UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 4)*

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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(1) As of February 28, 2007, there were 34,856,086 common units of TC Pipelines, LP outstanding.

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(2) As of February 28, 2007, there were 34,856,086 common units of TC Pipelines, LP outstanding.

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(3) As of February 28, 2007, there were 34,856,086 common units of TC Pipelines, LP outstanding.

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(4) As of February 28, 2007, there were 34,856,086 common units of TC Pipelines, LP outstanding.

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AMENDMENT NO. 4 TO
STATEMENT ON SCHEDULE 13D

 

Item 1.	Security and Issuer
This Amendment No. 4 (the “Amendment”) to Schedule 13D/A is being filed by TransCanada Corporation, a Canadian public company (“TransCanada”), TransCanada PipeLines Limited, a Canadian corporation (“TCPL”), TransCan Northern Ltd., a Delaware corporation (“TransCan Northern”) and TC PipeLines GP, Inc., a Delaware corporation (the “GP”), to amend the Schedule 13D that was filed on August 9, 2002, as amended by Amendment No. 1 filed on August 13, 2003, Amendment No. 2 filed on August 3, 2004, and Amendment No. 3 filed on April 1, 2005. This statement relates to the common units representing limited partner interests (the “Common Units”) of TC PipeLines, LP, a Delaware limited partnership (the “Partnership”), which has its mailing address at 110 Turnpike Road, Suite 203, Westborough, Massachusetts 01581 and the principal executive offices at 450 1st Street SW, Calgary, Alberta, Canada, T2P 5H1.
Item 2.	Identity and Background
The name, state or other place of organization and address of its principal office for the Reporting Persons are set forth on Schedule I attached hereto. (a)-(c)  The information required to be filed in response to paragraphs (a), (b) and (c) of Item 2 with respect to the persons listed on Appendices A, B, C and D (the “Listed Persons”) hereto is set forth therein. (d)  During the last five years, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, none of the Listed Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e)  During the last five years, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any of the Listed Persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which any of such persons was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f)  The information required to be filed in response to paragraph (f) of Item 2 with respect to the Listed Persons is set forth therein.
Item 3.	Source and Amount of Funds or Other Consideration
The information previously furnished in response to this Item 3 is amended by adding the following: To purchase the Common Units of the Partnership, TransCan Northern obtained US$300,000,000 from its parent, TransCanada PipeLine USA Ltd., who borrowed the funds via

 

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a credit facility with Citibank and certain others lenders party to the the credit agreement granting the loan.  A copy of the credit agreement is filed as Exhibit C hereto.
Item 4.	Purpose of Transaction
The information previously furnished in response to this Item 4 is amended by adding the following: Through a private placement completed on February 22, 2007, the Partnership sold 17,356,086 of its Common Units pursuant to a common unit purchase agreement by and among the Partnership and certain investors thereto.  Pursuant thereto, TransCan Northern, an indirect, wholly owned subsidiary of TransCanada, acquired 8,678,045 common units, and TransCanada is deemed beneficially to own 10,713,151 Common Units, which constitute approximately 30.7% of the 34,856,086 issued and outstanding Common Units.  The Common Units were acquired for investment purposes. GP, a wholly-owned subsidiary of TransCan Northern and an indirect, wholly owned subsidiary of TransCanada, purchased an additional $12.8 million of general partner interests, to maintains its ownership of all of the 2% general partner interest in the Partnership. Through its 100% ownership of GP, TransCan Northern has the right to appoint the board of directors of GP. Through the right to appoint the board of directors of GP, TransCan Northern and, through its 100% indirect ownership of TransCan Northern, TransCanada have the ability to influence the management policies and control of the Partnership with the aim of increasing the value of the Partnership, and thus, the Reporting Persons’ investment. Pursuant to the terms of the Amended and Restated Agreement of Limited Partnership of the Partnership (the “Partnership Agreement”), among other conditions, GP may not be removed from its position as general partner of the Partnership unless 66⅔% of the outstanding units, voting together as a single class, including units held by GP and its affiliates, vote to approve such removal and the Issuer receives an opinion of counsel regarding limited liability and tax matters. Any removal of GP is also subject to the approval of a successor general partner by the vote of the holders of a majority of the outstanding units, voting as separate classes. The ownership of more than 30% of the outstanding units by GP and its affiliates has the practical effect of making the general partner’s removal quite difficult. The Partnership Agreement contains specific provisions that are intended to discourage a person or group from attempting to remove GP as the Partnership’s general partner or otherwise change the Partnership’s management. If any person or group other than GP and its affiliates acquires beneficial ownership of 20% or more of any class of units, that person or group loses voting rights on all of its units. This loss of voting rights does not apply to any person or group that acquires the units from GP or its affiliates and any transferees of that person or group approved by GP or to any person or group who acquires the units with the prior approval of the board of directors of GP.

 

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Under the Partnership Agreement, the Issuer has agreed to register for resale under the Securities Act and applicable state securities laws any Common Units or other partnership securities proposed to be sold by GP or any of its affiliates or their assignees if an exemption from the registration requirements is not otherwise available. These registration rights continue for two years following any withdrawal or removal of GP as the Partnership’s general partner. Further, the Partnership may from time to time increase the amount of its quarterly distribution to unitholders at the discretion of the board of directors of GP. The information provided under the caption “Partnership Agreement-Cash Distributions” under Item 6 below is hereby incorporated by reference herein. As of the date of this Schedule 13D, none of the Reporting Persons, and to the Reporting Persons’ knowledge, none of the Listed Persons has any plans or proposals which relate to or would result in any of the following actions, except as disclosed herein and except that (i) the Reporting Persons or their affiliates or the Listed Persons may, from time to time or at any time, subject to market and general economic conditions and other factors, purchase additional Common Units in the open market, in privately negotiated transactions or otherwise, or sell at any time all or a portion of the Common Units now owned or hereafter acquired by them to one or more purchasers and (ii) members of the board of directors of GP may choose not to stand for re-election at the end of their respective terms: ·      the acquisition by any person of additional securities of the Partnership, or the disposition of securities of the Partnership; ·      an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Partnership or any of its subsidiaries; ·      a sale or transfer of a material amount of assets of the Partnership or any of its subsidiaries; ·      any change in the present board of directors or management of the Partnership, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; ·      any material change in the present capitalization or dividend policy of the Partnership; ·      any other material change in the Partnership’s business or corporate structure including but not limited to, if the Partnership is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by Section 13 of the Investment Company Act of 1940; ·     changes in the Partnership’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Partnership by any person;

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·      causing a class of securities of the Partnership to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; ·      a class of equity securities of the Partnership becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or ·      any action similar to any of those enumerated above. Depending on the factors described in the preceding paragraph, and other factors that may arise in the future, the Listed Persons may be involved in such matters and, depending on the facts and circumstances at such time, may formulate a plan with respect to such matters. In addition, the Listed Persons may entertain discussions with, and proposals to, the Partnership, to other unitholders of the Partnership or to third parties. References to, and descriptions of, the Partnership Agreement of the Partnership as set forth in this Item 4 are qualified in their entirety by reference to the Partnership Agreement, as amended, filed as Exhibit 3.1 to the Partnership’s Form 10-K, File No. 000-26091, filed on March 28, 2000, which is incorporated in its entirety in this Item 4.
Item 5.	Interest in Securities of the Issuer
(a)           As of the date hereof, GP beneficially owns, and TransCan Northern, TCPL and TransCanada own indirectly through GP, 2,035,106 Common Units.  In addition, as of the date hereof, TransCan Northern beneficially owns, and TransCanada and TCPL indirectly own, an additional 8,678,045 Common Units.  The directors and executive officers of each of the Reporting Persons disclaim any beneficial ownership of the Common Units owned by GP and TransCan Northern.  GP also owns a 2% general partner interest and the incentive distribution rights (which represent the right to receive increasing percentages of quarterly distributions in excess of specified amounts) in the Partnership. (b)           The number of Common Units as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or direct the disposition for the Reporting Persons is set forth on the cover pages of this Statement on Schedule 13D/A, and such information is incorporated herein by reference. Neither the directors nor the executive officers of each of the Reporting Persons individually have the power to vote or direct the vote of, or dispose or direct the disposition of, Common Units deemed beneficially owned by the Reporting Persons, or to dispose of or direct the disposition of, or receive or direct the receipt of, distributions with respect to such Common Units. TransCanada, by virtue of its ownership of TCPL and TransCan Northern, the sole stockholder of GP., has the sole power to elect the board of directors of GP, however, all decisions regarding Common Units owned by GP are within the exclusive authority of the board of directors of GP. (c)           On February 22, 2007, the Partnership sold 17,356,086 of its Common Units pursuant to a common unit purchase agreement by and among the Partnership and certain

 

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investors thereto.  Pursuant thereto, TransCan Northern acquired 8,678,045 Common Units.  Additional investors, acquired 8,678,041 Common Units.  The price per Common Units was $34.57.  There have been no other reportable transactions with respect to the Common Units within 60 days of the date hereof by the Reporting Persons. (d)           The Reporting Persons have the right to receive distributions from, and the proceeds from the sale of, the respective Common Units reported by such persons on the cover pages of this Statement on Schedule 13D/A. (e)           Not applicable.
Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
The information previously furnished in response to this Item 6 is amended by adding reference to the following: The information provided or incorporated by reference in Item 3 and Item 4 is incorporated by reference herein. Common Unit Purchase Agreement On February 20, 2007, the Partnership entered into a Common Unit Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Purchasers”) to sell 17,356,086 common units at $34.57 per common unit for gross proceeds of approximately $600 million in a private placement (the “Offering”).  The Offering closed on February 22, 2007.  TransCan Northern acquired 8,678,045 common units for approximately $300 million.  Pursuant to the Purchase Agreement, the Partnership agreed to indemnify the Purchasers, including TransCan Northern, and their respective officers, directors and other representatives against certain losses resulting from any breach of the Partnership’s representations, warranties or covenants contained therein. Registration Rights Agreement In connection with the Offering, the Partnership entered into a registration rights agreement (the “Registration Rights Agreement”) dated February 22, 2007 with the Purchasers. Pursuant to the Registration Rights Agreement, the Partnership is required to file a shelf registration statement to register the Common Units issued to TransCan Northern within 30 days, and use its commercially reasonable efforts to cause the registration statement to become effective within 90 days of the filing of the registration statement. In addition, the Registration Rights Agreement gives TransCan Northern piggyback registration rights under certain circumstances. These registration rights are transferable to affiliates and, in certain circumstances, to third parties.

 

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TC PipeLines, LP Partnership Agreement GP, as the sole general partner and a limited partner of the Partnership, and TransCan Northern, as a limited partner of the Partnership, and all other limited partners of the Issuer are party to the Partnership Agreement. Cash Distributions Pursuant to the terms of the Partnership’s Partnership Agreement, the Partnership intends to make minimum quarterly distributions of $0.45 per unit per quarter, or $1.80 per unit on an annualized basis, if the Partnership has sufficient cash from its operations after the establishment of cash reserves and payment of fees and expenses, including payments to GP in reimbursement for all expenses incurred by it on the Partnership’s behalf. In general, the Partnership will pay any cash distributions made each quarter to its unitholders in the following manner: ·      First, 98% to all units, pro rata, and 2% to the general partner, until each unitholder has received the minimum quarterly distribution of $0.45 per common unit for that quarter; ·      Second, 85% to all units, pro rata, and 15% to the general partner, until each unitholder has received a total of $0.5275 for that quarter; ·      Third, 75% to all units, pro rata, and 25% to the general partner, until each unitholder has received a total of $0.69 for that quarter; and ·      Thereafter, 50% to all units, pro rata, and 50% to the general partner. Voting Each holder of common units is entitled to one vote for each common unit on all matters submitted to a vote of the unitholders; provided that, if at any time any person or group, other than the GP and its affiliates, owns beneficially 20% or more of all common units, such common units so owned may not be voted on any matter and may not be considered to be outstanding when sending notices of a meeting of unitholders (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under the Partnership Agreement. Limited Call Right Pursuant to the Partnership Agreement, if at any time GP and its affiliates hold more than 80% of the then-issued and outstanding partnership securities of any class, GP will have the right, but not the obligation, which it may assign in whole or in part to any of its affiliates or to the Partnership, to acquire all, but not less than all, of the remaining partnership securities of the class held by unaffiliated persons as of a record date to be selected by GP, on at least 10 but not more than 60 days notice. The purchase price in the event of this purchase is the greater of: (i) the highest price paid by either of GP or any of its affiliates for any partnership securities of the class purchased within the 90 days preceding the date on which GP first mails notice of its election to purchase those partnership securities; and (ii) the current market price as of the date three days before the date the notice is mailed.

 

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Voting Rights The Partnership Agreement sets forth the voting rights of the partners of the Partnership (including TransCan Northern and GP), including, among others, those for the removal of GP as the Partnership’s general partner, the transfer of the general partner interest in the Partnership and the transfer of the incentive distribution rights in the Partnership. Registration Rights Under the Partnership Agreement, the Partnership has agreed to register for resale under the Securities Act and applicable state securities laws any Common Units or other partnership securities proposed to be sold by GP or any of its affiliates or their assignees if an exemption from the registration requirements is not otherwise available. These registration rights continue for two years following any withdrawal or removal of GP as the Partnership’s general partner. The Partnership is obligated to pay all expenses incidental to the registration, excluding underwriting discounts and commissions. The foregoing description of Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer does not purport to be complete and is qualified by the Purchase Agreement and Registration Rights Agreement attached as Exhibit 10.1 and 4.1, respectively, of the Partnership’s Form 8-K filed on February 23, 2007, and the Partnership Agreement, as amended, filed as Exhibit 3.1 to the Partnership’s Form 10-K filed on March 28, 2000.
Item 7.	Material to Be Filed as Exhibits
The information previously filed in response to this item is amended by adding reference to the following new exhibit(s) filed in this Amendment No. 4: Exhibit C:              Credit Agreement dated as of February 16, 2007, by and among TransCanada Pipeline USA, Ltd., TransCanada Corporation and the certain lenders named therein.

