Borrower (as defined below), The Bank of New York Mellon and
the Trustee have entered into an amended and restated trust indenture dated as
of November 23, 2011 (as amended, extended, restated, supplemented or otherwise
modified from time to time, the “Indenture”), providing for the issuance
of Debentures as therein described.

B.                
Brookfield Renewable Energy Partners L.P., Brookfield Renewable Energy
L.P. (“BRELP”), Brookfield BRP Holdings (Canada) Inc. and BRP Bermuda
Holdings I Limited (collectively, the “Existing Guarantors”) have each
unconditionally, jointly and severally, guaranteed the due payment of all
Guaranteed Obligations (as defined below) pursuant to guarantees in favour of
the Trustee dated as of November
23, 2011 (collectively, the “Original Guarantee”). 

C.                
The Guarantor is a direct wholly-owned material subsidiary of BRELP and
it is the current intent of BRELP that each of its direct wholly-owned material
subsidiaries guarantees the Guaranteed Obligations, on a joint and several
basis.

D.               
The Guarantor will, directly or indirectly, benefit from the issuance of
Debentures under the Indenture from time to time and, accordingly, desires to
execute this Guarantee.

NOW THEREFORE in
consideration of the foregoing and other benefits accruing to the Guarantor,
the receipt and sufficiency of which are hereby acknowledged, the Guarantor
hereby covenants and agrees with the Trustee as follows:

- 1 - 

 

Article 1

INTERPRETATION

1.1                                     
Definitions 

In this Agreement, all
capitalized terms used and not defined in this Agreement will have the meanings
given to such terms in the Indenture.  In addition, the following terms will
have the following meanings:

1.1.1            
“Additional Guarantor” means a “Guarantor” as that term is
defined in the Indenture, other than the Guarantor under this Agreement;

1.1.2            
“this Agreement”, “this Guarantee”, “herein”, “hereof”,
“hereby”, “hereunder”  and any similar expressions refer to this
Guarantee as it may be supplemented, amended or restated from time to time, and
not to any particular Article, section or other portion hereof;

1.1.3            
“Borrower”  means Brookfield Renewable Energy Partners ULC
(formerly BRP Finance ULC) a corporation incorporated under the laws of Alberta,
and its successors;

1.1.4            
“Event of Default” means the occurrence of any of the following:

(a)               
any Event of Default under the Indenture;

(b)              
failure on the part of the Guarantor to perform or comply with Section 5.6 of this Agreement;

(c)               
failure on the part of the Guarantor to perform any other covenant or
agreement of the Guarantor under this Agreement for the benefit of the
Debentureholders, which failure continues for 60 days after written notice
thereof is given to the Guarantor by the Trustee or Holders of at least 25% in
aggregate principal amount of outstanding Debentures; or

(d)              
failure on the part of the Guarantor to make payment of any amounts
payable by it under this Agreement;

1.1.5            
“Guaranteed Obligations” means the principal of, premium, if any,
and interest on all Debentures issued by the Borrower under the Indenture from
time to time when and as the same shall become due and payable, whether at
maturity, upon redemption, acceleration or otherwise, and all other obligations
and liabilities owing by the Borrower to the Trustee under the Indenture,
whether present or future, absolute or contingent, liquidated or unliquidated,
as principal or as surety, alone or with others, of whatsoever nature or kind,
in any currency, under or in respect of the Indenture;

1.1.6            
“Guarantor Counsel” means legal counsel retained by the Guarantor;

- 2 - 

 

1.1.7            
“Officers’ Certificate” means a certificate of the Guarantor
signed by any two officers of the Guarantor in their capacities as officers and
not in their personal capacities; and

1.1.8            
“Proceedings”  means any receivership, insolvency, proposal,
bankruptcy, compromise, arrangement, winding-up, dissolution or other similar
judicial proceedings.

1.2                                     
Headings 

The inclusion of
headings in this Agreement is for convenience of reference only and shall not
affect the construction or interpretation hereof.

1.3                                     
References to Articles and Sections

Whenever in this
Agreement a particular Article, section or other portion thereof is referred
to, such reference pertains to the Article, section or portion thereof
contained herein unless otherwise indicated.

1.4                                     
Currency 

All amounts in this
Agreement are stated and shall be paid in Canadian currency.

