Exhibit 10.1

 

EXECUTION VERSION

 

364-DAY SENIOR BRIDGE LOAN AGREEMENT

 

dated as of May 3, 2011

 

among

 

TC PIPELINES, LP

as Borrower

 

 

THE LENDERS FROM TIME TO TIME PARTY HERETO

 

 

SUNTRUST BANK

as Administrative Agent

 

 

 

SUNTRUST ROBINSON HUMPHREY, INC.,

as Sole Lead Arranger and Sole Book Runner

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

DEFINITIONS; CONSTRUCTION

1

Section 1.1.

Definitions

1

Section 1.2.

Accounting Terms and Determination

21

Section 1.3.

Terms Generally

21

 

 

 

ARTICLE II

AMOUNT AND TERMS OF THE TERM LOAN COMMITMENTS

22

Section 2.1.

General Description of Facilities

22

Section 2.2.

[Reserved]

22

Section 2.3.

Procedure for Borrowing

22

Section 2.4.

[Reserved]

22

Section 2.5.

[Reserved]

22

Section 2.6.

Funding of Term Loans

22

Section 2.7.

Interest Elections

22

Section 2.8.

[Reserved]

23

Section 2.9.

Repayment of Term Loans

23

Section 2.10.

Evidence of Indebtedness

24

Section 2.11.

Optional Prepayments

24

Section 2.12.

Mandatory Prepayments;

25

Section 2.13.

Interest on Term Loans

26

Section 2.14.

Fees

27

Section 2.15.

Computation of Interest and Fees

27

Section 2.16.

Inability to Determine Interest Rates

27

Section 2.17.

Illegality

28

Section 2.18.

Increased Costs

28

Section 2.19.

Funding Indemnity

29

Section 2.20.

Taxes

30

Section 2.21.

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

32

Section 2.22.

[Reserved]

33

Section 2.23.

Mitigation of Obligations

33

Section 2.24.

Replacement of Lenders

33

 

 

 

ARTICLE III

CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

34

Section 3.1.

Conditions To Effectiveness

34

Section 3.2.

Delivery of Documents

37

 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

37

Section 4.1.

Existence; Power

37

Section 4.2.

Organizational Power; Authorization

37

Section 4.3.

Governmental Approvals; No Conflicts

38

Section 4.4.

Financial Statements

38

Section 4.5.

Litigation and Environmental Matters

38

Section 4.6.

Compliance with Laws and Agreements

39

Section 4.7.

Investment Company Act, Etc.

39

 

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Section 4.8.

Taxes

39

Section 4.9.

Margin Regulations

39

Section 4.10.

ERISA

39

Section 4.11.

Ownership of Property

40

Section 4.12.

Disclosure

40

Section 4.13.

Labor Relations

40

Section 4.14.

Subsidiaries

41

Section 4.15.

Solvency

41

Section 4.16.

OFAC

41

Section 4.17.

Patriot Act

41

 

 

 

ARTICLE V

AFFIRMATIVE COVENANTS

41

Section 5.1.

Financial Statements and Other Information

41

Section 5.2.

Notices of Material Events

42

Section 5.3.

Existence; Conduct of Business

43

Section 5.4.

Compliance with Laws, Etc.

43

Section 5.5.

Payment of Obligations

43

Section 5.6.

Books and Records

43

Section 5.7.

Visitation, Inspection, Etc.

44

Section 5.8.

Maintenance of Properties; Insurance

44

Section 5.9.

Use of Proceeds

44

Section 5.10.

Maintenance of Tax Status

44

 

 

 

ARTICLE VI

FINANCIAL COVENANTS

44

Section 6.1.

Leverage Ratio

45

Section 6.2.

Interest Coverage Ratio

45

 

 

 

ARTICLE VII

NEGATIVE COVENANTS

45

Section 7.1.

Indebtedness

45

Section 7.2.

Negative Pledge

46

Section 7.3.

Fundamental Changes

48

Section 7.4.

Investments, Loans, Etc.

49

Section 7.5.

Restricted Payments

50

Section 7.6.

Transactions with Affiliates

50

Section 7.7.

Restrictive Agreements

50

Section 7.8.

Sale and Leaseback Transactions

51

Section 7.9.

Hedging Transactions

51

Section 7.10.

Certain Amendments to Cash Distribution Policies and Partnership Agreements

51

Section 7.11.

Accounting Changes

52

 

 

 

ARTICLE VIII

EVENTS OF DEFAULT

52

Section 8.1.

Events of Default

52

 

 

 

ARTICLE IX

THE ADMINISTRATIVE AGENT

55

Section 9.1.

Appointment of the Administrative Agent

55

Section 9.2.

Nature of Duties of the Administrative Agent

55

 

ii

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Section 9.3.

Lack of Reliance on the Administrative Agent

56

Section 9.4.

Certain Rights of the Administrative Agent

56

Section 9.5.

Reliance by Administrative Agent

56

Section 9.6.

The Administrative Agent in its Individual Capacity

56

Section 9.7.

Successor Administrative Agent

57

Section 9.8.

Authorization to Execute other Loan Documents

57

 

 

 

ARTICLE X

MISCELLANEOUS

57

Section 10.1.

Notices

57

Section 10.2.

Waiver; Amendments

59

Section 10.3.

Expenses; Indemnification

61

Section 10.4.

Successors and Assigns

62

Section 10.5.

Governing Law; Jurisdiction; Consent to Service of Process

66

Section 10.6.

WAIVER OF JURY TRIAL

66

Section 10.7.

Right of Setoff

67

Section 10.8.

Counterparts; Integration

67

Section 10.9.

Survival

67

Section 10.10.

Severability

67

Section 10.11.

Confidentiality

68

Section 10.12.

Interest Rate Limitation

68

Section 10.13.

Patriot Act

69

Section 10.14.

Non-Recourse

69

 

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Schedules

 

 

Schedule I

-

Term Loan Commitments

Schedule 4.5

-

Environmental Matters

Schedule 4.14

-

Subsidiaries

Schedule 7.1

-

Outstanding Indebtedness

Schedule 7.2

-

Existing Liens

Schedule 7.4

-

Existing Investments

Schedule 7.6

-

Transactions with Affiliates

 

 

 

Exhibits

 

 

 

 

 

Exhibit A

-

Form of Assignment and Acceptance

Exhibit B

-

Form of Term Note

Exhibit 2.3(a)

-

Form of Notice of Term Loan Borrowing

Exhibit 2.7

-

Form of Notice of Continuation/Conversion

Exhibit 3.1(b)(iii)

-

Form of Secretary’s Certificate

Exhibit 3.1(b)(viii)

-

Form of Officer’s Certificate

Exhibit 5.1(c)

-

Form of Compliance Certificate

 

iv

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364-DAY SENIOR BRIDGE LOAN AGREEMENT

 

THIS 364-DAY SENIOR BRIDGE LOAN AGREEMENT (this “Agreement”) is made and entered
into as of May 3, 2011, by and among TC PIPELINES, LP, a Delaware limited
partnership (the “Borrower”), the several banks and other financial institutions
and lenders from time to time party hereto (the “Lenders”), and SUNTRUST BANK,
in its capacity as administrative agent for the Lenders (the “Administrative
Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower has requested that the Lenders make term loans, in an
aggregate principal amount of up to $400,000,000, to the Borrower for purposes
of enabling the Borrower to pay a portion of the purchase price necessary for
consummating the Acquisition (as defined herein);

 

WHEREAS, subject to the terms and conditions of this Agreement, the Lenders, to
the extent of their respective Term Loan Commitments (as defined herein), are
willing severally to make term loans in an aggregate principal amount up to
$400,000,000 to the Borrower.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Borrower, the Lenders and the Administrative Agent agree as
follows:

 

ARTICLE I

 

DEFINITIONS; CONSTRUCTION

 

Section 1.1.           Definitions.  In addition to the other terms defined
herein, the following terms used herein shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined):

 

“Acquisition” shall mean the acquisition by the Borrower, directly or indirectly
through one or more indirect limited partnerships, of 25% of the issued and
outstanding Capital Stock of Bison and 25% of the issued and outstanding Capital
Stock of GTN LLC from subsidiaries of TransCanada Corporation pursuant to one or
more Acquisition Agreements.

 

“Acquisition Agreements” shall mean, collectively (i) that certain Agreement for
Purchase and Sale of Membership Interest by and between Transcanada American
Investments Ltd, as seller, and TC PipeLines ILP, as buyer, dated as of April
26, 2011, in connection with the acquisition of 25% of the Capital Stock of GTN
LLC, and (ii) that certain Agreement for Purchase and Sale of Membership
Interest by and among TC Continental Pipeline Holdings Inc., as seller, and TC
PipeLines ILP, as buyer, dated as of April 26, 2011, in connection with the
acquisition of 25% of the Capital Stock of Bison.

 

“Adjusted Cash Flow” shall mean, with reference to any period (I) the
consolidated net income (or loss) of the Borrower and its Subsidiaries for such
period calculated on a consolidated basis in accordance with GAAP, plus (II) to
the extent taken into account in determining such consolidated net income (or
loss), the sum of interest expense, expense for taxes paid or accrued,
depreciation, amortization and extraordinary losses incurred other than in

 

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the ordinary course of business, minus (III) to the extent taken into account in
determining such consolidated net income (or loss), extraordinary gains realized
other than in the ordinary course of business, minus (IV) to the extent taken
into account in determining such consolidated net income (or loss), equity
earnings of any Person in which the Borrower or any of its Subsidiaries has an
interest (which interest does not cause the net income of such Person to be
consolidated with the consolidated net income of the Borrower and its
Subsidiaries in accordance with GAAP), plus (V) the aggregate amount of all cash
dividends and other distributions of cash actually received by the Borrower or
any of its consolidated Subsidiaries during such period from any Person in which
the Borrower or any of its consolidated Subsidiaries has an interest (which
interest does not cause the consolidated net income of such other Person to be
consolidated with the consolidated net income of the Borrower and its
Subsidiaries in accordance with GAAP), plus (VI) any Material Project EBITDA
Adjustment; provided that for purposes of calculating consolidated net income
and the amount of cash dividends and other distributions of cash for any four
Fiscal Quarter period, if at any time during that period the Borrower or any
Subsidiary shall have consummated an acquisition, consolidated net income and
the amount of cash dividends and other distributions of cash for such period
shall be calculated after giving pro forma effect thereto as if such acquisition
had occurred on the first day of such period.  Notwithstanding the foregoing, it
is agreed that, for purposes of this Agreement,

 

(i) Adjusted Cash Flow of Bison for the four Fiscal Quarter period ending on the
last day of each of the following Fiscal Quarters shall be determined as
follows: (I) for the first Fiscal Quarter of 2011, (X) $3,281,494 multiplied by
(Y) four; (II) for the second Fiscal Quarter of 2011, (X) the sum of (A)
$3,281,494 plus (B) Adjusted Cash Flow of Bison for the second Fiscal Quarter of
2011 multiplied by (Y) two; (III) for the third Fiscal Quarter of 2011, (X) the
sum of (A) $3,281,494 plus (B) Adjusted Cash Flow of Bison for the second Fiscal
Quarter of 2011 plus (C) Adjusted Cash Flow of Bison for the third Fiscal
Quarter of 2011 multiplied by (Y) four-thirds; and (IV) for the fourth Fiscal
Quarter of 2011, the sum of (A) $3,281,494 plus (B) Adjusted Cash Flow of Bison
for the second Fiscal Quarter of 2011 plus (C) Adjusted Cash Flow of Bison for
the third Fiscal Quarter of 2011 plus (D) Adjusted Cash Flow of Bison for the
fourth Fiscal Quarter of 2011; and

 

(ii) Adjusted Cash Flow of GTN LLC for the four Fiscal Quarter period ending on
the last day of each of the following Fiscal Quarters shall be determined as
follows: (I) for the first Fiscal Quarter of 2011, (X) $8,869,500 multiplied by
(Y) four; (II) for the second Fiscal Quarter of 2011, (X) the sum of (A)
$8,869,500 plus (B) Adjusted Cash Flow of GTN LLC for the second Fiscal Quarter
of 2011 multiplied by (Y) two; (III) for the third Fiscal Quarter of 2011, (X)
the sum of (A) $8,869,500 plus (B) Adjusted Cash Flow of GTN LLC for the second
Fiscal Quarter of 2011 plus (C) Adjusted Cash Flow of GTN LLC for the third
Fiscal Quarter of 2011 multiplied by (Y) four-thirds; and (IV) for the fourth
Fiscal Quarter of 2011, the sum of (A) $8,869,500 plus (B) Adjusted Cash Flow of
GTN LLC for the second Fiscal Quarter of 2011 plus (C) Adjusted Cash Flow of GTN
LLC for the third Fiscal Quarter of 2011 plus (D) Adjusted Cash Flow of GTN LLC
for the fourth Fiscal Quarter of 2011.

 

“Adjusted LIBO Rate” shall mean, with respect to each Interest Period for a
Eurodollar Term Loan, the rate per annum obtained by dividing (i) LIBOR for such
Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve
Percentage.

 

2

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“Administrative Agent” shall have the meaning assigned to such term in the
opening paragraph hereof.

 

“Administrative Questionnaire” shall mean, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.

 

“Affiliate” shall mean, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person.  For purposes of this
definition the term “control” (including the terms “controlling”, “controlled
by” and “under common control with”) of a Person shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
stock, by contract or otherwise, provided, that, for purposes of Section 7.6,
each of Northern Border, GLGT, GTN LLC and Bison shall be deemed to be an
Affiliate of the Borrower as long as it qualifies as a Significant Subsidiary.

 

“Applicable Lending Office” shall mean, for each Lender, the “Lending Office” of
such Lender (or an Affiliate of such Lender) designated for the Term Loans in
the Administrative Questionnaire submitted by such Lender or such other office
of such Lender (or an Affiliate of such Lender) as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office by which
its Term Loans are to be made and maintained.

 

“Applicable Margin” shall mean, as of any date with respect to interest on the
Term Loans, a percentage per annum equal to the sum of (i) (x) 1.625% when the
Leverage Ratio is equal to or greater than 3.75:1.00 as of the last day of the
immediately prior Fiscal Quarter or (y) 1.500% when the Leverage Ratio is less
than 3.75:1.00 as of the last day of the immediately prior Fiscal Quarter; plus
(ii) each Applicable Margin Step-up, provided that, for purposes of calculating
Applicable Margin on the Closing Date, the Leverage Ratio will be calculated
after giving pro forma effect to the Acquisition as if it had occurred on the
first day of the first Fiscal Quarter used for determining the Leverage Ratio. 
Any increase or decrease in the Applicable Margin resulting from a change in the
Leverage Ratio shall become effective on the second Business Day immediately
following the date the Compliance Certificate is delivered pursuant to Section
5.1(c); provided, however, that if a Compliance Certificate is not delivered
when due in accordance with such Section, then, interest on the Term Loans shall
be calculated as if the Leverage Ratio is greater than 3.75 to 1:00 on the
second Business Day after the date on which such Compliance Certificate was
required to be delivered and shall continue to apply until the second Business
Day immediately following the date a Compliance Certificate is delivered in
accordance with Section 5.1(c), whereupon the Applicable Margin shall be
adjusted based on the calculation of the Leverage Ratio contained in such
Compliance Certificate.

 

“Applicable Margin Step-up” shall mean: (i) 0.25%, commencing on the date
falling 90 days after the Closing Date, (ii) 0.25%, commencing on the date
falling 180 days after the Closing Date, and (iii) 0.50%, commencing on the date
falling 270 days after the Closing Date; provided, however, that no Applicable
Margin Step-up shall be applied on the applicable date set forth above if, as of
such date, either (x) the Borrower’s Leverage Ratio is less than 3.75:1.00
(provided, if the Borrower is not in compliance with Section 5.1(c) as of such
date, Borrower

 

3

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shall be deemed not to satisfy this condition (x) as of such date) or (y) the
aggregate principal balance of the Term Loans, together with all accrued and
unpaid fees (other than any otherwise applicable duration fee), interest and
other amounts is less than $100,000,000, provided, further, that if an
Applicable Margin Step-up has occurred, such Applicable Margin Step-up shall
remain in effect regardless of whether the conditions set forth in clause (x) or
(y) of the preceding proviso shall subsequently be met at a later date.

 

“Approved Fund” shall mean any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (i) a Lender, (ii) an Affiliate
of a Lender or (iii) an entity or an Affiliate of an entity that administers or
manages a Lender.

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit A attached hereto or any other form approved by the
Administrative Agent.

 

“Base Rate” shall mean the highest of (i) the rate which the Administrative
Agent announces from time to time as its prime lending rate, as in effect from
time to time, (ii) the Federal Funds Rate, as in effect from time to time, plus
one-half of one percent (0.50%) per annum and (iii) the Adjusted LIBO Rate
determined on a daily basis for an Interest Period of one (1) month, plus one
percent (1.00%) per annum (any changes in such rates to be effective as of the
date of any change in such rate).  The Administrative Agent’s prime lending rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.  The Administrative Agent may make commercial
loans or other loans at rates of interest at, above, or below the Administrative
Agent’s prime lending rate.

 

“Bison” shall mean Bison Pipeline LLC, a Delaware limited liability company.

 

“Bison Operating Agreement” shall mean that certain Amended and Restated Limited
Liability Company Agreement of Bison Pipeline LLC, dated as of May 3, 2011, as
amended, supplemented, restated or otherwise modified from time to time.

 

“Borrower” shall have the meaning in the introductory paragraph hereof.

 

“Borrower Partnership Agreement” shall mean that certain Second Amended and
Restated Agreement of Limited Partnership of TC PipeLines, LP dated July 1,
2009, as amended, supplemented, restated or otherwise modified from time to
time.

 

 “Borrowing” shall mean the borrowing of Term Loans pursuant to Section 2.3
consisting of Term Loans of the same Type, made, converted or continued on the
same day and in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

 

“Business Day” shall mean (i) any day other than a Saturday, Sunday or other day
on which commercial banks in Atlanta, Georgia, Calgary, Canada or New York, New
York are authorized or required by law to close and (ii) if such day relates to
the borrowing of, a payment or prepayment of principal or interest on, a
conversion of or into, or an Interest Period for, a

 

4

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Eurodollar Term Loan or a notice with respect to any of the foregoing, any day
on which banks are not open for dealings in dollar deposits are carried on in
the London interbank market.

 

“Capital Lease Obligations” of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) of real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.

 

“Capital Stock” shall mean any non-redeemable capital stock (or in the case of a
partnership or limited liability company, the partners’ or members’ equivalent
equity interest) of any Person, whether common or preferred.

 

“Change in Control” shall mean the occurrence of one or more of the following
events: (i) any Person or two or more Persons (other than TransCanada
Corporation or any of its Subsidiaries or any other Person reasonably acceptable
to the Required Lenders) acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly,
of voting stock of the General Partner (or other securities convertible into
such voting stock ) (A) representing 50% or more of the combined voting power of
all voting stock of the General Partner or (B) representing the combined voting
power of all voting stock of the General Partner more than that owned, directly
or indirectly, by TransCanada Corporation; or (ii) any Person or two or more
Persons (other than TransCanada Corporation or any of its Subsidiaries or any
other Person reasonably acceptable to the Required Lenders) acting in concert
shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the General Partner; (iii) the
General Partner shall for any reason cease to be the managing general partner of
the Borrower, (iv) the failure of the Borrower to own, directly or indirectly,
free and clear of all Liens, at least 50% of the partnership interests in
Northern Border, (v) the failure of the Borrower to own, directly or indirectly,
free and clear of all Liens, at least 98% of the partnership interests in
Tuscarora or (vi) the failure of the Borrower to own, directly or indirectly,
free and clear of all Liens, at least 46.45% of the partnership interests in
GLGT.

 

“Change in Law” shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation, implementation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office)
(or, for purposes of Section 2.18(b), by the parent company of such Lender, if
applicable) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement; provided that for purposes of this Agreement, (x) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules,
guidelines or directives in connection therewith and (y) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States

 

5

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or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

“Closing Date” shall mean the date on which the conditions precedent set forth
in Section 3.1 have been satisfied or waived in accordance with Section 10.2.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect
from time to time.

 

“Commercial Operation Date” shall mean the date on which a Material Project is
substantially complete and commercially operable.

 

“Commitment Letter” shall mean that certain commitment letter, dated as of April
26, 2011, executed by SunTrust Robinson Humphrey, Inc., SunTrust Bank and Bank
of America, N.A. and accepted by the Borrower.

 

“Compliance Certificate” shall mean a certificate executed by the principal
executive officer, the principal financial officer or the controller of the
Borrower in the form of, and containing the certifications set forth in, the
certificate attached hereto as Exhibit 5.1(c).

 

“Consolidated Interest Expense” shall mean, for the Borrower and its
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, without duplication, the sum of (i) total interest expense, including
without limitation the interest component of any payments in respect of Capital
Lease Obligations capitalized or expensed during such period (whether or not
actually paid during such period) plus (ii) the net amount payable (or minus the
net amount receivable) with respect to Hedging Transactions during such period
(whether or not actually paid or received during such period).

 

“Consolidated Net Worth” shall mean, for the Borrower and its Subsidiaries for
any period, the aggregate amount of Capital Stock, minority interests, and other
equity accounts (including, without limitation, retained earnings, paid in
capital and accumulated other comprehensive income or loss (but without giving
effect to any non-cash pension and other post-retirement benefits liability
adjustments recorded in accordance with GAAP)) of the Borrower and its
Subsidiaries at such date determined on a consolidated basis in accordance with
GAAP.

