Exhibit 10.1

 

Execution Version

 

EIGHTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENBRIDGE ENERGY, LIMITED PARTNERSHIP

 

January 26, 2017

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS 1 Section 1.1 Definitions. 1 Section 1.2 Additional
Defined Terms. 30 Section 1.3 Construction. 33       ARTICLE II ORGANIZATION 33
Section 2.1 Continuation. 33 Section 2.2 Name. 34 Section 2.3 Principal Office;
Registered Office. 34 Section 2.4 Purpose and Business. 34 Section 2.5 Powers.
35 Section 2.6 Term. 35 Section 2.7 Title to Partnership Assets. 35      
ARTICLE III ESTABLISHMENT AND DESIGNATION OF SERIES 35 Section 3.1 Establishment
and Designation of Series. 35 Section 3.2 Series AC. 36 Section 3.3 Series EA.
37 Section 3.4 Series ME. 37 Section 3.5 Series L3R. 38 Section 3.6 Series LH.
39 Section 3.7 Allocation Among Series. 39 Section 3.8 No Transfer or Sale. 41  
    ARTICLE IV TRANSFER OF PARTNERSHIP INTERESTS; RIGHT OF FIRST REFUSAL;
TAG-ALONG RIGHTS 41 Section 4.1 Transfers Generally. 41 Section 4.2 General
Restrictions on Transfers of Partnership Interests. 42 Section 4.3 Additional
Restrictions on Transfers of Partnership Interests. 42 Section 4.4 Reserved. 43
Section 4.5 Series EA Right of First Refusal. 43 Section 4.6 Series ME Right of
First Refusal. 45 Section 4.7 Series L3R Right of First Refusal. 47 Section 4.8
Tag-Along Rights. 49 Section 4.9 Transfers of Certain Partnership Assets—ROFR.
50 Section 4.10 EA Call Option. 52 Section 4.11 Reserved. 54 Section 4.12 ME
Call Option. 54 Section 4.13 Reserved. 55 Section 4.14 L3R Call Option. 55
Section 4.15 Specific Performance. 57

 

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ARTICLE V CAPITAL CONTRIBUTIONS; PARTNERSHIP INTERESTS;  FUTURE CAPITAL
REQUIREMENTS 57 Section 5.1 Series LH Partnership Interests and Capital
Contributions. 57 Section 5.2 Series AC Capital Contributions, AC Debt Financing
and Partnership Interests. 57 Section 5.3 Reserved. 58 Section 5.4 Reserved. 58
Section 5.5 Initial Series EA Capital Contributions. 58 Section 5.6 Additional
Series EA Capital Contributions. 59 Section 5.7 Initial Series ME Capital
Contributions. 62 Section 5.8 Additional Series ME Capital Contributions. 63
Section 5.9 Initial Series L3R Capital Contributions. 67 Section 5.10 Additional
Series L3R Capital Contributions. 67 Section 5.11 Interest and Withdrawal of
Capital Contributions. 71 Section 5.12 Capital Accounts. 71       ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS 72 Section 6.1 Allocations for Capital Account
Purposes. 72 Section 6.2 Requirement and Characterization of Series AC
Distributions; Distributions to Series AC Partners. 76 Section 6.3 Requirement
and Characterization of Series EA Distributions; Distributions to Series EA
Partners. 77 Section 6.4 Requirement and Characterization of Series ME
Distributions; Distributions to Series ME Partners. 78 Section 6.5 Requirement
and Characterization of Series L3R Distributions; Distributions to Series L3R
Partners. 79 Section 6.6 Distributions to Series LH Partners. 79       ARTICLE
VII MANAGEMENT AND OPERATION OF BUSINESS; LIMITED PARTNERS 80 Section 7.1
Management. 80 Section 7.2 Certificate of Limited Partnership. 82 Section 7.3
Reserved. 82 Section 7.4 Actions Requiring the Approval of the Series EA
Partners. 82 Section 7.5 Actions Requiring the Approval of the Series ME
Partners. 84 Section 7.6 Actions Requiring the Approval of the Series L3R
Partners. 85 Section 7.7 Series EA Annual Budget. 87 Section 7.8 Series ME
Annual Budget. 88 Section 7.9 Series L3R Annual Budget. 88 Section 7.10
Collection of Series AC Revenue Entitlement. 89 Section 7.11 Collection of
Series EA Revenue Entitlement. 89 Section 7.12 Collection of Series ME Revenue
Entitlement. 90 Section 7.13 Collection of Series L3R Revenue Entitlement. 90
Section 7.14 Compensation of General Partners. 90 Section 7.15 Indemnification.
91 Section 7.16 Interseries Indemnification. 92 Section 7.17 Liability of
Indemnitees. 93 Section 7.18 Limitation of Liability. 93

 

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Section 7.19 Management of Business. 93 Section 7.20 Outside Activities of the
Limited Partners. 94 Section 7.21 Reliance by Third Parties. 94 Section 7.22
Managing General Partner. 95 Section 7.23 Conflicts of Interest. 95 Section 7.24
Shared Use of Shared Assets. 95       ARTICLE VIII BOOKS, RECORDS AND ACCOUNTING
96 Section 8.1 Records and Accounting. 96 Section 8.2 Fiscal Year. 96      
ARTICLE IX TAX MATTERS 96 Section 9.1 Tax Returns. 96 Section 9.2 Partner Tax
Return Information. 96 Section 9.3 Tax Elections. 97 Section 9.4 Tax
Controversies. 97 Section 9.5 Withholding. 98 Section 9.6 Tax Reimbursement. 98
Section 9.7 Tax Partnership. 99 Section 9.8 Tax Matters Following a Fundamental
Change. 99       ARTICLE X OTHER EVENTS 101 Section 10.1 Fundamental Change. 101
Section 10.2 Alberta Clipper Surcharge Expiration. 102 Section 10.3 Eastern
Access Surcharge Expiration. 103 Section 10.4 Mainline Expansion Surcharge
Expiration. 105 Section 10.5 L3R Surcharge Expiration. 106       ARTICLE XI
DISSOLUTION AND LIQUIDATION 108 Section 11.1 Dissolution of the Partnership. 108
Section 11.2 Termination of a Series. 109 Section 11.3 Winding Up, Liquidation
and Distribution of Assets of the Partnership or a Series Upon Dissolution of
the Partnership or Termination of Such Series. 109 Section 11.4 Cancellation of
Certificate of Limited Partnership. 111 Section 11.5 Return of Capital
Contributions. 111 Section 11.6 Waiver of Partition. 111 Section 11.7 Capital
Account Restoration. 111       ARTICLE XII AMENDMENT OF PARTNERSHIP AGREEMENT;
MEETINGS; RECORD DATE; MERGER 111 Section 12.1 Amendment. 111 Section 12.2
Amendment Requirements. 112 Section 12.3 Voting Rights. 112 Section 12.4
Meetings. 112 Section 12.5 Place of Meetings. 112 Section 12.6 Notice of
Meetings. 113

 

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Section 12.7 Quorum. 113 Section 12.8 Proxies. 113 Section 12.9 Action Without a
Meeting. 113 Section 12.10 Waiver of Notice. 113 Section 12.11 Merger,
Consolidation and Conversion. 114       ARTICLE XIII GENERAL PROVISIONS 114
Section 13.1 Addresses and Notices; Written Communications. 114 Section 13.2
Further Action. 115 Section 13.3 Binding Effect. 115 Section 13.4 Integration.
116 Section 13.5 Creditors. 116 Section 13.6 Waiver. 116 Section 13.7
Counterparts. 116 Section 13.8 Applicable Law. 116 Section 13.9 Invalidity of
Provisions. 116 Section 13.10 Consent of Partners. 116 Section 13.11 Third Party
Beneficiaries. 116

 

EXHIBITS

Exhibit A:Partnership Interests

Exhibit B:Exclusive Series AC Assets

Exhibit C:Exclusive Series EA Assets

Exhibit D:Exclusive Series ME Assets

Exhibit E:Exclusive Series L3R Assets

Exhibit F:Shared Assets

Exhibit G:Sample Illustration of Purchase Price Mechanics

 

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EIGHTH AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF ENBRIDGE ENERGY, LIMITED PARTNERSHIP

 

THIS EIGHTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
January 26, 2017, is entered into by and among Enbridge Pipelines (Lakehead)
L.L.C., a Delaware limited liability company (“Lakehead GP”), and Enbridge
Pipelines (Wisconsin) Inc., a Wisconsin corporation (“Wisconsin GP”), each as a
general partner of the Partnership with respect to the applicable Series as set
forth opposite its name on Exhibit A and, in the case of Lakehead GP, as a
general partner of the Partnership generally, and Enbridge Energy Company, Inc.,
a Delaware corporation (“EECI”), Enbridge Pipelines (Eastern Access) L.L.C., a
Delaware limited liability company (“EECI EA Sub”), Enbridge Pipelines (Mainline
Expansion) L.L.C., a Delaware limited liability company (“EECI ME Sub”),
Enbridge Pipelines (L3R) L.L.C., a Delaware limited liability company (“EECI L3R
Sub”), and Enbridge Energy Partners, L.P., a Delaware limited partnership
(“Enbridge Partners”), each as a limited partner of the Partnership with respect
to the applicable Series set forth opposite its name on Exhibit A, together with
any other Persons who become Partners in the Partnership associated with any
Series or the Partnership generally as provided herein.

 

WHEREAS, Lakehead GP, Wisconsin GP, EECI, EECI EA Sub, EECI ME Sub and Enbridge
Partners entered into that certain Seventh Amended and Restated Agreement of
Limited Partnership of Enbridge Energy, Limited Partnership on July 30, 2015
(the “Prior Agreement”) for the purpose of, among other things, providing for
the modification of distributions to and contributions by EECI and Enbridge
Partners with respect to Series EA (as defined herein) and Series ME (as defined
herein);

 

WHEREAS, the parties hereto have determined it to be in their respective best
interests to establish and designate a fifth separate series of partnership
interests and related assets and liabilities of the Partnership in accordance
with Section 17-218 of the Delaware Act (as defined herein), which shall be
named the Series L3R (as defined herein) and shall be related to the Line 3
Replacement Project (as defined herein), and to amend and restate the Prior
Agreement in its entirety; and

 

WHEREAS, as of the date of this Agreement, each of the Line 3 Replacement
Project and the execution and delivery of this Agreement have been approved by
the EEM Board (as defined herein).

 

NOW, THEREFORE, in consideration of the covenants, conditions and agreements
contained herein, the parties hereto do hereby amend and restate the Prior
Agreement to provide in its entirety as set forth below:

 

ARTICLE I
DEFINITIONS

 

Section 1.1           Definitions.

 

The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.

 

1

 

 

“Adjusted Capital Account” means the Series Capital Account maintained for a
Partner with respect to a Series, (i) increased by any amounts that such Partner
is obligated to restore or is treated as obligated to restore under Treasury
Regulation Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5) and
(ii) decreased by any amounts described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) with respect to such Partner.

 

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. For the purposes
of this Agreement, (i) with respect to Enbridge Partners and its Subsidiaries,
the term “Affiliate” shall exclude Enbridge Inc. and each of its Subsidiaries
(other than Enbridge Partners and its Subsidiaries) and (ii) with respect to
Enbridge Inc. and its Subsidiaries (other than Enbridge Partners and its
Subsidiaries), the term “Affiliate” shall exclude Enbridge Partners and each of
its Subsidiaries.

 

“Agreed Value” of property contributed by a Partner to the Partnership with
respect to a Series means the fair market value of such property or other
consideration at the time of contribution as reasonably determined by the
Managing General Partner of such Series. The Managing General Partner of such
Series shall use such method as it determines to be appropriate to allocate the
aggregate Agreed Value of properties contributed by a Partner to the Partnership
with respect to a Series in a single or integrated transaction among each
separate property on a basis proportional to the fair market value of each
contributed property.

 

“Agreement” means this Eighth Amended and Restated Agreement of Limited
Partnership of Enbridge Energy, Limited Partnership, including all exhibits
hereto, as it may be amended, supplemented or restated from time to time.

 

“Alberta Clipper 154-B Model” means the FERC Opinion No. 154-B model estimate
relating to the Alberta Clipper Surcharge on file with the FERC from time to
time.

 

“Alberta Clipper Surcharge” means the tariff surcharge related to the Alberta
Clipper System approved by the FERC by letter dated August 28, 2008 (124 FERC ¶
61,200 (2008)) as described in the FERC Settlement Offer.

 

“Alberta Clipper Surcharge Term” means the primary term of the Alberta Clipper
Surcharge and any extension thereof in accordance with the FERC Settlement
Offer.

 

“Alberta Clipper System” means (a) the U.S. segment of the 36-inch diameter
crude oil pipeline that extends from Hardisty, Alberta to Superior, Wisconsin,
with an initial annual capacity of 450,000 bpd and (b) related terminals,
interconnections, tanks and pump stations located within the United States, each
as more fully described in the FERC Settlement Offer.

 

“Allowance For Funds Used During Construction” or “AFUDC” has the meaning
assigned to such term by the FERC Uniform System of Accounts.

 

2

 

 

“Allowance Oil Revenue” means the collection by Enbridge Pipelines Inc. of one
tenth of one percent (.1%) of all hydrocarbon volume physically delivered from
the Enbridge Mainline under the International Joint Tariff, such amount being
allocated between the Canadian Mainline and the Lakehead System as one twentieth
of one percent (.05%) to each carrier.

 

“B1 Promissory Note” means the Promissory Note, dated as of March 15, 2010,
executed by the Partnership in favor of Enbridge Partners in the initial
principal amount of $324,591,140.79.

 

“Baseline Qualifying Volumes” means (i) 26,000 bpd during the year 2013 and (ii)
203,000 bpd during the year 2014 and thereafter.

 

“Book Value” means, with respect to any property associated with a Series, such
property’s adjusted basis for U.S. federal income tax purposes, except as
follows:

 

(a)         the initial Book Value of any property contributed by a Partner to
the Partnership with respect to a Series shall be the Agreed Value of such
property;

 

(b)         the Book Values of all properties of a Series shall be adjusted to
equal their respective fair market values as determined by the Managing General
Partner of such Series in connection with (i) the acquisition of an interest in
such Series by any new or existing Partner in exchange for more than a de
minimis capital contribution, (ii) the distribution to a Partner of more than a
de minimis amount of property of a Series as consideration for an interest in
such Series, (iii) the grant of an interest in such Series (other than a de
minimis interest) as consideration for the provision of services to or for the
benefit of such Series by an existing Partner acting in a Partner capacity, or
by a new Partner acting in a Partner capacity or in anticipation of becoming a
Partner, (iv) the liquidation of the Partnership or any Series within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g)(1) (other than
pursuant to Section 708(b)(1)(B) of the Code), or (v) any other event to the
extent determined by the Managing General Partner of such Series to be necessary
to properly reflect Book Values in accordance with the standards set forth in
Treasury Regulation Section 1.704-1(b)(2)(iv)(q);

 

(c)         the Book Value of any property of a Series distributed to a Partner
shall be the fair market value of such property as reasonably determined by the
Managing General Partner of such Series; and

 

(d)         the Book Values of all properties of a Series shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such property
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
attributable to such Series pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m) and clause (f) of the definition of Profits and
Losses or Section 6.1(b)(viii); provided, however, Book Value shall not be
adjusted pursuant to this clause (d) to the extent the Managing General Partner
of such Series reasonably determines that an adjustment pursuant to clause (b)
hereof is necessary or appropriate in connection with the transaction that would
otherwise result in an adjustment pursuant to this clause (d).

 

3

 

 

If the Book Value of any property has been determined or adjusted pursuant to
clauses (b) or (d) hereof, such Book Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such property for purposes of
computing Profits and Losses and other items allocated pursuant to Article VI.

 

“bpd” means barrels per day.

 

“Business Day” means Monday through Friday of each week, except that a legal
holiday recognized as such by the government of the United States of America or
the State of Texas shall not be regarded as a Business Day.

 

“C1 Promissory Note” the Promissory Note, dated as of March 15, 2010, executed
by the Partnership in favor of Enbridge Partners in the initial principal amount
of $162,271,227.30.

 

“Canadian Mainline” means the common carrier crude oil and liquid petroleum
pipeline system and associated facilities that extends from Edmonton, Alberta
through the provinces of Alberta, Saskatchewan and Manitoba, ultimately ending
at the crossing of the United States/Canada border near Neche, North Dakota
where it connects with the Lakehead System, as such pipeline may be extended or
modified from time to time, including by the Alberta Clipper System and the
Eastern Access Project.

 

“Capital Account” means the capital account maintained for a Partner pursuant to
Section 5.12.

 

“Capital Contribution” means, with respect to any Partner, the amount of money
and the Net Agreed Value of any property contributed by such Partner to the
Partnership with respect to a Series. Any reference in this Agreement to the
Capital Contribution of a Partner shall include its pro rata share of any
Capital Contribution of its predecessors in interest.

 

“CAPP” means the Canadian Association of Petroleum Producers.

 

“Certificate of Limited Partnership” means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 7.2, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.

 

“Chicago Connectivity 154-B Model” means the FERC Opinion No. 154-B model
estimate for the Chicago Connectivity Project on file with the FERC from time to
time.

 

“Chicago Connectivity Project” means a project to twin Line 62 with a new 76
mile 36-inch pipeline from Flanagan, Illinois to Griffith, Indiana.

 

“Chicago Connectivity Revenue Entitlement” means, prior to the expiration of the
Chicago Connectivity Term Sheet, the Chicago Connectivity Revenue Requirement
and Allowance Oil Revenue applicable to the Chicago Connectivity Project.
Following the expiration or suspension of the Chicago Connectivity Term Sheet,
the Chicago Connectivity Revenue Entitlement will be determined pursuant to
Section 10.4.

 

4

 

 

“Chicago Connectivity Revenue Requirement” means the revenue requirement
calculated pursuant to the Chicago Connectivity Term Sheet utilizing the FERC’s
Opinion No. 154-B methodology and using the FERC PLO7-2 methodology. If prior to
the expiration of the Chicago Connectivity Term Sheet, there is a change in the
FERC’s regulatory requirements or otherwise, that would eliminate the filing of
the applicable Chicago Connectivity 154-B Model, then the Chicago Connectivity
Revenue Requirement shall be estimated in accordance with a model prepared as if
a Chicago Connectivity 154-B Model were required to be filed with respect to the
Chicago Connectivity Project.

 

“Chicago Connectivity Surcharge” means the tariff surcharge component for the
Chicago Connectivity Project, as described in the Chicago Connectivity Term
Sheet and agreed to by CAPP.

 

“Chicago Connectivity Term Sheet” means the Commercial Term Sheet dated October
24, 2012 relating to the Chicago Connectivity Project and agreed to by CAPP, as
the same may be amended from time to time.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time. All references herein to sections of the Code shall include any
corresponding provision or provisions of succeeding law.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Control” means the possession, directly or indirectly (through one or more
intermediaries), of the power to direct or cause the direction of the management
or policies (whether through ownership of securities or any partnership or other
ownership interest, by contract or otherwise) of a Person.

 

“Delaware Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del
C. Section 17-101, et seq., as amended, supplemented or restated from time to
time, and any successor to such statute.

 

“Depreciation” means, for each taxable year, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable for U.S.
federal income tax purposes with respect to property for such taxable year,
except that with respect to any property the Book Value of which differs from
its adjusted tax basis for U.S. federal income tax purposes, Depreciation for
such taxable year shall be the amount of book basis recovered for such taxable
year under the rules prescribed by Treasury Regulation Section 1.704-3(d)(2).

 

“Eastern Access 154-B Model” means the FERC Opinion No. 154-B model estimate for
the applicable phase of the Eastern Access Project on file with the FERC from
time to time.

 

“Eastern Access Final In-Service Date” means the “In-Service Date” (as such term
is used in the applicable Series EA Tariff Term Sheet) of the final phase of the
Eastern Access Project to be completed and placed into service.

 

5

 

 

“Eastern Access First In-Service Date” means the “In-Service Date” (as such term
is used in the applicable Series EA Tariff Term Sheet) of the phase of the
Eastern Access Project that is first completed and placed into service.

 

“Eastern Access Phase I Capital Threshold” means the cost level as described in
paragraph 6 of the Eastern Access Phase I Term Sheet ($1.3 Billion).

 

“Eastern Access Phase II Capital Threshold” means the cost level as described in
paragraph 6 of the Eastern Access Phase II Term Sheet ($550 Million).

 

“Eastern Access Phase I Qualifying Volumes” means the Qualifying Volumes less
the Baseline Qualifying Volumes.

 

“Eastern Access Phase I Revenue Requirement” means the revenue requirement
calculated pursuant to the Eastern Access Phase I Term Sheet utilizing the
FERC’s Opinion No. 154-B methodology and using the FERC PLO7-2 methodology. If
prior to the expiration of the Eastern Access Phase I Term Sheet, there is a
change in the FERC’s regulatory requirements or otherwise, that would eliminate
the filing of the applicable Eastern Access 154-B Model, then the Eastern Access
Phase I Revenue Requirement shall be estimated in accordance with a model
prepared as if an Eastern Access 154-B Model were required to be filed with
respect to Eastern Access Phase 1.

 

“Eastern Access Phase II Revenue Requirement” means the revenue requirement
calculated pursuant to the Eastern Access Phase II Term Sheet excluding the
credit for the Line 6B integrity costs as described in the Eastern Access Phase
II Term Sheet, utilizing the FERC’s Opinion No. 154-B methodology and using the
FERC PLO7-2 methodology. If prior to the expiration of the Eastern Access Phase
I Term Sheet, there is a change in the FERC’s regulatory requirements or
otherwise, that would eliminate the filing of the applicable Eastern Access
154-B Model, then the Eastern Access Phase II Revenue Requirement shall be
estimated in accordance with a model prepared as if an Eastern Access 154-B
Model were required to be filed with respect to Eastern Access Phase II.

 

“Eastern Access Phase III Revenue Requirement” means the revenue requirement
calculated pursuant to the Eastern Access Phase III Term Sheet utilizing the
FERC’s Opinion No. 154-B methodology and using the FERC PLO7-2 methodology. If
prior to the expiration of the Eastern Access Phase III Term Sheet, there is a
change in the FERC’s regulatory requirements or otherwise, that would eliminate
the filing of the applicable Eastern Access 154-B Model, then the Eastern Access
Phase III Revenue Requirement shall be estimated in accordance with a model
prepared as if an Eastern Access 154-B Model were required to be filed with
respect to Eastern Access Phase III.

 

“Eastern Access Phase I Surcharge” means the tariff surcharge component for the
first phase of the Eastern Access Project, as described in the Eastern Access
Phase I Term Sheet and agreed to by CAPP. Such Eastern Access Phase I Surcharge
shall reflect adjustments for (i) capital costs above the Eastern Access Phase I
Capital Threshold, with a further adjustment to the extent that Eastern Access
Phase II capital costs are less than the Eastern Access Phase II Capital
Threshold and (ii) Line 6B avoided integrity costs, all as described in the
Eastern Access Phase I Term Sheet.

 

6

 

 

“Eastern Access Phase II Surcharge” means the tariff surcharge component for the
second phase of the Eastern Access Project, as described in the Eastern Access
Phase II Term Sheet and agreed to by CAPP. Such Eastern Access Phase II
Surcharge shall reflect adjustments for capital costs above the Eastern Access
Phase II Capital Threshold with a further adjustment to the extent that Eastern
Access Phase I capital costs are less than the Eastern Access Phase I Capital
Threshold, and no adjustment for the Line 6B avoided integrity cost credit, all
as described in the Eastern Access Phase II Term Sheet.

 

“Eastern Access Phase III Surcharge” means the tariff surcharge component for
the third phase of the Eastern Access Project, as described in the Eastern
Access Phase III Term Sheet and agreed to by CAPP.

 

“Eastern Access Phase I Term Sheet” means the Commercial Term Sheet dated
November 15, 2011 relating to Eastern Access Phase I and agreed to by CAPP, as
the same may be amended from time to time.

 

“Eastern Access Phase II Term Sheet” means the Commercial Term Sheet dated July
17, 2012 relating to Eastern Access Phase II and agreed to by CAPP, as the same
may be amended from time to time.

 

“Eastern Access Phase III Term Sheet” means the Commercial Term Sheet dated
October 24, 2012 relating to Eastern Access Phase III and agreed to by CAPP, as
the same may be amended from time to time.

 

“Eastern Access Project” means a project to expand pipeline system capacity of
the Lakehead System to alleviate bottlenecks and meet increased demand for
pipeline capacity and is comprised of the following three phases:

 

(a)           “Eastern Access Phase I”: (i) Line 62 expansion through pump
station additions and upgrades, (ii) a 36-inch replacement of Line 6B from
Griffith, Indiana to Stockbridge, Michigan (excluding a 25-mile portion of such
line scheduled for replacement under a separate project) and (iii) terminal
upgrades, including tankage, located in Superior, Wisconsin; Flanagan, Illinois;
Hartsdale, Indiana and Stockbridge, Michigan.

 

(b)          “Eastern Access Phase II”: (i) a 30-inch replacement of Line 6B
from Ortonville, Michigan to the United States/Canada border, (ii) an expansion
of Line 6B downstream of Stockbridge, Michigan through pump station additions
and upgrades, (iii) an additional 333,000 barrel tank in Griffith, Indiana and
(iv) terminal upgrades at Superior, Wisconsin.

 

(c)          “Eastern Access Phase III”: (i) Line 6B expansion between Griffith,
Indiana and Stockbridge, Michigan through the addition of new pumps and
modifications, (ii) five additional 333,000 barrel tanks and certain terminal
upgrades at the Stockbridge, Michigan terminal and (iii) an additional 333,000
barrel tank and terminal upgrades at Hartsdale, Indiana.

 

7

 

 

“Eastern Access Surcharge” means the combined Eastern Access Phase I Surcharge,
the Eastern Access Phase II Surcharge and the Eastern Access Phase III
Surcharge, as described in the Series EA Tariff Term Sheets.

 

“Eastern Access Surcharge Term” means the primary term of the Eastern Access
Surcharge, and any extension thereof.

 

“Economic Risk of Loss” has the meaning assigned to such term in Treasury
Regulation Section 1.752-2(a).

 

“EECI AC Sub” means Enbridge Pipelines (Alberta Clipper) L.L.C.

 

“Enbridge Inc.” means Enbridge Inc., a Canadian corporation.

 

“Enbridge Mainline” means the combined liquids pipeline system made up of the
Canadian Mainline and the Lakehead System.

 

“Enbridge Partners Options” means the EA Call Option, the ME Call Option and the
L3R Call Option, collectively.

 

“Enbridge Pipelines Inc.” means Enbridge Pipelines Inc., a Canadian corporation.

 

“Entity” means a corporation, firm, limited liability company, partnership
(general or limited), joint venture, trust, business trust, unincorporated
organization, cooperative, association or other legal entity.

 

“Exclusive Series AC Assets” means all assets and rights related exclusively to
the Alberta Clipper System, including the assets and rights set forth as
“Exclusive Series AC Assets” on Exhibit B hereto.

 

“Exclusive Series EA Assets” means all assets and rights related exclusively to
the Eastern Access Project, including the assets and rights set forth as
“Exclusive Series EA Assets” on Exhibit C hereto.

 

“Exclusive Series L3R Assets” means all assets and rights related exclusively to
the Line 3 Replacement Project, including the assets and rights set forth as
“Exclusive Series L3R Assets” on Exhibit E hereto.

 

“Exclusive Series ME Assets” means all assets and rights related exclusively to
the Mainline Expansion Project, including the assets and rights set forth as
“Exclusive Series ME Assets” on Exhibit D hereto.

 

“Existing Indebtedness” means Indebtedness of the Partnership or Enbridge
Partners or both existing on the Series AC Closing Date.

 

8

 

 

“Facility B1” means the credit facility designated as the B1 Credit Agreement,
dated July 31, 2009, by and between Enbridge Partners and the Partnership, on
behalf of the Series AC, which was refinanced with the proceeds of the B1
Promissory Note.

 

“Facility C1” means the credit facility designated as the C1 Credit Agreement,
dated July 31, 2009, by and between Enbridge Partners and the Partnership, on
behalf of Series AC, which was refinanced with the proceeds of the C1 Promissory
Note.

 

“FERC” means the U.S. Federal Energy Regulatory Commission.

 

“FERC Settlement Offer” means the Offer of Settlement of the Partnership filed
with the FERC, on June 27, 2008 in Docket No. OR08-12-000.

 

“Fifth A&R Agreement” means that certain Fifth Amended and Restated Agreement of
Limited Partnership of Enbridge Energy, Limited Partnership, dated as of
December 6, 2012.

 

“Flanagan Terminal” means that certain terminal operated by the Partnership
located in Flanagan, Illinois.

 

“General Partner” means a general partner of the Partnership generally or any
Series, as applicable.

 

“General Partner Interest” means the Partnership Interest of a General Partner
in the Partnership generally or with respect to a Series (in its capacity as a
General Partner without reference to any Limited Partner Interest held by it).

 

“Hartsdale Terminal” means the terminal in Hartsdale, Indiana receiving crude
oil from Line 62 and the Griffith, Indiana terminal.

 

“hp” means horsepower.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

 

“Indebtedness” means (a) debt for money borrowed and similar monetary
obligations evidenced by bonds (excluding surety and performance bonds), notes,
debentures or other similar instruments, (b) reimbursement obligations with
respect to letters of credit and (c) guaranties, endorsements and other
contingent obligations whether direct or indirect in respect of liabilities of
others of any of the types described in clauses (a) and (b) above (other than
endorsements for collection or deposit in the ordinary course of business). For
the avoidance of doubt, the term “Indebtedness” excludes trade accounts payable
in the ordinary course of business.

 

“Indemnitee” means, with respect to a Series, (a) any Person who is or was a
General Partner of such Series or a General Partner of the Partnership
generally, (b) any Person who is or was a delegate of any such General Partner,
(c) any Person who is or was an Affiliate of any such General Partner or
delegate, (d) any Person who is or was a member, partner, director, officer,
fiduciary or trustee of any such General Partner or delegate and (e) any Person
who is or was serving at the request of any such General Partner or delegate or
any Affiliate of any such General Partner or delegate as an officer, director,
member, partner, fiduciary or trustee of another Person; provided that a Person
shall not be an Indemnitee by reason of providing, on a fee-for-services basis,
trustee, fiduciary or custodial services.

 

9

 

 

“Initial AC Debt Financing” means the borrowings incurred under Facility B1 and
Facility C1 on the Series AC Closing Date as described in Section 5.2(b).

 

“Intercompany Obligations” means the Liabilities incurred, assumed or otherwise
contracted for between Enbridge Partners or any Material Subsidiary of Enbridge
Partners, on the one hand, and the Partnership generally or any Series, on the
other hand.

 

“Intercompany Preliminary AC Construction Cost Payable” means outstanding
Indebtedness of the Partnership arising from intercompany borrowings by the
Partnership from Enbridge Partners in an aggregate principal amount equal to the
Preliminary Alberta Clipper Construction Costs.

 

“Intercompany Preliminary EA Construction Cost Payable” means outstanding
Indebtedness of the Partnership arising from intercompany borrowings by the
Partnership from Enbridge Partners in an aggregate principal amount equal to the
Preliminary Eastern Access Construction Costs.

 

“Intercompany Preliminary L3R Construction Cost Payable” means outstanding
Indebtedness of the Partnership arising from intercompany borrowings by the
Partnership from Enbridge Partners in an aggregate principal amount equal to the
Preliminary L3R Construction Costs.

 

“Intercompany Preliminary ME Construction Cost Payable” means outstanding
Indebtedness of the Partnership arising from intercompany borrowings by the
Partnership from Enbridge Partners in an aggregate principal amount equal to the
Preliminary Mainline Expansion Construction Costs.

 

“International Joint Tariff or “IJT”” means the International Joint Tariff as
defined in that certain Competitive Toll Settlement Dated July 1, 2011.

 

“L3R 154-B Model” means the FERC Opinion No. 154-B model estimate for the Line 3
Replacement Project on file with the FERC from time to time.

 

“L3R Additional True-Up Amount” means $39,393,939.39.

 

“L3R In-Service Date” means the date on which the Line 3 Replacement Project is
completed and placed into service.1

 

“L3R Revenue Requirement” means the revenue requirement calculated pursuant to
the L3R ROE Support Letter, but without any adjustment for integrity credits,
utilizing the FERC’s Opinion No. 154-B methodology and using the negotiated
return on equity set forth in the L3R ROE Support Letter. If there is a change
in the FERC’s regulatory requirements or otherwise that would eliminate the
filing of the L3R 154-B Model, then the L3R Revenue Requirement shall be
estimated in accordance with a model prepared as if a L3R 154-B Model were
required to be filed with respect to the Line 3 Replacement Project.

 

 

1 NTD: ENB to confirm.

 

10

 

 

“L3R ROE Support Letter” means the CAPP support letter, dated June 4, 2014,
relating to the negotiated return on equity for the Line 3 Replacement Project
and agreed to by CAPP, as the same may be amended from time to time.

 

“L3R Support Letters” means, collectively, the L3R Surcharge Support Letter and
the L3R ROE Support Letter.

 

“L3R Surcharge” means the Lakehead System tariff surcharge component for the
Line 3 Replacement Project as described in the L3R Surcharge Support Letter and
to be ultimately approved by the FERC for inclusion in the Lakehead System
tariff, excluding any adjustments for integrity credits.

 

“L3R Surcharge Support Letter” means the CAPP support letter, dated February 28,
2014, relating to the Line 3 Replacement Project and agreed to by CAPP, as the
same may be amended from time to time.

 

“L3R Surcharge Term” means the primary term of the L3R Surcharge, and any
extension thereof.

 

“Lakehead System” means the crude oil and liquid petroleum pipeline, owned by
the Partnership (and associated with one or more Series) and regulated by the
FERC, that extends from the United States/Canada border near Neche, North Dakota
extending through the upper and lower Great Lakes region of the U.S. and
re-entering Canada near Marysville, Michigan with an extension across the
Niagara River into the Buffalo, New York area, as such pipeline may be extended
or modified from time to time, including by the Alberta Clipper System and the
Eastern Access Project.

 

“Liability” means any debt, liability, expense or other obligation.

 

“Limited Partner” means any limited partner of the Partnership generally or of
any Series, as applicable.

 

“Limited Partner Interest” means the Partnership Interest of a Limited Partner
in the Partnership generally or with respect to a Series (in its capacity as a
limited partner without reference to any General Partner Interest held by it).

 

“Line 3” means the 34-inch liquids pipeline between Edmonton, Alberta and
Superior, Wisconsin.

 

“Line 3 Replacement Project” means:

 

(a) a new 34-inch pipeline between the United States/Canada border and valve
site MP 789.45;

 

11

 

 

(b) a new 36-inch pipeline between valve site MP 789.45 and the terminal located
in Superior, Wisconsin;

 

(c) eight new pump stations along the pipeline corridor;

 

(d) modifications to terminals in Clearbrook, Minnesota and Superior, Wisconsin;
and

 

(e) the decommissioning of terminals relating to the existing Line 3 facilities.

 

For the avoidance of doubt, the Line 3 maintenance project to replace the first
16 miles of Line 3 at the United States/Canada border, which was placed in
service in September 2014, is considered to be a pre-build of the Line 3
Replacement Project and part of the Line 3 Replacement Project.

 

“Line 5” means the 30-inch liquids pipeline from Superior, Wisconsin to Sarnia,
Ontario.

 

“Line 6A” means the 34-inch liquids pipeline between Superior, Wisconsin and
Griffith, Indiana.

 

“Line 6B” means the 30-inch liquids pipeline from Griffith, Indiana to
Stockbridge, Michigan to Sarnia, Ontario.

 

“Line 17” means the 16-inch liquids pipeline from Stockbridge, Michigan to
Freedom Junction, Michigan.

 

“Line 17 IJT Discount” means the tariff discount described in that certain
Tariff Discount Sharing Agreement dated as of the Series EA Closing Date by and
between the Series EA and Enbridge Pipelines (Toledo) Inc., a Delaware
corporation, associated with Line 17.

 

“Line 62” means the 22-inch liquids pipeline from Flanagan, Illinois to
Hartsdale, Indiana.

 

“Line 79” means the 20-inch liquids pipeline between Stockbridge, Michigan and
Freedom Junction, Michigan and the leased 16-inch pipeline between Freedom
Junction, Michigan and Van Buren Station, Michigan.

 

“Liquidation Date” means (a) in the case of an event giving rise to the
dissolution of the Partnership or termination of a Series of the type described
in Sections 11.1(a)(iv), 11.1(a)(v) or 11.2(a)(iv), the date on which the
applicable time period during which the Partners have the right to elect to
continue the business of the Partnership or Series, as applicable, has expired
without such an election being made and (b) in the case of any other event
giving rise to the dissolution of the Partnership or termination of a Series,
the date on which such event occurs.

 

“Mainline Expansion 154-B Model” means the FERC Opinion No. 154-B model estimate
for the applicable phase of the Mainline Expansion Project on file with the FERC
from time to time.

 

12

 

 

“Mainline Expansion Final In-Service Date” means the “In-Service Date” (as such
term is used in the applicable Series ME Tariff Term Sheet) of the final
component of the Mainline Expansion Project to be completed and placed into
service.

 

“Mainline Expansion First In-Service Date” means the “In-Service Date” (as such
term is used in the applicable Series ME Tariff Term Sheet) of the component of
the Mainline Expansion Project that is first completed and placed into service.

 

“Mainline Expansion Phase I Revenue Requirement” means the revenue requirement
calculated pursuant to the Mainline Expansion Phase I Term Sheet utilizing the
FERC’s Opinion No. 154-B methodology and using the FERC PLO7-2 methodology. If
prior to the expiration of the Mainline Expansion Phase I Term Sheet, there is a
change in the FERC’s regulatory requirements or otherwise, that would eliminate
the filing of the applicable Mainline Expansion 154-B Model, then the Mainline
Expansion Phase I Revenue Requirement shall be estimated in accordance with a
model prepared as if a Mainline Expansion 154-B Model were required to be filed
with respect to Mainline Expansion Phase 1.

 

“Mainline Expansion Phase I Surcharge” means the tariff surcharge component for
the first phase of the Mainline Expansion Project, as described in the Mainline
Expansion Phase I Term Sheet and agreed to by CAPP.

 

“Mainline Expansion Phase I Term Sheet” means the Commercial Term Sheet dated
May 28, 2012 relating to Mainline Expansion Phase I and agreed to by CAPP, as
the same may be amended from time to time.

 

“Mainline Expansion Phase II Revenue Requirement” means the revenue requirement
calculated pursuant to the Mainline Expansion Phase II Term Sheet utilizing the
FERC’s Opinion No. 154-B methodology and using the FERC PLO7-2 methodology. If
prior to the expiration of the Mainline Expansion Phase II Term Sheet, there is
a change in the FERC’s regulatory requirements or otherwise, that would
eliminate the filing of the applicable Mainline Expansion 154-B Model, then the
Mainline Expansion Phase II Revenue Requirement shall be estimated in accordance
with a model prepared as if a Mainline Expansion 154-B Model were required to be
filed with respect to Mainline Expansion Phase II.

 

“Mainline Expansion Phase II Surcharge” means the tariff surcharge component for
the second phase of the Mainline Expansion Project, as described in the Mainline
Expansion Phase II Term Sheet and agreed to by CAPP. Such Mainline Expansion
Phase II Surcharge shall be exclusive of the surcharge applicable to $247
million of capital previously invested by the Partnership in 2007 for upsizing
Southern Access from 36 inches to 42 inches.

 

“Mainline Expansion Phase II Term Sheet” means the Commercial Term Sheet dated
October 24, 2012 relating to Mainline Expansion Phase II and agreed to by CAPP,
as the same may be amended from time to time.

 

“Mainline Expansion Phase III In-Service Date” means the “In-Service Date” (as
such term is used in the Mainline Expansion Phase III Term Sheet) of Mainline
Expansion Phase III.

 

13

 

 

“Mainline Expansion Phase III Revenue Requirement” means the revenue requirement
calculated pursuant to the Mainline Expansion Phase III Term Sheet utilizing the
FERC’s Opinion No. 154-B methodology and using the FERC PLO7-2 methodology. If
prior to the expiration of the Mainline Expansion Phase III Term Sheet, there is
a change in the FERC’s regulatory requirements or otherwise, that would
eliminate the filing of the applicable Mainline Expansion 154-B Model, then the
Mainline Expansion Phase III Revenue Requirement shall be estimated in
accordance with a model prepared as if a Mainline Expansion 154-B Model were
required to be filed with respect to Mainline Expansion Phase III.

 

“Mainline Expansion Phase III Surcharge” means the tariff surcharge component
for the third phase of the Mainline Expansion Project, as described in the
Mainline Expansion Phase III Term Sheet and agreed to by CAPP.

 

“Mainline Expansion Phase III Term Sheet” means the Commercial Term Sheet dated
October 24, 2012 relating to Mainline Expansion Phase III and agreed to by CAPP,
as the same may be amended from time to time.

 

“Mainline Expansion Project” means a project to expand pipeline system capacity
on the Lakehead System to alleviate bottlenecks and meet increased demand for
pipeline capacity and is comprised of the following four components:

 

(a)           the Chicago Connectivity Project;

 

(b)          “Mainline Expansion Phase I”: (i) the expansion of Alberta Clipper
System capacity from 450,000 bpd to 570,000 bpd, (ii) two additional 333,0000
barrel tanks and terminal upgrades at Superior, Wisconsin, (iii) the expansion
of Southern Access capacity from 400,000 bpd to 560,000 bpd and (iv) three
additional 333,000 barrel tanks in Flanagan, Illinois;

 

(c)          “Mainline Expansion Phase II”: (i) the further expansion of
Southern Access capacity from 560,000 bpd to 1,200,000 bpd through the addition
of 12 new pump stations and modifications at four existing stations, (ii) two
additional 333,000 barrel tanks in Flanagan, Illinois and (iii) four additional
333,000 barrel tanks and terminal upgrades in Superior Wisconsin; and

 

(d)          “Mainline Expansion Phase III”: (i) the further expansion of
Alberta Clipper System capacity from 570,000 bpd to 800,000 bpd and (ii)
terminal upgrades at Clearbrook, Minnesota.

 

“Mainline Expansion Surcharge” means the combined Chicago Connectivity
Surcharge, the Mainline Expansion Phase I Surcharge, the Mainline Expansion
Phase II Surcharge and the Mainline Expansion Phase III Surcharge, as described
in the Series ME Tariff Term Sheets.

 

“Mainline Expansion Surcharge Term” means the primary term of the Mainline
Expansion Surcharge, and any extension thereof.

 

14

 

 

“Majority in Interest” means, with respect to a Series, one or more Partners of
such Series holding Partnership Interests in such Series that in the aggregate
exceed fifty percent (50%) of all Percentage Interests owned by Partners of such
Series.