1.5                                     
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.

1.6                                     
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 shall 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.

1.7                                     
Entire Agreement

This Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter of this Agreement.

1.8                                     
Governing Law, Attornment

This Agreement shall be
governed by and construed in accordance with the laws of the Province of
Ontario and the laws of Canada applicable therein and the Guarantor hereby
irrevocably attorns to the jurisdiction of the courts of Ontario.

- 3 - 

 

Article 2

GUARANTEE

2.1                                     
Guarantee 

The Guarantor
unconditionally guarantees the due payment of all Guaranteed Obligations.

2.2                                     
Continuing Guarantee

The guarantee herein
shall be a continuing guarantee of the payment of all the Guaranteed
Obligations and shall apply to and secure any ultimate balance thereof due or
remaining unpaid.  The guarantee herein shall not be considered as wholly or
partially satisfied by the intermediate payment or satisfaction at any time of
all or any part of the Guaranteed Obligations.

Article 3

ENFORCEMENT of GUARANTEE

3.1                                     
Demand 

Upon the occurrence of
an Event of Default, the Guarantor shall, on demand by the Trustee, forthwith
pay to the Trustee all Guaranteed Obligations for which such demand was made.

3.2                                     
Right to Immediate Payment or Performance

The Trustee shall not
be bound to make any demand on or to seek or exhaust its recourse against the
Borrower or any other Person before being entitled to demand payment from the
Guarantor and enforce its rights under this Agreement, and the Guarantor hereby
renounces all benefits of discussion and division.

3.3                                     
Trustee’s Statement

The statement in
writing of the Trustee as to the amount payable hereunder shall be binding upon
the Guarantor and conclusive against it in the absence of manifest error.

Article 4

PROTECTION OF TRUSTEE

4.1                                     
Liability Absolute

The liability of the
Guarantor hereunder shall be absolute and unconditional and shall not be
discharged, diminished or in any way affected by:

4.1.1            
any amalgamation, merger, consolidation or reorganization of the
Borrower, the Guarantor or the Trustee, or any continuation of the Borrower,
the Guarantor or the Trustee 

- 4 - 

 

from the statute under
which it now or hereafter exists to another statute, whether under the laws of
the same jurisdiction or another jurisdiction;

4.1.2            
any change in the name, business, objects, capital structure, ownership,
constating documents, by-laws or resolutions of the Borrower, the Guarantor or
the Trustee, including without limitation any transaction (whether by way of
transfer, sale or otherwise) whereby all or any part of the undertaking, property
and assets of the Borrower, the Guarantor or the Trustee becomes the property
of any other Person;

4.1.3            
any Proceedings of or affecting the Borrower, the Guarantor, the Trustee
or any other Person, and any court orders made or action taken by the Borrower,
the Guarantor, the Trustee or any other Person under or in connection with
those Proceedings, whether or not those Proceedings or orders or that action
results in any of the matters described in Section 4.2 occurring with or without the consent of the Trustee;

4.1.4            
any defence, counterclaim or right of set-off available to the Borrower;
and

4.1.5            
any other circumstance which might otherwise constitute in whole or in
part a defence available to, or a discharge of, the Guarantor, the Borrower or
any other Person in respect of the Guaranteed Obligations or the liability of
the Guarantor.

4.2                                     
Dealings by Trustee

The Trustee may from
time to time in its absolute discretion, without discharging, diminishing or in
any way affecting the liability of the Guarantor hereunder:

4.2.1            
enforce or take action under or abstain from enforcing or taking action
under the Indenture, any other guarantee or any other agreement;

4.2.2            
renew all or any part of the Guaranteed Obligations or grant extensions
of time or any other indulgences to the Borrower or to any other guarantor or
other Person liable directly or as surety for all or any part of the Guaranteed
Obligations;

4.2.3            
accept or make any compositions or arrangements with or release,
discharge or otherwise deal with or abstain from dealing with the Borrower or
any other guarantor or other Person liable directly or as surety for all or any
part of the Guaranteed Obligations;

4.2.4            
in whole or in part prove or abstain from proving a claim of the Trustee
in any Proceedings of or affecting the Borrower or any other Person; and

4.2.5            
agree with the Borrower, any other guarantor or any other Person to do
anything described in Sections 4.2.1 to 4.2.4,

whether or not any of the matters described above occur
alone or in connection with one or more other such matters.

