Item 1.01   Entry into a Material Definitive Agreement.

Iroquois Purchase Agreement

On May 3, 2017, TC PipeLines Intermediate Limited Partnership ("TCILP"), a direct subsidiary of TC PipeLines, LP (the "Partnership") entered into a purchase and sale agreement (the "Iroquois Purchase Agreement") with TCPL Northeast Ltd. ("TCPL") and TransCanada Iroquois Ltd. ("TCIL").  Pursuant to the Iroquois Purchase Agreement, TCILP will acquire a 49.34% equity interest in Iroquois Gas Transmission System, L.P. ("Iroquois"), comprising the entire 21% limited partner interest held by TCPL, the entire 25% general partner interest held by TCIL, and a 3.34% limited partner interest held by TCIL (the "Iroquois Acquisition").

The Iroquois Purchase Agreement contains customary representations and warranties, covenants and indemnification obligations by the parties.

Upon consummation of the Iroquois Acquisition, TCIL will retain a 0.66% limited partner interest in Iroquois (the "Option Interest"). On May 3, 2017, TCILP entered into an option agreement (the "Option Agreement") setting forth the certain rights and obligations with respect to the Option Interest, including the grant by TCIL to TCILP of the right to purchase the Option Interest at the Exercise Price (as defined in the Option Agreement) and the payment by TCILP of $1,000 to TCIL as consideration for such option (the "Option Transaction)".

PNGTS Purchase Agreement

On May 3, 2017, TCILP entered into a purchase and sale agreement (the "PNGTS Purchase Agreement") with TCPL Portland Inc. ("TCPL Portland").  Pursuant to the PNGTS Purchase Agreement, TCILP will acquire a 11.81 percent equity interest in the Portland Natural Gas Transmission System ("PNGTS") from TCPL Portland (the "PNGTS Acquisition" and together with the Option Transaction and the Iroquois Acquisition, the "Acquisitions").

The PNGTS Purchase Agreement contains customary representations and warranties, covenants and indemnification obligations by the parties.

The total purchase price of the Acquisitions is $765 million comprised of $597 million in cash and the assumption of a total $168 million of proportional Iroquois and PNGTS debt. The cash portion of the purchase price of the Acquisitions is expected to be funded through a combination of debt and equity issuances. The Acquisitions are expected to close mid-2017.

TransCanada Corporation ("TransCanada") is the ultimate parent company of TC PipeLines GP, Inc. (the "General Partner"), which is the general partner of the Partnership.  The General Partner and the Partnership collectively own 100% of the equity interests in TCILP.

The purchase price for the Acquisitions was negotiated between the Partnership and TransCanada. The Conflicts Committee of the Board of Directors of the General Partner (the "Conflicts Committee"), composed entirely of independent directors, unanimously recommended approval of the Acquisitions to the Board of Directors.  The Conflicts Committee retained legal, market and financial advisors to assist it in evaluating and negotiating the Acquisitions.  The Board of Directors unanimously approved the Iroquois Purchase Agreement, the Option Agreement and the PNGTS Purchase Agreement and the terms of the Acquisitions.

The foregoing description of the Iroquois Purchase Agreement, the Option Agreement and the PNGTS Purchase Agreement are qualified in their entirety by reference to the Iroquois Purchase Agreement, the Option Agreement and the PNGTS Purchase Agreement, copies of which are filed as Exhibit 2.1, 2.2 and 2.3, respectively, to this Form 8-K, and are incorporated herein by reference.

Item 9.01   Financial Statements and Exhibits .

(d)   Exhibits

 

*	The schedules and exhibits to this agreement, as set forth in the table of contents of the agreement, have not been filed herewith pursuant to Item 601(b)(2) of Regulation S-K. The Partnership agrees to furnish any omitted materials to the Securities and Exchange Commission upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	TC PipeLines, LP by:  TC PipeLines GP, Inc., its general partner
May 4, 2017	By: /s/ Jon Dobson Jon Dobson Secretary

 

EXHIBIT INDEX

*	The schedules and exhibits to this agreement, as set forth in the table of contents of the agreement, have not been filed herewith pursuant to Item 601(b)(2) of Regulation S-K. The Partnership agrees to furnish any omitted materials to the Securities and Exchange Commission upon request.

AGREEMENT FOR PURCHASE AND SALE

OF

PARTNERSHIP INTEREST

IN
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
A DELAWARE LIMITED PARTNERSHIP

by and between

TCPL NORTHEAST LTD. and TRANSCANADA IROQUOIS LTD., as SELLERS

and

TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP, as BUYER

MAY 3, 2017

 

 

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AGREEMENT FOR PURCHASE AND SALE
OF
PARTNERSHIP INTEREST
IN
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
A DELAWARE LIMITED PARTNERSHIP

THIS AGREEMENT FOR PURCHASE AND SALE OF PARTNERSHIP INTEREST (this "Agreement"), is executed as of this 3rd day of May, 2017, by and among TCPL NORTHEAST LTD., a Delaware corporation ("TCPL"), TRANSCANADA IROQUOIS LTD., a Delaware corporation ("TCIL" and, collectively with TCPL, "Sellers") and TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP, a Delaware limited partnership ("Buyer").  TCPL, TCIL and Buyer are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

WITNESSETH:

WHEREAS, Sellers collectively own a 50% partnership interest in Iroquois Gas Transmission System, L.P., a Delaware limited partnership ("Iroquois"), comprising a 21% limited partner interest owned by TCPL, a 4% limited partner interest owned by TCIL, and a 25% general partner interest owned by TCIL;

WHEREAS, Buyer desires to purchase and acquire, and Sellers desire to sell and assign, a 49.34% partnership interest in Iroquois, comprising the entire 21% limited partner interest held by TCPL, the entire 25% general partner interest held by TCIL, and a 3.34% limited partner interest held by TCIL (collectively, the "Iroquois Interest") pursuant to the terms and conditions set forth in this Agreement;

WHEREAS, concurrently with the execution of this Agreement, Sellers and Buyer are entering into an Option Agreement that provides, among other things, that Buyer has the option to acquire TCIL's remaining 0.66% limited partner interest in Iroquois, on the terms and subject to the conditions set forth therein;

WHEREAS, the Conflicts Committee (the "Conflicts Committee") of the Board of Directors of the General Partner (as defined herein) has (i) received an opinion of Evercore Group L.L.C., the financial advisor to the Conflicts Committee (the "Partnership Financial Advisor"), that the aggregate consideration to be paid by the Partnership (as defined herein) in connection with the transactions contemplated hereby and under the PNGTS Agreement (as defined herein) is fair to the Partnership and its common unitholders (other than the General Partner (as defined herein) and its Affiliates (as defined herein)) from a financial point of view, (ii) determined that the Transaction Agreements (as defined herein) and the transactions contemplated thereby are fair and reasonable to, and in the best interests of, the MLP and the common unitholders of the MLP (other than the General Partner and its Affiliates), (iii) granted "Special Approval" with respect to the transactions contemplated by the Transactions Agreements on the terms and conditions set forth therein, and (iv) recommended that the Board of Directors of the General Partner approve the Transaction Agreements and the transactions contemplated thereby; and

WHEREAS, the Board of Directors of the General Partner has approved the Transaction Agreements and transactions contemplated thereby.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

At the Closing, and on the terms and subject to the conditions set forth in this Agreement, Sellers shall sell, assign and deliver to Buyer, and Buyer shall purchase and accept from Sellers, the Iroquois Interest.

The purchase price to be paid by Buyer to Sellers for the Iroquois Interest (the "Purchase Price") shall equal the Closing Payment, as adjusted in accordance with Section 1.03.

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Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, the closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the Houston offices of Vinson & Elkins L.L.P. at 10:00 a.m., local time, on the 30^th day of June 2017, provided that all of the conditions to each Party's obligations hereunder have been satisfied or waived (other than conditions to be satisfied at the Closing), or at such other place or time as the Parties may agree.  The date and time at which the Closing actually occurs is hereinafter referred to as the "Closing Date."  Other than with respect to those matters that are effective or applicable as of the Effective Time as expressly provided herein, the Closing shall be effective for all purposes as of 12:01 a.m. Eastern time on July 1, 2017.

At the Closing, Sellers shall deliver or cause to be delivered to Buyer the following:

At the Closing, Buyer shall deliver or cause to be delivered to Sellers, or their designate, the following:

Sellers represent and warrant to Buyer on a joint and several basis that the statements contained in this Article II are correct and complete as of the date hereof, except as set forth in the Schedules.