 

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SIGNATURE

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Date: March 29, 2007
	TransCanada Corporation
	/s/Donald R. Marchand
	Name: Donald R. Marchand
	Title: Vice-President, Finance and Treasurer
	/s/Donald J. DeGrandis
	Name: Donald J. DeGrandis
	Title: Secretary
	TransCanada PipeLines Limited
	/s/Donald R. Marchand
	Name: Donald R. Marchand
	Title: Vice-President, Fiance and Treasurer
	/s/Donald J. DeGrandis
	Name: Donald J. DeGrandis
	Title: Secretary
	TransCan Northern Ltd.
	/s/Donald R. Marchand
	Name: Donald R. Marchand
	Title: Treasurer
	/s/Donald J. DeGrandis
	Name: Donald J. DeGrandis
	Title: Secretary

 

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	TC PipeLines GP, Inc.
	/s/Mark A.P. Zimmerman
	Name: Mark A.P. Zimmerman
	Title: President
	/s/Donald J. DeGrandis
	Name: Donald J. DeGrandis
	Title: Secretary

 

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SCHEDULE I

Name		State of Incorporation or Formation		Principal Business		Business Address
TransCanada Corporation		Canada		Pipelines and Energy		TransCanada Tower 450 - 1st Street SW Calgary, Alberta, Canada T2P 5H1 Phone: (403) 920-2000
TransCanada PipeLines Limited		Canada		Pipelines and Energy		TransCanada Tower 450 - 1st Street SW Calgary, Alberta, Canada T2P 5H1 Phone: (403) 920-2000
TransCan Northern Ltd.		Delaware		Pipelines and Energy		TransCanada Tower 450 1st Street SW Calgary, Alberta, Canada T2P 5H1 Phone: (403) 920-2000
TC PipeLines GP, Inc.		Delaware		Pipelines and Energy		110 Turnpike Road Suite 203 Westborough, Massachusetts 01581 Phone: (508) 871-7046

 

APPENDIX A & B

Executive Officers and Directors of TransCanada Corporation (“TransCanada”) and TransCanada PipeLines Limited:

DIRECTORS:

Name and Citizenship		Principle Occupation		Business Address
Kevin E. Benson United States		President and Chief Executive Officer, Laidlaw Intl., Inc.		400, 55 Shuman Boulevard Naperville, Illinois, USA 60563
Derek H. Burney Canada		Senior Strategic Advisor, Ogilvy Renault LLP (law firm)		1500, 45 O’Connor Street Ottawa, Ontario, Canada K1P 1A4
Wendy K. Dobson Canada		Professor, Rotman School of Management and Director, Institute for International Business University of Toronto		105 St. George Street Toronto, Ontario, Canada M55 3E6
E. Linn Draper United States		Corporate Director		400 West 15th Street Suite 1500 Austin, Texas, USA 78701
The Hon. Paule Gauthier, P.C., O.C., O.Q., Q.C. Canada		Senior Partner, Desjardins Duchame Stein Monast		70 Dalhousie Street Suite 300 Quebec, Quebec, Canada G1K 4B2
Kerry L. Hawkins Canada		Corporate Director		300, 240 Graham Avenue Winnipeg, Manitoba, Canada R3C 0J7
S. Barry Jackson Canada		Corporate Director and Chair, TransCanada Corporation and TransCanada PipeLines Limited		730, 407 – 2 Street S.W. Calgary, Alberta, Canada T2P 2Y3
Paul L. Joskow United States		Professor, Department of Economics Massachusetts Institute of Technology		Room E52-271D 50 Memorial Drive Cambridge, Massachusetts, U.S.A. 02142

 

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Name and Citizenship		Principle Occupation		Business Address
Harold N. Kvisle Canada		President, Chief Executive Officer and Director TransCanada Corporation and TransCanada PipeLines Limited		450-1 Street SW Calgary, Alberta, Canada T2P 5H1
John A. MacNaughton, C.M. Canada		Corporate Director		1010, 22 St. Clair Avenue East Toronto, Ontario, Canada M4T 2S3
David P. O’Brien Canada		Corporate Director		1900, 855 – 2 Street S.W. Calgary, Alberta, Canada T2P 2S5
Harry G. Schaefer, F.C.A. Canada		President, Schaefer & Associates Ltd.		Suite H202, 500 Eau Claire Avenue SW Calgary, Alberta, Canada T2P 3R8
D. Michael G. Stewart Canada		Principal, Ballinacurra Group		730, 407 – 2 Street S.W. Calgary, Alberta, Canada T2P 2Y3

 

EXECUTIVE OFFICERS:

Name and Citizenship		Principle Occupation		Business Address
Harold N. Kvisle Canada		President and Chief Executive Officer		450-1 Street SW Calgary, Alberta, Canada T2P 5H1
Russell K. Girling Canada		President, Pipelines		450-1 Street SW Calgary, Alberta, Canada T2P 5H1
Gregory A. Lohnes Canada		Executive Vice-President and Chief Financial Officer		450-1 Street SW Calgary, Alberta, Canada T2P 5H1
Dennis J. McConaghy Canada		Executive Vice-President, Pipeline Strategy and Development		450-1 Street SW Calgary, Alberta, Canada T2P 5H1
Sean McMaster Canada		Executive Vice-President, Corporate and General Counsel and Chief Compliance Officer		450-1 Street SW Calgary, Alberta, Canada T2P 5H1

 

Appendix A&B-2

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Name and Citizenship		Principle Occupation		Business Address
Alexander J. Pourbaix Canada		President, Energy		450-1 Street SW Calgary, Alberta, Canada T2P 5H1
Sarah E. Raiss Canada		Executive Vice-President, Corporate Services		450-1 Street SW Calgary, Alberta, Canada T2P 5H1
Donald M. Wishart Canada		Executive Vice-President, Operations and Engineering		450-1 Street SW Calgary, Alberta, Canada T2P 5H1

 

Appendix A&B-3

APPENDIX C

Executive Officers and Directors of TransCan Northern Ltd. (“TransCan Northern”):

Name and Citizenship		Principle Occupation		Business Address
Ronald L. Cook Canada		Vice-President, Taxation of TransCan Northern; Vice-President, Taxation of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Donald J. DeGrandis Canada		Secretary, TransCan Northern; Corporate Secretary of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Amy W. Leong Canada		Controller of GP; Director, Pipeline Accounting of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Carl M. Fink United States		Director of TransCan Northern; Associate General Counsel of Gas Transmission Northwest Corporation		1400 SW Fifth Avenue Portland, Oregon, USA 97201
Donald R. Marchand Canada		Treasurer of TransCan Northern; Vice-President, Finance and Treasurer of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
G. Glenn Menuz Canada		Vice-President and Controller of TransCan Northern; Vice-President and Controller of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Lauri A. Newton United States		Director of TransCan Northern; Associate General Counsel of Gas Transmission Northwest Corporation		1400 SW Fifth Avenue Portland, Oregon, USA 97201

 

APPENDIX D

Executive Officers and Directors of TC PipeLines GP, Inc. (“GP”)

Name and Citizenship		Principle Occupation		Business Address
Russell K. Girling Canada		Chairman, Chief Executive officer and Director of GP; President, Pipelines Division of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Steven D. Becker Canada		Director of GP; Vice-President, Pipeline Development, Pipelines Division of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Sean M. Brett Canada		Vice-President and Treasurer of GP; Assistant Treasurer and Director, Capital Markets for TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Ronald L. Cook Canada		Vice-President, Taxation of GP; Vice-President, Taxation of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Donald J. DeGrandis Canada		Secretary of GP; Corporate Secretary of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Kristine L. Delkus Canada		Director of GP; Deputy General Counsel, Pipelines and Regulatory Affairs, Pipelines Division of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Max Feldman Canada		Vice-President of GP; Senior Vice-President, Canadian Pipelines of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
Amy W. Leong Canada		Controller of GP; Director, Pipeline Accounting of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1

 

APPENDIX D-1

 

Name and Citizenship		Principle Occupation		Business Address
Gregory A. Lohnes Canada		Director of GP; Executive Vice-President and Chief Financial Officer of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1
David L. Marshall United States		Director of GP		997 Wander Way Incline Village, Nevada, USA 89451
Walentin (Val) Mirosh Canada		Director of GP; Vice-President, NOVA Chemicals Corporation		1000 — 7 Avenue S.W. Calgary, Alberta, Canada T2P 5L5
Jack F. Jenkins-Stark United States		Director of GP; Chief Financial Officer of SVB Financial Group		3003 Tasman Drive Santa Clara, California, USA 95054
Mark A.P. Zimmerman Canada		President of GP; Vice-President, Commercial Transactions of TransCanada		450-1 Street SW, Calgary, Alberta, Canada, T2P 5H1

 

Appendix D-2

Exhibit 99.1

EXECUTION COPY

$1,000,000,000

CREDIT AGREEMENT

AMONG:

TRANSCANADA PIPELINE USA LTD.
(as Borrower)

TRANSCANADA CORPORATION
(as Guarantor)

AND

THE FINANCIAL INSTITUTIONS SIGNATORY HERETO
(as Lenders)

WITH

CITIGROUP GLOBAL MARKETS INC.
(as Lead Arranger and Bookmanager)

AND

CITIBANK, N.A.
(as Administration Agent for the Lenders)

AND

BMO CAPITAL MARKETS, THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
HOUSTON AGENCY, ROYAL BANK OF CANADA and THE TORONTO-DOMINION
BANK
(as Syndication Agents)

Dated as of February 16, 2007

TABLE OF CONTENTS

					Page
ARTICLE 1 INTERPRETATION					1
1.1		Definitions			1
1.2		Headings and Table of Contents			11
1.3		References			11
1.4		Rules of Interpretation			12
1.5		Generally Accepted Accounting Principles			12
1.6		Time			12
1.7		Payment for Value			12
1.8		Calculations by Lender			12
1.9		Pro Rata			13
ARTICLE 2 REPRESENTATIONS AND WARRANTIES					13
2.1		Representations and Warranties of the Loan Parties			13
2.2		Representations and Warranties of the Lenders			17
ARTICLE 3 THE CREDIT FACILITY					17
3.1		Obligations of Each Lender			17
3.2		Purpose			18
3.3		Borrowings			18
3.4		Selection of Interest Periods			18
3.5		Notice of Repayment			18
3.6		Pro-Rata Treatment of Borrowings			19
3.7		Conversion Option			19
3.8		Rollovers and Deemed Conversions			20
3.9		Notices Irrevocable			20
3.10		Extension			20
3.11		Takeover Notification			22
ARTICLE 4 REPAYMENT AND PREPAYMENT					24
4.1		Reduction of Commitment and Repayment of Borrowings			24
4.2		Cancellation of Commitment and Prepayment and Replacement			24
4.3		Evidence of Indebtedness			25
ARTICLE 5 PAYMENT OF INTEREST AND FEES					26
5.1		Interest on Base Rate Loans			26
5.2		Interest on Libor Loans			26
5.3		Interest on Overdue Amounts			26
5.4		Standby Fees			26
5.5		Effective Date of Rating Change			27
5.6		Agent’s Fees			27
5.7		Maximum Rate Permitted by Law			27
5.8		Interest Act			28

 

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5.9		Waivers		28
ARTICLE 6 PAYMENT AND TAXES				28
6.1		Time, Place and Currency of Payment		28
6.2		Application of Payments Prior to an Event of Default		28
6.3		Taxes		29
ARTICLE 7 CONDITIONS PRECEDENT				31
7.1		Effectiveness and Conditions Precedent		31
7.2		Conditions Precedent to Drawdown		32
7.3		Continuing Conditions Precedent		33
7.4		Waiver of a Condition Precedent		33
ARTICLE 8 COVENANTS OF THE GUARANTOR				33
8.1		Covenants of the Guarantor		33
8.2		Financial Covenant		39
ARTICLE 9 EVENTS OF DEFAULT				39
9.1		Events of Default		39
9.2		Acceleration		41
9.3		Waiver of Default		41
9.4		Application and Sharing of Payments Following Acceleration		42
9.5		Remedies Cumulative		42
9.6		Set-Off		43
9.7		Lenders May Perform Covenants		43
ARTICLE 10 EXPENSES AND INDEMNITIES				43
10.1		Reimbursement of Expenses		43
10.2		Increased Cost		44
10.3		Illegality		45
10.4		Substitute Basis of Borrowing		45
10.5		Funding Indemnity		46
10.6		General Indemnity		46
ARTICLE 11 THE AGENT AND THE LENDERS				47
11.1		Authorization of Agent		47
11.2		Responsibility		47
11.3		Acknowledgment of Lenders		48
11.4		Rights and Obligations of Each Lender		48
11.5		Determinations by Lenders		48
11.6		Notices		49
11.7		Duty to Deliver Documents Obtained from the Loan Parties		49
11.8		Arrangements for Borrowings		49
11.9		Arrangements for Repayment of Borrowings		49
11.10		Repayment by Lenders to Agent		50
11.11		Adjustments Among Lenders		51
11.12		Lenders’ Consents to Waivers, Amendments, etc.		51

 

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11.13		Reimbursement of Expenses		52
11.14		Reliance on Notices, etc.		52
11.15		Relations with Loan Parties		53
11.16		Successor Agent		53
11.17		Indemnity		54
11.18		Amendment to this Article 11		54
ARTICLE 12 SUCCESSORS AND ASSIGNS, JUDGMENT CURRENCY AND CONFIDENTIALITY				54
12.1		Successors and Assigns		54
12.2		Exchange and Confidentiality of Information		55
12.3		Judgment Currency		56
ARTICLE 13 GUARANTY				57
13.1		Guaranty		57
13.2		Guaranty Absolute		57
13.3		Waivers and Acknowledgments		58
13.4		Subrogation		59
13.5		Subordination		60
13.6		Continuing Guaranty; Assignments		61
ARTICLE 14 MISCELLANEOUS				61
14.1		Severability		61
14.2		Survival of Undertakings		61
14.3		Failure to Act		61
14.4		Waivers		62
14.5		Amendments		62
14.6		Notice		62
14.7		Whole Agreement		63
14.8		Governing Law		63
14.9		Term of Agreement		63
14.10		Time of Essence		63
14.11		Jurisdiction		64
14.12		Counterpart Execution		64
14.13		Patriot Act Notice		65
14.14		Waiver of Jury Trial		65

 

Schedules
Schedule A		-	Notice of Borrowing, Repayment, Prepayment or Cancellation of Commitment
Schedule B		-	Notice of Conversion
Schedule C		-	Notice of Rollover
Schedule D		-	Request for Extension
Schedule E		-	Compliance Certificate
Schedule F		-	Opinion of Borrower’s Counsel
Schedule H		-	Opinion of Counsel to the Lenders
Schedule I		-	Lender Transfer Agreement

 

iii

THIS CREDIT AGREEMENT is dated and effective as of February 16, 2007.

AMONG:

TRANSCANADA PIPELINE USA LTD., a corporation incorporated under the laws of Delaware, having its principal office in Calgary, Alberta, Canada

AND

TRANSCANADA CORPORATION, a corporation incorporated under the laws of Canada, having its principal office in Calgary, Alberta, Canada

AND

each of the financial institutions named on the signature pages hereto in their capacities as Lenders (the “Initial Lenders”)

AND

CITIBANK, N.A. (“Citibank”), in its capacity as Administrative Agent (the “Agent”)

NOW THEREFORE, in consideration of the premises, the covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto, the parties agree as follows:

ARTICLE 1
INTERPRETATION

1.1                         Definitions

In this Agreement and the Schedules hereto and in all notices pursuant to this Agreement, unless something in the subject matter or context is inconsistent therewith, the following words and phrases shall have the following meanings:

“Acceleration Notice” has the meaning given to it in Section 9.2;

“Accounts” has the meaning given to it in Section 4.3;

“Acquisition” means the acquisition by certain Subsidiaries of the Borrower of American Natural Resources Company and ANR Storage Company from El Paso Corporation or Subsidiaries thereof;

“Acquisition Closing Date” means the date, after the Effective Date, on which the Acquisition closes;

“Additional Compensation” has the meaning given to it in Section 10.2;

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“Agent” means Citibank when acting in its capacity as Administration Agent hereunder and includes any successor agent appointed pursuant to Section 11.16;

“Agent’s Applicable Account for Payments” means the account of the Agent maintained by the Agent at Citibank at its office at 388 Greenwich Street, New York, New York 10013, Account No. 36852248, Attention:  Bank Loan Syndications;

“Agent’s Branch of Account” means the principal office of the Agent in New York, New York or such other office or branch of the Agent as the Agent may from time to time advise the Borrower and the Lenders in writing;

“Affected Lender” has the meaning given to it in Section 4.2;

“Agreeing Lender” has the meaning given to it in Section 3.10(b);

“Agreement” means this agreement, all Schedules attached hereto and any future amendments or supplements thereto;

“Banking Day” means a day which is both a Business Day and a day on which dealings in Dollars by and between banks in the London, England interbank market may be conducted;

“Bankruptcy Law” means any proceeding of the type referred to in Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

“Base Rate” means, with respect to Base Rate Loans, the greater of:

(a)                                  the per annum rate of interest announced from time to time by Citibank in New York, New York as being Citibank’s base rate; and

(b)                                 the per annum rate of interest equal to the Fed Funds Rate plus one-half of one percent (0.50%) per annum;