 

“Material Subsidiary of Enbridge Partners” means any Subsidiary of Enbridge
Partners that directly or through one or more of its Subsidiaries (i) owns
assets with a book value equal to 10% or more of the book value of the
consolidated assets of Enbridge Partners and its consolidated Subsidiaries,
(ii) contributed 10% or more of consolidated operating income for any fiscal
quarter during the four fiscal quarters most recently ended of Enbridge Partners
and its Consolidated Unrestricted Subsidiaries (as defined in Enbridge Partners’
Credit Agreement dated as of September 26, 2011, as amended), or (iii) is a
“significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act as such Regulation is in effect on
any date of determination.

 

“Maximum Commitment” means, with respect to a Series EA Partner, a Series ME
Partner or a Series L3R Partner the amount set forth opposite such Partner’s
name on Exhibit A in the column entitled “Maximum Commitment.”

 

“Minimum Gain” has the meaning assigned to the term “partnership minimum gain”
in Treasury Regulation Section 1.704-2(d).

 

“Net Agreed Value” means, (a) in the case of any property contributed by a
Partner to the Partnership with respect to a Series, the Agreed Value of such
property reduced by any liabilities either assumed by such Series upon such
contribution or to which such property is subject when contributed and (b) in
the case of any property of a Series distributed to a Partner, the Book Value of
such property at the time such property is distributed, reduced by any
indebtedness either assumed by such Partner upon such distribution or to which
such property is subject at the time of distribution, in either case, as
determined under Section 752 of the Code.

 

“Nonrecourse Deductions” has the meaning assigned to such term in Treasury
Regulation Section 1.704-2(b).

 

“Omnibus Agreement” means the Omnibus Agreement, dated October 17, 2002, by and
among EECI, Enbridge Partners and Enbridge Pipelines Inc.

 

“Partner Nonrecourse Debt” has the meaning assigned to such term in Treasury
Regulation Section 1.704-2(b)(4).

 

“Partner Nonrecourse Debt Minimum Gain” has the meaning assigned to such term in
Treasury Regulation Section 1.704-2(i)(2).

 

“Partner Nonrecourse Deductions” has the meaning assigned to such term in
Treasury Regulation Section 1.704-2(i)(1).

 

“Partners” means the General Partners and the Limited Partners.

 

15

 

 

“Partnership” means Enbridge Energy, Limited Partnership, a Delaware limited
partnership, formed on October 9, 1991 pursuant to the Delaware Act upon the
filing of the Certificate of Limited Partnership in the office of the Secretary
of State of the State of Delaware and the entry into the Agreement of Limited
Partnership of the Partnership dated October 9, 1991.

 

“Partnership generally” means, with respect to the Partnership, the “limited
partnership generally” as such phrase is used in Section 17-218 of the Delaware
Act.

 

“Partnership Interest” means a partnership interest in the Partnership generally
or with respect to a Series, which shall include General Partner Interests and
Limited Partner Interests.

 

“Percentage Interest” means, with respect to any Partner of a Series, the
percentage of the Partnership Interests of the applicable Series held by such
Partner relative to the total outstanding Partnership Interests of such Series.
The Percentage Interest of each Partner with respect to each Series as of the
date of this Agreement is as set forth opposite such Partner’s name on Exhibit
A. The Percentage Interests of the Partners of any Series shall be adjusted as
follows:

 

(a)          in connection with the exercise of the Enbridge Partners Options as
set forth in Sections 4.10, 4.12 and 4.14;

 

(b)          from time to time pursuant to Sections 5.6(e), 5.8(e) or 5.10(e);
and

 

(c)          immediately following (i) the admission of any Person as a new
Partner of such Series or (ii) any Capital Contribution to such Series that is
not Pro Rata among the Partners of such Series (other than a Capital
Contribution pursuant to Sections 5.6(a)(ii), 5.6(e), 5.8(a)(ii), 5.8(e) or
5.10(e)), to reflect the quotient, expressed as a percentage, obtained by
dividing (A) such Partner’s Series Capital Account balance with respect to such
Series by (B) the sum of all Partners’ Series Capital Account balances with
respect to such Series, in each case, taking into account any prior adjustments
pursuant to clause (a) of this definition.

 

Upon the adjustment of the Percentage Interests in the manner set forth in this
definition, Exhibit A will be amended to reflect such adjusted Percentage
Interests. The Percentage Interest of any Partner of the Partnership generally
shall at all times be zero.

 

“Permitted Transferee” means, with respect to any Person, an Affiliate of such
Person; provided that the term “Permitted Transferee” shall not include any
Affiliate that, at the date of determination, such Person or any of its
Affiliates intends or expects to sell, assign, exchange or otherwise cease to
own or control.

 

“Person” means an individual, Entity or government agency or political
subdivision thereof.

 

“Preliminary Alberta Clipper Construction Costs” means $425,142,514.25, which
amount represents the sum of (1) all cash costs, expenses and liabilities
actually paid by the Partnership prior to the Series AC Closing Date that are
directly attributable to or properly allocable to the Series AC Assets and
(2) all AFUDC that are directly attributable to or properly allocable to the
Series AC Assets prior to the Series AC Closing Date.

 

16

 

 

“Preliminary Eastern Access Construction Costs” means $7,900,000.00, which
amount represents the sum of (1) all cash costs, expenses and liabilities
actually paid by the Partnership prior to the Series EA Closing Date that are
directly attributable to or properly allocable to the Series EA Assets and
(2) all AFUDC that are directly attributable to or properly allocable to the
Series EA Assets prior to the Series EA Closing Date.

 

“Preliminary L3R Construction Costs” means $415,127,273, which amount represents
the sum of (1) all cash costs, expenses and liabilities actually paid by the
Partnership prior to the Series L3R Closing Date that are directly attributable
to or properly allocable to the Series L3R Assets and (2) all AFUDC that are
directly attributable to or properly allocable to the Series L3R Assets prior to
the Series L3R Closing Date, less any depreciation that is directly attributable
to or properly allocable to the Series L3R Assets prior to the Series L3R
Closing Date.

 

“Preliminary Mainline Expansion Construction Costs” means $5,000,000, which
amount represents the sum of (1) all cash costs, expenses and liabilities
actually paid by the Partnership prior to the Series ME Closing Date that are
directly attributable to or properly allocable to the Series ME Assets and
(2) all AFUDC that are directly attributable to or properly allocable to the
Series ME Assets prior to the Series ME Closing Date.

 

“Pro Rata” means apportioned among all Partners of a particular Series in
accordance with their relative Percentage Interests in such Series.

 

“Profits” or “Losses” means, for each taxable year with respect to any Series,
an amount equal to such Series’ taxable income or loss for such taxable year,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments (without duplication):

 

(a)          any income of such Series that is exempt from U.S. federal income
tax and not otherwise taken into account in computing Profits and Losses
pursuant to this definition of “Profits” and “Losses” shall be added to such
taxable income or loss;

 

(b)          any expenditures of such Series described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i) and not otherwise
taken into account in computing Profits or Losses pursuant to this definition of
“Profits” and “Losses” shall be subtracted from such taxable income or loss;

 

(c)          in the event the Book Value of any asset is adjusted pursuant to
clause (b) or clause (c) of the definition of Book Value, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
Book Value of the asset) or an item of loss (if the adjustment decreases the
Book Value of the asset) from the disposition of such asset and shall be taken
into account for purposes of computing Profits or Losses;

 

(d)          gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for U.S. federal income tax purposes
shall be computed by reference to the Book Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Book Value;

 

17

 

 

(e)          in lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such taxable year;

 

(f)          to the extent an adjustment to the adjusted tax basis of any asset
pursuant to Code Section 734(b) is required, pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Account balances for such Series as a result of a distribution other than in
liquidation of a Partner’s Partnership Interest with respect to such Series, the
amount of such adjustment shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or an item of loss (if the adjustment
decreases such basis) from the disposition of such asset and shall be taken into
account for purposes of computing Profits or Losses; and

 

(g)          any items that are allocated pursuant to Sections 6.1(b) and 6.1(c)
shall be determined by applying rules analogous to those set forth in clauses
(a) through (g) hereof but shall not be taken into account in computing Profits
and Losses.

 

“Qualifying Volume Adjustment” means the product of (i) the Eastern Access Phase
I Qualifying Volumes, (ii) the United States/Canada border to Chicago, Illinois
toll as set forth in FERC Tariff No. 43.9.0 filed on March 1, 2012 and as
updated on an annual basis through filings with the FERC and (iii) 50%.

 

“Qualifying Volumes” has the meaning assigned to such term in paragraph 5(d)(2)
of Exhibit III of that certain Southern Access Offer of Settlement dated
December 21, 2005, provided, however, that such Qualifying Volumes shall be
limited to a maximum of 394,000 bpd.

 

“Quarter” means, unless the context requires otherwise, a fiscal quarter of the
Partnership.

 

“Regulatory Allocations” means the allocations set forth in
Sections 6.1(b)(i)-(iii) and 6.1(b)(v)-(vii).

 

“Securities Act” means the Securities Act of 1933, as amended, supplemented or
restated from time to time and any successor to such statute.

 

“Series” means the Series AC, the Series EA, the Series ME, the Series L3R and
the Series LH.

 

“Series AC Assets” means the assets identified as Series AC Assets in Section
3.2(a).

 

“Series AC Closing Date” means July 31, 2009.

 

18

 

 

“Series AC Distribution Amount” means, with respect to any Quarter (including
any Quarter in which the liquidation of the Series AC is completed), an amount
equal to (a) the sum of (i) the portion of the Series AC Revenue Entitlement
that has been collected during such Quarter through the system-wide rates of the
Lakehead System as either the facilities surcharge or the base rates as provided
in Section 7.10 (prior to the expiration of the Alberta Clipper Surcharge Term)
or as determined pursuant to Section 10.2 (following the expiration of the
Alberta Clipper Surcharge Term), (ii) any other cash receipts attributable to or
arising out of the ownership, operation, sale or other disposition of the
Series AC Assets collected during such Quarter and (iii) any net decrease in
Series AC Reserves as shall be established by the Managing General Partner of
the Series AC in respect of such Quarter, less (b) the sum of (i) all Series AC
Expenses for such Quarter, (ii) all cash interest expenses (and principal
reductions net of borrowings) of the Partnership for such Quarter attributable
to Series AC Liabilities (other than any Intercompany Obligation for which the
Series AC is not the Primary Obligor), (iii) any cash maintenance and pipeline
integrity capital expenditures for such Quarter properly allocable to the
Series AC, (iv) any other cash expenses for such Quarter constituting or
attributable to or arising out of a Series AC Liability (other than any
Intercompany Obligation for which the Series AC is not the Primary Obligor) or
otherwise attributable to or arising out of the ownership or operation of the
Series AC Assets and (v) any increase in Series AC Reserves as shall be
established by the Managing General Partner of the Series AC in respect of such
Quarter in accordance with Section 7.3.

 

“Series AC Expansion Capital Expenditures” means cash expenditures by the Series
AC for:

 

(a)          any transaction in which the Series AC acquires (through an asset
acquisition, merger, stock acquisition or other form of investment) control over
all or a portion of the assets, properties or business of another Person for the
purpose of increasing for a period longer than the short term the operating
capacity of the Series AC Assets or operating income of the Series AC from the
operating capacity of the Series AC Assets or operating income of the Series AC
existing immediately prior to such transaction, or

 

(b)          any (i) additions or improvements to the capital assets of the
Series AC or (ii) acquisitions of existing, or the construction of new or the
improvement or replacement of existing, capital assets, in each case if such
additions, improvements, acquisitions, replacements or construction is made to
increase for a period longer than the short term the operating capacity of the
Series AC Assets or operating income of the Series AC from the operating
capacity of the Series AC Assets or operating income of the Series AC existing
immediately prior to such addition, improvement, replacement, acquisition or
construction.

 

The term “Series AC Expansion Capital Expenditures” shall not include Series AC
Maintenance Capital Expenditures. For purposes of this definition, the term
“short term” generally refers to a period not exceeding 12 months.

 

“Series AC Expenses” means, for any period prior to the expiration of the
Alberta Clipper Surcharge Term, the aggregate Series AC General and
Administrative Expenses, Series AC Non-Mandatory Health and Safety Expenses,
Series AC Operating Expenses, Series AC Pipeline Integrity Operating Expenses,
Series AC Power Expenses and Series AC Property Taxes for such period. Following
the expiration of the Alberta Clipper Surcharge Term, the Series AC Expenses
will be determined pursuant to Section 10.2.

 

19

 

 

“Series AC General and Administrative Expenses” means, for any period, the cash
general and administrative expenses attributable to the Series AC Assets
determined by applying the allocation methodology used to determine the estimate
of such expenses pursuant to Section 3(f)(i) of the Series AC Tariff Term Sheet
to the actual general and administrative expenses of the Partnership for such
period.

 

“Series AC General Partner” means any General Partner of the Series AC.

 

“Series AC Liabilities” means the Liabilities identified as Series AC
Liabilities on the Series AC Records from time to time in accordance with this
Agreement.

 

“Series AC Limited Partner” means any Limited Partner of the Series AC.

 

“Series AC Long-Term Debt Financing” means the Indebtedness of the Series AC to
Enbridge Partners evidenced by the B1 Promissory Note and the C1 Promissory
Note.

 

“Series AC Maintenance Capital Expenditures” means cash expenditures by the
Series AC (including expenditures for the addition or improvement to or
replacement of the capital assets of the Series AC or for the acquisition of
existing, or the construction or development of, new capital assets) if such
expenditures are made to maintain, including for a period longer than the short
term, the operating capacity of the Series AC Assets or operating income of the
Series AC. The term “Series AC Maintenance Capital Expenditures” shall not
include Series AC Expansion Capital Expenditures. For purposes of this
definition, the term “short term” generally refers to a period not exceeding 12
months.

 

“Series AC Non-Mandatory Health and Safety Expenses” means, for any period, the
non-mandatory health and safety cash expenses related to the Series AC Assets
for such period.

 

“Series AC Operating Expenses” means, for any period, the cash operating
expenses (excluding any cash expenses related to property taxes, power, pipeline
integrity operating expenditures and non-mandatory health and safety
expenditures) attributable to the Series AC Assets determined by applying the
allocation methodology used to determine the estimate of such expenses pursuant
to Section 3(f)(i) of the Series AC Tariff Term Sheet to the actual cash
operating expenses (excluding any cash expenses related to property taxes,
power, pipeline integrity operating expenditures and non-mandatory health and
safety expenditures) of the Partnership for such period without regard to the
estimated expenses included in the Alberta Clipper 154-B Model for such period.

 

“Series AC Partners” means the Series AC General Partners and the Series AC
Limited Partners.

 

“Series AC Pipeline Integrity Operating Expenses” means, for any period, the
cash pipeline integrity operating expenses related to the Series AC Assets for
such period without regard to the allocation of such expenses pursuant to
Section 3(f)(iii)(1) of the Series AC Tariff Term Sheet.

 

20

 

 

“Series AC Power Expenses” means, for any period, the cash expenses for power
attributable to the Series AC Assets pursuant to Section 3(f)(ii) of the Series
AC Tariff Term Sheet for such period.

 

“Series AC Property Taxes” means, for any period, the cash property tax payments
attributable to the Series AC Assets determined by applying the allocation
methodology used to determine the estimate of such payments pursuant to
Section 3(f)(i) of the Series AC Tariff Term Sheet to the actual cash property
tax payments of the Partnership for such period, without regard to the risk
sharing provisions set forth in the second sentence of Section 3(f)(i)(4) of the
Series AC Tariff Term Sheet.

 

“Series AC Records” means the records maintained for the Series AC in accordance
with Section 3.1(b).

 

“Series AC Reserves” means any cash reserves established by the Managing General
Partner of the Series AC with respect to the Series AC to provide for the proper
conduct of the business of the Series AC, including reserves for future capital
expenditures and anticipated credit needs of the Series AC, or otherwise comply
with applicable law or any agreement or other obligation of the Series AC or to
which any Series AC Assets are subject.

 

“Series AC Revenue Entitlement” means, prior to the expiration of the Alberta
Clipper Surcharge Term, the Series AC Revenue Requirement (excluding any
reduction attributable to the “Revenue Credit” provided for in Section 13 of the
Series AC Tariff Term Sheet). The Series AC Revenue Entitlement will be
calculated in accordance with the Alberta Clipper 154-B Model on file at such
time. If the Partnership does not file an Alberta Clipper 154-B Model during any
year prior to the expiration of the Alberta Clipper Surcharge Term, due to a
change in the FERC’s regulatory requirements or otherwise, then the Series AC
Revenue Entitlement shall be estimated in accordance with a model prepared as if
an Alberta Clipper 154-B Model was required to be filed. Following the
expiration of the Alberta Clipper Surcharge Term, the Series AC Revenue
Entitlement will be determined pursuant to Section 10.2.

 

“Series AC Revenue Requirement” means the revenue requirement as set forth in
Section 3 “Revenue Requirement” of the Series AC Tariff Term Sheet.

 

“Series AC Tariff Term Sheet” means the Alberta Clipper U.S. Term Sheet dated
June 28, 2007 and approved by the FERC by the letter dated August 28, 2008 (124
FERC ¶ 61,200 (2008)), as the same may be amended from time to time.

 

“Series Capital Account” means the capital account maintained for a Partner with
respect to a Series pursuant to Section 5.12.

 

“Series EA Abatement Amount” means, as of any date of determination, an amount
equal to the sum of all incremental Series EA Distributions received by Enbridge
Partners at or prior to such date pursuant to Section 6.3(a)(i) in excess of its
Pro Rata portion.

 

“Series EA Assets” means the assets identified as Series EA Assets in Section
3.3(a).

 

“Series EA Closing Date” means May 17, 2012.

 

21

 

 

“Series EA Contribution Offset Amount” means, as of any date of determination,
an amount equal to the difference between (a) the Series EA Abatement Amount and
(b) the sum of all Additional Series EA Capital Contributions made by Enbridge
Partners pursuant to Section 5.6(a)(ii) in excess of its Pro Rata portion.

 

“Series EA Distribution Amount” means, with respect to any Quarter (including
any Quarter in which the liquidation of the Series EA is completed), an amount
equal to (a) the sum of (i) the portion of the Series EA Revenue Entitlement
that has been collected during such Quarter through the system-wide rates of the
Lakehead System as either the facilities surcharge or the base rates as provided
in Section 7.11 (prior to the expiration of one or more of the Series EA Tariff
Term Sheets) or as determined pursuant to Section 10.3 (following the expiration
of one or more of the Series EA Tariff Term Sheets), (ii) any other cash
receipts attributable to or arising out of the ownership, operation, sale or
other disposition of the Series EA Assets collected during such Quarter and
(iii) any net decrease in Series EA Reserves as shall be established by the
Managing General Partner of the Series EA in respect of such Quarter in
accordance with Section 7.4, less (b) the sum of (i) all Series EA Expenses for
such Quarter, (ii) all cash interest expenses (and principal reductions net of
borrowings) of the Partnership for such Quarter attributable to Series EA
Liabilities (other than any Intercompany Obligation for which the Series EA is
not the Primary Obligor), (iii) any cash maintenance and pipeline integrity
capital expenditures for such Quarter properly allocable to the Series EA,
(iv) any other cash expenses for such Quarter constituting or attributable to or
arising out of a Series EA Liability (other than any Intercompany Obligation for
which the Series EA is not the Primary Obligor) or otherwise attributable to or
arising out of the ownership or operation of the Series EA Assets and (v) any
net increase in Series EA Reserves as shall be established by the Managing
General Partner of the Series EA in respect of such Quarter in accordance with
Section 7.4.

 

“Series EA Expenses” means, for any period prior to the expiration of one or
more of the Series EA Tariff Term Sheets, the aggregate Series EA General and
Administrative Expenses, Series EA Non-Mandatory Health and Safety Expenses,
Series EA Operating Expenses, Series EA Pipeline Integrity Operating Expenses,
Series EA Power Expenses and Series EA Property Taxes for such period. Following
the expiration of one or more of the Series EA Tariff Term Sheets, the Series EA
Expenses will be determined pursuant to Section 10.3.

 

“Series EA General and Administrative Expenses” means, for any period, the cash
general and administrative expenses attributable to the Series EA Assets
determined by applying the allocation methodology used to determine the estimate
of such expenses pursuant to the Series EA Tariff Term Sheets to the actual
general and administrative expenses of the Partnership for such period.

 

“Series EA General Partner” means any General Partner of the Series EA.

 

“Series EA Liabilities” means the Liabilities identified as Series EA
Liabilities on the Series EA Records from time to time in accordance with this
Agreement.

 

“Series EA Limited Partner” means any Limited Partner of the Series EA.

 

22

 

 

“Series EA Maintenance Capital Expenditures” means cash expenditures by the
Series EA (including expenditures for the addition or improvement to or
replacement of the capital assets of the Series EA or for the acquisition of
existing, or the construction or development of new capital assets) if such
expenditures are made to maintain, including for a period longer than the short
term, the operating capacity of the Series EA Assets or operating income of the
Series EA. For purposes of this definition, the term “short term” generally
refers to a period not exceeding 12 months.

 

“Series EA Non-Mandatory Health and Safety Expenses” means, for any period, the
non-mandatory health and safety cash expenses related to the Series EA Assets
for such period.

 

“Series EA Operating Expenses” means, for any period, the cash operating
expenses (including realized oil losses and excluding cash expenses related to
property taxes, power, pipeline integrity operating expenditures and
non-mandatory health and safety expenditures) attributable to the Series EA
Assets determined by applying the allocation methodology used to determine the
estimate of such expenses pursuant to the Series EA Tariff Term Sheets to the
actual cash operating expenses (including realized oil losses and excluding cash
expenses related to property taxes, power, pipeline integrity operating
expenditures and non-mandatory health and safety expenditures) of the
Partnership for such period without regard to the estimated expenses included in
the applicable Eastern Access 154-B Model(s) for such period.

 

“Series EA Partners” means the Series EA General Partners and the Series EA
Limited Partners.

 

“Series EA Phase I Revenue Entitlement” means, prior to the expiration of the
Eastern Access Phase I Term Sheet, the Eastern Access Phase I Revenue
Requirement, Allowance Oil Revenue applicable to Eastern Access Phase I and the
Qualifying Volume Adjustment, all net of the Line 17 IJT Discount. Following the
expiration or suspension of the Eastern Access Phase I Term Sheet, the Series EA
Phase I Revenue Entitlement will be determined pursuant to Section 10.3.

 

“Series EA Phase II Revenue Entitlement” means, prior to the expiration of the
Eastern Access Phase II Term Sheet, the Eastern Access Phase II Revenue
Requirement and Allowance Oil Revenue applicable to Eastern Access Phase II.
Following the expiration or suspension of the Eastern Access Phase II Term
Sheet, the Series EA Phase II Revenue Entitlement will be determined pursuant to
Section 10.3.

 

“Series EA Phase III Revenue Entitlement” means, prior to the expiration of the
Eastern Access Phase III Term Sheet, the Eastern Access Phase III Revenue
Requirement and Allowance Oil Revenue applicable to Eastern Access Phase III.
Following the expiration or suspension of the Eastern Access Phase III Term
Sheet, the Series EA Phase III Revenue Entitlement will be determined pursuant
to Section 10.3.

 

“Series EA Pipeline Integrity Operating Expenses” means, for any period, the
cash pipeline integrity operating expenses related to the Series EA Assets for
such period without regard to the allocation of such expenses pursuant to the
Series EA Tariff Term Sheets.

 

23

 

 

“Series EA Power Expenses” means, for any period, the cash expenses for power
attributable to the Series EA Assets pursuant to the Series EA Tariff Term
Sheets for such period.

 

“Series EA Property Taxes” means, for any period, the cash property tax payments
attributable to the Series EA Assets determined by applying the allocation
methodology used to determine the estimate of such payments pursuant to the
Series EA Tariff Term Sheets to the actual cash property tax payments of the
Partnership for such period, without regard to the risk sharing provisions set
forth in the Series EA Tariff Term Sheets.

 

“Series EA Records” means the records maintained for the Series EA in accordance
with Section 3.1(b).

 

“Series EA Reserves” means any cash reserves established by the Managing General
Partner of the Series EA with respect to the Series EA to provide for the proper
conduct of the business of the Series EA, including reserves for future capital
expenditures and anticipated credit needs of the Series EA, or otherwise comply
with applicable law or any agreement or other obligation of the Series EA or to
which any Series EA Assets are subject.

 

“Series EA Revenue Entitlement” means the Series EA Phase I Revenue Entitlement,
the Series EA Phase II Revenue Entitlement and the Series EA Phase III Revenue
Entitlement, collectively.

 

“Series EA Tariff Term Sheets” means the Eastern Access Phase I Term Sheet, the
Eastern Access Phase II Term Sheet and the Eastern Access Phase III Term Sheet,
collectively.

 

“Series L3R Assets” means the assets identified as Series L3R Assets in Section
3.5(a).

 

“Series L3R Closing Date” means January 26, 2017.

 

“Series L3R Distribution Amount” means, with respect to any Quarter (including
any Quarter in which the liquidation of the Series L3R is completed), an amount
equal to (a) the sum of (i) the portion of the Series L3R Revenue Entitlement
that has been collected during such Quarter through the system-wide rates of the
Lakehead System as either the facilities surcharge or the base rates as provided
in Section 7.13 (prior to the expiration or termination of the L3R Support
Letters) or as determined pursuant to Section 10.5 (following the expiration or
termination of the L3R Support Letters), (ii) any other cash receipts
attributable to or arising out of the ownership, operation, sale or other
disposition of the Series L3R Assets collected during such Quarter and (iii) any
net decrease in Series L3R Reserves as shall be established by the Managing
General Partner of the Series L3R in respect of such Quarter in accordance with
Section 7.6, less (b) the sum of (i) all Series L3R Expenses for such Quarter,
(ii) all cash interest expenses (and principal reductions net of borrowings) of
the Partnership for such Quarter attributable to Series L3R Liabilities (other
than any Intercompany Obligation for which the Series L3R is not the Primary
Obligor), (iii) any cash maintenance and pipeline integrity capital expenditures
for such Quarter properly allocable to the Series L3R, (iv) any other cash
expenses for such Quarter constituting or attributable to or arising out of a
Series L3R Liability (other than any Intercompany Obligation for which the
Series L3R is not the Primary Obligor) or otherwise attributable to or arising
out of the ownership or operation of the Series L3R Assets and (v) any net
increase in Series L3R Reserves as shall be established by the Managing General
Partner of the Series L3R in respect of such Quarter in accordance with
Section 7.6.

 

24

 

 

“Series L3R Expenses” means, for any period prior to the expiration or
termination of the L3R Support Letters, the aggregate Series L3R General and
Administrative Expenses, Series L3R Non-Mandatory Health and Safety Expenses,
Series L3R Operating Expenses, Series L3R Pipeline Integrity Operating Expenses,
Series L3R Power Expenses and Series L3R Property Taxes for such period.
Following the expiration or termination of the L3R Support Letters, the
Series L3R Expenses will be determined pursuant to Section 10.5.

 

“Series L3R General and Administrative Expenses” means, for any period, the cash
general and administrative expenses attributable to the Series L3R Assets
determined by applying an allocation methodology substantially consistent with
past practice and determined to be reasonable by the Managing General Partner of
the Series L3R.

 

“Series L3R General Partner” means any General Partner of the Series L3R.

 

“Series L3R Liabilities” means the Liabilities identified as Series L3R
Liabilities in the Series L3R Records from time to time in accordance with this
Agreement.

 

“Series L3R Limited Partner” means any Limited Partner of the Series L3R.

 

“Series L3R Maintenance Capital Expenditures” means cash expenditures by the
Series L3R (including expenditures for the addition or improvement to or
replacement of the capital assets of the Series L3R or for the acquisition of
existing, or the construction or development of new capital assets) if such
expenditures are made to maintain, including for a period longer than the short
term, the operating capacity of the Series L3R Assets or operating income of the
Series L3R. For purposes of this definition, the term “short term” generally
refers to a period not exceeding 12 months.

 

“Series L3R Non-Mandatory Health and Safety Expenses” means, for any period, the
non-mandatory health and safety cash expenses related to the Series L3R Assets
for such period determined by applying an allocation methodology substantially
consistent with past practice and determined to be reasonable by the Managing
General Partner of the Series L3R.

 

“Series L3R Operating Expenses” means, for any period, the cash operating
expenses (including realized oil losses and excluding cash expenses related to
property taxes, power, pipeline integrity operating expenditures and
non-mandatory health and safety expenditures) attributable to the Series L3R
Assets determined by applying an allocation methodology substantially consistent
with past practice and determined to be reasonable by the Managing General
Partner of the Series L3R (including realized oil losses and excluding cash
expenses related to property taxes, power, pipeline integrity operating
expenditures and non-mandatory health and safety expenditures) of the
Partnership for such period without regard to the estimated expenses included in
the applicable L3R 154-B Model(s) for such period.

 

“Series L3R Partners” means the Series L3R General Partners and the Series L3R
Limited Partners.

 

25

 

 

“Series L3R Pipeline Integrity Operating Expenses” means, for any period, the
cash pipeline integrity operating expenses related to the Series L3R Assets for
such period determined by applying an allocation methodology substantially
consistent with past practice and determined to be reasonable by the Managing
General Partner of the Series L3R.

 

“Series L3R Power Expenses” means, for any period, the cash expenses for power
attributable to the Series L3R Assets for such period determined by applying an
allocation methodology substantially consistent with past practice and
determined to be reasonable by the Managing General Partner of the Series L3R.

 

“Series L3R Property Taxes” means, for any period, the cash property tax
payments attributable to the Series L3R Assets determined by applying an
allocation methodology substantially consistent with past practice and
determined to be reasonable by the Managing General Partner of the Series L3R.

 

“Series L3R Records” means the records maintained for the Series L3R in
accordance with Section 3.1(b).

 

“Series L3R Reserves” means any cash reserves established by the Managing
General Partner of the Series L3R with respect to the Series L3R to provide for
the proper conduct of the business of the Series L3R, including reserves for
future capital expenditures and anticipated credit needs of the Series L3R, or
otherwise comply with applicable law or any agreement or other obligation of the
Series L3R or to which any Series L3R Assets are subject.

 

“Series L3R Revenue Entitlement” means, prior to the expiration or termination
of the L3R Support Letters, the L3R Revenue Requirement and Allowance Oil
Revenue applicable to the Line 3 Replacement Project. Following the expiration,
termination or suspension of the L3R Support Letters, the Series L3R Revenue
Entitlement will be determined pursuant to Section 10.5.

 

“Series LH Assets” means the assets identified as Series LH Assets in Section
3.6(a).

 

“Series LH General Partner” means any General Partner of the Series LH.

 

“Series LH Liabilities” means the Liabilities identified as Series LH
Liabilities on the Series LH Records from time to time in accordance with this
Agreement.

 

“Series LH Limited Partner” means any Limited Partner of the Series LH.

 

“Series LH Partners” means the Series LH General Partners and the Series LH
Limited Partners.

 

“Series LH Records” means the records maintained for the Series LH in accordance
with Section 3.1(b).

 

“Series ME Abatement Amount” means, as of any date of determination, an amount
equal to the sum of all incremental Series ME Distributions received by Enbridge
Partners at or prior to such date pursuant to Section 6.4(a)(i) in excess of its
Pro Rata portion.

 

26

 

 

“Series ME Assets” means the assets identified as Series ME Assets in Section
3.4(a).

 

“Series ME Closing Date” means December 6, 2012.

 

“Series ME Contribution Offset Amount” means, as of any date of determination,
an amount equal to the difference between (a) the Series ME Abatement Amount and
(b) the sum of all Additional Series ME Capital Contributions made by Enbridge
Partners pursuant to Section 5.8(a)(ii) in excess of its Pro Rata portion.

 

“Series ME Distribution Amount” means, with respect to any Quarter (including
any Quarter in which the liquidation of the Series ME is completed), an amount
equal to (a) the sum of (i) the portion of the Series ME Revenue Entitlement
that has been collected during such Quarter through the system-wide rates of the
Lakehead System as either the facilities surcharge or the base rates as provided
in Section 7.12 (prior to the expiration of one or more of the Series ME Tariff
Term Sheets) or as determined pursuant to Section 10.4 (following the expiration
of one or more of the Series ME Tariff Term Sheets), (ii) any other cash
receipts attributable to or arising out of the ownership, operation, sale or
other disposition of the Series ME Assets collected during such Quarter and
(iii) any net decrease in Series ME Reserves as shall be established by the
Managing General Partner of the Series ME in respect of such Quarter in
accordance with Section 7.5, less (b) the sum of (i) all Series ME Expenses for
such Quarter, (ii) all cash interest expenses (and principal reductions net of
borrowings) of the Partnership for such Quarter attributable to Series ME
Liabilities (other than any Intercompany Obligation for which the Series ME is
not the Primary Obligor), (iii) any cash maintenance and pipeline integrity
capital expenditures for such Quarter properly allocable to the Series ME,
(iv) any other cash expenses for such Quarter constituting or attributable to or
arising out of a Series ME Liability (other than any Intercompany Obligation for
which the Series ME is not the Primary Obligor) or otherwise attributable to or
arising out of the ownership or operation of the Series ME Assets and (v) any
net increase in Series ME Reserves as shall be established by the Managing
General Partner of the Series ME in respect of such Quarter in accordance with
Section 7.5.

 

“Series ME Expenses” means, for any period prior to the expiration of one or
more of the Series ME Tariff Term Sheets, the aggregate Series ME General and
Administrative Expenses, Series ME Non-Mandatory Health and Safety Expenses,
Series ME Operating Expenses, Series ME Pipeline Integrity Operating Expenses,
Series ME Power Expenses and Series ME Property Taxes for such period. Following
the expiration of one or more of the Series ME Tariff Term Sheets, the Series ME
Expenses will be determined pursuant to Section 10.4.

 

“Series ME General and Administrative Expenses” means, for any period, the cash
general and administrative expenses attributable to the Series ME Assets
determined by applying the allocation methodology used to determine the estimate
of such expenses pursuant to the Series ME Tariff Term Sheets to the actual
general and administrative expenses of the Partnership for such period.

 

“Series ME General Partner” means any General Partner of the Series ME.

 

27

 

 

“Series ME Liabilities” means the Liabilities identified as Series ME
Liabilities on the Series ME Records from time to time in accordance with this
Agreement.

 

“Series ME Limited Partner” means any Limited Partner of the Series ME.

 

“Series ME Maintenance Capital Expenditures” means cash expenditures by the
Series ME (including expenditures for the addition or improvement to or
replacement of the capital assets of the Series ME or for the acquisition of
existing, or the construction or development of new capital assets) if such
expenditures are made to maintain, including for a period longer than the short
term, the operating capacity of the Series ME Assets or operating income of the
Series ME. For purposes of this definition, the term “short term” generally
refers to a period not exceeding 12 months.

 

“Series ME Non-Mandatory Health and Safety Expenses” means, for any period, the
non-mandatory health and safety cash expenses related to the Series ME Assets
for such period.

 

“Series ME Operating Expenses” means, for any period, the cash operating
expenses (including realized oil losses and excluding cash expenses related to
property taxes, power, pipeline integrity operating expenditures and
non-mandatory health and safety expenditures) attributable to the Series ME
Assets determined by applying the allocation methodology used to determine the
estimate of such expenses pursuant to the Series ME Tariff Term Sheets to the
actual cash operating expenses (including realized oil losses and excluding cash
expenses related to property taxes, power, pipeline integrity operating
expenditures and non-mandatory health and safety expenditures) of the
Partnership for such period without regard to the estimated expenses included in
the applicable Mainline Expansion 154-B Model(s) for such period.

 

“Series ME Partners” means the Series ME General Partners and the Series ME
Limited Partners.

 

“Series ME Phase I Revenue Entitlement” means, prior to the expiration of the
Mainline Expansion Phase I Term Sheet, the Mainline Expansion Phase I Revenue
Requirement and Allowance Oil Revenue applicable to Mainline Expansion Phase I.
Following the expiration or suspension of the Mainline Expansion Phase I Term
Sheet, the Series ME Phase I Revenue Entitlement will be determined pursuant to
Section 10.4.

 

“Series ME Phase II Revenue Entitlement” means, prior to the expiration of the
Mainline Expansion Phase II Term Sheet, the Mainline Expansion Phase II Revenue
Requirement and Allowance Oil Revenue applicable to Mainline Expansion Phase II.
Following the expiration or suspension of the Mainline Expansion Phase II Term
Sheet, the Series ME Phase II Revenue Entitlement will be determined pursuant to
Section 10.4.

 

“Series ME Phase III Revenue Entitlement” means, prior to the expiration of the
Mainline Expansion Phase III Term Sheet, the Mainline Expansion Phase III
Revenue Requirement and Allowance Oil Revenue applicable to Mainline Expansion
Phase III. Following the expiration or suspension of the Mainline Expansion
Phase III Term Sheet, the Series ME Phase III Revenue Entitlement will be
determined pursuant to Section 10.4.

 

28

 

 

“Series ME Pipeline Integrity Operating Expenses” means, for any period, the
cash pipeline integrity operating expenses related to the Series ME Assets for
such period without regard to the allocation of such expenses pursuant to the
Series ME Tariff Term Sheets.

 

“Series ME Power Expenses” means, for any period, the cash expenses for power
attributable to the Series ME Assets pursuant to the Series ME Tariff Term
Sheets for such period.

 

“Series ME Property Taxes” means, for any period, the cash property tax payments
attributable to the Series ME Assets determined by applying the allocation
methodology used to determine the estimate of such payments pursuant to the
Series ME Tariff Term Sheets to the actual cash property tax payments of the
Partnership for such period, without regard to the risk sharing provisions set
forth in the Series ME Tariff Term Sheets.

 

“Series ME Records” means the records maintained for the Series ME in accordance
with Section 3.1(b).

 

“Series ME Reserves” means any cash reserves established by the Managing General
Partner of the Series ME with respect to the Series ME to provide for the proper
conduct of the business of the Series ME, including reserves for future capital
expenditures and anticipated credit needs of the Series ME, or otherwise comply
with applicable law or any agreement or other obligation of the Series ME or to
which any Series ME Assets are subject.

 

“Series ME Revenue Entitlement” means the Chicago Connectivity Revenue
Entitlement, the Series ME Phase I Revenue Entitlement, the Series ME Phase II
Revenue Entitlement and the Series ME Phase III Revenue Entitlement,
collectively.

 

“Series ME Tariff Term Sheets” means the Chicago Connectivity Term Sheet, the
Mainline Expansion Phase I Term Sheet, the Mainline Expansion Phase II Term
Sheet and the Mainline Expansion Phase III Term Sheet, collectively.

 

“Southern Access” means a 42-inch liquids pipeline from Superior, Wisconsin to
Flanagan, Illinois.

 

“Stockbridge Terminal” means that certain terminal operated by the Partnership
located in Stockbridge, Michigan.

 

“Subsidiary” means, with respect to any Person, (a) a corporation of which more
than 50% of the voting power of shares entitled (without regard to the
occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.

 

29

 

 

“Supermajority Interest” means, with respect to a Series, one or more Partners
of such Series holding Partnership Interests in such Series that in the
aggregate exceed seventy-five percent (75%) of all Percentage Interests owned by
Partners of such Series.

 

“Tag Pro Rata Share” means with respect to any Partner that holds Series EA or
Series ME Partnership Interests, a fraction (expressed as a percentage), the
numerator of which equals such Partner’s Series EA or Series ME Percentage
Interest, as applicable, and the denominator of which equals (i) in a situation
where the Tag Pro Rata Share is being calculated with respect to all Partners
that hold Series EA or Series ME Partnership Interests, 100% and (ii) in a
situation where the Tag Pro Rata Share is being calculated with respect to a
particular group of Partners that hold less than 100% of the Series EA or Series
ME Partnership Interests, the total Series EA or Series ME Percentage Interests
held by all the Partners of such group.

 

“Third Party” means, with respect to any Partner, any Person that is not a
Permitted Transferee with respect to such Partner.

 

“Transfer” means, with respect to any Partnership Interest, a transaction (i) by
which a General Partner assigns its General Partner Interest to another Person,
and includes a sale, assignment, gift, pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or merger or otherwise or
(ii) by which the holder of a Limited Partner Interest assigns such Limited
Partner Interest to another Person, and includes a sale, assignment, gift,
pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition
by law or merger or otherwise.

 

Section 1.2          Additional Defined Terms.