 

“Consolidated Total Funded Debt” shall mean, as of any date, all Indebtedness of
the Borrower and its Subsidiaries measured on a consolidated basis as of such
date, but excluding Indebtedness of the type described in subsection (xi) of the
definition thereto.

 

“Contractual Obligation” of any Person shall mean any provision of any security
issued by such Person or of any agreement, instrument or undertaking under which
such Person is obligated or by which it or any of the property in which it has
an interest is bound.

 

“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

 

“Default Interest” shall have the meaning set forth in Section 2.13(b).

 

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“Dollar(s)” and the sign “$” shall mean lawful money of the United States of
America.

 

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters.

 

“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (i) any actual or alleged violation of
any Environmental Law, (ii) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (iii) any actual or
alleged exposure to any Hazardous Materials, (iv) the Release or threatened
Release of any Hazardous Materials or (v) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

 

“ERISA Affiliate” shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

 

“ERISA Event” shall mean (i) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (ii) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii)
the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (iv) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(v) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (vii) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar” when used in reference to any Term Loan or the Borrowing, refers to
whether such Term Loan or the Borrowing bears interest at a rate determined by
reference to the Adjusted LIBO Rate.

 

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“Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental, special
or other marginal reserves) expressed as a decimal (rounded upwards to the next
1/100th of 1%) in effect on any day to which the Administrative Agent is subject
with respect to the Adjusted LIBO Rate pursuant to regulations issued by the
Board of Governors of the Federal Reserve System (or any Governmental Authority
succeeding to any of its principal functions) with respect to eurocurrency
funding (currently referred to as “eurocurrency liabilities” under Regulation
D).  Eurodollar Term Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under Regulation D.  The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Event of Default” shall have the meaning provided in Article VIII.

 

“Excluded Taxes” shall mean with respect to the Administrative Agent, any
Lender, or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes in each case
imposed on (or measured by) its net income by (i) the United States of America,
any state or local taxing authority in the United States of America, (ii) the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located, (iii) in the case of any Lender, the jurisdiction
in which its Applicable Lending Office is located or (iv) any jurisdiction as a
result of a present or former connection between such Lender, Administrative
Agent or other recipient and such jurisdiction (other than a connection arising
from such Lender, Administrative Agent or other recipient having executed,
delivered, become a party to, performed its obligations under, received payments
under, received or perfected a security interest under, engaged in any other
transaction pursuant to, or enforced, any Loan Document, or sold or assigned an
interest in any Term Loan or Loan Document), (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which any Lender is located, (c) in the case of a Foreign
Lender, any withholding tax that (i) is imposed on amounts payable to such
Foreign Lender under the law applicable at the time such Foreign Lender becomes
a party to this Agreement, (ii) is imposed on amounts payable to such Foreign
Lender under the law applicable at any time that such Foreign Lender designates
a new lending office, other than taxes that have accrued prior to the
designation of such lending office that are otherwise not Excluded Taxes, or
(iii) is attributable to such Foreign Lender’s failure to comply with Section
2.20(e), and (d) any backup withholding tax imposed under Section 3406 of the
Code.

 

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average rounded upwards, if necessary, to the next 1/100th of
1% of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

 

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“Fee Letter” shall mean that certain fee letter, dated as of April 26, 2011,
executed by SunTrust Robinson Humphrey, Inc. and SunTrust Bank and accepted by
the Borrower.

 

“Fiscal Quarter” shall mean any fiscal quarter of the Borrower.

 

“Fiscal Year” shall mean any fiscal year of the Borrower.

 

“Foreign Lender” shall mean any Lender that is not a United States person under
Section 7701(a)(30) of the Code.

 

“General Partner” shall mean TC PipeLines GP, Inc. a Delaware corporation.

 

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.2.

 

“GLGT” shall mean Great Lakes Gas Transmission Limited Partnership, a Delaware
limited partnership.

 

“GLGT Partnership Agreement” shall mean that certain Amended and Restated
Agreement of Limited Partnership of Great Lakes Gas Transmission Limited
Partnership dated as of February 22, 2007, as amended, supplemented, restated or
otherwise modified from time to time.

 

“Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

 

“GTN LLC” shall mean Gas Transmission Northwest LLC, a Delaware limited
liability company.

 

“GTN Operating Agreement” shall mean that certain Amended and Restated Limited
Liability Company Agreement of Gas Transmission Northwest LLC, dated as of May
3, 2011, as amended, supplemented, restated or otherwise modified from time to
time.

 

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly and
including any obligation, direct or indirect, of the guarantor (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation; provided, that the term

 

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“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.  The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the primary obligation
in respect of which Guarantee is made or, if not so stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.  The term “Guarantee” used as a verb has a corresponding meaning.

 

“Hazardous Materials” shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Hedging Obligations” of any Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii)
any and all cancellations, buy backs, reversals, terminations or assignments of
any Hedging Transactions and (iii) any and all renewals, extensions and
modifications of any Hedging Transactions and any and all substitutions for any
Hedging Transactions.

 

“Hedging Transaction” of any Person shall mean any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by such
Person that is a rate swap, basis swap, forward rate transaction, commodity
swap, interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest
rates, foreign currencies, commodity prices, equity prices or other financial
measures.

 

“Hybrid Securities” shall mean any trust preferred securities, or deferrable
interest subordinated debt with a maturity of at least 20 years, which provides
for the optional or mandatory deferral of interest or distributions, issued by
the Borrower, or any business trusts, limited liability companies, limited
partnerships or similar entities (i) substantially all of the common equity,
general partner or similar interests of which are owned (either directly or
indirectly through one or more wholly owned Subsidiaries) at all times by the
Borrower or any Subsidiaries, (ii) that have been formed for the purpose of
issuing such securities or deferrable interest subordinated debt, and (iii)
substantially all the assets of which consist of (A) subordinated debt of the
Borrower or any Subsidiary, and (B) payments made from time to time on the
subordinated debt.

 

“Indebtedness” of any Person shall mean, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business), (iv) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such Person,
(v) all Capital Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person in respect of letters of

 

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credit, acceptances or similar extensions of credit, (vii) all Guarantees of
such Person of the type of Indebtedness described in clauses (i) through (vi)
above, (viii) all Indebtedness of a third party secured by any Lien on property
owned by such Person, whether or not such Indebtedness has been assumed by such
Person, (ix) all obligations of such Person to purchase, redeem, retire or
otherwise acquire for value any common stock of such Person, (x) Off-Balance
Sheet Liabilities and (xi) all Hedging Obligations.  The Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer, except to the extent
that the terms of such Indebtedness provide that such Person is not liable
therefor.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Interest Coverage Ratio” shall mean, as of any date, the ratio of (i) Adjusted
Cash Flow for the four consecutive Fiscal Quarters ending on or immediately
prior to such date to (ii) Consolidated Interest Expense for the four
consecutive Fiscal Quarters ending on or immediately prior to such date.

 

“Interest Period” shall mean with respect to any Eurodollar Term Loan, a period
of one, two or three weeks, or one, two, three or six months; provided, that:

 

(i)            the initial Interest Period for such Term Loan shall commence on
the date of the Borrowing (including the date of any conversion to a Term Loan
of another Type), and each Interest Period occurring thereafter in respect of
each such Term Loan shall commence on the day on which the immediately preceding
Interest Period expires;

 

(ii)           if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month or after
the Maturity Date, in which case such Interest Period would end on the next
preceding Business Day; and

 

(iii)          any Interest Period which begins on the last Business Day of a
calendar month or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period shall end on the last
Business Day of such calendar month.

 

“Lenders” shall have the meaning assigned to such term in the opening paragraph
of this Agreement.

 

 “Leverage Ratio” shall mean, as of any date, the ratio of (i) Consolidated
Total Funded Debt as of such date to (ii) Adjusted Cash Flow for the four
consecutive Fiscal Quarter period most recently ended for which the Borrower’s
financial statements are available.

 

“LIBOR” shall mean, for any applicable Interest Period with respect to any
Eurodollar Term Loan, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBOR01 Page (or any successor
page) as the London interbank offered rate for Dollar deposits as of 11:00 a.m.
(London, England time) on the day that is two Business Days prior to the first
day of the Interest Period; provided, that if the Administrative Agent
determines that the relevant foregoing sources are unavailable for the relevant
Interest

 

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Period, LIBOR shall mean the rate of interest determined by the Administrative
Agent to be the average (rounded upward, if necessary, to the nearest 1/100th of
1%) of the rates per annum at which deposits in Dollars are offered to the
Administrative Agent two (2) Business Days preceding the first day of such
Interest Period by leading banks in the London interbank market as of 10:00 a.m.
(New York time) for delivery on the first day of such Interest Period, for the
number of days comprised therein and in an amount comparable to the amount of
the Eurodollar Term Loan of the Administrative Agent.

 

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of the foregoing or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having the same economic effect as any
of the foregoing).

 

“Loan Documents” shall mean, collectively, this Agreement, the Term Notes (if
any), the Fee Letter, the Notice of Term Loan Borrowing, all Notices of
Conversion/Continuation, and all Compliance Certificates.

 

“Material Adverse Effect” shall mean, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singularly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related, a
material adverse change in, or a material adverse effect on, (i) the business,
results of operations, financial condition, assets, or liabilities of the
Borrower, its Subsidiaries, Northern Border, GLGT, Bison and GTN LLC, taken as a
whole, (ii) the ability of the Borrower to perform any of its obligations under
the Loan Documents, (iii) the rights and remedies of the Administrative Agent,
and the Lenders under any of the Loan Documents or (iv) the legality, validity
or enforceability of any of the Loan Documents.

 

“Material Indebtedness” shall mean Indebtedness (other than the Term Loans) of
the Borrower or any of its Subsidiaries, individually or in an aggregate
principal amount exceeding $15,000,000.

 

“Material Project” shall mean the construction or expansion of any capital
project of the Borrower or any of its Subsidiaries, the aggregate capital cost
of which exceeds $25,000,000.

 

“Material Project EBITDA Adjustment” shall mean, with respect to each Material
Project:

 

(A)      prior to the Commercial Operation Date of a Material Project (but
including the fiscal quarter in which such Commercial Operation Date occurs), a
percentage (based on the then-current completion percentage of such Material
Project) of an amount to be approved by the Administrative Agent as the
projected EBITDA of the Borrower and its Subsidiaries attributable to such
Material Project for the first 12-month period following the scheduled
Commercial Operation Date of such Material Project (such amount to be determined
based on customer contracts or tariff-based customers relating to such Material
Project, the

 

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creditworthiness of the other parties to such contracts or such tariff-based
customers, and projected revenues from such contracts, tariffs, capital costs
and expenses, scheduled Commercial Operation Date, oil and gas reserve and
production estimates, commodity price assumptions and other factors deemed
appropriate by the Administrative Agent), which may, at the Borrower’s option,
be added to actual EBITDA for the Borrower and its Subsidiaries for the fiscal
quarter in which construction of such Material Project commences and for each
fiscal quarter thereafter until the Commercial Operation Date of such Material
Project (including the fiscal quarter in which such Commercial Operation Date
occurs, but net of any actual EBITDA of the Borrower and its Subsidiaries
attributable to such Material Project following such Commercial Operation Date);
provided that if the actual Commercial Operation Date does not occur by the
scheduled Commercial Operation Date, then the foregoing amount shall be reduced,
for quarters ending after the scheduled Commercial Operation Date to (but
excluding) the first full quarter after its Commercial Operation Date, by the
following percentage amounts depending on the period of delay (based on the
period of actual delay or then-estimated delay, whichever is longer):  (i) 90
days or less, 0%, (ii) longer than 90 days, but not more than 180 days, 25%,
(iii) longer than 180 days but not more than 270 days, 50%, and (iv) longer than
270 days, 100%; and

 

(B)       beginning with the first full fiscal quarter following the Commercial
Operation Date of a Material Project and for the three immediately succeeding
fiscal quarters, an amount to be approved by the Administrative Agent as the
projected EBITDA of the Borrower and its Subsidiaries attributable to such
Material Project (determined in the same manner as set forth in clause (A)
above) for the balance of the four full fiscal quarter period following such
Commercial Operation Date, which may, at the Borrower’s option, be added to
actual EBITDA for the Borrower and its Subsidiaries for such fiscal quarters.

 

Notwithstanding the foregoing:

 

(i)        no such additions shall be allowed with respect to any Material
Project unless:

 

(a)       not later than 30 days prior to the delivery of any certificate
required by the Reporting Requirements, to the extent Material Project EBITDA
Adjustments will be made to Adjusted Cash Flow, the Borrower shall have
delivered to the Administrative Agent written pro forma projections of EBITDA of
the Borrower and its Subsidiaries attributable to such Material Project, and

 

(b)       prior to the date such certificate is required to be delivered, the
Administrative Agent shall have approved (such approval not to be unreasonably
withheld) such projections and shall have received such other information and
documentation as the Administrative Agent may reasonably request, all in form
and substance reasonably satisfactory to the Administrative Agent, and

 

(ii)       the aggregate amount of all Material Project EBITDA Adjustments
during any period shall be limited to 20% of the total actual EBITDA of the
Borrower and its Subsidiaries for such period (which total actual EBITDA shall
be determined without including any Material Project EBITDA Adjustments).

 

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“Maturity Date” shall mean the, the earlier of (x) date falling 364 days after
the Closing Date and (y) the date on which the principal amount of all
outstanding Term Loans have been declared or automatically have become due and
payable (whether by acceleration or otherwise).

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Moody’s Equity Credit” shall mean the percentage of equity credit ascribed to a
Hybrid Security by Moody’s as demonstrated by the Borrower to the reasonable
satisfaction of the Administrative Agent.

 

“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of
ERISA.

 

“Northern Border” shall mean Northern Border Pipeline Company, a Texas general
partnership.

 

“Northern Border Partnership Agreement” shall mean that certain First Amended
and Restated General Partnership Agreement relating to the formation of Northern
Border effective as of August 6, 2006, as amended, supplemented, restated or
otherwise modified from time to time.

 

“Notice of Conversion/Continuation” shall mean the notice given by the Borrower
to the Administrative Agent in respect of the conversion or continuation of an
outstanding Term Loan as provided in Section 2.7(b).

 

“Notice of Term Loan Borrowing” shall have the meaning as set forth in
Section 2.3.

 

“Obligations” shall mean all amounts owing by the Borrower to the Administrative
Agent or any Lender pursuant to or in connection with this Agreement or any
other Loan Document, including without limitation, all principal, interest
(including any interest accruing after the filing of any petition in bankruptcy
or the commencement of any insolvency, reorganization or like proceeding
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), all reimbursement
obligations, fees, expenses, indemnification and reimbursement payments, costs
and expenses (including all reasonable fees and expenses of counsel to the
Administrative Agent and any Lender (to the extent payable by the Borrower
pursuant to Section 10.3) incurred pursuant to this Agreement or any other Loan
Document), whether direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising hereunder or thereunder, and all
obligations and liabilities incurred in connection with collecting and enforcing
the foregoing, together with all renewals, extensions, modifications or
refinancings thereof.

 

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions that do not create a liability on the balance sheet
of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheet of such Person.

 

“Optional Prepayment Notice” shall have the meaning set forth in Section 2.11.

 

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“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended
from time to time, and any successor statute.

 

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.

 

“Participant” shall have the meaning set forth in Section 10.4(d).

 

“Patriot Act” shall have the meaning set forth in Section 10.13.

 

“Payment Office” shall mean the office of the Administrative Agent located at
303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to
which the Administrative Agent shall have given written notice to the Borrower
and the other Lenders.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.

 

“Permitted Acquisition” shall mean an acquisition by the Borrower or any of its
Subsidiaries of Capital Stock in, or of all or substantially all of the assets
of, another Person that is permitted by this Agreement.

 

“Permitted Encumbrances” shall mean:

 

(i)            Liens imposed by law for taxes, assessments or governmental
charges not yet due or which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves are
being maintained in accordance with GAAP;

 

(ii)           statutory Liens of landlords, carriers, warehousemen, mechanics,
materialmen and similar Liens arising by operation of law in the ordinary course
of business for amounts overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;

 

(iii)          pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

 

(iv)          deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

 

(v)           judgment and attachment liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal proceeding
that are currently being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in accordance with
GAAP;

 

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(vi)          customary rights of set-off, revocation, refund or chargeback
under deposit agreements or under the Uniform Commercial Code or common law of
banks or other financial institutions where the Borrower or any of its
Subsidiaries maintains deposits (other than deposits intended as cash
collateral) in the ordinary course of business; and

 

(vii)         easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or materially interfere with the
ordinary conduct of business of the Borrower and its Subsidiaries taken as a
whole;

 

provided, that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

“Permitted Investments” shall mean:

 

(i)            direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States or Canada
(or by any agency thereof to the extent such obligations are backed by the full
faith and credit of the United States or Canada), in each case maturing within
one year from the date of acquisition thereof;

 

(ii)           commercial paper rated at least A-1 (or its equivalent) by S&P or
P-1 (or its equivalent) by Moody’s at the time of acquisition thereof, and in
either case maturing within 360 days from the date of acquisition thereof;

 

(iii)          certificates of deposit, bankers’ acceptances and time deposits
maturing within 180 days of the date of acquisition thereof issued or guaranteed
by or placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States or any state thereof which has (a) a combined capital and surplus and
undivided profits of not less than $500,000,000 or (b) has certificates of
deposit or other debt obligations rated at least A-1 (or its equivalent) by S&P
or P-1 (or its equivalent) by Moody’s;

 

(iv)          fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (i) above and entered into with
a financial institution satisfying the criteria described in clause (iii) above;

 

(v)           mutual funds or similar funds that have at least 95% of their
assets invested in any one or more of the Permitted Investments described in
clauses (i) through (iv) above;

 

(vi)          demand deposit accounts maintained in the ordinary course of
business at a bank or trust company satisfying the requirements specified in
(a) or (b) of clause (iii) above;

 

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(vii)         any other securities issued or directly and fully guaranteed or
insured by the United States or Canadian government or any agency or
instrumentality thereof, in each case, maturing within one year from the date of
acquisition thereof;

 

(viii)        investments in any fund that invests exclusively in investments of
the type described in clauses (vii) which fund may also hold immaterial amounts
of cash pending investment and/or distribution; and

 

(ix)           other cash equivalents and securities reasonably acceptable to
the Administrative Agent.

 

“Permitted Subordinated Debt” shall mean any Indebtedness of the Borrower or any
Subsidiary (i) that is expressly subordinated to the Obligations and any Hedging
Obligations entered into with the Administrative Agent or any Lender on terms
satisfactory to the Administrative Agent and the Required Lenders in their sole
discretion, (ii) that matures by its terms no earlier than six months after the
Maturity Date with no scheduled principal payments permitted prior to such date
and (iii) that is evidenced by an indenture or other similar agreement that is
in a form satisfactory to the Administrative Agent and the Required Lenders.

 

“Permitted Tax Distributions” shall mean cash dividends or distributions to the
partners of the Borrower with respect to each taxable year during which the
Borrower is a partnership in an amount not to exceed the aggregate of the
maximum federal and state income tax liability of the partners of the Borrower
(assuming that all of such partners are taxed at the maximum permissible federal
and state rates of such partners or members) attributable to the taxable income
of the Borrower for such taxable year, computed in accordance with the Code.

 

“Person” shall mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or any
Governmental Authority.

 

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pro Rata Share” shall mean with respect to the Term Loan Commitment of any
Lender at any time, a percentage, the numerator of which shall be such Lender’s
Term Loan Commitment (or if such Term Loan Commitment has been terminated or
expired or the Term Loans have been declared to be due and payable, such
Lender’s Term Loans), and the denominator of which shall be the sum of such Term
Loan Commitments of all Lenders (or if such Term Loan Commitments have been
terminated or expired or the Term Loans have been declared to be due and
payable, the Term Loan, as applicable, of all Lenders).

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

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“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.

 

“Release” shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

 

“Required Lenders” shall mean, at any time, Lenders holding more than 50% of the
aggregate Term Loan Commitments and at such time or if the Lenders have no Term
Loan Commitments outstanding, then Lenders holding more than 50% of the Term
Loans.

 

“Requirement of Law” for any Person shall mean the articles or certificate of
incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may be,
and other organizational and governing documents of such Person, and any law,
treaty, rule or regulation, or determination of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

 

“Responsible Officer” shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the General Partner or such other representative of the
Borrower as may be designated in writing by any one of the foregoing with the
consent of the Administrative Agent; and, with respect to the financial
covenants only, the chief financial officer, treasurer, vice president of
finance or controller of the General Partner.

 

“Restricted Payment” shall have the meaning set forth in Section 7.5.

 

“Revolving and Term Loan Credit Facility” shall mean the Amended and Restated
Revolving Credit and Term Loan Credit Agreement, dated as of February 13, 2007,
among the Borrower, the lenders from time to time party thereto and SunTrust
Bank as administrative agent as amended, restated or otherwise modified from
time to time, provided that the Administrative Agent, in its reasonable
discretion, determines that such amendment, restatement or other modification is
acceptable, and  any replacement or refinancing thereof, provided that the
Administrative Agent, in its reasonable discretion, determines such refinancing
or replacement to be acceptable.

 

“S&P” shall mean Standard & Poor’s, a Division of the McGraw-Hill Companies.