Each Seller (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (b) has all requisite corporate power and authority to own and operate its business as presently conducted, and (c) is duly qualified as a foreign corporation and is in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified as a foreign corporation as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Each Seller has the requisite power and authority to execute, deliver and perform its obligations under this Agreement and the other Transaction Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby.  The execution and

delivery of this Agreement and the Transaction Agreements by the Sellers and the performance of their obligations hereunder and thereunder and the consummation of all of the transactions contemplated hereby and thereby have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will, at or prior to the Closing, be) duly authorized by the Boards of Directors (and, if required, shareholders) of the Sellers and by all other necessary corporate action, and no other proceedings are (or will be) necessary for the Sellers to authorize this Agreement or the other Transaction Agreements and the transactions contemplated hereby and thereby.  This Agreement and the Transaction Agreements have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will at or prior to the Closing, be) duly and validly executed and delivered by the Sellers and constitute (or will constitute) legal, valid and binding obligations of the Sellers, enforceable against the Sellers in accordance with their terms, except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

Sellers are, collectively, the legal and beneficial owners of the entirety of the Iroquois Interest.  Except as set forth on Schedule 2.04, at the Closing, Sellers will transfer good and valid title to the Iroquois Interest to Buyer, free and clear of any and all Liens.  Except as expressly provided in the Iroquois Partnership Agreement, there are (i) no authorized or outstanding subscriptions, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or otherwise acquire from Iroquois any equity interests of or in Iroquois, (ii) no commitments on the part of Iroquois to issue membership interests, shares, subscriptions, warrants, options, convertible securities or other similar rights, and (iii) no equity securities of Iroquois reserved for issuance for any such purpose. Iroquois has no obligation (contingent or other) to purchase, redeem or otherwise acquire any of its equity securities or interests. Except as expressly provided in the Iroquois Partnership Agreement and in this Agreement, there is, on the part of Iroquois or Sellers, no voting trust or agreement, stockholders agreement, pledge agreement, buy-sell agreement, right of first refusal, preemptive right or proxy relating to any equity securities of Iroquois. There are no outstanding subscriptions, options, warrants, calls, rights, commitments, arrangements, understandings or agreements of any character affecting Sellers' right to transfer the Iroquois Interest as contemplated herein. The Iroquois Interest has been duly authorized and is validly issued, fully paid and nonassessable.

Sellers do not have any liability to pay any compensation to any broker, finder or agent with respect to the transactions contemplated hereby for which Buyer or Iroquois could be liable or that could result in any Lien on the Iroquois Interest.

There are no actions or proceedings pending or, to Sellers' Knowledge, threatened, against Sellers before any court, arbitrator or Governmental Authority acting in an adjudicative capacity which, if adversely determined, would prohibit or restrain or allow recovery of damages for the execution, delivery or performance by Sellers of this Agreement or the Transaction Agreements or any of the transactions contemplated hereby or thereby.  None of Sellers nor Iroquois is subject to any outstanding judgments, rules, orders, writs, injunctions or decrees of any court or Governmental Authority which would prohibit or restrain the execution, delivery or performance by such Seller of this Agreement, the Transaction Agreements or any of the transactions contemplated hereby or thereby.

Except as set forth on Schedule 2.07, since December 31, 2016: (a) Iroquois  has not incurred any liabilities or obligations, fixed, contingent, accrued or otherwise that are of the type that are required to be set forth on a balance sheet prepared in accordance with GAAP (except for liabilities and obligations incurred in the ordinary course of business, which are not Material); (b) Iroquois has conducted the Business, in all Material respects, in the ordinary course; and (c) no event, occurrence or other matter has occurred that would reasonably be expected to have a Material Adverse Effect.

Each of the Iroquois Entities  (a) is an entity duly formed or organized, validly existing and in good standing under the laws of the State of Delaware, (b) has all requisite general partnership or corporate power and authority, as applicable, to own and operate its business as presently conducted and (c) is duly qualified as a foreign limited partnership or corporation, as applicable, in each of the jurisdictions where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified as a foreign limited partnership or corporation, as applicable, as would not reasonably be expected to have a Material Adverse Effect.  Sellers have made available to Buyer true and complete copies of the organizational documents of each Iroquois Entity as in effect as of the date of this Agreement.

Copies of the (i) audited consolidated financial statements of Iroquois as of December 31, 2016 (the "Annual Financial Statements") and the (ii) unaudited consolidated balance sheet of Iroquois as at March 31, 2017 and the unaudited consolidated statements of income and cash flows for the three month period ending March 31, 2017 (the "Interim Financial Statements" and together with the Annual Financial Statements, the "Financial Statements") are attached as Schedule 2.10.  The Financial Statements fairly present in all Material respects the consolidated financial position of Iroquois as of the dates specified therein, and the results of its consolidated operations for the respective period so specified, and have been prepared in accordance with GAAP consistently applied throughout the period involved.  There are no Material off balance sheet arrangements of Iroquois.

Except as set forth in Schedule 2.11:

Except for the Transaction Agreements or as set forth in Schedule 2.13, there are no intercompany contracts or other arrangements between any Iroquois Entity, on the one hand, and any Seller or its other Affiliates, on the other hand, that (a) cannot be terminated by the applicable Iroquois Entity upon notice of thirty (30) days or less and (b) would subject the applicable Iroquois Entity to any obligations or liabilities, or otherwise bind such Iroquois Entity subsequent to the Closing.

Except as set forth in Schedule 2.15, the Iroquois Entities have good title in fee simple to, or have valid and enforceable rights to lease or use, by easement, license, Contract or otherwise, all Material items of real and personal property used in the ordinary course of the Business (in each case free and clear of all Liens, except those that (a) do not materially interfere with the current use of such property by an Iroquois Entity or (b) constitute Permitted Encumbrances).

(i)

The Iroquois Entities have performed all obligations, whether arising by operation of any Applicable Laws or by contract, required to be performed by it in connection with Benefit Plans that are sponsored, maintained or contributed to or by the Iroquois Entities, or with respect to which any of the Iroquois Entities has or reasonably could have, individually or collectively, any liability (direct, indirect, contingent or otherwise) ("Iroquois Benefit Plans"), and there have been no material defaults or violations by any other party to the Iroquois Benefit Plans;

(ii)	there are no actions, suits or claims pending (other than routine claims for benefits) or, to the Knowledge of the Iroquois Entities, threatened against, or with respect to, any of the Iroquois Benefit Plans or their assets; and

(iii)

all contributions required to be made to the Iroquois Benefit Plans pursuant to their terms and provisions or pursuant to Applicable Laws have been made timely and all benefits accrued under any unfunded Iroquois Benefit Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with, GAAP.

Except as set forth on Schedule 2.19, none of the Iroquois Entities is (a) in violation of its organizational documents; (b) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, under any Contract to which an Iroquois Entity is a party or by which it is bound or to which any of its property or assets are subject; or (c) in violation of any Applicable Law or any judgment or order of any court or arbitrator or Governmental Authority, except, in the case of clauses (b) and (c) above, for any such default or violation that, individually or in the aggregate, would not reasonably be expected to have a

Material Adverse Effect.  Notwithstanding the foregoing, it is understood and agreed that the representations and warranties set forth in this Section 2.19 shall not apply to (i) matters relating to Taxes (as the sole and exclusive representations and warranties regarding Taxes  are set forth in Section 2.11), (ii) Permits, declarations and filings (as the sole and exclusive representations and warranties regarding Permits, declarations and filings are set forth in Section 2.16), (iii) employee matters (as the sole and exclusive representations and warranties regarding employee matters are set forth in Section 2.18) or (iv) environmental matters (as the sole and exclusive representations and warranties regarding environmental matters are set forth in Section 2.22).

The Contracts set forth on Schedule 2.20 (collectively, the "Material Agreements") constitute all Material gas transportation contracts, operation and maintenance agreements, construction contracts and other Material Contracts to which an Iroquois Entity is a party or by which an Iroquois Entity is bound or to which any of their respective properties or assets are subject.  The Material Agreements have been duly authorized, executed and delivered by the Iroquois Entity that is a party thereto as applicable and constitute valid and legally binding agreements of such Iroquois Entity, as the case may be, enforceable against such Iroquois Entity in accordance with their terms, except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law). To Sellers' Knowledge, none of the Iroquois Entities or any applicable counterparty thereto is in breach or default of any Material Agreement.

The Iroquois Entities have insurance with Reputable Insurers covering their properties against loss or damage of the kinds customarily insured against by companies similarly situated in the industry in which the Iroquois Entities conduct the Business, in such amounts and with such deductibles as is customary of similarly situated companies and, in the case of any of the foregoing insurance that is Material, no Iroquois Entity has received written notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance. Such policies are in full force and effect, and all premiums due and payable under such policies have been paid. In the case of any of the foregoing insurance that is material, no Iroquois Entity has received written notice of any pending or threatened termination of, or indication of an intention not to renew, such policies.