 

Each of the terms set forth below has the meaning set forth in the section of
this Agreement set forth opposite such term in the following table:

 

Term   Section Additional Series AC Capital Contributions   Section 5.2(f)
Additional Series EA Capital Contributions   Section 5.6(a) Additional Series ME
Capital Contributions   Section 5.8(a) Additional Series L3R Capital
Contributions   Section 5.10(a) Alberta Clipper Revised Tariff Structure  
Section 10.2(a) Claims   Section 7.15(a) Control Option   Section 10.1(b)
Damages   Section 7.15(a) Default Series EA Capital Contribution   Section
5.6(e) Default Series ME Capital Contribution   Section 5.8(e) Default Series
L3R Capital Contribution   Section 5.10(e) Defaulting Series EA Partner  
Section 5.6(e) Defaulting Series EA Partner Obligation   Section 5.6(e)(ii)(B)

 

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Defaulting Series ME Partner   Section 5.8(e) Defaulting Series ME Partner
Obligation   Section 5.8(e)(ii)(B) Defaulting Series L3R Partner   Section
5.10(e) Defaulting Series L3R Partner Obligation   Section 5.10(e)(ii)(B) EA
Call Option   Section 4.10(a) EA Call Option Closing Date   Section 4.10(b) EA
Call Option Deadline   Section 4.10(a) EA Call Option Interest   Section 4.10(b)
EA Call Option Notice   Section 4.10(b) EA Offered Interests   Section 4.5(a) EA
Offering Partner   Section 4.5(a) EA ROFR Closing Period   Section 4.5(d) EA
ROFR Expiration Date   Section 4.5(b) EA ROFR Notice   Section 4.5(a) EA ROFR
Notice Date   Section 4.5(a) EA ROFR Offer Price   Section 4.5(a) EA ROFR
Proportionate Share   Section 4.5(b) Eastern Access Revised Tariff Structure  
Section 10.3(a) EECI   Preamble EECI EA Sub   Preamble EECI ME Sub   Preamble
EECI L3R Sub   Preamble EEM Board   Section 4.10(a) Enbridge Partners   Preamble
Fundamental Change   Section 10.1(a) Indemnified Series   Section 7.16
Indemnifying Series   Section 7.16 Initial Series AC Capital Contribution  
Section 5.2(a) Initial Series EA Capital Contribution   Section 5.5(a) Initial
Series ME Capital Contribution   Section 5.7(a) Initial Series L3R Capital
Contribution   Section 5.9(a) L3R Revised Tariff Structure   Section 10.5(a) L3R
 Call Option   Section 4.12(a) L3R  Call Option Closing Date   Section 4.12(b)
L3R  Call Option Deadline   Section 4.12(a) L3R  Call Option Interest   Section
4.12(b) L3R  Call Option Notice   Section 4.12(b) L3R  Offered Interests  
Section 4.7(a) L3R  Offering Partner   Section 4.7(a) L3R  ROFR Closing Period  
Section 4.7(d) L3R  ROFR Expiration Date   Section 4.7(b) L3R  ROFR Notice  
Section 4.7(a) L3R  ROFR Notice Date   Section 4.7(a) L3R  ROFR Offer Price  
Section 4.7(a) L3R  ROFR Proportionate Share   Section 4.7(b) L3R Revised Tariff
Structure   Section 10.5

 

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Lakehead GP   Preamble Lending Series EA Partner   Section 5.6(e)(ii) Lending
Series ME Partner   Section 5.8(e)(ii) Lending Series L3R Partner   Section
5.10(e)(ii) Mainline Expansion Revised Tariff Structure   Section 10.4(a)
Managing General Partner   Section 7.22 Maximum Permitted Delegation   Section
10.1(a) ME Call Option   Section 4.12(a) ME Call Option Closing Date   Section
4.12(b) ME Call Option Deadline   Section 4.12(a) ME Call Option Interest  
Section 4.12(b) ME Call Option Notice   Section 4.12(b) ME Offered Interests  
Section 4.6(a) ME Offering Partner   Section 4.6(a) ME ROFR Closing Period  
Section 4.6(d) ME ROFR Expiration Date   Section 4.6(b) ME ROFR Notice   Section
4.6(a) ME ROFR Notice Date   Section 4.6(a) ME ROFR Offer Price   Section 4.6(a)
ME ROFR Proportionate Share   Section 4.6(b) Non-Defaulting Series EA Partner  
Section 5.6(e) Non-Defaulting Series ME Partner   Section 5.8(e) Non-Defaulting
Series L3R Partner   Section 5.10(e) Option Purchase Agreement   Section 5.5(c)
Option Committee   Section 4.10(a) Partnership Representative   Section 9.4(b)
Primary Obligor   Section 3.7(c) Prior Agreement   Preamble Proportionate Share
of Shared Liabilities   Section 3.7(d) ROFR Asset Closing Period   Section
4.9(d) ROFR Asset Expiration Date   Section 4.9(b) ROFR Asset Notice   Section
4.9(a) ROFR Asset Notice Date   Section 4.9(a) ROFR Asset Offer Price   Section
4.9(a) ROFR Holder   Section 4.5(a) ROFR Offered Asset   Section 4.9(a) Series
AC   Section 3.1(a) Series AC Distribution   Section 6.2(a) Series EA   Section
3.1(a) Series EA Annual Budget   Section 7.7(a) Series EA Capital Contribution
Notice   Section 5.6(a) Series EA Distribution   Section 6.3(a) Series EA
Monthly Capital Requirement   Section 5.6(b) Series EA Prior Budget   Section
7.7(c) Series EA Remainder Amount   Section 6.3(a)(ii) Series Indemnified
Damages   Section 7.16

 

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Series LH   Section 3.1(a) Series LH Distribution   Section 6.6(a) Series ME  
Section 3.1(a) Series ME Annual Budget   Section 7.8(a) Series ME Capital
Contribution Notice   Section 5.8(a) Series ME Distribution   Section 6.4(a)
Series ME Monthly Capital Requirement   Section 5.8(b) Series ME Prior Budget  
Section 7.8(c) Series ME Remainder Amount   Section 6.4(a)(ii) Series L3R  
Section 3.5(a) Series L3R Annual Budget   Section 7.9(a) Series L3R Capital
Contribution Notice   Section 5.9(a) Series L3R Distribution   Section 6.5(a)
Series L3R Monthly Capital Requirement   Section 5.8(b) Series L3R Prior Budget
  Section 7.9(c) Series L3R Remainder Amount   Section 6.5(a)(ii) Shared Assets
  Exhibit F Springing Guarantee   Section 7.3(g) Tag-Along Notice   Section
4.8(a) Tag-Along Right   Section 4.8(a) Tag-Along Transferee   Section 4.8(a)
Tag Offerees   Section 4.8(a) Third Party Asset Offer   Section 4.9(a) Third
Party Offer   Section 4.5(a) Transferor   Section 4.8(a) Wisconsin GP   Preamble

 

Section 1.3          Construction.

 

Unless the context requires otherwise: (a) any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa; (b) references to Articles and Sections refer to Articles and Sections of
this Agreement; (c) the terms “include,” “includes,” “including” or words of
like import shall be deemed to be followed by the words “without limitation”;
and (d) the terms “hereof,” “herein” or “hereunder” refer to this Agreement as a
whole and not to any particular provision of this Agreement. The headings
contained in this Agreement are for reference purposes only, and shall not
affect in any way the meaning or interpretation of this Agreement.

 

ARTICLE II
ORGANIZATION

 

Section 2.1          Continuation.

 

Lakehead GP, Wisconsin GP, EECI, EECI EA Sub, EECI ME Sub, and Enbridge Partners
hereby continue the Partnership as a limited partnership under the Delaware Act,
and together with EECI L3R Sub, enter into this Agreement, which amends and
restates the Prior Agreement in its entirety. This Agreement shall be effective
as of the date set forth in the introductory paragraph of this Agreement. Except
as modified in this Agreement, the rights, duties (including fiduciary duties),
liabilities and obligations of the Partners and the administration, dissolution
and termination of the Partnership or any Series shall be governed by the
Delaware Act.

 

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Section 2.2           Name.

 

The name of the Partnership shall continue to be “Enbridge Energy, Limited
Partnership.” Subject to applicable law, the Partnership’s business may be
conducted under any other name or names as determined by the Managing General
Partner of the Partnership generally, including the name of such Managing
General Partner. Each Series’ business shall be conducted under the name of the
Partnership on behalf of such Series, the name of such Series or, subject to
applicable law, any other name or names as determined by the Managing General
Partner of such Series, including the name of such Managing General Partner. The
words “Limited Partnership,” “LP” or similar words or letters shall be included
in the Partnership’s or any Series’ name where necessary for the purpose of
complying with the laws of any jurisdiction that so requires. Without the
consent of any Partner being required, the Managing General Partner of the
Partnership generally may amend this Agreement and the Certificate of Limited
Partnership to change the name of the Partnership at any time and from time to
time and shall promptly notify the Partners of such change.

 

Section 2.3           Principal Office; Registered Office.

 

(a)          The principal office of the Partnership and each Series shall be at
1100 Louisiana, Suite 3300, Houston, Texas 77002 or such other place as the
Managing General Partner of the Partnership generally may from time to time
designate. The Partnership and each Series may maintain offices at such other
places as the Managing General Partner of the Partnership generally or such
Series, as applicable, deems advisable.

 

(b)          The address of the Partnership’s registered office in the State of
Delaware shall be 1209 Orange Street, Wilmington, Delaware 19801, and the
Partnership’s registered agent for service of process on the Partnership in the
State of Delaware shall be The Corporation Trust Company. Without the consent of
any Partner being required, the Managing General Partner of the Partnership
generally may amend this Agreement and the Certificate of Limited Partnership to
change the address of the Partnership’s registered office or the Partnership’s
registered agent for service of process at any time and from time to time and
shall promptly notify the Partners of such change.

 

Section 2.4           Purpose and Business.

 

The purpose and nature of the business to be conducted by the Partnership and
each Series shall be to engage in any lawful activity for which limited
partnerships may be organized under the Delaware Act.

 

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Section 2.5          Powers.

 

The Partnership and each Series shall be empowered to do any and all acts and
things necessary or appropriate for the furtherance and accomplishment of the
purposes and business described in Section 2.4 and for the protection and
benefit of the Partnership or any Series.

 

Section 2.6          Term.

 

The term of the Partnership shall continue in existence until the dissolution of
the Partnership in accordance with the provisions of Article XI. The existence
of the Partnership as a separate legal entity shall continue until the
cancellation of the Certificate of Limited Partnership as provided in the
Delaware Act. Each Series shall have a perpetual existence until the earlier of
the dissolution of the Partnership or the termination of such Series in
accordance with the provisions of Article XI.

 

Section 2.7          Title to Partnership Assets.

 

Subject to applicable law, record title to any or all of the assets of any
Series may be held in the name of the Partnership, such Series, the Managing
General Partner of such Series or one or more nominees, as the Managing General
Partner of such Series may determine. Each Managing General Partner hereby
declares and warrants that the assets of any Series for which record title is
held in the name of such Managing General Partner or one or more nominees shall
be held in trust by such Managing General Partner or such nominee for the use
and benefit of the applicable Series in accordance with the provisions of this
Agreement.

 

ARTICLE III
ESTABLISHMENT AND DESIGNATION OF SERIES

 

Section 3.1           Establishment and Designation of Series.

 

(a)          Prior to the Series L3R Closing Date, the partnership interests in
the Partnership were divided into four series referred to as the “Series AC,”
the “Series EA,” the “Series ME” and the “Series LH.” As of the Series L3R
Closing Date, the Partners hereby establish a fifth series of partnership
interests in the Partnership referred to as the “Series L3R.” Each Series shall
constitute a separate series of partnership interests in accordance with
Section 17-218 of the Delaware Act, having separate rights, powers, duties and
obligations as set forth herein, with each such Series comprised of both General
Partner Interests and Limited Partner Interests, as set forth in Article V.

 

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(b)          Each Series shall be separate and distinct from each other Series,
and separate and distinct records shall be maintained for each Series. The
records maintained for each Series shall account for the assets and Liabilities
associated with such Series separately from the assets and Liabilities
associated with any other Series or the Partnership generally. Records
maintained for a Series that reasonably identify its assets, including by
specific listing, category, type, quantity, computational or allocational
formula or procedure (including a percentage or share of any asset or assets) or
by any other method where the identity of such assets is objectively
determinable, will be deemed to account for the assets associated with such
Series separately from the assets associated with any other Series. Except for
the Intercompany Obligations and the Springing Guarantees or as may be expressly
agreed to by a Series or the Partnership generally, no Liability of a Series
shall be a Liability of any other Series or the Partnership generally. To the
fullest extent permitted by applicable law, except for the Intercompany
Obligations and the Springing Guarantees or as may be expressly agreed to by a
Series or the Partnership generally, all of the Liabilities incurred, contracted
for or otherwise now or hereafter existing with respect to a particular Series
shall be enforceable against the assets of such Series only or a General Partner
associated with such Series and not against the assets of any other Series or of
the Partnership generally or any General Partner not associated with such
Series, and, except for the Intercompany Obligations and the Springing
Guarantees or as may be expressly agreed to by a Series or the Partnership
generally, none of the Liabilities incurred, contracted for or otherwise
existing with respect to any other Series shall be enforceable against the
assets of such Series. The Certificate of Limited Partnership shall contain a
notice of the limitation of liabilities of the Series and of the Partnership
generally in conformity with Section 17-218 of the Delaware Act.

 

(c)          Each Series shall have the power and capacity to, in its own name,
contract, hold title to assets (including real, personal and intangible
property), grant liens and security interests and sue and be sued.

 

Section 3.2            Series AC.

 

(a)          The following shall constitute the Series AC Assets:

 

(i)          the Exclusive Series AC Assets;

 

(ii)         all rights and interests of the Series AC set forth in Exhibit F
with respect to the Shared Assets; and

 

(iii)        all other assets identified as Series AC Assets on the Series AC
Records.

 

(b)          The following shall constitute the Series AC Liabilities (without
duplication):

 

(i)          all Liabilities associated with or arising from the ownership or
operation of the Exclusive Series AC Assets, including the B1 Promissory Note
and the C1 Promissory Note;

 

(ii)         the Series AC’s Proportionate Share of Shared Liabilities;

 

(iii)        the Intercompany Preliminary AC Construction Cost Payable;

 

(iv)        the Intercompany Obligations;

 

(v)         the Springing Guarantees; and

 

(vi)        all other Liabilities identified as Series AC Liabilities on the
Series AC Records.

 

(c)          The Partners hereby acknowledge and agree that all Series AC Assets
are available to satisfy the claims of all creditors in respect of any Series AC
Liability, in each case, without priority of claims among such creditors, except
as may be expressly set forth in the documents evidencing the obligations owed
to any such creditor.

 

36

 

 

Section 3.3          Series EA.

 

(a)          The following shall constitute the Series EA Assets:

 

(i)          the Exclusive Series EA Assets;

 

(ii)         all rights and interests of the Series EA set forth in Exhibit F
with respect to the Shared Assets; and

 

(iii)        all other assets identified as Series EA Assets on the Series EA
Records.

 

(b)          The following shall constitute the Series EA Liabilities (without
duplication):

 

(i)          all Liabilities associated with or arising from the ownership or
operation of the Exclusive Series EA Assets;

 

(ii)         the Series EA’s Proportionate Share of Shared Liabilities;

 

(iii)        the Intercompany Obligations;

 

(iv)        the Intercompany Preliminary EA Construction Cost Payable;

 

(v)         the Springing Guarantees; and

 

(vi)        all other Liabilities identified as Series EA Liabilities on the
Series EA Records.

 

(c)          The Partners hereby acknowledge and agree that all Series EA Assets
are available to satisfy the claims of all creditors in respect of any Series EA
Liability, in each case, without priority of claims among such creditors, except
as may be expressly set forth in the documents evidencing the obligations owed
to any such creditor.

 

Section 3.4          Series ME.

 

(a)          The following shall constitute the Series ME Assets:

 

(i)          the Exclusive Series ME Assets;

 

(ii)         all rights and interests of the Series ME set forth in Exhibit F
with respect to the Shared Assets; and

 

(iii)        all other assets identified as Series ME Assets on the Series ME
Records.

 

(b)          The following shall constitute the Series ME Liabilities (without
duplication):

 

37

 

 

(i)          all Liabilities associated with or arising from the ownership or
operation of the Exclusive Series ME Assets;

 

(ii)         the Series ME’s Proportionate Share of Shared Liabilities;

 

(iii)        the Intercompany Obligations;

 

(iv)        the Intercompany Preliminary ME Construction Cost Payable;

 

(v)         the Springing Guarantees; and

 

(vi)        all other Liabilities identified as Series ME Liabilities on the
Series ME Records.

 

(c)          The Partners hereby acknowledge and agree that all Series ME Assets
are available to satisfy the claims of all creditors in respect of any Series ME
Liability, in each case, without priority of claims among such creditors, except
as may be expressly set forth in the documents evidencing the obligations owed
to any such creditor.

 

Section 3.5          Series L3R.

 

(a)          The following shall constitute the Series L3R Assets:

 

(i)          the Exclusive Series L3R Assets;

 

(ii)         all rights and interests of the Series L3R set forth in Exhibit F
with respect to the Shared Assets; and

 

(iii)        all other assets identified as Series L3R Assets on the Series L3R
Records.

 

(b)          The following shall constitute the Series L3R Liabilities (without
duplication):

 

(i)          all Liabilities associated with or arising from the ownership or
operation of the Exclusive Series L3R Assets;

 

(ii)         the Series L3R’s Proportionate Share of Shared Liabilities;

 

(iii)        the Intercompany Obligations;

 

(iv)        the Intercompany Preliminary L3R Construction Cost Payable;

 

(v)         the L3R Additional True-Up Amount;

 

(vi)        the Springing Guarantees; and

 

(vii)       all other Liabilities identified as Series L3R Liabilities on the
Series L3R Records.

 

38

 

 

(c)          The Partners hereby acknowledge and agree that all Series L3R
Assets are available to satisfy the claims of all creditors in respect of any
Series L3R Liability, in each case, without priority of claims among such
creditors, except as may be expressly set forth in the documents evidencing the
obligations owed to any such creditor.

 

Section 3.6           Series LH.

 

(a)          The following shall constitute the Series LH Assets:

 

(i)          all assets and rights of the Partnership that are not associated
with any other Series;

 

(ii)         all rights and interests of the Series LH set forth in Exhibit F
with respect to the Shared Assets; and

 

(iii)        all other assets identified as Series LH Assets on the Series LH
Records.

 

(b)          The following shall constitute the Series LH Liabilities (without
duplication):

 

(i)          all Liabilities of the Partnership that are not associated with any
other Series;

 

(ii)         the Series LH’s Proportionate Share of Shared Liabilities;

 

(iii)        the Intercompany Obligations;

 

(iv)        the Springing Guarantees; and

 

(v)         all other Liabilities identified as Series LH Liabilities on the
Series LH Records.

 

(c)          The Partners hereby acknowledge and agree that all Series LH Assets
are available to satisfy the claims of all creditors in respect of any Series LH
Liability, in each case, without priority of claims among such creditors, except
as may be expressly set forth in the documents evidencing the obligations owed
to any such creditor.

 

Section 3.7           Allocation Among Series.

 

(a)          The Partnership may acquire assets only to the extent that they are
acquired by the Partnership with respect to one or more particular Series and
not with respect to the Partnership generally. To the extent commercially
feasible, all Liabilities (other than any Intercompany Obligations or Springing
Guarantees) contractually created or incurred or amended by any Series following
the Series AC Closing Date shall be made expressly non-recourse to (i) the
Partnership generally and any other Series and (ii) the Partners of the
Partnership generally or any Series (in their respective capacities as such).

 

39

 

 

(b)          The Managing General Partner of the Partnership generally shall
establish procedures designed to ensure that, to the extent commercially
feasible, all contracts of a Series (other than contracts relating to any
Intercompany Obligations or Springing Guarantees) entered into or amended after
the Series AC Closing Date, (i) expressly acknowledge the separateness of the
Partnership generally and each Series, (ii) notify the contract counterparty of
the identity of the obligor or obligors thereunder (and if more than one
obligor, the obligation of each obligor, which obligation may be joint and
several or may be several depending on the facts and circumstances) and
(iii) are properly executed and delivered by a duly authorized Person on behalf
of the Partnership generally and/or such Series, as applicable.

 

(c)          The Partners (in their respective capacities as such) on the one
hand, and Enbridge Partners (on behalf of itself and each Material Subsidiary of
Enbridge Partners) on the other hand, acknowledge and agree that, for so long as
any Existing Indebtedness (or refinancing thereof) requires, all Intercompany
Obligations currently or hereafter existing are expressly recourse to the
Partnership generally and to each Series, and expressly non-recourse to the
Partners of the Partnership generally and to the Partners of each Series (in the
case of Partners, in their respective capacities as such). The Managing General
Partner of the Partnership generally shall designate each Intercompany
Obligation as the primary obligation of the applicable Series (the “Primary
Obligor”) with respect to which the Intercompany Obligation was incurred. The
Series AC will be the Primary Obligor with respect to the Intercompany
Preliminary AC Construction Cost Payable and Facility B1 and Facility C1 and any
refinancing thereof, including the Series AC Long-Term Debt Financing; the
Series EA will be the Primary Obligor with respect to the Intercompany
Preliminary EA Construction Cost Payable; the Series ME will be the Primary
Obligor with respect to the Intercompany Preliminary ME Construction Cost
Payable; the Series L3R will be the Primary Obligor with respect to the
Intercompany Preliminary L3R Construction Cost Payable and the L3R Additional
True-Up Amount; and the Series LH will be the Primary Obligor with respect to
all other Intercompany Obligations. As among each Series of the Partnership and
the Partnership generally, the Primary Obligor with respect to an Intercompany
Obligation shall have the primary responsibility for administering and
discharging such obligation and shall have primary liability to the creditors or
other obligees associated with such obligation.

 

(d)          The Managing General Partner of the Partnership generally shall
determine the portion of the Liabilities associated with or arising from the
use, ownership or operation of the Shared Assets to be designated as Series AC
Liabilities, Series EA Liabilities, Series ME Liabilities, Series L3R
Liabilities or Series LH Liabilities (with respect to each Series, its
“Proportionate Share of Shared Liabilities”) based on the following criteria
(and the Managing General Partners of the Series AC, Series EA, Series ME,
Series L3R and the Series LH shall maintain the Series AC Records, the Series EA
Records, the Series ME Records, the Series L3R Records and the Series LH
Records, respectively, in a manner consistent with such determination):

 

(i)          the relative use by the Series AC, Series EA, Series ME, Series L3R
and Series LH of the Shared Asset to which the Liability relates;

 

(ii)         the relative benefit to the Series AC, Series EA, Series ME, Series
L3R and Series LH of the Shared Asset to which the Liability relates; and

 

40

 

 

(iii)        if applicable, the relative fault of the Series AC, Series EA,
Series ME, Series L3R and Series LH with respect to the activities or events
giving rise to the Liability related to such Shared Asset.

 

Section 3.8           No Transfer or Sale.

 

The Partners acknowledge and agree that neither the establishment of the Series
AC, Series EA, Series ME, Series L3R and Series LH, nor the designation of their
respective assets as set forth in this Article III shall constitute a sale,
transfer or other disposition of any asset of the Partnership.

 

ARTICLE IV
TRANSFER OF PARTNERSHIP INTERESTS;
RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS

 

Section 4.1            Transfers Generally.

 

(a)          Transfers of Partnership Interests may only be made in strict
compliance with all applicable terms of this Agreement, and any purported
Transfer of Partnership Interests that does not so comply with all applicable
provisions of this Agreement shall, to the fullest extent permitted by law, be
null and void and of no force or effect, and no Managing General Partner acting
on behalf of the Partnership generally or any Series shall recognize or be bound
by any such purported Transfer or effect any such purported Transfer on the
transfer books of the Partnership generally or any Series. The Partners agree
that the restrictions contained in this Article IV are fair and reasonable and
in the best interests of the Partnership, each Series and the Partners.

 

(b)          Notwithstanding anything herein to the contrary, no Transfer by a
Partner of all or any part of its Partnership Interest to another Person shall
be permitted unless (i) the transferee agrees in writing to assume the rights
and duties of such Partner under this Agreement and to be bound by the
provisions of this Agreement and (ii) such transferee shall be admitted to the
Partnership as a Partner with respect to the Partnership generally or a Series,
as applicable, pursuant to Section 4.1(c) immediately prior to the transferor
ceasing to be a Partner with respect to the transferred portion of the
Partnership Interest, and the business of the Partnership and each Series shall
continue without dissolution or termination, respectively.

 

(c)          To effect the admission of any Partner to the Partnership generally
or any Series, the Managing General Partner of the Partnership generally and
each applicable Series shall take all steps necessary or appropriate under the
Delaware Act to amend the records of the Partnership and the applicable Series
to reflect such admission and, if necessary, notwithstanding Sections 12.1 or
12.2, to prepare and adopt as soon as practicable an amendment to this Agreement
and, if required by law, the Managing General Partner of the Partnership
generally shall prepare and file an amendment to the Certificate of Limited
Partnership. The transferee shall be admitted to the Partnership with respect to
the Partnership generally or the applicable Series, as the case may be, as a
general partner or limited partner, as applicable, upon satisfaction of the
requirements of Section 4.1(b) and this Section 4.1(c), without the consent of
any other Partner being required.

 

41

 

 

(d)          No Partner shall have any right to withdraw from the Partnership or
any Series; provided, however, that when a transferee of a Partner’s Partnership
Interest is admitted to the Partnership or any Series in accordance with
Section 4.1(c) with respect to the Partnership Interest so transferred, the
transferring Partner shall cease to be a Partner with respect to the Partnership
Interest so transferred.

 

Section 4.2           General Restrictions on Transfers of Partnership
Interests.

 

(a)          Notwithstanding the other provisions of this Article IV, no
Transfer of any Partnership Interests shall be made if such Transfer would
(i) violate the then applicable federal or state securities laws or rules and
regulations of the Commission, any state securities commission or any other
governmental authority with jurisdiction over such Transfer, (ii) terminate the
existence or qualification of the Partnership or any Series under the laws of
the State of Delaware or (iii) cause the Partnership or any Series 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 (to the extent not already so treated or
taxed).

 

(b)          The Managing General Partner of the Partnership generally may
impose restrictions on the Transfer of Partnership Interests if it receives an
opinion of counsel that such restrictions are necessary to avoid a significant
risk of the Partnership or any Series becoming taxable as a corporation or
otherwise becoming taxable as an entity for U.S. federal income tax purposes.
Notwithstanding Sections 12.1 and 12.2, the Managing General Partner of the
Partnership generally may impose such restrictions by amending this Agreement.

 

(c)          For so long as the Partnership is a partnership for U.S. federal
income tax purposes, in no event may any Transfer of any Partnership Interests
by any Partner be made if such Transfer is effectuated through an “established
securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Section 7704 of the Code or if such Transfer
would otherwise result in the Partnership or any Series being treated as a
“publicly traded partnership,” as such term is defined in Section 7704(b) of the
Code and the regulations promulgated thereunder.

 

Section 4.3           Additional Restrictions on Transfers of Partnership
Interests.

 

(a)          Series EA, Series ME and Series L3R Partnership Interests. No
Transfer of a Series EA, Series ME or Series L3R Partnership Interest may be
made unless (i) such Transfer complies with the provisions of Section 4.1 and
Section 4.2 and (ii) unless such Transfer is to a Permitted Transferee of the
transferring Partner, such Transfer is made in accordance with Sections 4.5,
4.6, 4.7 or 4.8, as applicable.

 

(b)          Series AC and Series LH Partnership Interests. No Transfer of a
Series AC or Series LH Partnership Interest may be made unless such Transfer
complies with the provisions of Section 4.1 and Section 4.2.

 

42

 

 

Section 4.4           Reserved.

 

Section 4.5           Series EA Right of First Refusal.

 

(a)          If any Partner receives a bona fide written offer from a Third
Party (a “Third Party Offer”) for the Transfer of all or a part of such
Partner’s (and its respective Permitted Transferees) Partnership Interests in
Series EA and such Partner (the “EA Offering Partner”) desires to accept and is
otherwise permitted to effect such proposed Transfer pursuant to this
Article IV, such EA Offering Partner shall deliver written notice of such Third
Party Offer (the “EA ROFR Notice”) to the Managing General Partner of the
Partnership generally as soon as reasonably practicable, but in no event less
than 35 days prior to the date of the proposed Transfer. The date that the EA
ROFR Notice is received by the Managing General Partner of the Partnership
generally shall constitute the “EA ROFR Notice Date.” Within five Business Days
following the EA ROFR Notice Date, the Managing General Partner of the
Partnership generally shall send a copy of the EA ROFR Notice along with a
letter indicating the EA ROFR Notice Date to EECI and Enbridge Partners (each, a
“ROFR Holder” and collectively, the “ROFR Holders”). The EA ROFR Notice shall
set forth the identity of the Third Party (including, (x) if such information is
not publicly available, information about the identity of the Third Party,
(y) the identity of Affiliates of the Third Party and (z) if the Third Party is
making the Third Party Offer as a nominee of another Person, the identity of
such other Person and its Affiliates), the amount and the Partnership Interests
to be sold (the “EA Offered Interests”), the proposed purchase price for the EA
Offered Interests (the “EA ROFR Offer Price”), all details of the payment terms
and all other material terms and conditions, including the nature of the
representations and warranties to be made and the indemnities to be given, in
connection with the proposed Transfer. The EA ROFR Offer Price shall be
expressed in U.S. dollars, whether or not the form of consideration in the Third
Party Offer is wholly or partially cash or cash equivalents.

 

(b)          Each ROFR Holder shall have the right, but not the obligation, to
purchase up to that amount of the EA Offered Interests equal to the product of
(i) the amount of the EA Offered Interests and (ii) a fraction (the “EA ROFR
Proportionate Share”), the numerator of which shall be the Series EA Percentage
Interest of such ROFR Holder and the denominator of which shall be the sum of
the Series EA Percentage Interests held by the ROFR Holders. Within 25 days
after the EA ROFR Notice Date, each ROFR Holder may deliver a written notice to
the EA Offering Partner, the Managing General Partner of the Partnership
generally and the other EA ROFR Holder of its election to purchase such EA
Offered Interests. Any ROFR Holder whose written notice has not been received by
the Managing General Partner of the Partnership generally within such 25-day
period shall be deemed to have elected not to exercise its right of first
refusal in connection with such Transfer. To the extent a ROFR Holder does not
elect to purchase its full EA ROFR Proportionate Share of such EA Offered
Interests, the other ROFR Holder, if it has elected to purchase its full EA ROFR
Proportionate Share, shall be entitled, by delivering written notice to the EA
Offering Partner and the Managing General Partner of the Partnership generally
within five Business Days following the end of such 25-day period (such fifth
Business Day, the “EA ROFR Expiration Date”), to purchase up to all of the
remaining EA Offered Interests. The delivery of a notice of election under this
Section 4.5(b) shall constitute an irrevocable commitment to purchase such EA
Offered Interests. If the ROFR Holders shall have elected to purchase all but
not less than all of the EA Offered Interests, the Managing General Partner of
the Partnership generally shall thereafter set a reasonable place and time for
the closing of the purchase and sale of the EA Offered Interests, which shall be
not less than 10 days nor more than 60 days after the EA ROFR Expiration Date
(subject to extension to the extent necessary to pursue any required regulatory
or Partner approvals, including to allow for the expiration or termination of
all waiting periods under the HSR Act) unless otherwise agreed by all of the
parties to such transaction.

 

43

 

 

(c)          The purchase price and terms and conditions for the purchase of the
EA Offered Interests pursuant to this Section 4.5 shall be the purchase price
and terms and conditions set forth in the applicable Third Party Offer (or the
cash equivalent thereof); provided that the purchase price shall be the EA ROFR
Offer Price and shall be payable in immediately available U.S. dollars; and
provided further that the EA Offering Partner shall at a minimum make customary
representations and warranties concerning (i) such EA Offering Partner’s valid
title to and ownership of the EA Offered Interests, free and clear of all liens,
claims and encumbrances (excluding those arising hereunder and under applicable
securities laws), (ii) such EA Offering Partner’s authority, power and right to
enter into and consummate the sale of the EA Offered Interests, (iii) the
absence of any violation, default or acceleration of any agreement or obligation
to which such EA Offering Partner is subject or by which its assets are bound as
a result of the sale of the EA Offered Interests and (iv) the absence of, or
compliance with, any governmental or third party consents, approvals, filings or
notifications required to be obtained or made by such EA Offering Partner in
connection with the sale of the EA Offered Interests. The EA Offering Partner
and participating ROFR Holders shall use commercially reasonable efforts to
close the purchase of the EA Offered Interests as soon as reasonably practicable
following the EA ROFR Expiration Date and shall each execute and deliver such
instruments and documents and take such actions, including obtaining all
applicable approvals and consents and making all applicable notifications and
filings, as the other parties may reasonably request in order more effectively
to implement the purchase and sale of the EA Offered Interests hereunder.

 

(d)          Notwithstanding the foregoing, if (i) the ROFR Holders (A) shall
have elected to purchase less than all of the EA Offered Interests or (B) shall
not have elected to purchase any of the EA Offered Interests on or prior to the
EA ROFR Expiration Date, and the EA Offering Partner has fully complied with the
provisions of this Section 4.5, then the EA Offering Partner may sell all, but
not less than all, of the EA Offered Interests within 90 days after the EA ROFR
Expiration Date (subject to extension for a reasonable amount of time to the
extent necessary to obtain any required regulatory or Partner approvals,
including to allow for the expiration of all waiting periods under the HSR Act)
or (ii) if the ROFR Holders fail to consummate the closing of the purchase and
sale of the Offered Interests within the time period provided in the last
sentence of Section 4.5(b) (such period, the “EA ROFR Closing Period”) and the
EA Offering Partner has fully complied with the provisions of this Section 4.5,
then the EA Offering Partner may sell all, but not less than all, of the EA
Offered Interests within 90 days after the expiration of the EA ROFR Closing
Period to the Third Party, in each case subject to the provisions of
Section 4.2. Any such sale shall not be at less than the purchase price or upon
terms and conditions more favorable in any material respect, individually or in
the aggregate, to the purchaser than those specified in the Third Party Offer.
If the EA Offered Interests are not so transferred within the applicable time
periods specified in this Section 4.5(d), the EA Offering Partner may not sell
any of the EA Offered Interests without again complying in full with the
provisions of this Article IV.

 

44

 

 

(e)          Each of EECI and Enbridge Partners shall be entitled to assign any
rights it has to purchase EA Offered Interests pursuant to this Section 4.5 to
any of its Permitted Transferees.

 

(f)          This Section 4.5 shall not apply to any Transfer or proposed
Transfer of Partnership Interests to a Permitted Transferee.

 

Section 4.6           Series ME Right of First Refusal.

 

(a)          If any Partner receives a Third Party Offer for the Transfer of all
or a part of such Partner’s (and its respective Permitted Transferees)
Partnership Interests in Series ME and such Partner (the “ME Offering Partner”)
desires to accept and is otherwise permitted to effect such proposed Transfer
pursuant to this Article IV, such ME Offering Partner shall deliver written
notice of such Third Party Offer (the “ME ROFR Notice”) to the Managing General
Partner of the Partnership generally as soon as reasonably practicable, but in
no event less than 35 days prior to the date of the proposed Transfer. The date
that the ME ROFR Notice is received by the Managing General Partner of the
Partnership generally shall constitute the “ME ROFR Notice Date.” Within five
Business Days following the ME ROFR Notice Date, the Managing General Partner of
the Partnership generally shall send a copy of the ME ROFR Notice along with a
letter indicating the ME ROFR Notice Date to the ROFR Holders. The ME ROFR
Notice shall set forth the identity of the Third Party (including, (x) if such
information is not publicly available, information about the identity of the
Third Party, (y) the identity of Affiliates of the Third Party and (z) if the
Third Party is making the Third Party Offer as a nominee of another Person, the
identity of such other Person and its Affiliates), the amount and the
Partnership Interests to be sold (the “ME Offered Interests”), the proposed
purchase price for the ME Offered Interests (the “ME ROFR Offer Price”), all
details of the payment terms and all other material terms and conditions,
including the nature of the representations and warranties to be made and the
indemnities to be given, in connection with the proposed Transfer. The ME ROFR
Offer Price shall be expressed in U.S. dollars, whether or not the form of
consideration in the Third Party Offer is wholly or partially cash or cash
equivalents.

 

(b)          Each ROFR Holder shall have the right, but not the obligation, to
purchase up to that amount of the ME Offered Interests equal to the product of
(i) the amount of the ME Offered Interests and (ii) a fraction (the “ME ROFR
Proportionate Share”), the numerator of which shall be the Series ME Percentage
Interest of such ROFR Holder and the denominator of which shall be the sum of
the Series ME Percentage Interests held by the ROFR Holders. Within 25 days
after the ME ROFR Notice Date, each ROFR Holder may deliver a written notice to
the ME Offering Partner, the Managing General Partner of the Partnership
generally and the other ME ROFR Holder of its election to purchase such ME
Offered Interests. Any ROFR Holder whose written notice has not been received by
the Managing General Partner of the Partnership generally within such 25-day
period shall be deemed to have elected not to exercise its right of first
refusal in connection with such Transfer. To the extent a ROFR Holder does not
elect to purchase its full ME ROFR Proportionate Share of such ME Offered
Interests, the other ROFR Holder, if it has elected to purchase its full ME ROFR
Proportionate Share, shall be entitled, by delivering written notice to the ME
Offering Partner and the Managing General Partner of the Partnership generally
within five Business Days following the end of such 25-day period (such fifth
Business Day, the “ME ROFR Expiration Date”), to purchase up to all of the
remaining ME Offered Interests. The delivery of a notice of election under this
Section 4.6(b) shall constitute an irrevocable commitment to purchase such ME
Offered Interests. If the ROFR Holders shall have elected to purchase all but
not less than all of the ME Offered Interests, the Managing General Partner of
the Partnership generally shall thereafter set a reasonable place and time for
the closing of the purchase and sale of the ME Offered Interests, which shall be
not less than 10 days nor more than 60 days after the ME ROFR Expiration Date
(subject to extension to the extent necessary to pursue any required regulatory
or Partner approvals, including to allow for the expiration or termination of
all waiting periods under the HSR Act) unless otherwise agreed by all of the
parties to such transaction.

 

45

 

 

(c)          The purchase price and terms and conditions for the purchase of the
ME Offered Interests pursuant to this Section 4.6 shall be the purchase price
and terms and conditions set forth in the applicable Third Party Offer (or the
cash equivalent thereof); provided that the purchase price shall be the ME ROFR
Offer Price and shall be payable in immediately available U.S. dollars; and
provided further that the ME Offering Partner shall at a minimum make customary
representations and warranties concerning (i) such ME Offering Partner’s valid
title to and ownership of the ME Offered Interests, free and clear of all liens,
claims and encumbrances (excluding those arising hereunder and under applicable
securities laws), (ii) such ME Offering Partner’s authority, power and right to
enter into and consummate the sale of the ME Offered Interests, (iii) the
absence of any violation, default or acceleration of any agreement or obligation
to which such ME Offering Partner is subject or by which its assets are bound as
a result of the sale of the ME Offered Interests and (iv) the absence of, or
compliance with, any governmental or third party consents, approvals, filings or
notifications required to be obtained or made by such ME Offering Partner in
connection with the sale of the ME Offered Interests. The ME Offering Partner
and participating ROFR Holders shall use commercially reasonable efforts to
close the purchase of the ME Offered Interests as soon as reasonably practicable
following the ME ROFR Expiration Date and shall each execute and deliver such
instruments and documents and take such actions, including obtaining all
applicable approvals and consents and making all applicable notifications and
filings, as the other parties may reasonably request in order more effectively
to implement the purchase and sale of the ME Offered Interests hereunder.

 

(d)          Notwithstanding the foregoing, if (i) the ROFR Holders (A) shall
have elected to purchase less than all of the ME Offered Interests or (B) shall
not have elected to purchase any of the ME Offered Interests on or prior to the
ME ROFR Expiration Date, and the ME Offering Partner has fully complied with the
provisions of this Section 4.6, then the ME Offering Partner may sell all, but
not less than all, of the ME Offered Interests within 90 days after the ME ROFR
Expiration Date (subject to extension for a reasonable amount of time to the
extent necessary to obtain any required regulatory or Partner approvals,
including to allow for the expiration of all waiting periods under the HSR Act)
or (ii) if the ROFR Holders fail to consummate the closing of the purchase and
sale of the Offered Interests within the time period provided in the last
sentence of Section 4.6(b) (such period, the “ME ROFR Closing Period”) and the
ME Offering Partner has fully complied with the provisions of this Section 4.6,
then the ME Offering Partner may sell all, but not less than all, of the ME
Offered Interests within 90 days after the expiration of the ME ROFR Closing
Period to the Third Party, in each case subject to the provisions of
Section 4.2. Any such sale shall not be at less than the purchase price or upon
terms and conditions more favorable in any material respect, individually or in
the aggregate, to the purchaser than those specified in the Third Party Offer.
If the ME Offered Interests are not so transferred within the applicable time
periods specified in this Section 4.6(d), the ME Offering Partner may not sell
any of the ME Offered Interests without again complying in full with the
provisions of this Article IV.

 

46

 

 

(e)          Each of EECI and Enbridge Partners shall be entitled to assign any
rights it has to purchase ME Offered Interests pursuant to this Section 4.6 to
any of its Permitted Transferees.

 

(f)          This Section 4.6 shall not apply to any Transfer or proposed
Transfer of Partnership Interests to a Permitted Transferee.

 

Section 4.7           Series L3R Right of First Refusal.

 

(a)          If any Partner receives a Third Party Offer for the Transfer of all
or a part of such Partner’s (and its respective Permitted Transferees)
Partnership Interests in Series L3R and such Partner (the “L3R Offering
Partner”) desires to accept and is otherwise permitted to effect such proposed
Transfer pursuant to this Article IV, such L3R Offering Partner shall deliver
written notice of such Third Party Offer (the “L3R ROFR Notice”) to the Managing
General Partner of the Partnership generally as soon as reasonably practicable,
but in no event less than 35 days prior to the date of the proposed Transfer.
The date that the L3R ROFR Notice is received by the Managing General Partner of
the Partnership generally shall constitute the “L3R ROFR Notice Date.” Within
five Business Days following the L3R ROFR Notice Date, the Managing General
Partner of the Partnership generally shall send a copy of the L3R ROFR Notice
along with a letter indicating the L3R ROFR Notice Date to the ROFR Holders. The
L3R ROFR Notice shall set forth the identity of the Third Party (including,
(x) if such information is not publicly available, information about the
identity of the Third Party, (y) the identity of Affiliates of the Third Party
and (z) if the Third Party is making the Third Party Offer as a nominee of
another Person, the identity of such other Person and its Affiliates), the
amount and the Partnership Interests to be sold (the “L3R Offered Interests”),
the proposed purchase price for the L3R Offered Interests (the “L3R ROFR Offer
Price”), all details of the payment terms and all other material terms and
conditions, including the nature of the representations and warranties to be
made and the indemnities to be given, in connection with the proposed Transfer.
The L3R ROFR Offer Price shall be expressed in U.S. dollars, whether or not the
form of consideration in the Third Party Offer is wholly or partially cash or
cash equivalents.

 

(b)          Each ROFR Holder shall have the right, but not the obligation, to
purchase up to that amount of the L3R Offered Interests equal to the product of
(i) the amount of the L3R Offered Interests and (ii) a fraction (the “L3R ROFR
Proportionate Share”), the numerator of which shall be the Series L3R Percentage
Interest of such ROFR Holder and the denominator of which shall be the sum of
the Series L3R Percentage Interests held by the ROFR Holders. Within 25 days
after the L3R ROFR Notice Date, each ROFR Holder may deliver a written notice to
the L3R Offering Partner, the Managing General Partner of the Partnership
generally and the other L3R ROFR Holder of its election to purchase such L3R
Offered Interests. Any ROFR Holder whose written notice has not been received by
the Managing General Partner of the Partnership generally within such 25-day
period shall be deemed to have elected not to exercise its right of first
refusal in connection with such Transfer. To the extent a ROFR Holder does not
elect to purchase its full L3R ROFR Proportionate Share of such L3R Offered
Interests, the other ROFR Holder, if it has elected to purchase its full L3R
ROFR Proportionate Share, shall be entitled, by delivering written notice to the
L3R Offering Partner and the Managing General Partner of the Partnership
generally within five Business Days following the end of such 25-day period
(such fifth Business Day, the “L3R ROFR Expiration Date”), to purchase up to all
of the remaining L3R Offered Interests. The delivery of a notice of election
under this Section 4.7(b) shall constitute an irrevocable commitment to purchase
such L3R Offered Interests. If the ROFR Holders shall have elected to purchase
all but not less than all of the L3R Offered Interests, the Managing General
Partner of the Partnership generally shall thereafter set a reasonable place and
time for the closing of the purchase and sale of the L3R Offered Interests,
which shall be not less than 10 days nor more than 60 days after the L3R ROFR
Expiration Date (subject to extension to the extent necessary to pursue any
required regulatory or Partner approvals, including to allow for the expiration
or termination of all waiting periods under the HSR Act) unless otherwise agreed
by all of the parties to such transaction.