- 5 - 

 

Article 5

covenants of the GUARANTOR

5.1                                     
Limitations on Indebtedness

The Guarantor will not,
and will not permit any of its Subsidiaries to, directly or indirectly, issue,
incur, assume or otherwise become liable for or in respect of any Funded
Indebtedness unless, after giving effect thereto, the Funded Indebtedness of
BREP, calculated on a consolidated basis, would not exceed 75% of Total
Consolidated Capitalization.

5.2                                     
Limitation on Liens

The Guarantor will not
create or permit to exist any lien on any present or future assets of the
Guarantor to secure any borrowed money, or permit any of its Subsidiaries to
create or permit to exist any lien on any present or future assets of such
Subsidiary to secure any borrowed money, unless at the same time the Guaranteed
Obligations are secured equally and ratably with such borrowed money, provided
that this shall not apply to liens existing on the date hereof or Permitted
Encumbrances.  Upon being advised by the Guarantor in writing in an Officers’
Certificate that security has been provided for the Guaranteed Obligations on
an equal and ratable basis in connection with the grant to a third party of
security for borrowed money and subsequently that such security to the third
party has been released, the Trustee will forthwith release the security
granted for the Guaranteed Obligations.

5.3                                     
Limitation on Sale and Leaseback Transactions

The Guarantor will not,
and will not permit any of its Subsidiaries to, enter into any Sale and
Leaseback Transaction unless:

(a)               
the Sale and Leaseback Transaction is entered into prior to,
concurrently with, or within 180 days after the acquisition, the completion of
construction (including any improvements on an existing property) or the
commencement of commercial operations of the relevant property, and the
Guarantor or such Subsidiary applies within 60 days after the sale an amount
equal to the net proceeds of the sale (i) to the repayment of Indebtedness
which is pari passu to the Guaranteed Obligations, (ii) to the
redemption of the Debentures, or (iii) to the reinvestment in its core business
or the core business of the Borrower, an Additional Guarantor and/or any
Subsidiary of the Borrower or any Additional Guarantor; or

(b)              
the Guarantor or the Subsidiary could otherwise grant a security
interest on the property as a Permitted Encumbrance.

5.4                                     
Limitation on Distributions

The Guarantor may not,
and may not permit any of its Subsidiaries, to suffer to exist any encumbrance
or restriction on the ability of any Subsidiary of the Guarantor: (i) to pay,
directly or indirectly, dividends permitted by applicable law or make any other
distributions in respect of its Capital Stock or pay any Indebtedness or other
obligation owed to the Guarantor or any other such Subsidiary; (ii) to make
loans or advances to the Guarantor or any other such 

- 6 - 

 

Subsidiary;
or (iii) to transfer any or all of its property or assets to the Guarantor or
any other such Subsidiary. 

Notwithstanding the
foregoing, the Guarantor or any such Subsidiary may suffer to exist any such
encumbrance or restriction (a) pursuant to any agreement in effect on the date
hereof; (b) pursuant to an agreement relating to any Indebtedness incurred by
any such Subsidiary prior to the date on which such Subsidiary was acquired by
the Guarantor and outstanding on such date and not incurred in anticipation of
becoming a Subsidiary of the Guarantor; (c) pursuant to an agreement relating
to any Limited Recourse Indebtedness of the Guarantor or any such Subsidiary; or
(d) pursuant to an agreement effecting a renewal, refunding or extension of
Indebtedness incurred pursuant to an agreement referred to in clauses (a)
through (c) of this paragraph, provided however, that the provisions contained
in such renewal, refunding or extension agreement relating to such encumbrance
or restriction are no more restrictive in any material respect than the
provisions contained in the agreement the subject thereof, as determined in
good faith by the board of directors of the Guarantor.