 

“Significant Subsidiary” shall have the meaning specified in Article 1,
Rule 1-02(w) of Regulation S-X of the Securities Exchange Act of 1934 as of the
Effective Date, provided, that, even if Northern Border, GLGT, GTN LLC or Bison
would not otherwise constitute a Subsidiary of the Borrower, each of Northern
Border, GLGT, GTN LLC and Bison shall be deemed to be a Significant Subsidiary
of the Borrower if it would otherwise qualify as a Significant Subsidiary under
Article 1, Rule 1-02(w) of Regulation S-X as of the Closing Date.

 

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“Sole Lead Arranger” shall mean SunTrust Robinson Humphrey, Inc., as sole lead
arranger.

 

“Solvent” shall mean, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including subordinated and contingent liabilities,
of such Person; (b) the present fair saleable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts and liabilities, including subordinated and
contingent liabilities as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person’s property would
constitute an unreasonably small capital.  The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that would reasonably be expected to
become an actual or matured liability.

 

“Subsidiary” shall mean, with respect to any Person (the “parent”), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, partnership, joint venture, limited liability company,
association or other entity (i) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power, or in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (ii) that is, as
of such date, otherwise controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.  Unless
otherwise indicated, all references to “Subsidiary” hereunder shall mean a
Subsidiary of the Borrower.  For the avoidance of doubt, Northern Border, GLGT,
Bison and GTN LLC are not Subsidiaries of the Borrower as of the Closing Date.

 

“Synthetic Lease” shall mean a lease transaction under which the parties intend
that (i) the lease will be treated as an “operating lease” by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.

 

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of
(i) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.

 

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“TC GL ILP” shall mean TC GL Intermediate Limited Partnership, a Delaware
limited partnership.

 

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“TC GL Partnership Agreement” shall mean that certain Agreement of Limited
Partnership relating to the formation of TC GL ILP effective as of December 22,
2006, as amended, supplemented, restated or otherwise modified from time to
time.

 

“TC PipeLines ILP” shall mean TC PipeLines Intermediate Limited Partnership, a
Delaware limited partnership.

 

“TC PipeLines ILP Partnership Agreement” shall mean that certain Amended and
Restated Agreement of Limited Partnership relating to the formation of TC
PipeLines ILP effective as of May 28, 1999, as amended, supplemented, restated
or otherwise modified from time to time.

 

“Termination Date” shall mean the date that no Term Loan remains outstanding and
unpaid, no other amount is owing to any Lender or the Administrative Agent
hereunder or under any of the other Loan Documents (except contingent
indemnification obligations or expense reimbursement obligations to the extent
no claim giving rise thereto has been asserted) and the Term Loan Commitments
have been terminated.

 

“Term Loan” shall mean a term loan made by a Lender to the Borrower pursuant to
Section 2.1.

 

“Term Loan Commitment” shall mean, with respect to each Lender, the obligation
of such Lender to make a Term Loan hereunder in a principal amount not exceeding
the amount set forth with respect to such Lender on Schedule I.  As of the
Closing Date, the aggregate principal amount of all Lenders’ Term Loan
Commitments is $400,000,000.

 

“Term Note” shall mean a promissory note of the Borrower payable to the order of
a requesting Lender in the principal amount of such Lender’s Term Loan
Commitment, in substantially the form of Exhibit B.

 

“Total Capitalization” shall mean at any date, the sum of Consolidated Net Worth
and Consolidated Total Funded Debt of the Borrower and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP.

 

“Tuscarora” shall mean Tuscarora Gas Transmission Company, a Nevada general
partnership.

 

“Tuscarora ILP” shall mean TC Tuscarora Intermediate Limited Partnership, a
Delaware limited partnership.

 

“Tuscarora ILP Partnership Agreement” shall mean that certain Agreement of
Limited Partnership relating to the formation of Tuscarora ILP effective as of
July 19, 2000, as amended supplemented, restated or otherwise modified from time
to time.

 

“Tuscarora Partnership Agreement” shall mean that certain Amended and Restated
General Partnership Agreement relating to the formation of Tuscarora effective
as of December 13, 2010, as amended, supplemented, restated or otherwise
modified from time to time.

 

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“Type”, when used in reference to a Term Loan or the Borrowing, refers to
whether the rate of interest on such Term Loan, or on the Term Loans comprising
the Borrowing, is determined by reference to the Adjusted LIBO Rate or the Base
Rate.

 

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.2.           Accounting Terms and Determination.  Unless otherwise
defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time, applied on a basis
consistent with the most recent audited consolidated financial statement of the
Borrower delivered pursuant to Section 5.1(a); provided, that if the Borrower
notifies the Administrative Agent that the Borrower wishes to amend any covenant
in Article VI to eliminate the effect of any change in GAAP on the operation of
such covenant (or if the Administrative Agent notifies the Borrower that the
Required Lenders wish to amend Article VI for such purpose), then the Borrower’s
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders.

 

Section 1.3.           Terms Generally.  The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including” and the word “to”
means “to but excluding”.  Unless the context requires otherwise (i) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as it was originally executed or as it may from time to time be amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and permitted assigns, (iii) the words “hereof”, “herein” and
“hereunder” and words of similar import shall be construed to refer to this
Agreement as a whole and not to any particular provision hereof, (iv) all
references to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles, Sections, Exhibits and Schedules to this Agreement and
(v) all references to a specific time shall be construed to refer to the time in
the city and state of the Administrative Agent’s principal office, unless
otherwise indicated.  All actions required to be undertaken by the Borrower
under the Loan Documents shall be undertaken by the Borrower through the General
Partner.

 

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ARTICLE II

 

AMOUNT AND TERMS OF THE TERM LOAN COMMITMENTS

 

Section 2.1.           General Description of Facilities.  Subject to and upon
the terms and conditions herein set forth, each Lender severally agrees to make
a single Term Loan to the Borrower, in a single drawing, in a principal amount
not exceeding such Lender’s Term Loan Commitment on the Closing Date.

 

Section 2.2.           [Reserved].

 

Section 2.3.           Procedure for Borrowing.

 

The Borrower shall give the Administrative Agent written notice (or telephonic
notice promptly confirmed in writing) of the Borrowing substantially in the form
of Exhibit 2.3(a) (a “Notice of Term Loan Borrowing”).  The Borrower may only
submit one Notice of Term Loan Borrowing which must be submitted on or prior to
the Closing Date.  On the Closing Date, the Term Loans will be funded as a
Eurodollar Borrowing with an initial Interest Period of two weeks and an
Adjusted LIBO Rate calculated by the Administrative Agent two (2) Business Days
prior to the Closing Date.  Upon the funding of the Term Loans pursuant to the
Notice of Term Loan Borrowing, all unused Term Loan Commitments shall be
terminated.

 

Section 2.4.           [Reserved].

 

Section 2.5.           [Reserved].

 

Section 2.6.           Funding of Term Loans.  Each Lender will make available
the Term Loan to be made by it hereunder on the proposed date thereof by wire
transfer in immediately available funds by 11:00 a.m. (New York time) to the
Administrative Agent at the Payment Office.  The Administrative Agent will make
such Term Loans available to the Borrower by promptly crediting the amounts that
it receives, in like funds by 1:00 pm (New York time) on the Closing Date, to an
account maintained by the Borrower with the Administrative Agent or at the
Borrower’s option, by effecting a wire transfer of such amounts to an account
designated by the Borrower to the Administrative Agent.

 

Section 2.7.           Interest Elections.

 

(a)           The Borrowing initially shall be of the Type specified in the
Notice of Borrowing, and in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in the Notice of Borrowing.  Thereafter,
the Borrower may elect to convert Term Loans into different Types or to continue
such Term Loans, and in the case of Eurodollar Term Loans, may elect Interest
Periods therefor, all as provided in this Section 2.7.  The Borrower may elect
different options with respect to different portions of the Term Loans, in which
case each such portion shall be allocated ratably among the Lenders holding such
Term Loans, and the Term Loans comprising each such portion shall be considered 
separate Term Loans.

 

(b)           To make an election pursuant to this Section 2.7, the Borrower
shall give the Administrative Agent prior written notice (or telephonic notice
promptly confirmed in writing)

 

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of each Term Loan substantially in the form of Exhibit 2.7 attached hereto (a
“Notice of Conversion/Continuation”) that is to be converted or continued, as
the case may be, (x) prior to 10:00 a.m. (New York time) on the requested date
of a conversion into a Base Rate Term Loan and (y) prior to 11:00 a.m. (New York
time) three (3) Business Days prior to a continuation of or conversion into a
Eurodollar Term Loan.  Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify:

 

(i)            the Term Loans to which such Notice of Continuation/Conversion
applies and if different options are being elected with respect to different
portions thereof, the portions thereof that are to be allocated to each
resulting Term Loan (in which case the information to be specified pursuant to
clauses (iii) and (iv) shall be specified for each resulting Term Loan);

 

(ii)           the effective date of the election made pursuant to such Notice
of Continuation/Conversion, which shall be a Business Day;

 

(iii)         whether the resulting Term Loan is to be a Base Rate Term Loan or
a Eurodollar Term Loan; provided, that at no time shall the total number of
Eurodollar Term Loans outstanding exceed six; and

 

(iv)          if the resulting Term Loan is to be a Eurodollar Term Loan, the
Interest Period applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of “Interest Period”.  If any
such Notice of Continuation/Conversion requests a Eurodollar Term Loan but does
not specify an Interest Period, the Borrower shall be deemed to have selected an
Interest Period of one month.  The principal amount of any resulting Term Loan
shall satisfy the minimum borrowing amount for Eurodollar Term Loans and Base
Rate Term Loans set forth in Section 2.3.

 

(c)           If, on the expiration of any Interest Period in respect of any
Eurodollar Term Loan, the Borrower shall have failed to deliver a Notice of
Conversion/ Continuation, then, unless the Term Loan is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Term Loan
to a Base Rate Term Loan.  The Borrowing may not be converted into, or continued
as, a Eurodollar Borrowing if a Default or an Event of Default exists, unless
the Administrative Agent and each of the Lenders shall have otherwise consented
in writing.   No conversion of any Eurodollar Term Loans shall be permitted
except on the last day of the Interest Period in respect thereof.

 

(d)           Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender of the details thereof
and of such Lender’s portion of each resulting Term Loan.

 

Section 2.8.           [Reserved].

 

Section 2.9.           Repayment of Term Loans.  The outstanding balance of all
Term Loans shall be due and payable (together with accrued and unpaid interest
thereon) on the Maturity Date.

 

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Section 2.10.        Evidence of Indebtedness.  (a)  Each Lender shall maintain
in accordance with its usual practice appropriate records evidencing the
Indebtedness of the Borrower to such Lender resulting from the Term Loan made by
such Lender, including the amounts of principal and interest payable thereon and
paid to such Lender from time to time under this Agreement.  The Administrative
Agent shall maintain appropriate records in which shall be recorded (i) the Term
Loan Commitment of each Lender, (ii) the amount of each Term Loan made hereunder
by each Lender, the Type thereof and the Interest Period applicable thereto,
(iii) the date of each continuation thereof pursuant to Section 2.7, (iv) the
date of each conversion of all or a portion thereof to another Type pursuant to
Section 2.7, (v) the date and amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
in respect of such Term Loans and (vi) both the date and amount of any sum
received by the Administrative Agent hereunder from the Borrower in respect of
the Term Loans and each Lender’s Pro Rata Share thereof.  The entries made in
such records shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, that the failure or
delay of any Lender or the Administrative Agent in maintaining or making entries
into any such record or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Term Loans (both principal and unpaid
accrued interest) of such Lender in accordance with the terms of this Agreement.

 

(b)           At the request of any Lender at any time, the Borrower agrees that
it will execute and deliver to such Lender a Term Note payable to the order of
such Lender.

 

Section 2.11.        Optional Prepayments.  The Borrower shall have the right at
any time and from time to time to prepay any Term Loan, in whole or in part,
without premium or penalty, by giving written notice (or telephonic notice
promptly confirmed in writing) (an “Optional Prepayment Notice”) to the
Administrative Agent no later than (i) in the case of prepayment of any
Eurodollar Term Loan, 11:00 a.m. (New York time) not less than three
(3) Business Days prior to any such prepayment, and (ii) in the case of any
prepayment of any Base Rate Term Loan, not less than one (1) Business Day prior
to the date of such prepayment.  Upon receipt of any Optional Prepayment Notice,
the Administrative Agent shall promptly notify each Lender of the contents
thereof and of such Lender’s Pro Rata Share of any such prepayment.  Each
Optional Prepayment Notice shall be irrevocable and shall specify the proposed
date of such prepayment and the principal amount of Term Loans to be prepaid;
provided that any such Optional Prepayment Notice may state that such Optional
Prepayment Notice is conditioned upon the effectiveness of other credit
facilities or acquisitions or the receipt of net proceeds from the issuance of
Capital Stock of the Borrower, in which case such Optional Prepayment Notice may
be revoked by the Borrower giving written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent on or prior to the date for
prepayment specified in such Optional Prepayment Notice if such condition is not
satisfied.  If an Optional Prepayment Notice is given and has not been revoked
by the Borrower in accordance with the proviso to the immediately preceding
sentence, the aggregate amount specified in such Optional Prepayment Notice
shall be due and payable on the date designated in such Optional Prepayment
Notice, together with accrued interest to such date on the amount so prepaid in
accordance with Section 2.13(d); provided, that if a Eurodollar Term Loan is
prepaid on a date other than the last day of an Interest Period applicable
thereto, the Borrower shall also pay all amounts required pursuant to
Section 2.19.  Each prepayment of a Term Loan shall be applied ratably to the
Term Loans

 

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comprising such Borrowing.  Any amounts prepaid pursuant to this Section 2.11
may not be reborrowed.

 

Section 2.12.        Mandatory Prepayments;.

 

(a)           Within three (3) Business Days of receipt by the Borrower or any
of its Subsidiaries of any proceeds of (x) any sale or disposition by the
Borrower or such Subsidiary of any of its assets made after the Closing Date, or
(y) any proceeds from any casualty insurance policies or eminent domain,
condemnation or similar proceedings in excess of $1,000,000 per occurrence or
$5,000,000 in the aggregate, the Borrower shall prepay the Obligations in an
amount equal to all such proceeds, net of commissions and other reasonable and
customary transaction costs, fees and expenses properly attributable to such
transaction and payable by the Borrower in connection therewith (in each case,
paid to non-Affiliates); provided, however, that the Borrower shall not be
required to prepay the Obligations with respect to (i) proceeds from the sales
of assets in the ordinary course of business, (ii) proceeds from the sale or
disposition of assets of the Borrower and its Subsidiaries up to an aggregate
amount of $5,000,000, and (iii) proceeds that are reinvested in assets then used
or usable in the business of the Borrower and its Subsidiaries or used to
rebuild or repair assets subject to condemnation or casualty events within 180
days following receipt thereof or are committed to be so reinvested  or
committed to rebuilding assets pursuant to a binding contract prior to the
expiration of such 180-day period and actually so reinvested or so deployed
within 270 days following receipt thereof.  Any prepayment required by this
subsection (a) shall be applied in accordance with subsection (c) of this
Section.

 

(b)           If, at any time after the Closing Date, (x) the Borrower or any of
its wholly-owned Subsidiaries incurs any Indebtedness for borrowed money or
(y) the Borrower issues any Capital Stock, then no later than the third (3rd)
Business Day following the date of receipt of the proceeds thereof, the Borrower
shall prepay the Obligations in an amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by the Borrower in connection therewith (in each case, paid to
non-Affiliates); provided, however, that the Borrower shall not be required to
prepay the Obligations with respect to (i) proceeds of Indebtedness permitted
under Sections 7.1(a), (c), (d), (f) or (g), (ii) proceeds of Indebtedness
incurred by the Borrower under the Revolving and Term Loan Credit Facility,
(iii) proceeds of Indebtedness that extends, renews, refinances, or replaces any
Indebtedness of the Borrower existing as of the Closing Date (other than the
Term Loans); provided that the principal amount of such new Indebtedness is
equal to or less than the outstanding principal amount of such existing
Indebtedness immediately prior to giving effect to such extension, renewal or
replacement plus the amount of fees, expenses, premiums and accrued interest
paid in connection with such refinancing and does not have an earlier maturity
or shorter weighted average life than such existing Indebtedness), (iv) proceeds
of loans or advances made to the Borrower by any Subsidiary, (v) proceeds of
Indebtedness incurred by the Borrower that, when aggregated with the outstanding
principal amount of Indebtedness incurred by the Subsidiaries of the Borrower
under Section 7.1(e), does not exceed $35,000,000 at any one time outstanding,
(vi) proceeds of Capital Stock issued by the Borrower to members of management,
directors, officers and employees pursuant to employment agreements,
compensation or bonus plans, or employee stock or option plans of the Borrower,
or (vii) proceeds of Capital Stock issued by the Borrower

 

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pursuant to any dividend reinvestment plan of the Borrower.  Any prepayment
required by this subsection (b) shall be applied in accordance with subsection
(c) of this Section.

 

(c)           Any prepayments made by the Borrower pursuant to subsection (a) or
(b) above shall be applied as follows: first, to the Administrative Agent’s fees
and reimbursable expenses then due and payable pursuant to any of the Loan
Documents; second, to all reimbursable expenses of the Lenders, pro rata based
on their respective pro rata shares of such fees and expenses; third, to
interest and fees then due and payable hereunder, pro rata to the Lenders based
on their respective pro rata shares of such interest and fees; fourth, to the
principal balance of the Term Loans, until the same shall have been paid in
full, pro rata to the Lenders based on their Pro Rata Shares of the Term Loans
and fifth, to the Borrower for its own account; provided, that the Term Loan
Commitments of each Lender shall be reduced, pro rata based on their Pro Rata
Shares of the Term Loan Commitments on a dollar-for-dollar basis in an amount
equal to the amount of proceeds delivered to the Borrower pursuant to this
Section.

 

Section 2.13.        Interest on Term Loans.

 

(a)           The Borrower shall pay interest on each Base Rate Term Loan at the
Base Rate in effect from time to time and on each Eurodollar Term Loan at the
Adjusted LIBO Rate for the applicable Interest Period in effect for such Term
Loan, plus, in each case, the Applicable Margin in effect from time to time.

 

(b)           While an Event of Default exists or after acceleration, at the
option of the Required Lenders, the Borrower shall pay interest (“Default
Interest”) with respect to all Eurodollar Term Loans at the rate otherwise
applicable for the then-current Interest Period plus an additional 2% per annum
until the last day of such Interest Period, and thereafter, and with respect to
all Base Rate Term Loans and all other Obligations hereunder (other than Term
Loans), at the rate in effect for Base Rate Term Loans, plus an additional 2%
per annum.

 

(c)           Interest on the principal amount of all Term Loans shall accrue
from and including the date such Term Loans are made to but excluding the date
of any repayment thereof.  Interest on all outstanding Base Rate Term Loans
shall be payable quarterly in arrears on the last day of each March, June,
September and December and on the Maturity Date.  Interest on all outstanding
Eurodollar Term Loans shall be payable on the last day of each Interest Period
applicable thereto, and, in the case of any Eurodollar Term Loans having an
Interest Period in excess of three months or 90 days, respectively, on each day
which occurs every three months or 90 days, as the case may be, after the
initial date of such Interest Period, and on the Maturity Date.  Interest on any
Term Loan which is converted into a Term Loan of another Type or which is repaid
or prepaid shall be payable on the date of such conversion or on the date of any
such repayment or prepayment (on the amount repaid or prepaid) thereof.  All
Default Interest shall be payable on demand.

 

(d)           The Administrative Agent shall determine each interest rate
applicable to the Term Loans hereunder and shall promptly notify the Borrower
and the Lenders of such rate in writing (or by telephone, promptly confirmed in
writing).  Any such determination shall be conclusive and binding for all
purposes, absent manifest error.

 

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Section 2.14.        Fees.

 

(a)           The Borrower shall pay to the Administrative Agent for its own
account fees in the amounts and at the times previously agreed upon in writing
by the Borrower and the Administrative Agent or the Sole Lead Arranger,
including for the avoidance of doubt, fees described in the Fee Letter.

 

(b)           The Borrower agrees to pay to the Administrative Agent for the
ratable benefit of each Lender a duration fee: (i) on the date falling 90 days
after the Closing Date, in an amount equal to 0.25% times the aggregate
principal amount of Term Loans then outstanding; (ii) on the date falling 180
days after the Closing Date, in an amount equal to 0.50% times the aggregate
principal amount of the aggregate principal amount of the Term Loans then
outstanding; and (iii) on the date falling 270 days after the Closing Date
(together with the dates referenced in clauses (i) and (ii) above, each a
“Determination Date”), in an amount equal to 0.75% times the aggregate principal
amount of the Term Loans then outstanding; provided, that, no duration fee shall
be payable on any Determination Date if as of such Determination Date either
(x) the Leverage Ratio is less than 3.75:1.00; or (y) the aggregate principal
balance of Term Loans, together with accrued and unpaid fees (other than any
otherwise applicable duration fee), interest and other amounts is less than
$100,000,000.  The duration fee shall be payable on the first Business Day
following each Determination Date.

 

(c)           The Borrower shall pay to the Administrative Agent, for the
ratable benefit of each Lender, the upfront fee previously agreed upon by the
Borrower and the Administrative Agent as detailed in the Fee Letter, which shall
be due and payable on the Closing Date.

 

Section 2.15.        Computation of Interest and Fees.