Except as set forth on Schedule 2.22, each of the Iroquois Entities (a) has been and is currently operated in compliance with any and all Environmental Laws; (b) has received and is in compliance with all Permits required under Environmental Laws to own, operate, and maintain the Iroquois Pipeline and to otherwise conduct the Business; (c) has not been and is not currently the subject of any outstanding notice, claim, demand, suit, proceeding, order, agreement or judgment (collectively, a "Demand") from a Governmental Authority or other Person under Environmental Laws requiring remediation or payment of damages, losses,

expenses or fines; (d) has not received any written notice of any actual or potential liability for the violation of, or noncompliance with any Environmental Law or any Permit required under any Environmental Law; and (e) has not received any written notice of any actual or potential liability in connection with any release or threatened release into the environment of any Hazardous Material, except in the case of the foregoing clauses (a), (b), (d) and (e), for any such noncompliance or liability as would not reasonably be expected to have a Material Adverse Effect.  Except for actions, omissions, conditions and occurrences that have not had and would not reasonably be expected to have a Material Adverse Effect, no actions, omissions, conditions or occurrences existing on any property currently owned, leased or otherwise used by an Iroquois Entity or with respect to operation of the Iroquois Pipeline that would subject an Iroquois Entity, such property or the Iroquois Pipeline to any remedial obligations, receipt of Demands alleging liabilities, or any other liabilities, in each case, pursuant to or under Environmental Law.

Buyer hereby represents and warrants to Sellers as follows:

Buyer is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware.  Buyer has all requisite limited partnership power and authority to own and operate its business as presently conducted.  Buyer is duly qualified as a foreign limited partnership and is in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified as would not reasonably be expected to have a material adverse effect on Buyer.

Buyer has the requisite limited partnership power and authority to execute, deliver and perform its obligations under this Agreement and the other Transaction Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the other Transaction Agreements by Buyer and the performance by it of its obligations hereunder and thereunder and the consummation of all of the transactions contemplated hereby and thereby have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will, at or prior to the Closing, be) duly authorized by Buyer's general partner and by all other necessary corporate and limited partnership action on the part of Buyer and its general partner, and no other proceedings are (or will be) necessary for Buyer to authorize this Agreement or the other Transaction Agreements and the transactions contemplated hereby and thereby.  This Agreement and the other Transaction Agreements to which Buyer is a party have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will, at or prior to the Closing, be) duly and validly executed and delivered by Buyer and constitute (or will constitute) legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their terms, except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to

or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

Buyer has no liability to pay any compensation to any broker, finder or agent with respect to the transactions contemplated hereby based upon arrangements made by or on behalf of Buyer for which any Seller or any of the Iroquois Entities could be liable.

There are no actions or proceedings pending or, to Buyer's knowledge, threatened against Buyer before any court or Governmental Authority acting in an adjudicative capacity, which, if adversely determined, would prohibit or restrain the execution, delivery or performance of this Agreement or the other Transaction Agreements or any of the transactions contemplated hereby or thereby.  Buyer is not subject to any outstanding judgments, rules, orders, writs, injunctions or decrees of any court or Governmental Authority which would prohibit or restrain the execution, delivery or performance of this Agreement, the other Transaction Agreements or any of the transactions contemplated hereby or thereby.

Buyer has such knowledge and experience in financial and business matters that Buyer is capable of evaluating the merits and risks of the investment contemplated by this Agreement and making an informed investment decision with respect thereto. Buyer is acquiring the Iroquois Interest for Buyer's own account for investment only and not with a view to, or any present intention of, effecting a distribution of the Iroquois Interest in violation of the Securities Act.

Buyer acknowledges that the Iroquois Interest has not been registered under the Securities Act or the securities laws of any state or other jurisdiction and cannot be disposed of except in accordance with the Securities Act and any applicable state laws.  Buyer is an accredited investor (within the meaning of Regulation D promulgated under the Securities Act).

Except as provided in Article II of this Agreement, neither Seller has made, and neither Seller makes, any other representations or warranties as to the Iroquois Interest, the Iroquois Entities, the Business or any matter or thing affecting or relating to the Iroquois Entities or any of their respective business, operations, assets, properties, liabilities, financial condition, results of operation or other affairs.  Buyer hereby waives, to the extent permitted by law, any implied warranty applicable to the transactions contemplated hereby (including any implied warranty of merchantability or fitness for a particular purpose).  Buyer acknowledges that it has had the opportunity to conduct its own independent investigation, analysis and evaluation of the Iroquois Interest, the Iroquois Entities and the Business.

Except as otherwise provided in this Agreement, Buyer and Sellers shall be solely responsible for their respective expenses and costs incurred in connection with the execution and performance of this Agreement, the other Transaction Agreements and the transactions contemplated hereby and thereby.

Sellers shall grant Buyer reasonable access during normal business hours to all books and records concerning Iroquois which either Seller has in its possession or control, as Buyer deems reasonably necessary or advisable in connection with the consummation of the transactions contemplated hereby; provided that such access shall not materially interfere with normal operations of either Seller, any of the Iroquois Entities, or any of their respective Affiliates.

During the period commencing on the date hereof and ending on the Closing Date, Sellers will, after obtaining Knowledge thereof, give notice to Buyer of any event or occurrence which would reasonably be expected to have a Material Adverse Effect, which would reasonably be expected to be Material to the Iroquois Entities or the Business, or which would reasonably be expected to cause Sellers to breach any representation, warranty or covenant of Sellers contained in this Agreement.

In the event of a Dispute, upon the written request (a "Request") of any Party to this Agreement, the matter shall immediately be referred to senior officers of each Party designated by such Party for resolution.  The designated senior officers shall meet immediately and attempt

in good faith to negotiate a resolution of the Dispute.  If the Parties are unable to resolve the Dispute within fifteen (15) Business Days after receipt by the two other Parties of a Request, then any Party may seek any legal avenue available under this Agreement to resolve the Dispute.

Each Party shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement and the other Transaction Agreements as soon as reasonably practicable, including such actions or things as any Party hereto may reasonably request in order to cause any of the conditions to any other Party's obligation to consummate such transactions specified in Article V to be fully satisfied, and as promptly as is reasonably practicable cooperate with and furnish information to each other in connection with any requirements imposed upon any of them with respect thereto.

As promptly as practicable, Sellers and Buyer shall make all filings and notifications with all Governmental Authorities, if any, that may be or may become reasonably necessary, proper or advisable under this Agreement and Applicable Laws to consummate and make effective the transactions contemplated under this Agreement.  Buyer, on the one hand, and Sellers, on the other, shall share as to 50% each the filing fees and associated costs, including legal fees, in connection with the foregoing provisions of this Section 4.07.

During the period commencing on the date hereof and ending on the Closing Date, each Seller will use its commercially reasonable efforts to prepare, negotiate, finalize and cause the execution of the Distribution Agreement by all parties thereto in a form reasonably acceptable to each Seller and Buyer. If the Distribution Agreement is not executed prior to or at Closing, Buyer will use its commercially reasonable efforts after Closing to prepare, negotiate, finalize and cause the execution of the Distribution Agreement by all parties thereto.

The respective obligations of each Party to effect the transactions contemplated hereby shall be subject to the satisfaction or waiver (by both Parties) on or prior to the Closing Date of all of the following conditions:

The obligation of Sellers to effect the transactions contemplated hereby shall be subject to the satisfaction or waiver (by both Sellers) on or prior to the Closing Date of all of the following conditions:

Buyer's obligation to effect the transactions contemplated hereby shall be subject to the satisfaction or waiver, by Buyer, on or prior to the Closing Date of all of the following conditions:

The representations, warranties, covenants, agreements and indemnification obligations of the Parties contained in this Agreement shall survive the Closing until eighteen (18) months from the Closing Date and shall thereafter terminate and expire on the first Business Day following the date that is eighteen (18) months from the Closing Date; provided, however, that the representations and warranties of the Parties set forth in (a) Section 2.11 (Tax) (and the indemnification obligations of the Parties with respect thereto) shall expire after all applicable

statutes of limitation (giving effect to any waiver, mitigation or extension thereof), and (b) Section 2.02 (Authorization; Validity and Effect of Transaction Agreements), Section 2.04 (Ownership and Delivery of the Iroquois Interest), Section 2.05 (No Brokers-Seller), Section 3.02 (Authorization; Validity and Effect of Transaction Agreements) and Section 3.04 (No Brokers-Buyer), (collectively, the "Fundamental Representations") (and the indemnification obligations of the Parties with respect thereto) shall survive indefinitely.  Notwithstanding anything to the contrary in the preceding sentence, (i) any claim for indemnification which shall have been asserted pursuant to Section 6.04 prior to the expiration of the survival period applicable to such claim shall survive until the final resolution of such claim in accordance with the provisions of this Article VI; and (ii) in the event that (A) a Party provides written notice to the other Party that the first Party may seek indemnification under this Article VI for a potential Loss and Expense prior to the expiration period applicable to the potential claim described in such notice, (B) such written notice describes in reasonable detail the specific factual basis for such potential Loss and Expense and (C) such first Party asserts an actual claim for indemnification pursuant to Section 6.04 within sixty (60) days of such notice, then the potential indemnification claim described in such notice shall survive until the final resolution of such claim in accordance with the provisions of this Article VI.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by duly authorized officers of the Parties as of the day and year first above written.

