--------------------------------------------------------------------------------

 
Exhibit 10.1
 
 
 
 

 
COMMON UNIT PURCHASE AGREEMENT
 
BY AND AMONG
 
TC PIPELINES, LP
 
AND
 
TRANSCAN NORTHERN LTD.
 
DATED
 
July 1, 2009
 
 
 
 

--------------------------------------------------------------------------------

COMMON UNIT PURCHASE AGREEMENT
 
COMMON UNIT PURCHASE AGREEMENT, dated as of July 1, 2009 (this “Agreement”), by
and among TC PIPELINES, LP, a Delaware limited partnership (the “Partnership”),
and TRANSCAN NORTHERN LTD., a Delaware corporation (the “Purchaser”).
 
WHEREAS, (i) TC Pipelines GP, Inc., a Delaware corporation (the “General
Partner”), is an indirect wholly owned subsidiary of TransCanada PipeLines
Limited, a Canadian corporation (“TransCanada”); (ii) the General Partner is the
general partner of the Partnership and TC Tuscarora Intermediate Limited
Partnership, a Delaware limited partnership (“TCT Intermediate Partnership”), TC
PipeLines Intermediate Limited Partnership, a Delaware limited partnership (“TCP
Intermediate Partnership”), and TC GL Intermediate Partnership, a Delaware
limited partnership (“TCGL Intermediate Partnership” and, together with TCT
Intermediate Partnership and TCP Intermediate Partnership, the “Intermediate
Partnerships”); (iii) the Partnership owns all of the limited partner interests
in each of the Intermediate Partnerships; (iv) TCT Intermediate Partnership owns
directly and indirectly a 100% general partner interest in Tuscarora Gas
Transmission Company, a Nevada general partnership (“Tuscarora”); (v) TCP
Intermediate Partnership owns a 50% general partner interest in Northern Border
Pipeline Company, a Texas general partnership (“NBPC”), and (vi) TCGL
Intermediate Partnership owns a 46.45% general partner interest in Great Lakes
Gas Transmission Limited Partnership, a Delaware limited partnership (“Great
Lakes”).  The Partnership, the General Partner and the Intermediate Partnerships
are collectively referred to herein as the “TCP Parties;”
 
WHEREAS, on May 19, 2009, TCP Intermediate Partnership entered into an agreement
with Gas Transmission Northwest Corporation, a California corporation (“GTNC”),
to purchase a 100% membership interest in North Baja Pipeline, LLC, a Delaware
limited liability company (the “Acquisition”);
 
WHEREAS, coincident with the entry into the transactions contemplated by this
Agreement, the General Partner will enter into an agreement with the Partnership
for the exchange by the General Partner of the current incentive distribution
rights available to it under the Amended and Restated Agreement of Limited
Partnership of TC PipeLines, LP for 3,762,000 common units of the Partnership
and revised incentive distribution rights; and
 
WHEREAS, the Partnership desires to cause TCP Intermediate Partnership to pay a
portion of the purchase price related to the Acquisition out of the proceeds of
the sale of an aggregate of $78,400,000 of Common Units representing limited
partner interests in the Partnership (“Common Units”), and the Purchaser desires
to purchase an aggregate of $78,400,000 of Common Units from the Partnership,
each in accordance with the provisions of this Agreement.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:
 
1

--------------------------------------------------------------------------------

 
ARTICLE I
DEFINITIONS
 
Section 1.1    Definitions.  As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
 
“Acquisition” shall have the meaning specified in the recitals.
 
“Acquisition Agreement” means that certain Agreement for Purchase and Sale of
Membership Interests by and between GTNC and TC Intermediate Partnership dated
as of May 19, 2009.
 
“Action” against a Person means any lawsuit, action, proceeding, investigation
or complaint before any Governmental Authority, mediator or arbitrator.
 
“Affiliate” means, with respect to a specified Person, any other Person, whether
now in existence or hereafter created, directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control” (including, with correlative
meanings, “controlling,” “controlled by” and “under common control with”) means
the power to direct or cause the direction of the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
 
“Agreement” shall have the meaning specified in the introductory paragraph.
 
“Basic Documents” means, collectively, this Agreement and any and all other
agreements or instruments executed and delivered by the Parties to evidence the
execution, delivery and performance of this Agreement, and any amendments,
supplements, continuations or modifications thereto.
 
“Board of Directors” means the board of directors of the General Partner or the
Purchaser, as the case may be.
 
“Closing” shall have the meaning specified in Section 2.2.
 
“Closing Date” shall have the meaning specified in Section 2.2.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
 
“Commission” means the United States Securities and Exchange Commission.
 
“Commitment Amount” means $78,400,000.
 
“Common Units” shall have the meaning specified in the recitals.
 
“DGCL” shall have the meaning specified in Section 3.2.
 
“DRULPA” shall have the meaning specified in Section 3.2.
 
2

--------------------------------------------------------------------------------

 
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.
 
“GAAP” means generally accepted accounting principles in the United States of
America in effect from time to time.
 
“General Partner” shall have the meaning specified in the recitals.
 
“Governmental Authority” shall include the country, state, county, city and
political subdivisions in which any Person or such Person’s property is located
or that exercises valid jurisdiction over any such Person or such Person’s
property, and any court, agency, department, commission, board, bureau or
instrumentality of any of them and any monetary authorities that exercise valid
jurisdiction over any such Person or such Person’s property. Unless otherwise
specified, all references to Governmental Authority herein shall mean a
Governmental Authority having jurisdiction over, where applicable, the
Partnership, its Subsidiaries or any of their property or the Purchaser.
 
“Great Lakes” shall have the meaning set forth in the recitals.
 
“GTNC” shall have the meaning set forth in the recitals.
 
“Incentive Distribution Rights” shall have the meaning specified in Section
3.5(a).
 
“Indemnified Party” shall have the meaning specified in Section 8.3.
 
“Indemnifying Party” shall have the meaning specified in Section 8.3.
 
“Intermediate Partnership Agreements” shall have the meaning specified in
Section 3.4.
 
“Intermediate Partnerships” shall have the meaning specified in the recitals.
 
“Law” means any federal, state, local or foreign order, writ, injunction,
judgment, settlement, award, decree, statute, law, rule or regulation.
 
“Lien” means any mortgage, claim, encumbrance, pledge, lien (statutory or
otherwise), security agreement, conditional sale or trust receipt or a lease,
consignment or bailment, preference or priority or other encumbrance upon or
with respect to any property of any kind.
 
“NBPC” shall have the meaning specified in the recitals.
 
“Partnership” shall have the meaning specified in the introductory paragraph.
 
“Partnership Agreement” shall have the meaning specified in Section 2.1(a).
 
“Partnership Material Adverse Effect” shall have the meaning specified in
Section 3.2.
 
“Partnership Related Parties” shall have the meaning specified in Section 8.2.
 
“Partnership SEC Documents” shall have the meaning specified in Section 3.1.
 
3

--------------------------------------------------------------------------------

 
“Party” or “Parties” means the Partnership and the Purchaser, individually or
collectively, as the case may be.
 
“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof, or any other form of entity.
 
“Purchase Price” means the Commitment Amount.
 
“Purchaser” shall have the meaning specified in the introductory paragraph.
 
“Purchaser Material Adverse Effect” means any material and adverse effect on
(i) the ability of the Purchaser to meet its obligations under the Basic
Documents on a timely basis or (ii) the ability of the Purchaser to consummate
the transactions under any Basic Document.
 
“Purchaser Related Parties” shall have the meaning specified in Section 8.1.
 