“Base Rate Loans” means the advances in Dollars made available by the Lenders to the Borrower pursuant to either Section 3.3 or 3.7 and on which the Borrower has agreed to pay interest in accordance with Section 5.1;

“basis point” or “bp” means one one-hundredth of one percent (.01%);

“Borrower” means TransCanada PipeLine USA Ltd.;

“Borrowing” means a Term Borrowing or a Revolving Borrowing;

“Branch of Account” means, with respect to each Lender, the branch or office of such Lender at the address set forth opposite such Lender’s name on the signature pages of this Agreement or such other branch or office as such Lender may from time to time notify the Borrower and the Agent of in writing; provided that, for purposes of delivering any notice required to be delivered by the Agent to a Lender pursuant to Section 11.8 and for purposes of effecting any payments to a Lender in connection with this Agreement, a Lender may specify in writing to the Borrower

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and the Agent any other branch or office of such Lender and such branch or office shall thereafter be the Branch of Account of such Lender for such purpose;

“Business Day” means a day, excluding Saturday and Sunday, on which banking institutions are open for business in Calgary, Alberta, Canada and New York, New York;

“Canadian Dollars”, “Cdn. Dollars” and the symbol “Cdn. $” each means lawful money of Canada;

“Circumstance” has the meaning given to it in Section 10.2;

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder;

“Commitment” means a Term Commitment or a Revolving Commitment;

“Compliance Certificate” means a compliance certificate substantially in the form attached hereto as Schedule E executed by any two officers of the Guarantor;

“Conflicted Lender” has the meaning given to it in Section 3.11(b);

“Consolidated Equity” means the shareholders’ equity and non-controlling interest appearing on a consolidated balance sheet of the Guarantor prepared in accordance with Generally Accepted Accounting Principles;

“Conversion” means a conversion of one type of Borrowing into another type of Borrowing pursuant to Section 3.7;

“Conversion Date” means each Business Day or Banking Day, as applicable, on which the Conversion of a Borrowing or a portion thereof is to be made pursuant to a request from the Borrower under Section 3.7;

“Conversion Notice” means a notice of a Conversion, substantially in the form of Schedule B hereto;

“Dollars” and the symbol “ $” each means lawful money of the United States;

“Drawdown Date” means each Business Day or Banking Day, as applicable, on which Borrowings are made pursuant to a request from the Borrower under Section 3.3;

“Effective Date” means the date on which the conditions precedent under Section 7.1 have been satisfied;

“Environmental Laws” means any and all applicable federal, provincial, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment, to the release of any materials into the environment or to the manufacture,

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processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals, industrial substances, toxic substances, hazardous substances or wastes;

“Event of Default” means any of the events or circumstances specified in Section 9.1;

“Excluded Taxes” has the meaning given to it in Section 6.3(a);

“Extension Date” means, in respect of each Lender which has not previously refused (or deemed to have refused) a Request for Extension, the date which is four (4) years prior to the then current Maturity Date of such Lender;

“Fed Funds Rate” means, on any day, the per annum rate of interest for that day set forth in the weekly statistical release designated as H.15(519) published by the Board of Governors of the United States Federal Reserve System (including any successor publication, the “H.15(519)”) opposite the caption “Federal Funds (Effective)” and, if on any day such rate is not yet published in H.15(519), the rate for such day shall be the rate set forth in the Composite 3:30 p.m. Quotations for U.S. Government Securities for such day under the caption “Federal Funds Effective Rate”; provided that if such rate is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations for U.S. Government Securities, such rate shall be the average of the quotations for such day on overnight Federal funds (such words to have the meaning generally given to them by money market brokers of recognized standing doing business in the United States of America) transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent, acting reasonably;

“Fiscal Quarter” means the three month period commencing on the first day of each Fiscal Year and each successive three month period thereafter during such Fiscal Year;

“Fiscal Year” means the Guarantor’s (or the Borrower’s, as the context may require) fiscal year commencing on January 1 of each year and ending on December 31 of such year;

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that the United States of America, each State thereof and the District of Columbia;

“Forms” has the meaning given to it in Section 6.3(b);

“Funded Obligations” means all Indebtedness incurred by an obligor or Indebtedness of others upon which such obligor customarily pays interest charges, other than:

(a)                                  Indebtedness which is payable on demand; and

(b)                                 Indebtedness which matures by its terms, or which such obligor has the right at its option to renew or extend to a date, twenty-four (24) months or less after the date of its incurring by such obligor or the date on which such obligor commenced to pay interest charges thereon;

“Generally Accepted Accounting Principles” means generally accepted accounting principles which are in effect from time to time in Canada;

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“Guaranty” means the guaranty of the Guarantor set forth in Article 13.

“Guaranteed Obligations” has the meaning specified in Section 13.1.

“Guarantor” means TransCanada Corporation;

“Indebtedness” means, as to any person, and includes, without duplication:

(a)                                  all items of indebtedness or liability which in accordance with Generally Accepted Accounting Principles would be considered to be direct indebtedness or liabilities of such person as at the date as of which indebtedness is to be determined;

(b)                                 the full amount of all liabilities of others for the repayment, either in money or in property, of borrowed money, guaranteed or endorsed (otherwise than for purposes of collection) by such person, or which such person is obligated, contingently or otherwise, to purchase, or on which such person is otherwise contingently liable; and

(c)                                  liabilities secured by Purchase Money Mortgages on property owned by such person or by mortgages or liens existing on such property at the time of acquisition thereof by such person or by conditional sales or other title retention agreements with respect to any such property, whether or not such liabilities shall have been assumed by such person;

“Information” has the meaning given to it in Section 12.2;

“Interest Date” means:

(a)                                  in respect of Base Rate Loans, the last day of each calendar quarter; and

(b)                                 in respect of Libor Loans, the date falling on the last day of each Interest Period; provided that if the Borrower selects an Interest Period for a period longer than three months in respect of a Libor Loan, the Interest Date for such Libor Loan shall be each date falling every three months after the beginning of such Interest Period and the date falling on the last day of such Interest Period;

“Interest Determination Date” means, with respect to a Libor Loan, the second Banking Day prior to the first day of the Interest Period applicable to such Libor Loan;

“Interest Period” means, with respect to each Libor Loan, the initial period of approximately seven (7) days, one (1) month, two (2) months, three (3) months, four (4) months, five (5) months or six (6) months (as selected by the Borrower and notified to the Agent at the Agent’s Branch of Account pursuant to Section 3.4) commencing on and including the Drawdown Date, Conversion Date or Rollover Date, as the case may be, applicable to such Libor Loan and ending on and including the last day of such initial period, and thereafter, each successive period of approximately seven (7) days, one (1) month, two (2) months, three (3) months, four (4) months, five (5) months or six (6) months (as selected by the Borrower and notified to the Agent at the Agent’s Branch of Account pursuant to Section 3.4) commencing on and including the last day of the prior Interest Period and ending on and including the last day of such successive period;

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“Judgment Currency” has the meaning given to it in Section 12.3;

“Lender Transfer Agreement” means an agreement in the form attached hereto as Schedule I;

“Lender’s Proportion” means, at any time and from time to time (a) with respect to each Revolving Lender, the proportion that the amount of such Lender’s Revolving Commitment bears to the amount of the Total Commitment at such time, (b) with respect to each Term Lender, the proportion that the amount of such Lender’s Term Commitment bears to the amount of the Total Commitment at such time and (c) with respect of all Lenders, the proportion that the sum of the amount of such Lender’s Revolving Commitment plus such Lender’s Term Commitment bears to the sum of the amount of the aggregate Total Commitment in respect of Revolving Commitments and in respect of Term Commitments at such time, and, in each case, in the event that the Total Commitment is cancelled or terminated, “Lender’s Proportion” shall mean the Lender’s Proportion of such Lender, in effect immediately prior to such cancellation or termination;

“Lenders” means each of the financial institutions named on the signature pages hereto as a Lender and “Lender” means any one of them;

“Libor” means, with respect to any Interest Period applicable to a Libor Loan, the per annum rate of interest determined by the Agent, based on a three hundred sixty (360) day year, as the average of the offered quotations appearing on the display referred to as the “LIBOR 01 Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service (or if such LIBOR 01 Page shall not be available, any successor or similar services as may be selected by the Agent) for deposits in Dollars for a period equal to the number of days in the applicable Interest Period, at or about 11:00 a.m. (London, England time) on the second Banking Day prior to a Drawdown Date, Conversion Date or Rollover Date, as the case may be, for the applicable Interest Period. If neither such “LIBOR 01 Page” nor any successor or similar service is available, then “Libor” shall mean, with respect to any such Interest Period, the per annum rate of interest, based on a three hundred sixty (360) day year, determined by the Agent at approximately 11:00 a.m. (London, England time) (or so soon thereafter as practicable) on the second Banking Day prior to a Drawdown Date, Conversion Date or Rollover Date, as the case may be, for the applicable Interest Period offered to the Agent by leading banks in the London interbank market for the placing of Dollar deposits with the Agent having a term comparable to such Interest Period and in an amount comparable to the principal amount of the Agent Lender’s Proportion of the applicable Libor Loan.  Each determination of Libor may be computed using any reasonable averaging and attribution method;

“Libor Loans” means the advances in Dollars made available by the Lenders to the Borrower pursuant to Sections 3.3, 3.7 or 3.8 and on which the Borrower has agreed to pay interest in accordance with Section 5.2;

“Loan Documents” means this Agreement and all other certificates, instruments and documents delivered by or on behalf of the Loan Parties in connection therewith from time to time;

“Loan Party” means the Guarantor and the Borrower;

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“Loans” means Term Loans and Revolving Loans, each of which may be Base Rate Loans or Libor Loans;

“Majority Lenders” means, prior to the occurrence of an Event of Default, any Lender or group of Lenders having Lender’s Proportions in respect of the Total Commitment, in aggregate, of more than fifty percent (50%) and, after the occurrence of an Event of Default, any Lender or group of Lenders having Borrowings, in aggregate, of fifty percent (50%) or more;

“Margin” means, at any time, a per annum rate of interest (based, in the case of Libor Loans, on a three hundred and sixty (360) day year) equal to the rate set out in the following table opposite the applicable rating category assigned by Moody’s or S&P as an issuer rating or, if none, to the long term unsecured and unsubordinated debt of the Guarantor from time to time:

Rating Category (Moody’s/S&P)		Rate
Al/A+ or higher		17.5 bps
A2/A		19.0 bps
A3/A-		22.5 bps
Baal/BBB+		25.0 bps
Baa2/BBB		32.5 bps
Baa3/BBB- or lower or not rated		50.0 bps

 

provided that if at any time the issuer rating or, if none, the long term unsecured and unsubordinated debt of the Guarantor is rated by each of Moody’s and S&P and the rating so assigned by one of such agencies is in a category which is one category higher than the rating assigned by the other, then the Margin shall be the rate opposite the higher of the categories so assigned and if the rating so assigned by one of such agencies is in a category which is more than one higher than the rating assigned by the other, then the Margin shall be the category that is one category above the lower of such categories.  A change in the Margin shall be effective as provided for in Section 5.5;

“Material Adverse Effect” means a change in, or circumstances relating to, the business, operations or financial condition of the Guarantor and its Subsidiaries (including, without limitation, the assets, properties and operations acquired or to be acquired (directly or indirectly) in connection with the completion of the Acquisition), taken as a whole, that would reasonably be expected to have a significant adverse effect on the ability of any Loan Party to perform any of its payment obligations hereunder;

“Material Property” means any property or assets of the Guarantor or any Subsidiary having an aggregate value equal to or greater than 5% of the consolidated shareholders’ equity of the Guarantor as shown on the most recent statement of consolidated financial position provided by the Guarantor to the Lenders hereunder;

“Material Subsidiary” means the Borrower and any other Subsidiary of the Guarantor whose shareholders’ equity is equal to or greater than 5% of the consolidated total assets of the

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Guarantor as shown on the most recent consolidated financial statements provided by the Guarantor to the Lenders hereunder;

“Maturity Date” means February 16, 2012, subject, in the case of the Revolving Commitments, to extension as herein provided;

“Moody’s” means Moody’s Investors Service, Inc., and its successors;

“Non-Agreeing Lender” has the meaning given to it in Section 3.10(b);

“Permitted Assignee” has the meaning given to it in Section 12.1;

“Post-Petition Interest” has the meaning specified in Section 13.5.

“Purchase Agreement” means the Purchase and Sale Agreement dated December 22, 2006 between El Paso Corporation and El Paso CNG Company, L.L.C. (as sellers) and TAIL (as buyer);

“Purchase Money Mortgage” means a mortgage, charge or other lien on or against any property securing any Purchase Money Obligation for such property;

“Purchase Money Obligation” means any Indebtedness created or assumed as part of the purchase price of real or tangible personal property, whether or not secured, and any extensions, renewals or refundings of any such Indebtedness, provided that the principal amount of such Indebtedness outstanding on the date of such extension, renewal or refunding is not increased and further provided that any security given in respect of such Indebtedness shall not extend to any property other than the property acquired in connection with which such Indebtedness was created or assumed and fixed improvements, if any, erected or constructed thereon;

“Request for Extension” means a request of the Borrower substantially in the form attached as Schedule D;

“Requested Lender” has the meaning given to it in Section 3.10(a)

“Revolving Borrowing” means at any given time during the term of this Agreement the principal amount outstanding by way of Revolving Loans made by the Revolving Lenders;

“Revolving Commitment” means each Lender’s obligation hereunder to make Revolving Loans available to the Borrower in an aggregate principal amount in the amount, but not at any time in excess of the amount, set forth opposite such Lender’s name on the signature pages hereto as such Lender’s Revolving Commitment, as such amount may hereafter be decreased, cancelled or terminated from time to time pursuant to this Agreement;

“Revolving Lender” means each Lender that has a Revolving Commitment.

“Revolving Loans” has the meaning specified in Section 3.1(a).

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“Rollover” means a continuation of a Libor Loan for a new Interest Period pursuant to Section 3.8;

“Rollover Date” means a Business Day that the Borrower has notified the Agent at the Agent’s Branch of Account as the date on which a Rollover will take effect;

“Rollover Notice” means a notice of a Rollover substantially in the form of Schedule C;

“S&P” means Standard & Poor’s, a division of McGraw-Hill Companies, Inc. and its successors;

“Standby Fee Rate” means, at any time, a rate per annum equal to the rate set out in the following table opposite the applicable rating category assigned by Moody’s and S&P as an issuer rating or, if none, to the long term unsecured and unsubordinated debt of the Guarantor from time to time:

Rating Category (Moody’s/S&P)		Rating
Al/A+ or higher		5.0 bps
A2/A		6.0 bps
A3/A-		7.5 bps
Baal/BBB+		10.0 bps
Baa2/BBB		12.5 bps
Baa3/BBB- or lower or not rated		15.0 bps

 

provided that if at any time the issuer rating or, if none, the long term unsecured and unsubordinated debt of the Guarantor is rated by each of Moody’s and S&P and the rating so assigned by one of such agencies is in a category which is one category higher than the rating assigned by the other, then the Standby Fee Rate shall be the rate opposite the higher of the categories so assigned and if the rating as assigned by one of such agencies is in a category which is more than one higher than the rating assigned by the other, then the Standby Fee Rate shall be the category that is one category above the lower of such categories.  A change in the Standby Fee Rate shall be effective as provided for in Section 5.5;

“Subordinated Debt” means the Indebtedness of the Guarantor evidenced by an indenture or agreement entered into by the Guarantor subsequent to the date hereof evidencing Indebtedness of the Guarantor which in effect provides that if:

(i)                                     any Indebtedness of the Guarantor hereunder is not paid when due and such event or circumstance constitutes an Event of Default and written notice of such Event of Default has been given by or on behalf of the Lenders and such Event of Default shall not have been cured or waived; or

(ii)                                  any applicable grace period with respect to a payment default hereunder has ended and such default has not been cured or waived or ceased to exist and such circumstance or event constitutes an Event of Default and written notice of such

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Event of Default has been given by or on behalf of the Lenders and such Event of Default shall not have been cured or waived; or

(iii)                               the maturity of the Indebtedness hereunder has been accelerated because of a default and such circumstance or event constitutes an Event of Default and written notice of such Event of Default has been given by or on behalf of the Lenders and such Event of Default shall not have been cured or waived; or

(iv)                              there is any distribution of assets of the Guarantor to creditors upon any dissolution, winding-up, liquidation or reorganization of the Guarantor, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other similar proceedings,

then the principal amount of such Indebtedness, premium, if any, and interest shall be subordinate and junior in right of payment to, and no payments shall be made in respect thereof in priority to, the payment in full of all obligations (contingent or matured) of the Guarantor owing hereunder (or provision shall have been made for such payment) and, if any such payment is made, it shall be held in trust for the benefit of or paid over to the Lenders and other creditors ranking pari passu in right of payment with the Lenders;

“Subordinated Obligations” has the meaning specified in Section 13.5.