	TCPL NORTHEAST LTD.
	By:         /s/Jasmin Bertovic
	Name:    Jasmin Bertovic
	Title:      Vice President
	By:         /s/James R. Eckert
	Name:   James R. Eckert
	Title:     Vice President, Commercial East
	TRANSCANADA IROQUOIS LTD.
	By:         /s/Jasmin Bertovic
	Name:    Jasmin Bertovic
	Title:      Vice President
	By:         /s/James R. Eckert
	Name:   James R. Eckert
	Title:     Vice President, Commercial East
	TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP by TC PipeLines GP, Inc., its General Partner
	By:        /s/Janine M. Watson
	Name:   Janine M. Watson
	Title:     Vice President and General Manager
	By:        /s/Jon Dobson
	Name:  Jon Dobson
	Title:    Corporate Secretary

 

[Signature Page to Purchase Agreement]

 

 

 

 

OPTION AGREEMENT

RELATING TO

PARTNERSHIP INTEREST

IN
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
A DELAWARE LIMITED PARTNERSHIP

by and between

TRANSCANADA IROQUOIS LTD.

and

TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP

MAY 3, 2017

 

 

OPTION AGREEMENT

THIS OPTION AGREEMENT (this "Agreement") is executed as of this 3rd day of May, 2017, by and between TRANSCANADA IROQUOIS LTD., a Delaware corporation ("TCIL") and TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP, a Delaware limited partnership ("Buyer"). TCIL and Buyer are sometimes referred to herein individually as a "Party" and collectively as the "Parties".

 

 

WITNESSETH:

 

WHEREAS, simultaneously with the execution of this Agreement, TCIL, TCPL Northeast Ltd. ("TCPL"), and Buyer are entering into that certain Agreement for Purchase and Sale of Partnership Interest in Iroquois Gas Transmission System, L.P. dated as of the date hereof (the "Purchase Agreement"), pursuant to which Buyer will, subject to the fulfilment or waiver of certain conditions, acquire a 49.34% partnership interest in Iroquois Gas Transmission System, L.P., a Delaware limited partnership ("Iroquois"), comprising the entire 21% limited partner interest held by TCPL, the entire 25% general partner interest held by TCIL, and a 3.34% limited partner interest held by TCIL;

WHEREAS, TCIL will retain a 0.66% limited partner interest in Iroquois (the "Option Interest"); and

WHEREAS, the Parties desire to set forth in this Agreement certain rights and obligations relating to the Option Interest.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows.  Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in the Purchase Agreement.

ARTICLE I
OPTION

(a)	expiry or termination of the waiting period under the HSR Act applicable to the consummation of the transactions contemplated hereby;

(b)

receipt of the consent of TCIL and the other parties to the Iroquois Partnership Agreement from time to time, if the transfer of the Option Interest as contemplated hereby would cause (i) a termination of the partnership for federal tax purposes pursuant to Section 708(b)(1)(B) of the Code, or (ii) a breach of the Iroquois Partnership Agreement, in which case the consent shall include an express waiver of such breach;

(c)	receipt of any third party consent required to the transfer of the Option Interest as contemplated hereby;

(d)

subject to matters disclosed in the Schedules to the Purchase Agreement, the Fundamental Representations and the representation and warranties set forth in Section 2.01 (Organization and Qualification), 2.03 (No Conflict; Required Filings and Consents), 3.01 (Organization and Qualification of Buyer) and 3.03 (No Conflict; Required Filings and Consents Applicable to Buyer) (each such Section reference corresponding to the Section reference in the Purchase Agreement) being true and correct in all material respects with respect to the Option Interest (except where such representations and warranties are already modified by materiality, in which case, such representations and warranties shall be true and correct in all respects) on and as of the date of the Option Closing as if made on and as of the Option Closing (except to the extent that reference to the "Sellers" shall be deemed to refer to TCIL and not to TCPL and references to Iroquois Interest shall be deemed to refer to Option Interest); provided, that this condition may be waived only by the Party to which the Fundamental Representation is made; and

 

 

(e)	each Party having delivered all of the items required to be delivered by such Party as described in Section 1.5; provided, that this condition may be waived in respect of any item only by the Party with the right to require delivery of such item.

(a)	each Party shall deliver or cause to be delivered to the other Party a duly executed assignment and assumption agreement in respect of the Option Interest, in substantially the form of the Assignment and Assumption Agreement;

(b)	TCIL shall deliver or cause to be delivered to Buyer a properly completed and executed certificate of non-foreign status satisfying the requirements of Treasury Regulation Section 1.1445-2(b)(2);

(c)	TCIL shall deliver or cause to be delivered to Buyer a properly completed and executed Internal Revenue Service Form W-9;

(d)	TCIL shall deliver evidence satisfactory to the Buyer acting reasonably of the receipt of the consents, authorizations, approvals, notices, filings and registrations described on Schedule 2.03(b) or Schedule 2.12(b), to the extent applicable to the transactions contemplated by this Agreement;

(e)	TCIL shall deliver a certificate, dated as of the Option Closing and signed by a duly authorized officer of TCIL, certifying that the conditions set forth in Section 1.3 have been satisfied;

(f)

TCIL shall deliver a certificate of the secretary or assistant secretary of TCIL, dated as of the Option Closing: (A) (1) certifying as to and attaching the resolutions adopted by TCIL authorizing the transactions contemplated by this Agreement, and (2) attaching a certificate of good standing (or equivalent certificate) of TCIL, issued within 15 days prior to the Option Closing by the Secretary of State (or equivalent Governmental Authority) of TCIL's jurisdiction of organization; and (B) certifying as to the authorization of the officers of TCIL executing documents in connection with the he transactions contemplated by this Agreement; and

(g)	Buyer shall pay the Exercise Price to TCIL in cash, by wire transfer in accordance with wiring instructions provided by TCIL.

ARTICLE II
INTERIM COVENANTS

(a)	TCIL and Buyer shall make all filings and notifications with all Governmental Authorities, if any, that may be or may become reasonably necessary, proper or advisable under this Agreement and Applicable Laws to consummate and make effective the transactions contemplated under this Agreement; and

 

(b)

Without prejudice to the generality of the foregoing clause (a), TCIL and Buyer shall file or cause to be filed with the Federal Trade Commission and the United States Department of Justice any notifications required to be filed under the HSR Act and the rules and regulations promulgated thereunder with respect to the transactions contemplated by this Agreement as promptly as practicable.  The Parties shall consult with each other as to the appropriate time of filing such notifications and shall use their best efforts to make such filings at the agreed upon time, to respond promptly to any requests for additional information made by either of such agencies, and to cause the waiting periods under the HSR Act to terminate or expire at the earliest possible date after the date of filing. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

(c)	Buyer and TCIL shall equally share the filing fees and associated costs, including legal fees, in connection with the foregoing provisions of this Section 2.4.

ARTICLE III
TERMINATION

(a)	Option Closing;

(b)	the expiration of the Exercise Period without the delivery by Buyer of a valid notice under Section 1.2;

(c)	the termination of the Purchase Agreement in accordance with its terms.

ARTICLE IV
MISCELLANEOUS

The following provisions of the Purchase Agreement are incorporated herein by reference and shall apply mutatis mutandis to this Agreement. In each case, reference to the Parties shall be deemed to refer to TCIL and Buyer but not to TCPL, and references to Closing shall be deemed to refer to the Option Closing: Section 9.01 (Modification); Section 9.02 (Notices); Section 9.04 (Successors and Assigns); Section 9.05 (Press Releases); Section 9.06 (Assignment); Section 9.07 (Severability); Section 9.08 (Captions; Article and Section Reference); Section 9.09 (Choice of Law); Section 9.10 (Counterparts); Section 9.11 (Waiver); Section 9.12 (Construction); Section 9.13 (Incorporation of Exhibits, Schedules and Appendices); Section 9.14 (No Third-Party Beneficiaries); Section 9.15 (No Consequential or Punitive Damages); Section 9.16 (Time of Essence); and Section 9.17 (Defined Terms). Notwithstanding the foregoing, to the extent of any conflict between the Purchase Agreement and this Agreement, the provisions of this Agreement shall prevail. This Agreement and all other documents executed and delivered by the Parties pursuant hereto (or as contemplated hereby) contains the entire understanding of the Parties with respect to the subject matter of this Agreement, and there are no representations, warranties, covenants or agreements other than those expressly set forth herein or therein.  This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter of this Agreement.

