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Exhibit 10.1

Execution Copy
 

 

 

 

 

 
______________________________________________________________________________
 

 
MEMBERSHIP INTEREST PURCHASE AGREEMENT
 
by and between
 
NORTHERN BORDER PIPELINE COMPANY
 
and
 
TRANSCANADA PIPELINE USA LTD.
 

 
Dated as of August 28, 2008
 

 
______________________________________________________________________________
 

 

HOU:2825092.15

 
 

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TABLE OF CONTENTS
 
Page
 
 
 

 ARTICLE I DEFINITIONS 
 1
   

 ARTICLE II AGREEMENT TO SELL AND PURCHASE 
4

 
2.1
Sale and Purchase 
4

 
2.2
Closing 
5

 
2.3
Effective Date; Development Costs 
5

 
2.4
Conditions to Obligations of Purchaser 
5

 
2.5
Conditions to Obligations of Seller 
6

 
2.6
Purchase Price Allocation for Tax Purposes 
6

 
 

 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER 
 6

 
3.1
Organization 
6

 
3.2
Organization and Qualification of Bison 
6

 
3.3
Authority 
7

 
3.4
Ownership 
7

 
3.5
No Conflicts or Violations; Consents 
7

 
3.6
Certain Proceedings 
8

 
3.7
Brokers or Finders 
8

 
3.8
Taxes 
8

 

 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER 
 8

 
4.1
Organization 
8

 
4.2
Authority 
8

 
4.3
No Conflicts or Violations; Consents 
8

 
4.4
Certain Proceedings 
9

 
4.5
Brokers or Finders 
9

 
4.6
Investment Intent; Access 
9

 

 ARTICLE V COVENANTS OF THE PARTIES 
9

 
5.1
Expenses 
9

 
5.2
Pathfinder Project 
10

 
5.3
Northern Border Pipeline Company Capacity 
10

 
5.4
Discussions with Shippers 
10

 
5.5
Further Assurances 
10

 
5.6
Tax Matters 
10

 

 ARTICLE VI INDEMNIFICATION; REMEDIES 
12

 
6.1
Survival of Representations, Warranties and Covenants 
12

 
6.2
Indemnification and Payment of Damages by Seller 
13

 
6.3
Indemnification and Payment of Damages by Purchaser 
13

 
6.4
Limitations on Indemnification 
13

 
6.5
No Security Holder Liability 
13

HOU:2825092.15
 
 
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 ARTICLE VII GENERAL PROVISIONS
 14

 
7.1
Public Announcements 
14

 
7.2
Confidentiality 
14

 
7.3
Notices 
14

 
7.4
Waiver 
15

 
7.5
Entire Agreement and Modification 
15

 
7.6
Assignments; Successors; No Third-Party Rights 
15

 
7.7
Severability 
16

 
7.8
Article and Section Headings; Construction 
16

 
7.9
Time of Essence 
16

 
7.10
Enforcement 
16

 
7.11
Governing Law 
16

 
7.12
Counterparts 
17

 
7.13
No Other Representations; Disclaimers 
17

 
7.14
Waiver of Certain Damages 
17

 

 

HOU:2825092.15
 
 
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
 
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made and
entered into as of August 28, 2008, by and between Northern Border Pipeline
Company, a Texas general partnership (“Seller”), and TransCanada PipeLine USA
Ltd., a Nevada corporation (“Purchaser”).
 
RECITALS
 
WHEREAS, Seller is the sole member of Bison Pipeline LLC, a Delaware limited
liability company (“Bison”), and desires to sell its 100% membership interest in
Bison (the “Interest”) to Purchaser on the terms and conditions set forth
herein; and
 
WHEREAS, Purchaser desires to purchase the Interest from Seller on the terms and
conditions set forth herein; and
 
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
 
AGREEMENT
 
ARTICLE I
 
DEFINITIONS
 
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Article I.
 
“Affiliate” means, with respect to any Person, (a) each Person controlled by
such Person, (b) each Person that controls such Person and (c) each Person that
is under common control with such Person.
 
“Alternate Agreements” has the meaning given to such term in Section 2.1.
 
“Anadarko” means Anadarko Energy Services Company, a Delaware corporation.
 
“Approval Date” has the meaning given to such term in Section 5.2.
 
“Bison” has the meaning given to such term in the recitals.
 
“Bison Agreement” has the meaning given to such term in Section 3.2.
 
“Bison Open Season” means the terms and conditions defining the service to be
provided on the Bison Project and posted on the Seller’s website.
 
“Bison Project” means the pipeline project being developed by Bison to transport
natural gas from the Powder River Basin to the Seller’s pipeline system and
having FERC Docket No. PF08-23-000.
 
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“Closing” has the meaning given to such term in Section 2.2.
 
“Closing Date” has the meaning given to such term in Section 2.2.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Consent” means any approval, consent, permit, ratification, waiver, order or
other authorization.
 
“Contemplated Transactions” means the purchase and sale of the Interest and the
performance by Seller and Purchaser of their other obligations under this
Agreement.
 
“Damages” means all damages, penalties, fines, costs, amounts paid in
settlement, Liabilities, obligations, Taxes, liens, losses, expenses and fees
(including court costs and costs of investigation, defense and reasonable
attorneys’ fees and expenses) actually incurred, but specifically excluding
special, incidental, consequential and punitive damages, as reduced by any
insurance recoveries received in respect thereof.
 
“Dollars” means United States Dollars.
 
“FERC’ means the Federal Energy Regulatory Commission.
 