“Representatives” of any Person means the officers, directors, employees,
Affiliates, control persons, counsel, investment banker, agents and other
representatives of such Person.
 
“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the Commission promulgated thereunder.
 
“Subsidiary” means, as to any Person, any corporation or other entity of which a
majority of the outstanding equity interest having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation
or other entity (irrespective of whether or not at the time any equity interest
of any other class or classes of such corporation or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more of
its Subsidiaries.
 
“TCGL Intermediate Partnership” shall have the meaning specified in the
recitals.
 
“TCP Intermediate Partnership” shall have the meaning specified in the recitals.
 
“TCP Parties” shall have the meaning specified in the recitals.
 
“TCT Intermediate Partnership” shall have the meaning specified in the recitals.
 
“TransCanada” shall have the meaning specified in the recitals.
 
“Tuscarora” shall have the meaning specified in the recitals.
 
“Unit Price” shall have the meaning specified in Section 2.1(b).
 
“Unitholders” means the Unitholders of the Partnership (within the meaning of
the Partnership Agreement).
 
“Units” means the Units to be issued and sold to the Purchaser pursuant to this
Agreement.
 
 
4

--------------------------------------------------------------------------------

 
Section 1.2  Accounting Procedures and Interpretation. Unless otherwise
specified in this Agreement, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters under this
Agreement shall be made, and all financial statements and certificates and
reports as to financial matters required to be furnished to the Purchaser under
this Agreement shall be prepared, in accordance with GAAP applied on a
consistent basis during the periods involved (except, in the case of unaudited
statements, as permitted by Form 10-Q promulgated by the Commission) and in
compliance as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto.
 
ARTICLE II
SALE AND PURCHASE
 
Section 2.1    Sale and Purchase.  Subject to the terms and conditions of this
Agreement, at the Closing, the Partnership hereby agrees to issue and sell to
the Purchaser, and the Purchaser hereby agrees to purchase from the Partnership,
2,609,680 Units.  The Purchaser agrees to pay the Partnership the Unit Price for
each Unit.
 
(a)    Units. 2,609,680 Units will be issued and sold to the Purchaser.  The
Units shall have those rights, preferences, privileges and restrictions
governing the Common Units as set forth in the agreement of limited partnership
of the Partnership, as amended to date (the “Partnership Agreement”).
 
(b)    Consideration. The amount per Unit that the Purchaser will pay to the
Partnership to purchase the Units (the “Unit Price”) shall be $78,400,006.56,
which is the average of the closing bid prices of the Common Units as traded on
the Nasdaq Stock Market over the five trading day period ending on May 19, 2009.
 
(c)    Funding by the Purchaser.  On the Closing Date, upon receipt of
satisfactory evidence that the conditions set forth in Article VI have been
satisfied, the Purchaser shall pay the Commitment Amount by wire transfer of
immediately available funds to an account directed by the Partnership.
 
Section 2.2    Closing.  The execution and delivery of the Basic Documents
(other than this Agreement), the delivery of certificates representing the
Units, the payment by the Purchaser of its Commitment Amount, and execution and
delivery of all other instruments, agreements and other documents required by
this Agreement (the “Closing”) shall take place concurrently with the closing of
the Acquisition (the date of such Closing being referred to herein as the
“Closing Date”) at the offices of Orrick, Herrington & Sutcliffe LLP, 405 Howard
Street, San Francisco, CA 94105.
 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
 
The Partnership represents and warrants to the Purchaser, on and as of the date
of this Agreement and on and as of the Closing Date, as follows:
 
5

--------------------------------------------------------------------------------

 
Section 3.1    Partnership SEC Documents.  The Partnership has timely filed with
the Commission all forms, registration statements, reports, schedules and
statements required to be filed by it under the Exchange Act or the Securities
Act (all such documents as filed, collectively, the “Partnership SEC
Documents”).  The Partnership SEC Documents prior to the date hereof, when they
were filed, conformed in all material respects to the requirements of the
Exchange Act and did not, as of the time each such document was filed, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made not
misleading.
 
Section 3.2    Formation and Qualification of the TCP Parties.  The Partnership
and each of its Subsidiaries has been duly formed and is validly existing in
good standing as a corporation or limited partnership under the Delaware General
Corporation Law (“DGCL”) or the Delaware Revised Uniform Limited Partnership Act
(“DRULPA”), as the case may be, with full corporate or partnership power and
authority to own or lease its properties and to conduct the businesses in which
it is engaged, in each case in all material respects, and has all material
governmental licenses, authorizations, consents and approvals as described in
the Partnership SEC Documents.  Each of the General Partner, the Partnership and
its Subsidiaries is or, at the Closing Date will, be duly registered or
qualified as a foreign corporation or limited partnership, as the case may be,
for the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on (A) the condition (financial or otherwise),
business, prospects, assets, liabilities, affairs or results of operations of
the Partnership and its Subsidiaries, taken as a whole, (B) the ability of the
Partnership and its Subsidiaries, taken as a whole, to carry out their business
as of the date of this Agreement or to meet their obligations under the Basic
Documents on a timely basis or (C) the ability of the Partnership to consummate
the transactions under any Basic Document (any of the foregoing a “Partnership
Material Adverse Effect”) or (ii) subject the limited partners of the
Partnership to any material liability or disability.
 
Section 3.3    Formation and Qualification of NBPC, Tuscarora and Great
Lakes.  Each of NBPC, Tuscarora and Great Lakes has been duly formed and is
validly existing in good standing as a general partnership under the laws of the
State of Texas, the laws of the State of Nevada and the laws of the State of
Delaware, respectively, with full partnership power and authority to own or
lease its properties and to conduct its businesses in which it is engaged, in
each case in all material respects as described in the Partnership SEC
Documents.  Each of NBPC, Tuscarora and Great Lakes is or, at the Closing Date
will be duly registered or qualified as a foreign general partnership for the
transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Partnership Material Adverse Effect or (ii) subject the limited partners of
the Partnership to any material liability or disability.
 
Section 3.4    Ownership of the General Partner Interests.  The General Partner
is the sole general partner of the Partnership and each of the Intermediate
Partnerships with a 1.0% general partner interest in the Partnership and a
1.0101% general partner interest in each of the Intermediate Partnerships; such
general partner interests have been duly authorized and validly issued in
accordance with the Partnership Agreement, or the partnership agreements of each
of the Intermediate Partnerships, each as amended to date (collectively, the
“Intermediate Partnership Agreements”); and the General Partner owns such
general partner interests free and clear of all Liens (except restrictions on
transferability as described in the Partnership SEC Documents).
 
6

--------------------------------------------------------------------------------

 
Section 3.5    Capitalization.
 
(a)    As of the date hereof and prior to the issuance and sale of the Units,
the issued and outstanding limited partner interests of the Partnership consist
of 34,856,086 Common Units and the Incentive Distribution Rights (as defined in
the Partnership Agreement, the “Incentive Distribution Rights”).  All
outstanding Common Units and Incentive Distribution Rights and the limited
partner interests represented thereby have been duly authorized and validly
issued in accordance with the Partnership Agreement and are fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by Section 17-607 of the DRULPA and as
otherwise disclosed in the Partnership SEC Documents).
 