“Subsidiary” means:

(a)                                  any corporation of which there are owned, directly or indirectly, by or for the Guarantor (or the Borrower, as the context may require) or by or for any corporation in like relation to the Guarantor (or the Borrower, as the context may require), Voting Shares which, in the aggregate, entitle the holders thereof to cast more than 50% of the votes which may be cast by the holders of all the outstanding Voting Shares of such first mentioned corporation for the election of its directors and includes any corporation in like relation to a Subsidiary; or

(b)                                 any other person of which at least a majority of the outstanding income interests or capital interests are at the time directly, indirectly or beneficially owned or controlled by any combination of the Guarantor (or the Borrower, as the context may require) and one or more of its Subsidiaries;

“TAIL” means TransCanada American Investments Ltd., a Delaware corporation and a wholly-owned Subsidiary of the Borrower;

“Tax Refund” has the meaning given to it in Section 6.3(b);

“Taxes” has the meaning given to it in Section 6.3(a);

“TCPL” means TransCanada Pipelines Limited and its successors and assigns;

“Term Borrowing” means at any given time during the term of this Agreement the principal amount outstanding by way of Term Loans made by the Term Lenders;

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“Term Commitment” means each Term Lender’s obligation hereunder to make Term Loans available to the Borrower in an aggregate principal amount in the amount, but not at any time in excess of the amount, set forth opposite such Lender’s name on the signature pages hereto as such Lender’s Term Commitment, as such amount may hereafter be decreased, cancelled or terminated from time to time pursuant to this Agreement;

“Term Lender” means each Lender that has a Term Commitment.

“Term Loans” has the meaning specified in Section 3.1(b).

“Total Capitalization of the Guarantor” means, at any time, the aggregate of Consolidated Equity and the principal amount of Funded Obligations of the Guarantor and its Subsidiaries then outstanding, all determined on a consolidated basis for the Guarantor and its Subsidiaries in accordance with Generally Accepted Accounting Principles;

“Total Commitment” means (a) with respect to the Revolving Commitments, the aggregate of the Revolving Commitments of each of the Revolving Lenders, as hereafter decreased, cancelled or terminated from time to time pursuant to this Agreement, not to exceed $300,000,000 and (b) with respect to the Term Commitments, the aggregate of the Term Commitments of each of the Term Lenders, as hereafter decreased, cancelled or terminated from time to time pursuant to this Agreement, not to exceed $700,000,000;

“Unaffected Lender” has the meaning given to it in Section 4.2;

“Dollars” and the symbol “$” each means lawful money of the United States of America; and

“Voting Shares” means shares of capital stock of any class of a corporation having under all circumstances the right to vote for the election of the directors of such corporation, provided that, for the purpose of this definition, shares which only carry the right to vote conditionally on the happening of an event shall not be considered Voting Shares whether or not such event shall have happened.

1.2                         Headings and Table of Contents

The headings, the table of contents and the Article and Section titles are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

1.3                         References

Unless something in the subject matter or context is inconsistent therewith, all references to Sections, Articles and Schedules are to Sections and Articles of and Schedules to this Agreement.  The words “hereto”, “herein”, “hereof”, “hereunder” and similar expressions mean and refer to this Agreement.

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1.4                         Rules of Interpretation

In this Agreement, unless otherwise specifically provided, the singular includes the plural and vice versa, “month” means calendar month, “quarter” means calendar quarter, “person” includes any individual, firm, partnership, company, corporation or other body corporate, government, governmental body, agency, instrumentality, unincorporated body of persons or association and “in writing” or “written” includes printing, typewriting or any electronic means of communication capable of being visibly reproduced at the point of reception, including telecopier. In addition, in this Agreement where the Interest Period applicable to a Libor Loan is defined by reference to an approximate period of time, the actual period of time related thereto shall be as determined by the Agent, acting reasonably, and by giving effect to the provisions of this Agreement and as near as reasonably possible to the request of the Borrower in relation thereto so as to result in such Interest Period or other period ending on a Business Day or Banking Day as required by this Agreement.

1.5                         Generally Accepted Accounting Principles

All financial statements required to be furnished by the Guarantor to the Agent hereunder shall be prepared in accordance with Generally Accepted Accounting Principles.  Each accounting term used in this Agreement, unless otherwise defined herein or specifically dealt with herein, has the meaning assigned to it under Generally Accepted Accounting Principles and, except as otherwise provided herein, reference to any statement of consolidated financial position item, statement of consolidated income item or statement of changes in financial position item means such item as computed from the applicable financial statement prepared in accordance with Generally Accepted Accounting Principles.

1.6                         Time

Unless otherwise provided herein, all references to a time in this Agreement shall mean local time in the City of New York, New York.

1.7                         Payment for Value

All payments required to be made hereunder shall be made for value on the required day.

1.8                         Calculations by Lender

Subject to the specific terms hereof relating to a particular calculation, in circumstances where a Lender is required to make a calculation hereunder in respect of the Borrower and such calculation is of a general nature which similarly affects other persons to whom such Lender extends credit, the Lender shall, in making any such calculation, do so in its usual and customary manner and in accordance with its standard practices applicable to the Borrower and such other persons to whom it extends credit and are similarly affected by any such calculation.

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1.9                         Pro Rata

If, at any time, there are Revolving Lenders with different Maturity Dates, all Revolving Lenders will share in Revolving Borrowings made hereunder based on their Lender’s Proportion except to the extent the particular Borrowings requested has a maturity date after the Maturity Date of a Revolving Lender, in which case only those Revolving Lenders with a Maturity Date later than the maturity date of the requested Borrowing will be required to participate in providing such Borrowing and the Borrower may request a similar Borrowing, to the extent permitted hereunder, from the other Revolving Lenders with a maturity date occurring on or before the Maturity Date of such Lenders.  Each such determination by the Agent shall be prima facie evidence of such Lender’s Proportion.

ARTICLE 2
REPRESENTATIONS AND WARRANTIES

2.1                         Representations and Warranties of the Loan Parties

Each Loan Party represents and warrants to each of the Lenders and the Agent (all of which representations and warranties such Loan Party hereby acknowledges are being relied upon by the Lenders and the Agent in entering into this Agreement) that as of the date of this Agreement:

(a)                                  Corporate Existence of such Loan Party:  such Loan Party is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly registered and qualified to carry on business as a corporation under the laws of each other jurisdiction in which the nature of any business transacted by it or the character of any properties and assets owned or leased by it requires such registration and qualification and has all necessary consents, authorizations, approvals, orders, certificates, licenses and permits (collectively, “consents”) from, and has made all necessary filings with, all governmental or regulatory agencies or authorities as required by law and to conduct its business in each such jurisdiction and is in compliance with all such consents, except to the extent the failure to be in good standing or to be so registered or qualified or to have such consents or to be in compliance therewith or to have made such filings or to obtain or file any of the foregoing would not have a Material Adverse Effect;

(b)                                 Existence of Subsidiaries:  each Subsidiary of the Guarantor is a person either duly incorporated or created, as the case may be, validly existing and in good standing under the laws of its jurisdiction of incorporation or creation, and is duly registered and qualified to carry on business under the laws of each other jurisdiction in which the nature of any business transacted by it or the character of any properties and assets owned or leased by it requires such registration and qualification and has all necessary consents (as defined in Section 2.1(a)) from, and has made all necessary filings with, all governmental or regulatory agencies or authorities as required by law and to conduct its business in each such jurisdiction and is in compliance with all such consents, except to the extent the failure to be in good standing or to be so registered or qualified or to have

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such consents or be in compliance therewith or to have made such filings or to obtain or file any of the foregoing would not have a Material Adverse Effect;

(c)                                  Power to Carry on Business:  such Loan Party and each Subsidiary of a Loan Party has full power and capacity to own its properties and assets and conduct its business as presently conducted except, in respect of any such Subsidiary, to the extent the absence of any such power or capacity would not have a Material Adverse Effect;

(d)                                 Corporate Power to Enter into Loan Documents:  the execution, delivery and performance by such Loan Party of each of the Loan Documents to which it is a party:

(i)                                     have been duly authorized by all necessary corporate action;

(ii)                                  are within its corporate power and capacity;

(iii)                               do not violate any provision of law or of its constitutional documents;

(iv)                              will not result in a breach of or constitute a default or require any consent under, or result in the creation of any lien, charge or encumbrance upon any of its property or assets pursuant to, any indenture or other agreement or instrument to which it is a party or by which it or its property may be bound or affected; and

(v)                                 do not require any license, consent or approval of or notice to or filing with any governmental agency or regulatory agency or authority;

(e)                                  Execution and Delivery of Loan Documents:  each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto;

(f)                                    Enforceability:  except as enforceability may be limited by general principles of equity and by bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally, each Loan Document is a legal, valid and binding obligation of each Loan Party party thereto enforceable against such Loan Party in accordance with its terms;

(g)                                 Financial Position:  the audited consolidated financial statements of the Guarantor for the most recently ended Fiscal Year of the Guarantor which have been made available to its shareholders:

(i)                                     fairly present in all material respects the consolidated financial position of the Guarantor and its Subsidiaries as at the date thereof and the results of its operations for the period covered thereby; and

(ii)                                  have been prepared in accordance with Generally Accepted Accounting Principles;

and since such date, no Material Adverse Effect has occurred;

(h)                                 Insurance:  the property of the Guarantor and its Material Subsidiaries which is of a character usually insured by persons operating like businesses to the Guarantor and its Material Subsidiaries is properly insured with reputable insurers (which may include

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associations or other organizations for mutual or reciprocal insurance) against loss or damage by fire or other hazards of the nature and to the extent that such properties are usually insured by persons operating like businesses to the Guarantor and its Material Subsidiaries; except to the extent that from time to time another method or plan of protection against such loss or damage is substituted, in whole or in part, for the aforesaid insurance provided such plan or method shall afford protection to the property of the Guarantor and its Material Subsidiaries at least equal to the plan or method of protection against such loss or damage then generally in use with respect to similar property subject to similar or greater hazards or risks;

(i)                                     Litigation:  there are no actions, suits, litigation or other proceedings (including proceedings by or before any arbitrator, government commission, board, bureau or other administrative agency) pending or, to the knowledge of such Loan Party, threatened against or affecting the Guarantor or any of its Subsidiaries which would, if determined adversely to the Guarantor or such Subsidiary, be reasonably likely to result in a Material Adverse Effect;

(j)                                     Compliance with Laws:  such Loan Party and each of its Subsidiaries and their respective businesses and operations are in compliance with all federal, provincial, state and local laws, rules, regulations and orders, including, without limitation, Environmental Laws, except to the extent failure to so comply would not result in a Material Adverse Effect;

(k)                                  Environmental Condition of Property: the properties and assets of such Loan Party and each of its Subsidiaries:

(i)                                     are not the subject of any outstanding orders from a government agency or otherwise alleging violation of any Environmental Laws; and

(ii)                                  comply, with respect to their use and condition, with all Environmental Laws and all terms and conditions of all permits, licenses and other authorizations, which are required under all Environmental Laws;

except to the extent that such orders or failure to so comply would not result in a Material Adverse Effect;

(l)                                     Ranking with Other Debt:  all payment obligations of such Loan Party hereunder rank at least pari passu in right of payment with the other unsecured and unsubordinated Indebtedness of such Loan Party for borrowed money (except for such claims as may be preferred by operation of law); and

(m)                               Events of Default:  no event or circumstance has occurred and is continuing which constitutes, or which with the giving of notice, lapse of time or both would constitute, an Event of Default.

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(n)           Purchase Agreement:

(i)                                     TAIL has full corporate power and capacity to enter into and perform its obligations under the Purchase Agreement;

(ii)                                  as of the Acquisition Closing Date, the execution, delivery and performance by TAIL of the Purchase Agreement:

(A)                              have been duly authorized by all necessary corporate action on the part of TAIL;

(B)                                are within the corporate, power and capacity of TAIL;

(C)                                will not violate any provision of law applicable to TAIL (except to the extent provided for in subparagraph (E) below) or of its constitutional documents;

(D)                               will not result in the breach of or constitute a default or require any consent under, or result in the creation of any lien, charge or encumbrance upon any of its property or assets pursuant to, any indenture or other agreement or instrument to which it is a party or by which it or its property may be bound or affected, except to the extent any such breach, default or failure to obtain consent would not reasonably be expected to have a Material Adverse Effect; and

(E)                                 does not require any license, consent or approval of or advance notice to or advance filing with any governmental agency or regulatory authority which has not been obtained, other than any such license, consent, approval, notice or filing the failure of which to obtain or file would not enjoin, materially restrict, prohibit or make illegal the Acquisition;

(iii)                               the Purchase Agreement has been duly executed and delivered by TAIL;

(iv)                              the Purchase Agreement has not been amended, nor have any conditions precedent to the Acquisition that is for the benefit of the Guarantor or its Subsidiaries been waived except to the extent any such amendment or waiver would not reasonably be expected to have a Material Adverse Effect; and

(v)                                 the Purchase Agreement is a legal, valid and binding obligation of TAIL, enforceable against TAIL in accordance with its terms except as enforceability may be limited by general principles of equity and bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally.

(o)                                 Margin Regulations:  The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

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(p)                                 Investment Company Act:  The Borrower is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

2.2                                                                               Representations and Warranties of the Lenders

Each Lender, in respect of itself only, represents and warrants to the Borrower that as of the date of this Agreement:

(a)                                  Authorization, Execution and Delivery:  this Agreement has been duly authorized, executed and delivered by the Lender; and

(b)                                 Enforceability:  except as enforceability may be limited by general principles of equity and by bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally, this Agreement is a legal, valid and binding obligation of the Lender enforceable against the Lender in accordance with its terms.

Article 3
THE CREDIT FACILITY

3.1                                                                               Obligations of Each Lender

(a)  Revolving Loans.  Relying on each of the representations and warranties set out in Section 2.1, and subject to the terms and conditions of this Agreement, each Revolving Lender agrees to make revolving loans (“Revolving Loans”) available to the Borrower up to the amount of its Revolving Commitment commencing on the date of this Agreement and ending on the Maturity Date of such Lender by way of the advance of Revolving Loans by each such Lender.  Within the limits of each Revolving Lender’s Revolving Commitment, prior to the Maturity Date of such Lender, the Borrower may increase or decrease Revolving Borrowings from each such Lender by obtaining Revolving Loans and by making repayments in respect thereof.  No Revolving Lender shall have any obligation to make any Revolving Borrowing available if, after giving effect thereto, the Revolving Borrowings from such Lender would exceed the Revolving Commitment of such Lender.