“Governmental Body” means any:
 

  (a) nation, state, county, city, town, district or other jurisdiction of any
nature;         (b)  federal, state, local, municipal, foreign or other
government;      
 
(c)
governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official or entity and any court or
other tribunal); or

 
 
(d)
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of any
nature.

 
“Indemnity Period” has the meaning given to such term in Section 6.1.
 
“Initial Payment” has the meaning given to such term in Section 2.1.
 
“Interest” has the meaning given to such term in the recitals.
 
“Knowledge” means, with respect an individual’s knowledge of a particular fact
or other matter, that such individual is actually aware of such fact or other
matter, and with respect to the knowledge of a Person other than an individual
of a particular fact or other matter, that any individual who is serving as a
director, manager or executive officer of such Person is actually aware of such
fact or other matter.
 

HOU:2825092.15

 
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“Legal Requirement” means any federal, state, local, municipal, foreign,
international or other administrative order, constitution, law, ordinance,
regulation, statute or treaty applicable to a Person.
 
“Liability” means any liability (whether absolute or contingent, liquidated or
unliquidated, or due or to become due, or otherwise), including any liability
for Taxes.
 
“Lien” has the meaning given to such term in Section 3.4.
 
“MERC” means Minnesota Energy Resources Corporation, a Delaware corporation.
 
“MMBtu” means one million British thermal units.
 
“MMcf” means one million cubic feet of natural gas.
 
“Pathfinder Project” means the pipeline construction and development project
proposed by Purchaser that upon completion will transport natural gas from
Meeker, Colorado and/or Wamsutter, Wyoming to the Seller’s pipeline system,
terminating at a point near the Seller’s compression station in Morton County,
North Dakota and that has FERC Docket No. PF08-22-000.
 
“Person” means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
stock company, joint venture, estate, trust, association, organization, other
entity or Governmental Body.
 
“Post-Closing Payment” has the meaning given to such term in Section 2.1.
 
“Post-Effective Date Development Costs” has the meaning given to such term in
Section 2.3.
 
“Pre-Effective Date Development Costs” has the meaning given to such term in
Section 2.3.
 
“Proceeding” means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, or administrative) commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
 
“Purchase Price” has the meaning given to such term in Section 2.1.
 
“Purchaser” has the meaning given to such term in the preamble.
 
“Representative” means, with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor or other representative
of such Person, including legal counsel, accountants and financial advisors.
 
“Securities Act” has the meaning given to such term in Section 4.6.
 
“Seller” has the meaning given to such term in the preamble.
 

HOU:2825092.15
 
 
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“Tax” means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated or other tax of any kind
whatsoever, including any interest, penalty or addition thereto, whether
disputed or not.
 
“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes filed or required to be filed
with any taxing authority, including any schedule or attachment thereto, and
including any amendment thereof.
 
“Threatened” means that a demand or statement has been made in writing, or any
notice has been given in writing, asserting that a claim, Proceeding, dispute,
action or other matter may be commenced or taken in the future.
 
“Transfer Taxes” has the meaning given to such term in Section 5.6(b).
 
“Williams” means Williams Gas Marketing, Inc., a Delaware corporation
 
ARTICLE II
 
AGREEMENT TO SELL AND PURCHASE
 
2.1           Sale and Purchase.
 
Subject to the terms and conditions hereof, at the Closing Seller hereby agrees
to sell the Interest to Purchaser, and Purchaser agrees to purchase the Interest
from Seller, for a total purchase price of Twenty Million Dollars
(US$20,000,000) (the “Purchase Price”).  Purchaser agrees that it will pay the
Purchase Price as follows:  (a) Thirteen Million Five Hundred Thousand Dollars
(US$13,500,000) (the “Initial Payment”) shall be paid by Purchaser to Seller at
the Closing by wire transfer of immediately available funds to an account
designated in writing to Purchaser by Seller and (b) Six Million Five Hundred
Thousand Dollars (US$6,500,000) (the “Post-Closing Payment”) shall be paid by
Purchaser to Seller, by wire transfer of immediately available funds to an
account designated in writing to Purchaser by Seller, within ten (10) days of
the earlier to occur of (i) the satisfaction, expiration, termination or waiver
by MERC, by August 29, 2008, of the contingency set forth in MERC’s Anchor
Shipper Offer Sheet, which is attached to Exhibit B to the Precedent Agreement
for Firm Natural Gas Transportation Service dated May 22, 2008 by and between
MERC and Bison or (ii) the execution, on or before the Approval Date, of one or
more third-party firm transportation precedent agreements with an aggregate
maximum delivery quantity of at least 50 MMcf per day from the Powder River
Basin on terms and conditions no less favorable than those offered to shippers
in the Bison Open Season and having no material conditions outstanding or not
otherwise satisfied, other than conditions that are within the control of
Purchaser (the “Alternate Agreements”); provided that such Alternate Agreements
may include a firm transportation precedent agreement by MERC to transport at
least 50 MMcf per day on either the Bison Project or the Pathfinder Project that
is a substitute arrangement for that described in clause (i) of this sentence if
such agreement by MERC contains terms and conditions no less favorable than
those offered to shippers in the Bison Open Season and has no material
conditions outstanding or not otherwise satisfied, other than conditions that
are within the control of Purchaser.  For the avoidance of doubt, it is
acknowledged and agreed that Purchaser will only be required to pay the
Post-Closing Payment upon satisfaction of the conditions set forth in either of
clauses (b)(i) or (ii) of this Section 2.1, and that if the conditions set forth
in neither of such clauses are satisfied, the Purchase Price will consist only
of the Initial Payment.
 