 

47

 

 

(c)          The purchase price and terms and conditions for the purchase of the
L3R Offered Interests pursuant to this Section 4.7 shall be the purchase price
and terms and conditions set forth in the applicable Third Party Offer (or the
cash equivalent thereof); provided that the purchase price shall be the L3R ROFR
Offer Price and shall be payable in immediately available U.S. dollars; and
provided further that the L3R Offering Partner shall at a minimum make customary
representations and warranties concerning (i) such L3R Offering Partner’s valid
title to and ownership of the L3R Offered Interests, free and clear of all
liens, claims and encumbrances (excluding those arising hereunder and under
applicable securities laws), (ii) such L3R Offering Partner’s authority, power
and right to enter into and consummate the sale of the L3R Offered Interests,
(iii) the absence of any violation, default or acceleration of any agreement or
obligation to which such L3R Offering Partner is subject or by which its assets
are bound as a result of the sale of the L3R Offered Interests and (iv) the
absence of, or compliance with, any governmental or third party consents,
approvals, filings or notifications required to be obtained or made by such L3R
Offering Partner in connection with the sale of the L3R Offered Interests. The
L3R Offering Partner and participating ROFR Holders shall use commercially
reasonable efforts to close the purchase of the L3R Offered Interests as soon as
reasonably practicable following the L3R ROFR Expiration Date and shall each
execute and deliver such instruments and documents and take such actions,
including obtaining all applicable approvals and consents and making all
applicable notifications and filings, as the other parties may reasonably
request in order more effectively to implement the purchase and sale of the L3R
Offered Interests hereunder.

 

(d)          Notwithstanding the foregoing, if (i) the ROFR Holders (A) shall
have elected to purchase less than all of the L3R Offered Interests or (B) shall
not have elected to purchase any of the L3R Offered Interests on or prior to the
L3R ROFR Expiration Date, and the L3R Offering Partner has fully complied with
the provisions of this Section 4.7, then the L3R Offering Partner may sell all,
but not less than all, of the L3R Offered Interests within 90 days after the L3R
ROFR Expiration Date (subject to extension for a reasonable amount of time to
the extent necessary to obtain any required regulatory or Partner approvals,
including to allow for the expiration of all waiting periods under the HSR Act)
or (ii) if the ROFR Holders fail to consummate the closing of the purchase and
sale of the Offered Interests within the time period provided in the last
sentence of Section 4.6(b) (such period, the “L3R ROFR Closing Period”) and the
L3R Offering Partner has fully complied with the provisions of this Section 4.7,
then the L3R Offering Partner may sell all, but not less than all, of the L3R
Offered Interests within 90 days after the expiration of the L3R ROFR Closing
Period to the Third Party, in each case subject to the provisions of
Section 4.2. Any such sale shall not be at less than the purchase price or upon
terms and conditions more favorable in any material respect, individually or in
the aggregate, to the purchaser than those specified in the Third Party Offer.
If the L3R Offered Interests are not so transferred within the applicable time
periods specified in this Section 4.7(d), the L3R Offering Partner may not sell
any of the L3R Offered Interests without again complying in full with the
provisions of this Article IV.7

 

48

 

 

(e)          Each of EECI and Enbridge Partners shall be entitled to assign any
rights it has to purchase L3R Offered Interests pursuant to this Section 4.7 to
any of its Permitted Transferees.

 

(f)          This Section 4.7 shall not apply to any Transfer or proposed
Transfer of Partnership Interests to a Permitted Transferee.

 

Section 4.8           Tag-Along Rights.

 

(a)          If a Series EA Partner, Series ME Partner or Series L3R Partner
(the “Transferor”) proposes to Transfer all or a part of its Partnership
Interests in Series EA, Series ME or Series L3R to a Third Party (the “Tag-Along
Transferee”), then such Transferor shall send written notice of such proposed
Transfer (the “Tag-Along Notice”) to the other Partners of the Series of
Partnership Interests which such Transferor proposes to Transfer (the “Tag
Offerees”) at least 30 days prior to effecting such Transfer. Such Tag-Along
Notice may be combined with an EA ROFR Notice, ME ROFR Notice or L3R ROFR Notice
and may be conditioned upon the ROFR Holders not exercising the right of first
refusal contained in Section 4.5, Section 4.6 or Section 4.7. The Tag-Along
Notice shall set forth the identity of the Tag-Along Transferee (including, if
such information is not publicly available, information about the identity of
the Tag-Along Transferee and its Affiliates), the amount and the Partnership
Interests to be Transferred, the proposed purchase price expressed in U.S.
dollars (whether or not the form of consideration is wholly or partially cash or
cash equivalents), all details of the payment terms, the time and place for the
closing and all other material terms and conditions, including the nature of the
representations and warranties to be made and the indemnities to be given, in
connection with the proposed Transfer. Each of the Tag Offerees shall then have
the irrevocable right (a “Tag-Along Right”), exercisable by delivery of an
irrevocable notice to the Transferor at any time within 20 days after receipt of
the Tag-Along Notice, to participate in such Transfer by selling to the
Tag-Along Transferee a pro rata portion of such Tag Offeree’s Partnership
Interests in Series EA, Series ME or Series L3R, as applicable, based on the
respective Tag Pro Rata Share of the Transferor and the other Tag Offerees that
exercise their Tag-Along Right, on the same terms (including with respect to
representations, warranties and indemnification) as the Transferor; provided,
however, that (i) any representations and warranties relating specifically to
any such Tag Offeree shall only be made by such Tag Offeree; (ii) any
indemnification provided by the Transferor and any such Tag Offeree (other than
with respect to the representations referenced in the foregoing subsection (i))
shall be based on the Percentage Interest being sold by each party in the
proposed sale, either on a several, not joint, basis or solely with recourse to
an escrow (such escrow not to exceed 25% of the proceeds received by the Tag
Offerees that exercise their Tag-Along Right without the consent of such Tag
Offerees) established for the benefit of the proposed purchaser (each party’s
contributions to such escrow to be on a pro rata basis in accordance with the
proceeds received from such sale), it being understood and agreed that any such
indemnification obligation of any such Tag Offeree shall in no event exceed the
net proceeds to such Tag Offeree from such proposed Transfer; and (iii) the form
of consideration to be received by the Transferor in connection with the
proposed sale shall be the same as that received by such Tag Offeree.

 

49

 

 

(b)          If any Tag Offeree has exercised its Tag-Along Rights and the
Tag-Along Transferee is unwilling to purchase all of the Partnership Interests
proposed to be Transferred by the Transferor and each exercising Tag Offeree,
then the Transferor and the exercising Tag Offerees shall reduce, on a pro rata
basis, based on their respective Tag Pro Rata Share, the amount of such
Partnership Interests that each otherwise would have sold so as to permit the
Transferor and the exercising Tag Offerees to sell the portion of Partnership
Interests (determined in accordance with such Tag Pro Rata Share) that the
proposed Tag-Along Transferee is willing to purchase.

 

(c)          Each Tag Offeree and the Transferor shall sell to the Tag-Along
Transferee all of the Partnership Interests proposed to be Transferred by them,
at not less than the purchase price payable in immediately available U.S.
dollars and upon terms and conditions, if any, not more favorable in any
material respect, individually and in the aggregate, to the Tag-Along Transferee
than those in the Tag-Along Notice at the time and place provided for the
closing in the Tag-Along Notice, or at such other time and place as the Tag
Offerees, the Transferor and the Tag-Along Transferees shall agree.

 

(d)          The Transferor shall have the right to require the Managing General
Partner of the applicable Series and the Managing General Partner of the
Partnership generally to cooperate fully with potential acquirors of its
Partnership Interests by taking all customary and other actions reasonably
required by the Transferor or such potential acquirors, including making the
records and assets of each Series and the Partnership generally reasonably
available for inspection by such potential acquirors and making the officers and
employees who manage the business of the Partnership and the Series reasonably
available for interviews; provided that the potential acquirer has entered into
a customary confidentiality agreement with the Partnership and the applicable
Series. Neither the Managing General Partner of any Series nor the Managing
General Partner of the Partnership generally shall be required to disclose to
any potential acquirer (i) any information that such Managing General Partner
reasonably believes to be in the nature of trade secrets or (ii) other
information the disclosure of which such Managing General Partner reasonably
believes (A) could damage the Partnership or any Series or their respective
businesses or (B) that the Partnership or any Series is required by law or by
agreement to keep confidential.

 

Section 4.9           Transfers of Certain Partnership Assets—ROFR.

 

(a)          If the Partnership or any Series receives a bona fide written offer
from a Third Party (a “Third Party Asset Offer”) for the transfer of any Series
asset or group of related assets with a fair market value in excess of $5.0
million, and the Managing General Partner of the Series associated with such
assets desires to accept and is otherwise permitted to effect such proposed
transfer pursuant to this Section 4.9, such Managing General Partner shall
deliver written notice of such Third Party Asset Offer (the “ROFR Asset Notice”)
to EECI no less than 30 days prior to the date of the proposed transfer. The
date that the ROFR Asset Notice is received by EECI shall constitute the “ROFR
Asset Notice Date.” The ROFR Asset Notice shall set forth the identity of the
Third Party (including, if such information is not publicly available,
information about the identity of the Third Party and its Affiliates), a
description of the Series asset or group of related assets to be transferred
(the “ROFR Offered Asset”), the proposed purchase price for the ROFR Offered
Asset (the “ROFR Asset Offer Price”), all details of the payment terms and all
other material terms and conditions, including the nature of the representations
and warranties to be made and the indemnities to be given, in connection with
the proposed transfer. The ROFR Asset Offer Price shall be expressed in U.S.
dollars, whether or not the form of consideration in the Third Party Asset Offer
is wholly or partially cash or cash equivalents.

 

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(b)          For so long as EECI or any of its Affiliates is a holder of a
Partnership Interest, EECI shall have the right, but not the obligation, to
purchase the ROFR Offered Asset. Within 25 days after the ROFR Asset Notice Date
(such 25th day, the “ROFR Asset Expiration Date”), EECI may deliver a written
notice to the Managing General Partner of the applicable Series of its election
to purchase such ROFR Offered Asset. The delivery of a notice of election under
this Section 4.9 shall constitute an irrevocable commitment to purchase such
ROFR Offered Asset. Such Managing General Partner shall thereafter set a
reasonable place and time for the closing of the purchase and sale of the ROFR
Offered Asset, which shall be not less than 10 days nor more than 60 days after
the ROFR Asset Expiration Date (subject to extension to the extent necessary to
pursue any required regulatory or Partner approvals, including to allow for the
expiration or termination of all waiting periods under the HSR Act) unless
otherwise agreed by all of the parties to such transaction.

 

(c)          The purchase price and terms and conditions for the purchase of the
ROFR Offered Asset pursuant to this Section 4.9 shall be the purchase price and
terms and conditions set forth in the applicable Third Party Asset Offer;
provided that the purchase price shall be the ROFR Asset Offer Price and shall
be payable in immediately available U.S. dollars; and provided further that the
applicable Series shall at a minimum make customary representations and
warranties concerning (i) the Series’ valid title to and ownership of the ROFR
Offered Asset, free and clear of all liens, claims and encumbrances (excluding
those arising hereunder and under applicable securities laws), (ii) the Series’
authority, power and right to enter into and consummate the sale of the ROFR
Offered Asset, (iii) the absence of any violation, default or acceleration of
any agreement to which the Series is subject or by which its assets are bound as
a result of the agreement to sell and the sale of the ROFR Offered Asset and
(iv) the absence of, or compliance with, any governmental or third party
consents, approvals, filings or notifications required to be obtained or made by
the Series in connection with the sale of the ROFR Offered Asset. The Managing
General Partner of such Series and EECI shall use commercially reasonable
efforts to close the purchase of the ROFR Offered Asset as soon as reasonably
practicable following the giving of the ROFR Asset Notice and shall execute and
deliver such instruments and documents and take such actions, including
obtaining all applicable approvals and consents and making all applicable
notifications and filings, as the other party may reasonably request in order
more effectively to implement the purchase and sale of the ROFR Offered Asset
hereunder.

 

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(d)          If (i) EECI shall not have elected to purchase the ROFR Offered
Asset on or prior to the ROFR Asset Expiration Date and the Series has fully
complied with the provisions of this Section 4.9, then the Series may sell the
ROFR Offered Asset within 90 days after the ROFR Asset Expiration Date (subject
to extension for a reasonable amount of time to the extent necessary to obtain
any required regulatory or Partner approvals, including to allow for the
expiration of all waiting periods under the HSR Act) or (ii) EECI fails to
consummate the closing of the purchase and sale of the ROFR Offered Asset within
the time period provided in the last sentence of Section 4.9(b) (such period,
the “ROFR Asset Closing Period”) and the Series has fully complied with the
provisions of this Section 4.9, then EECI shall not have the right to purchase
the ROFR Offered Asset, and the Series may sell the ROFR Offered Asset within 90
days after the expiration of the ROFR Asset Closing Period, in each case subject
to the provisions of Section 7.3, Section 7.4 and Section 7.5, as applicable.
Any such sale shall not be at less than the purchase price or upon terms and
conditions more favorable in any material respect, individually or in the
aggregate, to the purchaser than those specified in the Third Party Asset Offer.
If the ROFR Offered Asset is not so transferred within the applicable time
periods specified in this Section 4.9(d), the Series may not sell the ROFR
Offered Asset without again complying in full with the provisions of this
Section 4.9.

 

(e)          EECI shall be entitled to assign any rights it has to purchase a
ROFR Offered Asset pursuant to this Section 4.9 to any of its Permitted
Transferees.

 

(f)          This Section 4.9 shall not apply to any transfer or proposed
transfer of assets to a Permitted Transferee.

 

Section 4.10          EA Call Option.

 

(a)          From time to time prior to the twelve-month anniversary of the
Eastern Access Final In-Service Date (the “EA Call Option Deadline”), Enbridge
Partners shall have the right to purchase, and EECI shall have the obligation to
sell (the “EA Call Option”), a portion of the Series EA Limited Partner
Interests held by EECI that represents, in the aggregate, up to fifteen percent
(15%) of the total outstanding Series EA Partnership Interests in accordance
with this Section 4.10. In considering whether to exercise the EA Call Option,
the Board of Directors of Enbridge Energy Management, L.L.C. (the “EEM Board”)
shall establish a committee of independent directors (an “Option Committee”) to
make a recommendation to the EEM Board, on behalf of Enbridge Partners, whether
to exercise the EA Call Option and the portion of Series EA Limited Partner
Interests held by EECI that Enbridge Partners will purchase if the EA Call
Option is exercised (not to exceed, in the aggregate, fifteen (15%) of the total
outstanding Series EA Partnership Interests). The general partner of Enbridge
Partners and the Managing General Partner of the Partnership and of each Series
shall provide the Option Committee with all of the information that the Option
Committee may reasonably request that is relevant to its determination.

 

52

 

 

(b)          If the EEM Board determines to exercise all or a portion of the EA
Call Option following receipt of the Option Committee’s recommendation, Enbridge
Partners shall deliver to the Partnership and to EECI, prior to the EA Call
Option Deadline, written notice (each, an “EA Call Option Notice”) of such
determination. Each EA Call Option Notice shall state (i) the portion of the
Series EA Limited Partner Interests held by EECI proposed to be purchased (not
to exceed, in the aggregate, fifteen percent (15%) of the total outstanding
Series EA Partnership Interests) (an “EA Call Option Interest”) and the
corresponding amount of consideration to be paid, calculated in accordance with
Section 4.10(c), (ii) the proposed date of purchase and (iii) other proposed
material terms and conditions of such sale. Upon receipt of each EA Call Option
Notice, EECI agrees to promptly take all necessary and desirable actions in
connection with the exercise of the EA Call Option reasonably requested by
Enbridge Partners, including the execution of such agreements and such
instruments and other actions reasonably necessary to consummate the purchase
and sale of the EA Call Option Interest hereunder. Each date on which the
purchase and sale of an EA Call Option Interest is consummated is referred to as
an “EA Call Option Closing Date.” Such agreements and instruments shall contain
customary representations and warranties concerning (i) EECI’s valid title to
and ownership of the EA Call Option Interest, free and clear of all liens,
claims and encumbrances (excluding those arising under this Agreement and
applicable securities laws), (ii) EECI’s authority, power and right to enter
into and consummate the sale of the EA Call Option Interest, (iii) the absence
of any violation, default or acceleration of any agreement to which EECI is
subject or by which its Partnership Interests are bound as a result of the
agreement to sell and the sale of the EA Call Option Interest, and (iv) the
absence of, or compliance with, any governmental or third party consents,
approvals, filings or notifications required to be obtained or made by EECI in
connection with the sale of the EA Call Option Interest. EECI shall execute and
deliver such instruments and documents and take such actions, including
obtaining all applicable approvals and consents and making all applicable
notifications and filings, as Enbridge Partners may reasonably request, but
neither the failure of EECI to execute or deliver any such documentation nor the
failure of EECI to comply with all required actions shall affect the validity of
a purchase and sale pursuant to this Section 4.10.

 

(c)          The purchase price to be paid by Enbridge Partners to EECI for the
purchase of an EA Call Option Interest shall equal the capital contributed by
EECI in respect of such EA Call Option Interest, plus the product of (i) the
AFUDC attributable to the Eastern Access Project, less depreciation attributable
to the Eastern Access Project, in each case, for the period from the Series EA
Closing Date through the applicable EA Call Option Closing Date, and (ii) the
quotient, expressed as a percentage, obtained by dividing the EA Call Option
Interest by the total outstanding Series EA Partnership Interests. For
illustrative purposes, an example of this calculation methodology is attached
hereto as Exhibit G.

 

(d)          If and to the extent that any distributions accruing on an EA Call
Option Interest that are attributable to the operations of the Series EA prior
to the applicable EA Call Option Closing Date are declared or paid on or after
such EA Call Option Closing Date, EECI shall be entitled to receive, and the
Partnership shall pay to EECI, subject to the Delaware Act, (i) with respect to
a Quarter ending prior to the Quarter in which the EA Call Option Closing Date
occurs for which distributions on the Series EA Partnership Interests have not
been declared and/or paid as of the EA Call Option Closing Date, an amount equal
to the distributions attributable to the EA Call Option Interest with respect to
such Quarter and (ii) with respect to a Quarter in which the EA Call Option
Closing Date occurs, an amount equal to the product of (x) the distributions
attributable to the EA Call Option Interest with respect to such Quarter and (y)
the quotient obtained by dividing the number of days the EA Call Option Interest
was held by EECI during such Quarter by the total number of days in such
Quarter.

 

53

 

 

Section 4.11          Reserved.

 

Section 4.12          ME Call Option.

 

(a)          From time to time, on and after January 1, 2019 and prior to
January 1, 2022 (the “ME Call Option Deadline”), Enbridge Partners shall have
the right to purchase, and EECI shall have the obligation to sell (the “ME Call
Option”), a portion of the Series ME Limited Partner Interests held by EECI that
represents, in the aggregate, up to fifteen percent (15%) of the total
outstanding Series ME Partnership Interests in accordance with this Section
4.12. In considering whether to exercise the ME Call Option, the EEM Board shall
establish an Option Committee to make a recommendation to the EEM Board, on
behalf of Enbridge Partners, whether to exercise the ME Call Option and the
portion of Series ME Limited Partner Interests held by EECI that Enbridge
Partners will purchase if the ME Call Option is exercised (not to exceed, in the
aggregate, fifteen (15%) of the total outstanding Series ME Partnership
Interests). The general partner of Enbridge Partners and the Managing General
Partner of the Partnership generally and of each Series shall provide the Option
Committee with all of the information that the Option Committee may reasonably
request that is relevant to its determination.

 

(b)          If the EEM Board determines to exercise all or a portion of the ME
Call Option following receipt of the Option Committee’s recommendation, Enbridge
Partners shall deliver to the Partnership and to EECI, prior to the ME Call
Option Deadline, written notice (each, a “ME Call Option Notice”) of such
determination. Each ME Call Option Notice shall state (i) the portion of the
Series ME Limited Partner Interests held by EECI proposed to be purchased (not
to exceed, in the aggregate, fifteen percent (15%) of the total outstanding
Series ME Partnership Interests) (a “ME Call Option Interest”) and the
corresponding amount of consideration to be paid, calculated in accordance with
Section 4.12(c), (ii) the proposed date of purchase and (iii) other proposed
material terms and conditions of such sale. Upon receipt of each ME Call Option
Notice, EECI agrees to promptly take all necessary and desirable actions in
connection with the exercise of the ME Call Option reasonably requested by
Enbridge Partners, including the execution of such agreements and such
instruments and other actions reasonably necessary to consummate the purchase
and sale of the ME Call Option Interest hereunder. Each date on which the
purchase and sale of a ME Call Option Interest is consummated is referred to as
a “ME Call Option Closing Date.” Such agreements and instruments shall contain
customary representations and warranties concerning (i) EECI’s valid title to
and ownership of the ME Call Option Interest, free and clear of all liens,
claims and encumbrances (excluding those arising under this Agreement and
applicable securities laws), (ii) EECI’s authority, power and right to enter
into and consummate the sale of the ME Call Option Interest, (iii) the absence
of any violation, default or acceleration of any agreement to which EECI is
subject or by which its Partnership Interests are bound as a result of the
agreement to sell and the sale of the ME Call Option Interest, and (iv) the
absence of, or compliance with, any governmental or third party consents,
approvals, filings or notifications required to be obtained or made by EECI in
connection with the sale of the ME Call Option Interest. EECI shall execute and
deliver such instruments and documents and take such actions, including
obtaining all applicable approvals and consents and making all applicable
notifications and filings, as Enbridge Partners may reasonably request, but
neither the failure of EECI to execute or deliver any such documentation nor the
failure of EECI to comply with all required actions shall affect the validity of
a purchase and sale pursuant to this Section 4.12.

 

54

 

 

(c)          The purchase price to be paid by Enbridge Partners to EECI for the
purchase of a ME Call Option Interest shall equal the capital contributed by
EECI in respect of such ME Call Option Interest, plus the product of (i) the
AFUDC attributable to the Mainline Expansion Project, less depreciation
attributable to the Mainline Expansion Project, in each case, for the period
from the Series ME Closing Date through the applicable ME Call Option Closing
Date, and (ii) the quotient, expressed as a percentage, obtained by dividing the
ME Call Option Interest by the total outstanding Series ME Partnership
Interests. For illustrative purposes, an example of this calculation methodology
is attached hereto as Exhibit G.

 

(d)          If and to the extent that any distributions accruing on a ME Call
Option Interest that are attributable to the operations of the Series ME prior
to the applicable ME Call Option Closing Date are declared or paid on or after
such ME Call Option Closing Date, EECI shall be entitled to receive, and the
Partnership shall pay to EECI, subject to the Delaware Act, (i) with respect to
a Quarter ending prior to the Quarter in which the ME Call Option Closing Date
occurs for which distributions on the Series ME Partnership Interests have not
been declared and/or paid as of the ME Call Option Closing Date, an amount equal
to the distributions attributable to the ME Call Option Interest with respect to
such Quarter and (ii) with respect to a Quarter in which the ME Call Option
Closing Date occurs, an amount equal to the product of (x) the distributions
attributable to the ME Call Option Interest with respect to such Quarter and (y)
the quotient obtained by dividing the number of days the ME Call Option Interest
was held by EECI during such Quarter by the total number of days in such
Quarter.

 

Section 4.13          Reserved.

 

Section 4.14          L3R Call Option.

 

(a)          From time to time prior to the four-year anniversary of the L3R
In-Service Date (the “L3R Call Option Deadline”), Enbridge Partners shall have
the right to purchase, and EECI shall have the obligation to sell (the “L3R Call
Option”), a portion of the Series L3R Limited Partner Interests held by EECI
that represents, in the aggregate, up to thirty-nine percent (39%) of the total
outstanding Series L3R Partnership Interests in accordance with this Section
4.14. In considering whether to exercise the EA Call Option, the EEM Board shall
establish an Option Committee to make a recommendation to the EEM Board, on
behalf of Enbridge Partners, whether to exercise the L3R Call Option and the
portion of Series L3R Limited Partner Interests held by EECI that Enbridge
Partners will purchase if the L3R Call Option is exercised (not to exceed, in
the aggregate, thirty-nine (39%) of the total outstanding Series L3R Partnership
Interests). The general partner of Enbridge Partners and the Managing General
Partner of the Partnership and of each Series shall provide the Option Committee
with all of the information that the Option Committee may reasonably request
that is relevant to its determination.

 

55

 

 

(b)           If the EEM Board determines to exercise all or a portion of the
L3R Call Option following receipt of the Option Committee’s recommendation,
Enbridge Partners shall deliver to the Partnership and to EECI, prior to the L3R
Call Option Deadline, written notice (each, an “L3R Call Option Notice”) of such
determination. Each L3R Call Option Notice shall state (i) the portion of the
Series L3R Limited Partner Interests held by EECI proposed to be purchased (not
to exceed, in the aggregate, thirty-nine percent (39%) of the total outstanding
Series L3R Partnership Interests) (an “L3R Call Option Interest”) and the
corresponding amount of consideration to be paid, calculated in accordance with
Section 4.14(c), (ii) the proposed date of purchase and (iii) other proposed
material terms and conditions of such sale. Upon receipt of each L3R Call Option
Notice, EECI agrees to promptly take all necessary and desirable actions in
connection with the exercise of the L3R Call Option reasonably requested by
Enbridge Partners, including the execution of such agreements and such
instruments and other actions reasonably necessary to consummate the purchase
and sale of the L3R Call Option Interest hereunder. Each date on which the
purchase and sale of an L3R Call Option Interest is consummated is referred to
as an “L3R Call Option Closing Date.” Such agreements and instruments shall
contain customary representations and warranties concerning (i) EECI’s valid
title to and ownership of the L3R Call Option Interest, free and clear of all
liens, claims and encumbrances (excluding those arising under this Agreement and
applicable securities laws), (ii) EECI’s authority, power and right to enter
into and consummate the sale of the L3R Call Option Interest, (iii) the absence
of any violation, default or acceleration of any agreement to which EECI is
subject or by which its Partnership Interests are bound as a result of the
agreement to sell and the sale of the L3R Call Option Interest, and (iv) the
absence of, or compliance with, any governmental or third party consents,
approvals, filings or notifications required to be obtained or made by EECI in
connection with the sale of the L3R Call Option Interest. EECI shall execute and
deliver such instruments and documents and take such actions, including
obtaining all applicable approvals and consents and making all applicable
notifications and filings, as Enbridge Partners may reasonably request, but
neither the failure of EECI to execute or deliver any such documentation nor the
failure of EECI to comply with all required actions shall affect the validity of
a purchase and sale pursuant to this Section 4.14.

 

(c)          The purchase price to be paid by Enbridge Partners to EECI for the
purchase of an L3R Call Option Interest shall equal the capital contributed by
EECI in respect of such L3R Call Option Interest, plus the product of (i) the
AFUDC attributable to the Line 3 Replacement Project, less depreciation
attributable to the Line 3 Replacement Project, in each case, through the
applicable L3R Call Option Closing Date, and (ii) the quotient, expressed as a
percentage, obtained by dividing the L3R Call Option Interest by the total
outstanding Series L3R Partnership Interests. For illustrative purposes, an
example of this calculation methodology is attached hereto as Exhibit G.

 

(d)          If and to the extent that any distributions accruing on an L3R Call
Option Interest that are attributable to the operations of the Series L3R prior
to the applicable L3R Call Option Closing Date are declared or paid on or after
such L3R Call Option Closing Date, EECI shall be entitled to receive, and the
Partnership shall pay to EECI, subject to the Delaware Act, (i) with respect to
a Quarter ending prior to the Quarter in which the L3R Call Option Closing Date
occurs for which distributions on the Series L3R Partnership Interests have not
been declared and/or paid as of the L3R Call Option Closing Date, an amount
equal to the distributions attributable to the L3R Call Option Interest with
respect to such Quarter and (ii) with respect to a Quarter in which the L3R Call
Option Closing Date occurs, an amount equal to the product of (x) the
distributions attributable to the L3R Call Option Interest with respect to such
Quarter and (y) the quotient obtained by dividing the number of days the L3R
Call Option Interest was held by EECI during such Quarter by the total number of
days in such Quarter.

 

56

 

 

Section 4.15          Specific Performance.

 

Each Partner acknowledges that it shall be inadequate or impossible, or both, to
measure in money the damage to the Partnership, any Series or the Partners, if
any of them or any transferee or any legal representative of any party hereto
fails to comply with any of the restrictions or obligations imposed by this
Article IV, that every such restriction and obligation is material, and that in
the event of any such failure, the Partnership, the Series and the Partners
shall not have an adequate remedy at law or in damages. Therefore, each Partner
consents to the issuance of an injunction or the enforcement of other equitable
remedies against such Partner at the suit of an aggrieved party without the
posting of any bond or other security, to compel specific performance of all of
the terms of this Article IV and to prevent any transfer of Partnership
Interests or ROFR Offered Assets in contravention of any terms of this
Article IV, and waives any defenses thereto, including the defenses of:
(i) failure of consideration; (ii) breach of any other provision of this
Agreement and (iii) availability of relief in damages.

 

ARTICLE V
CAPITAL CONTRIBUTIONS; PARTNERSHIP INTERESTS;
FUTURE CAPITAL REQUIREMENTS

 

Section 5.1           Series LH Partnership Interests and Capital Contributions.

 

The Percentage Interests of each Series LH General Partner and Series LH Limited
Partner as of the date of this Agreement are as set forth on Exhibit A. Any
Series LH Limited Partner, with the consent of the Managing General Partner of
the Series LH, may, but shall not be obligated to, make additional Capital
Contributions to the Series LH. Upon any such additional Capital Contribution,
each Series LH General Partner and any other Series LH Limited Partner shall be
obligated to make an additional Capital Contribution to the Series LH in an
amount necessary to maintain its Series LH Percentage Interest.

 

Section 5.2           Series AC Capital Contributions, AC Debt Financing and
Partnership Interests.

 

(a)          On the Series AC Closing Date, each of the Series AC Partners made
its respective Capital Contribution (each, an “Initial Series AC Capital
Contribution”) to the Series AC in immediately available U.S. dollars in the
amounts set forth opposite its name on Exhibit A to the Fifth A&R Agreement in
return for the Series AC Percentage Interest and type of Series AC Partnership
Interest set forth opposite its name on Exhibit A to the Fifth A&R Agreement,
and each such Series AC Partner was admitted as a Partner of the Series AC in
the capacity set forth opposite its name on Exhibit A to the Fifth A&R
Agreement.

 

(b)          On the Series AC Closing Date, the Series AC (i) borrowed under
Facility B1 an amount equal to 66.67% of 45% of the Preliminary Alberta Clipper
Construction Costs and (ii) borrowed under Facility C1 an amount equal to 33.33%
of 45% of the Preliminary Alberta Clipper Construction Costs.

 

(c)          On the Series AC Closing Date, the Managing General Partner of
Series AC applied the proceeds of the Initial Series AC Capital Contributions
and the Initial AC Debt Financing to repay the Intercompany Preliminary AC
Construction Cost Payable.

 

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(d)          On March 15, 2010, the B1 Facility and C1 Facility were refinanced
with the proceeds of the B1 Promissory Note and the C1 Promissory Note.

 

(e)          On January 2, 2015, EECI and EECI AC Sub contributed to Enbridge
Partners all of the Series AC Partnership Interests owned by EECI and EECI AC
Sub.

 

(f)          Any Series AC Limited Partner, with the consent of the Managing
General Partner of the Series AC, may, but shall not be obligated to, make
additional Capital Contributions to the Series AC (“Additional Series AC Capital
Contributions”). Upon any such Additional Series AC Capital Contribution, each
Series AC General Partner and any other Series AC Limited Partner shall be
obligated to make an additional Capital Contribution to the Series AC in an
amount necessary to maintain its Series AC Percentage Interest. The Percentage
Interests of each Series AC General Partner and Series AC Limited Partner as of
the date of this Agreement are as set forth on Exhibit A.

 

Section 5.3           Reserved.

 

Section 5.4           Reserved.

 

Section 5.5           Initial Series EA Capital Contributions.

 

(a)          On the Series EA Closing Date, each of the Series EA Partners made
its respective Capital Contribution (each, an “Initial Series EA Capital
Contribution”) to the Series EA in immediately available U.S. dollars in the
amounts set forth opposite its name on Exhibit A to the Fifth A&R Agreement in
return for the Series EA Percentage Interest and type of Series EA Partnership
Interest set forth opposite its name on Exhibit A to the Fifth A&R Agreement and
each such Series EA Partner was admitted as a Partner of the Series EA in the
capacity set forth opposite its name on Exhibit A to the Fifth A&R Agreement.

 

(b)          On the Series EA Closing Date, the Managing General Partner of
Series EA applied the proceeds of the Initial Series EA Capital Contributions to
repay the Intercompany Preliminary EA Construction Cost Payable.

 

(c)          On June 28, 2013, EECI and Enbridge Partners entered into that
certain Option Interests Purchase Agreement (the “Option Purchase Agreement”),
whereby Enbridge Partners sold to EECI a portion of the Series EA Limited
Partner Interests owned by Enbridge Partners representing, in the aggregate, 15%
of the total outstanding Series EA Limited Partner Interests in accordance with
Section 4.10 of the Fifth A&R Agreement. The Percentage Interests of each Series
EA General Partner and Series EA Limited Partner as of the date of this
Agreement are as set forth on Exhibit A.

 

58

 

 

Section 5.6           Additional Series EA Capital Contributions.

 

(a)          (i) Except as otherwise provided in Section 5.6(a)(ii), each
Series EA Partner hereby agrees to make additional Capital Contributions to the
Series EA (the “Additional Series EA Capital Contributions”) in proportion to
such Series EA Partner’s Series EA Percentage Interest at such times and in such
amounts as the Managing General Partner of the Series EA shall specify in a
notice delivered to the Series EA Partners pursuant to Section 5.6(b) or
Section 5.6(c) (“Series EA Capital Contribution Notice”); provided that, except
as a result of the operation of Section 5.6(a)(ii), in no event shall any
Series EA Partner be required to make, in the aggregate, Capital Contributions
in excess of such Series EA Partner’s respective Maximum Commitment with respect
to Series EA set forth on Exhibit A. All Additional Series EA Capital
Contributions shall be contributed to the Series EA in immediately available
U.S. dollars on the date specified in the applicable Series EA Capital
Contribution Notice. No Series EA Partner shall be required to make any
Additional Series EA Capital Contribution, or to otherwise contribute any
amount, to the Series EA unless such Additional Series EA Capital Contribution
is reflected on the Series EA Annual Budget for such fiscal year or is otherwise
approved by the Managing General Partner of the Series EA and a Supermajority
Interest of Series EA Partnership Interests.

 

(ii) Commencing with and including the date on which the Series EA Capital
Contribution Notice is delivered to the Series EA Partners in August 2015 and
continuing through the earlier of (A) the first date after the date on which the
Series EA Distribution is paid with respect to the Quarter ending March 31, 2016
on which Enbridge Partners has made Additional Series EA Capital Contributions
pursuant to this Section 5.6(a)(ii) in excess of its Pro Rata portion in an
amount equal to the Series EA Abatement Amount determined as of the date
immediately following the date on which the Series EA Distribution for the
Quarter ending March 31, 2016 is paid and (B) December 31, 2016, with respect to
each Series EA Capital Contribution Notice, Enbridge Partners shall contribute
an amount equal to its Pro Rata portion of any Additional Series EA Capital
Contribution plus the Series EA Contribution Offset Amount, and EECI shall
contribute an amount equal to its Pro Rata portion of such Additional Series EA
Capital Contribution less the Series EA Contribution Offset Amount; provided
that (1) Enbridge Partners’ contribution with respect to any such Series EA
Capital Contribution Notice shall in no event exceed 100.0% of the Additional
Series EA Capital Contributions specified in such Series EA Capital Contribution
Notice and (2) EECI’s contribution with respect to any such Series EA Capital
Contribution Notice shall in no event be less than zero.

 

(b)          On the 12th day of each month beginning prior to the Eastern Access
Final In-Service Date, the Managing General Partner of the Series EA shall
deliver a Series EA Capital Contribution Notice to each of the Series EA
Partners setting forth (i) the estimated cash construction costs related to the
Eastern Access Project for such month, adjusted for the difference between
(A) the actual construction costs related to the Eastern Access Project for the
immediately preceding month and (B) the estimated construction costs set forth
in the Series EA Capital Contribution Notice for the immediately preceding month
(the “Series EA Monthly Capital Requirement”), (ii) the amount of the required
Additional Series EA Capital Contribution to be made by such Series EA Partner,
which, except as provided in Section 5.6(a)(ii), shall be an amount equal to
such Series EA Partner’s Pro Rata portion of the Series EA Monthly Capital
Requirement, (iii) that such Additional Series EA Capital Contribution is due on
the 15th day of such month and (iv) the Person or the account to which such
Additional Series EA Capital Contribution is to be made.

 

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(c)          From time to time following the Eastern Access Final In-Service
Date, the Managing General Partner of the Series EA may deliver to the Series EA
Partners a Series EA Capital Contribution Notice related to amounts that the
Managing General Partner of the Series EA determines are necessary to fund the
Series EA’s operations and establish reasonable reserves in respect of the
Series EA’s expenses. Such notice shall set forth (i) the manner in which, and
the expected date on which, such Additional Series EA Capital Contribution is to
be applied, (ii) the amount of the required Additional Series EA Capital
Contribution to be made by such Series EA Partner, which, except as provided in
Section 5.6(a)(ii), shall be an amount equal to such Series EA Partner’s Pro
Rata portion of the total amount of such Additional Series EA Capital
Contribution, (iii) the date on which such Additional Series EA Capital
Contribution is due, which shall not be less than 10 Business Days from the date
such notice is delivered and (iv) the Person or the account to which such
Additional Series EA Capital Contribution is to be made.

 

(d)          Each Series EA Partner agrees that payment of its required
Additional Series EA Capital Contributions under this Agreement is an obligation
of such Series EA Partner, that any default by any Series EA Partner would cause
injury to the Series EA and to the other Series EA Partners and that the amount
of damages caused by any such default would be difficult to calculate.

 

(e)          If a Series EA Partner fails to fund all or any portion of its
required Additional Series EA Capital Contribution set forth in a Series EA
Capital Contribution Notice and fails to cure such default within five Business
Days after the due date set forth in such Series EA Capital Contribution Notice
(the “Default Series EA Capital Contribution”), the Series EA Partner failing to
make such contribution (the “Defaulting Series EA Partner”) will be in default.
Upon the occurrence of any such default, the Managing General Partner of
Series EA shall promptly notify the Defaulting Series EA Partner and the other
Series EA Partners not in default (each a “Non-Defaulting Series EA Partner”) of
the occurrence of such default. As long as a Default Series EA Capital
Contribution remains unpaid or arrangements for the payment thereof have not
been agreed to by the Series EA Partners, any Non-Defaulting Series EA Partner
may advance to the Series EA the entire amount of the Defaulting Series EA
Partner’s Capital Contribution that has not been contributed, with each
Non-Defaulting Series EA Partner electing to participate in such advance making
its share of such advance in proportion to its Series EA Percentage Interest
(without taking into account the Series EA Percentage Interest of the Defaulting
Series EA Partner). Each Non-Defaulting Series EA Partner who makes such an
advance on behalf of a Defaulting Series EA Partner will have the right to elect
the extent to which such advance will (x) constitute a loan to the Defaulting
Series EA Partner and/or (y) be treated as a Capital Contribution by such
Non-Defaulting Series EA Partner and result in an immediate adjustment of the
Series EA Percentage Interests of the Defaulting Series EA Partner and the
Non-Defaulting Series EA Partner making such election in accordance with Section
5.6(e)(i); provided, however, that if the advancing Non-Defaulting Series EA
Partner does not notify the Managing General Partner of the Series EA of its
election to have all, or any portion of, such advance treated as a loan to the
Defaulting Series EA Partner, in writing, at the time the advance is made, then
such advance shall be deemed a Capital Contribution and will automatically
result in an immediate adjustment of the Series EA Percentage Interests.

 

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(i)          To the extent that one or more Non-Defaulting Series EA Partners do
not elect to have an advance made pursuant to this Section 5.6(e) treated as a
loan to the Defaulting Series EA Partner, or affirmatively elects to have such
advance treated as a Capital Contribution, the Managing General Partner of the
Series EA will automatically adjust the Series EA Percentage Interest of
(A) each such Non-Defaulting Series EA Partner to equal the percentage obtained
by dividing (x) the Series EA Capital Account of each such Non-Defaulting
Series EA Partner (including any Capital Contribution made by such
Non-Defaulting Series EA Partner under this Section 5.6(e) multiplied by three)
by (y) the sum of the Series EA Capital Accounts of all Series EA Partners
(including all Capital Contributions made under this Section 5.6(e) multiplied
by three) and (B) such Defaulting Series EA Partner to equal the amount of (x)
such Defaulting Series EA Partner’s Series EA Percentage Interest immediately
prior to the occurrence of such default less (y) the aggregate increases to the
Series EA Percentage Interests of Non-Defaulting Series EA Partners pursuant to
clause (A). Notwithstanding the foregoing, the Defaulting Series EA Partner will
have the right to re-acquire the interest in question from any advancing
Non-Defaulting Series EA Partner within 30 days following the date on which such
Series EA Percentage Interest adjustment is made by paying the entire amount
advanced by such Non-Defaulting Series EA Partner in return for such adjustment,
plus interest thereon at a rate equal to the lesser of (A) the maximum, lawful
interest rate, compounded monthly, that is then-currently permitted under
applicable law, (B) 12% per annum or (C) in the case of an advance from EECI or
its Affiliates to Enbridge Partners or its Subsidiaries, the rate that would be
charged Enbridge Partners by unrelated lenders on a comparable loan, whereupon
the Series EA Percentage Interests of each Series EA Partner shall be adjusted
to equal the Percentage Interest such Series EA Partner would have had in the
absence of a default by such Defaulting Series EA Partner.