(b)    Except for the Share Unit Plan for Non-Employee Directors (2007) filed as
Exhibit 10.25 to the Partnership’s Form 10-K for the fiscal year ended December
31, 2008, the Partnership has no equity compensation plans that contemplate the
issuance of Common Units (or securities convertible into or exchangeable for
Common Units).  The Partnership has no outstanding indebtedness having the right
to vote (or convertible into or exchangeable for securities having the right to
vote) on any matters on which the Unitholders may vote.  Except as contemplated
by this Agreement or as are contained in the Partnership Agreement, there are no
outstanding or authorized (i) options, warrants, preemptive rights,
subscriptions, calls or other rights, convertible securities, agreements, claims
or commitments of any character obligating the Partnership or any of its
Subsidiaries to issue, transfer or sell any equity interests in the Partnership
or any of its Subsidiaries or securities convertible into or exchangeable for
such equity interests, (ii) obligations of the Partnership or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any equity interests in
the Partnership or any of its Subsidiaries or any such securities or agreements
listed in clause (i) of this sentence or (iii) voting trusts or similar
agreements to which the Partnership or any of its Subsidiaries is a party with
respect to the voting of the equity interests of the Partnership or any of its
Subsidiaries.
 
Section 3.6    Authorization and Rights of Units.  The offer and sale of the
Units and the limited partnership interests represented thereby will be duly
authorized by the Partnership pursuant to the Partnership Agreement prior to the
Closing and, when issued and delivered to the Purchaser against payment therefor
in accordance with the terms of this Agreement, will be validly issued, fully
paid (to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Section 17-607 of the DRULPA
and as otherwise disclosed in the Partnership SEC Documents) and will be free of
any and all Liens and restrictions on transfer, other than restrictions on
transfer under the Partnership Agreement and applicable state and federal
securities Laws and other than such Liens as are created by the Purchaser.  The
Units shall have those rights, preferences, privileges and restrictions
governing the Units as set forth in the Partnership Agreement.  A true and
correct copy of the Partnership Agreement, as amended through the date hereof,
was filed by the Partnership with the Commission as Exhibit 3.1 to the
Partnership’s Annual Report on Form 10-K for the year ended December 31, 1999,
as amended by the Amendment to the Partnership Agreement filed with the
Commission as Exhibit 3.1.1 to the Partnership’s Annual Report on Form 10-K for
the year ended December 31, 2007 (it being understood that the Partnership
Agreement will be amended concurrent with the Closing as set forth the
Acquisition Agreement).
 
7

--------------------------------------------------------------------------------

 
Section 3.7    Ownership of the Limited Partner Interests in the Intermediate
Partnerships.  The Partnership owns a 98.9899% limited partner interest in each
of the Intermediate Partnerships; such limited partner interests have been duly
authorized and validly issued in accordance with the applicable Intermediate
Partnership Agreement and are fully paid (to the extent required under the
applicable Intermediate Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Section 17-607 of the DRULPA); and the
Partnership owns such limited partner interests free and clear of all Liens or
claims.
 
Section 3.8    Ownership of Interest in NBPC.  TCP Intermediate Partnership owns
a 50% general partner interest in NBPC; such general partner interest has been
duly authorized and validly issued in accordance with the partnership agreement
of NBPC, as amended to date; and TCP Intermediate Partnership owns such general
partner interest free and clear of all Liens or claims.
 
Section 3.9    Ownership of Interest in Tuscarora.  TCT Intermediate Partnership
owns a 99% general partner interest in Tuscarora and 100% of the membership
interest in TC Pipelines Tuscarora LLC which owns a 1% general partner interest
in Tuscarora; such general partner interests have been duly authorized and
validly issued in accordance with the partnership agreement of Tuscarora, as
amended to date; and TCT Intermediate Partnership and TC Pipelines Tuscarora LLC
own such general partner interests free and clear of all Liens or claims.
 
Section 3.10    Ownership of Interest in Great Lakes.  TCGL Intermediate
Partnership owns a 46.45% general partner interest in Great Lakes; such general
partner interest has been duly authorized and validly issued in accordance with
the partnership agreement of Great Lakes, as amended to date; and TCGL
Intermediate Partnership owns such general partner interest free and clear of
all Liens or claims.
 
Section 3.11    No Other Subsidiaries.  Other than (i) the Partnership’s
ownership interest in the Intermediate Partnerships and (ii) the Intermediate
Partnerships’ ownership interests in each of NBPC, Tuscarora, Great Lakes and TC
Pipelines Tuscarora LLC, as applicable, neither the Partnership nor the
Intermediate Partnerships own, directly or indirectly, any equity or long-term
debt securities of any corporation, partnership, limited liability company,
joint venture, association or other entity.  Other than its ownership of its
partnership interests in the Partnership and each of the Intermediate
Partnerships, the General Partner does not own, directly or indirectly, any
equity or long-term debt or other securities of any corporation, partnership,
limited liability company, joint venture, association or other entity.
 
Section 3.12    No Preemptive Rights, Registration Rights or Options.  Except as
described in the Partnership SEC Documents, there are no preemptive rights or
other rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any partnership or equity interests of the
Partnership.  None of the execution of this Agreement nor the issuance or sale
of the Units as contemplated by this Agreement gives rise to any rights for or
relating to the registration of any Common Units or other securities of the
Partnership other than as provided in the Partnership SEC Documents.  There are
no outstanding options or warrants to purchase any Common Units.
 
8

--------------------------------------------------------------------------------

 
Section 3.13    MLP Status.  The Partnership met for the taxable years ended
December 31, 2007 and 2008, and the Partnership expects to meet for the taxable
year ending December 31, 2009, the gross income requirements of Section
7704(c)(2) of the Code, and accordingly the Partnership is not, and does not
reasonably expect to be, taxed as a corporation for U.S. federal income tax
purposes or for applicable state tax purposes.
 
Section 3.14    Offering.  Assuming the accuracy of the representations and
warranties of the Purchaser contained in this Agreement, the sale and issuance
of the Units pursuant to this Agreement are exempt from the registration
requirements of the Securities Act, and neither the Partnership nor, to the
Partnership’s knowledge, any authorized Representative acting on its behalf has
taken or will take any action that would cause the loss of such exemption.
 
Section 3.15    Certain Fees.  No fees or commissions will be payable by the
Partnership to brokers, finders or investment bankers with respect to the sale
of any of the Units or the consummation of the transactions contemplated by this
Agreement.
 
Section 3.16    Authorization and Enforceability of Basic Documents and Other
Agreements.  The Partnership has all necessary limited partnership power and
authority to execute, deliver and perform its obligations under the Basic
Documents and the Acquisition Agreement to which it is a party and to consummate
the transactions contemplated thereby.  The Basic Documents and the Acquisition
Agreement have been duly authorized, validly executed and delivered and are
valid and legally binding agreements, enforceable against the Partnership in
accordance with their terms; provided that, with respect to each such agreement,
the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws relating to or affecting
creditors’ rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
and, provided further, that the indemnity, contribution and exoneration
provisions contained in any of such agreements may be limited by applicable laws
and public policy.  No approval of the Unitholders is required as a result of
the Partnership’s issuance and sale of the Units pursuant to this Agreement.
 
Section 3.17    No Conflicts.  None of the sale by the Partnership of the Units,
the execution, delivery and performance of the Basic Documents or the
Acquisition Agreement by the Partnership and all other agreements and
instruments in connection with the transactions contemplated by the Basic
Documents or the Acquisition Agreement, or the consummation of the transactions
contemplated hereby or thereby by the Partnership (i) conflicts or will conflict
with or constitutes or will constitute a violation of the Partnership Agreement,
(ii) conflicts or will conflict with or constitutes or will constitute a breach
or violation of, or a default under (or an event that, with notice or lapse of
time or both, would constitute such a default), any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which the
Partnership or any of its Subsidiaries is a party or by which any of them or any
of their respective properties may be bound, (iii) violates or will violate any
statute, law or regulation, including exchange regulation, or any order,
judgment, decree or injunction of any court or governmental agency or body
directed to any of the Partnership or its Subsidiaries or any of their
properties in a proceeding to which any of them or their property is a party, or
(iv) results or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Partnership or any of its
Subsidiaries, which conflicts, breaches, violations, defaults or liens, in the
case of clauses (ii), (iii) or (iv), would, individually or in the aggregate,
have a Partnership Material Adverse Effect or would materially impair the
ability of the Partnership to perform its obligations under the Basic Documents
or the Acquisition Agreement.
 