 

All computations of interest based on the Base Rate shall be made by the
Administrative Agent on the basis of a year of 365/366 days, as the case may be,
and all computations of interest based on LIBOR or the Federal Funds Rate and of
fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable (to the extent computed
on the basis of days elapsed).  Each determination by the Administrative Agent
of an interest amount or fee hereunder shall be made in good faith and, except
for manifest error, shall be final, conclusive and binding for all purposes.

 

Section 2.16.        Inability to Determine Interest Rates.  If prior to the
commencement of any Interest Period for any Eurodollar Term Loan,

 

(i)            the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant interbank market, adequate means do not
exist for ascertaining LIBOR for such Interest Period, or

 

(ii)           the Administrative Agent shall have received notice from the
Required Lenders that the Adjusted LIBO Rate does not adequately and fairly
reflect the cost to such Lenders (or Lender, as the case may be) of making,
funding or maintaining their (or its, as the case may be) Eurodollar Term Loans
for such Interest Period,

 

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the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter.  Until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, (i) the obligations of the Lenders to continue or convert
outstanding Term Loans as or into Eurodollar Term Loans shall be suspended and
(ii) all such affected Term Loans shall be converted into Base Rate Term Loans
on the last day of the then current Interest Period applicable thereto unless
the Borrower prepays such Term Loans in accordance with this Agreement.

 

Section 2.17.        Illegality.  If, after the date of this Agreement, any
Change in Law shall make it unlawful or impossible for any Lender to make,
maintain or fund any Eurodollar Term Loan and such Lender shall so promptly
notify the Administrative Agent, the Administrative Agent shall promptly give
notice thereof to the Borrower and the other Lenders, whereupon until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligation of such Lender to
continue or convert outstanding Term Loans as or into Eurodollar Term Loans,
shall be suspended.  If the affected Eurodollar Term Loan is then outstanding,
such Term Loan shall be converted to a Base Rate Term Loan either (i) on the
last day of the then current Interest Period applicable to such Eurodollar Term
Loan if such Lender may lawfully continue to maintain such Term Loan to such
date or (ii) immediately if such Lender shall determine that it may not lawfully
continue to maintain such Eurodollar Term Loan to such date.  Notwithstanding
the foregoing, the affected Lender shall, prior to giving such notice to the
Administrative Agent, designate a different Applicable Lending Office if such
designation would avoid the need for giving such notice and if such designation
would not otherwise be disadvantageous to such Lender in the good faith exercise
of its discretion.

 

Section 2.18.        Increased Costs.

 

(a)           If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit or
similar requirement that is not otherwise included in the determination of the
Adjusted LIBO Rate hereunder against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or

 

(ii)           impose on any Lender or the eurodollar interbank market any other
condition affecting this Agreement or any Eurodollar Term Loans made by such
Lender;

 

and the result of either of the foregoing is to increase the cost to such Lender
of making, converting into, continuing or maintaining a Eurodollar Term Loan or
to increase the cost to such Lender or to reduce the amount received or
receivable by such Lender hereunder (whether of principal, interest or any other
amount), then the Borrower shall promptly pay, upon written notice from and
demand by such Lender on the Borrower (with a copy of such notice and demand to
the Administrative Agent), to the Administrative Agent for the account of such
Lender, within five Business Days after the date of such notice and demand,
additional amount or amounts sufficient to compensate such Lender for such
additional costs incurred or reduction

 

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suffered; provided, that amounts paid under this Section 2.18(a) shall be
without duplication of amounts paid under Section 2.20 and shall not include
Excluded Taxes.

 

(b)           If any Lender shall have determined that on or after the date of
this Agreement any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s capital (or on
the capital of such Lender’s parent corporation) as a consequence of its
obligations hereunder to a level below that which such Lender or such Lender’s
parent corporation could have achieved but for such Change in Law (taking into
consideration such Lender’s policies or the policies of such Lender’s parent
corporation with respect to capital adequacy) then, from time to time, within
five (5) Business Days after receipt by the Borrower of written demand by such
Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay
to such Lender such additional amounts as will compensate such Lender or such
Lender’s parent corporation for any such reduction suffered.

 

(c)           A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or such Lender’s parent corporation, as the
case may be, specified in paragraph (a) or (b) of this Section 2.18 shall be
delivered to the Borrower (with a copy to the Administrative Agent) and shall be
conclusive, absent manifest error.  The Borrower shall pay any such Lender such
amount or amounts within 10 days after receipt thereof.

 

(d)           Except as provided in Section 2.18(e), failure or delay on the
part of any Lender to demand compensation pursuant to this Section 2.18 shall
not constitute a waiver of such Lender’s right to demand such compensation.

 

(e)           Notwithstanding anything to the contrary in this Section 2.18, the
Borrower shall not be required to compensate a Lender pursuant to this
Section 2.18 for any amounts incurred prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation therefor;
provided that, if the circumstances giving rise to such claim have a retroactive
effect, then such six-month period shall be extended to include the period of
such retroactive effect.

 

Section 2.19.        Funding Indemnity.  In the event of (a) the payment of any
principal of a Eurodollar Term Loan other than on the last day of the Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion or continuation of a Eurodollar Term Loan other than on the
last day of the Interest Period applicable thereto, or (c) the failure by the
Borrower to borrow, prepay, convert or continue any Eurodollar Term Loan on the
date specified in any applicable notice (regardless of whether such notice is
withdrawn or revoked), then, in any such event, the Borrower shall compensate
each Lender, within five (5) Business Days after written demand from such
Lender, for any loss, cost or expense attributable to such event.  In the case
of a Eurodollar Term Loan, such loss, cost or expense shall be deemed to include
an amount determined by such Lender to be the excess, if any, of (A) the amount
of interest that would have accrued on the principal amount of such Eurodollar
Term Loan if such event had not occurred at the Adjusted LIBO Rate applicable to
such Eurodollar Term Loan for the period from the date of such event to the last
day of the then current Interest Period therefor (or in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Eurodollar Term Loan) over (B) the amount of interest that would
accrue on the principal amount of such Eurodollar Term Loan for the same period
if the Adjusted LIBO

 

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Rate were set on the date such Eurodollar Term Loan was prepaid or converted or
the date on which the Borrower failed to borrow, convert or continue such
Eurodollar Term Loan.  A certificate as to any additional amount payable under
this Section 2.19 submitted to the Borrower by any Lender (with a copy to the
Administrative Agent) shall be conclusive, absent manifest error.

 

Section 2.20.        Taxes.

 

(a)           Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.20 for Indemnified Taxes or Other Taxes) the Administrative
Agent and any Lenders, as the case may be, shall receive an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

 

(b)           In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

 

(c)           The Borrower shall indemnify the Administrative Agent and each
Lender within five (5) Business Days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent
or such Lender, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 2.20) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.

 

(d)           As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

 

(e)           Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Code or any treaty to which the United
States is a party, with respect to payments under this Agreement shall deliver
to the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate. 
Without limiting the generality of the foregoing, each Foreign Lender agrees
that it will deliver

 

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to the Administrative Agent and the Borrower (or in the case of a Participant,
to the Lender from which the related participation shall have been purchased),
as appropriate, two (2) duly completed copies of (i) Internal Revenue Service
Form W-8 ECI, or any successor form thereto, certifying that the payments
received from the Borrower hereunder are effectively connected with such Foreign
Lender’s conduct of a trade or business in the United States; or (ii) Internal
Revenue Service Form W-8 BEN, or any successor form thereto, certifying that
such Foreign Lender is entitled to benefits under an income tax treaty to which
the United States is a party which reduces the rate of withholding tax on
payments of interest; or (iii) Internal Revenue Service Form W-8 BEN, or any
successor form prescribed by the Internal Revenue Service, together with a
certificate (A) establishing that the payment to the Foreign Lender qualifies as
“portfolio interest” exempt from U.S. withholding tax under Code section
871(h) or 881(c), and (B) stating that (1) the Foreign Lender is not a bank for
purposes of Code section 881(c)(3)(A), or the obligation of the Borrower
hereunder is not, with respect to such Foreign Lender, a loan agreement entered
into in the ordinary course of its trade or business, within the meaning of that
section; (2) the Foreign Lender is not a 10% shareholder of the Borrower within
the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the Foreign
Lender is not a controlled foreign corporation that is related to the Borrower
within the meaning of Code section 881(c)(3)(C); or (iv) such other Internal
Revenue Service forms as may be applicable to the Foreign Lender, including
Forms W-8 IMY or W-8 EXP.  Each such Foreign Lender shall deliver to the
Borrower and the Administrative Agent such forms on or before the date that it
becomes a party to this Agreement (or in the case of a Participant, on or before
the date such Participant purchases the related participation).  In addition,
each such Foreign Lender shall deliver such forms promptly upon the obsolescence
or invalidity of any form previously delivered by such Foreign Lender.  Each
such Foreign Lender shall promptly notify the Borrower and the Administrative
Agent at any time that it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the Internal Revenue Service for such purpose).

 

(f)            For any period with respect to which a Foreign Lender has failed
to provide the Borrower with the appropriate form, certificate or other document
described in Section 2.20(e) (other than if such failure is due to a Change in
Law, occurring subsequent to the date on which a form, certificate or other
document originally was required to be provided, or if such form, certificate or
other document otherwise is not required under subsection (e) above), such
Foreign Lender shall not be entitled to the additional payment or
indemnification under Section 2.20(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Lender become subject to Taxes because of its failure to deliver a form,
certificate or other document required hereunder, the Borrower shall take such
steps as the Foreign Lender shall reasonably request to assist the Foreign
Lender to recover such Taxes.

 

(g)           If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid amounts pursuant to this Section 2.20, it shall pay over such
refund to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.20 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant governmental authority with respect to
such refund); provided, that the Borrower, upon

 

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the request of the Administrative Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant governmental authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such governmental authority.  This paragraph shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

 

Section 2.21.        Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.

 

(a)           The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees, or of amounts payable under
Sections 2.18, 2.19 or 2.20, or otherwise) prior to 12:00 noon (New York time)
on the date when due, in immediately available funds, free and clear of any
defenses, rights of set-off or counterclaims.  Any amounts received after such
time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon.  All such payments shall be made to the
Administrative Agent at the Payment Office except that payments pursuant to
Sections 2.18, 2.19 and 2.20 and 10.3 shall be made directly to the Persons
entitled thereto.  The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof.  If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be made payable for the period of such extension.  All
payments hereunder shall be made in Dollars.

 

(b)           If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.

 

(c)           If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Term Loans that would result in such Lender receiving
payment of a greater proportion of the aggregate amount of its Term Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Term Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Term Loans; provided, that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Term Loans to any
assignee or participant,

 

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other than to the Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply).  The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

(d)           Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount or amounts due.  In such event,
if the Borrower has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

 

(e)           If any Lender shall fail to make any payment required to be made
by it pursuant to Sections 2.6(a), 2.21(d), or 10.3(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid.

 

Section 2.22.        [Reserved].

 

Section 2.23.        Mitigation of Obligations.  If any Lender requests
compensation under Section 2.18, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.20, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Term
Loans hereunder or to assign its rights and obligations hereunder to another of
its offices, branches or affiliates, if, in the sole judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts payable
under Section 2.18 or Section 2.20, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to
pay all costs and expenses incurred by any Lender in connection with such
designation or assignment.

 

Section 2.24.        Replacement of Lenders.  If any Lender requests
compensation under Section 2.18, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority of the account of
any Lender pursuant to Section 2.20, or if any Lender defaults in its obligation
to fund Term Loans hereunder, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions set forth in Section 10.4(b)) all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another

 

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Lender); provided, that (i) the Borrower shall have received the prior written
consent of the Administrative Agent with respect to the proposed assignee, which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal amount of all Term
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (in the case of such outstanding principal and
accrued interest) and from the Borrower (in the case of all other amounts) and
(iii) in the case of a claim for compensation under Section 2.18 or payments
required to be made pursuant to Section 2.20, such assignment will result in a
reduction in such compensation or payments.  A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.

 

ARTICLE III

 

CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

 

Section 3.1.           Conditions To Effectiveness. The obligations of the
Lenders to make the Term Loans hereunder shall not become effective until the
date on which each of the following conditions is satisfied (or waived in
accordance with Section 10.2).

 

(a)           The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Closing Date, including upfront fees
for the Lenders and reimbursement or payment of all out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel to the
Administrative Agent) required to be reimbursed or paid by the Borrower
hereunder, under any other Loan Document and under any agreement with the
Administrative Agent or the Sole Lead Arranger

 

(b)           The Administrative Agent (or its counsel) shall have received the
following:

 

(i)            a counterpart of this Agreement and each other Loan Document
(other than the Term Notes) signed by or on behalf of each party hereto or
written evidence satisfactory to the Administrative Agent (which may include
telecopy or other electronic transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement;

 

(ii)           duly executed Term Notes payable to such Lenders that have
requested a Term Note at least one (1) Business Day prior to the Closing Date;

 

(iii)          delivery of lien searches in form and substance reasonably
satisfactory to the Administrative Agent;

 

(iv)          a certificate of the Secretary or Assistant Secretary of the
General Partner in the form of Exhibit 3.1(b)(iii), attaching and certifying
copies of (x) the bylaws, partnership agreement, or comparable organizational
documents of the Borrower and the General Partner and (y) resolutions of the
board of directors or comparable governing body of the General Partner and the
General Partner on behalf of the Borrower, authorizing the execution, delivery
and performance of the Loan Documents by the Borrower;

 

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(v)           certified copies of the articles or certificate of incorporation,
certificate of organization or limited partnership, or other registered
organizational documents of the Borrower and the General Partner, together with
certificates of good standing or existence, as may be available from the
Secretary of State of the jurisdiction of organization of the Borrower and the
General Partner, and each other jurisdiction where the Borrower is required to
be qualified to do business as a foreign corporation;

 

(vi)          a certificate signed by a Responsible Officer, certifying the
name, title and true signature of each officer of the General Partner executing
the Loan Documents on behalf of the Borrower;

 

(vii)         a favorable written opinion of counsel to the Borrower, addressed
to the Administrative Agent and each of the Lenders, and covering such matters
relating to the Borrower and the General Partner, the Loan Documents and the
transactions contemplated therein as the Administrative Agent shall reasonably
request; and

 

(viii)        a certificate in the form of Exhibit 3.1(b)(viii), dated the
Closing Date and signed by a Responsible Officer, certifying that (v) all
consents, approvals, authorizations, registrations and filings and orders
required or advisable to be made or obtained under any Requirement of Law or by
any Contractual Obligation of the Borrower, in connection with the execution,
delivery, performance, validity and enforceability of the Loan Documents, the
Acquisition Agreements or any of the transactions contemplated thereby have been
obtained, (w) no Default or Event of Default exists, (x) no default or event of
default exists in respect of any Material Indebtedness, (y) all representations
and warranties of the Borrower set forth in the Loan Documents are true and
correct in all material respects in all material respects (other than those
representations and warranties that are expressly qualified by a Material
Adverse Effect or other materiality, in which case such representations and
warranties shall be true and correct in all respects) and (z) as of the Closing
Date the Leverage Ratio, calculated after giving pro forma effect to the
Acquisition as if it had occurred on the first day of the first Fiscal Quarter
used for determining the Leverage Ratio, is not greater than 5.50:1.00;

 

(ix)           a certificate, dated the Closing Date and signed by the chief
financial officer of the General Partner, confirming that the Borrower is
Solvent before and after giving effect to the funding of the Term Loans and the
consummation of the transactions contemplated to occur on the Closing Date;

 

(x)            (A) unqualified audited financial statements of the Borrower and
GTN LLC for each of the three prior fiscal years ending more than 90 days prior
to the Closing Date, (B) unaudited income statements of Bison for each of the
two prior fiscal years ending more than 90 days prior to the Closing Date and
unaudited balance sheets of Bison for each of the three prior fiscal years
ending more than 90 days prior to the Closing Date, (C) to the extent not
otherwise included in one of the annual periods described above, unaudited
financial statements for any quarterly interim period or periods of the
Borrower, Bison and GTN LLC  (with notes to the financial statements of GTN LLC
only to the extent available) ending more than 45 days prior to the Closing
Date, together with unaudited financial statements for the corresponding period
of the

 

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prior year, (D) to the extent not otherwise included in one of the annual or
quarterly periods described above, unaudited financial statements of the
Borrower, Bison and GTN LLC  for each monthly period ending more than 30 days
prior to the Closing Date, together with unaudited financial statements for the
corresponding month of the prior year, to the extent available, (E) customary
additional unqualified audited and unaudited financial statements for all recent
or pending acquisitions by the Borrower and its Subsidiaries and (F) customary
pro forma financial statements, in each case contemplated by clauses (A) through
(E) above, meeting the requirements of Regulation S-X for Form S-1 registration
statements;

 

(xi)           the Administrative Agent shall have received financial
projections of the Borrower and its Subsidiaries through the 2015 Fiscal Year
which will be prepared on a pro forma basis to give effect to the transactions
contemplated hereunder and under the Acquisition Agreements and will include
consolidated income statements (with clearly noted levels of adjusted cash flow
prepared in accordance with Regulation S-X under the Securities Act of 1933, as
amended, and with such further adjustments in form and substance reasonably
satisfactory to the Administrative Agent, in each case, which levels shall be
consistent in all material respects with the pro forma schedule of sources and
uses and the financial projections provided to the Administrative Agent on or
prior to the date of the execution of the Commitment Letter), consolidated
balance sheets and consolidated cash flow statements, a pro forma schedule of
sources and uses and a pro forma consolidated balance sheet of the Borrower as
at the Closing Date, all of which will be in form and substance and at levels
reasonably satisfactory to the Administrative Agent (it being recognized by the
Administrative Agent that any projections and forecasts provided to the
Administrative Agent or the Sole Lead Arranger by the Borrower in good faith and
based upon reasonable assumptions are not to be viewed as facts and that actual
results during the period or periods covered by any such projections and
forecasts may differ from the projected or forecasted results); and

 

(xii)          to the extent requested by the Administrative Agent, the
Administrative Agent shall have received, a reasonable time prior to the Closing
Date, all documentation and other information with respect to the Borrower and
the General Partner that the Administrative Agent reasonably believes is
required by regulatory authorities under applicable “know-your-customer” and
anti-money laundering rules and regulations, including without limitation the
Patriot Act.

 

(c)           The terms of the Acquisition Agreements and all related documents
(the “Acquisition Documents”) shall be reasonably satisfactory to the
Administrative Agent.  The Acquisition shall have been consummated or will be
consummated on the Closing Date and no amendment, modification or waiver of any
term of any Acquisition Document or any condition to the Borrower’s obligation
to consummate the Acquisition thereunder (other than any such amendment,
modification or waiver that is not adverse in any material respects to any
interest of the Lenders) has been made or granted, as the case may be, without
the prior written consent of the Administrative Agent, such consent not to be
unreasonably withheld (it being understood that any increase in the price or
change to the structure of the Acquisition is deemed to be materially

 

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adverse to the interests of the Lenders and will require the prior written
consent of the Administrative Agent).

 

(d)           The Administrative Agent shall have completed and be satisfied, in
its discretion, with the results of its due diligence investigations with
respect to the business, general affairs, assets, liabilities, operations,
management, financial condition, equity holders’ equity, results of operations
and value of the Borrower, Bison, GTN LLC, and their respective subsidiaries
taken as a whole and the tax, accounting, legal, environmental, regulatory and
other issues relevant to the Borrower, Bison, GTN LLC and their respective
subsidiaries and the transactions contemplated hereunder and under the
Acquisition Agreements.

 

(e)           at the time of and immediately after giving effect to the
Borrowing, no Default or Event of Default shall exist;

 

(f)            at the time of and immediately after giving effect to the
Borrowing, all representations and warranties of the Borrower set forth in the
Loan Documents shall be true and correct in all material respects on and as of
the date of the Borrowing; and

 

(g)           the Borrower shall have delivered the required Notice of Term Loan
Borrowing.

 

Section 3.2.           Delivery of Documents.  All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article III, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for the
Term Notes, in sufficient counterparts or copies for each of the Lenders and
shall be in form and substance reasonably satisfactory in all respects to the
Administrative Agent.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and each Lender
as follows:

 

Section 4.1.           Existence; Power.  The Borrower and each of its
Subsidiaries (i) is duly organized, validly existing and in good standing as a
corporation, partnership or limited liability company under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority to
carry on its business as now conducted, and (iii) is duly qualified to do
business, and is in good standing, in each jurisdiction where such qualification
is required, except where a failure to be so qualified could not reasonably be
expected to result in a Material Adverse Effect.

 

Section 4.2.           Organizational Power; Authorization.  The execution,
delivery and performance by the Borrower of the Loan Documents to which it is a
party are within the Borrower’s organizational powers and have been duly
authorized by all necessary organizational, and if required, general partner
action. This Agreement has been duly executed and delivered by the Borrower, and
constitutes, and each other Loan Document to which the Borrower is a party, when
executed and delivered by the Borrower, will constitute, valid and binding
obligations of the Borrower, enforceable against it in accordance with their
respective terms, except as may be

 

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limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity.

 

Section 4.3.           Governmental Approvals; No Conflicts.  The execution,
delivery and performance by the Borrower of this Agreement, and of the other
Loan Documents to which it is a party (a) do not require any consent or approval
of, registration or filing with, or any action by, any Governmental Authority,
except those as have been obtained or made and are in full force and effect,
(b) will not violate any Requirements of Law applicable to the Borrower or any
of its Subsidiaries or any judgment, order or ruling of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
material agreement or other material instrument binding on the Borrower or any
of its Subsidiaries or any of its assets or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries, except Liens (if any) created under the
Loan Documents.