 

(ii)         To the extent one or more Non-Defaulting Series EA Partners (each,
a “Lending Series EA Partner”) elects to have an advance made pursuant to this
Section 5.6(e) constitute a loan to the Defaulting Series EA Partner, such
advance will have the following results (except to the extent otherwise agreed
by the Lending Series EA Partner and the Defaulting Series EA Partner, each in
their sole discretion):

 

(A)          the sum advanced will constitute a loan from the Lending Series EA
Partner to the Defaulting Series EA Partner and an Additional Series EA Capital
Contribution of that sum to the Series EA by the Defaulting Series EA Partner
pursuant to the applicable provisions of this Agreement;

 

(B)          the principal balance of the loan together with all accrued unpaid
interest thereon and all costs and expenses associated therewith (collectively,
the “Defaulting Series EA Partner Obligation”) will be due and payable in whole
no later than the tenth Business Day after the day written demand requesting
payment of the Defaulting Series EA Partner Obligation is made by the Lending
Series EA Partner to the Defaulting Series EA Partner; provided, however, that
the Defaulting Series EA Partner may prepay the Defaulting Series EA Partner
Obligation in whole or in part at any time prior to the date due;

 

(C)          the amount lent will bear interest at the rate that is the lesser
of (A) the maximum, lawful interest rate, compounded monthly, that is
then-currently permitted under applicable law, (B) 12% per annum or (C) in the
case of an advance from EECI or its Affiliates to Enbridge Partners or its
Subsidiaries, the rate that would be charged Enbridge Partners by unrelated
lenders on a comparable loan;

 

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(D)          the Lending Series EA Partner will have the right, in addition to
the other rights and remedies granted to it pursuant to this Agreement, to take
any action available to it at law or in equity that the Lending Series EA
Partner may deem appropriate to obtain payment from the Defaulting Series EA
Partner of the Defaulting Series EA Partner Obligation; and

 

(E)          initially, a loan by a Lending Series EA Partner to a Defaulting
Series EA Partner as contemplated by this Section 5.6(e)(ii) will not be
considered a Capital Contribution by such Lending Series EA Partner and will not
increase the Capital Account balance of such Lending Series EA Partner.
Notwithstanding the foregoing, if the principal and interest of any such loan
have not been repaid within one year from the date of the loan, a Lending Series
EA Partner, at any time thereafter by giving written notice to the Managing
General Partner of the Series EA and the Defaulting Series EA Partner, may elect
to have an amount equal to the unpaid principal and interest balance of such
loan transferred from such Defaulting Series EA Partner’s Capital Account to
such Lending Series EA Partner’s Capital Account and increase such Lending
Series EA Partner’s Capital Account with a corresponding decrease in such
Defaulting Series EA Partner’s Capital Account. Upon such transfer, the loan
will be treated as a Capital Contribution and the Series EA Percentage Interest
for (A) such Lending Series EA Partner will be automatically adjusted to equal
the percentage obtained by dividing (x) the Capital Account of such Lending
Series EA Partner (including any Capital Contribution made by such Lending
Series EA Partner under this Section 5.6(e)(ii)(E) on behalf of the Defaulting
Series EA Partner multiplied by three) by (y) the sum of the Series EA Capital
Accounts of all Series EA Partners (including all Capital Contributions made
under this Section 5.6(e)(ii)(E) on behalf of the Defaulting Series EA Partner
multiplied by three) and (B) such Defaulting Series EA Partner will be
automatically adjusted to equal the amount of (x) such Defaulting Series EA
Partner’s Series EA Percentage Interest immediately prior to such election by
the Lending Series EA Partner less (y) the increase to the Series EA Percentage
Interest of Lending Series EA Partner pursuant to clause (A).

 

(f)          Notwithstanding the rights of Non-Defaulting Series EA Partners
described in Section 5.6(e), the Managing General Partner of the Series EA, by a
vote of a Supermajority Interest of Series EA Partnership Interests (without
taking into account the Series EA Partnership Interests of the Defaulting Series
EA Partner), will have the right to exercise any rights and remedies available
at law or in equity.

 

Section 5.7           Initial Series ME Capital Contributions.

 

(a)          On the Series ME Closing Date, each of the Series ME Partners made
its respective Capital Contribution (each, an “Initial Series ME Capital
Contribution”) to the Series ME in immediately available U.S. dollars in the
amounts set forth opposite its name on Exhibit A to the Fifth A&R Agreement in
return for the Series ME Percentage Interest and type of Series ME Partnership
Interest set forth opposite its name on Exhibit A to the Fifth A&R Agreement,
and each such Series ME Partner was admitted as a Partner of the Series ME in
the capacity set forth opposite its name on Exhibit A to the Fifth A&R
Agreement.

 

(b)          On the Series ME Closing Date, the Managing General Partner of
Series ME applied the proceeds of the Initial Series ME Capital Contributions to
repay the Intercompany Preliminary ME Construction Cost Payable.

 

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(c)          On June 28, 2013, EECI and Enbridge Partners entered into the
Option Purchase Agreement whereby Enbridge Partners sold to EECI a portion of
the Series ME Limited Partner Interests owned by Enbridge Partners representing,
in the aggregate, 15% of the total outstanding Series ME Limited Partner
Interests in accordance with Section 4.12 of the Fifth A&R Agreement. The
Percentage Interests of each Series ME General Partner and Series ME Limited
Partner as of the date of this Agreement are as set forth on Exhibit A.

 

Section 5.8           Additional Series ME Capital Contributions.

 

(a)          (i) Except as otherwise provided in Section 5.8(a)(ii), each
Series ME Partner hereby agrees to make additional Capital Contributions to the
Series ME (the “Additional Series ME Capital Contributions”) in proportion to
such Series ME Partner’s Series ME Percentage Interest at such times and in such
amounts as the Managing General Partner of the Series ME shall specify in a
notice delivered to the Series ME Partners pursuant to Section 5.8(b) or
Section 5.8(c) (“Series ME Capital Contribution Notice”); provided that, except
as a result of the operation of Section 5.8(a)(ii), in no event shall any
Series ME Partner be required to make, in the aggregate, Capital Contributions
in excess of such Series ME Partner’s respective Maximum Commitment with respect
to Series ME set forth on Exhibit A. All Additional Series ME Capital
Contributions shall be contributed to the Series ME in immediately available
U.S. dollars on the date specified in the applicable Series ME Capital
Contribution Notice. No Series ME Partner shall be required to make any
Additional Series ME Capital Contribution, or to otherwise contribute any
amount, to the Series ME unless such Additional Series ME Capital Contribution
is reflected on the Series ME Annual Budget for such fiscal year or is otherwise
approved by the Managing General Partner of the Series ME and a Supermajority
Interest of Series ME Partnership Interests.

 

(ii) Commencing with and including the date on which the Series ME Capital
Contribution Notice is delivered to the Series ME Partners in August 2015 and
continuing through the earlier of (A) the first date after the date on which the
Series ME Distribution is paid with respect to the Quarter ending March 31, 2016
on which Enbridge Partners has made Additional Series ME Capital Contributions
pursuant to this Section 5.8(a)(ii) in excess of its Pro Rata portion in an
amount equal to the Series ME Abatement Amount determined as of the date
immediately following the date on which the Series ME Distribution for the
Quarter ending March 31, 2016 is paid and (B) December 31, 2016, with respect to
each Series ME Capital Contribution Notice, Enbridge Partners shall contribute
its Pro Rata portion of any Additional Series ME Capital Contribution plus the
Series ME Contribution Offset Amount, and EECI shall contribute an amount equal
to its Pro Rata portion of such Additional Series ME Capital Contribution less
the Series ME Contribution Offset Amount; provided, that (1) Enbridge Partners’
contribution with respect to any such Series ME Capital Contribution Notice
shall in no event exceed 100.0% of the Additional Series ME Capital
Contributions specified in such Series ME Capital Contribution Notice and (2)
EECI’s contribution with respect to any such Series ME Capital Contribution
Notice shall in no event be less than zero.

 

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(b)          On the 12th day of each month beginning prior to the Mainline
Expansion Final In-Service Date, the Managing General Partner of the Series ME
shall deliver a Series ME Capital Contribution Notice to each of the Series ME
Partners setting forth (i) the estimated cash construction costs related to the
Mainline Expansion Project for such month, adjusted for the difference between
(A) the actual construction costs related to the Mainline Expansion Project for
the immediately preceding month and (B) the estimated construction costs set
forth in the Series ME Capital Contribution Notice for the immediately preceding
month (the “Series ME Monthly Capital Requirement”), (ii) the amount of the
required Additional Series ME Capital Contribution to be made by such Series ME
Partner, which, except as provided in Section 5.8(a)(ii), shall be an amount
equal to such Series ME Partner’s Pro Rata portion of the Series ME Monthly
Capital Requirement, (iii) that such Additional Series ME Capital Contribution
is due on the 15th day of such month and (iv) the Person or the account to which
such Additional Series ME Capital Contribution is to be made.

 

(c)          From time to time following the Mainline Expansion Final In-Service
Date, the Managing General Partner of the Series ME may deliver to the Series ME
Partners a Series ME Capital Contribution Notice related to amounts that the
Managing General Partner of the Series ME determines are necessary to fund the
Series ME’s operations and establish reasonable reserves in respect of the
Series ME’s expenses. Such notice shall set forth (i) the manner in which, and
the expected date on which, such Additional Series ME Capital Contribution is to
be applied, (ii) the amount of the required Additional Series ME Capital
Contribution to be made by such Series ME Partner, which, except as provided in
Section 5.8(a)(ii), shall be an amount equal to such Series ME Partner’s Pro
Rata portion of the total amount of such Additional Series ME Capital
Contribution, (iii) the date on which such Additional Series ME Capital
Contribution is due, which shall not be less than 10 Business Days from the date
such notice is delivered and (iv) the Person or the account to which such
Additional Series ME Capital Contribution is to be made.

 

(d)          Each Series ME Partner agrees that payment of its required
Additional Series ME Capital Contributions under this Agreement is an obligation
of such Series ME Partner, that any default by any Series ME Partner would cause
injury to the Series ME and to the other Series ME Partners and that the amount
of damages caused by any such default would be difficult to calculate.

 

(e)          If a Series ME Partner fails to fund all or any portion of its
required Additional Series ME Capital Contribution set forth in a Series ME
Capital Contribution Notice and fails to cure such default within five Business
Days after the due date set forth in such Series ME Capital Contribution Notice
(the “Default Series ME Capital Contribution”), the Series ME Partner failing to
make such contribution (the “Defaulting Series ME Partner”) will be in default.
Upon the occurrence of any such default, the Managing General Partner of
Series ME shall promptly notify the Defaulting Series ME Partner and the other
Series ME Partners not in default (each a “Non-Defaulting Series ME Partner”) of
the occurrence of such default. As long as a Default Series ME Capital
Contribution remains unpaid or arrangements for the payment thereof have not
been agreed to by the Series ME Partners, any Non-Defaulting Series ME Partner
may advance to the Series ME the entire amount of the Defaulting Series ME
Partner’s Capital Contribution that has not been contributed, with each
Non-Defaulting Series ME Partner electing to participate in such advance making
its share of such advance in proportion to its Series ME Percentage Interest
(without taking into account the Series ME Percentage Interest of the Defaulting
Series ME Partner). Each Non-Defaulting Series ME Partner who makes such an
advance on behalf of a Defaulting Series ME Partner will have the right to elect
the extent to which such advance will (x) constitute a loan to the Defaulting
Series ME Partner and/or (y) be treated as a Capital Contribution by such
Non-Defaulting Series ME Partner and result in an immediate adjustment of the
Series ME Percentage Interests of the Defaulting Series ME Partner and the
Non-Defaulting Series ME Partner making such election in accordance with Section
5.8(e)(i); provided, however, that if the advancing Non-Defaulting Series ME
Partner does not notify the Managing General Partner of the Series ME of its
election to have all, or any portion of, such advance treated as a loan to the
Defaulting Series ME Partner, in writing, at the time the advance is made, then
such advance shall be deemed a Capital Contribution and will automatically
result in an immediate adjustment of the Series ME Percentage Interests.

 

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(i)          To the extent that one or more Non-Defaulting Series ME Partners do
not elect to have an advance made pursuant to this Section 5.8(e) treated as a
loan to the Defaulting Series ME Partner, or affirmatively elects to have such
advance treated as a Capital Contribution, the Managing General Partner of the
Series ME will automatically adjust the Series ME Percentage Interest of
(A) each such Non-Defaulting Series ME Partner to equal the percentage obtained
by dividing (x) the Series ME Capital Account of each such Non-Defaulting Series
ME Partner (including any Capital Contribution made by such Non-Defaulting
Series ME Partner under this Section 5.8(e) multiplied by three) by (y) the sum
of the Series ME Capital Accounts of all Series ME Partners (including all
Capital Contributions made under this Section 5.8(e) multiplied by three) and
(B) such Defaulting Series ME Partner to equal the amount of (x) such Defaulting
Series ME Partner’s Series ME Percentage Interest immediately prior to the
occurrence of such default less (y) the aggregate increases to the Series ME
Percentage Interests of Non-Defaulting Series ME Partners pursuant to clause
(A). Notwithstanding the foregoing, the Defaulting Series ME Partner will have
the right to re-acquire the interest in question from any advancing
Non-Defaulting Series ME Partner within 30 days following the date on which such
Series ME Percentage Interest adjustment is made by paying the entire amount
advanced by such Non-Defaulting Series ME Partner in return for such adjustment,
plus interest thereon at a rate equal to the lesser of (A) the maximum, lawful
interest rate, compounded monthly, that is then-currently permitted under
applicable law, (B) 12% per annum or (C) in the case of an advance from EECI or
its Affiliates to Enbridge Partners or its Subsidiaries, the rate that would be
charged Enbridge Partners by unrelated lenders on a comparable loan, whereupon
the Series ME Percentage Interests of each Series ME Partner shall be adjusted
to equal the Percentage Interest such Series ME Partner would have had in the
absence of a default by such Defaulting Series ME Partner.

 

(ii)          To the extent one or more Non-Defaulting Series ME Partners (each,
a “Lending Series ME Partner”) elects to have an advance made pursuant to this
Section 5.8(e) constitute a loan to the Defaulting Series ME Partner, such
advance will have the following results (except to the extent otherwise agreed
by the Lending Series ME Partner and the Defaulting Series ME Partner, each in
their sole discretion):

 

(A)          the sum advanced will constitute a loan from the Lending Series ME
Partner to the Defaulting Series ME Partner and an Additional Series ME Capital
Contribution of that sum to the Series ME by the Defaulting Series ME Partner
pursuant to the applicable provisions of this Agreement;

 

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(B)          the principal balance of the loan together with all accrued unpaid
interest thereon and all costs and expenses associated therewith (collectively,
the “Defaulting Series ME Partner Obligation”) will be due and payable in whole
no later than the tenth Business Day after the day written demand requesting
payment of the Defaulting Series ME Partner Obligation is made by the Lending
Series ME Partner to the Defaulting Series ME Partner; provided, however, that
the Defaulting Series ME Partner may prepay the Defaulting Series ME Partner
Obligation in whole or in part at any time prior to the date due;

 

(C)          the amount lent will bear interest at the rate that is the lesser
of (A) the maximum, lawful interest rate, compounded monthly, that is
then-currently permitted under applicable law, (B) 12% per annum or (C) in the
case of an advance from EECI or its Affiliates to Enbridge Partners or its
Subsidiaries, the rate that would be charged Enbridge Partners by unrelated
lenders on a comparable loan;

 

(D)          the Lending Series ME Partner will have the right, in addition to
the other rights and remedies granted to it pursuant to this Agreement, to take
any action available to it at law or in equity that the Lending Series ME
Partner may deem appropriate to obtain payment from the Defaulting Series ME
Partner of the Defaulting Series ME Partner Obligation; and

 

(E)          initially, a loan by a Lending Series ME Partner to a Defaulting
Series ME Partner as contemplated by this Section 5.8(e)(ii) will not be
considered a Capital Contribution by such Lending Series ME Partner and will not
increase the Capital Account balance of such Lending Series ME Partner.
Notwithstanding the foregoing, if the principal and interest of any such loan
have not been repaid within one year from the date of the loan, a Lending Series
ME Partner, at any time thereafter by giving written notice to the Managing
General Partner of the Series ME and the Defaulting Series ME Partner, may elect
to have an amount equal to the unpaid principal and interest balance of such
loan transferred from such Defaulting Series ME Partner’s Capital Account to
such Lending Series ME Partner’s Capital Account and increase such Lending
Series ME Partner’s Capital Account with a corresponding decrease in such
Defaulting Series ME Partner’s Capital Account. Upon such transfer, the loan
will be treated as a Capital Contribution and the Series ME Percentage Interest
for (A) such Lending Series ME Partner will be automatically adjusted to equal
the percentage obtained by dividing (x) the Capital Account of such Lending
Series ME Partner (including any Capital Contribution made by such Lending
Series ME Partner under this Section 5.8(e)(ii)(E) on behalf of the Defaulting
Series ME Partner multiplied by three) by (y) the sum of the Series ME Capital
Accounts of all Series ME Partners (including all Capital Contributions made
under this Section 5.8(e)(ii)(E) on behalf of the Defaulting Series ME Partner
multiplied by three) and (B) such Defaulting Series ME Partner will be
automatically adjusted to equal the amount of (x) such Defaulting Series ME
Partner’s Series ME Percentage Interest immediately prior to such election by
the Lending Series ME Partner less (y) the increase to the Series ME Percentage
Interest of Lending Series ME Partner pursuant to clause (A).

 

(f)          Notwithstanding the rights of Non-Defaulting Series ME Partners
described in Section 5.8(e), the Managing General Partner of the Series ME, by a
vote of a Supermajority Interest of Series ME Partnership Interests (without
taking into account the Series ME Partnership Interests of the Defaulting Series
ME Partner), will have the right to exercise any rights and remedies available
at law or in equity.

 

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Section 5.9           Initial Series L3R Capital Contributions.

 

(a)          On the Series L3R Closing Date, each of the Series L3R Partners
made its respective Capital Contribution (each, an “Initial Series L3R Capital
Contribution”) to the Series L3R in the amounts set forth opposite its name on
Exhibit A in return for the Series L3R Percentage Interest and type of
Series L3R Partnership Interest set forth opposite its name on Exhibit A, and
each such Series L3R Partner was admitted as a Partner of the Series L3R in the
capacity set forth opposite its name on Exhibit A.

 

(b)          On the Series L3R Closing Date, the Managing General Partner of
Series L3R applied the proceeds of the Initial Series L3R Capital Contributions
to (i) repay the Intercompany Preliminary L3R Construction Cost Payable and (ii)
pay to Enbridge Partners the L3R Additional True-Up Amount.

 

Section 5.10          Additional Series L3R Capital Contributions.

 

(a)          Each Series L3R Partner hereby agrees to make additional Capital
Contributions to the Series L3R (the “Additional Series L3R Capital
Contributions”) in proportion to such Series L3R Partner’s Series L3R Percentage
Interest at such times and in such amounts as the Managing General Partner of
the Series L3R shall specify in a notice delivered to the Series L3R Partners
pursuant to Section 5.10(b) or Section 5.10(c) (“Series L3R Capital Contribution
Notice”); provided that in no event shall any Series L3R Partner be required to
make, in the aggregate, Capital Contributions in excess of such Series L3R
Partner’s respective Maximum Commitment with respect to Series L3R set forth on
Exhibit A. All Additional Series L3R Capital Contributions shall be contributed
to the Series L3R in immediately available U.S. dollars on the date specified in
the applicable Series L3R Capital Contribution Notice. No Series L3R Partner
shall be required to make any Additional Series L3R Capital Contribution, or to
otherwise contribute any amount, to the Series L3R unless such Additional Series
L3R Capital Contribution is reflected on the Series L3R Annual Budget for such
fiscal year or is otherwise approved by the Managing General Partner of the
Series L3R and a Supermajority Interest of Series L3R Partnership Interests.

 

(b)          On the 12th day of each month beginning prior to the L3R In-Service
Date, the Managing General Partner of the Series L3R shall deliver a Series L3R
Capital Contribution Notice to each of the Series L3R Partners setting forth (i)
the estimated cash construction costs related to the Line 3 Replacement Project
for such month, adjusted for the difference between (A) the actual construction
costs related to the Line 3 Replacement Project for the immediately preceding
month and (B) the estimated construction costs set forth in the Series L3R
Capital Contribution Notice for the immediately preceding month (the “Series L3R
Monthly Capital Requirement”), (ii) the amount of the required Additional Series
L3R Capital Contribution to be made by such Series L3R Partner, which shall be
an amount equal to such Series L3R Partner’s Pro Rata portion of the Series L3R
Monthly Capital Requirement, (iii) that such Additional Series L3R Capital
Contribution is due on the 15th day of such month and (iv) the Person or the
account to which such Additional Series L3R Capital Contribution is to be made.

 

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(c)          From time to time following the L3R In-Service Date, the Managing
General Partner of the Series L3R may deliver to the Series L3R Partners a
Series L3R Capital Contribution Notice related to amounts that the Managing
General Partner of the Series L3R determines are necessary to fund the Series
L3R’s operations and establish reasonable reserves in respect of the Series
L3R’s expenses. Such notice shall set forth (i) the manner in which, and the
expected date on which, such Additional Series L3R Capital Contribution is to be
applied, (ii) the amount of the required Additional Series L3R Capital
Contribution to be made by such Series L3R Partner, which shall be an amount
equal to such Series L3R Partner’s Pro Rata portion of the total amount of such
Additional Series L3R Capital Contribution, (iii) the date on which such
Additional Series L3R Capital Contribution is due, which shall not be less than
10 Business Days from the date such notice is delivered and (iv) the Person or
the account to which such Additional Series L3R Capital Contribution is to be
made.

 

(d)          Each Series L3R Partner agrees that payment of its required
Additional Series L3R Capital Contributions under this Agreement is an
obligation of such Series L3R Partner, that any default by any Series L3R
Partner would cause injury to the Series L3R and to the other Series L3R
Partners and that the amount of damages caused by any such default would be
difficult to calculate.

 

(e)          If a Series L3R Partner fails to fund all or any portion of its
required Additional Series L3R Capital Contribution set forth in a Series L3R
Capital Contribution Notice and fails to cure such default within five Business
Days after the due date set forth in such Series L3R Capital Contribution Notice
(the “Default Series L3R Capital Contribution”), the Series L3R Partner failing
to make such contribution (the “Defaulting Series L3R Partner”) will be in
default. Upon the occurrence of any such default, the Managing General Partner
of Series L3R shall promptly notify the Defaulting Series L3R Partner and the
other Series L3R Partners not in default (each a “Non-Defaulting Series L3R
Partner”) of the occurrence of such default. As long as a Default Series L3R
Capital Contribution remains unpaid or arrangements for the payment thereof have
not been agreed to by the Series L3R Partners, any Non-Defaulting Series L3R
Partner may advance to the Series L3R the entire amount of the Defaulting Series
L3R Partner’s Capital Contribution that has not been contributed, with each
Non-Defaulting Series L3R Partner electing to participate in such advance making
its share of such advance in proportion to its Series L3R Percentage Interest
(without taking into account the Series L3R Percentage Interest of the
Defaulting Series L3R Partner). Each Non-Defaulting Series L3R Partner who makes
such an advance on behalf of a Defaulting Series L3R Partner will have the right
to elect the extent to which such advance will (x) constitute a loan to the
Defaulting Series L3R Partner and/or (y) be treated as a Capital Contribution by
such Non-Defaulting Series L3R Partner and result in an immediate adjustment of
the Series L3R Percentage Interests of the Defaulting Series L3R Partner and the
Non-Defaulting Series L3R Partner making such election in accordance with
Section 5.10(e)(i); provided, however, that if the advancing Non-Defaulting
Series L3R Partner does not notify the Managing General Partner of the Series
L3R of its election to have all, or any portion of, such advance treated as a
loan to the Defaulting Series L3R Partner, in writing, at the time the advance
is made, then such advance shall be deemed a Capital Contribution and will
automatically result in an immediate adjustment of the Series L3R Percentage
Interests.

 

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(i)          To the extent that one or more Non-Defaulting Series L3R Partners
do not elect to have an advance made pursuant to this Section 5.10(e) treated as
a loan to the Defaulting Series L3R Partner, or affirmatively elects to have
such advance treated as a Capital Contribution, the Managing General Partner of
the Series L3R will automatically adjust the Series L3R Percentage Interest of
(A) each such Non-Defaulting Series L3R Partner to equal the percentage obtained
by dividing (x) the Series L3R Capital Account of each such Non-Defaulting
Series L3R Partner (including any Capital Contribution made by such
Non-Defaulting Series L3R Partner under this Section 5.10(e) multiplied by
three) by (y) the sum of the Series L3R Capital Accounts of all Series L3R
Partners (including all Capital Contributions made under this Section 5.10(e)
multiplied by three) and (B) such Defaulting Series L3R Partner to equal the
amount of (x) such Defaulting Series L3R Partner’s Series L3R Percentage
Interest immediately prior to the occurrence of such default less (y) the
aggregate increases to the Series L3R Percentage Interests of Non-Defaulting
Series L3R Partners pursuant to clause (A). Notwithstanding the foregoing, the
Defaulting Series L3R Partner will have the right to re-acquire the interest in
question from any advancing Non-Defaulting Series L3R Partner within 30 days
following the date on which such Series L3R Percentage Interest adjustment is
made by paying the entire amount advanced by such Non-Defaulting Series L3R
Partner in return for such adjustment, plus interest thereon at a rate equal to
the lesser of (A) the maximum, lawful interest rate, compounded monthly, that is
then-currently permitted under applicable law, (B) 12% per annum or (C) in the
case of an advance from EECI or its Affiliates to Enbridge Partners or its
Subsidiaries, the rate that would be charged Enbridge Partners by unrelated
lenders on a comparable loan, whereupon the Series L3R Percentage Interests of
each Series L3R Partner shall be adjusted to equal the Percentage Interest such
Series L3R Partner would have had in the absence of a default by such Defaulting
Series L3R Partner.

 

(ii)          To the extent one or more Non-Defaulting Series L3R Partners
(each, a “Lending Series L3R Partner”) elects to have an advance made pursuant
to this Section 5.10(e) constitute a loan to the Defaulting Series L3R Partner,
such advance will have the following results (except to the extent otherwise
agreed by the Lending Series L3R Partner and the Defaulting Series L3R Partner,
each in their sole discretion):

 

(A)          the sum advanced will constitute a loan from the Lending Series L3R
Partner to the Defaulting Series L3R Partner and an Additional Series L3R
Capital Contribution of that sum to the Series L3R by the Defaulting Series L3R
Partner pursuant to the applicable provisions of this Agreement;

 

(B)          the principal balance of the loan together with all accrued unpaid
interest thereon and all costs and expenses associated therewith (collectively,
the “Defaulting Series L3R Partner Obligation”) will be due and payable in whole
no later than the tenth Business Day after the day written demand requesting
payment of the Defaulting Series L3R Partner Obligation is made by the Lending
Series L3R Partner to the Defaulting Series L3R Partner; provided, however, that
the Defaulting Series L3R Partner may prepay the Defaulting Series L3R Partner
Obligation in whole or in part at any time prior to the date due;

 

(C)          the amount lent will bear interest at the rate that is the lesser
of (A) the maximum, lawful interest rate, compounded monthly, that is
then-currently permitted under applicable law, (B) 12% per annum or (C) in the
case of an advance from EECI or its Affiliates to Enbridge Partners or its
Subsidiaries, the rate that would be charged Enbridge Partners by unrelated
lenders on a comparable loan;

 

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(D)          the Lending Series L3R Partner will have the right, in addition to
the other rights and remedies granted to it pursuant to this Agreement, to take
any action available to it at law or in equity that the Lending Series L3R
Partner may deem appropriate to obtain payment from the Defaulting Series L3R
Partner of the Defaulting Series L3R Partner Obligation; and

 

(E)          initially, a loan by a Lending Series L3R Partner to a Defaulting
Series L3R Partner as contemplated by this Section 5.10(e)(ii) will not be
considered a Capital Contribution by such Lending Series L3R Partner and will
not increase the Capital Account balance of such Lending Series L3R Partner.
Notwithstanding the foregoing, if the principal and interest of any such loan
have not been repaid within one year from the date of the loan, a Lending Series
L3R Partner, at any time thereafter by giving written notice to the Managing
General Partner of the Series L3R and the Defaulting Series L3R Partner, may
elect to have an amount equal to the unpaid principal and interest balance of
such loan transferred from such Defaulting Series L3R Partner’s Capital Account
to such Lending Series L3R Partner’s Capital Account and increase such Lending
Series L3R Partner’s Capital Account with a corresponding decrease in such
Defaulting Series L3R Partner’s Capital Account. Upon such transfer, the loan
will be treated as a Capital Contribution and the Series L3R Percentage Interest
for (A) such Lending Series L3R Partner will be automatically adjusted to equal
the percentage obtained by dividing (x) the Capital Account of such Lending
Series L3R Partner (including any Capital Contribution made by such Lending
Series L3R Partner under this Section 5.10(e)(ii)(E) on behalf of the Defaulting
Series L3R Partner multiplied by three) by (y) the sum of the Series L3R Capital
Accounts of all Series L3R Partners (including all Capital Contributions made
under this Section 5.10(e)(ii)(E) on behalf of the Defaulting Series L3R Partner
multiplied by three) and (B) such Defaulting Series L3R Partner will be
automatically adjusted to equal the amount of (x) such Defaulting Series L3R
Partner’s Series L3R Percentage Interest immediately prior to such election by
the Lending Series L3R Partner less (y) the increase to the Series L3R
Percentage Interest of Lending Series L3R Partner pursuant to clause (A).

 

(f)          Notwithstanding the rights of Non-Defaulting Series L3R Partners
described in Section 5.10(e), the Managing General Partner of the Series L3R, by
a vote of a Supermajority Interest of Series L3R Partnership Interests (without
taking into account the Series L3R Partnership Interests of the Defaulting
Series L3R Partner), will have the right to exercise any rights and remedies
available at law or in equity.

 

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Section 5.11          Interest and Withdrawal of Capital Contributions.

 

No interest shall be paid by the Partnership or any Series on Capital
Contributions. No Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon dissolution of the Partnership or the
termination of any Series may be considered as such by law and then only to the
extent expressly provided for in this Agreement. Except to the extent expressly
provided in this Agreement, no Partner shall have priority over any other
Partner either as to the return of Capital Contributions or as to Profits,
Losses or distributions. Any such return shall be a compromise to which all
Partners agree within the meaning of Section 17-502(b) of the Delaware Act.

 

Section 5.12          Capital Accounts.

 

(a)          A separate Capital Account shall be established and maintained for
each Partner in accordance with the requirements of Treasury Regulation
Section 1.704-1(b)(2)(iv). A Partner that owns a Partnership Interest in more
than one Series shall have a single Capital Account that reflects all such
Partnership Interests; provided, however, that Series Capital Accounts shall be
maintained for each Partner in accordance with the requirements of Treasury
Regulation Section 1.704-1(b)(2)(iv). A Partner’s Capital Account balance shall
be the sum of the balances of each of such Partner’s Series Capital Accounts.

 

(b)          Each Series Capital Account for each Partner shall be increased by
(i) the amount of money contributed by that Partner to the Partnership with
respect to a Series, (ii) the Book Value of property contributed by that Partner
to the Partnership with respect to a Series (net of liabilities secured by such
contributed property that the Partnership is considered to assume or take
subject to under Section 752 of the Code), and (iii) allocations to that Partner
of Profits and any other items of income and gain attributable to a Series, and
shall be decreased by (iv) the amount of money of a Series distributed to that
Partner, (v) the Book Value of property of a Series distributed to that Partner
(net of liabilities secured by such distributed property that such Partner is
considered to assume or take subject to under Section 752 of the Code), and
(vi) allocations to that Partner of Losses and any other items of loss and
deduction attributable to a Series.

 

(c)          The Partners’ Series Capital Accounts shall also be maintained and
adjusted as permitted by the provisions of Treasury Regulation §
1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treasury
Regulation §§ 1.704-1(b)(2)(iv) and 1.704-1(b)(4).

 

(d)          Whenever the fair market value of property of a Series is required
to be determined pursuant to this Section 5.12, the Managing General Partner of
such Series shall establish the fair market value in a notice to the Partners of
such Series.

 

(e)          On a Transfer of all or part of a Partner’s Partnership Interest,
each applicable Series Capital Account of the transferor that is attributable to
the transferred Partnership Interests shall carry over to the transferee Partner
in accordance with the provisions of Treasury Regulation § 1.704-1(b)(2)(iv)(1).

 

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ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS

 

Section 6.1           Allocations for Capital Account Purposes.

 

(a)          Allocations. For purposes of maintaining the Series Capital
Accounts pursuant to Section 5.12 and in determining the rights of the Partners
among themselves with respect to each Series, after making all of the
allocations under Sections 6.1(b) and 6.1(c), Profits and Losses and items
thereof with respect to a Series shall be allocated among the Partners of such
Series in each taxable year (or portion thereof) as provided herein below.

 

(i)          Series AC. Each item of income, gain, loss, deduction and credit
attributable to Series AC Assets and Series AC Liabilities shall be allocated to
the Series AC Partners in accordance with their respective Series AC Percentage
Interests.

 

(ii)          Series EA. Each item of income, gain, loss, deduction and credit
attributable to Series EA Assets and Series EA Liabilities shall be allocated to
the Series EA Partners in accordance with their respective Series EA Percentage
Interests.

 

(iii)          Series ME. Each item of income, gain, loss, deduction and credit
attributable to Series ME Assets and Series ME Liabilities shall be allocated to
the Series ME Partners in accordance with their respective Series ME Percentage
Interests.

 

(iv)          Series L3R. Each item of income, gain, loss, deduction and credit
attributable to Series L3R Assets and Series L3R Liabilities shall be allocated
to the Series L3R Partners in accordance with their respective Series L3R
Percentage Interests.

 

(v)          Series LH. Each item of income, gain, loss, deduction and credit
attributable to Series LH Assets and Series LH Liabilities shall be allocated to
the Series LH Partners in accordance with their respective Series LH Percentage
Interests.

 

(vi)          Notwithstanding Sections 6.1(a)(i), 6.1(a)(ii), 6.1(a)(iii),
6.1(a)(iv) and 6.1(a)(v) in the event of the dissolution and liquidation of the
Partnership or the termination of a Series, allocations of Profit and Loss, and
items thereof in connection with the liquidation shall be made in accordance
with Section 11.3(a).

 

Losses and other items of deduction and loss specially allocated to a Partner
with respect to a Series shall not exceed the maximum amount of Losses and items
of deduction and loss that can be allocated without causing such Partner to have
a deficit in its Adjusted Capital Account for such Series at the end of any
taxable year or other period. In the event that some but not all of the Partners
would have a deficit in their Adjusted Capital Accounts for such Series as a
consequence of an allocation pursuant to this Section 6.1, the limitation set
forth in the preceding sentence shall be applied on a Partner by Partner basis,
and Losses or items of deduction and loss not allocable to any Partner as a
result of such limitation shall be allocated to the other Partners of such
Series in accordance with and to the extent of the relative positive balances in
such Partners’ Adjusted Capital Accounts attributable to such Series. Any excess
Losses or other items of deduction and loss remaining shall be allocated, Pro
Rata, to the Partners of any other Series whose Adjusted Capital Accounts for
such other Series have positive balances to the extent of such positive
balances.

 

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(b)          Special Allocations. Notwithstanding any other provisions of this
Section 6.1, the following special allocations shall be made on a Series by
Series basis in the following order for each taxable period:

 

(i)          Notwithstanding any other provision of this Section 6.1, if there
is a net decrease in Minimum Gain attributable to a Series during any taxable
year, each Partner of such Series shall be allocated items of income and gain
attributable to such Series for such year (and, if necessary, subsequent taxable
years) in the manner and amounts provided in Treasury Regulation Sections
1.704-2(f)(6), (g)(2) and (j)(2)(i). For purposes of this Section 6.1(b), each
Partner’s Adjusted Capital Account balance for such Series shall be determined,
and the allocation of income or gain required hereunder shall be effected, prior
to the application of any other allocations pursuant to this Section 6.1 with
respect to such taxable year. This Section 6.1(b)(i) is intended to comply with
the minimum gain chargeback requirement in Treasury Regulation
Section 1.704-2(f) and shall be interpreted consistently therewith.

 

(ii)          Notwithstanding the other provisions of this Section 6.1 (other
than Section 6.1(b)(i) above), if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Series during any taxable year, any Partner
with a share of such Partner Nonrecourse Debt Minimum Gain at the beginning of
such taxable year shall be allocated items of income and gain attributable to
such Series for such year (and, if necessary, subsequent taxable years) in the
manner and amounts provided in Treasury Regulation Section 1.704-2(i)(4) and
(j)(2)(ii). For purposes of this Section 6.1(b), each Partner’s Adjusted Capital
Account balance shall be determined, and the allocation of income and gain
required hereunder shall be effected, prior to the application of any other
allocations pursuant to this Section 6.1, other than Section 6.1(b)(i) above,
with respect to such taxable year. This Section 6.1(b)(ii) is intended to comply
with the partner nonrecourse debt minimum gain chargeback requirement in
Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.

 

(iii)          Except as provided in Sections 6.1(b)(i) and 6.1(b)(ii) above, in
the event any Partner unexpectedly receives an adjustment, allocation or
distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
(5) or (6) attributable to a Series, items of income and gain of such Series
shall be allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by such Treasury Regulation, the deficit
balance, if any, in its Adjusted Capital Account attributable to such Series
created by such adjustment, allocation or distribution as quickly as possible
unless such deficit balance is otherwise eliminated pursuant to Sections
6.1(b)(i), 6.1(b)(ii), 6.1(b)(iv) or 6.1(b)(v). This Section 6.1(b)(iii) is
intended to constitute a qualified income offset described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

 

(iv)          After giving effect to the allocations in Sections 6.1(b)(i),
6.1(b)(ii) and 6.1(b)(iii):

 

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(A)          in the event that the Series LH Partners become obligated to make
payments to the Series AC Partners, Series EA Partners, Series ME Partners or
Series L3R Partners pursuant to Section 6.2(c), Section 6.3(c), Section 6.4(c)
or Section 6.5(c), items of Partnership gross income and gain shall be allocated
to the Series LH Partners in accordance with their respective Series LH
Percentage Interests until the aggregate amounts of items allocated to the
Series LH Partners pursuant to this Section 6.1(b)(iv) for such taxable year and
all prior taxable years equals the cumulative amount of payments made by the
Series LH Partners to the Series AC Partners, Series EA Partners, Series ME
Partners or Series L3R Partners, as applicable, pursuant to Section 6.2(c),
Section 6.3(c), Section 6.4(c) or Section 6.5(c) for such taxable year and all
prior taxable years;

 

(B)          in the event that the Series AC Partners become obligated to make
payments to the Series LH Partners pursuant to Section 6.6(c), items of
Partnership gross income and gain shall be allocated to the Series AC Partners
in accordance with their respective Series AC Percentage Interests until the
aggregate amounts of items allocated to the Series AC Partners pursuant to this
Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the
cumulative amount of payments made by the Series AC Partners to the Series LH
Partners pursuant to Section 6.6(c) for such taxable year and all prior taxable
years;

 

(C)          in the event that the Series EA Partners become obligated to make
payments to the Series LH Partners pursuant to Section 6.6(d), items of
Partnership gross income and gain shall be allocated to the Series EA Partners
in accordance with their respective Series EA Percentage Interests until the
aggregate amounts of items allocated to the Series EA Partners pursuant to this
Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the
cumulative amount of payments made by the Series EA Partners to the Series LH
Partners pursuant to Section 6.6(d) for such taxable year and all prior taxable
years;

 

(D)          in the event that the Series ME Partners become obligated to make
payments to the Series LH Partners pursuant to Section 6.6(e), items of
Partnership gross income and gain shall be allocated to the Series ME Partners
in accordance with their respective Series ME Percentage Interests until the
aggregate amounts of items allocated to the Series ME Partners pursuant to this
Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the
cumulative amount of payments made by the Series ME Partners to the Series LH
Partners pursuant to Section 6.6(e) for such taxable year and all prior taxable
years; and

 

(E)          in the event that the Series L3R Partners become obligated to make
payments to the Series LH Partners pursuant to Section 6.6(f), items of
Partnership gross income and gain shall be allocated to the Series L3R Partners
in accordance with their respective Series L3R Percentage Interests until the
aggregate amounts of items allocated to the Series L3R Partners pursuant to this
Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the
cumulative amount of payments made by the Series L3R Partners to the Series LH
Partners pursuant to Section 6.6(f) for such taxable year and all prior taxable
years.

 

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(v)          In the event any Partner has a deficit balance in its Adjusted
Capital Account attributable to a Series at the end of any taxable year, such
Partner shall be allocated items of gross income and gain of such Series in the
amount of such excess as quickly as possible; provided, however, that an
allocation pursuant to this Section 6.1(b)(v) shall be made only if and to the
extent that such Partner would have a deficit balance in its Adjusted Capital
Account for such Series after all other allocations provided in this
Section 6.1(b) (other than Section 6.1(b)(iii)) have been tentatively made as if
Section 6.1(b)(iii) and this Section 6.1(b)(v) were not in this Agreement.

 

(vi)          Nonrecourse Deductions attributable to a Series for any taxable
year shall be allocated to the Partners of such Series in accordance with their
Percentage Interests for such Series.

 

(vii)          Partner Nonrecourse Deductions with respect to a Partner
Nonrecourse Debt for any taxable year shall be allocated 100% to the Partner
that bears the Economic Risk of Loss with respect to the Partner Nonrecourse
Debt to which such Partner Nonrecourse Deductions are attributable in accordance
with Treasury Regulation Section 1.704-2(i). If more than one Partner bears the
Economic Risk of Loss with respect to a Partner Nonrecourse Debt, Partner
Nonrecourse Deductions attributable thereto shall be allocated between or among
such Partners in accordance with the ratios in which they share such Economic
Risk of Loss. This Section 6.1(b)(vii) is intended to comply with the provisions
of Treasury Regulation Section 1.704-2(i) and shall be interpreted consistently
therewith.

 

(viii)          To the extent an adjustment to the adjusted tax basis of any
asset pursuant to Code Sections 734(b) or 743(b) is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts as a result of a distribution in liquidation of a
Partner’s Partnership Interest in a Series, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such item of gain or loss shall be allocated to the Partners in a
manner consistent with the manner in which their Series Capital Accounts are
required to be adjusted pursuant to such provisions.

 

(c)          Curative Allocation. The Regulatory Allocations are intended to
comply with certain requirements of the Treasury Regulations. It is the intent
of the Partners that, to the extent possible, all Regulatory Allocations
attributable to a Series shall be offset either with other Regulatory
Allocations attributable to such Series, or with special allocations of other
items of income, gain, loss or deduction attributable to such Series pursuant to
this Section 6.1(c). Therefore, notwithstanding any other provision of this
Article VI (other than the Regulatory Allocations), but subject to the Code and
the Treasury Regulations, the Managing General Partner of the applicable Series
shall make such offsetting special allocations of income, gain, loss or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Partner’s applicable Series Capital
Account balance is, to the extent possible, equal to the balance such Partner
would have had if the Regulatory Allocations were not part of this Agreement. In
exercising its discretion under this Section 6.1(c), the Managing General
Partner of the applicable Series shall take into account future Regulatory
Allocations that, although not yet made, are likely to offset other Regulatory
Allocations previously made.