9

--------------------------------------------------------------------------------

 
Section 3.18    No Consents.  No permit, consent, approval, authorization,
waiver, license, declaration, order, registration, filing or qualification
(“consent”) of or with any court, governmental agency or body having
jurisdiction over the Partnership or any of its properties is required in
connection with the offering and sale by the Partnership of the Units, the
execution, delivery and performance of the Basic Documents and the Acquisition
Agreement by the Partnership, or the consummation by the Partnership of the
transactions contemplated by the Basic Documents and the Acquisition Agreement,
except for such consents required under the Securities Act or state securities
or “Blue Sky” laws.
 
Section 3.19    Independent Registered Public Accounting Firm.  The independent
registered public accounting firm, KPMG LLP, who has audited the financial
statements of the Partnership, NBPC and Great Lakes included in the Partnership
SEC Documents is a registered independent public accounting firm with respect to
the Partnership, NBPC and Great Lakes, as required by the Exchange Act or the
Securities Act, as applicable, and has not resigned or been dismissed as
independent registered public accountants of the Partnership as a result of or
in connection with any disagreement with the Partnership on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedures.
 
Section 3.20    Financial Statements.  At March 31, 2009, the Partnership had a
capitalization as indicated in the Partnership’s Quarterly Report on Form 10-Q
for the three months ended March 31, 2009.  The historical financial statements
(including the related notes and supporting schedules) of the Partnership, NBPC
and Great Lakes included in the Partnership SEC Documents comply as to form in
all material respects with the requirements of Regulation S-X under the Exchange
Act or the Securities Act, as applicable, and present fairly in all material
respects the financial position, results of operations and cash flows of the
Partnership, NBPC and Great Lakes on the basis stated therein at the respective
dates or for the respective periods which have been prepared in accordance with
GAAP consistently applied through the periods involved, except to the extent
disclosed therein.
 
Section 3.21    No Material Adverse Change.  None of the Partnership or any of
its Subsidiaries or NBPC, Great Lakes or Tuscarora has sustained, since the date
of the latest financial statements included in the Partnership’s Quarterly
Report on Form 10-Q for the three months ended March 31, 2009, any material loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, investigation, order or decree, otherwise than as set forth
or contemplated in the Partnership SEC Documents.  Except as disclosed in the
Partnership SEC Documents, subsequent to the respective dates as of which such
information is given in the Partnership SEC Documents, (i) none of the
Partnership or any of its Subsidiaries or NBPC, Great Lakes or Tuscarora has
incurred any liability or obligation, indirect, direct or contingent, or entered
into any transactions, not in the ordinary course of business, that,
individually or in the aggregate, is material to the Partnership and its
Subsidiaries, taken as a whole, (ii) there has not been any material change in
the capitalization or material increase in the short-term debt or long-term debt
of the Partnership and its Subsidiaries, NBPC, Great Lakes and Tuscarora taken
as a whole, except for debt incurred to finance the Acquisition, (iii) there has
been no acquisition or disposition of any material asset by the Partnership or
any of its Subsidiaries or NBPC, Great Lakes or Tuscarora or any contract or
arrangement therefor, otherwise than for fair value in the ordinary course of
business, (iv) there has been no material change in the Partnership’s accounting
principles, practices or methods and (v) there has not been any material adverse
change, or any development, individually or in the aggregate, that has had or
would be reasonably expected to have a Partnership Material Adverse Effect.
 
10

--------------------------------------------------------------------------------

 
Section 3.22    Investment Company.  The Partnership is not now, and after
issuance and sale of the Units to be issued and sold by the Partnership
hereunder and application of the net proceeds from such sale as described in
Section 5.2 hereof will not be, an “investment company” within the meaning of
the Investment Company Act of 1940, as amended.
 
Section 3.23    Litigation.  Except as described in the Partnership SEC
Documents or the forms, reports, schedules and statements filed with the
Commission by the Partnership under the Exchange Act or the Securities Act,
there is (i) no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or, to
the best of the Partnership’s knowledge, threatened, to which the Partnership or
any of its Subsidiaries or NBPC, Great Lakes or Tuscarora is or may be a party
or to which the business or property of any of the Partnership or its
Subsidiaries or NBPC, Great Lakes or Tuscarora is or may be subject, (ii) no
statute, rule, regulation or order that has been enacted, adopted or issued by
any governmental agency or that has been formally proposed by any governmental
agency, and (iii) no injunction, restraining order or order of any nature issued
by a federal or state court or foreign court of competent jurisdiction to which
any of the Partnership or its Subsidiaries or NBPC, Great Lakes or Tuscarora is
or may be subject, that, in the case of clauses (i), (ii) and (iii) above, is
reasonably expected to (A) individually or in the aggregate have a Partnership
Material Adverse Effect, (B) prevent or result in the suspension of the offering
and sale of the Units, or (C) in any manner draw into question the validity of
this Agreement.
 
Section 3.24    Listing.  The Common Units are listed on the Nasdaq Global
Select Market.  The Units will be issued in compliance with all applicable rules
of The Nasdaq Market.  Prior to the Closing, the Partnership will have submitted
to The Nasdaq Market a “Notification Form: Listing of Additional Shares” with
respect to the Units.  The Partnership has not received a notice of delisting
with respect to the Common Units.
 
Section 3.25    Acknowledgment Regarding Certificates.  Any certificate signed
by any officer of any of the General Partner on behalf of the Partnership and
delivered to the Purchaser or counsel for the Purchaser in connection with the
offering of the Units shall be deemed a representation and warranty by the
Partnership as to matters covered thereby to the Purchaser.
 
11

--------------------------------------------------------------------------------

 
Section 3.26    Insurance.  The Partnership and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as the Partnership believes are prudent for its
businesses.  The Partnership does not have any reason to believe that it or any
Subsidiary will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business.
 
Section 3.27    Form S-3 Eligibility.  The Partnership is eligible to register
the Units for resale by the Purchaser on a registration statement on Form S-3
under the Securities Act.
 
Section 3.28    No Integration. Neither the Partnership, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Units to be integrated with prior offerings by the Partnership for purposes of
the Securities Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the exchange on which the
Units are currently listed or quoted.
 
Section 3.29    Taxes.  Each of the Partnership and its Subsidiaries has filed
all necessary federal, state and foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon except for taxes being
contested in good faith by the Partnership for which adequate reserves have been
established, and neither the Partnership nor any of its subsidiaries has
knowledge of a tax deficiency which has been asserted in writing against it
which would reasonably be expected to have a Material Adverse Effect.
 
Section 3.30    Registration Rights.  The Purchaser is an “Affiliate” of the
General Partner within the meaning of the Partnership Agreement, as such
Partnership Agreement will be amended in connection with the Acquisition, and is
therefore entitled to rely upon the registration rights set forth in Section
7.12(a) of the Partnership Agreement .
 