[Signature page follows]

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by duly authorized officers of the Parties as of the day and year first above written.

 

	TRANSCANADA IROQUOIS LTD.
	By:         /s/Jasmin Bertovic
	Name:    Jasmin Bertovic
	Title:      Vice President
	By:         /s/James R. Eckert
	Name:    James R. Eckert
	Title:      Vice President, Commercial East
	TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP by TC PipeLines GP, Inc., its General Partner
	By:        /s/Janine M. Watson
	Name:   Janine M. Watson
	Title:     Vice President and General Manager
	By:         /s/Jon Dobson
	Name:    Jon Dobson
	Title:      Corporate Secretary

 

 

 

 

 

AGREEMENT FOR PURCHASE AND SALE

OF

PARTNERSHIP INTEREST

IN
PORTLAND NATURAL GAS TRANSMISSION SYSTEM,
A MAINE GENERAL PARTNERSHIP

by and between

TCPL PORTLAND INC., as SELLER

and

TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP, as BUYER

MAY 3, 2017

---

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AGREEMENT FOR PURCHASE AND SALE
OF
PARTNERSHIP INTEREST
IN
PORTLAND NATURAL GAS TRANSMISSION SYSTEM
A MAINE GENERAL PARTNERSHIP

THIS AGREEMENT FOR PURCHASE AND SALE OF PARTNERSHIP INTEREST (this "Agreement"), is executed as of this 3rd day of May, 2017, by and between TCPL PORTLAND INC., a Delaware corporation ("Seller") and TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP, a Delaware limited partnership ("Buyer").  Seller and Buyer are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

WITNESSETH:

WHEREAS, Seller owns an 11.81% partnership interest in Portland Natural Gas Transmission System, a Maine general partnership ("PNGTS");

WHEREAS, TC PipeLines, LP, a Delaware limited partnership ("MLP"), owns a 98.9899% limited partnership interest in Buyer and TC Pipelines GP, Inc. (the "General Partner") owns a 1.0101% general partnership interest in Buyer.

WHEREAS, the Conflicts Committee  (the "Conflicts Committee") of the Board of Directors of the General Partner, in its capacity as the General Partner of the Buyer and in its capacity as the General Partner of the MLP, has (i) received an opinion of Evercore Group L.L.C., the financial advisor to the Conflicts Committee (the "Financial Advisor"), that the aggregate consideration to be paid by the MLP in connection with the transactions contemplated hereby and under the Iroquois Agreement (as defined herein) is fair to the MLP and its common unitholders (other than the General Partner (as defined herein) and its Affiliates (as defined herein)) from a financial point of view, (ii) determined that the Transaction Agreements (as defined herein) and the transactions contemplated thereby are fair and reasonable to, and in the best interests of, the MLP and the common unitholders of the MLP (other than the General Partner and its Affiliates), (iii) granted "Special Approval" with respect to the transactions contemplated by the Transactions Agreements on the terms and conditions set forth therein, and (iv) recommended that the Board of Directors of the General Partner approve the Transaction Agreements and the transactions contemplated thereby; and

WHEREAS, the Board of Directors of the General Partner has approved the Transaction Agreements and transactions contemplated thereby.

WHEREAS, Buyer desires to purchase and acquire, and Seller desires to sell and assign, the entirety of such interest in PNGTS (the "PNGTS Interest") pursuant to the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

 

ARTICLE I
SALE AND PURCHASE

At the Closing, and on the terms and subject to the conditions set forth in this Agreement, Seller shall sell, assign and deliver to Buyer, and Buyer shall purchase and accept from Seller, the PNGTS Interest.

The purchase price to be paid by Buyer to Seller for the PNGTS Interest (the "Purchase Price") shall equal the Closing Payment, adjusted in accordance with Section 1.03.

Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, the closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the Houston offices of Vinson & Elkins L.L.P. at 10:00 a.m., local time, on the 30^th day of June, 2017, provided that all of the conditions to each Party's obligations hereunder have been satisfied or waived (other than conditions to be satisfied at the Closing), or at such other place or time as the Parties may agree.  The date and time at which the Closing actually occurs is hereinafter referred to as the "Closing Date."  Other than with respect to those matters that are effective or applicable as of the Effective Time as expressly provided herein, the Closing shall be effective for all purposes as of 12:01 a.m. Eastern time on July 1, 2017.

At the Closing, Seller shall deliver or cause to be delivered to Buyer the following:

(a)	the Assignment and Assumption Agreement, duly executed by Seller;

(b)	the Partnership Agreement Amendment, duly executed by Seller (to the extent Seller's execution thereof is required by Buyer or any other party thereto);

 

 

(c)	if James Eckert is replaced as the President of PNGTS prior to Closing, an assignment of a 1% nominee interest held in PNGTS OpCo from James Eckert to the new President of PNGTS, duly executed by James Eckert;

(d)	a properly completed and an executed certificate of non-foreign status satisfying the requirements of Treasury Regulation Section 1.1445-2(b)(2) with respect to Seller (substantially in the form attached hereto as Exhibit A);

(i)	such other agreements, documents, instruments and writings as are expressly required to be delivered by Seller at or prior to the Closing Date pursuant to this Agreement.

At the Closing, Buyer shall deliver or cause to be delivered to Seller, or its designate, the following:

(a)	the Closing Payment;

(b)	the Assignment and Assumption Agreement, duly executed by Buyer;

(c)	the Partnership Agreement Amendment, duly executed by Buyer;

(e)	if requested by Seller, an amendment to the Debt Service Reserve Backup Guaranty to clarify coverage of the increase in Buyer's interest in PNGTS from and after Closing, in form and substance satisfactory to Seller, reasonably acceptable to Buyer;

(f)	any documents Seller may request Buyer to deliver, to the extent such documents are required by the PNGTS Partnership Agreement or reasonably requested by the management committee of PNGTS; and

(g)	such other agreements, documents, instruments and writings as are expressly required to be delivered by Buyer at or prior to the Closing Date pursuant to this Agreement.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that the statements contained in this Article II are correct and complete as of the date hereof, except as set forth in the Schedules.

Seller (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (b) has all requisite corporate power and authority to own and operate its business as presently conducted, and (c) is duly qualified as a foreign corporation and is in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified as a foreign corporation as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Seller has the requisite power and authority to execute, deliver and perform its obligations under this Agreement and the other Transaction Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the Transaction Agreements by Seller and the performance of its obligations hereunder and thereunder and the consummation of all of the transactions contemplated hereby and thereby have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will, at or prior to the Closing, be) duly authorized by the Board of Directors (and, if required, shareholders) of Seller and by all other necessary corporate action, and no other proceedings are (or will be) necessary for Seller to authorize this Agreement or the other Transaction Agreements and the transactions contemplated hereby and thereby.  This Agreement and the Transaction Agreements have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will at or prior to the Closing, be) duly and validly executed and delivered by Seller and constitute (or will constitute) legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their terms, except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

Seller is the legal and beneficial owner of the PNGTS Interest.  Except as set forth on Schedule 2.04, at the Closing, Seller will transfer good and valid title to the PNGTS Interest to Buyer, free and clear of any and all Liens.  Except as expressly provided in the PNGTS Partnership Agreement, to Seller's Knowledge, there are (i) no authorized or outstanding subscriptions, warrants, options, convertible securities or other rights (contingent or otherwise) to purchase or otherwise acquire from PNGTS any equity interests of or in PNGTS, (ii) no commitments on the part of PNGTS to issue membership interests, shares, subscriptions, warrants, options, convertible securities or other similar rights, and (iii) no equity securities of PNGTS reserved for issuance for any such purpose. PNGTS has no obligation (contingent or other) to purchase, redeem or otherwise acquire any of its equity securities or interests. To Seller's Knowledge, except as expressly provided in the PNGTS Partnership Agreement and in this Agreement, there is no voting trust or agreement, stockholders agreement, pledge agreement, buy-sell agreement, right of first refusal, preemptive right or proxy relating to any equity securities of PNGTS. There are no outstanding subscriptions, options, warrants, calls, rights, commitments, arrangements, understandings or agreements of any character affecting Seller's right to transfer the PNGTS Interest as contemplated herein. The PNGTS Interest has been duly authorized and is validly issued, fully paid and nonassessable.

Seller does not have any liability to pay any compensation to any broker, finder or agent with respect to the transactions contemplated hereby for which MLP, Buyer or PNGTS could be liable or that could result in any Lien on the PNGTS Interest.