 

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(d)          Income Tax Allocations.

 

(i)          Except as otherwise provided in this Section 6.1, each item of
income, gain, loss and deduction of a Series shall be allocated among the
Partners of such Series for U.S. federal income tax purposes in the same manner
as such items are allocated under Sections 6.1(a), 6.1(b) and 6.1(c).

 

(ii)          For U.S. federal income tax purposes, income, gain, loss and
deduction with respect to property contributed to a Series by a Partner or the
Book Value of which is adjusted pursuant to clause (b) or (d) of the definition
of Book Value shall be allocated among the Partners of such Series in a manner
that takes into account the variation between the adjusted tax basis of such
property and its Book Value, as required by Section 704(c) of the Code and
Treasury Regulation Section 1.704-1(b)(4)(i), using the remedial allocation
method permitted by Treasury Regulation Section 1.704-3(d).

 

(iii)          All items of income, gain, loss, deduction and credit allocated
to the Partners in accordance with the provisions hereof and basis allocations
recognized by a Series for U.S. federal income tax purposes shall be determined
without regard to any election under Code Section 754 that may be made by the
Series.

 

(iv)          If any deductions for depreciation or cost recovery are recaptured
as ordinary income upon the sale or other disposition of property of a Series,
the ordinary income character of the gain from such sale or disposition shall be
allocated among the Partners of such Series in the same ratio as the deductions
giving rise to such ordinary income character were allocated.

 

Section 6.2           Requirement and Characterization of Series AC
Distributions; Distributions to Series AC Partners.

 

(a)          Within 45 days following the end of each Quarter, the Partnership
in respect of the Series AC shall distribute Pro Rata to the Series AC Partners
as of the last day of such Quarter an amount in cash equal to the Series AC
Distribution Amount (if such amount is greater than zero) with respect to such
Quarter (the “Series AC Distribution”). Notwithstanding any provision to the
contrary contained in this Agreement, neither the Partnership nor the Series AC
shall make any distribution to any Series AC Partner on account of its Series AC
Partnership Interest if such distribution would violate the Delaware Act or any
other applicable law.

 

(b)          Notwithstanding Section 6.2(a), in the event of the dissolution and
liquidation of the Partnership or the termination of the Series AC, all cash
receipts received during or after the Quarter in which the Liquidation Date
occurs shall be applied and distributed solely in accordance with, and subject
to the terms and conditions of, Section 11.3.

 

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(c)          If, for any Quarter (including the Quarter in which the liquidation
of the Series AC is completed), the cash that is distributed by the Partnership
to the Series AC Partners is less than the Series AC Distribution Amount for
such Quarter, then the Series LH Partners shall promptly pay to the Series AC
Partners Pro Rata in cash an amount equal to such shortfall. Such payment
obligation shall be allocated Pro Rata among the Series LH Partners.

 

Section 6.3           Requirement and Characterization of Series EA
Distributions; Distributions to Series EA Partners.

 

(a)          Within 45 days following the end of each Quarter commencing with
the Quarter in which the Eastern Access First In-Service Date occurs, the
Partnership in respect of the Series EA shall distribute an amount in cash equal
to the Series EA Distribution Amount (if such amount is greater than zero) with
respect to such Quarter (the “Series EA Distribution”) as follows:

 

(i)          so long as Enbridge Partners is a Series EA Limited Partner,
commencing with and including the Series EA Distribution made with respect to
the Quarter ending June 30, 2015 and continuing through and including the Series
EA Distribution made with respect to the Quarter ending March 31, 2016, to the
Series EA General Partner Pro Rata and the remainder to Enbridge Partners;

 

(ii)          so long as EECI is a Series EA Limited Partner, and if the Series
EA Contribution Offset Amount is greater than zero (such amount, as reduced by
Series EA Distribution Amounts distributed to EECI in excess of its Pro Rata
portion pursuant to this Section 6.3(a)(ii), the “Series EA Remainder Amount”),
commencing with and including the Series EA Distribution made with respect to
the Quarter ending March 31, 2017 and continuing each consecutive Quarter
thereafter until EECI has received aggregate Series EA Distribution Amounts in
excess of its Pro Rata portion in an amount equal to the Series EA Remainder
Amount as of the date immediately preceding the date on which the Series EA
Distribution for the Quarter ending March 31, 2017 is made, to the Series EA
General Partner Pro Rata, to Enbridge Partners Pro Rata less the Series EA
Remainder Amount, and to EECI Pro Rata plus the Series EA Remainder Amount;
provided, however, that in no event shall EECI be entitled to Series EA
Distribution Amounts in excess of its Pro Rata portion pursuant to this Section
6.3(a)(ii) with respect to any Quarter to the extent such excess would be
greater than (A) 25.0% of the Series EA Contribution Offset Amount determined as
of the date immediately preceding the date on which the Series EA Distribution
for the Quarter ending March 31, 2017 is made or (B) 50.0% of Enbridge Partners’
Pro Rata portion of any Series EA Distribution Amount; and

 

(iii)          for any Quarter during any period not described in clause (i) or
(ii) of this Section 6.3(a), Pro Rata to the Series EA Partners as of the last
day of such Quarter.

 

(b)          Notwithstanding Section 6.3(a), in the event of the dissolution and
liquidation of the Partnership or the termination of the Series EA, all cash
receipts received during or after the Quarter in which the Liquidation Date
occurs shall be applied and distributed solely in accordance with, and subject
to the terms and conditions of, Section 11.3.

 

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(c)          If, for any Quarter (including the Quarter in which the liquidation
of the Series EA is completed), the cash that is distributed by the Partnership
to the Series EA Partners is less than the Series EA Distribution Amount for
such Quarter, then the Series LH Partners shall promptly pay to the Series EA
Partners Pro Rata in cash an amount equal to such shortfall. Such payment
obligation shall be allocated Pro Rata among the Series LH Partners.

 

(d)          Notwithstanding any provision to the contrary contained in this
Agreement, neither the Partnership nor the Series EA shall make any distribution
to any Series EA Partner on account of its Series EA Partnership Interest if
such distribution would violate the Delaware Act or any other applicable law.

 

Section 6.4           Requirement and Characterization of Series ME
Distributions; Distributions to Series ME Partners.

 

(a)          Within 45 days following the end of each Quarter commencing with
the Quarter in which the Mainline Expansion First In-Service Date occurs, the
Partnership in respect of the Series ME shall distribute an amount in cash equal
to the Series ME Distribution Amount (if such amount is greater than zero) with
respect to such Quarter (the “Series ME Distribution”) as follows:

 

(i)          so long as Enbridge Partners is a Series ME Limited Partner,
commencing with and including the Series ME Distribution made with respect to
the Quarter ending June 30, 2015 and continuing through and including the Series
ME Distribution made with respect to the Quarter ending March 31, 2016, to the
Series ME General Partner Pro Rata and the remainder to Enbridge Partners;

 

(ii)          so long as EECI is a Series ME Limited Partner, and if the Series
ME Contribution Offset Amount is greater than zero (such amount, as reduced by
Series ME Distribution Amounts distributed to EECI in excess of its Pro Rata
portion pursuant to this Section 6.4(a)(ii), the “Series ME Remainder Amount”),
commencing with and including the Series ME Distribution made with respect to
the Quarter ending March 31, 2017 and continuing each consecutive Quarter
thereafter until EECI has received aggregate Series ME Distribution Amounts in
excess of its Pro Rata portion in an amount equal to the Series ME Remainder
Amount as of the date immediately preceding the date on which the Series ME
Distribution for the Quarter ending March 31, 2017 is made, to the Series ME
General Partner Pro Rata, to Enbridge Partners Pro Rata less the Series ME
Remainder Amount, and to EECI Pro Rata plus the Series ME Remainder Amount;
provided, however, that in no event shall EECI be entitled to Series ME
Distribution Amounts in excess of its Pro Rata portion pursuant to this Section
6.4(a)(ii) with respect to any Quarter to the extent such excess would be
greater than (A) 25.0% of the Series ME Contribution Offset Amount determined as
of the date immediately preceding the date on which the Series ME Distribution
for the Quarter ending March 31, 2017 is made or (B) 50.0% of Enbridge Partners’
Pro Rata portion of any Series ME Distribution Amount; and

 

(iii)          for any Quarter during any period not described in clause (i) or
(ii) of this Section 6.4(a), Pro Rata to the Series ME Partners as of the last
day of such Quarter.

 

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(b)          Notwithstanding Section 6.4(a), in the event of the dissolution and
liquidation of the Partnership or the termination of the Series ME, all cash
receipts received during or after the Quarter in which the Liquidation Date
occurs shall be applied and distributed solely in accordance with, and subject
to the terms and conditions of, Section 11.3.

 

(c)          If, for any Quarter (including the Quarter in which the liquidation
of the Series ME is completed), the cash that is distributed by the Partnership
to the Series ME Partners is less than the Series ME Distribution Amount for
such Quarter, then the Series LH Partners shall promptly pay to the Series ME
Partners Pro Rata in cash an amount equal to such shortfall. Such payment
obligation shall be allocated Pro Rata among the Series LH Partners.

 

(d)          Notwithstanding any provision to the contrary contained in this
Agreement, neither the Partnership nor the Series ME shall make any distribution
to any Series ME Partner on account of its Series ME Partnership Interest if
such distribution would violate the Delaware Act or any other applicable law.

 

Section 6.5           Requirement and Characterization of Series L3R
Distributions; Distributions to Series L3R Partners.

 

(a)          Within 45 days following the end of each Quarter commencing with
the Quarter in which the L3R In-Service Date occurs, the Partnership in respect
of the Series L3R shall distribute Pro Rata to the Series L3R Partners as of the
last day of such Quarter an amount in cash equal to the Series L3R Distribution
Amount (if such amount is greater than zero) with respect to such Quarter (the
“Series L3R Distribution”). Notwithstanding any provision to the contrary
contained in this Agreement, neither the Partnership nor the Series L3R shall
make any distribution to any Series L3R Partner on account of its Series L3R
Partnership Interest if such distribution would violate the Delaware Act or any
other applicable law.

 

(b)          Notwithstanding Section 6.5(a), in the event of the dissolution and
liquidation of the Partnership or the termination of the Series L3R, all cash
receipts received during or after the Quarter in which the Liquidation Date
occurs shall be applied and distributed solely in accordance with, and subject
to the terms and conditions of, Section 11.3.

 

(c)          If, for any Quarter (including the Quarter in which the liquidation
of the Series L3R is completed), the cash that is distributed by the Partnership
to the Series L3R Partners is less than the Series L3R Distribution Amount for
such Quarter, then the Series LH Partners shall promptly pay to the Series L3R
Partners Pro Rata in cash an amount equal to such shortfall. Such payment
obligation shall be allocated Pro Rata among the Series LH Partners.

 

Section 6.6           Distributions to Series LH Partners.

 

(a)          On the date that the Series AC Distribution, the Series EA
Distribution, the Series ME Distribution and the Series L3R Distribution is made
pursuant to Section 6.2(a), Section 6.3(a), Section 6.4(a) and Section 6.5(a),
as applicable, the Managing General Partner of the Series LH may, in its sole
discretion, cause the Partnership in respect of the Series LH to distribute Pro
Rata to the Series LH Partners any cash that is not otherwise required under
this Agreement to be distributed to the Partners of any other Series or properly
reserved by any other Series in accordance with this Agreement (the “Series LH
Distribution”). Notwithstanding any provision to the contrary contained in this
Agreement, neither the Partnership nor the Series LH shall make any distribution
to any Series LH Partner on account of its Series LH Partnership Interest if
such distribution would violate the Delaware Act or other applicable law.

 

79

 

 

(b)          Notwithstanding Section 6.6(a), in the event of the dissolution and
liquidation of the Partnership or the termination of the Series LH, all cash
receipts received during or after the Quarter in which the Liquidation Date
occurs shall be applied and distributed solely in accordance with, and subject
to the terms and conditions of, Section 11.3.

 

(c)          If, for any Quarter (including the Quarter in which the liquidation
of the Series LH is completed), the Series AC Distribution Amount is less than
zero, then the Series AC Partners shall promptly pay to the Series LH Partners
Pro Rata in cash an amount equal to the aggregate amount by which the Series AC
Distribution Amount was less than zero. Such payment obligation shall be
allocated Pro Rata among the Series AC Partners.

 

(d)          If, for any Quarter (including the Quarter in which the liquidation
of the Series LH is completed), the Series EA Distribution Amount is less than
zero, then the Series EA Partners shall promptly pay to the Series LH Partners
Pro Rata in cash an amount equal to the aggregate amount by which the Series EA
Distribution Amount was less than zero. Such payment obligation shall be
allocated Pro Rata among the Series EA Partners.

 

(e)          If, for any Quarter (including the Quarter in which the liquidation
of the Series LH is completed), the Series ME Distribution Amount is less than
zero, then the Series ME Partners shall promptly pay to the Series LH Partners
Pro Rata in cash an amount equal to the aggregate amount by which the Series ME
Distribution Amount was less than zero. Such payment obligation shall be
allocated Pro Rata among the Series ME Partners.

 

(f)          If, for any Quarter (including the Quarter in which the liquidation
of the Series LH is completed), the Series L3R Distribution Amount is less than
zero, then the Series L3R Partners shall promptly pay to the Series LH Partners
Pro Rata in cash an amount equal to the aggregate amount by which the Series L3R
Distribution Amount was less than zero. Such payment obligation shall be
allocated Pro Rata among the Series L3R Partners.

 

ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS; LIMITED PARTNERS

 

Section 7.1           Management.

 

(a)          The Managing General Partner of the Partnership generally shall
conduct, direct and manage all activities of the Partnership generally, and the
Managing General Partner of each Series shall conduct, direct and manage all
activities of the Series for which it serves as Managing General Partner. Except
as otherwise expressly provided in this Agreement, (i) all management powers
over the business and affairs of the Partnership generally shall be exclusively
vested in the Managing General Partner of the Partnership generally, and no
Limited Partner or other General Partner shall have any management power over
the business and affairs of (or authority to bind) the Partnership generally and
(ii) all management powers over the business and affairs of each Series shall be
exclusively vested in the Managing General Partner of such Series, and no
Limited Partner or other General Partner shall have any management power over
the business and affairs of (or authority to bind) such Series. In addition to
the powers now or hereafter granted a general partner of a limited partnership
under applicable law or that are granted to a Managing General Partner under any
other provision of this Agreement, each Managing General Partner, subject to any
approval required by Section 7.4, Section 7.5, Section 7.6 or any other
provision of this Agreement, shall have full power and authority to do all
things and on such terms as it determines to be necessary or appropriate to
conduct the business of the Partnership generally or the applicable Series, as
the case may be, to exercise all powers set forth in Section 2.5 and to
effectuate the purposes set forth in Section 2.4, including the following:

 

80

 

 

(i)          the making of any expenditures, the lending or borrowing of money,
the assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness and the incurring of any
other obligations;

 

(ii)          the making of regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having jurisdiction
over the business or assets of the Partnership and each Series (other than in
connection with the matters set forth in Section 9.3);

 

(iii)          the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the applicable Series
or the merger or other combination of the Partnership with or into another
Person;

 

(iv)          the use of the assets of the applicable Series (including cash on
hand) for any purpose consistent with the terms of this Agreement;

 

(v)          the negotiation, execution and performance of any contracts,
conveyances or other instruments on behalf of the Partnership generally or the
applicable Series;

 

(vi)          the distribution of cash or property of the applicable Series;

 

(vii)          the maintenance of separate or joint insurance policies for the
benefit of the Partnership, any Series, any Partners or any Indemnitees;

 

(viii)          the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any further limited or
general partnerships, joint ventures, corporations, limited liability companies
or other relationships subject to the restrictions set forth in Section 2.4;

 

(ix)          the control of any matters affecting the rights and obligations of
the Partnership or the applicable Series, including the bringing and defending
of actions at law or in equity and otherwise engaging in the conduct of
litigation, arbitration or mediation and the incurring of legal expense and the
settlement of claims and litigation; and

 

(x)          the indemnification of any Person against liabilities and
contingencies to the extent permitted by law.

 

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Section 7.2           Certificate of Limited Partnership.

 

The Managing General Partner of the Partnership generally has caused an
amendment to and restatement of the Certificate of Limited Partnership to be
filed with the Secretary of State of the State of Delaware as required by the
Delaware Act, which contains a notice of the limitation of liabilities of the
Series in conformity with Section 17-218 of the Delaware Act. To the extent the
Managing General Partner of the Partnership generally determines such action to
be necessary or appropriate, the Managing General Partner of the Partnership
generally shall file amendments to and restatements of the Certificate of
Limited Partnership and do all necessary things to maintain the Partnership as a
limited partnership (or a partnership or other entity in which the limited
partners have limited liability) under the laws of the State of Delaware or of
any other state in which the Partnership may elect to do business or own
property.

 

Section 7.3           Reserved.

 

Section 7.4           Actions Requiring the Approval of the Series EA Partners.

 

Notwithstanding any other provision of this Agreement to the contrary, and in
addition to the requirements of Section 7.5 and Section 7.6, none of the
Partnership, any Series, any Managing General Partner nor any other Partner
shall cause or commit the Partnership or any Series to take any of the following
actions without the prior written consent or vote of a Supermajority Interest of
Series EA Partnership Interests:

 

(a)          approve the Series EA Annual Budget as provided for in Section 7.7;

 

(b)          request or otherwise require any additional Series EA Capital
Contributions, pursuant to Section 5.6 or otherwise, that are not reflected in
the approved Series EA Annual Budget;

 

(c)          establish any Series EA Reserves;

 

(d)          with respect to the Series EA, make any expenditure or series of
related expenditures in excess of $1,000,000 that are not (i) reflected in the
approved Series EA Annual Budget or (ii) required to address an emergency;

 

(e)          the issuance, incurrence or assumption of any Indebtedness by the
Series EA other than (i) Indebtedness reflected in the approved Series EA Annual
Budget, (ii) an Intercompany Obligation permitted by Section 7.4(f) or (iii) a
Springing Guarantee permitted by Section 7.4(g);

 

(f)          the issuance, incurrence or assumption of any Indebtedness by the
Partnership generally or any Series (other than the Series EA) unless such
Indebtedness is (i) (x) (A) by its terms, expressly non-recourse to any
Series EA Assets and the Series EA Partners or (B) an Intercompany Obligation
and (y) after giving effect to the issuance, incurrence or assumption of such
Indebtedness, the aggregate principal amount of Indebtedness of the Partnership
and all Series (excluding (A) short term Indebtedness incurred in connection
with the construction of projects that have not yet been placed into service and
(B) Indebtedness of the Series EA) does not exceed 45% of the total
capitalization of the Partnership as a whole, (ii) incurred in connection with
the refinancing of Existing Indebtedness for which the Partnership is the direct
obligor (other than Existing Indebtedness that is an Intercompany Obligation),
(iii) an Intercompany Obligation permitted by Section 7.4(e) or (iv) a Springing
Guarantee permitted by Section 7.4(g);

 

82

 

 

(g)          any guarantee of Indebtedness of another Person by the Partnership
generally or any Series other than a Springing Guarantee;

 

(h)          any material modification of any material contract related to the
Series EA Assets or to which the Series EA is a party (excluding this
Agreement);

 

(i)          any material modification to the Series EA Tariff Term Sheets or
the Eastern Access Surcharge;

 

(j)          any merger, consolidation, conversion, business combination or
reorganization of the Partnership or any Subsidiary of the Partnership that owns
any Series EA Assets (other than any conversion pursuant to Section 12.11(c));

 

(k)          any direct or indirect sale, exchange or other transfer of (i) any
Series EA Assets or (ii) any assets of the Partnership generally or any Series
(other than the Series EA) in excess of $25,000,000, in each case, other than
sales, exchanges or other transfers as a result of the exercise of remedies
pursuant to Existing Indebtedness;

 

(l)          any issuance of any additional Partnership Interests of the
Partnership generally or any Series;

 

(m)          except as otherwise provided in Section 4.1(c), the admission of
any Person as a new Partner of the Partnership generally or of any Series
(whether by Transfer of existing Partnership Interests, merger or issuance of
additional Partnership Interests);

 

(n)          except as otherwise provided in Section 4.1(c), any withdrawal or
removal of any General Partner or admission of any new General Partner of the
Partnership generally or any Series;

 

(o)          the amendment of any provision of this Agreement relating to the
Series EA or any other amendment of this Agreement that would have an adverse
effect on the Series EA, the Series EA Assets or the Series EA Partners;

 

(p)          the entry into or termination of any activity or business, or the
acquisition or divestiture of any asset or business, that would cause the
Partnership or any Series to be taxed as an association taxable as a corporation
or otherwise taxable as an entity for U.S. federal income tax purposes;

 

(q)          the voluntary dissolution or liquidation of the Partnership or
voluntary termination of any Series; or

 

83

 

 

(r)          the commencement of a voluntary case with respect to, or the
consent to the entry of an order for relief in an involuntary case against, the
Partnership or any Series under any bankruptcy laws.

 

Section 7.5           Actions Requiring the Approval of the Series ME Partners.

 

Notwithstanding any other provision of this Agreement to the contrary, and in
addition to the requirements of Section 7.4 and Section 7.6, none of the
Partnership, any Series, any Managing General Partner nor any other Partner
shall cause or commit the Partnership or any Series to take any of the following
actions without the prior written consent or vote of a Supermajority Interest of
Series ME Partnership Interests:

 

(a)          approve the Series ME Annual Budget as provided for in Section 7.8;

 

(b)          request or otherwise require any additional Series ME Capital
Contributions, pursuant to Section 5.8 or otherwise, that are not reflected in
the approved Series ME Annual Budget;

 

(c)          establish any Series ME Reserves;

 

(d)          with respect to the Series ME, make any expenditure or series of
related expenditures in excess of $1,000,000 that are not (i) reflected in the
approved Series ME Annual Budget or (ii) required to address an emergency;

 

(e)          the issuance, incurrence or assumption of any Indebtedness by the
Series ME other than (i) Indebtedness reflected in the approved Series ME Annual
Budget, (ii) an Intercompany Obligation permitted by Section 7.5(f) or (iii) a
Springing Guarantee permitted by Section 7.5(g);

 

(f)          the issuance, incurrence or assumption of any Indebtedness by the
Partnership generally or any Series (other than the Series ME) unless such
Indebtedness is (i) (x) (A) by its terms, expressly non-recourse to any
Series ME Assets and the Series ME Partners or (B) an Intercompany Obligation
and (y) after giving effect to the issuance, incurrence or assumption of such
Indebtedness, the aggregate principal amount of Indebtedness of the Partnership
and all Series (excluding (A) short term Indebtedness incurred in connection
with the construction of projects that have not yet been placed into service and
(B) Indebtedness of the Series ME) does not exceed 45% of the total
capitalization of the Partnership as a whole, (ii) incurred in connection with
the refinancing of Existing Indebtedness for which the Partnership is the direct
obligor (other than Existing Indebtedness that is an Intercompany Obligation),
(iii) an Intercompany Obligation permitted by Section 7.5(e) or (iv) a Springing
Guarantee permitted by Section 7.5(g);

 

(g)          any guarantee of Indebtedness of another Person by the Partnership
generally or any Series other than a Springing Guarantee;

 

(h)          any material modification of any material contract related to the
Series ME Assets or to which the Series ME is a party (excluding this
Agreement);

 

84

 

 

(i)          any material modification to the Series ME Tariff Term Sheets or
the Mainline Expansion Surcharge;

 

(j)          any merger, consolidation, conversion, business combination or
reorganization of the Partnership or any Subsidiary of the Partnership that owns
any Series ME Assets (other than any conversion pursuant to Section 12.11(c));

 

(k)          any direct or indirect sale, exchange or other transfer of (i) any
Series ME Assets or (ii) any assets of the Partnership generally or any Series
(other than the Series ME) in excess of $25,000,000, in each case, other than
sales, exchanges or other transfers as a result of the exercise of remedies
pursuant to Existing Indebtedness;

 

(l)          any issuance of any additional Partnership Interests of the
Partnership generally or any Series;

 

(m)          except as otherwise provided in Section 4.1(c), the admission of
any Person as a new Partner of the Partnership generally or of any Series
(whether by Transfer of existing Partnership Interests, merger or issuance of
additional Partnership Interests);

 

(n)          except as otherwise provided in Section 4.1(c), any withdrawal or
removal of any General Partner or admission of any new General Partner of the
Partnership generally or any Series;

 

(o)          the amendment of any provision of this Agreement relating to the
Series ME or any other amendment of this Agreement that would have an adverse
effect on the Series ME, the Series ME Assets or the Series ME Partners;

 

(p)          the entry into or termination of any activity or business, or the
acquisition or divestiture of any asset or business, that would cause the
Partnership or any Series to be taxed as an association taxable as a corporation
or otherwise taxable as an entity for U.S. federal income tax purposes;

 

(q)          the voluntary dissolution or liquidation of the Partnership or
voluntary termination of any Series; or

 

(r)          the commencement of a voluntary case with respect to, or the
consent to the entry of an order for relief in an involuntary case against, the
Partnership or any Series under any bankruptcy laws.

 

Section 7.6           Actions Requiring the Approval of the Series L3R Partners.

 

Notwithstanding any other provision of this Agreement to the contrary, and in
addition to the requirements of Section 7.4 and Section 7.5, none of the
Partnership, any Series, any Managing General Partner nor any other Partner
shall cause or commit the Partnership or any Series to take any of the following
actions without the prior written consent or vote of a Supermajority Interest of
Series L3R Partnership Interests:

 

(a)          approve the Series L3R Annual Budget as provided for in
Section 7.9;

 

85

 

 

(b)          request or otherwise require any additional Series L3R Capital
Contributions, pursuant to Section 5.10 or otherwise, that are not reflected in
the approved Series L3R Annual Budget;

 

(c)          establish any Series L3R Reserves;

 

(d)          with respect to the Series L3R, make any expenditure or series of
related expenditures in excess of $1,000,000 that are not (i) reflected in the
approved Series L3R Annual Budget or (ii) required to address an emergency;

 

(e)          the issuance, incurrence or assumption of any Indebtedness by the
Series L3R other than (i) Indebtedness reflected in the approved Series L3R
Annual Budget, (ii) an Intercompany Obligation permitted by Section 7.6(f) or
(iii) a Springing Guarantee permitted by Section 7.6(g);

 

(f)          the issuance, incurrence or assumption of any Indebtedness by the
Partnership generally or any Series (other than the Series L3R) unless such
Indebtedness is (i) (x) (A) by its terms, expressly non-recourse to any
Series L3R Assets and the Series L3R Partners or (B) an Intercompany Obligation
and (y) after giving effect to the issuance, incurrence or assumption of such
Indebtedness, the aggregate principal amount of Indebtedness of the Partnership
and all Series (excluding (A) short term Indebtedness incurred in connection
with the construction of projects that have not yet been placed into service and
(B) Indebtedness of the Series L3R) does not exceed 45% of the total
capitalization of the Partnership as a whole, (ii) incurred in connection with
the refinancing of Existing Indebtedness for which the Partnership is the direct
obligor (other than Existing Indebtedness that is an Intercompany Obligation),
(iii) an Intercompany Obligation permitted by Section 7.6(e) or (iv) a Springing
Guarantee permitted by Section 7.6(g);

 

(g)          any guarantee of Indebtedness of another Person by the Partnership
generally or any Series other than a Springing Guarantee;

 

(h)          any material modification of any material contract related to the
Series L3R Assets or to which the Series L3R is a party (excluding this
Agreement);

 

(i)          any material modification to the L3R Support Letters or the L3R
Surcharge;

 

(j)          any merger, consolidation, conversion, business combination or
reorganization of the Partnership or any Subsidiary of the Partnership that owns
any Series L3R Assets (other than any conversion pursuant to Section 12.11(c));

 

(k)          any direct or indirect sale, exchange or other transfer of (i) any
Series L3R Assets or (ii) any assets of the Partnership generally or any Series
(other than the Series L3R) in excess of $25,000,000, in each case, other than
sales, exchanges or other transfers as a result of the exercise of remedies
pursuant to Existing Indebtedness;

 

(l)          any issuance of any additional Partnership Interests of the
Partnership generally or any Series;

 

86

 

 

(m)          except as otherwise provided in Section 4.1(c), the admission of
any Person as a new Partner of the Partnership generally or of any Series
(whether by Transfer of existing Partnership Interests, merger or issuance of
additional Partnership Interests);

 

(n)          except as otherwise provided in Section 4.1(c), any withdrawal or
removal of any General Partner or admission of any new General Partner of the
Partnership generally or any Series;

 

(o)          the amendment of any provision of this Agreement relating to the
Series L3R or any other amendment of this Agreement that would have an adverse
effect on the Series L3R, the Series L3R Assets or the Series L3R Partners;

 

(p)          the entry into or termination of any activity or business, or the
acquisition or divestiture of any asset or business, that would cause the
Partnership or any Series to be taxed as an association taxable as a corporation
or otherwise taxable as an entity for U.S. federal income tax purposes;

 

(q)          the voluntary dissolution or liquidation of the Partnership or
voluntary termination of any Series; or

 

(r)          the commencement of a voluntary case with respect to, or the
consent to the entry of an order for relief in an involuntary case against, the
Partnership or any Series under any bankruptcy laws.

 

Section 7.7           Series EA Annual Budget.

 

(a)          Fifteen days prior to the beginning of each fiscal year beginning
after December 31, 2012, the Managing General Partner of the Series EA shall
cause to be prepared and submitted to the Series EA Partners a budget and
forecast setting forth the anticipated revenues and expenses for the Series EA
for the following fiscal year, including any anticipated Series EA Maintenance
Capital Expenditures, operating expenses, revenues, Capital Contributions and
distributions (the “Series EA Annual Budget”).

 

(b)          After the Series EA Annual Budget has been approved by a
Supermajority Interest of Series EA Partnership Interests, the Managing General
Partner of the Series EA shall implement the Series EA Annual Budget and shall
be authorized to make the expenditures and incur the obligations provided for
therein. The Series EA Annual Budget may be revised at any time during a fiscal
year subject to the approval of a Supermajority Interest of Series EA
Partnership Interests.

 

(c)          If a Supermajority Interest of Series EA Partnership Interests
fails to adopt on or before December 31 of any year a Series EA Annual Budget
that has been properly submitted for approval by the Managing General Partner of
the Series EA, then a Supermajority Interest of Series EA Partnership Interests
shall be deemed to have approved as the Series EA Annual Budget for the next
calendar year the last Series EA Annual Budget that was approved by a
Supermajority Interest of Series EA Partnership Interests (the “Series EA Prior
Budget”) adjusted as follows: (i) all operating expense items (including Series
EA Maintenance Capital Expenditures) set forth in the Series EA Prior Budget
shall be increased by 5% from the Series EA Prior Budget and (ii) all
expenditures related to the construction of the Eastern Access Project set forth
in the Series EA Prior Budget shall be replaced with the estimated expenditures
related to the construction of the Eastern Access Project for the next calendar
year; provided, however, that if a Series EA Annual Budget subsequently is
approved by a Supermajority Interest of Series EA Partnership Interests, such
subsequently approved Series EA Annual Budget shall be effective for the
remainder of the applicable fiscal year.

 

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Section 7.8           Series ME Annual Budget.

 

(a)          Fifteen days prior to the beginning of each fiscal year beginning
after December 31, 2012, the Managing General Partner of the Series ME shall
cause to be prepared and submitted to the Series ME Partners a budget and
forecast setting forth the anticipated revenues and expenses for the Series ME
for the following fiscal year, including any anticipated Series ME Maintenance
Capital Expenditures, operating expenses, revenues, Capital Contributions and
distributions (the “Series ME Annual Budget”).

 

(b)          After the Series ME Annual Budget has been approved by a
Supermajority Interest of Series ME Partnership Interests, the Managing General
Partner of the Series ME shall implement the Series ME Annual Budget and shall
be authorized to make the expenditures and incur the obligations provided for
therein. The Series ME Annual Budget may be revised at any time during a fiscal
year subject to the approval of a Supermajority Interest of Series ME
Partnership Interests.

 

(c)          If a Supermajority Interest of Series ME Partnership Interests
fails to adopt on or before December 31 of any year a Series ME Annual Budget
that has been properly submitted for approval by the Managing General Partner of
the Series ME, then a Supermajority Interest of Series ME Partnership Interests
shall be deemed to have approved as the Series ME Annual Budget for the next
calendar year the last Series ME Annual Budget that was approved by a
Supermajority Interest of Series ME Partnership Interests (the “Series ME Prior
Budget”) adjusted as follows: (i) all operating expense items (including Series
ME Maintenance Capital Expenditures) set forth in the Series ME Prior Budget
shall be increased by 5% from the Series ME Prior Budget and (ii) all
expenditures related to the construction of the Mainline Expansion Project set
forth in the Series ME Prior Budget shall be replaced with the estimated
expenditures related to the construction of the Mainline Expansion Project for
the next calendar year; provided, however, that if a Series ME Annual Budget
subsequently is approved by a Supermajority Interest of Series ME Partnership
Interests, such subsequently approved Series ME Annual Budget shall be effective
for the remainder of the applicable fiscal year.

 

Section 7.9           Series L3R Annual Budget.

 

(a)          Fifteen days prior to the beginning of each fiscal year beginning
after December 31, 2016, the Managing General Partner of the Series L3R shall
cause to be prepared and submitted to the Series L3R Partners a budget and
forecast setting forth the anticipated revenues and expenses for the Series L3R
for the following fiscal year, including any anticipated Series L3R Maintenance
Capital Expenditures, operating expenses, revenues, Capital Contributions and
distributions (the “Series L3R Annual Budget”).

 

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(b)          After the Series L3R Annual Budget has been approved by a
Supermajority Interest of Series L3R Partnership Interests, the Managing General
Partner of the Series L3R shall implement the Series L3R Annual Budget and shall
be authorized to make the expenditures and incur the obligations provided for
therein. The Series L3R Annual Budget may be revised at any time during a fiscal
year subject to the approval of a Supermajority Interest of Series L3R
Partnership Interests.

 

(c)          If a Supermajority Interest of Series L3R Partnership Interests
fails to adopt on or before December 31 of any year a Series L3R Annual Budget
that has been properly submitted for approval by the Managing General Partner of
the Series L3R, then a Supermajority Interest of Series L3R Partnership
Interests shall be deemed to have approved as the Series L3R Annual Budget for
the next calendar year the last Series L3R Annual Budget that was approved by a
Supermajority Interest of Series L3R Partnership Interests (the “Series L3R
Prior Budget”) adjusted as follows: (i) all operating expense items (including
Series L3R Maintenance Capital Expenditures) set forth in the Series L3R Prior
Budget shall be increased by 5% from the Series L3R Prior Budget and (ii) all
expenditures related to the construction of the Line 3 Replacement Project set
forth in the Series L3R Prior Budget shall be replaced with the estimated
expenditures related to the Line 3 Replacement Project for the next calendar
year; provided, however, that if a Series L3R Annual Budget subsequently is
approved by a Supermajority Interest of Series L3R Partnership Interests, such
subsequently approved Series L3R Annual Budget shall be effective for the
remainder of the applicable fiscal year.

 

Section 7.10          Collection of Series AC Revenue Entitlement.

 

(a)          The Series AC Revenue Entitlement for each year will be collected
on a monthly basis by the Partnership on behalf of the Series AC through the
surcharge provided for in Section 3 “Revenue Requirement” of the Series AC
Tariff Term Sheet (excluding any reduction attributable to the “Revenue Credit”
provided for in Section 13 of the Series AC Tariff Term Sheet that is collected
through the base system tolls) that is levied during that year with respect to
the projected level of costs and throughput volumes, including the adjustment
provided for in Section 4 “Revenue Requirement Adjustment” of the Series AC
Tariff Term Sheet for over or under collection that is included in the surcharge
levied in the year following the year of such over or under collection,
inclusive of carrying charges.

 

(b)          The Managing General Partner of the Series AC shall cause the
Series AC Records to set forth the cumulative amount by which the Series AC
Revenue Entitlement exceeds or is less than amounts actually collected,
inclusive of carrying charges.

 

(c)          Neither the Series AC Revenue Entitlement, nor the amount of the
Series AC Revenue Entitlement that is collected on behalf of Series AC in any
period, will be reduced by any part of the revenue credit to the Alberta Clipper
Surcharge specified in Section 13 of the Series AC Tariff Term Sheet.

 

Section 7.11          Collection of Series EA Revenue Entitlement.

 

(a)          The Series EA Revenue Entitlement for each year will be collected
on a monthly basis by the Partnership on behalf of Series EA through (i) the
Eastern Access Surcharge, (ii) the collection of Allowance Oil Revenue
applicable to Series EA Assets and (iii) the Qualifying Volume Adjustment. The
Series EA Revenue Entitlement will be reduced by the Line 17 IJT Discount.

 

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(b)          The Managing General Partner of the Series EA shall cause the
Series EA Records to set forth the cumulative amount by which the Series EA
Revenue Entitlement exceeds or is less than amounts actually collected,
inclusive of carrying charges.

 

(c)          Neither the Series EA Revenue Entitlement, nor the amount of the
Series EA Revenue Entitlement that is collected on behalf of Series EA in any
period, will be reduced by any part of the revenue credit to the Eastern Access
Surcharge specified in such Series EA Tariff Term Sheets.

 

Section 7.12          Collection of Series ME Revenue Entitlement.

 

(a)          The Series ME Revenue Entitlement for each year will be collected
on a monthly basis by the Partnership on behalf of Series ME through (i) the
Mainline Expansion Surcharge and (ii) the collection of Allowance Oil Revenue
applicable to Series ME Assets.

 

(b)          The Managing General Partner of the Series ME shall cause the
Series ME Records to set forth the cumulative amount by which the Series ME
Revenue Entitlement exceeds or is less than amounts actually collected,
inclusive of carrying charges.

 

(c)          Neither the Series ME Revenue Entitlement, nor the amount of the
Series ME Revenue Entitlement that is collected on behalf of Series ME in any
period, will be reduced by any part of the revenue credit to the Mainline
Expansion Surcharge specified in such Series EA Tariff Term Sheets.

 

Section 7.13          Collection of Series L3R Revenue Entitlement.

 

(a)          The Series L3R Revenue Entitlement for each year will be collected
on a monthly basis by the Partnership on behalf of Series L3R through (i) the
L3R Surcharge and (ii) the collection of Allowance Oil Revenue applicable to
Series L3R Assets.

 

(b)          The Managing General Partner of the Series L3R shall cause the
Series L3R Records to set forth the cumulative amount by which the Series L3R
Revenue Entitlement exceeds or is less than amounts actually collected,
inclusive of carrying charges.

 

(c)          Neither the Series L3R Revenue Entitlement, nor the amount of the
Series L3R Revenue Entitlement that is collected on behalf of Series L3R in any
period, will be reduced by any part of the revenue credit to the L3R Surcharge
specified in the L3R Surcharge Support Letter.

 

Section 7.14          Compensation of General Partners.

 

No General Partner shall be compensated for its services as a General Partner of
the Partnership generally or any Series; provided, however, this Section 7.14
shall not prohibit or restrict any reimbursement to which any General Partner is
otherwise entitled for expenses it incurs or payments it makes on behalf of the
Partnership generally or any Series, including any general and administrative
expenses.

 

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Section 7.15          Indemnification.

 

(a)          To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, each Series shall indemnify
and hold harmless all of such Series’ Indemnitees from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts (“Damages”) arising from any and all claims, demands, actions,
suits or proceedings, whether civil, criminal, administrative or investigative
(“Claims”), in which any such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise, by reason of its management of the affairs of
such Series or by reason of its status as an Indemnitee of such Series, that
relates to or arises out of such Series, its property, its business or its
affairs; provided, that the Indemnitee shall not be indemnified and held
harmless if there has been a final and non-appealable judgment entered by a
court of competent jurisdiction determining that, in respect of the matter for
which the Indemnitee is seeking indemnification pursuant to this Section 7.15,
the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in
the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was unlawful. Any indemnification pursuant to this Section 7.15 shall be
made only out of the assets of the indemnifying Series, it being agreed that,
except as provided in Section 11.7, no Partner shall be personally liable for
such indemnification nor shall any Partner have any obligation to contribute or
loan any monies or property to such Series to enable it to effectuate such
indemnification.

 

(b)          To the fullest extent permitted by law, expenses (including legal
fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.15(a) in defending any Claim shall, from time to time, be advanced by
the indemnifying Series prior to a determination that the Indemnitee is not
entitled to be indemnified upon receipt by such Series of an undertaking by or
on behalf of the Indemnitee to repay such amount if it shall be determined that
the Indemnitee is not entitled to be indemnified as authorized in this
Section 7.15.

 

(c)          The indemnification provided by this Section 7.15 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of a Majority in Interest of Partnership
Interests, in the case of the Series AC and the Series LH, or a Supermajority
Interest of the Partnership Interests, in the case of the Series EA, the Series
ME and the Series L3R, as a matter of law or otherwise, both as to actions in
the Indemnitee’s capacity as an Indemnitee and as to actions in any other
capacity, and shall continue as to an Indemnitee who has ceased to serve in such
capacity and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee.

 

(d)          Any Series may purchase and maintain (or reimburse such Series’
General Partners or their Affiliates for the cost of) insurance, on behalf of
such Series’ General Partners, their Affiliates and such other Persons as such
Series’ General Partners shall determine, against any liability that may be
asserted against, or expense that may be incurred by, such Person in connection
with such Series’ activities or such Person’s activities on behalf of such
Series, regardless of whether such Series would have the power to indemnify such
Person against such liability under the provisions of this Agreement.

 

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(e)          In no event may an Indemnitee subject any Partner to personal
liability by reason of the indemnification provisions set forth in this
Agreement.

 

(f)          An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.15 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement with respect to the
indemnifying Series.

 

(g)          The provisions of this Section 7.15 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

 

(h)          No amendment, modification or repeal of this Section 7.15 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by a Series, nor the
obligations of such Series to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.15 as in effect immediately
prior to such amendment, modification or repeal with respect to Claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such Claims may arise or
be asserted.

 

(i)          The provisions of this Section 7.15 shall not be construed to limit
the power of any Series to indemnify an Indemnitee of such Series to the fullest
extent permitted by law or to enter into specific agreements, commitments or
arrangements for indemnification permitted by law. The absence of any express
provision for indemnification herein shall not limit any right of
indemnification existing independently of this Section 7.15.

 

Section 7.16          Interseries Indemnification.