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2.2           Closing.
 
The closing of the sale and purchase of the Interest under this Agreement (the
“Closing”) shall take place at 10:00 a.m. Omaha, Nebraska time on August 29,
2008, at the offices of Seller, 13710 FNB Parkway, Omaha, Nebraska 68154, or at
such other time or place as Seller and Purchaser may mutually agree (such date
is hereinafter referred to as the “Closing Date”).  At the Closing, subject to
the terms and conditions hereof, Seller and Purchaser will deliver an executed
Bill of Sale and Assignment and Assumption Agreement substantially in the form
of Exhibit A hereto with respect to the Interest to be purchased at the Closing
by Purchaser, upon payment of the Initial Payment by wire transfer of
immediately available funds to an account designated in writing to Purchaser by
Seller.
 
2.3           Effective Date; Development Costs.
 
Regardless of the Closing Date, the Contemplated Transactions shall have an
effective date of July 31, 2008.  Seller shall assume and pay all development
costs and expenses relating to the Bison Project that are incurred by Bison or
by Seller on behalf of Bison at any time prior to 12:00 a.m. CDT on August 1,
2008 (“Pre-Effective Date Development Costs”).  Purchaser shall assume and pay
all reasonable and documented development costs and expenses relating to the
Bison Project that are incurred by Bison or by Seller on behalf of Bison at any
time commencing after 12:00 a.m. CDT on August 1, 2008 (“Post-Effective Date
Development Costs”), provided that the Closing occurs.  On or before the date
that is ninety (90) days after the Closing Date, Seller shall provide to
Purchaser a written accounting of all Pre-Effective Date Development Costs and
Post-Effective Date Development Costs, and shall identify those Post-Effective
Date Development Costs already paid by Bison or by Seller on behalf of
Bison.  Purchaser shall reimburse Seller, by wire transfer of immediately
available funds to an account designated in writing to Purchaser by Seller, for
all Post-Effective Date Development Costs paid by Bison or by Seller on behalf
of Bison within ten (10) days of Seller’s receipt of such written accounting.
 
2.4           Conditions to Obligations of Purchaser.
 
Purchaser’s obligation to purchase the Interest at the Closing is subject to the
satisfaction or waiver, at or prior to the Closing Date, of the following
conditions:
 
    (a)           Approval by Purchaser.  The Board of Directors of Purchaser
shall have authorized and approved (a) the execution, delivery and performance
by Purchaser of this Agreement and the Contemplated Transactions and (b) the
Bison Project.  Purchaser acknowledges that this condition has been satisfied.
 
   (b)           Certain Proceedings.  No Proceeding shall have been commenced
against Seller or Bison that challenges, or may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the Contemplated
Transactions.
 
    (c)           ONEOK Letter.  Seller shall have delivered to Purchaser a
letter from ONEOK Partners Intermediate Limited Partnership in the form of
Exhibit B attached hereto.
 

HOU:2825092.15
 
 
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    (d)           Closing Documents.  Seller shall have delivered to Purchaser,
at the Closing, (i) an Assistant Secretary’s Certificate, reasonably
satisfactory to Purchaser, certifying the approvals described in Section 2.5(a),
(ii) an Officers’ Certificate, signed by two duly authorized officers of the
operator of Seller, stating that the representations and warranties of Seller
contained herein are true and correct as of the Closing Date as if made on the
Closing Date and that Seller has performed all of its covenants and obligations
set forth herein that are to be performed by it at or before the Closing, and
(iii) pursuant to Section 1445 of the Code, a tax certificate that (1) states
that Seller is not a foreign corporation, foreign partnership, foreign trust or
foreign estate and (2) provides Seller’s employer identification number and
address.
 
2.5           Conditions to Obligations of Seller.
 
Seller’s obligation to sell the Interest at the Closing is subject to the
satisfaction or waiver, on or prior to the Closing Date, of the following
conditions:
 
    (a)           Approval by Seller.  The Management Committee of Seller shall
have authorized and approved the execution, delivery and performance by Seller
of this Agreement and the Contemplated Transactions.
 
    (b)           Certain Proceedings.  No Proceeding shall have been commenced
against Purchaser that challenges, or may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the Contemplated
Transactions.
 
    (c)           Closing Documents.  Purchaser shall have delivered to Seller,
at the Closing, (i) a Certificate, reasonably satisfactory to Seller, certifying
the approvals described in Section 2.4(a) and (ii) an Officers’ Certificate,
signed by two duly authorized officers of Purchaser, stating that the
representations and warranties of Purchaser contained herein are true and
correct as of the Closing Date as if made on the Closing Date and that Purchaser
has performed all of its covenants and obligations set forth herein that are to
be performed by it at or before the Closing.
 
2.6           Purchase Price Allocation for Tax Purposes.
 
Within one hundred eighty (180) days after the Closing Date, Purchaser shall
provide to Seller a copy of Internal Revenue Service Form 8594 and any required
exhibits thereto with Purchaser’s prepared allocation of the Purchase
Price.  Purchaser and Seller agree to make all reasonable efforts to file all
Tax Returns of both Purchaser and Seller consistently with this allocation.
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF SELLER
 
Seller represents and warrants to Purchaser that:
 
3.1           Organization.
 
Seller is a general partnership duly formed, validly existing and in good
standing under the laws of the State of Texas.
 