 

Section 4.4.           Financial Statements.

 

(a)           The Borrower has furnished to each Lender (i) the audited
consolidated balance sheet of the Borrower and its Subsidiaries as of
December 31, 2010 and the related consolidated statements of income, partners’
equity and cash flows for the Fiscal Year then ended audited by KPMG LLP and
(ii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of March 31, 2011, and the related unaudited consolidated
statements of income and cash flows for the Fiscal Quarter and year-to-date
period then ending, certified by a Responsible Officer.  Such financial
statements fairly present in all material respects the consolidated financial
condition of the Borrower and its Subsidiaries as of such dates and the
consolidated results of operations for such periods in conformity with GAAP
consistently applied, subject to year end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii).

 

(b)           Since December 31, 2010, there have been no changes with respect
to the Borrower, its Subsidiaries, Northern Border, GLGT, and, to the Borrower’s
knowledge, Bison and GTN LLC which have had or could reasonably be expected to
have, singly or in the aggregate, a Material Adverse Effect.

 

Section 4.5.           Litigation and Environmental Matters.

 

(a)           No litigation, investigation or proceeding of or before any
arbitrators or Governmental Authorities is pending against or, to the knowledge
of the Borrower, threatened against the Borrower or any of its Subsidiaries
(i) as to which there is a reasonable likelihood of an adverse determination
that could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect or (ii) which in any manner draws into
question the validity or enforceability of this Agreement or any other Loan
Document.

 

(b)           Except for the matters set forth on Schedule 4.5 and except as
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval

 

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required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.

 

Section 4.6.           Compliance with Laws and Agreements.  The Borrower and
each Subsidiary is in compliance with (a) all Requirements of Law and all
judgments, decrees and orders of any Governmental Authority and (b) all
indentures, agreements or other instruments binding upon it or its properties,
except where non-compliance, either singly or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 4.7.           Investment Company Act, Etc.  Neither the Borrower nor
any of its Subsidiaries is (a) an “investment company” or is “controlled” by an
“investment company”, as such terms are defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, or (b) otherwise subject
to any other regulatory scheme limiting its ability to incur debt or requiring
any approval or consent from or registration or filing with, any Governmental
Authority in connection therewith, except those as have been obtained or made
and are in full force and effect.

 

Section 4.8.           Taxes.  The Borrower and its Subsidiaries and each other
Person for whose taxes the Borrower or any Subsidiary is liable have timely
filed or caused to be filed all Federal income tax returns and all other
material tax returns that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority, except where the same
are currently being contested in good faith by appropriate proceedings and for
which the Borrower or such Subsidiary, as the case may be, has set aside on its
books adequate reserves in accordance with GAAP.  The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of such
taxes are adequate, and no tax liabilities that could be materially in excess of
the amount so provided are anticipated.

 

Section 4.9.           Margin Regulations.  None of the proceeds of any of the
Term Loans will be used, directly or indirectly, for “purchasing” or “carrying”
any “margin stock” with the respective meanings of each of such terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulation U.  Neither the Borrower nor its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying “margin stock.”

 

Section 4.10.        ERISA.  No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.  With respect to the Plans, (a) the present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of such Plan, and (b) the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Standards
No. 87) did not, as of the date of the most recent financial statements

 

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reflecting such amounts, exceed the fair market value of the assets of all such
underfunded Plans, where the liability, if any, in (a) or (b) above could
reasonably be expected to result in a Material Adverse Effect.

 

Section 4.11.        Ownership of Property.  Except as could not reasonably be
expected to result in a Material Adverse Effect:

 

(a)           Each of the Borrower and its Subsidiaries has good title to, or
valid leasehold interests in, all of its real and personal property material to
the operation of its business, including all such properties reflected in the
most recent audited consolidated balance sheet of the Borrower referred to in
Section 4.4 or purported to have been acquired by the Borrower or any Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this
Agreement.  All leases that individually or in the aggregate are material to the
business or operations of the Borrower and its Subsidiaries are valid and
subsisting and are in full force.

 

(b)           Except as could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, each of the
Borrower and its Subsidiaries owns, or is licensed, or otherwise has the right,
to use, all patents, trademarks, service marks, trade names, copyrights and
other intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe in any material respect on the
rights of any other Person.

 

(c)           The properties of the Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies, in such amounts with
such deductibles and covering such risks of loss or damage of the kinds
customarily carried by companies in the same or similar businesses operating in
the same or similar locations, which may include self-insurance, if determined
by the Borrower to be reasonably prudent and consistent with business practices
as in effect on the date hereof.

 

Section 4.12.        Disclosure.  The Borrower has disclosed to the Lenders all
agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.  None of the reports (including
without limitation all reports that the Borrower is required to file with the
Securities and Exchange Commission), financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender in connection with the negotiation or syndication of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by any other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, taken as a whole, in light of the circumstances
under which they were made, not materially misleading;

 

Section 4.13.        Labor Relations.  There are no strikes, lockouts or other
material labor disputes or grievances against the Borrower or any of its
Subsidiaries, or, to the Borrower’s knowledge, threatened against or affecting
the Borrower or any of its Subsidiaries, and no significant unfair labor
practice, charges or grievances are pending against the Borrower or any

 

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of its Subsidiaries, or to the Borrower’s knowledge, threatened against any of
them before any Governmental Authority. All payments due from the Borrower or
any of its Subsidiaries pursuant to the provisions of any collective bargaining
agreement have been paid or accrued as a liability on the books of the Borrower
or any such Subsidiary, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

 

Section 4.14.        Subsidiaries.  Schedule 4.14 attaches a true and complete
organizational chart of the Borrower and all of its Subsidiaries (including the
ownership of Northern Border, Tuscarora, GLGT, Bison and GTN LLC) after giving
effect to the Acquisition, which the Borrower shall update upon notice to the
Administrative Agent promptly following the completion of any material Permitted
Acquisition and promptly following the incorporation, organization or formation
of any material Subsidiary.

 

Section 4.15.        Solvency.  After giving effect to the execution and
delivery of the Loan Documents, the making of the Term Loans under this
Agreement, the Borrower and the Borrower together with its Subsidiaries taken as
a whole will be Solvent.

 

Section 4.16.        OFAC.  The Borrower (i) is not a person whose property or
interest in property is blocked or subject to blocking pursuant to Section 1 of
Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)), (ii) does not knowingly engage in any dealings or
transactions prohibited by Section 2 of such executive order, or is not
otherwise knowingly associated with any such person in any manner violative of
Section 2 of such executive order, or (iii) is not a person on the list of
Specially Designated Nationals and Blocked Persons or subject to the limitations
or prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

 

Section 4.17.        Patriot Act.  The Borrower is in compliance, in all
material respects, with (i) the Trading with the Enemy Act, as amended, and each
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) the Patriot Act.  No
part of the proceeds of the Term Loans will be used, directly or indirectly, for
any payments to any governmental official or employee, political party, official
of a political party, candidate for political office, or anyone else acting in
an official capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Until the Termination Date, the Borrower covenants and agrees that:

 

Section 5.1.           Financial Statements and Other Information.  The Borrower
will deliver to the Administrative Agent and each Lender:

 

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(a)           as soon as available and in any event within 105 days after the
end of each Fiscal Year of the Borrower, a copy of the annual audited financial
statements for such Fiscal Year for the Borrower and its Subsidiaries,
containing a consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of such Fiscal Year and the related consolidated statements of
income, partners’ equity and cash flows (together with all footnotes thereto) of
the Borrower and its Subsidiaries for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and reported on by KPMG LLP or other independent public
accountants of nationally recognized standing (without a “going concern” or like
qualification, exception or explanation and without any qualification or
exception as to scope of such audit) to the effect that such financial
statements present fairly in all material respects the financial condition and
the results of operations of the Borrower and its Subsidiaries for such Fiscal
Year on a consolidated basis in accordance with GAAP and that the examination by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;

 

(b)           as soon as available and in any event within 45 days after the end
of each of the first three Fiscal Quarters of any Fiscal Year of the Borrower,
an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of such Fiscal Quarter and the related unaudited consolidated and
consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for such Fiscal Quarter and the then elapsed portion of such Fiscal
Year, setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower’s previous
Fiscal Year;

 

(c)           concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a Compliance Certificate; and

 

(d)           promptly following any request therefor, such other information
regarding the results of operations, business affairs and financial condition of
the Borrower or any Subsidiary as the Administrative Agent or any Lender may
reasonably request.

 

So long as the Borrower is required to file periodic reports under
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended, the Borrower’s obligation to deliver the financial statements referred
to in clauses (a) and (b) shall be deemed satisfied upon the filing of such
financial statements in the EDGAR system and the giving by the Borrower of
notice to the Lenders and the Administrative Agent as to the public availability
of such financial statements from such source.

 

Section 5.2.           Notices of Material Events.  The Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the following:

 

(a)           the occurrence of any Default or Event of Default;

 

(b)           the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against the Borrower or any
Subsidiary which could reasonably be expected to result in a Material Adverse
Effect;

 

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(c)           the occurrence of any event or any other development by which the
Borrower or any of its Subsidiaries (i) fails to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability
and in each of the preceding clauses, which individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;

 

(d)           the occurrence of any ERISA Event that alone, or together with any
other ERISA Events that have occurred, since the Closing Date, could reasonably
be expected to result in liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding $15,000,000; and

 

(e)           the occurrence of any default or event of default, or the receipt
by the Borrower or any of its Subsidiaries of any written notice of an alleged
default or event of default, in respect of any Material Indebtedness of the
Borrower or any of its Subsidiaries.

 

Each notice delivered under this Section 5.2 shall be accompanied by a written
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

 

Section 5.3.           Existence; Conduct of Business.  The Borrower will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and maintain in full force and effect its (a) legal
existence; provided, that nothing in this Section 5.3(a) shall prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 7.3
and (b) its respective rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names except for any failure to
preserve, renew or maintain any such right, license, permit, privilege,
franchise, patent, copyright, trademark or trade name as could not reasonably be
expected to result in a Material Adverse Effect.

 

Section 5.4.           Compliance with Laws, Etc. The Borrower will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its business and
properties, including without limitation, all Environmental Laws, ERISA and
OSHA, except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

Section 5.5.           Payment of Obligations.  The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge at or before maturity, all
of its obligations and liabilities (including without limitation all taxes,
assessments and other governmental charges, levies and all other claims that
could result in a statutory Lien) before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings and the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP or (b) the failure to make any such payment could not reasonably be
expected to result in a Material Adverse Effect.

 

Section 5.6.           Books and Records. The Borrower will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which full,
true and correct entries

 

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shall be made of all dealings and transactions in relation to its business and
activities to the extent necessary to prepare the consolidated financial
statements of the Borrower in conformity with GAAP.

 

Section 5.7.           Visitation, Inspection, Etc.  The Borrower will, and will
cause each of its Subsidiaries to, permit at any reasonable time and from time
to time and upon reasonable notice, the Administrative Agent or any of its
agents or representatives, to (i) permit the Administrative Agent or any
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
any of its Subsidiaries, and to discuss the affairs, finances and accounts of
the Borrower and any of its Subsidiaries with any of their officers or directors
and (ii) use commercially reasonable efforts to provide for the Administrative
Agent or any representatives thereof (in the presence of representatives of the
Borrower) to meet with the independent certified public accountants; provided,
however, if an Event of Default has occurred and is continuing, no prior notice 
of such visit or inspection shall be required of the Borrower and its
Subsidiaries; provided, that any such visits or inspections shall be subject to
such conditions as the Borrower and each of its Subsidiaries shall deem
necessary based on reasonable considerations of safety and security; and
provided, further, that neither the Borrower nor any Subsidiary shall be
required to disclose to the Administrative Agent or any representatives thereof
any information which is subject to the attorney-client privilege or attorney
work-product privilege properly asserted by the applicable Person to prevent the
loss of such privilege in connection with such information or which is prevented
from disclosure pursuant to a confidentiality agreement with third parties.

 

Section 5.8.           Maintenance of Properties; Insurance.  The Borrower will,
and will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, except as could not reasonably be expected to
have a Material Adverse Effect, and (b) maintain with financially sound and
reputable insurance companies, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by companies in the same or
similar businesses operating in the same or similar locations, which may include
self-insurance, if determined by the Borrower to be reasonably prudent and
consistent with business practices as in effect on the date hereof.

 

Section 5.9.           Use of Proceeds.  The Borrower will use the proceeds of
all Term Loans to fund, in part, the Acquisition and to pay fees and expenses
incurred in connection therewith and with this Agreement.

 

Section 5.10.        Maintenance of Tax Status.  The Borrower shall take all
action necessary to prevent the Borrower from being, and will take no action
which would have the effect of causing the Borrower to be, treated as an
association taxable as a corporation or otherwise to be taxed as an entity for
U.S. federal income tax purposes.

 

ARTICLE VI

 

FINANCIAL COVENANTS

 

Until the Termination Date, the Borrower covenants and agrees that:

 

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Section 6.1.           Leverage Ratio. The Borrower and its Subsidiaries will
maintain on a consolidated basis (i) a Leverage Ratio not greater than 5.50:1.00
as of the end of the Fiscal Quarters ending June 30, 2011, September 30, 2011
and December 31, 2011 and (ii) a Leverage Ratio not greater than 4.75:1.00 as of
the end of the Fiscal Quarters ending March 31, 2012 and thereafter; provided,
however that in determining compliance with the Leverage Ratio, Permitted
Subordinated Debt in an amount not to exceed $300,000,000 shall not be included
in such calculation.  The Borrower’s compliance with this requirement shall be
calculated on a rolling four Fiscal Quarter basis, measured on the last day of
each Fiscal Quarter.  For purposes of the foregoing, to the extent Consolidated
Total Funded Debt includes outstanding amounts under Hybrid Securities, then a
portion of the amount of such Hybrid Securities not to exceed a total of 15% of
Total Capitalization may be excluded from Consolidated Total Funded Debt (the
“Excluded Hybrid Securities”).

 

Section 6.2.           Interest Coverage Ratio.  The Borrower and its
Subsidiaries will maintain on a consolidated basis as of the end of each Fiscal
Quarter, commencing with the Fiscal Quarter ending June 30, 2011, an Interest
Coverage Ratio of not less than 3.00:1.00.  For purposes of the foregoing, to
the extent Consolidated Interest Expense includes interest expense under
Excluded Hybrid Securities, then an amount equal to such interest expense
multiplied by the Moody’s Equity Credit shall be excluded from Consolidated
Interest Expense.

 

ARTICLE VII

 

NEGATIVE COVENANTS

 

Until the Termination Date, the Borrower covenants and agrees that:

 

Section 7.1.           Indebtedness. The Borrower will not permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Indebtedness,
except (“Permitted Indebtedness”):

 

(a)           Indebtedness of the Subsidiaries of the Borrower listed in
Schedule 7.1 and existing on the date of this Agreement and extensions,
renewals, refinancings and replacements thereof; provided that (A) the principal
amount of any such refinancing does not exceed the principal amount of the
Indebtedness being refinanced plus the amount of fees, expenses, premiums and
accrued interest paid in connection with such refinancing and (B) the final
maturity of such refinancing debt is not shorter than the maturity of the
Indebtedness being replaced;

 

(b)           endorsements of checks or drafts in the ordinary course of
business;

 

(c)           Indebtedness of the Subsidiaries of the Borrower resulting from
loans made by the Borrower to a Subsidiary or loans made by a Subsidiary to
another Subsidiary;

 

(d)           other Indebtedness of the Subsidiaries of the Borrower (excluding
Indebtedness otherwise permitted in this Section 7.1) which does not exceed
$35,000,000 outstanding at any time in the aggregate;

 

(e)           Permitted Subordinated Debt;

 

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(f)            Guarantees of the Subsidiaries of the Borrower in respect of
Permitted Indebtedness of other Subsidiaries of the Borrower or Guarantees of
the Subsidiaries of the Borrower in respect of Indebtedness of the Borrower
permitted by this Agreement;

 

(g)           Indebtedness of any Person which becomes a Subsidiary of the
Borrower after the Closing Date and extensions, renewals, refinancings and
replacements thereof; provided that (A) the principal amount of any such
refinancing does not exceed the principal amount of the Indebtedness being
refinanced plus the amount of reasonable fees, expenses, premiums and accrued
interest paid in connection with such refinancing and (B) the final maturity of
such refinancing debt is not shorter than the maturity of the Indebtedness being
replaced; provided further, that (1) such Indebtedness exists at the time such
Person becomes a Subsidiary and is not created or incurred in contemplation of
or in connection with such Person becoming a Subsidiary and (2) no Default or
Event of Default exists at the time such Person becomes a Subsidiary and
immediately after such Person becomes a Subsidiary.

 

provided, however, no Indebtedness otherwise permitted under this Section 7.1
shall be permitted if, after giving effect to the incurrence thereof, any
Default or Event of Default shall have occurred and be continuing.

 

The Borrower will not, and will not permit any Subsidiary to, issue any
preferred shares or other preferred partnership, limited liability company or
other equity interests that (i) mature or are mandatorily redeemable pursuant to
a sinking fund obligation or otherwise, (ii) are or may become redeemable or
repurchaseable by the Borrower or such Subsidiary at the option of any holders
thereof, in whole or in part or (iii) are convertible or exchangeable at the
option of any holders thereof for Indebtedness not permitted by this Agreement,
on or prior to, in the case of clause (i), (ii) or (iii), the first anniversary
of the Maturity Date.

 

Section 7.2.           Negative Pledge.  The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien on any of its assets or property now owned or hereafter acquired, except:

 

(a)           Permitted Encumbrances;

 

(b)           any Liens on any property or asset of the Borrower or any
Subsidiary existing on the Closing Date set forth on Schedule 7.2; provided,
that such Lien shall not apply to any other property or asset of the Borrower or
any Subsidiary;

 

(c)           purchase money Liens upon or in any fixed or capital assets to
secure the purchase price or the cost of construction or improvement of such
fixed or capital assets or to secure Indebtedness incurred solely for the
purpose of financing the acquisition, construction or improvement of such fixed
or capital assets (including Liens securing any Capital Lease Obligations);
provided, that (i) such Lien secures Indebtedness permitted by this Agreement,
(ii) such Lien attaches to such asset concurrently or within 90 days after the
acquisition, improvement or completion of the construction thereof; (iii) such
Lien does not extend to any other asset; and (iv) the Indebtedness secured
thereby does not exceed the original cost of acquiring, constructing or
improving such fixed or capital assets;

 

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(d)           any Lien (i) existing on any asset of any Person at the time such
Person becomes a Subsidiary of the Borrower, (ii) existing on any asset of any
Person at the time such Person is merged with or into the Borrower or any
Subsidiary of the Borrower or (iii) existing on any asset prior to the
acquisition thereof by the Borrower or any Subsidiary of the Borrower; provided,
that any such Lien was not created in the contemplation of any of the foregoing
and any such Lien secures only those obligations which it secures on the date
that such Person becomes a Subsidiary or the date of such merger or the date of
such acquisition;

 

(e)           extensions, renewals, or replacements of any Lien referred to in
paragraphs (a) through (f) of this Section 7.2; provided, that the principal
amount of the Indebtedness secured thereby is not increased and that any such
extension, renewal or replacement is limited to the assets originally encumbered
thereby;

 

(f)            any right which any municipal or governmental body or agency may
have by virtue of any franchise, license, contract or status to purchase or
designate a purchaser of, or order the sale of, any property of the Borrower or
any Subsidiary upon payment of reasonable compensation therefor or to terminate
any franchise, license or other rights or to regulate the property and business
of the Borrower or any Subsidiary;

 

(g)           Liens on cash and cash equivalents granted pursuant to master
netting agreements entered into in the ordinary course of business in connection
with Hedging Transactions; provided that (i) the transactions secured by such
Liens are governed by standard International Swaps and Derivatives
Association, Inc. (“ISDA”) documentation, and (ii) such Hedging Transactions
consist of derivative transactions contemplated to be settled in cash and not by
physical delivery and are designed to minimize the risk of fluctuations in oil
and gas prices, interest rates or foreign currency rates with respect to the
Borrower’s and its Subsidiaries’ operations in the ordinary course of its
business;

 

(h)           Liens pursuant to master netting agreements entered into in the
ordinary course of business in connection with Hedging Transactions, in each
case pursuant to which the Borrower or any Subsidiary of the Borrower, as a
party to such master netting agreement and as pledgor, pledges or otherwise
transfers to the other party to such master netting agreement, as pledgee, in
order to secure the Borrower’s or such Subsidiary’s obligations under such
master netting agreement, a Lien upon and/or right of set off against, all
right, title, and interest of the pledgor in any obligations of the pledgee owed
to the pledgor, together with all accounts and general intangibles and payment
intangibles in respect of such obligations and all dividends, interest, and
other proceeds from time to time received, receivable, or otherwise distributed
in respect of, or in exchange for, any or all of the foregoing;

 

(i)            Liens securing Indebtedness permitted under Section 7.1(g); and

 

(j)            Liens not otherwise permitted by this Section 7.2 if at the time
of, and after giving effect to, the creation or assumption of any such Lien, the
aggregate of all obligations of the Borrower and its Subsidiaries secured by any
Liens not otherwise permitted hereby does not exceed five percent (5%) of the
sum of (i) the consolidated owners’ equity, determined in accordance with GAAP,
of the Borrower and its Subsidiaries, and (ii) Consolidated Total Funded Debt.