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
 
The Purchaser represents and warrants to the Partnership, on and as of the date
of this Agreement and on and of the Closing Date, as follows:
 
Section 4.1    Valid Existence. The Purchaser (i) is duly organized, validly
existing and in good standing under the Laws of its jurisdiction of organization
and (ii) has all requisite power, and has all material governmental licenses,
authorizations, consents and approvals, necessary to own its properties and
carry on its business as its business is now being conducted, except where the
failure to obtain such licenses, authorizations, consents and approvals would
not have and would not reasonably be expected to have a Purchaser Material
Adverse Effect.
 
12

--------------------------------------------------------------------------------

 
Section 4.2    No Breach. The execution, delivery and performance by the
Purchaser of the Basic Documents to which it is a party and all other agreements
and instruments in connection with the transactions contemplated by the Basic
Documents to which it is a party, and compliance by the Purchaser with the terms
and provisions hereof and thereof and the purchase of the Units by the Purchaser
do not and will not (a) violate any provision of any Law, governmental permit,
determination or award having applicability to the Purchaser or any of its
properties, (b) conflict with or result in a violation of any provision of the
organizational documents of the Purchaser or (c) require any consent (other than
standard internal consents), approval or notice under or result in a violation
or breach of or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, cancellation or
acceleration) under (i) any note, bond, mortgage, license, loan or credit
agreement to which the Purchaser is a party or by which the Purchaser or any of
its properties may be bound or (ii) any other such agreement, instrument or
obligation, except in the case of clauses (a) and (c) where such violation,
default, breach, termination, cancellation, failure to receive consent or
approval, or acceleration with respect to the foregoing provisions of this
Section 4.2 would not, individually or in the aggregate, reasonably be expected
to have a Purchaser Material Adverse Effect.
 
Section 4.3    Investment. The Units are being acquired for the Purchaser’s own
account, not as a nominee or agent, and with no present intention of
distributing the Units or any part thereof, and the Purchaser has no present
intention of selling or granting any participation in or otherwise distributing
the same in any transaction in violation of the securities Laws of the United
States of America or any state, without prejudice, however, to the Purchaser’s
right at all times to sell or otherwise dispose of all or any part of the Units
under a registration statement under the Securities Act and applicable state
securities Laws or under an exemption from such registration available
thereunder (including, if available, Rule 144 promulgated thereunder). If the
Purchaser should in the future decide to dispose of any of the Units, the
Purchaser understands and agrees (a) that it may do so only (i) in compliance
with the Securities Act and applicable state securities Law, as then in effect,
or pursuant to an exemption therefrom or (ii) in the manner contemplated by any
registration statement pursuant to which such securities are being offered, and
(b) that stop-transfer instructions to that effect will be in effect with
respect to such securities. Notwithstanding the foregoing, the Purchaser may at
any time enter into one or more total return swaps with respect to the
Purchaser’s Units with a third party provided that such transactions are exempt
from registration under the Securities Act.
 
Section 4.4    Nature of the Purchaser. The Purchaser represents and warrants
to, and covenants and agrees with, the Partnership that (a) it is an “accredited
investor” within the meaning of Rule 501 of Regulation D promulgated by the
Commission pursuant to the Securities Act and (b) by reason of its business and
financial experience it has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Units, is able to bear the economic
risk of such investment and, at the present time, would be able to afford a
complete loss of such investment.
 
Section 4.5    Receipt of Information; Authorization. The Purchaser acknowledges
that it has (a) had access to the Partnership SEC Documents, (b) had access to
information publicly disclosed regarding the Acquisition and its potential
effect on the Partnership’s operations and financial results and (c) been
provided a reasonable opportunity to ask questions of and receive answers from
Representatives of the Partnership regarding such matters.
 
Section 4.6    Restricted Securities. The Purchaser understands that the Units
it is purchasing are characterized as “restricted securities” under the federal
securities Laws inasmuch as they are being acquired from the Partnership in a
transaction not involving a public offering and that under such Laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,
the Purchaser represents that it is knowledgeable with respect to Rule 144 of
the Commission promulgated under the Securities Act.
 
13

--------------------------------------------------------------------------------

 
Section 4.7    Certain Fees. No fees or commissions will be payable by the
Purchaser to brokers, finders or investment bankers with respect to the sale of
any of the Units or the consummation of the transactions contemplated by this
Agreement.
 
Section 4.8    Legend. It is understood that the certificates evidencing the
Units initially will bear the following legend: “These securities have not been
registered under the Securities Act of 1933. These securities may not be sold,
offered for sale, pledged or hypothecated in the absence of a registration
statement in effect with respect to the securities under such Act or pursuant to
an exemption from registration thereunder and, in the case of a transaction
exempt from registration, unless sold pursuant to Rule 144 under such Act or the
issuer has received documentation reasonably satisfactory to it that such
transaction does not require registration under such Act.”
 
 
ARTICLE V
COVENANTS
 
Section 5.1    Taking of Necessary Action. Each of the Parties hereto shall use
its commercially reasonable efforts promptly to take or cause to be taken all
action and promptly to do or cause to be done all things necessary, proper or
advisable under applicable Law and regulations to consummate and make effective
the transactions contemplated by this Agreement. Without limiting the foregoing,
the Partnership and the Purchaser will, and the Partnership shall cause each of
its Subsidiaries to, use its commercially reasonable efforts to make all filings
and obtain all consents of Governmental Authorities that may be necessary or, in
the reasonable opinion of the Purchaser or the Partnership, as the case may be,
advisable for the consummation of the transactions contemplated by this
Agreement or the other Basic Documents.
 
Section 5.2    Use of Proceeds. The Partnership shall use the collective
proceeds from the sale of the Units to provide funds to TCP Intermediate
Partnership to partially fund the purchase price set forth in the Acquisition
Agreement.
 
Section 5.3    Tax Information. The Partnership shall provide the Purchaser with
any reasonably requested tax information related to its ownership of the Units.
 
Section 5.4    Certain Special Allocations of Book and Taxable Income.  To the
extent that the Unit Price is more or less than the trading price of the Common
Units of the Partnership on the Nasdaq Global Select Market as of the Closing
Date, the General Partner intends to specially allocate items of book and
taxable loss or income to the Purchaser so that its capital account in its Units
is consistent, on a per-Unit basis, with the capital accounts of the other
holders of Common Units (and thus to assure fungibility of all Common
Units).  The Purchaser acknowledges and agrees to such special allocations.
 
Section 5.5    Non-Disclosure; Interim Public Filings.  Promptly following the
execution of this Agreement and in any event within the time period proscribed
by applicable Law, the Partnership shall issue a press release reasonably
acceptable to the Purchaser or otherwise disclose the transactions contemplated
hereby as required by applicable Law.  In addition and without limitation of the
foregoing, the Partnership shall timely file a Current Report on Form 8-K with
the Commission in the form required by the Exchange Act (the “8-K Filing”)
describing the terms of the transactions contemplated by this Agreement and
containing all other information required to be disclosed by the Exchange Act in
connection with the transactions contemplated hereby (and, if necessary,
attaching this Agreement as an exhibit thereto).  Thereafter, the Partnership
shall timely file any filings and notices required by the Commission or
applicable Law with respect to the transactions contemplated hereby.  Except
with respect to the 8-K Filing (a copy of which will be provided to the
Purchaser for its review as early as practicable prior to its filing), the
Partnership shall, at least two Business Days prior to the filing or
dissemination of any disclosure required by this Section 5.5, provide a copy
thereof to the Purchaser for their review.  The Partnership and the Purchaser
shall consult with each other in issuing any press releases or otherwise making
public statements or filings and other communications with the Commission or any
regulatory agency or The Nasdaq Stock Market (or other exchange on which
securities of the Partnership are listed or traded) with respect to the
transactions contemplated hereby, and neither Party shall issue any such press
release or otherwise make any such public statement, filing or other
communication without the prior consent of the other, except if such disclosure
is required by Law, in which case the disclosing Party shall promptly provide
the other Party with prior notice of such public statement, filing or other
communication. 
 