(b)  Term Loans.  Relying on each of the representations and warranties set out in Section 2.1, and subject to the terms and conditions of this Agreement, each Term Lender agrees to make term loans (“Term Loans”) available to the Borrower up to the amount of its Term Commitment commencing on the date of this Agreement and ending on the date that is six months after the date of this Agreement by way of the advance of Term Loans by each such Lender.  Term Borrowings made under this Section 3.1(b) and repaid or prepaid may not be reborrowed.  No Term Lender shall have any obligation to make any Term Borrowing available if, after giving effect thereto, the Term Borrowings from such Lender would exceed the Term Commitment of such Lender.

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3.2                                                                               Purpose

(a)  Revolving Borrowings.  Revolving Borrowings shall only be used by the Borrower for general corporate purposes (including, without limiting the generality of the foregoing, capital expenditures and acquisitions).

(b)  Term Borrowings.  Term Borrowings shall only be used by the Borrower, directly or indirectly through a Subsidiary, to pay a portion of the purchase price with respect to the Acquisition.

3.3                                                                               Borrowings

Subject to the provisions of this Agreement, the Borrower may borrow Loans as follows:

(a)                                  Base Rate Loans:  Base Rate Loans from the Lenders upon prior written notice given no later than the Business Day prior to the date of such requested Borrowing; and

(b)                                 Libor Loans:  Libor Loans from the Lenders upon prior written notice given no later than the third Banking Day prior to the date of such requested Borrowing;

each such notice to be given by the Borrower prior to 10:00 a.m. (New York time) on the last day on which such notice can be given pursuant to this Section 3.3 and to be substantially in the form of Schedule A.  All Borrowings must be requested in minimum amounts of $10,000,000.

3.4                                                                               Selection of Interest Periods

If the Borrower elects to borrow by way of a Libor Loan pursuant to Section 3.3, elects to Convert a Borrowing into a Libor Loan pursuant to Section 3.7 or elects to Rollover a Libor Loan pursuant to Section 3.8, the Borrower shall, prior to the beginning of the Interest Period applicable to such Libor Loan, in accordance with the same period of notice required for the initial drawdown of a Libor Loan as set forth in Section 3.3, select and notify the Agent of the Interest Period (which shall begin and end on a Banking Day) applicable to such Libor Loan.

3.5                                                                               Notice of Repayment

The Borrower shall give the Agent prior written notice of each repayment of Borrowings in accordance with the same period of notice required pursuant to Section 3.3 for the initial drawdown of the basis of Borrowing being repaid, such notice to be substantially in the form of Schedule A.  Notwithstanding the foregoing, a Libor Loan shall only be repaid on the last day of the Interest Period applicable to such Libor Loan unless, in respect of any payment made on a Libor Loan other than on the last day of the Interest Period applicable to such Libor Loan, the Borrower pays all amounts payable in respect thereof pursuant to Section 10.5.

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3.6                                                                               Pro-Rata Treatment of Borrowings

(a)                                  Pro-Rata Borrowings:  (i)  Revolving Borrowings.  Subject to Sections 1.9, 3.6(b), 3.11(b) and 3.11(c) and that there may be Revolving Lenders with different Maturity Dates, each Revolving Borrowing shall be made available by each Revolving Lender and all repayments and reductions in respect thereof shall be made and applied in a manner so that the proportion of Revolving Borrowings outstanding hereunder to each Revolving Lender will, to the extent possible, thereafter be in the same proportion as the Lender’s Proportion of such Lender.  The Agent is authorized by the Borrower and each Revolving Lender to determine, in its sole and unfettered discretion, the amount of Revolving Borrowings to be made available by each Revolving Lender and the application of repayments and reductions of Revolving Borrowings to give effect to the provisions of this Section 3.6(a)(i) and Section 6.2; provided that no Revolving Lender shall, as a result of any such determination, have Revolving Borrowings outstanding in an amount which is in excess of the amount of its Revolving Commitment.

(ii)  Term Borrowings.  Subject to Section 3.6(b), each Term Borrowing shall be made available by each Term Lender and all repayments and reductions in respect thereof shall be made and applied in a manner so that the proportion of Term Borrowings outstanding hereunder to each Term Lender will, to the extent possible, thereafter be in the same proportion as the Lender’s Proportion of such Lender.  The Agent is authorized by the Borrower and each Term Lender to determine, in its sole and unfettered discretion, the amount of Term Borrowings to be made available by each Term Lender and the application of repayments and reductions of Term Borrowings to give effect to the provisions of this Section 3.6(a)(ii) and Section 6.2; provided that no Term Lender shall, as a result of any such determination, have Term Borrowings outstanding in an amount which is in excess of the amount of its Term Commitment.

(b)                                 Agent’s Discretion on Allocation:  In the event it is not practicable to allocate Borrowings in accordance with Section 3.6(a) by reason of the occurrence of circumstances described in Sections 10.2, 10.3 or 10.4, the Agent is authorized by the Borrower and each Lender to make such allocation as the Agent determines in its sole and unfettered discretion may be equitable in the circumstances; provided that the cost to the Borrower of such Borrowings is not thereby increased.

(c)                                  Further Assurances by Borrower:  To the extent reasonably possible, the Borrower and each Lender agrees to be bound by and to do all things necessary or appropriate to give effect to the provisions of this Section 3.6.

3.7                                                                               Conversion Option

The Borrower may, during the term of this Agreement and on a day which is either a Business Day or Banking Day, as applicable, convert any Borrowing to another basis of Borrowing upon giving the Agent a Conversion Notice in accordance with the period of notice and other requirements set out in Section 3.3 applicable to the basis of Borrowing to which any such Borrowing is being converted (other than delivery of a notice in the form of Schedule A), provided that a Libor Loan may only be converted on the last day of the Interest Period

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applicable to such Libor Loan or on any other day if the Borrower pays all amounts payable in respect thereof pursuant to Section 10.5.

The conversion of a Borrowing to another basis of Borrowing shall convert the obligation of the Borrower from the one Borrowing into the other Borrowing but shall not constitute a repayment or prepayment hereunder.

3.8                                                                               Rollovers and Deemed Conversions

The Borrower may, during the term of this Agreement, rollover all or any portion of a Libor Loan for an additional Interest Period subsequent to the initial or any subsequent Interest Period, upon giving the Agent at the Agent’s Branch of Account a Rollover Notice in accordance with the period of notice and other requirements set out in Section 3.3 applicable to Libor Loans (other than delivery of a notice in the form of Schedule A), unless immediately prior to the commencement of any subsequent Interest Period, an Event of Default shall have occurred and be continuing, in which event the Borrower shall be deemed to have converted any such Libor Loan to a Base Rate Loan, in each case pursuant to Section 3.7 on the last day of the Interest Period applicable thereto, in each case unless the Agent in its discretion acting reasonably, otherwise permits.  In the event a Rollover Notice in respect of an existing Libor Loan is not given pursuant to this Section 3.8 or a Conversion Notice in respect of such existing Libor Loan is not given pursuant to Section 3.7, any such Libor Loan shall be converted to a Base Rate Loan on the last day of the Interest Period applicable to such existing Libor Loan and the provisions of the last sentence of Section 3.7 shall apply to any such conversion.

3.9                                                                               Notices Irrevocable

Except as otherwise permitted by the Agent, all notices delivered or deemed to be delivered by the Borrower pursuant to Article 3 shall be irrevocable and shall oblige the Borrower to take the action contemplated on the date specified therein.

3.10                                                                        Extension

(a)                                  Request for Extension:  The Borrower may, from time to time, request an extension of the Maturity Date of each Revolving Lender who has not previously refused to agree to any such request (each, a “Requested Lender”) by sending to the Agent a Request for Extension, certifying therein, for the benefit of the Requested Lenders, that (i) the representations and warranties contained in Section 2.1 are true and correct on the date thereof with the same effect as if such representations and warranties were made on such date except as noted therein and (ii) the then applicable rating category assigned by at least one of Moody’s or S&P as an issuer rating or, if none, to the long term unsecured and unsubordinated debt, of the Guarantor better than Baa3 or BBB-, respectively, not later than the forty-fifth day and not earlier than the sixtieth day prior to the then current Extension Date and the Agent shall forthwith, and in any event within one (1) Business Day, notify each Requested Lender of such request and each such Requested Lender shall acknowledge receipt of such notification.  Each Requested Lender shall advise the Agent as to whether it agrees to extend the Maturity Date in accordance with any such Request for Extension before the twentieth day prior to the Extension Date, provided that in the

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event such Lender does not so advise the Agent before such twentieth day, such Lender shall be deemed to have advised the Agent that it is not prepared to extend the applicable Maturity Date.  Within two (2) Business Days of the Agent receiving from each Requested Lender its decision with respect to extending the applicable Maturity Date, the Agent shall, subject to Section 3.10(c), advise the Borrower of the Requested Lenders that have agreed to extend the applicable Maturity Date.

(b)                                 Payment or Replacement by Borrower:  Subject to Section 3.10(c), if a Requested Lender does not agree to extend the Maturity Date (such Lender being a “Non-Agreeing Lender” and any Requested Lender agreeing to extend such Maturity Date being an “Agreeing Lender”) the Borrower may, but is not obligated, to:

(i)                                     so long as there exists no Event of Default and subject to Section 10.5, repay all Borrowings and other amounts owing hereunder to any Non-Agreeing Lender on or prior to the then current applicable Maturity Date and upon such payment any Non-Agreeing Lender shall cease to be a Lender hereunder and each such Non-Agreeing Lender’s Commitment shall be terminated and the Total Commitment reduced accordingly; or

(ii)                                  arrange for a replacement lender (which may be one of the Lenders) to replace each Non-Agreeing Lender’s Revolving Borrowings and its Revolving Commitment on or prior to the then current applicable Maturity Date; provided that any such replacement lender (if it is not a Lender) shall have been approved by the Agent (such approval not to be unreasonably withheld) and shall be novated into the Loan Documents in the place and stead of the Non-Agreeing Lender by execution of all necessary documentation on or prior to the then current applicable Maturity Date and in respect of which the Lenders shall do all things and make all such adjustments as are reasonably necessary to give effect to any such replacement and the Maturity Date of such replacement Lender shall be the same as the Agreeing Lenders.

(c)                                  Non-Extension:  The applicable Maturity Date shall not be extended in accordance with Section 3.10(a) if Requested Lenders holding more than fifty-one percent (51%) of the Revolving Commitments of all Requested Lenders at such time do not agree or are deemed not to agree to extend such Maturity Date pursuant to any Request for Extension.

In any such case:

(i)                                     the applicable Maturity Date of all such Requested Lenders shall not be extended; and

(ii)                                  the Borrower shall not be entitled to request any further extensions of such Maturity Date.

(d)                                 Extension for all Requested Lenders:  If all Requested Lenders agree to extend the applicable Maturity Date pursuant to a Request for Extension, then the Maturity Date for all Requested Lenders shall be extended for a period of one (1) year.

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(e)                                  Partial Extension:  If, with respect to any Request for Extension, the provisions of Section 3.10(c) or 3.10(d) are not applicable and there are Non-Agreeing Lenders under Section 3.10(b) then:

(i)                                     the applicable Maturity Date for the Agreeing Lenders shall be extended for a period of one (1) year;

(ii)                                  the applicable Maturity Date for the Non-Agreeing Lenders shall not be extended; and

(iii)                               in the case of Section 3.10(e)(ii), the Borrower shall not be entitled to request any further offers to extend the applicable Maturity Date from such Non-Agreeing Lenders.

(f)                                    Independent Decision:  The Borrower understands that consideration of any Request for Extension constitutes an independent credit decision which each Lender retains the absolute and unfettered discretion to make and that no commitment in this regard is hereby given by any Lender.

3.11                                                                        Takeover Notification

Except as may relate to the Acquisition or to the acquisition by certain Subsidiaries of the Guarantor of American Natural Resources and ANR Storage Company and an additional 3.55% interest in Great Lakes Gas Transmission Limited Partnership, in each case from El Paso Corporation or subsidiaries thereof, in the event the Borrower wishes to utilize Borrowings to, or to provide funds to any Subsidiary to, offer to acquire (which shall include an offer to purchase securities, solicitation of an offer to sell securities or an acceptance of an offer to sell securities, whether or not the offer to sell was solicited, or any combination of the foregoing) outstanding securities of any person (other than a private issuer as defined under the Securities Act (Alberta) or a corporation whose shares are directly or indirectly held by one person) (the “Target”) where, as of the date of the offer to acquire, the securities that are subject to the offer to acquire, together with the securities of the Target that are beneficially owned, or over which control or direction is exercised, by the Borrower and its Subsidiaries and any person acting jointly or in concert with any thereof on the date that the offer to acquire is made, constitute in the aggregate the lesser of such percentage of outstanding securities as is considered to be a “takeover bid” under any law or regulation applicable to the Target and twenty percent (20%) or more of all of the outstanding securities of that class of securities of the person (a “Takeover”) except where such Takeover is made pursuant to exemptions from formal takeover bid requirements as provided in Section 161 of the Securities Act (Alberta) or any order of the Alberta Securities Commission or in any successor legislation or by any successor securities regulatory authority or in any analogous provisions of the securities laws of any other jurisdiction or by any securities regulatory authority of any other jurisdiction, then either:

(a)                                  Agreement of the Target Entity:  the Borrower shall provide to the Agent evidence satisfactory to the Agent of the agreement of the board of directors or like body of the Target approving the Takeover; or

(b)                                 No Conflict by Lenders:  the following steps shall be followed:

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(i)                                     no later than the fifth Business Day prior to the delivery of any notice to the Agent pursuant to Section 3.4 requesting Accommodations intended to be utilized for such Takeover, the President, Chief Financial Officer or Treasurer of the Borrower (or such other senior officer of the Borrower as may be designated by the Borrower from time to time) shall notify the Agent who shall forthwith, but, in any event not later than the following Business Day, notify a Vice President or more senior officer of each Lender (or such other senior officer of such Lender as may be designated by such Lender from time to time) from whom Accommodations will be requested to fund such Takeover of the particulars of such Takeover in sufficient detail to enable such Lender to determine whether it is a Conflicted Lender;

(ii)                                  no later than the fourth Business Day following the day on which notice is given by the Borrower to the Agent pursuant to Section 3.11(b)(i), each such Lender shall notify the Agent of such Lender’s determination, acting reasonably, as to whether it is a Conflicted Lender, failing which such Lender shall be deemed not to be a Conflicted Lender (a “Non-Conflicted Lender”); and

(iii)                               the Agent shall promptly notify the President, Chief Financial Officer, Treasurer or other applicable senior officer of the Borrower of such Lender’s determination.

In the event that any Lender has determined it is a Conflicted Lender, then upon the Agent so notifying the Borrower, such Lender shall have no obligation to provide Accommodations for such Takeover notwithstanding any other provision of this Agreement to the contrary; provided, however, that each other Non-Conflicted Lender shall have an obligation, up to the amount of its Commitment, to provide Accommodations for such Takeover, and any such Accommodations for such Takeover shall be provided by each Non-Conflicted Lender in accordance with the ratio that its Lender’s Proportion bears to the aggregate of the Lender’s Proportions of all the Non-Conflicted Lenders.

For the purposes of this Section 3.11, a Lender shall be a “Conflicted Lender” only if such Lender:

(A)                              has existing commitments (whether funded or unfunded) to provide credit to the person subject to the Takeover (including the Target);

(B)                                is providing financial advisory or other similar services to the person subject to the Takeover (including the Target); or

(C)                                there exists other circumstances which such Lender has advised the Borrower of and which would make it inappropriate for such Lender, acting reasonably, to fund a Takeover.