 

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Section 7.3.           Fundamental Changes.

 

(a)           The Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate into any other Person, or permit any other Person to
merge into or consolidate with it, or sell, lease, transfer or otherwise dispose
of (in a single transaction or a series of transactions) all of its assets (in
each case, whether now owned or hereafter acquired) or all or substantially all
of the Capital Stock of its Subsidiaries (in each case, whether now owned or
hereafter acquired) or liquidate or dissolve; provided, that if at the time
thereof and immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing, then (i) the Borrower or any
Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the
Borrower is not a party to such merger) is the surviving Person, (ii) any
Subsidiary may merge into another Subsidiary; (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of all or substantially all of its assets
to the Borrower or to another Subsidiary, and (iv) any Subsidiary may sell,
lease, transfer or otherwise dispose of (in a single transaction or a series of
transactions) all of its assets (in each case, whether now owned or hereafter
acquired) or all or substantially all of the Capital Stock of its Subsidiaries
or may liquidate or dissolve if the Borrower determines in good faith that such
sale, lease, transfer, disposition, liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders;
provided, however, that in no event shall any such merger, consolidation, sale,
transfer, lease or other disposition whether or not otherwise permitted by this
Section 7.3 have the effect of releasing the Borrower from any of its
obligations and liabilities under this Agreement or the other Loan Documents.

 

(b)           So long as Northern Border is a Significant Subsidiary of the
Borrower, the Borrower shall not provide its consent to, or vote to, permit
Northern Border to lease, sell or otherwise dispose of its assets to any other
Person except: (i) sales of inventory, investments, and other assets in the
ordinary course of business, (ii) leases, sales or other dispositions of its
assets that, together with all other assets of Northern Border previously
leased, sold or disposed of (other than disposed of pursuant to this
Section 7.3(b)) during the twelve-month period ending with the month in which
any such lease, sale or other disposition occurs, do not constitute a
substantial portion of the assets of Northern Border, (iii) sales of assets
which are concurrently leased back, (iv) dispositions of assets which are
obsolete or no longer used or useful in the business of Northern Border, and
(v) as permitted pursuant to the Northern Border Partnership Agreement as in
effect on the Closing Date.

 

(c)           So long as GLGT is a Significant Subsidiary of the Borrower, the
Borrower shall not provide its consent to, or vote to, permit GLGT to lease,
sell or otherwise dispose of its assets to any other Person except: (i) sales of
inventory, investments, and other assets in the ordinary course of business,
(ii) leases, sales or other dispositions of its assets that, together with all
other assets of GLGT previously leased, sold or disposed of (other than disposed
of pursuant to this Section 7.3(c)) during the twelve-month period ending with
the month in which any such lease, sale or other disposition occurs, do not
constitute a substantial portion of the assets of GLGT, (iii) sales of assets
which are concurrently leased back, (iv) dispositions of assets which are
obsolete or no longer used or useful in the business of GLGT, and (v) as
permitted pursuant to the GLGT Partnership Agreement as in effect on the Closing
Date.

 

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(d)           So long as Bison is a Significant Subsidiary of the Borrower, the
Borrower shall not provide its consent to, or vote to, permit Bison to lease,
sell or otherwise dispose of its assets to any other Person except: (i) sales of
inventory, investments, and other assets in the ordinary course of business,
(ii) leases, sales or other dispositions of its assets that, together with all
other assets of Bison previously leased, sold or disposed of (other than
disposed of pursuant to this Section 7.3(d)) during the twelve-month period
ending with the month in which any such lease, sale or other disposition occurs,
do not constitute a substantial portion of the assets of Bison, (iii) sales of
assets which are concurrently leased back, (iv) dispositions of assets which are
obsolete or no longer used or useful in the business of Bison and (v) as
permitted pursuant to the Bison Operating Agreement as in effect on the Closing
Date.

 

(e)           So long as GTN LLC is a Significant Subsidiary of the Borrower,
the Borrower shall not provide its consent to, or vote to, permit GTN LLC to
lease, sell or otherwise dispose of its assets to any other Person except:
(i) sales of inventory, investments, and other assets in the ordinary course of
business, (ii) leases, sales or other dispositions of its assets that, together
with all other assets of GTN LLC previously leased, sold or disposed of (other
than disposed of pursuant to this Section 7.3(e)) during the twelve-month period
ending with the month in which any such lease, sale or other disposition occurs,
do not constitute a substantial portion of the assets of GTN LLC, (iii) sales of
assets which are concurrently leased back, (iv) dispositions of assets which are
obsolete or no longer used or useful in the business of GTN LLC and (v) as
permitted pursuant to the GTN Operating Agreement as in effect on the Closing
Date.

 

(f)            The Borrower shall not engage in any business activity except
(i) the direct or indirect ownership of Capital Stock of TC PipeLines ILP, TC GL
ILP and Tuscarora ILP, (ii) the ownership or operation of energy infrastructure
assets and/or (iii) such activities as may be incidental or related thereto. 
Neither TC PipeLines ILP, TC GL ILP, nor Tuscarora ILP shall, and the Borrower
shall not permit any of its Subsidiaries to, engage, directly or indirectly, in
any business activity not related to the ownership or operation of energy
infrastructure assets.

 

Section 7.4.           Investments, Loans, Etc.  The Borrower will not, and will
not permit any of its Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly-owned Subsidiary
prior to such merger), any common stock, evidence of indebtedness or other
securities (including any option, warrant, or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person (all of the foregoing being collectively called
“Investments”), or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person that constitute a business unit,
or create or form any Subsidiary, except:

 

(a)           Investments (other than Permitted Investments) existing on the
date hereof (and after giving effect to the Acquisition) and set forth on
Schedule 7.4 (including Investments in Subsidiaries);

 

(b)           Permitted Investments;

 

(c)           Guarantees constituting Indebtedness permitted by Section 7.1;

 

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(d)           loans or advances to employees, officers or directors of the
Borrower or any Subsidiary in the ordinary course of business for travel,
relocation and related expenses; provided, however, that the aggregate amount of
all such loans and advances does not exceed $1,000,000 at any time;

 

(e)           Accounts receivable or other indebtedness and extensions of trade
credit which arose in the ordinary course of such Person’s business;

 

(f)            Prepaid expenses of such Person incurred and prepaid in the
ordinary course of business;

 

(g)           Endorsements of instruments for deposit or collection in the
ordinary course of business;

 

(h)           Hedging Transactions permitted by Section 7.9; and

 

(i)            Investments permitted by Section 7.3(f).

 

Section 7.5.           Restricted Payments.  The Borrower will not, and will not
permit its Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any dividend on any class of its Capital Stock, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, retirement, defeasance or other acquisition of,
any shares of Capital Stock or Indebtedness subordinated to the Obligations of
the Borrower or any Guarantee thereof or any options, warrants, or other rights
to purchase such Capital Stock or such Indebtedness, whether now or hereafter
outstanding (each, a “Restricted Payment”), except for (i) dividends payable by
Subsidiaries of the Borrower solely in shares of any class of its Capital Stock,
(ii) Restricted Payments made by any Subsidiary to the Borrower or to another
Subsidiary, on at least a pro rata basis with any other holders of its Capital
Stock if such Subsidiary is not wholly owned by the Borrower and other wholly
owned Subsidiaries, (iii) so long as no Event of Default has occurred and is
continuing, distributions on the Limited Partnership Units and General Partners’
interests in accordance with the Borrower Partnership Agreement, (iv) Permitted
Tax Distributions, and (v) payments made with respect to Permitted Subordinated
Debt to the extent allowed by the terms of the agreements entered into
connection therewith, which agreements shall have been approved by the
Administrative Agent and the Required Lenders.

 

Section 7.6.           Transactions with Affiliates.  Except as set forth in
Schedule 7.6, the Borrower will not, and will not permit any of its Subsidiaries
to, sell, lease or otherwise transfer any property or assets to, or purchase,
lease or otherwise acquire any property or assets from, or otherwise engage in
any other transactions with, any of its Affiliates, except (a) at prices and on
terms and conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm’s-length basis from unrelated third parties, (b) any
Restricted Payment permitted by Section 7.5 and (c) any Investment permitted by
Section 7.4.

 

Section 7.7.           Restrictive Agreements.  The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement that prohibits, restricts or imposes any condition
upon (a) the ability of the Borrower or any Subsidiary to create, incur or
permit any Lien upon any of its assets or properties, whether now

 

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owned or hereafter acquired, to secure any obligations owing under the Loan
Documents, except by indentures or other agreements governing Indebtedness of
the Borrower requiring that such Indebtedness be secured by an equal and ratable
Lien with any Lien that may be granted to secure any obligations owing under the
Loan Documents, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to its Capital Stock, to make or repay loans or
advances to the Borrower or any other Subsidiary, to Guarantee Indebtedness of
the Borrower or any other Subsidiary or to transfer any of its property or
assets to the Borrower or any Subsidiary of the Borrower; provided, that the
foregoing shall not apply to (i) restrictions or conditions imposed by law or
by this Agreement or any other Loan Document or any loan or credit agreement
governing Indebtedness permitted by this Agreement, (ii) customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided such restrictions and conditions apply only to the
Subsidiary that is sold and such sale is permitted hereunder, (iii) customary
provisions in leases restricting the assignment thereof, (iv) any such covenant
contained in a Contractual Obligation granting or relating to a particular Lien
permitted by this Agreement which affects only the property that is the subject
of such Lien, (v) restrictions which are not more restrictive than those
contained in this Agreement and are contained in any documents governing any
Indebtedness incurred after the Closing Date and permitted in accordance with
the provisions of this Agreement, (vi) in the case of any joint venture,
customary restrictions in such person’s organizational or governing documents or
pursuant to any joint venture agreement or stockholders agreement, (vii) any
agreement in effect at the time a Person first became a Subsidiary, so long as
such agreement was not entered into solely in contemplation of such Person
becoming a Subsidiary and such agreement only applies to Subsidiaries of such
Person or (viii) restrictions or conditions contained in the Revolving and Term
Loan Credit Facility.

 

Section 7.8.           Sale and Leaseback Transactions.  The Borrower will not,
and will not permit any of the Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.

 

Section 7.9.           Hedging Transactions.  The Borrower will not, and will
not permit any of the Subsidiaries to, enter into any Hedging Transaction, other
than Hedging Transactions entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.  Solely for
the avoidance of doubt, the Borrower acknowledges that a Hedging Transaction
entered into for speculative purposes or of a speculative nature (which shall be
deemed to include any Hedging Transaction under which the Borrower or any of the
Subsidiaries is or may become obliged to make any payment (i) in connection with
the purchase by any third party of any common stock or any Indebtedness or
(ii) as a result of changes in the market value of any common stock or any
Indebtedness but shall be deemed to exclude any Hedging Transaction in which the
Borrower hedges the issuance price of its Limited Partnership Units in
connection with an anticipated offering of additional Limited Partnership Units)
is not a Hedging Transaction entered into in the ordinary course of business to
hedge or mitigate risks.

 

Section 7.10.        Certain Amendments to Cash Distribution Policies and
Partnership Agreements.   The Borrower agrees that it shall not consent to, vote
in favor of or permit any

 

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amendment of (a) the cash distribution policies of the Borrower, TC PipeLines
ILP, TC GL ILP, Tuscarora ILP, Northern Border, GLGT or Tuscarora in any manner
which would materially adversely affect the rights and remedies of the Lenders
under and in connection with this Agreement, the Term Notes or any other Loan
Document; or (b) the Borrower Partnership Agreement, the TC PipeLines ILP
Partnership Agreement, the Tuscarora ILP Partnership Agreement, the Northern
Border Partnership Agreement, the TC GL Partnership Agreement , the GLGT
Partnership Agreement or the Tuscarora Partnership Agreement in any manner which
would (i) have a material adverse effect on the rights and remedies of the
Lenders under and in connection with this Agreement, the Notes or any other Loan
Document; or (ii) result in a Material Adverse Effect.

 

Section 7.11.        Accounting Changes.  The Borrower will not, and will not
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Borrower or of any of its Subsidiaries, except to change the
fiscal year of a Subsidiary to conform its fiscal year to that of the Borrower.

 

ARTICLE VIII

 

EVENTS OF DEFAULT

 

Section 8.1.           Events of Default.  If any of the following events (each
an “Event of Default”) shall occur:

 

(a)           the Borrower shall fail to pay any principal of any Term Loan when
and as the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment or otherwise; or

 

(b)           the Borrower shall fail to pay any interest on any Term Loan or
any fee or any other amount (other than an amount payable under clause (a) of
this Section 8.1) payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days; or

 

(c)           any representation or warranty made or deemed made by or on behalf
of the Borrower in or in connection with this Agreement or any other Loan
Document and any amendments or modifications hereof shall prove to be incorrect
in any material respect when made or deemed made or submitted; or

 

(d)           the Borrower shall fail to observe or perform any covenant or
agreement contained in Sections 5.1, 5.2, or 5.3(a) or Articles VI or VII; or

 

(e)           the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in clauses
(a), (b) and (d) above) or any other Loan Document, and such failure shall
remain unremedied for 30 days after the earlier of (i) any Responsible Officer
becomes aware of such failure, or (ii) written notice thereof shall have been
given to the Borrower by the Administrative Agent or any Lender; or

 

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(f)            the Borrower or any of its Significant Subsidiaries (whether as
primary obligor or as guarantor or other surety) shall fail to pay any principal
of, or premium or interest on, (i) any Material Indebtedness that is
outstanding, when and as the same shall become due and payable (whether at
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument evidencing or governing such Indebtedness; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to such Indebtedness and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or permit the acceleration of, the
maturity of such Indebtedness; (ii) any such Indebtedness shall be declared to
be due and payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or defeased,
or any offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof; or
(iii) (A) there occurs under any Hedging Transaction an Early Termination Date
(as defined in such Hedging Transaction) resulting from an event of default
under such Hedging Transaction as to which the Borrower or any of its
Significant Subsidiaries is the Defaulting Party (as defined in such Hedging
Transaction) and the value owed by the Borrower or any of its Significant
Subsidiaries as a result thereof is greater than (individually or collectively)
$15,000,000 and such amount is not paid when due under such Hedging Transaction,
or (B) there occurs under any Hedging Transaction an Early Termination Date (as
defined in such Hedging Transaction) resulting from any Termination Event (as so
defined) under such Hedging Transaction as to which the Borrower or any of its
Significant Subsidiaries is an Affected Party (as defined in such Hedging
Transaction) and the value owed by the Borrower or any of its Significant
Subsidiaries as a result thereof is greater than (individually or collectively)
$15,000,000 and such amount is not paid when due under such Hedging Transaction;
or

 

(g)           the General Partner, the Borrower or any of its Significant
Subsidiaries shall (i) commence a voluntary case or other proceeding or file any
petition seeking liquidation, reorganization or other relief under any federal,
state or foreign bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a custodian, trustee, receiver, liquidator
or other similar official of them or any substantial part of their property,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Section 8.1, (iii) apply for or consent to the appointment of a custodian,
trustee, receiver, liquidator or other similar official for the General Partner,
the Borrower or any of its Significant Subsidiaries or for a substantial part of
their assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, or (vi) take any partnership action for the
purpose of effecting any of the foregoing; or

 

(h)           an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the General Partner, the Borrower or any of its Significant
Subsidiaries or their debts, or any substantial part of their assets, under any
federal, state or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect or (ii) the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the General Partner, the Borrower or
any of its Significant Subsidiaries or for a substantial part of their assets,
and in any such case, such proceeding or petition shall remain

 

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undismissed for a period of 60 days or an order or decree approving or ordering
any of the foregoing shall be entered; or

 

(i)            the General Partner, the Borrower or any of its Significant
Subsidiaries shall admit in writing its inability to pay, or shall fail to pay,
its debts as they become due; or

 

(j)            an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with other ERISA Events that have
occurred, could reasonably be expected to result in liability to the Borrower or
any of its Significant Subsidiaries in an aggregate amount exceeding
$15,000,000; or

 

(k)           any judgment or order for the payment of money in excess of
$15,000,000 in the aggregate shall be rendered against the Borrower or any of
its Significant Subsidiaries, and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be a period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that any such judgment or order shall not be an Event
of Default under this Section 8.1(k) if and for so long as (i) the amount of
such judgment or order is covered (subject to customary deductibles) by a valid
and binding policy of insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer, which shall be rated at least “A-”
by A.M. Best Company, has been notified of, and has not denied coverage of, the
amount of such judgment or order; or

 

(l)            any non-monetary judgment or order shall be rendered against the
Borrower or any of its Significant Subsidiaries that could reasonably be
expected to have a Material Adverse Effect, and there shall be a period of 30
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or

 

(m)          a Change in Control shall occur or exist,

 

then, and in every such event (other than an event with respect to the General
Partner, the Borrower or any of its Significant Subsidiaries described in clause
(g) or (h) of this Section 8.1) and at any time thereafter during the
continuance of such event, the Administrative Agent may, and upon the written
request of the Required Lenders shall, by notice to the Borrower, take any or
all of the following actions, at the same or different times: (i) terminate the
Term Loan Commitments, whereupon the Term Loan Commitment of each Lender shall
terminate immediately, (ii) declare the principal of and any accrued interest on
the Term Loans, and all other Obligations owing hereunder, to be, whereupon the
same shall become, due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower, (iii) exercise all remedies contained in any other Loan Document, and
(iv) exercise any other remedies available at law or in equity; and that, if an
Event of Default specified in either clause (g) or (h) shall occur, the Term
Loan Commitments shall automatically terminate and the principal of the Term
Loans then outstanding, together with accrued interest thereon, and all fees,
and all other Obligations shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

 

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ARTICLE IX

 

THE ADMINISTRATIVE AGENT

 

Section 9.1.           Appointment of the Administrative Agent.

 

Each Lender irrevocably appoints SunTrust Bank as the Administrative Agent and
authorizes it to take such actions on its behalf and to exercise such powers as
are delegated to the Administrative Agent under this Agreement and the other
Loan Documents, together with all such actions and powers that are reasonably
incidental thereto.  The Administrative Agent may perform any of its duties
hereunder or under the other Loan Documents by or through any one or more
sub-agents or attorneys-in-fact appointed by the Administrative Agent.  The
Administrative Agent and any such sub-agent or attorney-in-fact may perform any
and all of its duties and exercise its rights and powers through their
respective Related Parties.  The exculpatory provisions set forth in this
Article shall apply to any such sub-agent or attorney-in-fact and the Related
Parties of the Administrative Agent, any such sub-agent and any such
attorney-in-fact and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as the Administrative Agent.

 

Section 9.2.           Nature of Duties of the Administrative Agent.  The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in this Agreement and the other Loan Documents.  Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default or an Event of Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except those discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2), and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
Administrative Agent or any of its Affiliates in any capacity.  The
Administrative Agent shall not be liable for any action taken or not taken by
it, its sub-agents or attorneys-in-fact with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 10.2) or in the
absence of its own gross negligence or willful misconduct.  The Administrative
Agent shall not be responsible for the negligence or misconduct of any
sub-agents or attorneys-in-fact selected by it with reasonable care.  The
Administrative Agent shall not be deemed to have knowledge of any Default or
Event of Default unless and until written notice thereof (which notice shall
include an express reference to such event being a “Default” or “Event of
Default” hereunder) is given to the Administrative Agent by the Borrower or any
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements, or other terms and conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other

 

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agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article III or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative
Agent.  The Administrative Agent may consult with legal counsel (including
counsel for the Borrower) concerning all matters pertaining to such duties.

 

Section 9.3.           Lack of Reliance on the Administrative Agent.  Each of
the Lenders acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each of the Lenders also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it has deemed
appropriate, continue to make its own decisions in taking or not taking of any
action under or based on this Agreement, any related agreement or any document
furnished hereunder or thereunder.

 

Section 9.4.           Certain Rights of the Administrative Agent.  If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act, unless and until it shall have received
instructions from such Lenders; and the Administrative Agent shall not incur
liability to any Person by reason of so refraining.  Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders where required by the terms of this Agreement.

 

Section 9.5.           Reliance by Administrative Agent.  The Administrative
Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, posting or other
distribution) believed by it to be genuine and to have been signed, sent or made
by the proper Person.  The Administrative Agent may also rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person and shall not incur any liability for relying thereon.  The
Administrative Agent may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or not taken by it in accordance with
the advice of such counsel, accountants or experts.

 

Section 9.6.           The Administrative Agent in its Individual Capacity.  The
bank serving as the Administrative Agent shall have the same rights and powers
under this Agreement and any other Loan Document in its capacity as a Lender as
any other Lender and may exercise or refrain from exercising the same as though
it were not the Administrative Agent; and the terms “Lenders”, “Required
Lenders”, “holders of Notes”, or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity.  The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
it were not the Administrative Agent hereunder.

 

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Section 9.7.           Successor Administrative Agent.

 

(a)           The Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower.  Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, subject to the approval by the Borrower provided that no Default or Event
of Default shall exist at such time.  If no successor Administrative Agent shall
have been so appointed, and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or any state thereof or a bank which maintains
an office in the United States, having a combined capital and surplus of at
least $500,000,000.