3.2           Organization and Qualification of Bison.
 
Bison is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware and is duly authorized to
conduct business, duly registered or qualified and in good standing under the
laws of each jurisdiction where the nature of its assets or business requires it
to be so authorized, registered or qualified, except where the failure to be so
authorized, registered or qualified would not reasonably be expected to impair
Seller’s ability to consummate the Contemplated Transactions.  Bison has the
full limited liability company power and authority to own or hold its properties
and assets and to carry on its business as currently conducted.  Seller has
delivered to Purchaser correct and complete copies of the Certificate of
Formation of Bison, the Limited Liability Company Agreement, dated March 27,
2008, of Bison (the “Bison Agreement”), and any other organizational documents
of Bison.
 
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3.3           Authority.
 
Seller has the full partnership power and authority to enter into this Agreement
and to perform its obligations hereunder.  The execution, delivery and
performance of this Agreement by Seller have been duly and validly authorized by
all necessary partnership action.  Assuming the due and valid authorization,
execution and delivery of this Agreement by Purchaser, this Agreement
constitutes the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as such enforceability may
be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights
generally and (b) laws relating to the availability of equitable remedies.
 
3.4           Ownership.
 
Seller is the sole member of Bison and the legal and beneficial owner of the
Interest, which has been duly and validly authorized and issued in accordance
with the Bison Agreement; Seller owns such membership interest free and clear of
all liens, encumbrances, security interests, equities, charges or claims
(collectively, “Liens”); and at the Closing, upon payment of the Purchase Price,
Seller will deliver to Purchaser good, valid and marketable title to the
Interest, free and clear of any Liens.  Except (a) as provided in the Bison
Agreement, (b) as provided in Anadarko’s Precedent Agreement for Firm Natural
Gas Transportation Service, dated May 23, 2008, with Bison and (c) for the
Contemplated Transactions, there are no outstanding or authorized options,
warrants, purchase rights, conversion rights, preemptive rights, exchange rights
or other contracts or commitments to sell, subscribe for or purchase any equity
interest in Bison, and there are no restrictions upon the transfer of the
Interest.
 
3.5           No Conflicts or Violations; Consents.
 
Neither the execution and delivery of this Agreement by Seller nor the
performance by Seller of its obligations hereunder (a) conflicts or will
conflict with, or constitutes or will constitute a violation of, the general
partnership agreement of Seller, certificate of formation of Seller or Bison,
limited liability company agreement of Bison or other organizational document of
Seller or Bison, (b) conflicts or will conflict with, constitutes or will
constitute a breach of or default under (or an event that, with notice or lapse
of time or both, would constitute such a breach of or default under), or
provides or will provide any party the right to accelerate, terminate, modify or
cancel, any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which Seller or Bison is a party, by which either of
them is bound or to which any of their properties or assets is subject, (c)
violates or will violate any statute, law, ordinance, regulation, order,
judgment, decree or injunction of any court or Governmental Body to which
Seller, Bison or any of their properties or assets may be subject or (d) will
result in the creation or imposition of any Lien upon the Interest or any of the
property or assets of Seller or Bison.  Neither Seller nor Bison is required to
provide any notice to or obtain any Consent from any Person in connection with
the consummation of the Contemplated Transactions, except for such notices or
Consents where the failure to provide such notice or obtain such Consent would
not reasonably be expected to impair its ability to consummate the Contemplated
Transactions.
 
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3.6           Certain Proceedings.
 
There is no pending Proceeding that has been commenced against Seller or Bison
that challenges, or may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the Contemplated Transactions.  To the
Knowledge of Seller, no such Proceeding has been Threatened.
 
3.7           Brokers or Finders.
 
Seller and its officers and agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
or other similar payment in connection with this Agreement.
 
3.8           Taxes.
 
Except as would not reasonably be expected to have a material adverse effect,
(a) Seller has filed, or caused to be filed, all Tax Returns required to be
filed by Bison or with respect to its assets or operations on a timely basis
(taking into account all extensions of due dates), (b) all such Tax Returns were
complete and correct, (c) all Taxes owed by Bison which are or have become due
have been timely paid in full, (d) there are no Liens on the Interest or any of
Bison’s assets that arose in connection with any failure (or alleged failure) to
pay any Tax on any such assets or with respect to the Interest, other than Liens
for Taxes not yet due and payable, (e) there is no pending action, proceeding
or, to the Knowledge of Seller, investigation for assessment or collection of
Taxes and no Tax assessment, deficiency or adjustment has been asserted or
proposed with respect to Bison or its assets, (f) Bison, since its inception,
has been disregarded as an entity separate from Seller for federal income tax
purposes under Treasury Regulations 3017701-2 and -3 and any comparable
provisions of state and local jurisdictions that permit such treatment and (g)
there is no tax allocation agreement or tax sharing agreement to which Bison is
a party.
 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
Purchaser represents and warrants to Seller as follows:
 
4.1           Organization.
 
Purchaser is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada.
 
4.2           Authority.
 
Purchaser has the full corporate power and authority to enter into this
Agreement and to perform its obligations hereunder.  The execution, delivery and
performance of this Agreement by Purchaser have been duly and validly authorized
by all necessary corporate action.  Assuming the due and valid authorization,
execution and delivery of this Agreement by Seller, this Agreement constitutes
the legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as such enforceability may be
limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (b) laws relating to the availability of equitable remedies.
 
