EXHIBIT 10.2
 

 FINANCIAL ASSURANCES AGREEMENT
 This Financial Assurances Agreement made effective as of the 30th day of
November, 2017.
BETWEEN:
TRANSCANADA PIPELINES LIMITED 
a Canadian corporation
(hereinafter called "TransCanada")
AND:

PORTLAND NATURAL GAS TRANSMISSION SYSTEM
a Maine general partnership
(hereinafter called "Shipper")

WITNESSES THAT:
WHEREAS, upon Shipper and TransCanada executing this Financial Assurances
Agreement (hereinafter called the "Financial Assurances Agreement"), Shipper and
TransCanada shall enter into a Precedent Agreement (hereinafter called the
"Precedent Agreement") wherein both parties shall agree, subject to satisfaction
of the conditions contained in the Precedent Agreement, to enter into Firm 
Transportation Service Contracts for each Phase (as defined below) substantially
in the form attached as Exhibit "A" to the Precedent Agreement (each a
"Contract" and collectively the "Contracts"); and
WHEREAS, each Contract, upon execution, will be for gas transportation and
related services where TransCanada determined it must construct facilities in
order to provide such service (the "Expansion Capacity Service") and would
provide for TransCanada to transport for the account of Shipper up to 174,311
GJ/d of natural gas from the Union Dawn Receipt Point and 8,440 GJ/d of natural
gas from the Parkway Receipt Point to, in both cases, the East Hereford, Quebec
Delivery Point  (into the PNGTS system); and
WHEREAS, the Expansion Capacity Service is anticipated to be on a three
phased-basis commencing (for each phase, its "In-Service Date") as follows (such
three phases are sometimes referred to individually as a "Phase"):

·
Commencing on the 1st of November, 2018 or as soon as possible thereafter,
39,663 GJ/day from the Dawn Receipt Point and 2,651 GJ/day from the Parkway
Receipt Point for an aggregate of 42,314 GJ/day, for a term of 22 years ("Phase
I");

·
Commencing on the 1st of November, 2019 or as soon as possible thereafter,
159,960 GJ/day from the Dawn Receipt Point and 7,481 GJ/day from the Parkway
Receipt Point for an aggregate of 167,441 GJ/day, for a term of 21 years ("Phase
II");and

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·
Commencing on the 1st of November, 2020 or as soon as possible thereafter,
174,311 GJ/day from the Dawn Receipt Point and 8,440 GJ/day from the Parkway
Receipt Point for an aggregate of 182,751 GJ/day, for a term of 20 years
(transportation services commencing at this time shall be referred to as "Phase
III" of the Expansion Capacity Service); and

WHEREAS the General Terms and Conditions of TransCanada's Canadian Mainline
Transportation Tariff that are applicable to each Contract, as such may be
amended, replaced or varied from time to time (hereinafter called the "Tariff"),
sets out that TransCanada may request and Shipper shall provide if TransCanada
so requests, financial assurances for the payment of the charges to be paid by
Shipper pursuant to the Contract; and
WHEREAS, the parties wish to enter into this Financial Assurances Agreement for
the purpose of describing the manner in which such security is to be provided by
Shipper.
NOW THEREFORE THIS FINANCIAL ASSURANCES AGREEMENT WITNESSES THAT, in
consideration of the mutual covenants and agreements contained herein, Shipper
and TransCanada agree as follows:
1.
Prior to the execution of each Contract, TransCanada may request financial
assurances from Shipper in respect of a particular Phase and the related
Contract, in form and substance acceptable to TransCanada and in an amount
determined in accordance with the Tariff for the Expansion Capacity Service.
Shipper shall provide such financial assurances within four (4) Banking Days of
TransCanada's request or such other time as may be set forth by TransCanada in
the request.  Upon receipt by TransCanada of the requested financial assurances,
section of the Precedent Agreement shall be satisfied with respect to the
corresponding Phase, and until receipt by TransCanada of the requested financial
assurances, section of the Precedent Agreement shall not be satisfied with
respect to the corresponding Phase.

2.
TransCanada may request that Shipper at any time and from time to time prior to
and during service, provide TransCanada with financial assurances acceptable to
TransCanada, in form and substance satisfactory to TransCanada and in an amount
determined in accordance with the Tariff for Expansion Capacity Service (the
"Financial Assurances Request"). 

3.
Shipper shall provide TransCanada with the financial assurances requested in the
Financial Assurances Request within the time period set out in the Tariff.

4.
If Shipper fails to provide TransCanada with the financial assurances requested,
then TransCanada may, in addition to any other remedy available to it, exercise
any remedies available to it in the Precedent Agreement, any Contract or the
Tariff.

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5.
This Financial Assurances Agreement shall become effective on the date of
execution hereof and shall remain in effect until:

(a)
the Precedent Agreement is terminated by either party in accordance with the
terms thereof and all of the Shipper's obligations pursuant to the Precedent
Agreement have been satisfied, and

(b)
if any Contract is executed, then with regard to the financial assurances
associated with a specific Contract only and not the financial assurances
associated with any other Contract, the rights and obligations hereunder shall
terminate in the event:

(i)
the Contract is terminated by either party in accordance with the terms thereof
and all of the Shipper's obligations pursuant to the Contract have been
satisfied; or

(ii)
all of the Shipper's obligations pursuant to the Contract for the initial term
have been satisfied; or

(iii)
the Contract is assigned in full by Shipper to one or more third parties with
the consent of TransCanada; provided that such third parties agree to assume all
obligations under the Contract and execute financial assurance agreements, in a
form satisfactory to TransCanada.

6.
For greater certainty, this Financial Assurances Agreement is deemed to be a
financial assurances agreement under the Tariff.