 

(b)           Upon the acceptance of its appointment as the Administrative Agent
hereunder by a successor, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents.  If within 45 days after written notice is given of the
retiring Administrative Agent’s resignation under this Section 9.7 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above. 
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Article shall continue in effect for the benefit of such retiring
Administrative Agent and its representatives and agents in respect of any
actions taken or not taken by any of them while it was serving as the
Administrative Agent.

 

Section 9.8.           Authorization to Execute other Loan Documents.  Each
Lender hereby authorizes the Administrative Agent to execute on behalf of all
Lenders all Loan Documents other than this Agreement.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.1.        Notices.

 

(a)           Written Notices.

 

(i)            Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to any
party herein to be effective shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

 

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To the Borrower:

TC PipeLines, LP

 

c/o TC PipeLines GP

 

450-1 Street SW

 

Calgary, AB T2P5H1

 

Attention: Corporate Secretary

 

Telecopy Number: 403.920.2467

 

 

With a copy to:

TC PipeLines, LP

 

c/o TC PipeLines GP

 

450-1 Street SW

 

Calgary, AB T2P5H1

 

Attention: Vice President and Treasurer

 

Telecopy Number: 403.920.2358

 

 

To the Administrative Agent:

SunTrust Bank

 

303 Peachtree Street, N.E.

 

Atlanta, Georgia 30308

 

Attention: Peter Panos

 

Telecopy Number: (404) 827-6270

 

 

With a copy to:

SunTrust Bank Agency Services

 

303 Peachtree Street, N.E./25th Floor

 

Atlanta, Georgia 30308

 

Attention: Doug Weltz

 

Telecopy Number: (404) 221-2001; and

 

 

 

King & Spalding LLP

 

100 N. Tryon Street, Suite 3900

 

Charlotte, North Carolina 28202

 

Attention: Todd Holleman

 

Telecopy Number: (704) 503-2622

 

 

To any other Lender:

the address set forth in the Administrative Questionnaire or the Assignment and
Acceptance Agreement executed by such Lender

 

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All such
notices and other communications shall, when transmitted by overnight delivery,
or faxed, be effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the mail or if
delivered, upon delivery; provided, that the Notice of Term Loan Borrowing, any
Notices of Conversion/Continuation, and any notices provided under Section 5.2
or 5.3 delivered to the Administrative Agent shall not be effective until
actually received by the Administrative Agent at its address specified in this
Section 10.1.

 

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(ii)           Any agreement of the Administrative Agent and the Lenders herein
to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower.  The Administrative Agent and
the Lenders shall be entitled to rely on the authority of any Person believed by
it to be a Person authorized by the Borrower to give such notice and the
Administrative Agent and Lenders shall not have any liability to the Borrower or
other Person on account of any action taken or not taken by the Administrative
Agent or the Lenders in reliance upon such telephonic or facsimile notice.  The
obligation of the Borrower to repay the Term Loans and all other Obligations
hereunder shall not be affected in any way or to any extent by any failure of
the Administrative Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent and
the Lenders of a confirmation which is at variance with the terms understood by
the Administrative Agent and the Lenders to be contained in any such telephonic
or facsimile notice.

 

(b)           Electronic Communications.

 

(i)            Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II unless such Lender and the Administrative
Agent have agreed to receive notices under such Section by electronic
communication and have agreed to the procedures governing such communications. 
The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.

 

(ii)           Unless the Administrative Agent otherwise prescribes, (A) notices
and other communications sent to an e-mail address shall be deemed received upon
the sender’s receipt of an acknowledgement from the intended recipient (such as
by the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (B) notices or communications
posted to an internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

Section 10.2.        Waiver; Amendments.

 

(a)           No failure or delay by the Administrative Agent, or any Lender in
exercising any right or power hereunder or any other Loan Document, and no
course of dealing between the Borrower and the Administrative Agent or any
Lender, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise

 

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thereof or the exercise of any other right or power hereunder or thereunder. 
The rights and remedies of the Administrative Agent and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies provided by law.  No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 10.2, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. 
Without limiting the generality of the foregoing, the making of a Term Loan
shall not be construed as a waiver of any Default or Event of Default,
regardless of whether the Administrative Agent, any Lender may have had notice
or knowledge of such Default or Event of Default at the time.

 

(b)           No amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Borrower and the Required Lenders or the Borrower and the Administrative
Agent with the consent of the Required Lenders and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, that no amendment or waiver shall: (i) increase the
Term Loan Commitment of any Lender without the written consent of such Lender,
(ii) reduce the principal amount of any Term Loan or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the date fixed for any payment of
any principal of, or interest on, any Term Loan or interest thereon or any fees
hereunder or reduce the amount of, waive or excuse any such payment, or postpone
the scheduled date for the termination or reduction of any Term Loan Commitment,
without the written consent of each Lender affected thereby, provided, however,
that this clause (iii) shall not apply to the postponement of the date fixed
for, or the waiver of any requirement by the Borrower to make, any optional
prepayment Section 2.11 or any mandatory prepayment under Section 2.12 (it being
understood that such postponement or waiver shall be effective with the written
consent of the Required Lenders), (iv) change Section 2.21(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, or (v) change any of the provisions of this
Section 10.2 or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders which are required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the consent of each Lender; provided further,
that no such agreement shall amend, modify or otherwise affect the rights,
duties or obligations of the Administrative Agent without the prior written
consent of the Administrative Agent.  Notwithstanding anything contained herein
to the contrary, this Agreement may be amended and restated without the consent
of any Lender (but with the consent of the Borrower and the Administrative
Agent) if, upon giving effect to such amendment and restatement, such Lender
shall no longer be a party to this Agreement (as so amended and restated), the
Term Loan Commitments of such Lender shall have terminated (but such Lender
shall continue to be entitled to the benefits of Sections 2.18, 2.19, 2.20 and
10.3), such Lender shall have no other commitment or other obligation hereunder
and shall have been paid in full all principal, interest and other amounts owing
to it or accrued for its account under this Agreement.

 

(c)           Notwithstanding anything set forth herein, the Borrower, the
Administrative Agent and the Lenders agree that so long as the Revolving and
Term Loan Credit Facility is in effect, if any provision contained therein is
amended then the corresponding provision in this

 

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Agreement shall be deemed amended to the same extent amended in the Revolving
and Term Loan Credit Facility, effective hereunder when such amendment becomes
effective thereunder, automatically and without any action necessary by the
Borrower, the Administrative Agent or any Lender, provided that this
Section 10.2(c) shall not apply to (i) the definition of “Applicable Margin”,
“Applicable Margin Step-up”, “Fee Letter”, “Term Loan Commitment”, “Term Loan”
and “Term Note” and (ii) any provision contained in Article II (other than
Sections 2.16, 2.17, 2.18, 2.19 and 2.20), Article III or Section 8.1(f) of this
Agreement; provided further that notwithstanding this Section 10.2(c), (A) the
maximum Leverage Ratio permitted by Section 6.1 as of the end of the Fiscal
Quarters ending June 30, 2011, September 30, 2011 and December 31, 2011 shall
not exceed 5.50:1.00, (B) the maximum Leverage Ratio permitted by Section 6.1 as
of the end of any Fiscal Quarter ending on or after March 31, 2012 shall not
exceed 5.00:1.00 and (C) the minimum Interest Coverage Ratio required by
Section 6.2 as of the end of any Fiscal Quarter shall not be less than 2.50:1.00
(unless such amendment allows for the removal of the Interest Coverage Ratio if
the Borrower obtains a rating of at least Baa3/BBB- from either S&P or Moody’s
(as applicable)).  This Section 10.2(c) shall not require any amendments that
would have the effect of changing the character of the Term Loans hereunder into
revolving loans.  The Borrower agrees to provide the Administrative Agent and
each Lender with a copy of such amendment.  The Administrative Agent and each
Lender agrees to execute and deliver promptly, and in any event within 30 days
(or such longer period as the Administrative Agent may agree in its sole
discretion), a document in form and substance satisfactory to the Administrative
Agent to reflect any such amendment pursuant to this subsection (c), provided,
that the execution and delivery of such document shall not be a condition to the
effectiveness of such amendment.

 

Section 10.3.        Expenses; Indemnification.

 

(a)           The Borrower shall pay (i) all reasonable, out-of-pocket costs and
expenses of the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and its Affiliates, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof (whether or not
the transactions contemplated in this Agreement or any other Loan Document shall
be consummated), and (ii) all out-of-pocket costs and expenses incurred by the
Administrative Agent or any Lender in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section 10.3, or in connection with the Term Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Term Loans; provided that the
Borrower shall only be responsible for reimbursing the legal fees and expenses
of one outside counsel for the Administrative Agent and the Lenders.

 

(b)           The Borrower shall indemnify the Administrative Agent (and any
sub-agent thereof), each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from
all fees and time charges and disbursements for attorneys who may be employees
of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee
by

 

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any third party or by the Borrower arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Term Loan or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or Release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower, and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrower has
obtained a final judgment in its favor on such claim as determined by a court of
competent jurisdiction.

 

(c)           To the extent that the Borrower fails to pay any amount required
to be paid to the Administrative Agent under clauses (a) or (b) hereof, each
Lender severally agrees to pay to the Administrative Agent such Lender’s Pro
Rata Share (determined as of the time that the unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided, that the unreimbursed
expense or indemnified payment, claim, damage, liability or related expense, as
the case may be, was incurred by or asserted against the Administrative Agent in
its capacity as such.

 

(d)           To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to actual or direct damages) arising out of, in connection with or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated therein, any Term Loan or the use of proceeds thereof.

 

(e)           All amounts due under this Section 10.3 shall be payable promptly
after written demand therefor.

 

Section 10.4.        Successors and Assigns.

 

(a)           The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender, and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of paragraph (b) of this Section, (ii) by way of
participation in accordance with the provisions of paragraph (d) of this
Section or (iii) by way of pledge or assignment of a security interest subject
to the restrictions of paragraph (f) of this Section.  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person

 

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(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in paragraph (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

 

(b)           Any Lender may at any time assign to one or more assignees all or
a portion of its rights and obligations under this Agreement (including all or a
portion of its Term Loan Commitment and the Term Loans at the time owing to it);
provided that any such assignment shall be subject to the following conditions:

 

(i)            Minimum Amounts.

 

(A)          in the case of an assignment of the entire remaining amount of the
assigning Lender’s Term Loan Commitment and the Term Loans at the time owing to
it or in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, no minimum amount need be assigned; and

 

(B)           in any case not described in paragraph (b)(i)(A) of this Section,
the aggregate amount of the Term Loan Commitment and the principal outstanding
balance of the Term Loan of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Acceptance, as of the Trade Date) shall not be
less than $1,000,000, unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed).

 

(ii)           Proportionate Amounts.  Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Term Loans or the Term Loan
Commitment assigned.

 

(iii)          Required Consents.  No consent shall be required for any
assignment except to the extent required by paragraph (b)(i)(B) of this
Section and, in addition:

 

(A)          the consent of the Borrower (such consent not to be unreasonably
withheld or delayed) shall be required unless (x) an Event of Default has
occurred and is continuing at the time of such assignment or (y) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund; and

 

(B)           the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments to a Person
that is not a Lender with a Term Loan Commitment.

 

(iv)          Assignment and Acceptance.  The parties to each assignment shall
deliver to the Administrative Agent (A) a duly executed Assignment and
Acceptance, (B) a processing and recordation fee of $3,500, (C) an
Administrative Questionnaire unless the

 

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assignee is already a Lender and (D) the documents required under Section 2.20
if such assignee is a Foreign Lender.

 

(v)           No Assignment to Borrower.  No such assignment shall be made to
the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

(vi)          No Assignment to Natural Persons.  No such assignment shall be
made to a natural person.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section 10.4, from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.18, 2.19, 2.20 and 10.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this
Section 10.4.

 

(c)           The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in Atlanta, Georgia
a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Term Loan
Commitments of, and principal amount of the Term Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive absent manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement.  Information contained in the Register with
respect to any Lender shall be available for inspection by such Lender at any
reasonable time and from time to time upon reasonable prior notice; information
contained in the Register shall also be available for inspection by the Borrower
at any reasonable time and from time to time upon reasonable prior notice.  In
establishing and maintaining the Register, the Administrative Agent shall serve
as the Borrower’s agent solely for tax purposes and solely with respect to the
actions described in this Section, and the Borrower hereby agrees that, to the
extent SunTrust Bank serves in such capacity, SunTrust Bank and its officers,
directors, employees, agents, sub-agents and affiliates shall constitute
“Indemnitees.”

 

(d)           Any Lender may at any time, without the consent of, or notice to,
the Borrower, the Administrative Agent sell participations to any Person (other
than a natural person, the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Term Loan Commitment and/or the Term Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain

 

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solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver with respect to the following to the extent affecting
such Participant:  (i) increase the Term Loan Commitment of such Lender,
(ii) reduce the principal amount of any Term Loan owing to such Lender or reduce
the rate of interest thereon, or reduce any fees payable to such Lender
hereunder, (iii) postpone the date fixed for any payment of any principal of, or
interest on, any Term Loan owing to any Lender or interest thereon or any fees
payable to such Lender hereunder, or postpone the scheduled date for the
termination or reduction of the Term Loan Commitment of such Lender, provided,
however, that this clause (iii) shall not apply to the postponement of the date
fixed for, or the waiver of any requirement by the Borrower to make, any
optional prepayment Section 2.11 or any mandatory prepayment under Section 2.12
(it being understood that such postponement or waiver shall be effective with
the written consent of the Required Lenders), (iv) change Section 2.21(b) or
(c) in a manner that would alter the pro rata sharing of payments required
thereby, (v) change any of the provisions of this Section 10.4 or the definition
of “Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders which are required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder; or
(vi) release all or substantially all collateral (if any) securing any of the
Obligations.  Subject to paragraph (e) of this Section 10.4, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.18, 2.19,
and 2.20 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section 10.4.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.7 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.21 as though it were a Lender.

 

(e)           A Participant shall not be entitled to receive any greater payment
under Section 2.18 and Section 2.20 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant, after disclosure of
such greater payment, is made with the Borrower’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.20 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.20(e) as though it were a
Lender.

 

(f)            Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

65

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Section 10.5.        Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof except for Sections 5-1401 and 5-1402 of the
New York General Obligations Law) of the State of New York.

 

(b)           The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the exclusive jurisdiction of the United States
District Court of the Southern District of New York, and of the Supreme Court of
the State of New York sitting in New York county and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document or the transactions contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York state court or, to the extent permitted by applicable law, such Federal
court.  Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. 
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.

 

(c)           The Borrower irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding described in paragraph (b) of this Section 10.5 and brought
in any court referred to in paragraph (b) of this Section 10.5.  Each of the
parties hereto irrevocably waives, to the fullest extent permitted by applicable
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(d)           Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in Section 10.1.  Nothing in this
Agreement or in any other Loan Document will affect the right of any party
hereto to serve process in any other manner permitted by law.

 

Section 10.6.        WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

66

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Section 10.7.        Right of Setoff.  In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, each Lender shall have the right, at any time or from time to time upon
the occurrence and during the continuance of an Event of Default, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, to set off and apply against all
deposits (general or special, time or demand, provisional or final) of the
Borrower at any time held or other obligations at any time owing by such Lender
or any of its Affiliates to or for the credit or the account of the Borrower
against any and all Obligations held by such Lender irrespective of whether such
Lender shall have made demand hereunder and although such Obligations may be
unmatured.  Each Lender agree promptly to notify the Administrative Agent and
the Borrower after any such set-off and any application made by such Lender,
provided, that the failure to give such notice shall not affect the validity of
such set-off and application.  Each Lender agrees to apply all amounts collected
from any such set-off to the Obligations before applying such amounts to any
other Indebtedness or other obligations owed by the Borrower and any of its
Subsidiaries to such Lender.

 

Section 10.8.        Counterparts; Integration.  This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.  This Agreement, the Fee Letter, the other Loan Documents, and
any separate letter agreement(s) relating to any fees payable to the
Administrative Agent constitute the entire agreement among the parties hereto
and thereto regarding the subject matters hereof and thereof and supersede all
prior agreements and understandings, oral or written, regarding such subject
matters.

 

Section 10.9.        Survival.  All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Term
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent, or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Term Loan
or any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Term Loan Commitments have not expired or terminated. 
The provisions of Sections 2.18, 2.19, 2.20, and 10.3 and Article IX shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Term Loans, the
expiration or termination of and the Term Loan Commitments or the termination of
this Agreement or any provision hereof provided that the provisions of Sections
2.18, 2.19, and 2.20 shall only survive and remain in full force and effect
until the first anniversary of the Termination Date.  All representations and
warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents, and the making of the
Term Loans.

 

Section 10.10.      Severability.  Any provision of this Agreement or any other
Loan Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such

 

67

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jurisdiction, be ineffective to the extent of such illegality, invalidity or
unenforceability without affecting the legality, validity or enforceability of
the remaining provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 10.11.      Confidentiality.  Each of the Administrative Agent and each
Lender agrees to take normal and reasonable precautions to maintain the
confidentiality of any confidential information provided to it by the Borrower
or any Subsidiary, except that such information may be disclosed (i) to any
Related Party of the Administrative Agent or any such Lender, including without
limitation accountants, legal counsel and other advisors with a reasonable need
for such information (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential on
substantially the same terms as provided herein), (ii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(iii) to the extent requested by any regulatory agency or authority or
self-regulatory body having or claiming authority to regulate or oversee any
aspect of the Administrative Agent’s or any Lender’s business or businesses,
(iv) to the extent that such information becomes publicly available other than
as a result of a breach of this Section 10.11, or which becomes available to the
Administrative Agent any Lender or any Related Party of any of the foregoing on
a non-confidential basis from a source other than the Borrower, (v) in
connection with the exercise of any remedy hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
and (ix) subject to provisions substantially similar to this Section 10.11, to
any actual or prospective assignee or Participant, or (vi) with the consent of
the Borrower.  Any Person required to maintain the confidentiality of any
information as provided for in this Section 10.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such information as such
Person would accord its own confidential information; provided that, in the case
of clauses (ii) or (iii), with the exception of disclosure to bank regulatory
authorities, the Administrative Agent and each Lender agree, to the extent
practicable and legally permissible, to give the Borrower prompt prior notice so
that it may seek a protective order or other appropriate remedy.

 

Section 10.12.      Interest Rate Limitation.  Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Term Loan,
together with all fees, charges and other amounts which may be treated as
interest on such Term Loan under applicable law (collectively, the “Charges”),
shall exceed the maximum lawful rate of interest (the “Maximum Rate”) which may
be contracted for, charged, taken, received or reserved by a Lender holding such
Term Loan in accordance with applicable law, the rate of interest payable in
respect of such Term Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Term
Loan but were not payable as a result of the operation of this Section 10.12
shall be cumulated and the interest and Charges payable to such Lender in
respect of other Term Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Rate to the date of repayment (to the extent
permitted by applicable law), shall have been received by such Lender.

 

68

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Section 10.13.      Patriot Act.   The Administrative Agent and each Lender to
whom the Patriot Act applies hereby notifies the Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Patriot Act.  The Borrower shall, and shall cause each of
its Subsidiaries to, provide to the extent commercially reasonable, such
information and take such other actions as are reasonably requested by the
Administrative Agent or any Lender in order to assist the Administrative Agent
and the Lenders in maintaining compliance with the Patriot Act.

 

Section 10.14.      Non-Recourse to the General Partner and Associated Persons. 
The Administrative Agent and each Lender agrees on behalf of itself and its
successors, assigns and legal representatives, that neither the General Partner
nor any Person which is a partner, shareholder, member, owner, officer,
director, supervisor, trustee or other principal (collectively, “Associated
Persons”) of the Borrower, the General Partner, or any of their respective
successors or assigns, shall have any personal liability for the payment or
performance of any of the Borrower’s obligations hereunder or under any of the
Notes and no monetary or other judgment shall be sought or enforced against the
General Partner or any of such Associated Persons or any of their respective
successors or assigns.  Notwithstanding the foregoing, neither the
Administrative Agent nor any Lender shall be deemed barred by this Section 10.14
from asserting any claim against any Person based upon an allegation of fraud or
misrepresentation.

 

(remainder of page left intentionally blank)

 

69

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed under seal in the case of the Borrower by their respective authorized
officers as of the day and year first above written.

 

 

TC PIPELINES, LP

 

By: TC PipeLines GP, Inc., its General Partner

 

 

 

 

 

By

/s/ Robert C. Jacobucci

 

 

Name: Robert C. Jacobucci

 

 

Title: Controller and Principal Financial Officer

 

 

 

 

 

By

/s/ Rhonda L. Amundson

 

 

Name: Rhonda L. Amundson

 

 

Title: Treasurer

 

[SIGNATURE PAGE TO THE 364-DAY

BRIDGE LOAN AGREEMENT]

 

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

 

 

SUNTRUST BANK

 

as Administrative Agent and as a Lender

 

 

 

 

 

By

/s/ Peter Panos

 

 

Name: Peter Panos

 

 

Title: Director

 

[SIGNATURE PAGE TO THE 364-DAY

BRIDGE LOAN AGREEMENT]

 

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

 

 

BANK OF AMERICA, N.A.

 

as a Lender

 

 

 

 

 

By

/s/ James K.G. Campbell

 

 

Name: James K.G. Campbell

 

 

Title: Director

 

[SIGNATURE PAGE TO THE 364-DAY

BRIDGE LOAN AGREEMENT]

 

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

 

Schedule I

 

Term Loan Commitments

 

Lender

 

Commitment

 

SunTrust Bank

 

$

250,000,000.00

 

Bank of America, N.A.