4.3           No Conflicts or Violations; Consents.
 
Neither the execution and delivery of this Agreement by Purchaser nor the
performance by Purchaser of its obligations hereunder (a)conflicts or will
conflict with, or constitutes or will constitute a violation of, the certificate
or articles of incorporation, bylaws or other organizational document of
Purchaser, (b) conflicts or will conflict with, constitutes or will constitute a
breach of or default under (or an event that, with notice or lapse of time or
both, would constitute such a breach of or default under), or provides or will
provide any party the right to accelerate, terminate, modify or cancel, any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which Purchaser is a party, by which Purchaser is bound or to
which any of its properties or assets is subject, (c) violates or will violate
any statute, law, ordinance, regulation, order, judgment, decree or injunction
of any court or Governmental Body to which Purchaser or any of its properties or
assets may be subject or (d) will result in the creation or imposition of any
Lien upon any of the property or assets of Purchaser.  Purchaser is not required
to provide any notice to or obtain any Consent from any Person in connection
with the consummation of the Contemplated Transactions, except for such notices
or Consents where the failure to provide such notice or obtain such Consent
would not reasonably be expected to impair its ability to consummate the
Contemplated Transactions.
 
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4.4           Certain Proceedings.
 
There is no pending Proceeding that has been commenced against Purchaser that
challenges, or may have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the Contemplated Transactions.  To the
Knowledge of Purchaser, no such Proceeding has been Threatened.
 
4.5           Brokers or Finders.
 
Purchaser and its officers and agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
or other similar payment in connection with this Agreement.
 
4.6           Investment Intent; Access.
 
Purchaser acknowledges that (a) the Interest has not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any state
securities laws, and (b) Seller has disclosed to Purchaser that the Interest may
not be resold absent such registration or unless an exemption from registration
is available.  Purchaser is acquiring the Interest for its own account, for
investment purposes only and not with a view to its distribution within the
meaning of the Securities Act.  Purchaser has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the Contemplated Transactions.  Seller has made available to Purchaser
and its Representatives the opportunity to ask questions of the officers and
Representatives of Seller, to engage in diligence and to acquire such additional
information about the business, assets and financial condition of Seller as
Purchaser has requested, and all such requested information has been received by
Purchaser.
 
ARTICLE V
 
COVENANTS OF THE PARTIES
 
5.1           Expenses.
 
Except as contemplated by Section 2.3, each party shall bear its own expenses
incurred in connection with the preparation, execution and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, counsel, accountants and other Representatives.
 

HOU:2825092.15
 
 
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5.2           Pathfinder Project.
 
Provided that (a) Bison has entered into firm transportation precedent
agreements with respect to the Bison Project with an aggregate maximum delivery
quantity of at least 405 MMcf per day and that have no material conditions
outstanding or not otherwise satisfied by August 31, 2008 (unless otherwise
extended by Purchaser), other than conditions that are within the control of
Purchaser, and (b) Purchaser has not, by September 30, 2008 (or such other later
date agreed to by the Bison and Pathfinder shippers) (the “Approval Date”),
received management approval to proceed with the Pathfinder Project, Purchaser
will, subject to the rights and obligations of Bison set forth in the Precedent
Agreements for Firm Natural Gas Transportation Service executed with the Bison
shippers, use commercially reasonable efforts to complete the Bison Project and
place it in-service during the fourth quarter of 2010.
 
5.3           Northern Border Pipeline Company Capacity.
 
Subject to Seller’s tariff and applicable law, Seller shall use commercially
reasonable efforts to assist Purchaser after the Closing by marketing existing
capacity on Seller’s pipeline system and the potential expansion of its pipeline
system to shippers, including, but not limited to, shippers on the Bison Project
and/or the Pathfinder Project.  Commercially reasonable efforts shall consist of
(a) the continuation at least until September 30, 2008 of the offer to all
shippers of a discounted reservation rate on Seller’s pipeline system of US$0.23
per MMBtu for transportation from Port of Morgan to Ventura for a ten (10) year
commitment, (b) initiating the applicable right of first refusal process for
capacity on Seller’s pipeline system to Chicago during the month of September
2008 and (c) Seller offering the market, including, but not limited to, shippers
on the Bison Project and/or the Pathfinder Project, an open season having a bid
period during the month of August 2008 proposing the expansion of Seller’s
pipeline system for transportation on Seller’s pipeline system to Chicago for a
ten (10) year commitment with a targeted in-service date of the fourth quarter
of 2010, or as soon as practicable thereafter.  Such capacity shall be offered
at a rate that the Seller reasonably believes to be marketable; provided that
Seller’s obligation under this Agreement to undertake any such expansion shall
be subject to a fair and reasonable return analysis by Seller relating to the
expected economics of any such expansion and the approval of its Management
Committee.
 
5.4           Discussions with Shippers.
 
Seller shall assist Purchaser in discussions with the existing shippers on the
Bison Project in order to assist with the satisfaction of the outstanding
conditions precedent under such shippers’ firm transportation precedent
agreements and encourage their participation in the Pathfinder Project; provided
that Seller’s obligations pursuant to this Section 5.4 shall be expressly
limited to participating in conversations and shall not include any obligation
to undertake or incur any liabilities or expenses or to make concessions of any
kind to shippers.
 
5.5           Further Assurances.
 
Each party agrees (a) to furnish upon request to the other party such further
information, (b) to execute and deliver to the other party such other documents
and (c) to do such other acts and things, in each case as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the Contemplated Transactions.
 
5.6           Tax Matters.
 
The following provisions shall govern the allocation of responsibility between
Seller and Purchaser for certain Tax matters following the Closing Date:
 

HOU:2825092.15
 
 
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         (a)     Tax Returns.
 