(c)                                  Adjustment:  If Accommodations are utilized for the purposes of a Takeover (a “Takeover Loan”) and there are Conflicted Lenders, the Lender’s Proportion of each Non-Conflicted Lender shall be temporarily adjusted in accordance with Section 3.11(b) and subsequent Accommodations shall be funded firstly by Conflicted Lenders and

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subsequent repayments shall be applied firstly to amounts owed to Non-Conflicted Lenders, in each case, until such time as the Lender’s Proportion of each Non-Conflicted Lender and Conflicted Lender is equal to such Lender’s Proportion in effect immediately prior to the advance of the Takeover Loan.

Article 4
REPAYMENT AND PREPAYMENT

4.1                                                                               Reduction of Commitment and Repayment of Borrowings

On the Maturity Date of each Lender, the Borrower shall repay all Borrowings and all other amounts owing hereunder to such Lender and the Commitment(s) of such Lender shall be reduced to zero.  The Borrower shall ensure that all Libor Loans forming a part of the Borrowings of such Lender mature on or before the Maturity Date of such Lender.

4.2                                                                               Cancellation of Commitment and Prepayment and Replacement

The Borrower may, without penalty or premium, at any time and from time to time during the term of this Agreement upon written notice substantially in the form of Schedule A given no later than the fifth Business Day prior to the cancellation date set out in such notice, cancel all of the Total Commitment or any portion thereof in minimum amounts of $10,000,000 and whole multiples thereafter of $10,000,000 by canceling the Revolving Commitment or Term Commitment of each Lender in an amount equal to such Lender’s Proportion of the amount of the Total Commitment being so cancelled; provided that on or prior to the day immediately preceding the cancellation date set out in such notice the Borrower has:

(a)                                  Prepaid Borrowings:  prepaid or otherwise reduced Borrowings outstanding to each Lender in an amount equal to the amount by which Borrowings outstanding to such Lender would otherwise be in excess of the amount of such Lender’s applicable Commitment immediately after the reduction of the Total Commitment provided for in such notice; and

(b)                                 Paid Interest:  paid all accrued interest and other charges and fees in respect of the Borrowings being repaid or reduced as aforesaid.

Any such notice of cancellation is irrevocable and the amount of the Total Commitment and each Lender’s Commitment so cancelled and reduced may not be reinstated hereunder.  Notwithstanding the foregoing, the Borrower shall be entitled to exercise its rights under this Section 4.2 in respect of the Revolving Commitment of those Revolving Lenders whose Maturity Dates are the same without being concurrently required to cancel any other Revolving Commitment.

In addition to the foregoing and if a Lender is (in this Section 4.2, an “Affected Lender” and any Lender which is not an Affected Lender being an “Unaffected Lender”):

(i)                                     a Conflicted Lender who has not waived its status as a Conflicted Lender pursuant to Section 3.11(b)(ii);

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(ii)                                  a Lender in respect of whom the Borrower has been required to make increased payments pursuant to Section 6.3(a);

(iii)                               a Lender who has invoked the provisions of Section 10.2, Section 10.3 or Section 10.4;

(iv)                              a Lender who has not consented to a request by the Borrower to an amendment or waiver of the provisions of Section 8.2 set out in Section 11.12(a)(vi); or

(v)                                 a Lender who has failed to provide a Borrowing as and when required hereunder;

the Borrower may for a period of sixty (60) days after such Lender has become an Affected Lender and without prejudice to any other right or remedy the Borrower may have in respect of a Lender who has failed to provide a Borrowing as and when required hereunder:

(c)                                  Payment:  so long as there exists no Event of Default and subject to Section 10.5 (other than in respect of the circumstances referred to in (iv) of the preceding paragraph, in which case no such conditions shall apply), repay all Borrowings and other amounts owing hereunder to such Affected Lender and upon such payment such Affected Lender shall cease to be a Lender hereunder and such Affected Lender’s Commitment shall be terminated and the Total Commitment reduced accordingly; or

(d)                                 Replacement:  arrange for a replacement lender (which may be one of the Lenders) to replace such Affected Lender’s Borrowings and its Commitment(s) provided that any such replacement lender (if it is not a Lender) shall have been approved by the Agent (such approval not to be unreasonably withheld) and shall be novated into the Loan Documents in the place and stead of such Affected Lender by execution of all necessary documentation within such sixty (60) day period and in respect of which the Lenders shall do all things and make all such adjustments as are reasonably necessary to give effect to any such replacement.

4.3                                                                               Evidence of Indebtedness

The Agent shall open and maintain on the books at the Agent’s Branch of Account accounts and records (the “Accounts”) evidencing the Borrowings and other amounts owing by the Borrower to the Agent and each Lender under this Agreement.  The Agent shall debit therein the amount of such Borrowings and shall enter therein as a credit each payment of principal of and interest on the Borrowings and fees and other amounts payable pursuant to this Agreement by the Borrower and shall record all other amounts becoming due to the Agent, and each Lender under this Agreement.  The Accounts constitute, in the absence of manifest error, prima facie evidence of the indebtedness of the Borrower to the Agent and each Lender pursuant to this Agreement, the date each Lender made each Borrowing available to the Borrower and the amounts the Borrower has paid from time to time on account of the principal of and interest on the Borrowings, fees payable pursuant to this Agreement and other amounts owing hereunder.

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Article 5
PAYMENT OF INTEREST AND FEES

5.1                                                                               Interest on Base Rate Loans

The Borrower shall pay to the Agent on behalf of each Lender interest in Dollars on each Base Rate Loan made by each such Lender at a rate per annum equal to the Base Rate.  A change in the Base Rate shall simultaneously cause a corresponding change in the interest payable for a Base Rate Loan.  Such interest shall be payable quarterly in arrears on the third Business Day following each Interest Date applicable to such Base Rate Loan or on the Maturity Date of each such Lender for the period commencing on and including the day of the advance of each such Base Rate Loan or the day after the immediately preceding Interest Date to which interest has been paid, as applicable, up to and including the Interest Date to which interest is payable or up to but excluding the Maturity Date of each such Lender and shall be calculated on a daily basis on the principal amount outstanding under each such Base Rate Loan in such period based on the actual number of days elapsed in the period for which such interest is payable divided by three hundred sixty-five (365) or three hundred and sixty-six (366) depending on the actual number of days in the year for which such interest is determined.

5.2                                                                               Interest on Libor Loans

The Borrower shall pay to the Agent on behalf of each Lender interest in Dollars on each Libor Loan made by each such Lender at a per annum rate of interest based on a three hundred sixty (360) day year equal to the sum of Libor plus the applicable Margin on the first day of the Interest Period applicable to such Libor Loan.  Such interest shall be payable in arrears on each Interest Date applicable to such Libor Loan for the period commencing on and including the day of advance of each such Libor Loan or the last Interest Date to which interest has been paid, as applicable, up to but excluding the Interest Date to which such interest is payable and shall be calculated on a daily basis on the principal amount outstanding under each such Libor Loan in such Interest Period based on the actual number of days elapsed in the period for which such interest is payable divided by three hundred sixty (360).

5.3                                                                               Interest on Overdue Amounts

The Borrower shall, on demand, pay to the Agent on behalf of each Lender interest on all overdue payments owing by it in connection with this Agreement from the date any such payment becomes overdue and for so long as such amount remains unpaid at a rate per annum which is equal to the Base Rate plus two percent (2%) in respect of amounts due in Dollars to the Lenders.

Such interest on overdue amounts shall be compounded monthly and shall be payable both before and after default, maturity and judgment.

5.4                                                                               Standby Fees

Prior to the Maturity Date of each Lender, the Borrower shall pay standby fees to the Agent on behalf of each Lender at the Agent’s Applicable Account for Payments quarterly in arrears on the third Business Day of each calendar quarter in each year during the term of this

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Agreement commencing with the third Business Day of the calendar quarter occurring after the Effective Date.  Each payment of standby fees shall be calculated for the period commencing on and including the Effective Date or the first day of the calendar quarter following a calendar quarter for which standby fees have been paid, as the case may be, up to and including the last day of such calendar quarter or the Maturity Date of each Lender and shall be in an amount equal to the applicable Standby Fee Rate in effect on each day during such period calculated daily on the amount of such Lender’s Commitment in effect on such day during such period. Such standby fees shall be calculated on a daily basis and on the basis of the actual number of days elapsed in a year of three hundred sixty (360) days.

5.5                                                                               Effective Date of Rating Change

In the event of a change in the rating assigned by Moody’s or S&P as an issuer rating or to the long term unsecured and unsubordinated debt of the Guarantor which results in a change to the Margin or Standby Fee Rate, such change shall take effect immediately on such change in the rating occurring and, if the Agent is not made aware of any such change in the rating immediately, the Agent, the Borrower and the Lenders shall make all adjustments, if any, as are necessary to ensure that all interest and fees payable hereunder are paid based on the correct Margin and Standby Fee Rate in effect from time to time.

5.6                                                                               Agent’s Fees

The Borrower shall pay agency fees to the Agent for the Agent’s sole account at the Agent’s Applicable Account for Payments at the time or times and in the amount agreed to in writing by the Borrower and the Agent.  Such fees shall, for purposes of this Agreement, be deemed to be amounts payable pursuant to this Agreement.

5.7                                                                               Maximum Rate Permitted by Law

Under no circumstances shall a Lender be entitled to receive nor shall it in fact receive a payment or partial payment of interest, fees or other amounts under this Agreement at a rate that is prohibited by applicable law.  Accordingly, notwithstanding anything herein or elsewhere contained, if and to the extent that under any circumstances, the effective annual rate of “interest” (as defined in section 347 of the Criminal Code of Canada) received or to be received by a Lender (determined in accordance with such section) on any amount of “credit advanced” (as defined in that section) pursuant to these presents or any agreement or arrangement collateral hereto entered into in consequence or implementation hereof would, but for this Section 5.7 be a rate that is prohibited by applicable law, then the effective annual rate of interest, as so determined, received or to be received by the Lender on such amount of credit advanced shall be and be deemed to be adjusted to a rate that is one whole percentage point less than the lowest effective annual rate of interest that is so prohibited (the “adjusted rate”); and, if the Lender has received a payment or partial payment which would, but for this Section 5.7, be so prohibited then any amount or amounts so received by the Lender in excess of the adjusted rate shall be deemed to have comprised a credit to be applied to subsequent payments on account of interest, fees or other amounts due to the Lender at the adjusted rate or shall be paid to the Borrower if no further interest, fees or other amounts are or will become due to the Lender.

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5.8                                                                               Interest Act

Whenever a rate of interest hereunder is calculated on the basis of a year (the “deemed year”) which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.

5.9                                                                               Waivers

To the extent permitted by applicable law, any provision of the Interest Act (Canada) or the Judgment Interest Act (Alberta) which restricts any rate of interest set forth herein shall be inapplicable to this Agreement and is hereby waived by each Loan Party.

Article 6
PAYMENT AND TAXES

6.1                                                                               Time, Place and Currency of Payment

Payments of principal, interest, fees and all other amounts payable by the Borrower pursuant to this Agreement shall be paid in Dollars at or before 11:00 a.m. (New York time) on the day such payment is due.  If any such day is not a Business Day or a Banking Day, as applicable, such amount shall be deemed for all purposes of this Agreement to be due on the Business Day or Banking Day next following such day and any such extension of time shall be included in the computation of the payment of any interest or fees payable under this Agreement unless such extension of time is included in a successive period for which interest is payable hereunder.  Unless otherwise specifically provided for herein, all payments required to be made by the Borrower or a Lender shall be made to the Agent’s Applicable Account for Payments.  Receipt by the Agent from the Borrower of funds pursuant to this Agreement, as principal, interest, fees or otherwise, shall be deemed to be receipt of such funds by the Agent or Lenders, as the case may be.

6.2                                                                               Application of Payments Prior to an Event of Default

Except as otherwise agreed to by all of the Lenders in their sole discretion, all payments made by or on behalf of the Borrower pursuant to this Agreement prior to the delivery of an Acceleration Notice shall be applied by the Agent ratably, among the Lenders and the Agent in accordance with amounts owed to the Lenders and the Agent in respect of each category of amounts set forth below, each such application to be made in the following order with the balance remaining after application in respect of each category to be applied to the next succeeding category:

(a)                                  Expenses:  firstly, in payment of any amounts due and payable as and by way of recoverable expenses hereunder;

(b)                                 Agent’s Fees:  secondly, in payment of any amounts due and payable as and by way of the Agent’s fees referred to in Section 5.6;

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(c)                                  Standby Fees:  thirdly, in payment of any amounts due and payable as and by way of the standby fees referred to in Section 5.4;

(d)                                 Interest:  fourthly, in payment of any amounts due and payable as and by way of interest pursuant to Sections 5.1 and 5.2, and interest on overdue amounts pursuant to Section 5.3; and

(e)                                  Other Amounts (other than Borrowings): fifthly, in payment of any amounts (other than Borrowings) then due and payable by the Borrower hereunder other than amounts hereinbefore referred to in this Section 6.2;

with the balance to be applied to repay or otherwise reduce Borrowings in a manner so that the Borrowings outstanding hereunder will, to the extent possible but subject to Section 3.6(a), be outstanding or in the same proportion as the Lender’s Proportion of such Borrowings.

6.3                                                                               Taxes

(a)                                  Withholding:  Each Loan Party agrees that any and all payments by such Loan Party to or for the benefit of the Lenders shall be, except as otherwise required by law or expressly provided in this Section 6.3, free and clear of and without set-off, counterclaim, reduction or deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on such Lender’s income or such Lender’s capital, and franchise taxes imposed on such Lender, and taxes imposed with respect to such payments by the United States or any political subdivision thereof, or any other jurisdiction or country which taxes are imposed by reason of such Lender being resident in the United States or such other country or carrying on business in, or maintaining a permanent establishment or fixed base in, the United States or such other country, unless such residence, business, permanent establishment or fixed base arises solely by reason of a Borrowing hereunder or any other right under this Agreement or the receipt of any payment on or with respect to any Borrowing from such Lender (all such excluded taxes referred to in this Section 6.3 being referred to herein as “Excluded Taxes” and all such other taxes (other than Excluded Taxes), levies, imposts, deductions, charges, withholdings and liabilities being referred to herein as “Taxes”).  If a Loan Party shall be required by law to deduct or withhold any Taxes from or in respect of any sum payable hereunder to any Lender, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions or withholdings (including deductions applicable to additional sums payable under this Section 6.3), such Lender has received an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) such Loan Party shall make such deductions or withholdings, and (iii) such Loan Party shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law.  “Excluded Taxes” shall include, in the case of any Foreign Lender, any United States withholding Tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a change in law) to comply with Section 6.3(d), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of

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designation of a new lending office (or assignment), to receive additional amounts from a Loan Party with respect to such withholding Tax pursuant to Section 6.3(a).

(b)                                 Refunds:  If any Taxes are imposed on or with respect to any payment on or under this Agreement, in consequence of which a Loan Party is required to make any additional payment to any Lender under this Section 6.3, and if such Lender is entitled to a cash refund which is both identifiable and quantifiable by such Lender as being attributable to the imposition of such Taxes (a “Tax Refund”), and such Tax Refund may be obtained without increased liability to such Lender by filing one or more forms, certificates, documents, applications or returns (collectively, the “Forms”), then such Lender shall within a reasonable time after receiving a written request from such Loan Party (which request shall specify in reasonable detail the Forms to be filed and explain the actions necessary to obtain such Tax Refund), file such Forms.  If such Lender subsequently receives a Tax Refund, and such Lender is able to identify the Tax Refund as being attributable, in whole or in part, to the tax with respect to which such additional payment was made, then such Lender shall reimburse the applicable Loan Party such amount as such Lender shall determine acting in good faith to be the proportion of the Tax Refund, together with any interest received thereon, attributable to such additional payment as will leave such Lender after the reimbursement in the same position as it would have been if the additional payment had not been required; provided that, if any Tax Refund reimbursed by a Lender to a Loan Party is subsequently disallowed, such Loan Party shall repay such Lender such amount (together with interest and any applicable penalty payable by such Lender to the relevant taxing authority) promptly after receipt of notice by such Lender of such disallowance.  Each Loan Party agrees to reimburse each such Lender for such Lender’s reasonable out-of-pocket expenses, if any, incurred in complying with any request hereunder and agrees that all costs incurred by such Lender in respect of this Section 6.3 may be deducted from the amount of any reimbursement to such Loan Party in respect of any Tax Refund pursuant to this Section 6.3.