5.5                                     
Limitations on Debt and Preferred Stock of Subsidiaries

The Guarantor will not
permit any of its Subsidiaries to, directly or indirectly, issue, incur, assume
or otherwise become liable for or in respect of any Indebtedness or issue any
Preferred Stock except:  (a) Inter-Company Indebtedness of such Subsidiary; (b)
Preferred Stock issued to any one or more of the Guarantor, an Additional
Guarantor or any Subsidiary of the Guarantor or an Additional Guarantor; (c)
Limited Recourse Indebtedness of such Subsidiary; (d) Net Swap Exposure of such
Subsidiary; (e) Capital Lease Obligations of such Subsidiary; (f) purchase
money obligations of such Subsidiary; and/or (g) any other Indebtedness or
Preferred Stock of such Subsidiary (in addition to the Indebtedness and
Preferred Stock referred to in paragraphs (a) to (f)) if, after giving effect
to such other Indebtedness or Preferred Stock,  the aggregate consolidated
amount of all Indebtedness and Preferred Stock of BREP that does not constitute
Inter-Company Indebtedness, Preferred Stock issued to the Borrower, a
Guarantor, an Additional Guarantor or any of their Subsidiaries, Limited
Recourse Indebtedness, Net Swap Exposure, Capital Lease Obligations or purchase
money obligations, would not exceed 5% of the Net Worth.  For the purposes of
this covenant, the assignment by the Guarantor to a third party of
Inter-Company Indebtedness owing by a Subsidiary will be considered to be
incurrence of Indebtedness by that Subsidiary.

5.6                                     
Limitations
Concerning Merger, Consolidations and Certain Asset Sales

So long as any
Debentures are outstanding, the Guarantor will not enter into any transaction,
directly or indirectly through a Subsidiary of the Guarantor, whereby all or
substantially all of the undertaking, property and assets of the Guarantor
would become the property of any other Person (any such Person being herein
referred to as a “Successor”), whether by way of reorganization, consolidation,
amalgamation, arrangement, merger, transfer, sale or otherwise, provided that
nothing contained in this Indenture will prevent any such transaction if:

(a)               
the Successor shall have executed, prior to or contemporaneously with
the consummation of any such transaction, an assumption of the obligations of
the 

- 7 - 

 

Guarantor under this Agreement, including the
due and punctual payment of all amounts payable hereunder, and such other
instruments as in the opinion of the Guarantor’s Counsel are necessary or
advisable to evidence the agreement of the Successor to observe and perform all
the covenants and obligations of the Guarantor under this Indenture; 

(b)              
no condition or event shall exist as to the Guarantor or the Successor,
either at the time of or immediately after the consummation of any such
transaction and after giving full effect thereto or immediately after
compliance by the Successor with the provisions of this Section 5.6, which constitutes or would constitute, after the giving of notice or lapse of
time, or both, an Event of Default; and

(c)               
the Guarantor shall have delivered to the Trustee an Opinion of the
Guarantor Counsel and an Officers’ Certificate stating that the conditions
precedent in this Section 5.6 have been satisfied,

provided,
however, the provisions of this Section 5.6 shall not be
applicable to any transaction between or among any one or more of the Borrower,
the Guarantor, an Additional Guarantor and/or any Subsidiary of any of them.   

Whenever the
conditions of this Section 5.6 have been duly
observed and performed, (i) the Person who was a party to this Agreement as
Guarantor immediately prior to the transaction described in Section 5.6 shall be
released and discharged from all liability under this Agreement, (ii)
references to the Guarantor under this Agreement will thereafter refer to the
Successor which has complied with the provisions of this Section 5.6, and (iii) the
Trustee will execute and deliver any documents which it may be advised are necessary,
desirable or advisable for effecting or evidencing such release and discharge.

Article 6

REPRESENTATIONS AND WARRANTIES

6.1                                     
Representations and Warranties

The Guarantor
represents and warrants to the Trustee as follows:

6.1.1            
it is duly created and existing under the laws of its jurisdiction of
formation and has the power and capacity to own its properties and assets and
to carry on its business as presently carried on by it;

6.1.2            
it has the power and capacity to enter into this Agreement and to do all
acts and things as are required or contemplated hereunder to be done, observed
and performed by it;

6.1.3            
it has taken all necessary corporate and, if applicable, partnership
action to authorize the execution, delivery and performance of this Agreement;

6.1.4            
there is no unanimous shareholder agreement which restricts, in whole or
in part, the powers of the directors of the Guarantor to manage or supervise
the business and affairs of the Guarantor;

- 8 - 

 