7.
This Financial Assurances Agreement and the rights and obligations of the
parties hereunder shall be subject to all present and future laws, rules,
regulations, decisions and orders of any legislative body or duly constituted
authority now or hereafter having jurisdiction over any of the matters contained
herein, including without limitation the General Terms and Conditions of the
Tariff.

8.
Any notice, request or demand (hereinafter called a "Notice") to or upon the
respective parties hereto, shall be in writing and shall be validly communicated
by the delivery thereof to its addressee, either personally or by courier, first
class mail,  telecopier or email to the address hereinafter mentioned:

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In the case of TransCanada:
TRANSCANADA PIPELINES LIMITED
 
Delivery Address:
TransCanada PipeLines Tower
 
450 – 1st Street S.W.
 
Calgary, Alberta
 
T2P 5H1
 
Mailing Address:
P.O. Box 1000, Station M
 
Calgary, Alberta
 
T2P 4K5
 
Attention:  Director, Counterparty Risk
 
Telecopier: (403) 920-2359
   
Email:
counterparty_risk@transcanada.com
       
In the case of Shipper:             
Portland Natural Gas Transmission System
 
Delivery Address:
700 Louisiana Street
 
Houston, Texas
 
77002-2700
   
Mailing Address:
Same As Above
     
Attention: Vice-President, Business Development
 
Telecopier:  832-320-5555
   
Email :
Email Address: russell_mahan@transcanada.com

 
 

Any Notice shall be sent in order to ensure prompt receipt by the other party. 
Such Notice sent as aforesaid shall be deemed to have been received by the party
to whom it is sent:  (a) at the time of its delivery if personally delivered or
if sent by telecopier or email, or (b) on the business day following transmittal
thereof if sent by courier, or (c) on the third (3rd) Banking Day following the
transmittal thereof if sent by first class mail; provided, however, that in the
event normal mail service, courier service,  telecopier or email  shall be
interrupted by a cause beyond the control of the parties hereto, then the party
sending the Notice shall utilize any of the said services which has not been so
interrupted or shall personally deliver such Notice.  Each party shall provide
Notice to the other of any change of address for the purposes hereof.
9.
Any company which shall succeed by purchase, merger or consolidation to the
assets substantially or in entirety, of Shipper or TransCanada, as the case may
be, shall be entitled to the rights and shall be subject to the obligations of
its predecessor under this Financial Assurances Agreement.  Either party may,
without relieving itself of its obligations under this Financial Assurances
Agreement, assign any of its rights and obligations hereunder to an affiliate

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(as such term is defined in the Canada Business Corporations Act) of such party
without the consent of the other party hereto, but otherwise no assignment of
this Financial Assurances Agreement or any of the rights or obligations
hereunder shall be made unless there first shall have been obtained the written
consent thereto of the other party, such consent not to be unreasonably
withheld.  Notwithstanding the foregoing, Shipper may not assign its rights or
obligations hereunder unless Shipper concurrently assigns its rights and/or
obligations under the Precedent Agreement or the Contracts to the same
assignee.  It is agreed, however, that the restrictions on assignment contained
in this paragraph shall not in any way prevent either party to this Financial
Assurances Agreement from pledging or mortgaging its rights hereunder as
security for its indebtedness.  This Financial Assurances Agreement shall be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the parties hereto.
10.
This Financial Assurances Agreement shall be construed and applied in accordance
with, and be subject to, the laws of the Province of Alberta, and, where
applicable, the laws of Canada.

11.
If any provision of this Financial Assurances Agreement is determined to be
invalid or unenforceable in whole or in part, such invalidity or enforceability
shall apply only to such provision and all other provisions hereof shall
continue in full force and effect.

12.
TransCanada and Shipper hereby stipulate and agree that this Financial
Assurances Agreement is executed for the sole benefit of TransCanada and
Shipper, including all successors and assignees permitted under the terms of
this Financial Assurances Agreement.  TransCanada and Shipper expressly intend
that no rights under this Financial Assurances Agreement inure to any other
parties.

13.
Shipper acknowledges and agrees that it has reviewed and is familiar with the
terms, conditions and provisions of the Tariff. 

14.
TransCanada and Shipper agree that any upper case terms not defined herein shall
have the meaning ascribed thereto in the Tariff.

15.
No personal liability whatsoever will be attached to, be imposed upon, or
otherwise be incurred by, any partner, agent, management official or employee of
Shipper (or any shareholder, director, officer or employee of Shipper) for any
liability that may arise by reason of this Financial Assurances Agreement or for
any claim based on such liability, other than by a partner in respect of assets
of Shipper held in the name of, or on behalf by, such partner.  The sole
recourse of TransCanada for any such liability or claim is limited to the assets
of Shipper, whether held in its own name or held for Shipper in the name of one
or more of its partners.

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16.
This Financial Assurances Agreement may be so executed in counterpart and a
complete set of counterpart pages shall be provided to each party.

IN WITNESS WHEREOF, the parties hereto have executed this Financial Assurances
Agreement as of the date first above written.
 
 
 
 
PORTLAND NATURAL GAS TRANSMISSION SYSTEM
By its Operator, PNGTS Operating Co., LLC
 
TRANSCANADA PIPELINES LIMITED
Per:
/s/ James Eckert
 
Per:
 /s/ Karl Johannson  
Name: James Eckert
   
Name: Karl Johannson
 
Title: President
   
Title: Executive Vice-President & President, Canada & Mexico, Natural Gas
Pipelines & Energy
         
Per:
/s/ Lauri Newton
 
Per:
 /s/ Don Bell  
Name: Lauri Newton
   
Name: Don Bell
 
Title: Chief Compliance Officer, FERC
   
Title: General Manager

 
 

 

Contract Approval
Customer Service Leader
 
Customer Representative
 
Legal Review
Proforma

 
 
 

 
 
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