 (i)           Seller shall prepare or cause to be prepared and file or cause to
be filed all Tax Returns for Bison for periods ending on or before the Closing
Date that are required to be filed after the Closing Date, and shall be
responsible for the timely payment (and entitled to any refund) of Taxes due
with respect to the period covered by such Tax Returns.
 
 (ii)           Seller shall prepare or cause to be prepared and file or cause
to be filed any Tax Returns of Bison for periods which begin before the Closing
Date and end after the Closing Date, shall furnish a copy of such Tax Return to
Purchaser.  Seller shall be responsible for the timely payment of Taxes due with
respect to the period covered by such Tax Return allocable to the period prior
to and including the Closing Date, and Purchaser shall be responsible for the
timely payment of Taxes due with respect to the period after the Closing Date.
 
 (iii)           To the extent permitted by law or administrative practice, the
taxable year of Bison shall end on and include the Closing Date.  Whenever it is
necessary to determine the liability for Taxes of Bison for a portion of a
taxable year or period that begins before and ends after the Closing Date, the
determination of the Taxes for the portion of the year or period ending on, and
the portion of the year or period beginning after, the Closing Date shall be
determined by assuming that the taxable year or period ended on and included the
Closing Date, except that exemptions, allowances or deductions that are
calculated on an annual basis and annual property taxes shall be prorated on the
basis of the number of days in the annual period elapsed through the Closing
Date as compared to the number of days in the annual period elapsing after the
Closing Date.
 
 (iv)           Any Tax Return to be prepared pursuant to the provisions of this
Section 5.6 shall be prepared in a manner consistent with practices followed in
prior years with respect to similar Tax Returns, except for changes required by
changes in law or fact.  Purchaser shall not file an amended Tax Return for any
period ending on or prior to the Closing Date without the consent of Seller,
which consent shall not be unreasonably withheld or delayed.
 
   (b)        Transfer Taxes.  Purchaser shall be responsible for the payment of
all excise, sales, use, transfer (including real property transfer or gains),
stamp, documentary, filing, recordation and other similar taxes, together with
any interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties, resulting directly from the Contemplated
Transactions (collectively, “Transfer Taxes”).
 
   (c)        Access to Information.  After the Closing Date, Seller shall grant
to Purchaser (or its designees) access at all reasonable times to all of the
information, books, and records relating to Bison within the possession of
Seller (including work papers and correspondence with taxing authorities), and
shall afford Purchaser (or its designees) the right (at Purchaser's expense) to
take       
 
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extracts therefrom and to make copies thereof, to the extent reasonably
necessary to permit Purchaser (or its designees) to prepare Tax Returns and to
conduct negotiations with taxing authorities.  After the Closing Date, Purchaser
shall grant or cause Bison to grant to Seller (or its designees) access at all
reasonable times to all of the information, books and records relating to Bison
within the possession of Purchaser or Bison (including work papers and
correspondence with taxing authorities), and shall afford Seller (or its
designees) the right (at Seller’s expense) to take extracts therefrom and to
make copies thereof, to the extent reasonably necessary to permit Seller (or its
designees) to prepare Tax Returns and to conduct negotiations with taxing
authorities.
 
   (d)        Survival.  Anything to the contrary in this Agreement
notwithstanding, the representations, warranties, covenants, agreements, rights
and obligations of the parties with respect to any Tax matter covered by this
Agreement shall survive the Closing and shall not terminate until ninety (90)
days after the expiration of the applicable statutes of limitations (including
all periods of extension and tolling) applicable to such Tax matter.
 
   (e)        Conflict.  In the event of a conflict between the provisions of
this Section 5.6 and any other provisions of this Agreement, the provisions of
this Section 5.6 shall control.
 
   (f)         Tax Indemnity.
 
(i)           Seller shall be liable for, and shall indemnify and hold Bison and
Purchaser and its Affiliates harmless from, any Taxes (other than Transfer
Taxes) (1) imposed on or incurred by or with respect to Bison or its assets with
respect to the period prior to and including the Closing Date, (2) attributable
to a breach by Seller of any covenant with respect to Taxes in this Agreement or
(3) attributable to a breach of Seller’s representations and warranties in
Section 3.8.
 
(ii)           Purchaser shall be liable for, and shall indemnify and hold
Seller and its Affiliates harmless from, any Taxes (including Transfer Taxes)
attributable to a breach by Purchaser of any covenant with respect to Taxes in
this Agreement.
 
(iii)           If Purchaser or its Affiliates receive a refund of any Taxes
that Seller is responsible for hereunder, or if Seller or its Affiliates receive
a refund of any Taxes that Purchaser is responsible for hereunder, the party
receiving such refund shall, within ninety (90) days after receipt of such
refund, remit it to the party who has responsibility for such Taxes
hereunder.  The parties shall cooperate in order to take all necessary steps to
claim any such refund.
 
ARTICLE VI
 
INDEMNIFICATION; REMEDIES
 
6.1           Survival of Representations, Warranties and Covenants.
 
The representations, warranties and covenants set forth in this Agreement shall
survive until the expiration of the period (the “Indemnity Period”) that
commences on the Closing Date and terminates on the date that is one hundred
eighty (180) days after the Closing Date, at which time they will expire;
provided, however, that the Indemnity Period with respect to the covenant set
forth in Section 5.2 shall extend until January 15, 2011; and provided, further,
that the Indemnity Period with respect to the representations and warranties set
forth in Section 3.8 and the covenants set forth in Section 5.6 shall extend
until ninety (90) days after the expiration of the applicable statute of
limitations.  Neither party shall have any liability (for indemnification or
otherwise) with respect to any representation or warranty, or any covenant or
obligation to be performed or complied with by it hereunder, unless on or before
the expiration or termination of the Indemnity Period, the other party notifies
such party of a claim, specifying the factual basis of that claim in reasonable
detail to the extent then known by it.
 