6.1.5            
the entering into of this Agreement and the performance by the Guarantor
of its obligations hereunder does not and will not contravene, breach or result
in any default under the constating documents of the Guarantor or under any
material mortgage, lease, agreement or other legally binding instrument,
license, permit or law to which the Guarantor is a party or by which the
Guarantor or any of its properties or assets may be bound and will not result
in or permit the acceleration of the maturity of any indebtedness, liability or
obligation of the Guarantor under any material mortgage, lease, agreement or
other legally binding instrument of or affecting the Guarantor; and

6.1.6            
no authorization, consent or approval of, of filing with or notice to,
any Person or governmental body is required in connection with the execution,
delivery or performance of this Agreement by the Guarantor.

Article 7

DEFAULT

7.1                                     
Judgment Against the Guarantor

In case of any judicial
or other proceedings to enforce the rights of the Debentureholders, judgment
may be rendered against the Guarantor in favour of the Debentureholders or in
favour of the Trustee, as trustee for the Debentureholders, for any amount
which may remain due in respect of the Debentures and the interest thereon.

7.2                                     
Immunity of Shareholders, Directors and Officers

The Trustee and the
Holders by their acceptance of the Debentures hereby waive and release
any right, cause of action or remedy now or hereafter existing in any
jurisdiction against any past, present or future incorporator, shareholder,
director, officer or partner of the Guarantor or of any successor thereof for
the payment of the principal of or premium or interest on any of the Debentures
or on any covenant, agreement, representation or warranty by the Guarantor
herein or in the Debentures contained.

7.3                                     
Recourse 

Notwithstanding
anything contained in this Guarantee or the Indenture to the contrary, the
obligations of the Guarantor hereunder will be performed, satisfied and paid
only out of, and enforced only against, and recourse will only be had against,
the assets of the Guarantor. 

Article 8

MISCELLANEOUS

8.1                                     
Incorporation by Reference

The provisions of
Articles 11 (Meetings of Debentureholders), 12 (Notices), 13 (Concerning the
Trustee) and 14 (Supplemental Indentures) of the Trust Indenture shall apply mutatis
mutandis to this Guarantee.

- 9 - 

 

8.2                                     
Payment of Costs and Expenses

The Guarantor shall pay
to the Trustee on demand all costs and expenses of the Trustee, its officers,
employees and agents and any receiver or receiver-manager appointed by it or by
a court in connection with this Agreement, including, without limitation, in
connection with:

8.2.1            
any actual or proposed amendment or modification hereof or any waiver
hereunder and all instruments supplemental or ancillary thereto;

8.2.2            
obtaining advice as to the Trustee’s rights and responsibilities under
this Agreement; and

8.2.3            
the defence, establishment, protection or enforcement of any of the
rights or remedies of the Trustee under this Agreement including, without
limitation, all costs and expenses of establishing the validity and
enforceability of, or of collection of amounts owing under, this Agreement;

and further including, without limitation, all of the reasonable fees,
expenses and disbursements of the Trustee’s lawyers, on a substantial indemnity
basis, incurred in connection therewith and all sales or value-added taxes
payable by the Trustee (whether refundable or not) on all such costs and
expenses.

8.3                                     
No Waiver

No delay on the part of
the Trustee in the exercise of any right, power or remedy hereunder or
otherwise shall operate as a waiver thereof, and no single or partial exercise
by the Trustee of any right, power or remedy shall preclude other or further
exercise thereof or the exercise of any other right, power or remedy.  No
action of the Trustee permitted hereunder shall in any way impair or affect its
rights, powers or remedies under this Agreement.

8.4                                     
Successors and Assigns

This Agreement shall be
binding upon the Guarantor and its successors and enure to the benefit of the
Trustee and its successors and assigns.

8.5                                     
Copy Received

The Guarantor
acknowledges receipt of a copy of this Agreement.

- 10 - 

 

IN
WITNESS WHEREOF the Guarantor has executed this Agreement as of the date
first above written.

	
  BROOKFIELD
  BRP EUROPE HOLDINGS (Bermuda) Limited

  
	
  by:

  	
  /s/ “Jane Sheere” 

  
	
   

  	
  Name:     Jane
  Sheere

  
	
   

  	
  Title:       Secretary

  
	
   

  	
   

  

 

 

- 11 -

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