 

Notwithstanding anything to the contrary set forth in this Agreement, in the
event that any Series (the “Indemnified Series”) (a) becomes liable for any
Liability of another Series (the “Indemnifying Series”), including any Claim for
Damages by a Third Party that relate to or arise out of the actions, obligation,
assets, property, business or affairs of the Indemnifying Series or (b) pays or
discharges an Intercompany Obligation for which the Indemnifying Series is the
Primary Obligor (collectively, “Series Indemnified Damages”), to the fullest
extent permitted by law, the Indemnifying Series shall indemnify the Indemnified
Series for the amount of the Series Indemnified Damages promptly following their
incurrence or payment, as applicable. Any indemnification pursuant to this
Section 7.16 shall be made (i) only out of the assets of the Indemnifying
Series, it being agreed that, except as provided in Section 11.7, no Partner
shall be personally liable for such indemnification nor shall any Partner have
any obligation to contribute or loan any monies or property to the Indemnifying
Series to enable it to effectuate such indemnification and (ii) only to the
extent that the Partners of the Indemnified Series have not received a payment
from the Partners of the Indemnifying Series under Sections 6.2, 6.3, 6.4, 6.5
or 6.6 with respect to a shortfall related to the Liability that gave rise to
the Series Indemnified Damages.

 

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Section 7.17          Liability of Indemnitees.

 

(a)          Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damages to any Series, any
Partner or any other Person who is bound by this Agreement, for losses sustained
or liabilities incurred as a result of any act or omission of an Indemnitee
unless there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter in question,
the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in
the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was criminal.

 

(b)          Subject to its obligations and duties as a Managing General Partner
set forth in this Agreement, each Managing General Partner may exercise any of
the powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents, and such Managing
General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by such Managing General Partner in good faith.

 

(c)          To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the
Partnership, any Series or the Partners, the General Partners and any other
Indemnitee acting in connection with the Partnership’s or a Series’ business or
affairs shall not be liable to the Partnership, such Series or any Partner for
its good faith reliance on the provisions of this Agreement. The provisions of
this Agreement, to the extent that they restrict or eliminate the duties and
liabilities of a Partner or other Person to the parties hereto otherwise
existing at law or in equity, are agreed by the parties hereto to replace such
other duties and liabilities of such Partner or other Person.

 

(d)          Any amendment, modification or repeal of this Section 7.17 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability of the Indemnitees under this Section 7.17 as in
effect immediately prior to such amendment, modification or repeal with respect
to Claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such Claims
may arise or be asserted.

 

Section 7.18          Limitation of Liability.

 

The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement or the Delaware Act. A General Partner of a
Series shall not be liable for the obligations of the Partnership generally or
any other Series solely as a result of its status as a General Partner of a
Series, and a General Partner of the Partnership generally shall not be liable
for the obligations of any Series solely as a result of its status as a General
Partner of the Partnership generally.

 

Section 7.19          Management of Business.

 

No Limited Partner, in its capacity as such, shall participate in the operation,
management or control (within the meaning of the Delaware Act) of the
Partnership’s or any Series’ business, transact any business in the
Partnership’s or any Series’ name or have the power to sign documents for or
otherwise bind the Partnership or any Series. Any action taken by any Affiliate
of a General Partner or any officer, director, employee, manager, member,
general partner, agent or trustee of a General Partner or any of its Affiliates
shall not be deemed to be participation in the control of the business of the
Partnership or any Series by a Limited Partner of the Partnership generally or
any Series (within the meaning of Section 17-303(a) of the Delaware Act) and
shall not affect, impair or eliminate the limitations on the liability of the
Limited Partners under this Agreement.

 

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Section 7.20          Outside Activities of the Limited Partners.

 

Notwithstanding any duty otherwise existing at law or in equity, except as
otherwise set forth in any other agreement to which a Partner is a party,
including the Omnibus Agreement, any Partner of the Partnership generally or any
Series shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership or any
Series, including business interests and activities in direct competition with
the Partnership or any Series.

 

Section 7.21          Reliance by Third Parties.

 

Notwithstanding anything to the contrary in this Agreement, (a) any Person
dealing with the Partnership shall be entitled to assume that the Managing
General Partner of the Partnership generally, and any officer of such Managing
General Partner authorized by such Managing General Partner to act on behalf of
and in the name of the Partnership, has full power and authority to encumber,
sell or otherwise use in any manner any and all assets of the Partnership
generally, and to enter into any authorized contracts on behalf of the
Partnership as a whole and the Partnership generally, and such Person shall be
entitled to deal with such Managing General Partner or any such officer as if it
were the Partnership’s sole party in interest, both legally and beneficially and
(b) any Person dealing with any Series shall be entitled to assume that the
Managing General Partner of such Series, and any officer of such Managing
General Partner authorized by such Managing General Partner to act on behalf of
and in the name of such Series, has full power and authority to encumber, sell
or otherwise use in any manner any and all assets of such Series and to enter
into any authorized contracts on behalf of such Series and such Person shall be
entitled to deal with such Managing General Partner or any such officer as if it
were such Series’ sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives, to the fullest extent permitted by law, any and
all defenses or other remedies that may be available against such Person to
contest, negate or disaffirm any action of any Managing General Partner or any
such officer in connection with any such dealing. In no event shall any Person
dealing with any Managing General Partner or any such officer or its
representatives be obligated to ascertain that the terms of this Agreement have
been complied with or to inquire into the necessity or expedience of any act or
action of such Managing General Partner or any such officer or its
representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership or any Series by the Managing General
Partner of the Partnership generally or such Series, respectively, or its
respective representatives shall be conclusive evidence in favor of any and
every Person relying thereon or claiming thereunder that (a) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership or such Series and (c) such certificate,
document or instrument was duly executed and delivered in accordance with the
terms and provisions of this Agreement and is binding upon the Partnership or
such Series, as applicable.

 

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Section 7.22          Managing General Partner.

 

Except as provided for in Section 10.1, Lakehead GP (or its designee) shall
serve as the managing general partner (the “Managing General Partner”) of the
Partnership generally and of each Series. Except as expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership generally or a Series shall be exclusively vested in the Managing
General Partner of the Partnership generally or of such Series, as applicable,
and no other General Partner nor any Limited Partner shall have any management
power over the business and affairs of the Partnership generally or any Series.

 

Section 7.23          Conflicts of Interest.

 

Unless otherwise expressly provided herein, (a) whenever a conflict of interest
exists or arises between a Managing General Partner or any of its Affiliates, on
the one hand, and the Partnership, any Series or any Partner or any Affiliates
thereof, on the other hand, or (b) whenever this Agreement or any other
agreement contemplated herein provides that a Managing General Partner or any of
its Affiliates shall act in a manner that is, or provides terms that are, fair
and reasonable to the Partnership or any Partner or any Affiliate thereof, such
Managing General Partner shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement, transaction
or situation and the benefits and burdens relating to such interests, any
customary or accepted industry practices and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by such Managing
General Partner, the resolution, action or terms so made, taken or provided by
such Managing General Partner shall be permitted and deemed approved by all the
Partners and shall not constitute a breach of this Agreement or any other
agreement contemplated herein or of any duty, including any fiduciary duty, or
obligation of such Managing General Partner at law or in equity or otherwise,
and it shall be presumed in making its decision that the Managing General
Partner acted in good faith. In any proceeding challenging such decision, the
party bringing the challenge shall have the burden of overcoming such
presumption.

 

Section 7.24          Shared Use of Shared Assets.

 

The Shared Assets shall be shared between the Series AC, Series EA, Series ME,
Series L3R and the Series LH in accordance with the terms set forth in Exhibit
F. Exhibit F is hereby incorporated by reference herein and constitutes an
integral, non-severable part of this Agreement. The parties hereto hereby agree
to be bound by the terms and conditions of Exhibit F.

 

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ARTICLE VIII
BOOKS, RECORDS AND ACCOUNTING

 

Section 8.1           Records and Accounting.

 

The Managing General Partner of the Partnership generally and the Managing
General Partner of each Series shall keep or cause to be kept full and true
books of account maintained in accordance with generally accepted accounting
principles consistently applied and in which shall be entered fully and
accurately each transaction of the Partnership generally or such Series, as
applicable. Such books of account, together with a copy of this Agreement, and
of the Certificate of Limited Partnership, shall at all times be maintained at
the principal place of business of the Partnership. The records maintained for
each Series shall account for the assets associated with each such Series
separately from the other assets of the Partnership, if any, or of any other
Series. Upon written request, each Partner associated with a Series shall have
the right, at a time during ordinary business hours, as reasonably determined by
the Managing General Partner of such Series, to inspect and copy, at the
requesting Partner’s expense, the records of such Series for any purpose
reasonably related to such Partner’s interest with respect to such Series.

 

Section 8.2           Fiscal Year.

 

The fiscal year of the Partnership and of each Series shall be a fiscal year
ending December 31.

 

ARTICLE IX
TAX MATTERS

 

Section 9.1           Tax Returns.

 

The Partnership shall timely file all returns of the Partnership that are
required for U.S. federal, state and local income tax purposes on the basis of
the accrual method and the taxable year or years that it is required by law to
adopt, from time to time, as determined by the Managing General Partner of the
Partnership generally. In the event the Partnership is required to use a taxable
year other than a year ending on December 31, the Managing General Partner of
the Partnership generally shall use reasonable efforts to change the taxable
year of the Partnership to a year ending on December 31. The tax information
reasonably required by Partners for U.S. federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Partnership’s taxable year
ends. The classification, realization and recognition of income, gain, losses
and deductions and other items shall be on the accrual method of accounting for
U.S. federal income tax purposes.

 

Section 9.2           Partner Tax Return Information.

 

The Partnership shall cause to be delivered to each Partner within 75 days after
the end of the Partnership’s taxable year an IRS Form K-1 or a good faith
estimate of the amounts to be included on such IRS Form K-1 for such Partner and
such other information as shall be necessary (including a statement for that
year of each Partner’s share of net income, net losses and other items allocated
to such Partner) for the preparation and timely filing by the Partners of their
U.S. federal, state and local income and other tax returns.

 

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Section 9.3           Tax Elections.

 

(a)          If there is a distribution of property of a Series as described in
Code Section 734 or a transfer of Partnership Interests as described in Code
Section 743, upon request by notice from any Partner of such Series, the
Partnership will elect, pursuant to Code Section 754, to adjust the basis of
Series property.

 

(b)          Except as otherwise provided herein, the Managing General Partner
of the Partnership generally shall determine whether the Partnership should make
any other elections permitted by the Code.

 

Section 9.4           Tax Controversies.

 

(a)          For all tax years beginning on or before December 31, 2017, subject
to the provisions hereof, the Managing General Partner of the Partnership
generally is designated as the Tax Matters Partner (as defined in the Code) and
is authorized and required to represent the Partnership in connection with all
examinations of the Partnership’s affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend funds for
professional services and costs associated therewith.

 

(i)          Each Partner agrees to cooperate with the Tax Matters Partner and
to do or refrain from doing any or all things reasonably required by the Tax
Matters Partner to conduct such proceedings.

 

(ii)          The Tax Matters Partner shall take such action as may be necessary
to cause any Partner so requesting to become a “notice partner” within the
meaning of Section 6231(a)(8) of the Code. The Tax Matters Partner shall inform
each other Partner of all significant matters that may come to its attention in
its capacity as Tax Matters Partner by giving notice thereof on or before the
fifth Business Day after becoming aware thereof and, within that time, shall
forward to each other Partner copies of all significant written communications
it may receive in that capacity. Any cost or expense incurred by the Tax Matters
Partner in connection with its duties, including the preparation for or
pursuance of administrative or judicial proceedings, shall be paid by the
Partnership.

 

(iii)          If an audit of any of the Partnership’s tax returns shall occur,
the Tax Matters Partner shall not settle or otherwise compromise assertions of
the auditing agent that may be adverse to any Partner as compared to the
position taken on the Partnership’s tax returns without the prior written
consent of each such affected Partner.

 

(iv)          No Partner shall file a request pursuant to Code Section 6227 for
an administrative adjustment of Partnership items for any taxable year, or a
petition under Code Sections 6226 or 6228 or other Code sections with respect to
any item involving the Partnership, without first notifying the other Partners.
Any Partner that enters into a settlement agreement with respect to any
Partnership item (within the meaning of Code Section 6231(a)(3)) shall notify
the other Partners of such settlement agreement and its terms within 90 days
from the date of the settlement.

 

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(v)          If any Partner intends to file a notice of inconsistent treatment
under Code Section 6222(b), such Partner shall give reasonable notice under the
circumstances to the other Partners of such intent and the manner in which the
Partner’s intended treatment of an item is (or may be) inconsistent with the
treatment of that item by the other Partners.

 

(b)          For all tax years beginning after December 31, 2017, pursuant to
Section 6221 et. seq., Subchapter C of Chapter 63 of Subtitle F of the Internal
Revenue Code, the Managing General Partner of the Partnership generally is
designated as the “partnership representative” (such Partner, the “Partnership
Representative”) of the Partnership for purposes of the Code. Subject to the
limitations contained in Section 9.4(a), the Partnership Representative shall
have the right and obligation to take all actions authorized and required,
respectively, by the Code for the “partnership representative.”

 

Section 9.5           Withholding.

 

The Managing General Partner of the Partnership generally is authorized to take
any action that may be required to cause the Partnership or any Series to comply
with any withholding requirements established under the Code or any other
federal, state or local law, including pursuant to Sections 1441, 1442, 1445 and
1446 of the Code. To the extent that the Partnership or any Series is required
or elects to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner (including by
reason of Section 1446 of the Code), the Managing General Partner of the
Partnership generally or of the applicable Series may treat the amount withheld
as a distribution of cash pursuant to Section 6.2, Section 6.3, Section 6.4
Section 6.5 or Section 6.6, as applicable, in the amount of such withholding
from such Partner.

 

Section 9.6           Tax Reimbursement.

 

If Texas law requires the Partnership or a Series and any Partner both to
participate in the filing of a Texas franchise tax combined group report, and if
such Partner or any other member of the Partner’s combined group pays the
franchise tax liability due in connection with such combined report, the parties
agree that the Partnership or the applicable Series shall promptly reimburse
such Partner for the franchise tax paid on behalf of the Partnership as a
combined group member. The franchise tax paid on behalf of the Partnership with
respect to each applicable Series shall equal the excess, if any, of (i) the
franchise tax that the combined group including the Partnership pays over
(ii) the amount the combined group would have paid if it had computed its
franchise tax liability for the report period without the Partnership as a
member of the combined group, but in no event more than what the Partnership or
each applicable Series would have paid had it filed the franchise tax return not
as a member of a group. In such event, the parties agree that such Partner shall
be considered as paying such amount on behalf of the Partnership with respect to
each applicable Series and the Partnership with respect to each applicable
Series shall deduct for U.S. federal income tax purposes 100% of the Texas
franchise tax attributable to the Partnership with respect to each applicable
Series; provided that in the event that such deduction may not be properly taken
by the Partnership with respect to each applicable Series, the Partnership with
respect to each applicable Series shall reimburse such Partner for the after-tax
cost of such payment of Texas franchise tax paid on the Partnership’s behalf.

 

98

 

 

Section 9.7           Tax Partnership.

 

It is the intention of the Partners that the Partnership be classified as a
partnership for U.S. federal tax purposes. Neither the Partnership nor any
Partner shall make an election for the Partnership or any Series to be excluded
from the application of the provisions of subchapter K of chapter 1 of subtitle
A of the Code or any similar provisions of applicable state or local law or to
be classified as other than a partnership pursuant to Treasury Regulation
Section 301.7701-3 or any similar provision of state or local law.

 

Section 9.8           Tax Matters Following a Fundamental Change.

 

Following the occurrence of a Fundamental Change, the following provisions shall
take effect and supersede any conflicting provisions of this Article IX:

 

(a)          Series EA Tax Matters.

 

(i)          EECI EA Sub shall exercise full and exclusive discretion over all
tax matters relating to or affecting the Series EA. For the avoidance of doubt,
EECI EA Sub’s right to exercise its discretion shall include matters relating to
the Partnership generally, such as Partnership tax elections permitted by the
Code, to the extent that such matter affects the Series EA.

 

(ii)          The Partnership shall cause to be delivered to EECI EA Sub at
least 15 Business Days before the due date of any Partnership tax return a copy
of the proposed tax return. EECI EA Sub shall have ten Business Days to request
changes to any portions of such tax return that affect Series EA, and the Tax
Matters Partner shall make all changes to such tax return requested by EECI EA
Sub prior to timely filing such return.

 

(iii)          If an audit of any of the Partnership’s tax returns shall occur,
EECI EA Sub shall have the right, at its discretion, to control all decisions
with respect to any matter relating to or affecting the Series EA, and the Tax
Matters Partner shall act in accordance with EECI EA Sub’s direction. For the
avoidance of doubt, EECI EA Sub shall control all decisions with respect to all
matters under audit affecting or relating to the Partnership generally to the
extent that such matters also affect the Series EA.

 

(b)          Series ME Tax Matters.

 

(i)          EECI ME Sub shall exercise full and exclusive discretion over all
tax matters relating to or affecting the Series ME. For the avoidance of doubt,
EECI ME Sub’s right to exercise its discretion shall include matters relating to
the Partnership generally, such as Partnership tax elections permitted by the
Code, to the extent that such matter affects the Series ME.

 

99

 

 

(ii)          The Partnership shall cause to be delivered to EECI ME Sub at
least 15 Business Days before the due date of any Partnership tax return a copy
of the proposed tax return. EECI ME Sub shall have ten Business Days to request
changes to any portions of such tax return that affect Series ME, and the Tax
Matters Partner shall make all changes to such tax return requested by EECI ME
Sub prior to timely filing such return.

 

(iii)          If an audit of any of the Partnership’s tax returns shall occur,
EECI ME Sub shall have the right, at its discretion, to control all decisions
with respect to any matter relating to or affecting the Series ME, and the Tax
Matters Partner shall act in accordance with EECI ME Sub’s direction. For the
avoidance of doubt, EECI ME Sub shall control all decisions with respect to all
matters under audit affecting or relating to the Partnership generally to the
extent that such matters also affect the Series ME.

 

(c)          Series L3R Tax Matters.

 

(i)          EECI L3R Sub shall exercise full and exclusive discretion over all
tax matters relating to or affecting the Series L3R. For the avoidance of doubt,
EECI L3R Sub’s right to exercise its discretion shall include matters relating
to the Partnership generally, such as Partnership tax elections permitted by the
Code, to the extent that such matter affects the Series L3R.

 

(ii)          The Partnership shall cause to be delivered to EECI L3R Sub at
least 15 Business Days before the due date of any Partnership tax return a copy
of the proposed tax return. EECI L3R Sub shall have ten Business Days to request
changes to any portions of such tax return that affect Series L3R, and the Tax
Matters Partner shall make all changes to such tax return requested by EECI L3R
Sub prior to timely filing such return.

 

(iii)          If an audit of any of the Partnership’s tax returns shall occur,
EECI L3R Sub shall have the right, at its discretion, to control all decisions
with respect to any matter relating to or affecting the Series L3R, and the Tax
Matters Partner shall act in accordance with EECI L3R Sub’s direction. For the
avoidance of doubt, EECI L3R Sub shall control all decisions with respect to all
matters under audit affecting or relating to the Partnership generally to the
extent that such matters also affect the Series L3R.

 

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ARTICLE X
OTHER EVENTS

 

Section 10.1          Fundamental Change.

 

(a)          If, at any time, (i) EECI is removed as the general partner of
Enbridge Partners pursuant to Section 13.2 (or equivalent provision) of the
Eighth Amended and Restated Agreement of Limited Partnership of Enbridge
Partners, as amended, or (ii) Enbridge Partners shall cease to directly or
indirectly Control the Partnership generally and each Series (each, a
“Fundamental Change”), then (x) the Managing General Partner of Series EA shall,
without any further action on its part, be deemed to have automatically and
irrevocably delegated to EECI EA Sub (or its designee), (y) the Managing General
Partner of Series ME shall, without any further action on its part, be deemed to
have automatically and irrevocably delegated to EECI ME Sub (or its designee)
and (z) the Managing General Partner of Series L3R shall, without any further
action on its part, be deemed to have automatically and irrevocably delegated to
EECI L3R Sub (or its designee) in each case, to the fullest extent permitted
under this Agreement and Delaware law, all of such Managing General Partner’s
power and authority to manage and control the business and affairs of the
applicable Series (such delegation being referred to herein as the “Maximum
Permitted Delegation”), subject to termination only in the sole discretion of
EECI EA Sub, EECI ME Sub or EECI L3R Sub, as applicable. Notwithstanding the
delegation provided for in this Section 10.1(a), no Managing General Partner
shall be deemed to have withdrawn as a General Partner of the Partnership
generally or the applicable Series, and such Managing General Partner shall
retain all of its Partnership Interests and Percentage Interests in the
Partnership generally and the applicable Series (as the case may be), and none
of the foregoing shall be deemed to have been assigned or transferred to EECI EA
Sub, EECI ME Sub or EECI L3R Sub (or their designees), as applicable.

 

(b)          If all or a portion of the Maximum Permitted Delegation is
determined to be invalid or unenforceable for any reason following a Fundamental
Change, EECI, in its sole discretion, may elect to become the Managing General
Partner of the Series EA, the Series ME and the Series L3R by providing five
Business Days’ prior written notice of such election to the Managing General
Partner of the Partnership generally at any time (such election, the “Control
Option”). Upon exercise of the Control Option:

 

(i)          the Limited Partner Interest of EECI EA Sub in the Series EA shall
automatically convert into a General Partner Interest in the Series EA, the
Limited Partner Interest of EECI ME Sub in the Series ME shall automatically
convert into a General Partner Interest in the Series ME and the Limited Partner
Interest of EECI L3R Sub in the Series L3R shall automatically convert into a
General Partner Interest in the Series L3R;

 

(ii)         EECI EA Sub shall automatically become the Managing General Partner
of the Series EA, EECI ME Sub shall automatically become the Managing General
Partner of the Series ME and EECI L3R Sub shall automatically become the
Managing General Partner of the Series L3R in each case, with all rights, powers
and obligations of the Managing General Partner of such Series as set forth in
this Agreement; and

 

(iii)        all rights, powers and obligations of the existing Managing General
Partner of the Series EA, Series ME and the Series L3R (in its capacity as such)
shall immediately terminate.

 

The exercise of the Control Option pursuant to this Section 10.1(b) shall not
affect (A) the status of any Managing General Partner of the Partnership
generally or any Series (other than the Series EA, Series ME or the Series L3R)
or (B) the Percentage Interest of the Series EA Partners, the Series ME Partners
or the Series L3R.

 

101

 

 

(c)          In connection with the exercise of the Control Option pursuant to
this Section 10.1, each of the Partners agrees to cooperate with respect to such
matters and to execute such further assignments, releases, assumptions,
amendments of this Agreement and the Certificate of Limited Partnership,
notifications and other documents as may be reasonably requested by EECI, EECI
EA Sub, EECI ME Sub, EECI L3R Sub or the Managing General Partner of the Series
EA, Series ME or Series L3R, as applicable, for the purpose of giving effect to,
or evidencing or giving notice of, the transactions contemplated by such
provisions and the otherwise continued operations of the Partnership.

 

Section 10.2          Alberta Clipper Surcharge Expiration.

 

(a)          Upon the expiration or earlier termination of the Alberta Clipper
Surcharge Term, the Series AC Tariff Term Sheet shall be replaced with a revised
tariff structure in accordance with Section 2(b) of the Series AC Tariff Term
Sheet (the “Alberta Clipper Revised Tariff Structure”).

 

(b)          If the Alberta Clipper Revised Tariff Structure sets forth an
objectively determinable definition of (i) the revenue that the Partnership is
entitled to collect in tolls and other charges in respect of the Series AC
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series AC Assets, then the Series AC Revenue Entitlement and
Series AC Expenses shall be calculated in accordance with the Alberta Clipper
Revised Tariff Structure.

 

(c)          If the Alberta Clipper Revised Tariff Structure does not set forth
an objectively determinable definition of (i) the revenue that the Partnership
is entitled to collect in tolls and other charges in respect of the Series AC
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series AC Assets, then Lakehead GP and EECI, on behalf of all
Partners of the Partnership generally and each Series, will negotiate in good
faith an arrangement to allocate among each Series the total Lakehead System
revenue collected by the Partnership following the expiration or earlier
termination of the Alberta Clipper Surcharge Term. Such allocation arrangement
will be based on the relative economic value of each Series as of the expiration
or earlier termination of the Alberta Clipper Surcharge Term. If EECI and
Lakehead GP are able to agree on such allocation arrangement, then the Series AC
Revenue Entitlement and Series AC Expenses will be calculated in accordance with
such arrangement. If EECI and Lakehead GP are unable to agree on such allocation
arrangement at least 180 days prior to the expiration or earlier termination of
the Alberta Clipper Surcharge Term, then the matter will be submitted to
arbitration pursuant to Section 10.2(d).

 

102

 

 

(d)          If the Alberta Clipper Revised Tariff Structure does not set forth
an objectively determinable definition of (i) the revenue that the Partnership
is entitled to collect in tolls and other charges in respect of the Series AC
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series AC Assets, and EECI and Lakehead GP are unable to agree on
an allocation arrangement pursuant to Section 10.2(c), such allocation
arrangement shall be determined through binding arbitration using three
arbitrators, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as supplemented to the extent necessary to determine
any procedural appeal questions by the Federal Arbitration Act (Title 9 of the
United States Code). If there is any inconsistency between this Section 10.2(d)
and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms
of this Section 10.2(d) will control the rights and obligations of the parties.
Arbitration shall be initiated 180 days prior to the expiration of the Alberta
Clipper Surcharge Term. Each of EECI and Lakehead GP shall appoint an arbitrator
at least 150 days prior to the expiration of the Alberta Clipper Surcharge Term.
If either party fails for any reason to name an arbitrator within such period,
the other party shall petition to the American Arbitration Association for
appointment of an arbitrator for such party’s account. The two arbitrators so
chosen shall select a third arbitrator within 15 days after the second
arbitrator has been appointed. Each of EECI and Lakehead GP will pay the
compensation and expenses of the arbitrator named by or for it. The costs of
petitioning for the appointment of an arbitrator, if any, shall be paid by the
party that has failed to appoint an arbitrator in the requisite period. Each of
EECI and Lakehead GP will each pay one-half of the compensation and expenses of
the third arbitrator. All arbitrators must (a) be neutral Persons who have never
been officers, directors or employees of Enbridge Partners, EECI or any of their
Affiliates and (b) have not less than seven years experience in the energy
industry. The hearing will be conducted in Houston, Texas and commence within 30
days after the selection of the third arbitrator. Within five days after the
selection of the third arbitrator, EECI and Lakehead GP shall exchange in
writing, signed by the respective parties, their respective proposed allocation
arrangements. At the conclusion of the hearing, the arbitrators shall choose
either the allocation arrangement of EECI or the allocation arrangement of
Lakehead GP, and shall have no power or authority whatsoever to reach any other
result. In making their choice, the arbitrators shall choose the allocation
arrangement that in their judgment most equitably allocates the total Lakehead
System revenues in a manner that best represents the relative economic value of
each Series as of the expiration of the Alberta Clipper Surcharge Term. EECI,
Lakehead GP and the arbitrators shall proceed diligently and in good faith in
order that the determination may be made as promptly as possible. Except as
provided in the Federal Arbitration Act, the decision of the arbitrators will be
binding on and non-appealable by the parties.

 

Section 10.3          Eastern Access Surcharge Expiration.

 

(a)          Upon the expiration or earlier termination of the term of one or
more of the Series EA Tariff Term Sheets, the Series EA Tariff Term Sheet so
affected shall be replaced with a revised tariff structure in accordance with
the provisions of the Series EA Tariff Term Sheets (the “Eastern Access Revised
Tariff Structure”).

 

(b)          If the Eastern Access Revised Tariff Structure sets forth an
objectively determinable definition of (i) the revenue that the Partnership is
entitled to collect in tolls and other charges in respect of the Series EA
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series EA Assets, then the Series EA Revenue Entitlement and
Series EA Expenses shall be calculated in accordance with the Eastern Access
Revised Tariff Structure.

 

(c)          If the Eastern Access Revised Tariff Structure does not set forth
an objectively determinable definition of (i) the revenue that the Partnership
is entitled to collect in tolls and other charges in respect of the Series EA
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series EA Assets, then EECI EA Sub and Lakehead GP, on behalf of
all Partners of the Partnership generally and each Series, will negotiate in
good faith an arrangement to allocate among each Series the total Lakehead
System revenue collected by the Partnership following the expiration or earlier
termination of the Series EA Tariff Term Sheet so affected. Such allocation
arrangement will be based on the relative invested capital of each Series as of
the expiration or earlier termination of the applicable Series EA Tariff Term
Sheet. If EECI EA Sub and Lakehead GP are able to agree on such allocation
arrangement, then the Series EA Revenue Entitlement and Series EA Expenses will
be calculated in accordance with such arrangement. If EECI EA Sub and Lakehead
GP are unable to agree on such allocation arrangement at least 180 days prior to
the expiration or earlier termination of the applicable Series EA Tariff Term
Sheet, then the matter will be submitted to arbitration pursuant to
Section 10.3(d).

 

103

 

 

(d)          If the Eastern Access Revised Tariff Structure does not set forth
an objectively determinable definition of (i) the revenue that the Partnership
is entitled to collect in tolls and other charges in respect of the Series EA
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series EA Assets, and EECI EA Sub and Lakehead GP are unable to
agree on an allocation arrangement pursuant to Section 10.3(c), such allocation
arrangement shall be determined through binding arbitration using three
arbitrators, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as supplemented to the extent necessary to determine
any procedural appeal questions by the Federal Arbitration Act (Title 9 of the
United States Code). If there is any inconsistency between this Section 10.3(d)
and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms
of this Section 10.3(d) will control the rights and obligations of the parties.
Arbitration shall be initiated 180 days prior to the expiration of the
applicable Series EA Tariff Term Sheet. Each of EECI EA Sub and Lakehead GP
shall appoint an arbitrator at least 150 days prior to the expiration of the
applicable Series EA Tariff Term Sheet. If either party fails for any reason to
name an arbitrator within such period, the other party shall petition to the
American Arbitration Association for appointment of an arbitrator for such
party’s account. The two arbitrators so chosen shall select a third arbitrator
within 15 days after the second arbitrator has been appointed. Each of EECI EA
Sub and Lakehead GP will pay the compensation and expenses of the arbitrator
named by or for it. The costs of petitioning for the appointment of an
arbitrator, if any, shall be paid by the party that has failed to appoint an
arbitrator in the requisite period. Each of EECI EA Sub and Lakehead GP will
each pay one-half of the compensation and expenses of the third arbitrator. All
arbitrators must (a) be neutral Persons who have never been officers, directors
or employees of Enbridge Partners, EECI or any of their Affiliates and (b) have
not less than seven years experience in the energy industry. The hearing will be
conducted in Houston, Texas and commence within 30 days after the selection of
the third arbitrator. Within five days after the selection of the third
arbitrator, EECI EA Sub and Lakehead GP shall exchange in writing, signed by the
respective parties, their respective proposed allocation arrangements. At the
conclusion of the hearing, the arbitrators shall choose either the allocation
arrangement of EECI EA Sub or the allocation arrangement of Lakehead GP, and
shall have no power or authority whatsoever to reach any other result. In making
their choice, the arbitrators shall choose the allocation arrangement that in
their judgment most equitably allocates the total Lakehead System revenues in a
manner that best represents the relative economic value of each Series as of the
expiration of the applicable Series EA Tariff Term Sheet. EECI EA Sub, Lakehead
GP and the arbitrators shall proceed diligently and in good faith in order that
the determination may be made as promptly as possible. Except as provided in the
Federal Arbitration Act, the decision of the arbitrators will be binding on and
non-appealable by the parties.

 

104

 

 

(e)          Notwithstanding the provisions of this Section 10.3, following the
end of the Eastern Access Surcharge Term, EECI EA Sub and Lakehead GP may, by
mutual agreement, elect to remove the Eastern Access Project from integrated
common carrier service within the Lakehead System and transfer it to stand alone
service either on a common carrier basis or on a contract basis, as permitted by
applicable law. Upon the execution of such agreement, the Series EA Revenue
Entitlement shall be determined by reference to the applicable toll principles
established by applicable regulation or by contract for standalone service.

 

Section 10.4          Mainline Expansion Surcharge Expiration.

 

(a)          Upon the expiration or earlier termination of the term of one or
more of the Series ME Tariff Term Sheets, the Series ME Tariff Term Sheet so
affected shall be replaced with a revised tariff structure in accordance with
the provisions of the Series ME Tariff Term Sheets (the “Mainline Expansion
Revised Tariff Structure”).

 

(b)          If the Mainline Expansion Revised Tariff Structure sets forth an
objectively determinable definition of (i) the revenue that the Partnership is
entitled to collect in tolls and other charges in respect of the Series ME
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series ME Assets, then the Series ME Revenue Entitlement and
Series ME Expenses shall be calculated in accordance with the Mainline Expansion
Revised Tariff Structure.

 

(c)          If the Mainline Expansion Revised Tariff Structure does not set
forth an objectively determinable definition of (i) the revenue that the
Partnership is entitled to collect in tolls and other charges in respect of the
Series ME Assets and (ii) the expenses that the Partnership is entitled to
allocate in respect of the Series ME Assets, then EECI ME Sub and Lakehead GP,
on behalf of all Partners of the Partnership generally and each Series, will
negotiate in good faith an arrangement to allocate among each Series the total
Lakehead System revenue collected by the Partnership following the expiration or
earlier termination of the Series ME Tariff Term Sheet so affected. Such
allocation arrangement will be based on the relative invested capital of each
Series as of the expiration or earlier termination of the applicable Series ME
Tariff Term Sheet. If EECI ME Sub and Lakehead GP are able to agree on such
allocation arrangement, then the Series ME Revenue Entitlement and Series ME
Expenses will be calculated in accordance with such arrangement. If EECI ME Sub
and Lakehead GP are unable to agree on such allocation arrangement at least 180
days prior to the expiration or earlier termination of the applicable Series ME
Tariff Term Sheet, then the matter will be submitted to arbitration pursuant to
Section 10.4(d).

 

105

 

 

(d)          If the Mainline Expansion Revised Tariff Structure does not set
forth an objectively determinable definition of (i) the revenue that the
Partnership is entitled to collect in tolls and other charges in respect of the
Series ME Assets and (ii) the expenses that the Partnership is entitled to
allocate in respect of the Series ME Assets, and EECI ME Sub and Lakehead GP are
unable to agree on an allocation arrangement pursuant to Section 10.4(c), such
allocation arrangement shall be determined through binding arbitration using
three arbitrators, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, as supplemented to the extent necessary to
determine any procedural appeal questions by the Federal Arbitration Act (Title
9 of the United States Code). If there is any inconsistency between this
Section 10.4(d) and the Commercial Arbitration Rules or the Federal Arbitration
Act, the terms of this Section 10.4(d) will control the rights and obligations
of the parties. Arbitration shall be initiated 180 days prior to the expiration
of the applicable Series ME Tariff Term Sheet. Each of EECI ME Sub and Lakehead
GP shall appoint an arbitrator at least 150 days prior to the expiration of the
applicable Series ME Tariff Term Sheet. If either party fails for any reason to
name an arbitrator within such period, the other party shall petition to the
American Arbitration Association for appointment of an arbitrator for such
party’s account. The two arbitrators so chosen shall select a third arbitrator
within 15 days after the second arbitrator has been appointed. Each of EECI ME
Sub and Lakehead GP will pay the compensation and expenses of the arbitrator
named by or for it. The costs of petitioning for the appointment of an
arbitrator, if any, shall be paid by the party that has failed to appoint an
arbitrator in the requisite period. Each of EECI ME Sub and Lakehead GP will
each pay one-half of the compensation and expenses of the third arbitrator. All
arbitrators must (a) be neutral Persons who have never been officers, directors
or employees of Enbridge Partners, EECI or any of their Affiliates and (b) have
not less than seven years experience in the energy industry. The hearing will be
conducted in Houston, Texas and commence within 30 days after the selection of
the third arbitrator. Within five days after the selection of the third
arbitrator, EECI ME Sub and Lakehead GP shall exchange in writing, signed by the
respective parties, their respective proposed allocation arrangements. At the
conclusion of the hearing, the arbitrators shall choose either the allocation
arrangement of EECI ME Sub or the allocation arrangement of Lakehead GP, and
shall have no power or authority whatsoever to reach any other result. In making
their choice, the arbitrators shall choose the allocation arrangement that in
their judgment most equitably allocates the total Lakehead System revenues in a
manner that best represents the relative economic value of each Series as of the
expiration of the applicable Series ME Tariff Term Sheet. EECI ME Sub, Lakehead
GP and the arbitrators shall proceed diligently and in good faith in order that
the determination may be made as promptly as possible. Except as provided in the
Federal Arbitration Act, the decision of the arbitrators will be binding on and
non-appealable by the parties.

 

(e)          Notwithstanding the provisions of this Section 10.4, following the
end of the Mainline Expansion Surcharge Term, EECI ME Sub and Lakehead GP may,
by mutual agreement, elect to remove the Mainline Expansion Project from
integrated common carrier service within the Lakehead System and transfer it to
stand alone service either on a common carrier basis or on a contract basis, as
permitted by applicable law. Upon the execution of such agreement, the Series ME
Revenue Entitlement shall be determined by reference to the applicable toll
principles established by applicable regulation or by contract for standalone
service.

 

Section 10.5          L3R Surcharge Expiration.

 

(a)          Upon the expiration or earlier termination of the L3R Support
Letters, the L3R Support Letters shall be replaced with a revised tariff
structure in accordance with terms to be negotiated with CAPP at the time of
such expiration or termination (the “L3R Revised Tariff Structure”).

 

(b)          If the L3R Revised Tariff Structure sets forth an objectively
determinable definition of (i) the revenue that the Partnership is entitled to
collect in tolls and other charges in respect of the Series L3R Assets and
(ii) the expenses that the Partnership is entitled to allocate in respect of the
Series L3R Assets, then the Series L3R Revenue Entitlement and Series L3R
Expenses shall be calculated in accordance with the L3R Revised Tariff
Structure.

 

106

 

 

(c)          If the L3R Revised Tariff Structure does not set forth an
objectively determinable definition of (i) the revenue that the Partnership is
entitled to collect in tolls and other charges in respect of the Series L3R
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series L3R Assets, then EECI L3R Sub and Lakehead GP, on behalf
of all Partners of the Partnership generally and each Series, will negotiate in
good faith an arrangement to allocate among each Series the total Lakehead
System revenue collected by the Partnership following the expiration or earlier
termination of the L3R Support Letters. Such allocation arrangement will be
based on the relative invested capital of each Series as of the expiration or
earlier termination of the L3R Support Letters. If EECI L3R Sub and Lakehead GP
are able to agree on such allocation arrangement, then the Series L3R Revenue
Entitlement and Series L3R Expenses will be calculated in accordance with such
arrangement. If EECI L3R Sub and Lakehead GP are unable to agree on such
allocation arrangement at least 180 days prior to the expiration or earlier
termination of the L3R Support Letters, then the matter will be submitted to
arbitration pursuant to Section 10.5(d).

 

(d)          If the L3R Revised Tariff Structure does not set forth an
objectively determinable definition of (i) the revenue that the Partnership is
entitled to collect in tolls and other charges in respect of the Series L3R
Assets and (ii) the expenses that the Partnership is entitled to allocate in
respect of the Series L3R Assets, and EECI L3R Sub and Lakehead GP are unable to
agree on an allocation arrangement pursuant to Section 10.5(c), such allocation
arrangement shall be determined through binding arbitration using three
arbitrators, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as supplemented to the extent necessary to determine
any procedural appeal questions by the Federal Arbitration Act (Title 9 of the
United States Code). If there is any inconsistency between this Section 10.5(d)
and the Commercial Arbitration Rules or the Federal Arbitration Act, the terms
of this Section 10.5(d) will control the rights and obligations of the parties.
Arbitration shall be initiated 180 days prior to the expiration of the L3R
Support Letters. Each of EECI L3R Sub and Lakehead GP shall appoint an
arbitrator at least 150 days prior to the expiration of the L3R Support Letters.
If either party fails for any reason to name an arbitrator within such period,
the other party shall petition to the American Arbitration Association for
appointment of an arbitrator for such party’s account. The two arbitrators so
chosen shall select a third arbitrator within 15 days after the second
arbitrator has been appointed. Each of EECI L3R Sub and Lakehead GP will pay the
compensation and expenses of the arbitrator named by or for it. The costs of
petitioning for the appointment of an arbitrator, if any, shall be paid by the
party that has failed to appoint an arbitrator in the requisite period. Each of
EECI L3R Sub and Lakehead GP will each pay one-half of the compensation and
expenses of the third arbitrator. All arbitrators must (a) be neutral Persons
who have never been officers, directors or employees of Enbridge Partners, EECI
or any of their Affiliates and (b) have not less than seven years experience in
the energy industry. The hearing will be conducted in Houston, Texas and
commence within 30 days after the selection of the third arbitrator. Within five
days after the selection of the third arbitrator, EECI L3R Sub and Lakehead GP
shall exchange in writing, signed by the respective parties, their respective
proposed allocation arrangements. At the conclusion of the hearing, the
arbitrators shall choose either the allocation arrangement of EECI L3R Sub or
the allocation arrangement of Lakehead GP, and shall have no power or authority
whatsoever to reach any other result. In making their choice, the arbitrators
shall choose the allocation arrangement that in their judgment most equitably
allocates the total Lakehead System revenues in a manner that best represents
the relative economic value of each Series as of the expiration of the L3R
Support Letters. EECI L3R Sub, Lakehead GP and the arbitrators shall proceed
diligently and in good faith in order that the determination may be made as
promptly as possible. Except as provided in the Federal Arbitration Act, the
decision of the arbitrators will be binding on and non-appealable by the
parties.

 

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(e)          Notwithstanding the provisions of this Section 10.5, following the
end of the L3R Surcharge Term, EECI L3R Sub and Lakehead GP may, by mutual
agreement, elect to remove the Line 3 Replacement Project from integrated common
carrier service within the Lakehead System and transfer it to stand alone
service either on a common carrier basis or on a contract basis, as permitted by
applicable law. Upon the execution of such agreement, the Series L3R Revenue
Entitlement shall be determined by reference to the applicable toll principles
established by applicable regulation or by contract for standalone service.

 

ARTICLE XI
DISSOLUTION AND LIQUIDATION

 

Section 11.1          Dissolution of the Partnership.