(c)                                  Cooperation:  In the event that a Loan Party makes any indemnification payment to a Lender under this Section 6.3 and in the event such Lender determines in its good faith judgment that it is not liable for the Taxes for which such indemnification payment was made, such Lender agrees to use reasonable efforts to cooperate with such Loan Party in contesting the liability for such Taxes; provided that, such Loan Party shall reimburse such Lender for any reasonable out-of-pocket costs and expenses incurred in providing such cooperation and shall indemnify and hold such Lender harmless from and against any liabilities incurred as a result of such Lender providing such cooperation or contesting such liability, and provided further that no such cooperation shall be required if such contest shall in such Lender’s good faith judgment subject it to any liability not covered by such indemnity.

(d)                                 Tax Forms.  Each Foreign Lender, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender and on the date of the Lender Transfer Agreement pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter as reasonably requested in writing by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide each of the Agent and the Borrower with the number of original copies requested by the recipient of any

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required forms, certifying that such Lender is exempt from or entitled to a reduced rate of United States withholding Tax on payments pursuant to this Agreement or the Notes (including Internal Revenue Service Forms W-8BEN or W-8ECI, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, or, in the case of a Foreign Lender claiming exemption from U.S. federal withholding Tax under section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest,” both a Form W-8BEN and a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code).

(e)                                  Mitigation.  Any Lender claiming any additional amounts payable pursuant to this Section 6.3 agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Branch of Account if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

Article 7
CONDITIONS PRECEDENT

7.1                                                                               Effectiveness and Conditions Precedent

This Agreement shall become effective on the date hereof if the following conditions precedent are satisfied:

(a)                                  Receipt of Documentation:  the Agent has received, in form and substance satisfactory to the Lenders acting reasonably, the following:

(i)                                     a duly executed copy of this Agreement for each Lender and the Agent;

(ii)                                  a certificate of the Guarantor dated as of such date certifying that:

(A)                              as of such date, there exists no Event of Default and no event or circumstance has occurred and is continuing which, with the giving of notice or lapse of time, or both, would constitute an Event of Default; and

(B)                                the representations and warranties of the Loan Parties contained in Article 2 are true and correct as of such date;

(iii)                               a certified copy of the Purchase Agreement and all other material documentation related to the Acquisition;

(iv)                              the most recent publicly disclosed consolidated balance sheet for the Guarantor;

(v)                                 a certificate of the Guarantor dated as of such date listing the Material Subsidiaries;

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(vi)                              a certified copy of a directors’ resolution of the Guarantor with respect to the Loan Documents, certified as of such date;

(vii)                           a certificate of the Guarantor dated as of such date, setting forth specimen signatures of the individuals executing the Loan Documents;

(viii)                        a certified copy of a directors’ resolution of the Borrower with respect to the Loan Documents, certified as of such date;

(ix)                                a certificate of the Borrower dated as of such date, setting forth specimen signatures of the individuals executing the Loan Documents;

(x)                                   an officer’s certificate from a senior officer of the Guarantor certifying the rating provided by either of Moody’s or S&P as an issuer rating or to the long term unsecured and unsubordinated debt, if any, of the Guarantor as of such date:

(xi)                                an opinion of Kristine Delkus, Deputy General Counsel, Pipelines and Regulatory Affairs, counsel to the Guarantor, addressed to the Agent and each Lender, with respect to the transactions provided for herein, substantially in the form attached as Schedule F;

(xii)                             an opinion of Mayer, Brown, Rowe & Maw LLP, special New York counsel to the Borrower, addressed to the Agent and each Lender, with respect to the transactions provided for herein, substantially in the form attached as Schedule G;

(xiii)                          an opinion of Shearman & Sterling LLP, counsel to the Lenders, addressed to the Agent and each Lender, substantially in the form attached as Schedule H; and

(xiv)                         such other documents and documentation which the Agent may reasonably request; and

(b)                                 Agent’s Fees:  prior to or concurrently with the execution of this Agreement, the Agent has received, in form and substance satisfactory to it, an agreement between the Borrower and the Agent with respect to fees payable pursuant to Section 5.6 duly executed by the Borrower and the Agent.

Each Lender hereby authorizes the Agent to confirm to the Borrower that the conditions precedent set forth in this Section 7.1 have been satisfied provided such Lender has not advised the Agent prior to this Agreement becoming effective pursuant to this Section 7.1 that such Lender is not satisfied that the Borrower has complied with such conditions precedent.  Such confirmation shall be deemed to have been given to the Borrower upon delivery to the Borrower of a duly executed copy of this Agreement by the Agent and the Lenders.

7.2                                                                               Conditions Precedent to Drawdown

The obligation of the Lenders to make available any Borrowings pursuant to Section 3.3 is subject to and conditional upon the satisfaction of each of the following terms:

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(a)                                  Effective Date:  the Effective Date has occurred;

(b)                                 Representations and Warranties:  on each Drawdown Date, the representations and warranties contained in Section 2.1 are true and correct in all material respects and, on the Acquisition Closing Date, the Agent has received a certificate of the Borrower that the representations and warranties shall be true and correct in all material respects immediately after the closing of the Acquisition; and

(c)                                  Acquisition: on the initial Drawdown Date of Term Borrowings, the Agent has received a certificate of the Borrower certifying that the Acquisition will close within three (3) days after the advance of such Term Borrowings and the Agent, acting reasonably, is satisfied that the Term Borrowings will be advanced in a manner so as to ensure they are used solely for the purposes of completing the Acquisition.

7.3                                                                               Continuing Conditions Precedent

The obligation of each Lender to make any Conversion of Base Rate Loans into Libor Loans pursuant to Section 3.7 or Rollover is subject to and conditional upon the satisfaction of the condition precedent that on each Conversion Date and Rollover Date there exists no Event of Default.

7.4                                                                               Waiver of a Condition Precedent

The terms and conditions of Sections 7.1 and 7.2 are inserted for the sole benefit of the Agent and the Lenders and may be waived by the Agent and the Majority Lenders in whole or in part with or without terms or conditions, in respect of all or any portion of the Borrowings, without affecting the right of the Agent and the Lenders to assert such terms and conditions in whole or in part in respect of any other Borrowing.

Article 8
COVENANTS OF THE Guarantor

8.1                                                                               Covenants of the Guarantor

During the term of this Agreement, the Guarantor covenants with each of the Lenders and the Agent that:

(a)                                  Payment and Performance:  the Guarantor shall cause the Borrower to punctually pay all sums of money due by it hereunder and shall perform, and cause the Borrower to perform, all other obligations on its part to be performed under the terms of the Loan Documents at the times and places and in the manner provided for therein;

(b)                                 Maintenance of Existence and Properties:  subject to Section 8.1(m), the Guarantor shall at all times maintain, and shall cause the Borrower to maintain, its corporate existence and shall, and shall cause each of its Material Subsidiaries to, carry on and conduct its business in a proper, efficient and business-like manner and in accordance with good business practice, and diligently maintain, use and operate its properties and

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plants so as to preserve and protect the earnings, incomes, rents, issues and profits thereof (provided, however, that nothing herein shall prevent

(i)                                     the Guarantor from disposing of or winding up a Material Subsidiary (except for the disposition of any shares or other equity interests of TCPL owned or held by it); or

(ii)                                  any Loan Party or any Material Subsidiary from ceasing to operate any particular plant or property, but not all or substantially all of its undertaking;

if in the opinion of such Loan Party or such Material Subsidiary it shall be advisable and in the best interests of such Loan Party or such Material Subsidiary to do so) and to keep proper books of account in accordance with Generally Accepted Accounting Principles;

(c)                                  Year End Consolidated Financial Statements of the Guarantor: the Guarantor shall furnish to the Agent as soon as provided to its shareholders and in any event within one hundred and forty (140) days after the end of each Fiscal Year of the Guarantor, a statement of consolidated financial position of the Guarantor as at the close of such Fiscal Year and statements of consolidated income and consolidated changes in financial position of the Guarantor for such Fiscal Year, setting forth in comparative form the corresponding figures of the preceding Fiscal Year together with an auditor’s report containing:

(i)                                     such auditor’s statement stating that its examinations of such consolidated financial statements were made in accordance with generally accepted auditing standards and accordingly included such tests and other procedures as it considered necessary in the circumstances; and

(ii)                                  such auditor’s opinion that such consolidated financial statements fairly present in all material respects the consolidated financial position of the Guarantor as of the close of such Fiscal Year and the results of its operations and the changes in its financial position for the Fiscal Year then ended in accordance with Generally Accepted Accounting Principles;

provided that if and for so long as the Guarantor is a “reporting issuer” under the Securities Act (Alberta) or successor legislation thereto, delivery of the financial statements of the Guarantor and auditor’s report included in the annual reports delivered to its shareholders and filed with provincial securities regulatory authorities shall be deemed to satisfy the requirements of this Section 8.1(c);

(d)                                 Compliance Certificate; Notice of Default: within one hundred and forty (140) days after the end of each Fiscal Year of the Guarantor, the Guarantor shall provide a Compliance Certificate to the Agent, and within five Business Days after the occurrence of any event or circumstance that constitutes, or which with the giving of notice, lapse of time or both would constitute, an Event of Default, if such event or circumstance is then continuing, a certificate of the chief financial officer or the chief accounting officer of the Guarantor setting forth the details thereof and the action which the Guarantor is taking or proposes to take with respect thereto;

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(e)                                  Quarterly Consolidated Financial Statements of the Guarantor: the Guarantor shall furnish to the Agent as soon as provided to its shareholders and in any event within sixty (60) days after the end of each of the first three (3) Fiscal Quarters of each Fiscal Year of the Guarantor, an unaudited statement of consolidated financial position of the Guarantor as at the end of such quarter and unaudited statements of consolidated income and consolidated changes in financial position of the Guarantor for such Fiscal Quarter; provided that if and for so long as the Guarantor is a “reporting issuer” under the Securities Act (Alberta) or successor legislation thereto, delivery of the financial statements of the Guarantor included in the interim reports delivered to its shareholders and filed with provincial securities regulatory authorities shall be deemed to satisfy the requirements of this Section 8.1(e);

(f)                                    Taxes:  the Guarantor shall from time to time pay or cause to be paid all taxes, rates, levies, assessments, ordinary or extraordinary, government fees or dues lawfully levied, assessed or imposed upon or in respect of its property or any part thereof or upon the income and profits of the Guarantor and of its Material Subsidiaries as and when the same become due and payable, except to the extent that failure to do so would not result in a Material Adverse Effect, and it will exhibit or cause to be exhibited to the Agent, when required, the receipts and vouchers establishing such payment and will duly observe and conform to all valid requirements of any governmental authority relative to any of the property or rights of the Guarantor and of its Material Subsidiaries and all covenants, terms and conditions upon or under which any such property or rights are held; provided, however, that the Guarantor and its Material Subsidiaries shall have the right to contest by legal proceedings any such taxes, rates, levies, assessments, government fees or dues, and upon such contest, may delay or defer payment or discharge thereof;

(g)                                 Renewal Rights:  the Guarantor shall, from time to time, if and whenever any Loan Party or any Material Subsidiary shall be able or entitled to obtain a renewal of any easements, rights-of-ways, leases, licenses, franchises, grants, permits or rights held by any Loan Party or any Material Subsidiary, duly exercise or cause to be exercised such rights and powers of renewal if, in the opinion of the Guarantor, it is advantageous to such Loan Party or to such Material Subsidiary so to do, or except to the extent that failure to do so would not result in a Material Adverse Effect; and

(h)                                 Insurance:  the Guarantor shall cause all its property and the property of its Material Subsidiaries which is of a character usually insured by persons operating like businesses to be properly insured and kept insured with reputable insurers (which may include associations or other organizations for mutual or reciprocal insurance) against loss or damage by fire or other hazards of the nature and to the extent that such properties are usually insured by persons operating like businesses; provided that from time to time another method or plan of protection against such loss or damage may be substituted, in whole or in part, for the aforesaid insurance if such plan or method shall afford protection to the property of the Guarantor and its Material Subsidiaries at least equal to the plan or method of protection against such loss or damage then generally in use with respect to similar property subject to similar or greater hazards or risks;

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(i)                                     Negative Pledge:  the Guarantor shall not mortgage, hypothecate, charge, pledge or otherwise encumber any of its assets to secure any obligation unless at the same time all of the indebtedness and liabilities of the Loan Parties to the Agent and the Lenders hereunder shall be secured equally and ratably with such obligations; provided that this Section 8.1(i) shall not apply to or operate to prevent:

(i)                                     Purchase Money Mortgages;

(ii)                                  liens for taxes and assessments not at the time overdue and liens securing workmen’s compensation assessments;

(iii)                               liens for specified taxes and assessments which are overdue but the validity of which is being contested at the time by the Guarantor in good faith;

(iv)                              liens or rights of distress reserved in or exercisable under any lease for rent and for compliance with the terms of such lease;

(v)                                 any obligations or duties, affecting the property of the Guarantor to any municipality or governmental, statutory or public authority, with respect to any franchise, grant, license or permit;

(vi)                              deposits in connection with contracts, bids, tenders or expropriation proceedings, or to secure workmen’s compensation, unemployment insurance, surety or appeal bonds, costs of litigation when required by law, public and statutory obligations, liens or claims incidental to current construction, mechanics’, warehousemen’s, carriers’ and other similar liens;

(vii)                           security given to a public utility or any municipality or governmental or other public authority when required by such utility or other authority in connection with the operations of the Guarantor;

(viii)                        liens and privileges arising out of judgments or awards with respect to which the Guarantor shall be prosecuting an appeal or proceedings for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review;

(ix)                                any other liens of a nature similar to those referred to in paragraphs (iv) through (x) inclusive of this Section 8.1(i) which do not in the opinion of the Guarantor materially impair the use of the property subject thereto or the operation of the business of the Guarantor or the value of such property for the purpose of such business; or

(x)                                   any security interest on assets or property of the Guarantor and its Subsidiaries if, after giving effect to such security interest, the aggregate amount of Indebtedness secured by such security interests permitted only by this clause (x) does not at that time exceed 5% of the Guarantor’s consolidated net tangible assets;

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provided that the Guarantor shall not be entitled to create any mortgage, charge, security interest or other lien pursuant to paragraphs (i) and (x) above against the shares or other equity interests of TCPL owned by it.