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6.2           Indemnification and Payment of Damages by Seller.
 
Subject to the limitations set forth in this Article VI, Seller shall indemnify
Purchaser and its Representatives and Affiliates for, shall hold Purchaser and
its Representatives and Affiliates harmless from, and shall pay to Purchaser and
its Representatives and Affiliates the amount of, any Damages arising from or in
connection with (a) any inaccuracy in or breach of any representation or
warranty made by Seller in this Agreement or (b) any breach of any covenant or
agreement of Seller in this Agreement.
 
6.3           Indemnification and Payment of Damages by Purchaser.
 
Subject to the limitations set forth in this Article VI, Purchaser shall
indemnify Seller and its Representatives and Affiliates for, shall hold Seller
and its Representatives and Affiliates harmless from, and shall pay to Seller
and its Representatives and Affiliates the amount of, any Damages arising from
or in connection with (a) any inaccuracy in or breach of any representation or
warranty made by Purchaser in this Agreement or (b) any breach of any covenant
or agreement of Purchaser in this Agreement.
 
6.4           Limitations on Indemnification.
 
Neither party shall have any liability (for indemnification or otherwise) with
respect to any representation, warranty, covenant or agreement made in this
Agreement until the total of all Damages asserted by the other party with
respect to all such matters exceeds $500,000 in the aggregate, and then the
liable party shall be liable for such Damages only to the extent they exceed
such amount.  The limitations set forth in the preceding sentence shall not
apply to a breach of the representations and warranties set forth in Section 3.8
or the covenants set forth in Section 5.6, any fraudulent representations and
warranties made in this Agreement or any willful breach of any covenant or
agreement made in this Agreement, and the liable party shall be liable for all
Damages with respect thereto.  In no event shall the aggregate liability of
either party for breach of its representations, warranties, covenants and
agreements exceed fifteen percent (15%) the Purchase Price, except in the case
of fraud or a breach of representations and warranties set forth in Section 3.8
or the covenants set forth in Section 5.6.
 
6.5           No Security Holder Liability.
 
The parties acknowledge that the stockholders, members, and other security
holders of Purchaser and Seller are not parties to this Agreement and that the
representations, warranties, covenants and agreements made in this Agreement are
provided only by Seller or Purchaser, as the case may be, to the other.  The
parties agree that neither party shall have recourse (including for
indemnification or otherwise) against any officer, director, stockholder,
member, manager or security holder of the other party under or in connection
with this Agreement.
 

HOU:2825092.15
 
 
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ARTICLE VII
 
GENERAL PROVISIONS
 
7.1           Public Announcements.
 
The initial press release or releases to be issued in connection with the
Contemplated Transactions shall be agreed upon by the parties prior to the
issuance thereof.  Otherwise, prior to the Closing, neither party shall, without
the other party’s prior written consent (which shall not be unreasonably
withheld or delayed) or unless permitted by the Confidentiality Agreement, dated
July 18, 2008, between the parties or any amendments thereto or waivers
therefrom, make any disclosure concerning this Agreement or the Contemplated
Transactions to any Person other than (a) their respective members, managers,
officers, directors or employees who have a need to know in connection with this
Agreement or (b) their respective counsel, public accountants and financial
advisors.
 
7.2           Confidentiality.
 
.  Each party hereto shall hold, and shall cause its Representatives to hold, in
strict confidence, unless compelled to disclose by judicial or administrative
process or, in the opinion of its counsel, by other Legal Requirements, and not
use for its own advantage, any information about the other provided in or
pursuant to this Agreement, except to the extent that such information can be
shown to have been generally available to the public other than as a result of a
disclosure by such party or its Representatives.
 
7.3           Notices.
 
All notices, consents, waivers and other communications under this Agreement
must be in writing and shall be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
transmission (with written confirmation of receipt), provided that a copy is
also mailed or (c) received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the addresses
and facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other party):
 
Seller:

Northern Border Pipeline Company
P.O. Box 542500
Omaha, NE 68154-8500
Attention:  Eva Neufeld
Facsimile No.: (402) 492-7480

with a copy (which shall not constitute notice) to:

Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas  77002
Attention:  Mike O’Leary
Facsimile No.: (713) 238-7130

HOU:2825092.15
 
 
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and

ONEOK Partners, L.P.
100 West 5th Street
Tulsa, Oklahoma 74103-4298
Attention:  General Counsel
Facsimile No.:  (918) 588-7971

Purchaser:

TransCanada PipeLine USA Ltd.
717 Texas Avenue, Suite 2400
Houston, Texas 77252-2446
Attention: Kelly Jameson
Facsimile No.:  (713) 420-6548

with a copy (which shall not constitute notice) to:

TransCanada PipeLines Limited
 450 1st Street SW
Calgary, Alberta
Canada
Attention:  Ron Anderson
Facsimile No.:  (403) 920-2363

7.4           Waiver.
 
Neither the failure to exercise, nor any delay in exercising, any right, power
or privilege by either party under this Agreement shall operate as a waiver of
such right, power, or privilege, and no single or partial exercise of any such
right, power or privilege shall preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power, or
privilege.  To the maximum extent permitted by applicable law, except as
otherwise expressly provided herein, (a) no claim or right arising out of this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party,
(b) no waiver that may be given by a party shall be applicable except in the
specific instance for which it is given and (c) no notice to or demand on one
party shall be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement.
 