 

$

150,000,000.00

 

 

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

 

SCHEDULE 4.5

 

ENVIRONMENTAL MATTERS

 

None

 

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

 

SCHEDULE 4.14

 

SUBSIDIARIES

 

See Attached Organizational Chart

 

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

 

GRAPHIC [g115231kg17i001.gif]

 

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

 

SCHEDULE 7.1

 

OUTSTANDING INDEBTEDNESS

 

Indenture, Assignment and Security Agreement dated as at December 21, 1995
(between Tuscarora Gas Transmission Company and Wilmington Trust Company, as
Trustee), as supplemented by (i) a Third Supplemental Indenture dated as of
March 15, 2002 relating to up to $10,000,000 Principal Amount of 6.89% Senior
Secured Notes, Series C, due December 21, 2012 (the “Tuscarora Series C Notes”)
and (ii) a Fourth Supplemental Indenture dated as of December 21, 2010 relating
to up to $27,000,000 Principal Amount of 3.82% Senior Secured Notes, Series D,
due August 21, 2017 (the “Tuscarora Series D Notes”).  The outstanding principal
balance for the Tuscarora Series C Notes is $3,883,590 and for the Tuscarora
Series D Notes is $27,000,000, for a total of $30,883,590.

 

 

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

 

SCHEDULE 7.2

 

EXISTING LIENS

 

Wilmington Trust Company, as Trustee, has a lien on Tuscarora’s right, title and
interest in certain Collateral Security Transportation Contracts, Support
Agreements and other property, which lien is more particularly described on
UCC-1 financing statement 9518398 filed with the Nevada Secretary of State on
December 20, 1995 (as amended).

 

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

 

SCHEDULE 7.4

 

EXISTING INVESTMENTS

 

See Schedule 4.14

 

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

 

SCHEDULE 7.6

 

TRANSACTIONS WITH AFFILIATES

 

The Borrower’s pipeline systems are operated by TransCanada and its affiliates
pursuant to operating agreements. Under these agreements, the Borrower’s
pipeline systems are required to reimburse TransCanada for their costs including
payroll, employee benefit costs, and other costs incurred on behalf of the
Borrower’s pipeline systems.

 

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

 

EXHIBIT A

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

[date to be supplied]

 

Reference is made to the 364-Day Senior Bridge Loan Agreement dated as of May 3,
2011 (as amended, restated, supplemented or otherwise modified from time to time
and in effect on the date hereof, the “Loan Agreement”), by and among TC
PipeLines, LP, a Delaware limited partnership (the “Borrower”), the several
banks and other financial institutions and lenders as are, or may become,
parties to the Loan Agreement (collectively, the “Lenders”) and SunTrust Bank,
as administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”). Terms defined in the
Loan Agreement are used herein with the same meanings.

 

The [name of assignor] (the “Assignor”) hereby sells and assigns, without
recourse, to [name of assignee] (the “Assignee”), and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Assignment Date set forth below, the interests set forth below (the “Assigned
Interest”) in the Assignor’s rights and obligations under the Loan Agreement,
including, without limitation, the interests set forth below in the Term Loans
of the Assignor on the Assignment Date but excluding accrued interest and fees
to and excluding the Assignment Date.  The Assignee hereby acknowledges receipt
of a copy of the Loan Agreement.  From and after the Assignment Date (i) the
Assignee shall be a party to and be bound by the provisions of the Loan
Agreement and, to the extent of the Assigned Interest, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of
the Assigned Interest, relinquish its rights and be released from its
obligations under the Loan Agreement.

 

This Assignment and Acceptance is being delivered to the Administrative Agent
together with (i) if the Assignee is a Person that is not a United States person
under Section 7701(a)(3) of the Code (a “Foreign Person”), any documentation
required to be delivered by the Assignee pursuant to Section 2.20(e) of the Loan
Agreement, duly completed and executed by the Assignee, and (ii) if the Assignee
is not already a Lender under the Loan Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee.  The Assignee shall pay the fee payable to the Administrative
Agent pursuant to Section 10.4(b) of the Loan Agreement.

 

The Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of
any lien, encumbrance or other adverse claim and (ii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Acceptance and to consummate the transactions contemplated
hereby, and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Loan Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

 

The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Acceptance and to consummate the transactions contemplated hereby
and to become a Lender under the Loan Agreement, (ii) it meets all requirements
of an Assignee under the Loan Agreement (subject to receipt of such consents as
may be

 

A-1

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

 

required under the Loan Agreement), (iii) from and after the Assignment Date, it
shall be bound by the provisions of the Loan Agreement as a Lender thereunder
and,  to the extent of the Assigned Interest, shall have the obligations of a
Lender thereunder, (iv) it has received a copy of the Loan Agreement, together
with copies of the most recent financial statements delivered pursuant to
Section 5.1 thereof, as applicable, and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is a
Foreign Person, attached to the Assignment and Acceptance is any documentation
required to be delivered by it pursuant to the terms of the Loan Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

From and after the Assignment Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued
to but excluding the Assignment Date and to the Assignee for amounts which have
accrued from and after the Assignment Date, unless otherwise agreed in writing
by the Administrative Agent.

 

This Assignment and Acceptance shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns.  This
Assignment and Acceptance may be executed in any number of counterparts, which
together shall constitute one instrument.  Delivery of an executed counterpart
of a signature page of this Assignment and Acceptance by telecopy shall be
effective as delivery of a manually executed counterpart of this Assignment and
Acceptance.  This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.

 

Assignment Date:

 

Legal Name of Assignor:

 

Legal Name of Assignee:

 

Assignee’s Address for Notices:

 

Facility

 

Principal Amount
Assigned

 

Percentage Assigned of Term
Loan (set forth, to at least 8
decimals, as a percentage of the
aggregate Term Loans of all
Lenders thereunder)

 

Term Loan:

 

$

 

 

 

%

 

Exhibit 2.4-2

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

 

The terms set forth above are hereby agreed to:

 

 

[Name of Assignor], as Assignor

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

[Name of Assignee], as Assignee

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Exhibit 2.4-3

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

 

 

The undersigned hereby consents to the within assignment(1):

 

TC PipeLines, LP, as

SunTrust Bank, as Administrative Agent

Borrower

 

 

 

By:

TC PipeLines GP, Inc.,

 

 

 

its General Partner

 

 

 

 

 

 

 

 

 

 

By:

 

 

By:

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

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

(1)   Consents to be included to the extent required by Section 10.4(b) of the
Credit Agreement.

 

Exhibit 2.4-4

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

 

EXHIBIT 2.3(a)

 

FORM OF NOTICE OF TERM LOAN BORROWING

 

[Date]

 

SunTrust Bank,

as Administrative Agent

for the Lenders referred to below

303 Peachtree Street, N.E., 23rd Floor

Atlanta, GA  30308

Attention: TC PipeLines Portfolio Manager

 

Ladies and Gentlemen:

 

Reference is made to the 364-Day Senior Bridge Loan Agreement dated as of May 3,
2011 (as amended, restated, supplemented or otherwise modified from time to time
and in effect on the date hereof, the “Loan Agreement”), by and among TC
PipeLines, LP, a Delaware limited partnership (the “Borrower”), the several
banks and other financial institutions and lenders as are, or may become,
parties to the Loan Agreement (collectively, the “Lenders”) and SunTrust Bank,
as administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).  Terms defined in the
Loan Agreement are used herein with the same meanings.

 

This notice constitutes a Notice of Term Loan Borrowing, and the Borrower hereby
requests the Term Loan Borrowing under the Loan Agreement, and in that
connection the Borrower specifies the following information with respect to the
Term Loan Borrowing requested hereby:

 

(A)                              Aggregate principal amount of Term Loan
Borrowing:

 

(B)                                Date of Term Loan Borrowing (which is a
Business Day): May 3, 2011

 

(C)                                Interest Rate basis: Eurodollar

 

(D)                               Interest Period:

 

(E)                                 Location and number of the account to which
proceeds of Term Loan Borrowing are to be disbursed:

 

[Signature Page Follows]

 

Exhibit 2.4-1

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

 

The Borrower hereby represents and warrants that the conditions specified in
Section 3.1 of the Loan Agreement are satisfied.

 

 

Very truly yours,

 

 

 

TC PIPELINES, LP, as Borrower

 

 

 

By:

TC PipeLines GP, Inc.,

 

 

its General Partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Exhibit 2.4-2

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

 

EXHIBIT 2.7

 

FORM OF NOTICE OF CONTINUATION/ CONVERSION

 

[Date]

 

SunTrust Bank,

as Administrative Agent

for the Lenders referred to below

303 Peachtree Street, N.E., 23rd Floor

Atlanta, GA  30308

Attention: TC PipeLines Portfolio Manager

 

Ladies and Gentlemen:

 

Reference is made to the 364-Day Senior Bridge Loan Agreement dated as of
                    , 2011 (as amended, restated, supplemented or otherwise
modified from time to time and in effect on the date hereof, the “Loan
Agreement”), by and among TC PipeLines, LP, a Delaware limited partnership (the
“Borrower”), the several banks and other financial institutions and lenders as
are, or may become, parties to the Loan Agreement (collectively, the “Lenders”)
and SunTrust Bank, as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Administrative Agent”). 
Terms defined in the Loan Agreement are used herein with the same meanings.

 

This notice constitutes a Notice of Continuation/Conversion and the Borrower
hereby requests the conversion or continuation of the Term Loans under the Loan
Agreement, and in that connection the Borrower specifies the following
information with respect to the Term Loans to be converted or continued as
requested hereby:

 

(A)                              Term Loans to which this request applies:

 

(B)                                Principal amount of Term Loans to be
converted/continued:

 

(C)                                Effective date of election (which is a
Business Day):

 

(D)                               Interest Rate basis:

 

(E)                                 Interest Period:

 

[Signature Page Follows]

 

Exhibit 2.7-1

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

 

 

Very truly yours,

 

 

 

TC PIPELINES, LP, as Borrower

 

 

 

By:

TC PipeLines GP, Inc.,

 

 

its General Partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Exhibit 2.7-2

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

 

EXHIBIT 3.1(b)(iv)

 

FORM OF [ASSISTANT] SECRETARY’S CERTIFICATE OF TC PIPELINES, LP

 

Date: May 3, 2011

 

The undersigned, being the duly elected, qualified and acting [Assistant]
Secretary of TC PIPELINES GP, INC. (the “General Partner”), a Delaware
corporation and the general partner of TC PIPELINES, LP, a Delaware limited
partnership (the “Borrower”), hereby certifies in such capacity and not in any
individual capacity to SUNTRUST BANK, (“SunTrust”) as administrative agent (in
such capacity, together with its successors in such capacity, the
“Administrative Agent”), for the lenders (collectively, the “Lenders”) as are,
or may become, parties to the Loan Agreement, dated as of even date herewith (as
amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”; capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Loan Agreement), by and among
the Borrower, the Administrative Agent, and the Lenders, that:

 

1.             In such capacity as [Assistant] Secretary of the General Partner
of the Borrower, he/she (a) has knowledge of the business affairs of the
Borrower and the General Partner, (b) is familiar with the Borrower’s limited
partnership agreement and the General Partner’s bylaws and minute books and
(c) is authorized and empowered to issue this certificate for and on behalf of
the General Partner and the Borrower.

 

2.             Attached hereto as Exhibit A is a true, correct and complete copy
of the certificate of limited partnership of the Borrower, and such certificate
of limited partnership has not been modified, amended, rescinded or revoked,
except as shown, and is in full force and effect as of the date hereof.

 

3.             Attached hereto as Exhibit B is a true, correct and complete copy
of the limited partnership agreement of the Borrower and such agreement is in
full force and effect as of the date hereof.

 

4.             Attached hereto as Exhibit C is a true, correct and complete copy
of the certificate of incorporation of the General Partner, and such certificate
of incorporation has not been modified, amended, rescinded or revoked, except as
shown, and is in full force and effect as of the date hereof.

 

5.             Attached hereto as Exhibit D is a true, correct and complete copy
of the bylaws of the General Partner, and such bylaws are in full force and
effect as of the date hereof.

 

6.             Attached hereto as Exhibit E is a true and correct copy of the
resolutions of the Board of Directors of the General Partner, duly adopted at a
meeting held on April 26, 2011 authorizing the Borrower to enter into the
transactions contemplated by the Loan Agreement and the other Loan Documents,
said resolutions have not been amended, and are in full force and effect as of
the date hereof, and said resolutions were duly adopted in accordance with law
and the General Partner’s bylaws.

 

[Signature page to follow]

 

Exhibit 3.1(b)(iv)-1

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

 

IN WITNESS WHEREOF, the undersigned has executed this certificate in his/her
aforesaid capacity, as of the date first set forth above.

 

 

 

TC PIPELINES, LP, as Borrower

 

 

 

By:

TC PipeLines GP, Inc.,

 

 

its General Partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Exhibit 3.1(b)(iii)-2

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

 

EXHIBIT A

 

Certificate of Limited Partnership

(TC PipeLines, LP)

 

See Attached

 

Exhibit 3.1(b)(iv)-3

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

 

EXHIBIT B

 

Limited Partnership Agreement

(TC PipeLines, LP)

 

See Attached

 

Exhibit 3.1(b)(iv)-4

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

 

EXHIBIT C

 

Certificate of Incorporation

(TC PipeLines GP, Inc.)

 

See Attached

 

Exhibit 3.1(b)(iv)-5

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

 

EXHIBIT D

 

Bylaws

(TC PipeLines GP, Inc.)

 

See Attached

 

Exhibit 3.1(b)(iv)-6

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

 

EXHIBIT E

 

Board Resolutions

(TC PipeLines GP, Inc.)

 

Exhibit 3.1(b)(iv)-7

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

 

EXHIBIT 3.1(b)(viii)

 

FORM OF OFFICER’S CERTIFICATE

 

May 3, 2011

 

Reference is made to the 364-Day Senior Bridge Loan Agreement dated as of May 3,
2011 (as amended, restated, supplemented or otherwise modified from time to time
and in effect on the date hereof, the “Loan Agreement”), by and among TC
PipeLines, LP, a Delaware limited partnership (the “Borrower”), the several
banks and other financial institutions and lenders as are, or may become,
parties to the Loan Agreement (collectively, the “Lenders”) and SunTrust Bank,
as administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).  Terms defined in the
Loan Agreement are used herein with the same meanings.

 

This certificate is being delivered pursuant to Section 3.1(b)(viii) of the Loan
Agreement.

 

I, [                                ], in my capacity as [                    ]
of TC PipeLines GP, Inc., (the “General Partner”), a Delaware corporation and
the general partner of the Borrower, and not in any individual capacity, DO
HEREBY CERTIFY, that as of the Closing Date, after giving effect to the funding
of the Term Loans and the consummation of the transactions contemplated to occur
on the Closing Date:

 

(a)           all consents, approvals, authorizations, registrations and filings
and orders required or advisable to be made or obtained under any Requirement of
Law, or by any Contractual Obligation of the Borrower, in connection with the
execution, delivery, performance, validity and enforceability of the Loan
Documents, the Acquisition Agreements or any of the transactions contemplated
thereby have been obtained;

 

(b)           no Default or Event of Default exists;

 

(c)           no default or event of default or similar event has occurred and
is continuing in respect of any Material Indebtedness;

 

(d)           all representations and warranties of the Borrower set forth in
the Loan Documents are true and correct in all material respects (other than
those representations and warranties that are expressly qualified by a Material
Adverse Effect or other materiality, in which case such representations and
warranties shall be true and correct in all respects); and

 

(e)           the Leverage Ratio, calculated after giving pro forma effect to
the Acquisition as if it had occurred on the first day of the first Fiscal
Quarter used for determining the Leverage Ratio, is not greater than 5.50:1.00.

 

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

 

IN WITNESS WHEREOF, I have hereunto signed my name as of the date first above
written.

 

 

 

TC PIPELINES, LP, as Borrower

 

 

 

By:

TC PipeLines GP, Inc.,

 

 

its General Partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[Officer’s Certificate]

 

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

 

EXHIBIT 5.1(c)

 

FORM OF COMPLIANCE CERTIFICATE

 

[Date]

 

To:                              SunTrust Bank, as Administrative Agent

303 Peachtree St., N.E., 23rd Floor

Atlanta, GA 30308

Attention: TC PipeLines Portfolio Manager

 

Ladies and Gentlemen:

 

Reference is made to the 364-Day Senior Bridge Loan Agreement dated as of May 3,
2011 (as amended, restated, supplemented or otherwise modified from time to time
and in effect on the date hereof, the “Loan Agreement”), by and among TC
PipeLines, LP, a Delaware limited partnership (the “Borrower”), the several
banks and other financial institutions and lenders as are, or may become,
parties to the Loan Agreement (collectively, the “Lenders”) and SunTrust Bank,
as administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”).  Terms defined in the
Loan Agreement are used herein with the same meanings.

 

I,                                     , being the duly elected and qualified,
and acting in my capacity as the Controller of TC PipeLines GP, Inc., (the
“General Partner”), a Delaware corporation and the general partner of the
Borrower, hereby certify in such capacity and not in any individual capacity to
the Administrative Agent and each Lender as follows:

 

1.             The consolidated financial statements of Borrower and its
Subsidiaries attached hereto for the Fiscal [Quarter][Year] ending
                                         fairly present in all material respects
the financial condition of Borrower and its Subsidiaries as at the end of such
Fiscal [Quarter][Year] on a consolidated basis, and the related statements of
income cash flows of Borrower and its Subsidiaries for such Fiscal
[Quarter][Year], in accordance with generally accepted accounting principles
consistently applied (subject, in the case of such quarterly financial
statements, to normal year-end audit adjustments and the absence of footnotes).

 

2.             The calculations set forth in Attachment 1 are computations of
the financial covenants set forth in Article VI of the Loan Agreement calculated
from the financial statements referenced in clause 1 above in accordance with
the terms of the Loan Agreement.

 

3.             Based upon a review of the activities of the Borrower and its
Subsidiaries and the financial statements attached hereto during the period
covered thereby, as of the date hereof,

 

[there exists no Default or Event of Default.]

 

[there exists a Default or Event of Default as specified below :

 

                                                                                                                                                                                              and
the Borrower [has taken] [proposes to take] the following actions with respect
thereto:

 

                                                                                                                                                                                              .]

 

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

 

4.             [No change in GAAP or the application thereof has occurred since
December 31, 2010 that would affect any of the financial statements delivered in
connection with this certificate or the calculations set forth herein.]

 

[A change has occurred in GAAP or the application of thereof since December 31,
2010 and the effect of such change on the financial statements accompanying this
Compliance Certificate or the calculations set forth herein is specified below:

 

                                                                                                                                                     .]

 

5.             [Since the date of the most recently delivered Compliance
Certificate, there has been no casualty or other insured damage to any material
portion of any assets of the Borrower or the commencement of any action or
preceding for the taking of any material portion of any assets of the Borrower
under power of eminent domain or by condemnation or similar proceeding.]

 

[Since the date of the most recently delivered Compliance Certificate, there has
been casualty or other insured damage to a material portion of assets of the
Borrower or the commencement of an action or preceding for the taking of a
material portion of assets of the Borrower under power of eminent domain or by
condemnation or similar proceeding as specified below:

 

                                                                                                                                                     .]

 

 

 

TC PIPELINES, LP, as Borrower

 

 

 

By:

TC PipeLines GP, Inc.,

 

 

its General Partner

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title: Controller

 

Exhibit 5.1(c)-2

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

 

Attachment 1 to Compliance Certificate

 

A.

 

LEVERAGE RATIO

 

 

 

 

 

 

 

 

 

 

 

1.

 

Consolidated Total Funded Debt

 

$

 

 

 

 

 

 

 

 

2.

 

Lesser of (i) principal amount of Permitted Subordinated Debt and
(ii) $300,000,000

 

$

 

 

 

 

 

 

 

 

3.

 

Lesser of (i) outstanding amount of Hybrid Securities included in Consolidated
Total Funded Debt and (ii) 15% of Total Capitalization (“Excluded Hybrid
Securities”)

 

$

 

 

 

 

 

 

 

 

4.

 

Item 1 minus Item 2 minus Item 3

 

$

 

 

 

 

 

 

 

 

5.

 

Adjusted Cash Flow

 

$

 

 

 

 

 

 

 

 

6.

 

Ratio of Item 4 to Item 5

 

 

 

 

 

 

 

 

 

7.

 

Maximum Permissible Leverage Ratio from Section 6.1 of the Loan Agreement

 

 

 

 

 

 

 

 

 

8.

 

Default Indicated?

 

 

 

 

 

 

 

 

 

B.

 

INTEREST COVERAGE RATIO

 

 

 

 

 

 

 

 

 

1.

 

Adjusted Cash Flow

 

$

 

 

 

 

 

 

 

 

2.

 

Consolidated Interest Expense

 

$

 

 

 

 

 

 

 

 

3.

 

Interest expense under Excluded Hybrid Securities multiplied by Moody’s Equity
Credit

 

$

 

 

 

 

 

 

 

 

4.

 

Item 2 minus Item 3

 

$

 

 

 

 

 

 

 

 

5.

 

Ratio of Item 1 to Item 4

 

 

 

 

 

 

 

 

 

6.

 

Minimum Interest Coverage Ratio from Section 6.2 of the Loan Agreement:

 

3.00 to 1.00

 

 

 

 

 

 

 

7.

 

Default indicated?

 

 

 

 

Exhibit 5.1(c)-3

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