(j)                                     Pari Passu Ranking:  the Guarantor shall not, and shall cause the Borrower to not, create, assume or otherwise incur any Funded Obligations ranking prior to the Indebtedness and liabilities of the Loan Parties hereunder and shall ensure that at all times all of its payment obligations hereunder and under any other Loan Documents rank at least pari passu in right of payment with the other unsecured and unsubordinated Indebtedness for borrowed money of such Loan Party (other than claims preferred by operation of law);

(k)                                  Subordination:  if the Guarantor or the Borrower shall cause the payment of the principal of, premium, if any, and interest on any of its Indebtedness to be subordinated to the prior payment of any other of its Indebtedness, such Loan Party shall in like manner subordinate such payment to the prior payment in full of all the Indebtedness and liabilities of such Loan Party hereunder;

(l)                                     Voting Shares:  the Guarantor shall at all times directly or indirectly hold Voting Shares or other ownership interests of the Borrower which, together with Voting Shares and other ownership interests of the Borrower held by other Subsidiaries, are sufficient to entitle such holders to elect at least a majority of the directors or persons of like capacity of the Borrower;

(m)                               Restriction of Amalgamation etc.:  the Guarantor shall not, and shall not permit the Borrower to, enter into any transaction whereby all or substantially all of its undertaking, property and assets would become the property of any other person (herein called a “successor company”) whether by way of reconstruction, reorganization, consolidation, amalgamation, merger, transfer, sale, conveyance or otherwise unless, but may do so if:

(i)                                     the successor company shall execute, prior to or contemporaneously with the consummation of such transaction such agreements together with such other instruments as are satisfactory to the Majority Lenders and in the opinion of counsel to the Lenders necessary or advisable to evidence the assumption by the successor company of the indebtedness, liabilities and other obligations of the such Loan Party under this Agreement and the other Loan Documents and to observe and perform all the covenants and obligations of such Loan Party under this Agreement and the other Loan Documents;

(ii)                                  such transaction shall, to the satisfaction of the Majority Lenders and in the opinion of counsel to the Lenders, be upon such terms as shall be necessary to substantially preserve and not impair any of the rights and powers of the Agent and the Lenders hereunder and under the other Loan Documents;

(iii)                               no condition or event shall exist as to such Loan Party or the successor company either at the time of or immediately after such consolidation, amalgamation, merger, transfer, sale or conveyance and after giving full effect thereto, or immediately after the successor company complying with the provisions of

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Section 8.1(m)(i), which constitutes or would with the giving of notice or lapse of time, or both constitute an Event of Default; and

(iv)                              the successor company is lawfully entitled to acquire and operate the said undertaking, property and assets;

(n)                                 Specific Use of Borrowings:  if any interest, fees or other amounts due by the Borrower hereunder are unpaid but such failure to pay has not yet become an Event of Default, the Guarantor shall cause the Borrower to apply any future Borrowings hereunder firstly to pay in full all such outstanding interest, fees or other amounts then due and payable and the Borrower hereby irrevocably directs the Agent to use the proceeds of any such Borrowing accordingly;

(o)                                 Certain Information:  the Guarantor shall provide the Agent with copies of:

(i)                                     any material change reports which it files with any provincial securities regulatory authorities or stock exchange forthwith upon provision of the same to such regulatory authority or stock exchange, unless such material change report is filed on a confidential basis, in which case the report shall be provided to the Agent on the earlier of a determination by the Guarantor or such regulatory authority or stock exchange that such report is no longer confidential;

(ii)                                  such information and documents as it provides to its shareholders at the same time it provides such information and documents to its shareholders; and

(iii)                               such other information and documents as are normally made available by the Guarantor’s investor relations officers to shareholders and which are from time to time requested by the Agent;

(p)                                 Further Assurances:  the Guarantor shall within thirty (30) days after notice thereof from the Agent, do and cause the Borrower to do all such further acts and things and execute and deliver all such further documents as shall be reasonably required by the Agent in order to ensure the terms and provisions of this Agreement and the other Loan Documents are fully performed and carried out; and

(q)                                 Year End Consolidated Financial Statements of the Borrower: the Guarantor shall furnish to the Agent as soon as provided to its shareholders and in any event within one hundred and forty (140) days after the end of each Fiscal Year of the Borrower, a statement of consolidated financial position of the Borrower as at the close of such Fiscal Year and statements of consolidated income and consolidated changes in financial position of the Borrower for such Fiscal Year, setting forth in comparative form the corresponding figures of the preceding Fiscal Year together with an auditor’s report containing:

(i)                                     such auditor’s statement stating that its examinations of such consolidated financial statements were made in accordance with generally accepted auditing standards and accordingly included such tests and other procedures as it considered necessary in the circumstances; and

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(ii)                                  such auditor’s opinion that such consolidated financial statements fairly present in all material respects the consolidated financial position of the Borrower as of the close of such Fiscal Year and the results of its operations and the changes in its financial position for the Fiscal Year then ended in accordance with generally accepted accounting principles as in effect from time to time in the United States.

8.2                                                                               Financial Covenant

During the term of this Agreement, the Guarantor covenants with each of the Lenders and the Agent that the Guarantor shall not create, assume or otherwise incur any Funded Obligations if immediately thereafter the Funded Obligations of the Guarantor would be in excess of seventy-five percent (75%) of the Total Capitalization of the Guarantor.  For the purposes of this Section 8.2, Subordinated Debt shall not be included in Funded Obligations of the Guarantor but shall be included in Total Capitalization of the Guarantor.

Article 9
EVENTS OF DEFAULT

9.1                                                                               Events of Default

The occurrence of any one or more of the following events or circumstances constitutes an Event of Default under this Agreement:

(a)                                  Repayment of Borrowings:  the failure by the Borrower to repay or otherwise reduce the principal amount of any Loans or any portion thereof when due for repayment or other reduction hereunder;

(b)                                 Repayment of Other Amounts:  the failure to pay any amount due hereunder (other than amounts due by way of repayment or other reduction of the principal amount of any Loans) for a period of ten (10) Business Days after written notice thereof has been given by the Agent to the Borrower;

(c)                                  Winding-Up or Liquidation:  if an order shall be made or an effective resolution be passed for the winding-up or liquidation of any Loan Party except in the course of carrying out a transaction permitted by Section 8.1(m) or pursuant to a transaction in respect of which the conditions of Section 8.1(m) are duly observed and performed;

(d)                                 Insolvency:  if any Loan Party or any Material Subsidiary shall make a general assignment for the benefit of creditors, or shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or any proceeding shall be instituted by or against any Loan Party or any Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the

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actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or any Loan Party or any Material Subsidiary shall take any corporate action to authorize any of the actions set forth above in this subsection (d), or if a custodian or a sequestrator or a receiver and manager or any other officer with similar powers shall be appointed of any Material Property;

(e)                                  Execution:  if any process of execution is enforced or levied upon any Material Property and remains unsatisfied for a period of sixty (60) days, as to moveable or personal property, or ninety (90) days, as to immovable or real property, provided that such process is not in good faith disputed by the Guarantor or any Material Subsidiary;

(f)                                    Cross Default at Maturity:  any Loan Party or any Material Subsidiary fails to make any payment at maturity, including any applicable grace period, in respect of any issue of Indebtedness (which shall include, for avoidance of doubt, Indebtedness incurred, assumed or otherwise created by such Loan Party) in an aggregate amount in excess of the greater of (i) Cdn. $100,000,000 or (ii) two and one half percent (2.5%) of the Consolidated Equity of the Guarantor; or the equivalent amount of (i) or (ii) above (as applicable) in any other currency;

(g)                                 Cross Acceleration:  a default with respect to any issue of Indebtedness (which shall include, for avoidance of doubt, Indebtedness incurred, assumed or otherwise created by any Loan Party), which default results in the acceleration of any Indebtedness in an aggregate amount in excess of the greater of (i) Cdn. $100,000,000 or (ii) two and one half percent (2.5%) of the Consolidated Equity of the Guarantor or the equivalent amount of (i) or (ii) above (as applicable) in any other currency without such Indebtedness having been discharged or such acceleration having been cured, waived, rescinded or annulled;

(h)                                 Judgments:  if a final judgment or order (subject to no further right of appeal) for the payment of money aggregating in excess of the greater of (i) Cdn. $100,000,000 or (ii) two and one half percent (2.5%) of the Consolidated Equity of the Guarantor or the equivalent amount of (i) or (ii) above (as applicable) in any other currency shall be rendered against any Loan Party or any Material Subsidiary in respect of which enforcement proceedings have been commenced and such proceedings have not been effectively stayed; and

(i)                                     if the judgment relates to indebtedness for borrowed money, the Guarantor has not paid or settled such judgment or order within three (3) Business Days after enforcement proceedings have been commenced; or

(ii)                                  if the judgment does not relate to indebtedness for borrowed money, the Guarantor has not paid or settled such judgment or order within thirty (30) days after enforcement proceedings have been commenced;

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(i)                                     Representations and Warranties:  if any representation or warranty made by the Loan Parties in Article 2 shall prove to have been incorrect in any material respect when made or deemed to be made hereunder;

(j)                                     Breach of Certain Covenants:  if there is a breach or failure of due performance by the Guarantor of any covenants contained in Sections 8.1(i), 8.1(j), 8.1(k), 8.1(l) or 8.1(m) or Section 8.2; or

(k)                                  Breach of Other Covenants:  if there is a breach or failure of due performance by any Loan Party of any covenant or provision of this Agreement or of any of the other Loan Documents (other than those heretofore referred to in this Section 9.1), unless such breach or failure is cured to the reasonable satisfaction of the Majority Lenders within thirty (30) days after written notice thereof by the Agent to the Borrower (or such shorter period as would at any time, if continued, render any Material Property liable to forfeiture) unless the Majority Lenders shall have agreed to a longer period and in such an event, within the period agreed to by the Majority Lenders.

9.2                                                                               Acceleration

Upon the occurrence of any Event of Default which has not been remedied or waived, the Agent may on behalf of the Lenders and shall if so required by the Majority Lenders by written notice to the Borrower (an “Acceleration Notice”):

(a)                                  declare the Total Commitment and each Lender’s Commitment and the right of the Borrower to apply for further Borrowings to be terminated; and

(b)                                 declare all indebtedness and liabilities (whether matured or unmatured) of the Borrower outstanding to the Lenders hereunder to be immediately due and payable (or to be due and payable at such later time as may be stated in such notice) without further demand, presentation, protest or other notice of any kind, all of which are expressly waived by the Borrower.

At the time stated in an Acceleration Notice, the Borrower shall pay to the Agent on behalf of each Lender all amounts owing or payable in respect of all indebtedness and liabilities specified in Section 9.2(b) failing which all rights and remedies of the Lenders and the Agent hereunder and under the other Loan Documents shall thereupon become enforceable.

9.3                                                                               Waiver of Default

Any single or partial exercise by any Lender, the Agent or by the Agent on behalf of any Lender of any right or remedy for a default or breach of any term, covenant, condition or agreement contained in the Loan Documents shall not be deemed to be a waiver of or to alter, affect or prejudice any other right or remedy to which the Agent or such Lender may be lawfully entitled for the same default or breach, and any waiver by any Lender, the Agent or by the Agent on behalf of any Lender of the strict observance, performance or compliance with any term, covenant, condition or agreement contained in the Loan Documents, and any indulgence granted thereby, shall be deemed not to be a waiver of any subsequent default.  To the extent permitted by applicable law, the Borrower hereby waives any rights now or hereafter conferred by statute

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or otherwise which are inconsistent with the Agent’s or a Lender’s rights or remedies under the Loan Documents.

9.4                                                                               Application and Sharing of Payments Following Acceleration

Except as otherwise agreed to by all of the Lenders in their sole discretion, any sum received by the Agent at any time after delivery of an Acceleration Notice which the Agent is obliged to apply in or towards satisfaction of sums due from the Borrower hereunder shall be applied by the Agent ratably among the Lenders and the Agent in accordance with amounts owed to the Lenders and the Agent in respect of each category of amounts set forth below, each such application to be made in the following order with the balance remaining after application in respect of each category to be applied to the next succeeding category:

(a)                                  Agent’s Fees:  firstly, in or towards payment of any fees then due and payable to the Agent hereunder, including, without limitation, those fees payable pursuant to Section 5.6;

(b)                                 Agent’s Expenses:  secondly, ratably among the Agent and the Lenders in accordance with amounts owed to the Agent and the Lenders in respect of amounts due and payable as and by way of recoverable expenses hereunder;

(c)                                  Interest and Fees:  thirdly, ratably among the Lenders in accordance with amounts owed to the Lenders in respect of amounts due and payable as and by way of interest pursuant to Sections 5.1 and 5.2, interest on overdue amounts pursuant to Section 5.3 and standby fees pursuant to Section 5.4;

(d)                                 Other Amounts (other than Borrowings):  fourthly, ratably among the Lenders in accordance with amounts owed to the Lenders in respect of any amount (other than Borrowings) then due and payable by the Borrower hereunder other than amounts hereinbefore referred to in this Section 9.4; and

(e)                                  Borrowings:  fifthly, in or towards repayment to the Lenders of the Borrowings then outstanding hereunder in accordance with the provisions of Section 11.11.

9.5                                                                               Remedies Cumulative

The rights and remedies of the Agent and each Lender under the Loan Documents are cumulative and are in addition to and not in substitution for any rights or remedies provided by law.  The Agent may on behalf of the Lenders and shall if so required by the Majority Lenders, to the extent permitted by applicable law, bring suit at law, in equity or otherwise for any available relief or purpose including but not limited to:

(a)                                  the specific performance of any covenant or agreement contained in the Loan Documents;

(b)                                 enjoining a violation of any of the terms of the Loan Documents;

(c)                                  aiding in the exercise of any power granted by the Loan Documents or by law; or

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(d)                                 obtaining and recovering judgment for any and all amounts due in respect of the Borrowings or amounts otherwise due hereunder or under the Loan Documents.

9.6                                                                               Set-Off

In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, the Agent and the Lenders are authorized at any time after the delivery of an Acceleration Notice to the Borrower and from time to time thereafter, without notice to any Loan Party or to any other person, any such notice being expressly waived by each Loan Party, to set-off and to appropriate and to apply any and all deposits (general and special) and any other indebtedness at any time held by or owing by the Agent or such Lender or any of their respective affiliates to or for the credit of or the account of any Loan Party against and on account of the obligations and liabilities of such Loan Party to the Agent or such Lender under this Agreement, including without limitation, all claims of any nature or description arising out of or connected with this Agreement, and although such obligations, liabilities or claims of such Loan Party are contingent or unmatured.

9.7                                                                               Lenders May Perform Covenants

If any Loan Party shall fail to perform any of its obligations under any covenant contained in any of the Loan Documents within the time permitted for the performance of any such covenant or for the cure of any default thereof, the Agent may on behalf of the Lenders, on the instructions of the Majority Lenders and after notice to such Loan Party and after providing such Loan Party with a reasonable opportunity to object to such payment on the basis that the obligation underlying the covenant is being disputed in good faith by such Loan Party (in which case no payment shall be made by the Agent pursuant to this Section 9.7 unless failure to make such payment would result in a Material Adverse Effect), perform any such covenant capable of being performed by it and, if any such covenant requires the payment or expenditure of money, it may make such payment or expenditure with its own funds on behalf of the Lenders.  All amounts so paid by the Agent hereunder shall be repaid by the applicable Loan Party on demand therefor, and shall bear interest at the Base Rate from and including the date paid by the Agent hereunder to but excluding the date such amounts are repaid in full by such Loan Party.

Article 10
EXPENSES AND INDEMNITIES

10.1                                                                        Reimbursement of Expenses

All statements, reports, opinions and other documents or information required to be furnished to the Agent (for its benefit or for the benefit of the Lenders) by the Guarantor under this Agreement shall be supplied by the Guarantor without cost to the Agent or the Lenders and in sufficient quantities for distribution to the Agent and the Lenders.  In addition, the Borrower agrees to pay promptly to the Agent on demand:

(a)                                  all reasonable legal fees of outside counsel approved by the Borrower and other reasonable out-of-pocket expenses which are incurred from time to time by the Agent in respect of the documentation, preparation, registration, negotiation, execution and administration of the Loan Documents; and

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