14

--------------------------------------------------------------------------------

 
ARTICLE VI
CONDITIONS TO CLOSING
 
Section 6.1    Mutual Conditions.  The respective obligation of each Party to
consummate the purchase and issuance and sale of the Units shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions (any or all of which may be waived by a particular Party on behalf of
itself in writing, in whole or in part, to the extent permitted by applicable
Law):
 
(a)    no Law shall have been enacted or promulgated, and no action shall have
been taken, by any Governmental Authority of competent jurisdiction which
temporarily, preliminarily or permanently restrains, precludes, enjoins or
otherwise prohibits the consummation of the transactions contemplated by this
Agreement or makes the transactions contemplated by this Agreement  illegal; and
 
(b)    there shall not be pending any Action by any Governmental Authority
seeking to restrain, preclude, enjoin or prohibit the transactions contemplated
by this Agreement.
 
Section 6.2    The Purchaser’s Conditions.  The obligation of the Purchaser to
consummate the purchase of its Units shall be subject to the satisfaction on or
prior to the Closing Date of each of the following conditions (any or all of
which may be waived by the Purchaser on behalf of itself in writing, in whole or
in part, to the extent permitted by applicable Law):
 
15

--------------------------------------------------------------------------------

 
(a)    the Partnership shall have performed and complied in all material
respects with the covenants and agreements contained in this Agreement that are
required to be performed and complied with by it on or prior to the Closing
Date;
 
(b)    the representations and warranties of the Partnership contained in this
Agreement that are qualified by materiality or Partnership Material Adverse
Effect shall be true and correct when made and as of the Closing Date and all
other representations and warranties shall be true and correct in all material
respects when made and as of the Closing Date, in each case as though made at
and as of the Closing Date (except that representations made as of a specific
date shall be required to be true and correct as of such date only);
 
(c)    since the date of this Agreement, no Partnership Material Adverse Effect
shall have occurred and be continuing;
 
(d)    the Partnership shall have delivered, or caused to be delivered, to the
Purchaser at the Closing, its closing deliveries described in Section 7.1; and
 
(e)    the Partnership shall have submitted to The Nasdaq Market a “Notification
Form: Listing of Additional Shares” with respect to the Units and no notice of
delisting from The Nasdaq Market shall have been received by the Partnership
with respect to the Common Units.
 
Section 6.3    The Partnership’s Conditions.   The obligation of the Partnership
to consummate the sale of the Units to the Purchaser shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
with respect to the Purchaser (any or all of which may be waived by the
Partnership in writing, in whole or in part, to the extent permitted by
applicable Law):
 
(a) the Purchaser shall have performed and complied in all material respects
with the covenants and agreements contained in this Agreement that are required
to be performed and complied with by the Purchaser on or prior to the Closing
Date;
 
(b) the representations and warranties of the Purchaser contained in this
Agreement that are qualified by materiality or Purchaser Material Adverse Effect
shall be true and correct when made and as of the Closing Date and all other
representations and warranties of the Purchaser shall be true and correct in all
material respects when made and as of the Closing Date, in each case as though
made at and as of the Closing Date (except that representations or warranties
made as of a specific date shall be required to be true and correct as of such
date only); and
 
(c) the Purchaser shall have delivered, or caused to be delivered, its closing
deliveries described in Section 7.2 (including payment of its Commitment Amount
as provided in Section 7.2(b) and Section 2.1(c)).
 
16

--------------------------------------------------------------------------------

 
ARTICLE VII
CLOSING DELIVERIES
 
Section 7.1    The Partnership Deliveries. At the Closing, subject to the terms
and conditions of this Agreement, the Partnership shall have delivered, or
caused to be delivered, to the Purchaser:
 
(a)    the Units by delivering certificates (bearing the legend set forth in
Section 4.8) evidencing such Units, all free and clear of any Liens,
encumbrances or interests of any other party;
 
(b)    a certificate signed on behalf of the Partnership by the Chairman of the
Board of Directors or the President and the principal financial or accounting
officer of the General Partner, dated the Closing Date, to the effect that:
 
(i)    the representations and warranties of the Partnership in this Agreement
are true and correct on and as of the Closing Date with the same effect as if
made on the Closing Date and the Partnership has performed and complied with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
 
(ii)    since the date of the most recent financial statements included or
incorporated by reference in the Partnership SEC Documents, there has been no
Partnership Material Adverse Effect, except as set forth in or contemplated in
the Partnership SEC Documents;
 
(iii)    the conditions to the closing of the Acquisition set forth in the
Acquisition Agreement (other than the payment of the purchase price by the
Partnership) have been satisfied or waived;
 
(c)    a certificate dated as of a recent date of the Secretary of State of the
State of Delaware with respect to the due organization and good standing in the
State of Delaware of the Partnership; and
 
(d)    a receipt, dated the Closing Date, executed by the Partnership and
delivered to the Purchaser certifying that the Partnership has received the
Purchase Price with respect to the Units issued and sold to the Purchaser.
 
Section 7.2    The Purchaser Deliveries.  Subject to the terms and conditions of
this Agreement, the Purchaser will deliver, or cause to be delivered, at the
Closing:
 
(a)    a certificate signed on behalf of the Purchaser by the Chairman of the
Board of Directors or the President and the principal financial or accounting
officer, dated the Closing Date, to the effect that the representations and
warranties of the Purchaser in this Agreement are true and correct on and as of
the Closing Date with the same effect as if made on the Closing Date and the
Purchaser has performed and complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to the
Closing Date; and
 
17

--------------------------------------------------------------------------------

 
(b)    payment to the Partnership of Purchaser’s Commitment Amount by wire
transfer(s) of immediately available funds to an account designated by the
Partnership.
 
 
ARTICLE VIII
INDEMNIFICATION, COSTS AND EXPENSES
 
Section 8.1    Indemnification by the Partnership. The Partnership agrees to
indemnify the Purchaser and its Representatives (collectively, the “Purchaser
Related Parties”) from, and hold each of them harmless against, any and all
actions, suits, proceedings (including any investigations, litigation or
inquiries), demands and causes of action, and, in connection therewith, and
promptly upon demand, pay and reimburse each of them for all costs, losses,
liabilities, damages or expenses of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel and all other reasonable expenses
incurred in connection with investigating, defending or preparing to defend any
such matter that may be incurred by them or asserted against or involve any of
them as a result of, arising out of or in any way related to (i) any actual or
proposed use by the Partnership of the proceeds of the sale of the Units or
(ii) the breach of any of the representations, warranties or covenants of the
Partnership contained herein; provided that such claim for indemnification
relating to a breach of a representation or warranty is made prior to the
expiration of such representation or warranty; provided further, that no
Purchaser Related Party shall be entitled to recover special, consequential
(including lost profits or diminution in value) or punitive damages.
 
Section 8.2    Indemnification by the Purchaser. The Purchaser agrees to
indemnify the Partnership and its Representatives (collectively, the
“Partnership Related Parties”) from, and hold each of them harmless against, any
and all actions, suits, proceedings (including any investigations, litigation or
inquiries), demands and causes of action, and, in connection therewith, and
promptly upon demand, pay and reimburse each of them for all costs, losses,
liabilities, damages or expenses of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel and all other reasonable expenses
incurred in connection with investigating, defending or preparing to defend any
such matter that may be incurred by them or asserted against or involve any of
them as a result of, arising out of or in any way related to the breach of any
of the covenants of the Purchaser contained herein; provided further, that no
Partnership Related Party shall be entitled to recover special, consequential
(including lost profits or diminution in value) or punitive damages.
 