There are no actions or proceedings pending or, to the Knowledge of Seller, threatened, against Seller before any court, arbitrator or Governmental Authority acting in an adjudicative capacity which, if adversely determined, would prohibit or restrain or allow recovery of damages for the execution, delivery or performance by Seller of this Agreement or the Transaction Agreements or any of the transactions contemplated hereby or thereby.  Neither Seller nor PNGTS is subject to any outstanding judgments, rules, orders, writs, injunctions or decrees of any court or Governmental Authority which would prohibit or restrain the execution, delivery or performance by Seller of this Agreement, the Transaction Agreements or any of the transactions contemplated hereby or thereby.

Except as set forth on Schedule 2.07, to Seller's Knowledge, since December 31, 2016: (a) PNGTS  has not incurred any liabilities or obligations, fixed, contingent, accrued or otherwise that are of the type that are required to be set forth on a balance sheet prepared in accordance with GAAP (except for liabilities and obligations incurred in the ordinary course of business, which are not Material); (b) PNGTS has conducted the Business, in all Material respects, in the ordinary course; and (c) no event, occurrence or other matter has occurred that would reasonably be expected to have a Material Adverse Effect.

Except for the Transaction Agreements or as set forth in Schedule 2.08, there are no intercompany contracts or other arrangements between PNGTS, on the one hand, and Seller or its other Affiliates, on the other hand, that (a) cannot be terminated by PNGTS upon notice of thirty (30) days or less and (b) would subject PNGTS to any obligations or liabilities, or otherwise bind PNGTS subsequent to the Closing.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:

Buyer is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware.  Buyer has all requisite limited partnership power and authority to own and operate its business as presently conducted.  Buyer is duly qualified as a foreign limited partnership and is in good standing in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except for such failures to be so qualified as would not reasonably be expected to have a material adverse effect on Buyer.

Buyer has the requisite limited partnership power and authority to execute, deliver and perform its obligations under this Agreement and the other Transaction Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the other Transaction Agreements by Buyer and the performance by it of its obligations hereunder and thereunder and the consummation of all of the transactions contemplated hereby and thereby have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will, at or prior to the Closing, be) duly authorized by Buyer's general partner and by all other necessary corporate and limited partnership action on the part of Buyer and its general partner, and no other proceedings are (or will be) necessary for Buyer to authorize this Agreement or the other Transaction Agreements and the transactions contemplated hereby and thereby.  This Agreement and the other Transaction Agreements to which Buyer is a party have been (or, with respect to those Transaction Agreements to be delivered at the Closing, will, at or prior to the Closing, be) duly and validly executed and delivered by Buyer and constitute (or will constitute) legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their terms, except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

Buyer has no liability to pay any compensation to any broker, finder or agent with respect to the transactions contemplated hereby based upon arrangements made by or on behalf of Buyer for which Seller or PNGTS could be liable.

There are no actions or proceedings pending or, to Buyer's knowledge, threatened against Buyer before any court or Governmental Authority acting in an adjudicative capacity, which, if adversely determined, would prohibit or restrain the execution, delivery or performance of this Agreement or the other Transaction Agreements or any of the transactions contemplated hereby or thereby.  Buyer is not subject to any outstanding judgments, rules, orders, writs, injunctions or decrees of any court or Governmental Authority which would prohibit or restrain the execution, delivery or performance of this Agreement, the other Transaction Agreements or any of the transactions contemplated hereby or thereby.

Buyer has such knowledge and experience in financial and business matters that Buyer is capable of evaluating the merits and risks of the investment contemplated by this Agreement and making an informed investment decision with respect thereto. Buyer is acquiring the PNGTS Interest for Buyer's own account for investment only and not with a view to, or any present intention of, effecting a distribution of the PNGTS Interest in violation of the Securities Act.  Buyer acknowledges that the PNGTS Interest has not been registered under the Securities Act or the securities laws of any state or other jurisdiction and cannot be disposed of except in accordance with the Securities Act and any applicable state laws.  Buyer is an accredited investor (within the meaning of Regulation D promulgated under the Securities Act).

Except as provided in Article II of this Agreement, Seller has not made and does not make any other representations or warranties as to the PNGTS Interest, PNGTS, the Business or any matter or thing affecting or relating to PNGTS or its business, operations, assets, properties, liabilities, financial condition, results of operation or other affairs.  Buyer hereby waives, to the extent permitted by law, any implied warranty applicable to the transactions contemplated hereby (including any implied warranty of merchantability or fitness for a particular purpose).  Buyer acknowledges that it has had the opportunity to conduct its own independent investigation, analysis and evaluation of the PNGTS Interest, PNGTS and the Business.

ARTICLE IV
COVENANTS OF THE PARTIES

Except as otherwise provided in this Agreement, Buyer and Seller shall be solely responsible for their respective expenses and costs incurred in connection with the execution and performance of this Agreement, the other Transaction Agreements and the transactions contemplated hereby and thereby.

Seller shall grant Buyer reasonable access during normal business hours to all books and records concerning PNGTS which Seller has in its possession or control, as Buyer deems reasonably necessary or advisable in connection with the consummation of the transactions contemplated hereby; provided that such access shall not materially interfere with normal operations of Seller, PNGTS or any of their respective Affiliates.

During the period commencing on the date hereof and ending on the Closing Date, Seller will, after obtaining Knowledge thereof, give notice to Buyer of any event or occurrence which would reasonably be expected to have a Material Adverse Effect, which would reasonably be expected to be Material to PNGTS or the Business, or which would reasonably be expected to cause Seller to breach any representation, warranty or covenant of Seller contained in this Agreement.

In the event of a Dispute, upon the written request (a "Request") of any Party to this Agreement, the matter shall immediately be referred to senior officers of each Party designated by such Party for resolution.  The designated senior officers shall meet immediately and attempt in good faith to negotiate a resolution of the Dispute.  If the Parties are unable to resolve the Dispute within fifteen (15) Business Days after receipt by a Party of a Request, then either Party may seek any legal avenue available under this Agreement to resolve the Dispute.

Each Party shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement and the other Transaction Agreements as soon as reasonably practicable, including such actions or things as any Party hereto may reasonably request in order to cause any of the conditions to any other Party's obligation to consummate such transactions specified in Article V to be fully satisfied, and as promptly as is reasonably practicable cooperate with and furnish information to each other in connection with any requirements imposed upon any of them with respect thereto.

ARTICLE V
CONDITIONS PRECEDENT

The respective obligations of each Party to effect the transactions contemplated hereby shall be subject to the satisfaction or waiver (by both Parties) on or prior to the Closing Date of all of the following conditions:

Seller's obligation to effect the transactions contemplated hereby shall be subject to the satisfaction or waiver (by Seller) on or prior to the Closing Date of all of the following conditions:

Buyer's obligation to effect the transactions contemplated hereby shall be subject to the satisfaction or waiver (by Buyer) on or prior to the Closing Date of all of the following conditions:

ARTICLE VI
SURVIVAL; INDEMNIFICATION

The representations, warranties, covenants, agreements and indemnification obligations of the Parties contained in this Agreement shall survive the Closing until eighteen (18) months from the Closing Date and shall thereafter terminate and expire on the first Business Day following the date that is eighteen (18) months from the Closing Date; provided, however, that the representations and warranties of the Parties set forth in Section 2.02 (Authorization; Validity and Effect of Transaction Agreements), Section 2.04 (Ownership and Delivery of the PNGTS Interest), Section 2.05 (No Brokers-Seller), Section 3.02 (Authorization; Validity and Effect of Transaction Agreements) and Section 3.04 (No Brokers-Buyer), (collectively, the "Fundamental Representations") (and the indemnification obligations of the Parties with respect thereto) shall survive indefinitely.  Notwithstanding anything to the contrary in the preceding sentence, (i) any claim for indemnification which shall have

been asserted pursuant to Section 6.04 prior to the expiration of the survival period applicable to such claim shall survive until the final resolution of such claim in accordance with the provisions of this Article VI; and (ii) in the event that (A) a Party provides written notice to the other Party that the first Party may seek indemnification under this Article VI for a potential Loss and Expense prior to the expiration period applicable to the potential claim described in such notice, (B) such written notice describes in reasonable detail the specific factual basis for such potential Loss and Expense and (C) such first Party asserts an actual claim for indemnification pursuant to Section 6.04 within sixty (60) days of such notice, then the potential indemnification claim described in such notice shall survive until the final resolution of such claim in accordance with the provisions of this Article VI.

The indemnification rights provided to the Parties pursuant to this Article VI, as limited by and subject to the provisions of this Article VI, shall be the Parties' sole and exclusive remedy with respect to this Agreement and the other Transaction Agreements, including with respect to any breach of any representation or warranty by, or covenant or obligation of, the other Party under this Agreement and the other Transaction Agreements, other than with respect to: (i) a breach of the covenant contained in Section 9.05; or (ii) any action or inaction by a Party that constitutes fraud.