7.5           Entire Agreement and Modification.
 
This Agreement supersedes all prior agreements between the parties with respect
to its subject matter and constitutes a complete and exclusive statement of the
terms of the agreement between the parties with respect to its subject
matter.  This Agreement may not be amended except by a written agreement
executed by each of the parties.
 
7.6           Assignments; Successors; No Third-Party Rights.
 
Neither party may assign any of its rights under this Agreement without the
prior consent of the other party; provided that Purchaser may assign its rights
to any Affiliate of Purchaser without Seller’s consent so long as Purchaser
remains obligated to Seller pursuant to the terms and conditions of this
Agreement and such Affiliate expressly assumes the obligations of Purchaser
hereunder.  Any attempted assignment of this Agreement or any of the rights
hereunder in violation of the foregoing shall be voidable by the non-assigning
party.  Subject to the preceding sentences, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties.  Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy or claim under or with respect to
this Agreement or any provision of this Agreement.  This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and permitted assigns.
 
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7.7           Severability.
 
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement shall remain
in full force and effect.  Any provision of this Agreement held invalid or
unenforceable only in part or degree shall remain in full force and effect to
the extent not held invalid or unenforceable.
 
7.8           Article and Section Headings; Construction.
 
The headings of Articles and Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation.  All
references to “Article” or “Section” refer to the corresponding Article or
Section of this Agreement.  All words used in this Agreement will be construed
to be of such gender or number as the circumstances require.  Unless otherwise
expressly provided, the word “including” does not limit the preceding words or
terms.  The terms and provisions of this Agreement represent the results of
negotiations between the parties, each of which has been represented by counsel
of its own choosing, and none of which has acted under duress or compulsion,
whether legal, economic or otherwise.  Accordingly, the terms and provisions of
this Agreement shall be interpreted and construed in accordance with their usual
and customary meanings, and the parties hereby waive the application, in
connection with the interpretation and construction of this Agreement, of any
rule of law to the effect that ambiguous or conflicting terms or provisions
contained in this Agreement shall be interpreted or construed against the party
whose attorney prepared the executed draft or any earlier draft of this
Agreement.
 
7.9           Time of Essence.
 
With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
 
7.10           Enforcement.
 
Each party agrees that it will not bring any action against the other party
hereto relating to this Agreement in any court other than the United States
District Court for the District of Delaware or a Delaware state court located in
Wilmington, Delaware.  Each party (a) submits unconditionally to the exclusive
jurisdiction of the state and federal courts located in Wilmington, Delaware,
(b) waives and agrees not to assert any objection to the venue of any proceeding
in any such court and agrees not to assert that any such court provides an
inconvenient forum and (c) waives any right to trial by jury with respect to any
claim or proceeding related to or arising out of this Agreement.
 
7.11           Governing Law.
 
This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware without regard to conflicts of laws
principles that would apply any other law.
 
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7.12           Counterparts.
 
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original copy of this Agreement and all of which, when taken
together, shall be deemed to constitute one and the same agreement.
 
7.13           No Other Representations; Disclaimers.
 
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IT IS THE
EXPLICIT INTENT AND AGREEMENT OF EACH PARTY HERETO THAT SELLER IS MAKING NO
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO ANY IMPLIED REPRESENTATION OR WARRANTY AS TO CONDITION,
MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, WITH
RESPECT TO THE INTEREST, BISON, ITS ASSETS, OR ANY PART THEREOF, EXCEPT THOSE
REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN ARTICLE III HEREOF.  IN
PARTICULAR, SELLER MAKES NO REPRESENTATION OR WARRANTY TO PURCHASER WITH RESPECT
TO ANY FINANCIAL PROJECTION, FORECAST OR FORWARD-LOOKING STATEMENT.
 
7.14           Waiver of Certain Damages.
 
IN NO EVENT WILL EITHER PARTY OR ITS SECURITY HOLDERS, DIRECTORS, OFFICERS,
EMPLOYEES, MEMBERS, MANAGERS, AGENTS OR REPRESENTATIVES BE LIABLE TO THE OTHER
PARTY OR ITS SECURITY HOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, MEMBERS,
MANAGERS, AGENTS OR REPRESENTATIVES UNDER THIS AGREEMENT AT ANY TIME FOR
PUNITIVE, CONSEQUENTIAL, SPECIAL, OR INDIRECT LOSSES OR DAMAGES, INCLUDING LOSS
OF PROFIT, LOSS OF REVENUE OR ANY OTHER SPECIAL OR INCIDENTAL DAMAGES, WHETHER
IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.
 

[Signature page follows]

HOU:2825092.15
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Membership Interest
Purchase Agreement as of the date first set forth above.
 
 

   SELLER:        Northern Border Pipeline Company    
 
By:
TransCanada Northern Border Inc.,
   
its Operator 

 
 
  By: /s/ Paul F. Miller   Name:   Paul F. Miller    Title:   Vice President and
General Manager          By:     /s/ Patricia M. Wiederholt    Name: Patricia M.
Wiederholt    Title:
Principal Financial Officer and Controller 

         

 

   PURCHASER:       TransCanada PipeLine USA Ltd.       By:  /s/ Donald R.
Marchand   Name: Donald R. Marchand    Title: Treasurer          By:      /s/
Donald J.DeGrandis      Assistant Secretary