Section 8.3    Indemnification Procedure. Promptly after any the Partnership
Related Party or Purchaser Related Party (hereinafter, the “Indemnified Party”)
has received notice of any indemnifiable claim hereunder, or the commencement of
any action or proceeding by a third party, which the Indemnified Party believes
in good faith is an indemnifiable claim under this Agreement, the Indemnified
Party shall give the indemnitor hereunder (the “Indemnifying Party”) written
notice of such claim or the commencement of such action or proceeding, but
failure to so notify the Indemnifying Party will not relieve the Indemnifying
Party from any liability it may have to such Indemnified Party hereunder except
to the extent that the Indemnifying Party is materially prejudiced by such
failure. Such notice shall state the nature and the basis of such claim to the
extent then known.  The Indemnifying Party shall have the right to defend and
settle, at its own expense and by its own counsel who shall be reasonably
acceptable to the Indemnified Party, any such matter as long as the Indemnifying
Party pursues the same diligently and in good faith. If the Indemnifying Party
undertakes to defend or settle, it shall promptly notify the Indemnified Party
of its intention to do so, and the Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in all commercially reasonable respects in
the defense thereof and the settlement thereof. Such cooperation shall include
furnishing the Indemnifying Party with any books, records and other information
reasonably requested by the Indemnifying Party and in the Indemnified Party’s
possession or control. Such cooperation of the Indemnified Party shall be at the
cost of the Indemnifying Party. After the Indemnifying Party has notified the
Indemnified Party of its intention to undertake to defend or settle any such
asserted liability, and for so long as the Indemnifying Party diligently pursues
such defense, the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any defense
or settlement of such asserted liability; provided, however, that the
Indemnified Party shall be entitled (i) at its expense, to participate in the
defense of such asserted liability and the negotiations of the settlement
thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense
or employ counsel reasonably acceptable to the Indemnified Party or (B) if the
defendants in any such action include both the Indemnified Party and the
Indemnifying Party and counsel to the Indemnified Party shall have concluded
that there may be reasonable defenses available to the Indemnified Party that
are different from or in addition to those available to the Indemnifying Party
or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, then the Indemnified
Party shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the Indemnifying Party as incurred.
Notwithstanding any other provision of this Agreement, the Indemnifying Party
shall not settle any indemnified claim without the consent of the Indemnified
Party, unless the settlement thereof imposes no liability or obligation on,
involves no admission of wrongdoing or malfeasance by, and includes a complete
release from liability of, the Indemnified Party.
 
18

--------------------------------------------------------------------------------

 
ARTICLE IX
MISCELLANEOUS
 
Section 9.1    Interpretation. Article, Section, Schedule and Exhibit references
are to this Agreement, unless otherwise specified.  All references to
instruments, documents, contracts and agreements are references to such
instruments, documents, contracts and agreements as the same may be amended,
supplemented and otherwise modified from time to time, unless otherwise
specified. The word “including” shall mean “including but not limited to”.
Whenever the Partnership has an obligation under the Basic Documents, the
expense of complying with such obligation shall be an expense of the Partnership
unless otherwise specified. Whenever any determination, consent or approval is
to be made or given by the Purchaser under this Agreement, such action shall be
in the Purchaser’s sole discretion unless otherwise specified. If any provision
in the Basic Documents is held to be illegal, invalid, not binding or
unenforceable, such provision shall be fully severable and the Basic Documents
shall be construed and enforced as if such illegal, invalid, not binding or
unenforceable provision had never comprised a part of the Basic Documents, and
the remaining provisions shall remain in full force and effect. The Basic
Documents have been reviewed and negotiated by sophisticated parties with access
to legal counsel and shall not be construed against the drafter.
 
19

--------------------------------------------------------------------------------

 
Section 9.2    Survival of Provisions. The representations and warranties set
forth in Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.12, 3.13,
3.15, 3.16, 3.22, 3.23, 4.1, 4.3, 4.4, 4.6, 4.7 and 4.8 of this Agreement shall
survive the execution and delivery of this Agreement indefinitely, and the other
representations and warranties set forth in this Agreement shall survive for a
period of twelve (12) months following the Closing Date regardless of any
investigation made by or on behalf of the Partnership or the Purchaser.  The
covenants made in this Agreement or any other Basic Document shall survive the
closing of the transactions described herein and remain operative and in full
force and effect regardless of acceptance of any of the Units and payment
therefor and conversion, exercise or repurchase thereof.  All indemnification
obligations of the Partnership and the Purchaser pursuant to Article VIII of
this Agreement shall remain operative and in full force and effect unless such
obligations are expressly terminated in a writing by the Parties referencing the
particular Article or Section, regardless of any purported general termination
of this Agreement.
 
Section 9.3    No Waiver; Modifications in Writing.
 
(a)    Delay.  No failure or delay on the part of any Party in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any right, power or
remedy.  The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to a Party at law or in equity or
otherwise.
 
(b)    Specific Waiver. Except as otherwise provided in this Agreement, no
amendment, waiver, consent, modification or termination of any provision of this
Agreement or any other Basic Document shall be effective unless signed by each
of the Parties or each of the original signatories thereto affected by such
amendment, waiver, consent, modification or termination.  Any amendment,
supplement or modification of or to any provision of this Agreement or any other
Basic Document, any waiver of any provision of this Agreement or any other Basic
Document and any consent to any departure by the Partnership from the terms of
any provision of this Agreement or any other Basic Document shall be effective
only in the specific instance and for the specific purpose for which made or
given.  Except where notice is specifically required by this Agreement, no
notice to or demand on any Party in any case shall entitle any Party to any
other or further notice or demand in similar or other circumstances.
 
Section 9.4    Binding Effect; Assignment.
 
(a)    Binding Effect. This Agreement shall be binding upon the Partnership, the
Purchaser, and their respective successors and permitted assigns.  Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the Parties to this
Agreement and as provided in Article VII, and their respective successors and
permitted assigns.
 
(b)    Assignment of Units. All or any portion of the Purchaser’s Units
purchased pursuant to this Agreement may be sold, assigned or pledged by the
Purchaser, subject to compliance with applicable securities Laws.
 
20

--------------------------------------------------------------------------------

 
(c)    Assignment of Rights. The Purchaser may assign all or any portion of its
rights and obligations under this Agreement without the consent of the
Partnership (i) to any Affiliate of the Purchaser or (ii) in connection with a
total return swap or similar transaction with respect to the Units purchased by
the Purchaser, and in each case the assignee shall be deemed to be the Purchaser
hereunder with respect to such assigned rights or obligations and shall agree to
be bound by the provisions of this Agreement.  Except as expressly permitted by
this Section 9.4(c), such rights and obligations may not otherwise be
transferred except with the prior written consent of the Partnership (which
consent shall not be unreasonably withheld), in which case the assignee shall be
deemed to be the Purchaser hereunder with respect to such assigned rights or
obligations and shall agree to be bound by the provisions of this Agreement.
 