Notwithstanding anything to the contrary in this Article VI, Seller shall not be obligated under this Article VI to indemnify any Buyer Indemnified Party for any Loss and Expense that directly arises out of or results directly from any event, occurrence or state of facts disclosed in the Schedules to this Agreement provided that such event, occurrence or state of facts are disclosed in sufficient detail to enable the reader thereof to reasonably determine, without further investigation, the nature of the issue and the potential consequences thereof..

For all Tax purposes, the Parties agree to treat (and will cause each of their respective Affiliates to treat) (a) any indemnification payment made under this Article VI and (b) any adjustment pursuant to Section 1.03 as an adjustment to the Purchase Price.

ARTICLE VII
TAX MATTERS

(i)	in the case of Income Taxes, Seller shall be liable for an amount equal to the amount that would be payable if the taxable year ended on the Closing Date; and

(ii)

in the case of Taxes other than Income Taxes, Seller shall be liable for an amount equal to the amount of such Taxes multiplied by a fraction the numerator of which is the number of calendar days in the period ending on and including the Closing Date and the denominator of which is the number of calendar days in the Straddle Period.

The Parties acknowledge and agree that neither Party has identified any Transfer Taxes that would result from the transactions contemplated by this Agreement.  However, if any Transfer Taxes are owed by either Party on account of the transactions contemplated by this Agreement, they shall be borne equally by Buyer and Seller.

"Seller Taxes" means any and all Loss and Expense suffered or incurred by any of the Buyer Indemnified Parties with respect to any and all: (i) breaches of any covenants set forth in this Article VII; (ii) Taxes imposed on or asserted against the properties, income or operations of PNGTS or for which PNGTS may otherwise be liable, for all Pre-Closing Periods or Straddle Periods ending on the Closing Date (determined in accordance with Section 7.01(b)), in each case to the extent attributable to the PNGTS Interest; (iii) Taxes, except for Transfer Taxes which are the responsibility of Buyer pursuant to Section 7.02, imposed on PNGTS or for which PNGTS may be liable, as a result of any transaction contemplated by this Agreement; (iv) Taxes imposed on PNGTS as a result of the provisions of Treasury Regulations Section 1.1502-6 or the analogous provisions of any state, local or foreign law) or the Taxes of any other Person for which PNGTS is or has been liable as a transferee or successor, by contract or otherwise, in each case to the extent attributable to the PNGTS Interest; and (v) Income Taxes for which PNGTS is liable as a result of any election for PNGTS to be treated as other than a partnership for U.S. federal, state or local income tax purposes that is filed at any time on or prior to the Closing Date (other than any election made in accordance with the PNGTS Partnership Agreement and with the consent of Buyer), to the extent attributable to the PNGTS Interest; provided, however, that no such Tax shall constitute a Seller Tax to the extent such Tax was included as a Current Liability in the determination of Working Capital.  For the avoidance of doubt, the determination of Seller Taxes shall take into account the fact that Buyer is only acquiring an 11.81% interest in PNGTS pursuant to this Agreement.

To the extent PNGTS receives any refund of Taxes with respect to any Pre-Closing Period or Straddle Period, Buyer shall pay Seller within ten (10) Business Days 11.81% of the amount of such refund of Taxes; provided, however that no refund of Taxes shall be payable to Seller to the extent such refund was included as a Current Asset in the determination of Working Capital.  All other Tax refunds attributable to PNGTS shall be the property of PNGTS.

ARTICLE VIII
TERMINATION

This Agreement may be terminated at any time prior to the Closing:

If this Agreement is terminated in accordance with this Article VIII, all further obligations of the Parties hereunder shall terminate.  In the event of a termination contemplated hereby by any Party pursuant to this Article VIII, the transactions contemplated hereby shall be abandoned without further action by any Party hereto, and there shall be no obligation of or liability under this Agreement to any Party hereto, or their respective shareholders, directors, officers, employees, representatives or agents, except that this Section 8.02 and Article IX shall survive termination of this Agreement.

ARTICLE IX
MISCELLANEOUS

This Agreement may be amended or modified only by a written instrument executed by the Parties, with the consent of the Conflicts Committee.

All notices which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be deemed given: (i) the next Business Day after being sent by Federal Express or any other recognized overnight courier service providing delivery confirmation; (ii) three (3) Business Days after mailing by certified or registered mail, with postage prepaid and with return receipt requested; or (iii) when a confirmation is received after being sent by legible facsimile transmission, addressed as follows:

If to Sellers to:	TCPL Portland Inc.
	700 Louisiana Street
	Suite 700
	Houston, Texas 77002-2761
	Attention:  Corporate Secretary
	Fax:  (832) 320-6201
	with a copy (which shall not constitute notice) to:
	TransCanada PipeLines Limited
	450 – 1st Street S.W.
	Calgary, Alberta
	Canada
	T2P 5H1
	Attention:  Executive Vice President, Law and General Counsel
	Fax:  (403) 920-2411

 

 

If to Buyer to:	TC Pipelines Intermediate Limited Partnership
	c/o TC PipeLines GP, Inc.
	700 Louisiana Street, Suite 700
	Houston, TX 77002-2873
	Attention: President
	Fax: (832) 320-6488
	with a copy (which shall not constitute notice) to:
	Gillian Hobson
	Vinson & Elkins L.L.P.
	1001 Fannin Street, Suite 2500
	Houston, TX 77002-6760
	Fax (713) 615-5794

or to such other address or addresses as any Party shall have designated by notice in writing to the other Party in accordance with this Section 9.02.

The Transaction Agreements and all the other documents executed and delivered by the Parties pursuant hereto (or as contemplated hereby), contain the entire understanding of the Parties with respect to the subject matter of this Agreement, and there are no representations, warranties, covenants or agreements other than those expressly set forth herein or therein.  This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter of this Agreement.

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APPENDIX A
DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings:

"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly controls (including all directors and officers of such Person), is controlled by, or through one or more intermediaries, under direct or indirect common control with, such Person.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, Buyer and Seller shall not be considered Affiliates of one another for the purposes of this Agreement.

"Agreement" has the meaning set forth in the preamble.

"Applicable Law" means, with respect to any Person, any statute, law, regulation, ordinance, rule, judgment, rule of common law, order or decree, directive, requirement, or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether in effect as of the date hereof or thereafter, and in each case as amended and legally enforceable, applicable to such Person or its subsidiaries or their respective assets.

"Assignment and Assumption Agreement" means an assignment and assumption agreement to give effect to the assignment contemplated by this Agreement, in substantially the form attached as Exhibit B hereto, with any changes as may be necessary to cause such agreement or the assignment thereunder to comply with the requirements of the PNGTS Partnership Agreement or the reasonable requirements of the PNGTS management committee.

"Base Purchase Price" means fifty-five million dollars ($55,000,000) less 11.81% of all current and long term debt under the Debt Documents at Closing.

"Business" means PNGTS' business of constructing, owning and operating the PNGTS Pipeline and transporting natural gas on its system pursuant to transportation contracts with shippers.

"Business Day" means any day on which banks are generally open to conduct business in New York, New York.

"Buyer" has the meaning set forth in the preamble.

"Buyer Indemnified Parties" has the meaning set forth in Section 6.02(a).

"Claim" has the meaning set forth in Section 6.04(b).

"Closing" has the meaning set forth in Section 1.04.

"Closing Date" has the meaning set forth in Section 1.04.

 

"Closing Payment" means the Base Purchase Price, adjusted as follows: (x) if the Estimated Working Capital is in excess of the Reference Amount, the Base Purchase Price shall be increased by 11.81% of the amount of such excess in order to determine the Closing Payment and (y) if the Estimated Working Capital is less than the Reference Amount, the Base Purchase Price shall be decreased by 11.81% of the amount of the deficiency in order to determine the Closing Payment.

"Closing Statement" has the meaning set forth in Section 1.05(a).

"Code" means the United States Internal Revenue Code of 1986, as amended.

"Conflicts Committee" has the meaning set forth in the recitals.

"Contract" means any note, bond, indenture, mortgage, deed of trust, lease, franchise, permit, authorization, license, contract, instrument, employee benefit plan or practice, or other agreement, obligation or commitment or concession of any nature.

"Current Assets" means, as calculated under the consolidated unaudited financial statements of PNGTS, the aggregate of (i) cash, (ii) accounts receivable, (iii) accounts receivable and advances receivable from affiliated companies, (iv) plant material and operating supplies, and (v) prepayments; but excluding accrued Income Taxes and deferred Income Tax assets.

"Current Liabilities" means, as calculated under the consolidated unaudited financial statements of PNGTS, the aggregate of (i) accounts payable, (ii) payables to and advances from affiliated companies, (iii) accrued taxes other than Income Taxes, and (iv) other current and accrued liabilities due within a year, excluding accrued Income Taxes, deferred Income Tax liabilities, and the current portion of long term debt.

"Debt Documents" means the Note Purchase Agreement and all related agreements thereto, including any debt service guarantees, security agreements and collateral agency agreements.

"Debt Service Reserve Backup Guaranty" means that certain Indemnity Agreement made effective as of January 1, 2016 between TC PipeLines, LP and TransCanada PipeLines Limited.

"Debt Service Reserve Guaranty" means that certain guaranty dated April 10, 2003 made by TransCanada PipeLines Limited in favor of The Bank of New York Mellon (in its capacity as collateral agent under the Note Purchase Agreement) in respect of the obligations of PNGTS under the Debt Documents.

"Dispute" means any dispute, controversy or claim arising out or relating to this Agreement or the breach, termination or validity thereof.

"Effective Time" means 12:01 am Central Standard Time on the Closing Date.

"Estimated Working Capital" means Seller's good faith estimate of the Working Capital as of the Closing Date.

"FERC" means the Federal Energy Regulatory Commission and any successor entity thereto.

"Financial Advisor" has the meaning set forth in the recitals.

"Financial Statements" has the meaning set forth in Section 2.10.

"Fundamental Representations" has the meaning set forth in Section 6.01.

"GAAP" means U.S. generally accepted accounting principles.  All references to GAAP shall mean GAAP as in effect on the date hereof, unless otherwise specified.

"General Partner" means TC PipeLines GP, Inc., the general partner of the MLP.

"Governmental Authority" means any federal, state, county, municipal, regional or other governmental authority, agency, board, body, instrumentality, commission or political subdivision of any of the foregoing, or any court, arbitrator, tribunal, or individual having adjudicative, regulatory, judicial, quasi-judicial, administrative, or similar functions.

"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

"Income Tax" means federal, state, local, or foreign income or franchise Taxes or other similar Taxes measured in whole or in part by income and any interest and penalties or additions thereon.

"Indemnified Party" has the meaning set forth in Section 6.04(a).

"Indemnifying Party" has the meaning set forth in Section 6.04(a).

"Independent Accounting Firm" means an independent nationally recognized accounting firm as mutually selected by Seller and Buyer.

"Iroquois Agreement" has the meaning set forth in Section 5.03(e).

"Knowledge" means the actual knowledge of James Eckert, Stephen Clark, Don Bell and Keith Nelson, after reasonable inquiry and investigation of those persons employed by Seller whom such individuals reasonably believe in good faith to be generally responsible for the information, facts, or events with respect to which such representation applies.

"Law" means any law, statute, ordinance, rule, regulation, code, order, judgment, injunction or decree enacted, issued, promulgated, enforced or entered by any Governmental Authority.

"Lien" means any lien, pledge, charge, claim, security interest, purchase agreement, option, restriction on transfer or other recorded encumbrance of any nature whatsoever, whether consensual, statutory or otherwise.

"Loss and Expense" has the meaning set forth in Section 6.02(a).

"Material" means material in relation to the Business, taken as a whole.

"Material Adverse Effect" means any circumstance, change or effect that is materially adverse to the financial condition or results of operations of PNGTS, taken as a whole, or that impedes or delays the ability of Seller to perform its obligations under this Agreement or to consummate the transactions contemplated hereby, other than (i) any adverse circumstance, change, or effect arising from or relating to general business or economic conditions in the industries or markets in which PNGTS  operates not having a materially disproportionate effect on PNGTS as compared to other participants in such industry or market, including (A) changes in national or regional gathering, pipeline or storage facilities or (B) rules, regulations or decisions of FERC or the courts affecting the natural gas transportation industry as a whole or the natural gas storage industry as a whole, (ii) any adverse circumstance, change or effect arising from weather conditions, including unexpected or harsh weather conditions, (iii) seasonal reductions in revenues or earnings of PNGTS  in the ordinary course of business consistent with past periods, (iv) national or international political, diplomatic or military conditions (including any engagement in hostilities, whether or not pursuant to a declaration of war, or the occurrence of any military or terrorist attack) not disproportionately affecting PNGTS  as compared to other participants in the industries or markets in which PNGTS  operates, (v) changes in GAAP, (vi) changes in Applicable Laws not disproportionately affecting PNGTS as compared to other participants in the industries or markets in which PNGTS  operates, (vii) any changes in prices for commodities, goods, or services, or the availability or costs of hedges or other derivatives, including fluctuations in interest rates, (viii) any matter that is expressly disclosed in the Schedules as of the date of execution of this Agreement provided such matter is disclosed in sufficient detail to enable the reader thereof to reasonably determine, without further investigation, the nature of the issue and the potential consequences thereof, and (ix) the execution and delivery or announcement of this Agreement.

"MLP" has the meaning set forth in the recitals.

"MLP Agreement" means that certain Third Amended and Restated Agreement of Limited Partnership of the Partnership dated as of April 1, 2015, as amended.

"Note Purchase Agreement" means the note purchase agreement dated as of April 10, 2003 between PNGTS as issuer and the "Initial Noteholders" thereto.

"Notifying Party" has the meaning set forth in Section 6.04(a).

"Partnership Agreement Amendment" means, in form and substance acceptable to Buyer and Seller, acting reasonably: an amendment to the PNGTS Partnership Agreement to acknowledge the assignment of the PNGTS Interest as contemplated by this Agreement, and to make such amendments to the PNGTS Partnership Agreement as the parties to the Partnership Agreement Amendment shall see fit, in each case with effect from and after the Effective Time.

"PNGTS" has the meaning set forth in the recitals.

"PNGTS Interest" has the meaning set forth in the recitals.

"PNGTS OpCo" means PNGTS Operating Co., LLC.

"PNGTS Partnership Agreement" means that certain Amended and Restated General Partnership Agreement of PNGTS dated as of March 1, 1996, as amended.

"PNGTS Pipeline" means, collectively with all associated laterals and meter stations, a natural gas pipeline system extending between East Hereford, Maine and Dracut, Massachusetts, consisting of the PNGTS pipeline, plus any expansions or improvements undertaken, in whole or in part, by PNGTS.

"Party" has the meaning set forth in the preamble.

"Person" means a person, corporation, partnership, limited liability company, joint venture, trust, Governmental Authority or other entity or organization.

"Pre-Closing Period" means any Tax period ending on or before the Closing Date.

"Pre-Closing Tax Return" has the meaning set forth in Section 7.01(a).

"Prime Rate" means the prime interest rate reported in The Wall Street Journal.

"Purchase Price" has the meaning set out in Section 1.02.

"Qualifying Claim" has the meaning set forth in Section 6.05(a).

"Reference Amount" means two hundred and nineteen thousand, seven hundred and forty-six dollars ($219,746).

"Request" has the meaning set forth in Section 4.04.

"Securities Act" means the federal Securities Act of 1933, as amended.

"Seller" has the meaning set forth in the preamble.

"Seller Indemnified Parties" has the meaning set forth in Section 6.03(a).

"Seller Taxes" has the meaning set forth in Section 7.04.

"Straddle Period" means any Tax period beginning on or before and ending after the Closing Date.

"Tax" or "Taxes" means all income, gross receipts, profits, franchise, sales, use, ad valorem, occupation, property (including in lieu-of-taxes), capital, environmental, employment, severance, excise, workers' compensation, social security, withholding or similar taxes, unclaimed property or escheat obligations or other governmental fees or charges of a similar nature, however denominated, imposed by any federal, state, local, foreign or other political subdivision taxing authority, whether imposed directly on a person or resulting under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise, and including any interest and penalties (civil or criminal) on or additions to any such taxes or in respect of a failure to comply with any requirement relating to any Tax Return and any expenses incurred in connection with the determination, settlement or litigation of any tax liability.

 

"Tax Matter" has the meaning set forth in Section 7.03(a).

"Tax Return" means any return, declaration, report, claim for refund, statement, information or other document, including any schedule or attachment thereto and including amendment thereto, filed or to be filed or required to be filed or supplied to any federal, state, local or foreign Tax authority or any other Governmental Authority with respect to Taxes, including, where permitted or required, combined, consolidated, unitary or any similar returns for any group of entities.

"Third Party Claim" has the meaning set forth in Section 6.04(c).

"Transaction Agreements" means this Agreement, the Assignment and Assumption Agreement, the Partnership Agreement Amendment, and any documents or certificates to be provided pursuant hereto or thereto.

"Transfer Taxes" means any and all transfer Taxes, including sales taxes, use, excise, stock, stamp, documentary, filing, recording, permit, license, authorization, and similar Taxes fees, duties, levies, customs, tariffs, imposts, assessments, obligations and charges.

"Violation" has the meaning set forth in Section 2.03(a).

"Working Capital" means (i) Current Assets, minus (ii) Current Liabilities.  For the avoidance of doubt, Working Capital may be a negative number.

"Working Capital Adjustment Statement" means the statement provided pursuant to Section 1.03(a).

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