Section 9.5    Aggregation of Units. All Units held or acquired by Persons who
are Affiliates of one another shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
 
Section 9.6    Communications. All notices and demands provided for hereunder
shall be in writing and shall be given by regular mail, registered or certified
mail, return receipt requested, facsimile, air courier guaranteeing overnight
delivery, electronic mail or personal delivery to the following addresses:
 
(a)    If to the Purchaser:
 
TransCan Northern Ltd.
                13710 First National Bank Parkway
                Omaha, Nebraska 68154-5200
 
Attention: Marcia Anderson
                Facsimile: (XXX) XXX-XXX
 
with a copy to:
 
Attention: Donald DeGrandis
                Facsimile: (403) 920-2460
 
(b)    If to the Partnership:
 
TC Pipelines, LP
                450 – 1st Street S.W.
                Calgary, Alberta, Canada T2P 5H1
 
Attention: Mark Zimmerman
                Facsimile: (403) 920-2363
 
with a copy to:
 
Attention: Donald DeGrandis
                Facsimile: (403) 920-2460
 
21

--------------------------------------------------------------------------------

 
with a copy to:
 
Orrick, Herrington & Sutcliffe LLP
                The Orrick Building
                405 Howard Street
                San Francisco, California 94105
 
Attention: Alan Talkington
                Facsimile: (415) 773-5759;
 
or to such other address as the Partnership or the Purchaser may designate in
writing. All notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; upon actual receipt if
sent by registered or certified mail, return receipt requested, or regular mail,
if mailed; when receipt acknowledged, if sent via facsimile; and upon actual
receipt when delivered by an air courier guaranteeing overnight delivery or via
electronic mail.
 
Section 9.7    Removal of Legend. The Partnership shall remove the legend
described in Section 4.8 from the certificates evidencing the Units at the
request of the Purchaser submitting to the Partnership such certificates,
together with such other documentation as may be reasonably requested by the
Partnership or required by its transfer agent, unless the Partnership, with the
advice of counsel, reasonably determines that such removal is inappropriate;
provided that no opinion of counsel shall be required in the event the Purchaser
is effecting a sale of such Units pursuant to Rule 144 or an effective
registration statement (unless required by the Partnership’s transfer
agent).  The Partnership shall cooperate with the Purchaser to effect removal of
such legend.  The legend described in Section 4.8 shall be removed and the
Partnership shall issue a certificate without such legend to the holder of Units
upon which it is stamped, if, unless otherwise required by state securities
Laws, (i) such Units are sold pursuant to an effective Registration Statement,
(ii) in connection with a sale, assignment or other transfer, such holder
provides the Partnership with an opinion of a law firm reasonably acceptable to
the Partnership, in a generally acceptable form, to the effect that such sale,
assignment or transfer of such Units may be made without registration under the
applicable requirements of the Securities Act, or (iii) such holder provides the
Partnership with reasonable assurance that such Units can be sold, assigned or
transferred pursuant to Rule 144 or Rule 144A under the Securities Act.
 
Section 9.8    Expenses. Each Party shall bear its own fees and expenses
incurred in connection with the preparation of and performance under this
Agreement.
 
Section 9.9    Entire Agreement. This Agreement and the other Basic Documents
are intended by the Parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the Parties hereto and thereto in respect of the subject matter
contained herein and therein.  There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein or therein
with respect to the rights granted by the Partnership or the Purchaser set forth
herein or therein.  This Agreement and the other Basic Documents supersede all
prior agreements and understandings between the Parties with respect to such
subject matter.
 
 
22

--------------------------------------------------------------------------------

 
Section 9.10    Governing Law. This Agreement will be construed in accordance
with and governed by the Laws of the State of New York without regard to
principles of conflicts of Laws.
 
Section 9.11    Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different Parties hereto in separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
 
Section 9.12    Expenses. If any action at law or equity is necessary to enforce
or interpret the terms of the Basic Documents, the prevailing Party shall be
entitled to reasonable attorney’s fees, costs and necessary disbursements in
addition to any other relief to which such Party may be entitled.
 
Section 9.13    Termination.
 
(a)    Notwithstanding anything herein to the contrary, this Agreement may be
terminated at any time at or prior to the Closing by the mutual written consent
of the Purchaser and the Partnership.
 
(b)    Notwithstanding anything herein to the contrary, this Agreement shall
automatically terminate at any time at or prior to the Closing:
 
(i)    if a Law shall have been enacted or promulgated, or if any action shall
have been taken by any Governmental Authority of competent jurisdiction which
permanently restrains, precludes, enjoins or otherwise prohibits the
consummation of the transactions contemplated by this Agreement or makes the
transactions contemplated by this Agreement illegal;
 
(ii)    if the Closing shall not have occurred on or before December 31, 2009;
or
 
(iii)    if the Acquisition Agreement shall have been terminated in accordance
with its terms.
 
(c)    In the event of the termination of this Agreement as provided in Section
9.13(a) or Section 9.13(b), this Agreement shall forthwith become null and
void.  In the event of such termination, there shall be no liability on the part
of any Party hereto; provided that nothing herein shall relieve any Party from
any liability or obligation with respect to any willful breach of this
Agreement.
 
Section 9.14    Recapitalization, Exchanges, Etc. Affecting the Units. The
provisions of this Agreement shall apply to the full extent set forth herein
with respect to any and all units or other equity interests of the Partnership
or any successor or assign of the Partnership (whether by merger, consolidation,
sale of assets or otherwise) which may be issued in respect of, in exchange for
or in substitution of, the Units, and shall be appropriately adjusted for
combinations, unit splits, recapitalizations and the like occurring after the
date of this Agreement.
 
23

--------------------------------------------------------------------------------

 
Section 9.15    Obligations Limited to Parties to Agreement. Each of the parties
hereto covenants, agrees and acknowledges that no Person other than the
Purchaser (and their permitted assignees) and the Partnership shall have any
obligation hereunder and that, notwithstanding that the Purchaser may be a
corporation, partnership or limited liability company, no recourse under this
Agreement or the other Basic Documents or under any documents or instruments
delivered in connection herewith or therewith shall be had against any former,
current or future director, officer, employee, agent, general or limited
partner, manager, member, stockholder or Affiliate of the Purchaser or the
Partnership or any former, current or future director, officer, employee, agent,
general or limited partner, manager, member, stockholder or Affiliate of any of
the foregoing, whether by the enforcement of any assessment or by any legal or
equitable proceeding, or by virtue of any applicable Law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any former, current or future
director, officer, employee, agent, general or limited partner, manager, member,
stockholder or Affiliate of the Purchaser or the Partnership or any former,
current or future director, officer, employee, agent, general or limited
partner, manager, member, stockholder or Affiliate of any of the foregoing, as
such, for any obligations of the Purchaser and the Partnership under this
Agreement or the other Basic Documents or any documents or instruments delivered
in connection herewith or therewith or for any claim based on, in respect of or
by reason of such obligation or its creation.
 
[The remainder of this page is intentionally left blank.]
 

 
 
24

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of
the date first above written.
 
 
PARTNERSHIP
 
 
TC PipeLines, LP
 
 
By: TC PipeLines GP, Inc., its general partner
 
 
By:  /s/ Mark Zimmerman            
Name: Mark Zimmerman
Title:   President
                                
 
By:  /s/ Donald DeGrandis           
Name: Donald DeGrandis
Title:   Secretary

                                  [Signature page to Common Unit Purchase
Agreement]
 
 

--------------------------------------------------------------------------------

 

 
PURCHASER
 
 
TransCan Northern Ltd.
 
 
By:  /s/ Ron Cook               
Name: Ron Cook
Title:   Vice-President, Taxation

 
 
 
By:  /s/ Julie E. Willett             
Name: Julie E. Willett
Title:   Vice-President, Finance
 

 

                                   [Signature page to Common Unit Purchase
Agreement]

 
 
 

--------------------------------------------------------------------------------