 

(a)          The Partnership shall not be dissolved by the admission of
additional Partners. The Partnership shall dissolve, and its affairs shall be
wound up, upon:

 

(i)          subject to Section 7.4(q), Section 7.5(q) and Section 7.6(q), an
election to dissolve the Partnership by the Managing General Partner of the
Partnership generally and the Managing General Partner of each Series that is
approved by a Majority in Interest of each of the Series AC and Series LH and a
Supermajority Interest of the Series EA, Series ME and Series L3R;

 

(ii)         the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act;

 

(iii)        the termination of the last remaining Series;

 

(iv)        at any time that there are no Limited Partners, unless the
Partnership is continued without dissolution in accordance with the Delaware
Act; or

 

(v)         any event that causes a General Partner to cease to be a general
partner of the Partnership generally or any Series; provided that the
Partnership shall not be dissolved and required to be wound up in connection
with any such event if (A) at the time of the occurrence of such event there is
at least one remaining general partner of the Partnership generally or any
Series who is hereby authorized to and does carry on the business of the
Partnership or (B) within 90 days after the occurrence of such event, a Majority
in Interest of each of the Series AC and Series LH and a Supermajority Interest
of the Series EA, Series ME and Series L3R, agree in writing or vote to continue
the business of the Partnership and to the appointment, effective as of the date
of such event, if required, of one or more additional general partners of the
Partnership generally and, to the extent applicable, each Series.

 

108

 

 

(b)          Upon the dissolution of the Partnership as provided herein, the
Partnership shall be wound up by winding up each Series in the manner provided
by Section 11.3.

 

Section 11.2          Termination of a Series.

 

(a)          a Series shall be terminated upon any of the following events:

 

(i)          the dissolution of the Partnership;

 

(ii)         the entry of a decree of judicial termination of such Series under
Section 17-218 of the Delaware Act;

 

(iii)        subject to Section 7.4(q), Section 7.5(q) and Section 7.6(q), the
approval of each General Partner of such Series and a Majority in Interest of
the Partnership Interests of such Series, in the case of the Series AC and
Series LH, or a Supermajority Interest of the Partnership Interests of such
Series, in the case of Series EA, Series ME and Series L3R; or

 

(iv)        any event that causes a General Partner to cease to be a general
partner of the Series; provided that the Series shall not be terminated and
required to be wound up in connection with any such event if (A) at the time of
the occurrence of such event there is at least one remaining general partner of
the Series who is hereby authorized to and does carry on the business of the
Series or (B) within 90 days after the occurrence of such event, a Majority in
Interest of each of the Series AC and Series LH and a Supermajority Interest of
the Series EA, Series ME and Series L3R, agree in writing or vote to continue
the business of the Series and to the appointment, effective as of the date of
such event, if required, of one or more additional general partners of the
Series.

 

(b)          The termination and winding up of a Series (other than the last
Series) shall not, in and of itself, cause a dissolution of the Partnership or
the termination of any other Series. The termination of a Series shall not
affect the limitation on liabilities of such Series or any other Series provided
by this Agreement, the Certificate of Limited Partnership and the Delaware Act.

 

Section 11.3          Winding Up, Liquidation and Distribution of Assets of the
Partnership or a Series Upon Dissolution of the Partnership or Termination of
Such Series.

 

(a)          Upon dissolution of the Partnership or termination of a Series, the
Managing General Partner of the Partnership generally or of such Series, as
applicable, shall commence to wind up the affairs of the Partnership (and all
Series) or such Series, as applicable; provided, however, that a reasonable time
shall be allowed for the orderly liquidation of the assets of any applicable
Series and the discharge of liabilities of the Partnership (and all Series) or
such Series, as applicable, to its creditors so as to enable the Partners to
minimize the normal losses attendant upon a liquidation. Upon dissolution of the
Partnership or termination of a Series after taking into account Regulatory
Allocations, all allocations of Profit, Losses and items thereof with respect to
a Series shall be made in a manner so that, to the greatest extent possible, the
Series Capital Accounts of each Partner in such Series shall equal the amount
that would be distributed to such Partner if liquidating distributions were made
in accordance with the Partners’ Percentage Interests in such Series. The
Partners of each Series being liquidated, as applicable, shall be furnished with
a statement prepared by a certified public accountant selected by the Managing
General Partner of the Partnership generally, in its sole discretion, at the
expense of such Series, if applicable, that shall set forth the assets and
liabilities of the Partnership (and all Series) or such Series (as applicable)
as of the date of termination. The proceeds of liquidation shall be distributed
in the following order and priority:

 

109

 

 

(i)          to creditors of each applicable Series, including Partners who are
creditors, to the extent otherwise permitted by law, in satisfaction (whether by
payment or the making of reasonable provision for payment thereof) of all
Liabilities of such Series, including, without limitation, the expenses incurred
in connection with the liquidation of the Partnership (and all Series) or such
Series;

 

(ii)         to the Partners of each Series being liquidated in accordance with
such Partners’ Series Capital Account balances for such Series (after giving
effect to all contributions, distributions, allocations and other Series Capital
Account adjustments for all taxable years, including the year during which such
termination and liquidation occurs) in compliance with Treasury Regulation §
1.704-1(b)(2)(ii)(b)(2); and

 

(iii)        if any Limited Partner has a deficit balance in its Series Capital
Account for such Series (after giving effect to all contributions, distributions
and allocations for all fiscal years, including the fiscal year during which
such liquidation occurs), such Limited Partner shall have no obligation to make
any contribution to the capital of the Partnership or of such Series with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Partnership, such Series or to any other Person for any purpose whatsoever.

 

(b)          Notwithstanding any other provisions of this Section 11.3, in the
event the Partnership is “liquidated” within the meaning of Treasury Regulation
§ 1.704-1(b)(2)(ii)(g), but such liquidation does not constitute a dissolution
of the Partnership, the assets of the Partnership (and each Series) shall not be
liquidated, the liabilities of the Partnership (and each Series) shall not be
paid or discharged and the affairs of the Partnership (and each Series) shall
not be wound up. Instead, solely for U.S. federal income tax purposes, the
Partnership (and each Series) shall be deemed to have distributed all of the
assets of the Partnership (and each Series) in kind to a new partnership in
exchange for an interest in such new partnership and, immediately thereafter,
the Partnership shall be deemed to liquidate by distributing interests in the
new partnership to the Partners.

 

(c)          The Managing General Partners and Partners shall comply with all
requirements of applicable law pertaining to the winding up of the affairs of
the Partnership or any Series and the final distribution of its assets.

 

110

 

 

Section 11.4          Cancellation of Certificate of Limited Partnership.

 

Upon the completion of the winding up of the Partnership and each Series and the
distribution of Series cash and property as provided in Section 11.3 in
connection with the liquidation of the Partnership and each Series, the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled, and such other actions as may be necessary to terminate the
Partnership and each Series shall be taken.

 

Section 11.5          Return of Capital Contributions.

 

(a)          Except as otherwise provided by applicable laws, upon termination
of a Series, each Partner of such Series shall look solely to the assets of such
Series for the return of its Capital Contributions made to such Series, and if
the assets of such Series remaining after satisfaction (whether by payment or
reasonable provision for payment) of the Liabilities of such Series are
insufficient to return such Capital Contributions, such Partner shall have no
recourse against any other Series, the Partnership or any Partner, except as
otherwise provided by law or by Section 6.2(c), 6.3(c), 6.4(c), 6.5(c), 6.6(c),
6.6(d), 6.6(e) or 6.6(f).

 

(b)          Except as provided in Section 6.2(c), 6.3(c), 6.4(c), 6.5(c),
6.6(c), 6.6(d), 6.6(e) or 6.6(f) or 11.7, no General Partner shall be personally
liable for, and shall have no obligation to contribute or loan any monies or
property to the Partnership or any Series to enable it to effectuate, the return
of the Capital Contributions of the Limited Partners, or any portion thereof, it
being expressly understood that any such return shall be made solely from Series
assets.

 

Section 11.6          Waiver of Partition.

 

To the maximum extent permitted by law, each Partner hereby waives any right to
partition of the Partnership or any Series property.

 

Section 11.7          Capital Account Restoration.

 

No Limited Partner shall have any obligation to restore any negative balance in
its Capital Account or any Series Capital Account upon liquidation of the
Partnership or such Series. A General Partner shall be obligated to restore any
negative balance in its Capital Account upon liquidation of its interest in the
Partnership or any Series by the end of the taxable year of the Partnership
during which such liquidation occurs, or, if later, within 90 days after the
date of such liquidation.

 

ARTICLE XII
AMENDMENT OF PARTNERSHIP AGREEMENT;
MEETINGS; RECORD DATE; MERGER

 

Section 12.1          Amendment.

 

Except as otherwise provided by this Agreement, this Agreement may be amended by
the Managing General Partner of the Partnership generally in writing without the
approval of any other Partner; provided that the provisions of Section 7.15
shall not be amended in any way that would adversely affect an Indemnitee
without the consent of such Indemnitee.

 

111

 

 

Section 12.2          Amendment Requirements.

 

Notwithstanding the provisions of Section 12.1, no provision of this Agreement
that establishes a Percentage Interest required to take any action with respect
to any Series shall be amended, altered, changed, repealed or rescinded in any
respect that would have the effect of reducing such voting percentage unless
such amendment is approved by the written consent or the affirmative vote of
holders of Partnership Interests of such Series whose aggregate Percentage
Interests constitute not less than the voting requirement sought to be reduced.

 

Section 12.3          Voting Rights.

 

Unless otherwise required by the Delaware Act or this Agreement, all actions,
approvals and consents to be taken or given by the Partners of a Series under
the Delaware Act, this Agreement or otherwise shall require the affirmative vote
or written consent of a Majority in Interest of the Partnership Interests of
such Series, in the case of the Series AC and Series LH, or a Supermajority
Interest of the Partnership Interests of such Series, in the case of Series EA,
Series ME and Series L3R, or if with respect to the Partnership as a whole, the
affirmative vote or written consent of a Majority in Interest of the Partnership
Interests of the Series AC and Series LH and a Supermajority Interest of the
Partnership Interests of the Series EA, Series ME and Series L3R.

 

Section 12.4          Meetings.

 

Meetings of the Partners of a Series, for any purpose or purposes, may be called
by the Managing General Partner of such Series or by any Partner or Partners of
such Series holding at least 25% of the Percentage Interests of such Series.

 

Section 12.5          Place of Meetings.

 

The Partner or Partners calling a meeting may designate any place, either within
or outside the State of Delaware, as the place of meeting for any meeting of the
Partners of a Series. If a designation is not made, the place of meeting shall
be the principal place of business of the Partnership. The Partners of a Series
may participate in a meeting of the Partners of such Series by means of
conference telephone or similar communications equipment; provided that all
individuals participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
If all the participants of a meeting are participating by conference telephone
or similar communications equipment, the meeting shall be deemed to be held at
the principal place of business of the Partnership.

 

112

 

 

Section 12.6          Notice of Meetings.

 

Written notice stating the place, day and hour of a meeting and the purpose or
purposes for which a meeting of the Partners of a Series is called shall be
delivered not less than five nor more than 30 days before the date of the
meeting, either personally or by mail, at the direction of the Partner or
Partners calling the meeting, to each Partner of such Series entitled to vote at
such meeting; provided, however, if the Partners of a Series representing a
Majority in Interest of the Partnership Interests of such Series, in the case of
the Series AC and Series LH, or a Supermajority Interest of the Partnership
Interests of such Series, in the case of Series EA, Series ME and Series L3R,
shall meet or participate in a meeting at any time and place, either within or
outside the State of Delaware, and consent (whether orally or in writing) to the
holding of a meeting at such time, such meeting shall be valid without call or
notice, and at such meeting lawful action may be taken.

 

Section 12.7          Quorum.

 

Partners of any Series holding a Majority in Interest of such Series entitled to
vote, represented in person or by proxy, shall constitute a quorum at any
meeting of Partners of such Series. In the absence of a quorum at any such
meeting, Partners of such Series holding a Majority in Interest of such Series
may adjourn the meeting from time to time for a period not to exceed 60 days
without further notice. However, if the adjournment is for more than 60 days, a
notice of the adjourned meeting shall be given to each Partner of such Series of
record entitled to vote at such meeting. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted that
might have been transacted at the meeting as originally noticed. The Partners of
such Series present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal during such meeting
of Partners of such Series whose absence would cause less than a quorum to be
present. If a quorum is present, the affirmative vote of Partners of such Series
holding a Majority in Interest of the Partnership Interests of such Series, in
the case of the Series AC and Series LH, or a Supermajority Interest of the
Partnership Interests of such Series, in the case of Series EA, Series ME and
Series L3R, shall be the act of the Partners of such Series, unless a vote of
greater or lesser proportion is otherwise expressly required or permitted by
this Agreement.

 

Section 12.8          Proxies.

 

At all meetings of Partners of a Series, a Partner of such Series may vote in
person or by proxy executed in writing by such Partner or by a duly authorized
attorney-in-fact. Such proxy shall be filed with the Partnership before or at
the time of the meeting. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy. A proxy may only
be given orally during a meeting taking place by conference telephone or similar
communications equipment and shall expire at the termination of such meeting.

 

Section 12.9          Action Without a Meeting.

 

Any action required or permitted to be taken at a meeting of Partners of any
Series may be taken without a meeting and without prior notice if the Managing
General Partner of such Series receives written consents by the Partners of such
Series representing the minimum number of votes that would be necessary to
authorize or to take such action at a meeting at which all Partners of such
Series were present and voted.

 

Section 12.10        Waiver of Notice.

 

When any notice is required to be given to any Partner, a waiver thereof in
writing signed by the Partner entitled to such notice, whether before, at or
after the time stated therein, or the presence and participation of such Partner
in a meeting, or the participation by such Partner in a meeting by conference
telephone or similar communications equipment, shall be equivalent to the giving
of such notice.

 

113

 

 

Section 12.11        Merger, Consolidation and Conversion.

 

(a)          Subject to Section 7.4, Section 7.5 and Section 7.6, the
Partnership may merge or consolidate with or into one or more corporations,
limited liability companies, statutory trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
partnership (whether general or limited (including a limited liability
partnership)) or convert into any such entity, whether such entity is formed
under the laws of the State of Delaware or any other state of the United States
of America, pursuant to a written plan of merger or consolidation or a written
plan of conversion, as the case may be, approved by the Managing General Partner
of the Partnership generally, a Majority in Interest of the Partnership
Interests of each of Series AC and Series LH and a Supermajority Interest of the
Series EA Partnership Interests, Series ME Partnership Interests and Series L3R
Partnership Interests.

 

(b)          Pursuant to Section 17-211(g) of the Delaware Act, an agreement of
merger or consolidation approved in accordance with this Section 12.11 may
(i) effect any amendment to this Agreement or (ii) effect the adoption of a new
partnership agreement for the Partnership. Any such amendment or adoption made
pursuant to this Section 12.11 shall be effective at the effective time or date
of the merger or consolidation.

 

(c)          The Managing General Partner of the Partnership generally shall
have the authority to convert the Partnership to a Delaware statutory trust if,
on the advice of counsel, such conversion (i) is necessary and advisable for
Wisconsin GP to have or retain condemnation authority under Wisc. Stat. § 32.01,
et seq. and (ii) would not result in a default under any Indebtedness of the
Partnership or Enbridge Partners existing at such time; provided that (A) the
trust is structured as a series trust pursuant to Del. Code tit. 12, § 3801, et
seq., (B) the relative rights and obligations of the Partners of each Series are
maintained in the trust (and each series thereof), (C) the beneficial owners of
each series of the trust own an undivided beneficial interest in all of the
assets of the Series of which they are beneficial owners, (D) the trust would be
disregarded for U.S. federal income tax purposes and (E) the limited liability
of the beneficial owners of the trust (and each series thereof) would be
expected to be respected in all relevant states to the same extent as that
applicable to limited partners of a Delaware limited partnership.

 

ARTICLE XIII
GENERAL PROVISIONS

 

Section 13.1          Addresses and Notices; Written Communications.

 

(a)          Any notice, demand, request or report required or permitted to be
given or made to a Partner under this Agreement shall be in writing and shall be
deemed given or made when delivered in person or when sent by first class United
States mail or by other means of written communication to the Partner at the
following addresses:

 

114

 

 

If to EECI, EECI EA Sub, EECI ME Sub or EECI L3R Sub, to:

 

Enbridge Inc.

3000 Fifth Avenue Place

425 – 1st Street S.W.

Calgary, Alberta

T2P 3L8 Canada

Attention: Executive Vice President and Chief Legal Officer

Facsimile: 403-231-3920

 

If to Enbridge Partners, Lakehead GP or Wisconsin GP, to:

 

Enbridge Energy Partners, L.P.

1100 Louisiana Street, Suite 3300

Houston, Texas 77001

Attention: Vice President—Law and Deputy General Counsel

Facsimile: 713-821-2000

 

Any notice, payment or report to be given or made to a Partner hereunder shall
be deemed conclusively to have been given or made, and the obligation to give
such notice or report or to make such payment shall be deemed conclusively to
have been fully satisfied, upon sending of such notice, payment or report to
such Partner at its address as shown on the records of the Partnership,
regardless of any claim of any Person who may have an interest in such
Partnership Interests by reason of any assignment or otherwise. Any notice to
the Partnership generally or any Series shall be deemed given if received by the
Managing General Partner of the Partnership generally or the applicable Series
at the principal office of the Partnership generally or the applicable Series
designated pursuant to Section 2.3. Each Managing General Partner may rely and
shall be protected in relying on any notice or other document from a Partner or
other Person if believed by it to be genuine.

 

(b)          The terms “in writing,” “written communications,” “written notice”
and words of similar import shall be deemed satisfied under this Agreement by
use of e-mail and other forms of electronic communication.

 

Section 13.2          Further Action.

 

The parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to achieve
the purposes of this Agreement.

 

Section 13.3          Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

 

115

 

 

Section 13.4          Integration.

 

This Agreement constitutes a single, non-severable agreement and the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.

 

Section 13.5          Creditors.

 

None of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership or any Series.

 

Section 13.6          Waiver.

 

No failure by any party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof shall constitute a waiver of any such
breach of any other covenant, duty, agreement or condition.

 

Section 13.7          Counterparts.

 

This Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.

 

Section 13.8          Applicable Law.

 

This Agreement shall be construed in accordance with and governed by the laws of
the State of Delaware, without regard to the principles of conflicts of law.

 

Section 13.9          Invalidity of Provisions.

 

If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

 

Section 13.10          Consent of Partners.

 

Each Partner hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote
or consent of less than all of the Partners of the Partnership or any Series,
such action may be so taken upon the concurrence of less than all of the
Partners and each Partner shall be bound by the results of such action.

 

Section 13.11          Third Party Beneficiaries.

 

Except for the provisions of Section 3.7(c) (which are intended to be for the
benefit of, and shall be enforceable by, each Material Subsidiary of Enbridge
Partners as if they were party to this Agreement), nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person other than
the parties hereto and Indemnitees any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

116

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, such
execution manifesting each party’s assent thereto and vote in favor thereof, as
of the date first written above.

 

  ENBRIDGE ENERGY PARTNERS, L.P.       By:    ENBRIDGE ENERGY MANAGEMENT,
L.L.C., as delegate of authority of Enbridge Energy Company, Inc., its general
partner         By: /s/ VALORIE J. WANNER   Name: Valorie Wanner   Title:
Corporate Secretary       ENBRIDGE PIPELINES (LAKEHEAD) L.L.C.         By: /s/
VALORIE J. WANNER   Name: Valorie Wanner   Title: Corporate Secretary      
ENBRIDGE PIPELINES (WISCONSIN) INC.         By: /s/ VALORIE J. WANNER   Name:
Valorie Wanner   Title: Corporate Secretary

 

Signature Page – Eighth Amended and Restated Agreement of Limited Partnership
of Enbridge Energy, Limited Partnership

 

 

 

 

  ENBRIDGE ENERGY COMPANY, INC.         By: /s/ NOOR S. KAISSI   Name: Noor S.
Kaissi   Title: Controller       ENBRIDGE PIPELINES (EASTERN ACCESS) L.L.C.    
    By: /s/ NOOR S. KAISSI   Name: Noor S. Kaissi   Title: Controller      
ENBRIDGE PIPELINES (MAINLINE EXPANSION) L.L.C.         By: /s/ NOOR S. KAISSI  
Name: Noor S. Kaissi   Title: Controller       ENBRIDGE PIPELINES (L3R) L.L.C.  
      By: /s/ NOOR S. KAISSI   Name: Noor S. Kaissi   Title: Controller

 

Signature Page – Eighth Amended and Restated Agreement of Limited Partnership
of Enbridge Energy, Limited Partnership

 

 

 

 

EXHIBIT A

 

Partnership Interests

 

Series AC Partners  Series AC Partnership Interest Enbridge Partners  99.999%
limited partner interest Lakehead GP  0.0005% general partner interest Wisconsin
GP  0.0005% general partner interest Total:  100.0000%

 

Series EA Partners  Series EA Partnership Interest  Initial Series EA
Capital Contribution   Maximum Commitment  EECI  74.99% limited partner
interest  $4,739,210.00   $1,922,743,600.00  EECI EA Sub  0.01% limited partner
interest   790.00    256,400.00  Enbridge Partners  24.9995% limited partner
interest   3,159,960.50    640,987,180.00  Lakehead GP  0.0005% general partner
interest   39.50    12,820.00  Total:  100.0000%  $7,900,000.00  
$2,564,000,000.00               Series ME Partners  Series ME Partnership
Interest  Initial Series ME
Capital Contribution   Maximum Commitment  EECI  74.99% limited partner
interest  $2,999,500   $1,893,497,500.00  EECI ME Sub  0.01% limited partner
interest   500.00    252,500.00  Enbridge Partners  24.9995% limited partner
interest   1,999,975.00    631,237,375.00  Lakehead GP  0.0005% general partner
interest   25.00    12,625.00  Total:  100.0000%  $5,000,000.00  
$2,525,000,000.00                 Series L3R Partners  Series L3R Partnership
Interest  Initial Series L3R
Capital Contribution   Maximum Commitment  EECI  98.99% limited partner
interest  $449,930,548.15   $2,612,346,100.00  EECI L3R Sub  0.01% limited
partner interest   45,452.12    263,900.00  Enbridge Partners  0.999% limited
partner interest   4,540,666.91    26,363,610.00  Lakehead GP  0.0005% general
partner interest   2,272.61    13,195.00  Wisconsin GP  0.0005% general partner
interest   2,272.61    13,195.00  Total:  100.0000%  $454,521,212.39  
$2,639,000,000.00 

 

Series LH Partners  Series LH Partnership Interest Enbridge Partners  99.999%
limited partner interest Lakehead GP  0.0005% general partner interest Wisconsin
GP  0.0005% general partner interest Total:  100.0000%

 

A-1

 

 

EXHIBIT B

 

Exclusive Series AC Assets

 

1.Approximately 325 miles of new 36-inch diameter crude oil pipeline from the
U.S.-Canadian border near Neche, North Dakota to Superior, Wisconsin.

 

2.Three (3) new pump stations located at Viking, Clearbrook and Deer River,
Minnesota.

 

3.30-inch delivery piping with manifold connections and related control valves
at Clearbrook, Minnesota.

 

4.Five (5) 200,000 barrel break out tanks at Superior, Wisconsin.

 

5.36-inch diameter tank lines from each tank at Superior, Wisconsin.

 

6.Three (3) 1,000 hp booster pumps at Superior, Wisconsin.

 

7.36-inch line from tank manifold to connections with Southern Access expansion
and Line 6A.

 

8.All service agreements, easements and rights-of-way related solely to the
operation of the Alberta Clipper System.

 

9.All permits, licenses, consents and approvals related solely to the operation
of the Alberta Clipper System.

 

10.All rights to the Series AC Revenue Requirement.

 

11.All shipping, transportation and storage agreements or arrangements related
solely to the Alberta Clipper System.

 

12.All other property interests (including real and personal property and
tangible and intangible property) solely related to the Alberta Clipper System.

 

B-1

 

 

EXHIBIT C

 

Exclusive Series EA Assets

 

Eastern Access Phase I

 

1.One (1) 333,000 barrel (working volume) external floating roof tank at
Flanagan Terminal.

 

2.Three (3) 750 hp booster pumps at Flanagan Terminal.

 

3.Three (3) 3,000 hp mainline pumps for Line 62 at Flanagan Terminal.

 

4.Two (2) new pump stations on Line 62 at Kankakee, Illinois and Reddick,
Illinois (Greenfield). Each station to consist of three (3) 3,000 hp mainline
pumps.

 

5.Nine (9) new 42-inch tank lines and new NPS36 manifold at Hartsdale Terminal
to allow for full connectivity between all tanks and incoming and outgoing
pipelines.

 

6.Three (3) 1,500 hp booster pumps and three (3) 400 hp booster pumps at
Hartsdale Terminal.

 

7.160 miles of new 36-inch Pipeline between Griffith, Indiana and Stockbridge,
Michigan.

 

8.Three (3) new pump stations on Line 6B at Griffith, Indiana (4 x 5,750 hp
pumps), Niles, Michigan (2 x 5,750 hp pumps) and Mendon, Michigan (3 x 5,750 hp
pumps).

 

9.One (1) 333,000 barrel (working volume) internal floating roof tank at
Stockbridge Terminal.

 

10.Five (5) additional drag reducing agent skids and replacement of three (3)
existing drag reducing agent skids at stations on Line 5.

 

11.Line 6B Griffith Connectivity – EA 1 Portion.

 

12.Line 5 hydrotest.

 

13.Line 5 Pre-hydrotest digs.

 

14.Line 5 hydrotest water treatment.

 

15.Line 6B decommissioning – EA 1 portion.

 

C-1

 

 

16.All service agreements, easements and rights-of-way related solely to the
operation of Eastern Access Phase I.

 

17.All permits, licenses, consents and approvals related solely to the operation
of Eastern Access Phase I.

 

18.All rights to the Series EA Phase I Revenue Entitlement.

 

19.All shipping, transportation and storage agreements or arrangements related
solely to Eastern Access Phase I.

 

20.All other property interests (including real and personal property and
tangible and intangible property) solely related to Eastern Access Phase I.

 

Eastern Access Phase II

 

1.One (1) 533,000 barrel (working volume) external floating roof tank at
Hartsdale Terminal.

 

 

2.50 miles of new 30-inch pipeline between the Ortonville, Michigan pumping
station and the St. Clair River.

 

3.Four (4) new pump stations on Line 6B at Stockbridge, Michigan (3 x 5,750 hp
Pumps), Howell, Michigan (3 x 5,750 hp Pumps), Ortonville, Michigan (3 x 5,750
hp Pumps), and St. Clair, Michigan (2 x 5,750 hp Pumps).

 

4.Line 6B Griffith Connectivity – EA 2 Portion.

 

5.Expansion of existing custody transfer metering manifolds at Marysville
Terminal.

 

6.Line 6B decommissioning – EA 2 Portion.

 

7.All service agreements, easements and rights-of-way related solely to the
operation of Eastern Access Phase II.

 

8.All permits, licenses, consents and approvals related solely to the operation
of Eastern Access Phase II.

 

9.All rights to the Series EA Phase II Revenue Entitlement.

 

10.All shipping, transportation and storage agreements or arrangements related
solely to Eastern Access Phase II.

 

C-2

 

 

11.All other property interests (including real and personal property and
tangible and intangible property) solely related to Eastern Access Phase II.

 

Eastern Access Phase III

 

1.Upgrades to nine (9) existing pump units (impeller and volute changeouts) on
Line 6B at Griffith, Indiana; Niles, Michigan and Mendon, Michigan.

 

2.Eleven (11) 42-inch tank lines, new 48-inch booster pump header, three (3) 900
hp booster pumps at Griffith Terminal to allow for full connectivity of incoming
Line 78 and outgoing Line 6B.

 

3.Addition of a 5,750 hp pump on Line 6B at each of the following sites:
Griffith, Indiana; Niles, Michigan and Mendon, Michigan.

 

4.Five (5) additional 333,000 barrel tanks at Stockbridge Terminal.

 

5.Six (6) 850 hp, two (2) 350 hp and two (2) 300 hp booster pump additions and
two (2) new 600 hp transfer pumps at Stockbridge Terminal.

 

6.Line 6B Griffith Connectivity – EA 3 Portion.

 

7.All service agreements, easements and rights-of-way related solely to the
operation of Eastern Access Phase III.

 

8.All permits, licenses, consents and approvals related solely to the operation
of Eastern Access Phase III.

 

9.All rights to the Series EA Phase III Revenue Entitlement.

 

10.All shipping, transportation and storage agreements or arrangements related
solely to Eastern Access Phase III.

 

11.All other property interests (including real and personal property and
tangible and intangible property) solely related to Eastern Access Phase III.

 

C-3

 

 

EXHIBIT D

 

Exclusive Series ME Assets

 

Chicago Connectivity Project

 

1.76 miles of new 36-inch pipeline between Flanagan Terminal and Hartsdale
Terminal.

 

2.Three (3) 900 hp booster pumps at Flanagan Terminal.

 

3.One (1) new pump station at Flanagan, Illinois (4 x 5,750 hp pumps).

 

4.All service agreements, easements and rights-of-way related solely to the
operation of the Chicago Connectivity Project.

 

5.All permits, licenses, consents and approvals related solely to the operation
of the Chicago Connectivity Project.

 

6.All rights to the Chicago Connectivity Revenue Entitlement.

 

7.All shipping, transportation and storage agreements or arrangements related
solely to the Chicago Connectivity Project.

 

8.All other property interests (including real and personal property and
tangible and intangible property) solely related to the Chicago Connectivity
Project.

 

Mainline Expansion Phase I

 

1.Install five (5) additional 6000 hp pumps at three (3) existing stations:
Viking, Minnesota one (1), Clearbrook, Minnesota two (2) and Deer River,
Minnesota two (2); and replace six (6) existing pump impellers (2 per station)
at same stations.

 

2.Two (2) additional 333,000 barrel tanks at Superior, Wisconsin.

 

3.Three (3) additional 504,000 barrel tanks at Flanagan, Illinois.

 

4.One (1) new pump station at Sheldon, Wisconsin (1 x 6,000 hp pumps).

 

5.Upgrades to three (3) existing pump stations at Superior, Wisconsin (2 x 6,000
hp pump additions plus three (3) impeller replacements); Vesper, Wisconsin (1 x
6,000 hp pump addition plus two (2) impeller replacements) and Delavan,
Wisconsin (three (3) impeller replacements).

 

6.All service agreements, easements and rights-of-way related solely to the
operation of Mainline Expansion Phase I.

 

D-1

 

 

7.All permits, licenses, consents and approvals related solely to the operation
of Mainline Expansion Phase I.

 

8.All rights to the Series ME Phase I Revenue Entitlement.

 

9.All shipping, transportation and storage agreements or arrangements related
solely to Mainline Expansion Phase I.

 

10.All other property interests (including real and personal property and
tangible and intangible property) solely related to Mainline Expansion Phase I.

 

Mainline Expansion Phase II

 

1.Three (3) additional 504,000 barrel tanks at Superior, Wisconsin.

 

2.Two (2) additional 333,000 barrel tanks at Flanagan, Illinois.

 

3.Eight (8) pump changeouts at Superior, Wisconsin (three (3)); Vesper,
Wisconsin (two (2)) and Delavan, Wisconsin (three (3)).

 

4.Six (6) 6,000 hp pump additions at Superior, Wisconsin (two (2)); Sheldon,
Wisconsin (two (2)); Vesper, Wisconsin (one (1)) and Delavan, Wisconsin (two
(2)).

 

5.Twelve (12) new stations comprised of forty-one (41) 6000 hp units.

 

6.Terminal modifications at Superior, including tank lines, field boosters,
manifold upgrades, ESB and VFD buildings.

 

7.All service agreements, easements and rights-of-way related solely to the
operation of Mainline Expansion Phase II.

 

8.All permits, licenses, consents and approvals related solely to the operation
of Mainline Expansion Phase II.

 

9.All rights to the Series ME Phase II Revenue Entitlement.

 

10.All shipping, transportation and storage agreements or arrangements related
solely to Mainline Expansion Phase II.

 

11.All other property interests (including real and personal property and
tangible and intangible property) solely related to Mainline Expansion Phase II.

 

D-2

 

 

Mainline Expansion Phase III

 

1.Four (4) new pump stations at Donaldson, Minnesota (3 x 5500 hp pumps);
Plummer, Minnesota (3 x 5500 hp pumps); Cass Lake, Minnesota (3 x 5500 hp pumps)
and Floodwood, Minnesota (3 x 6000 hp pumps).

 

2.Modifications to three (3) existing pump stations (impeller and volute
replacements) at Viking, Minnesota (three (3) units); Clearbook, Minnesota (four
(4) units) and Deer River, Minnesota (four (4) units).

 

3.All service agreements, easements and rights-of-way related solely to the
operation of Mainline Expansion Phase III.

 

4.All permits, licenses, consents and approvals related solely to the operation
of Mainline Expansion Phase III.

 

5.All rights to the Series ME Phase III Revenue Entitlement.

 

6.All shipping, transportation and storage agreements or arrangements related
solely to Mainline Expansion Phase III.

 

7.All other property interests (including real and personal property and
tangible and intangible property) solely related to Mainline Expansion Phase
III.

 

D-3

 

 

EXHIBIT E

 

Exclusive Series L3R Assets

 

Line 3 Replacement Project

 

1.15 miles of new 34-inch pipeline between the United States/Canada border and
valve site MP 789.45.

 

2.360 miles of new 36-inch pipeline between valve site MP 789.45 and the
Superior Terminal.

 

3.Eight new pump stations along the pipeline corridor comprised of twenty-three
(23) 7,000 hp pumps.

 

4.Modifications to terminals in Clearbrook, Minnesota and Superior, Wisconsin

 

5.Decommissioning of terminals relating to the existing Line 3 facilities.

 

6.Decommissioning of original Line 3 facilities.

 

7.All service agreements, easements and rights-of-way related exclusively to
L3R.

 

8.All permits, licenses, consents and approvals related exclusively to L3R.

 

9.All rights to the Series L3R Revenue Entitlement.

 

10.All shipping, transportation and storage agreements or arrangements related
exclusively to L3R.

 

11.All other property interests (including real and personal property and
tangible and intangible property) related exclusively to L3R.

 

E-1

 

 

EXHIBIT F

 

Shared Assets

 

ARTICLE I
DEFINITIONS

 

1.1          Additional Defined Terms. The following additional definitions
shall be for all purposes, unless otherwise clearly indicated to the contrary,
applied to the terms used in this Exhibit F. Unless specifically defined in this
Exhibit F, terms defined in the Agreement are used in this Exhibit F as defined
in the Agreement:

 

“Capital Improvement Project” has the meaning assigned to such term in Section
4.3(a) of this Exhibit F.

 

“Force Majeure Event” has the meaning assigned to such term in Section 5.1(b) of
this Exhibit F.

 

“Governmental Authority” shall mean (i) the United States of America or Canada,
or any state, province or political subdivision thereof within the United States
of America or Canada and (ii) any court or any governmental or administrative
department, commission, board, bureau or agency of the United States of America
or Canada, or of any state, province or political subdivision thereof within the
United States of America or Canada.

 

“Improvement Series” has the meaning assigned to such term in Section 4.3(a) of
this Exhibit F.

 

“Rejecting Series” has the meaning assigned to such term in Section 4.3(b) of
this Exhibit F.

 

“Shared Asset Manager” has the meaning assigned to such term in Section 4.2(a)
of this Exhibit F.

 

“Shared Assets” means collectively, the Shared Contracts, the Shared Facilities,
the Shared Permits and the Shared Real Property Rights.

 

“Shared Contract Party” means one or more of the Partnership generally, the
Series AC, the Series EA, the Series ME, the Series L3R or the Series LH,
depending on which is or are parties to a particular Shared Contract.

 

“Shared Contracts” means the contracts, agreements and commitments of the
Partnership generally or a Series existing as of the Series AC Closing Date or
entered into thereafter that, in each case, are related to or necessary for the
operation of the assets of two or more Series, including the contracts described
in Schedule 1 to this Exhibit F.

 

F-1

 

 

“Shared Facilities” means the information systems, control systems, electrical
infrastructure and equipment, data lines, emergency response equipment,
communication lines, maintenance facilities, valves, motor control centers,
buildings, pump station locations, terminal facilities, lab facilities, fire
protection systems, tank farms and other facilities or systems of the
Partnership generally or a Series existing as of the Series AC Closing Date or
developed, constructed or acquired thereafter that, in each case, are related to
or necessary for the operation of the assets of two or more Series.

 

“Shared Permits” means the licenses, consents, approvals, registrations,
franchises, permits and authorizations of the Partnership generally or a Series
existing as of the Series AC Closing Date or acquired thereafter that, in each
case, are related to or necessary for the operation of the assets of two or more
Series.

 

“Shared Real Property Rights” means the easements, leasehold rights, real
property at station sites, other surface use rights and rights-of-way of the
Partnership generally or a Series existing as of the Series AC Closing Date or
acquired thereafter that, in each case, are related to or necessary for the
operation of the assets of two or more Series.

 

ARTICLE II
DESIGNATION OF SHARED ASSETS

 

2.1          Shared Facilities. Each Series is hereby granted an unconditional,
irrevocable, perpetual royalty free right to use the Shared Facilities to the
extent necessary in connection with the construction, operation or maintenance
of the assets of such Series.

 

2.2          Shared Contracts. Each Shared Contract Party shall hold each Shared
Contract to which it is a party for the benefit of the Partnership generally,
the Series AC, the Series EA, the Series ME, the Series L3R and the Series LH to
the extent related to or necessary for the operation of the assets of such
Series or the Partnership generally. Each of the Partnership generally, the
Series AC, the Series EA, the Series ME, the Series L3R and the Series LH shall
have the benefit of all rights available to the Shared Contract Party under each
Shared Contract to the extent related to or necessary for the operation of the
assets of such Series or the Partnership generally. All decisions in respect of
the Shared Contracts shall be made by the Shared Asset Managers in accordance
with the terms of Section 4.2 of this Exhibit F. The Shared Contract Party shall
comply with such decisions or delegation of authority, as applicable, with
respect to each Shared Contract. Without limiting the foregoing, promptly upon
receipt and delivery as applicable, the Shared Contract Party shall provide (a)
to the Shared Asset Managers, copies of all notices and other correspondence
relating to each Shared Contract, (b) to the Series AC Partners, copies of all
notices and other correspondence relating to the Series AC Tariff Term Sheet,
(c) to the Series EA Partners, copies of all notices and other correspondence
relating to the Series EA Tariff Term Sheets, (d) to the Series ME Partners,
copies of all notices and other correspondence relating to the Series ME Tariff
Term Sheets and (e) to the Series L3R Partners, copies of all notices and other
correspondence relating to the L3R Support Letters. In addition, the Shared
Contract Party shall immediately notify the Shared Asset Managers if a default
or other material event occurs in respect of a Shared Contract (such as an event
that affects the validity or enforceability of a Shared Contract or an event
that may result in an early termination of a Shared Contract).

 

F-2

 

 

2.3          Shared Real Property Rights. Each Series is hereby granted an
unconditional, irrevocable, perpetual royalty free right to use the Shared Real
Property Rights to the extent necessary in connection with the construction,
operation or maintenance of the assets of such Series.

 

2.4          Shared Permits. The Partnership shall hold the Shared Permits for
the benefit of each Series to the extent related to or necessary for the
operation of the assets of such Series. Each Series shall have the benefit of
all rights available to the Partnership under the Shared Permits to the extent
related to or necessary for the operation of the assets of such Series. All
decisions in respect of the Shared Permits shall be made by the Shared Asset
Managers in accordance with the terms of Section 4.2 of this Exhibit F. The
Partnership shall comply with such decisions or delegation of authority, as
applicable. Without limiting the foregoing, promptly upon receipt and delivery
as applicable, the Partnership shall provide to the Shared Asset Managers copies
of all notices and other correspondence relating to the Shared Permits.

 

2.5          Designation of Shared Assets. The designated interest of each
Series in a Shared Asset shall be allocated to the Series pro rata in accordance
with a ratio the numerator of which is the costs incurred by each Series to
develop, construct or acquire such Shared Asset and the denominator of which is
the aggregate costs incurred by the Series AC, the Series EA, the Series ME, the
Series L3R and the Series LH collectively to develop, construct or acquire such
Shared Asset; provided, however, that all of the Shared Assets existing as of
the Series AC Closing Date will be allocated to the Series LH, except for any of
the Shared Assets existing as of the Series AC Closing Date that have been
developed, constructed or acquired by the Partnership in connection with the
Alberta Clipper Project, which shall be allocated to the Series AC; and
provided, further, that any of the Shared Assets existing as of the Series EA
Closing Date that have been developed, constructed or acquired by the
Partnership in connection with the Eastern Access Project shall be allocated to
the Series EA; and provided further, that any of the Shared Assets existing as
of the Series ME Closing Date that have been developed, constructed or acquired
by the Partnership in connection with the Mainline Expansion Project shall be
allocated to the Series ME. The rights of each Series to use the Shared Assets
as described in this Article II shall not be affected by the terms of this
Section 2.5.

 

ARTICLE III
ADDITIONAL SERIES

 

3.1          Additional Series. In the event that, subsequent to the date of
this Agreement, an additional Series is established, then each Series shall
cooperate in good faith with such additional Series and the Partnership
generally, if necessary, to amend the Agreement and this Exhibit F as
appropriate to reflect the addition of such Series and for the applicable assets
to be shared among the Series on mutually agreeable terms, reasonably determined
on a basis similar to the terms set forth in this Exhibit F.

 

F-3

 

 

ARTICLE IV
COVENANTS OF THE PARTIES

 

4.1          Use of Shared Assets.

 

(a)          Rights to Use. Each Series acknowledges that the Series AC, the
Series EA, the Series ME, the Series L3R and the Series LH will have the right
to use the Shared Assets in accordance with the terms of this Exhibit F.

 

(b)          Liability. Each Series shall be responsible for its Proportionate
Share of Shared Liabilities with respect to each Shared Asset pursuant to
Section 3.7(d) of the Agreement.

 

(c)          Cooperation. Each Series shall cooperate in good faith with each
other with respect to the use of the Shared Assets and will not use the Shared
Assets in a manner that interferes unreasonably with the operations of any other
Series or the Partnership generally.

 

(d)          Priority of Use. In the event of a conflict limiting the ability of
one or more Series to make use of a particular Shared Asset to the extent
desired by such Series, priority of use shall be given for the Series AC, the
Series EA, the Series ME, the Series L3R or the Series LH to use such Shared
Asset in the following order:

 

(i)first, to the Series AC, the Series EA, the Series ME, the Series L3R or the
Series LH, to the extent necessary to address any emergency;

 

(ii)second, prior to the Eastern Access Final In-Service Date, Mainline
Expansion Final In-Service Date and L3R In-Service Date, as applicable, to the
Series EA, Series ME and Series L3R equally, to the extent necessary in
connection with the construction of the Eastern Access Project, the Mainline
Expansion Project and the Line 3 Replacement Project; provided that the Series
EA’s, Series ME’s and Series L3R’s use of the Shared Assets pursuant to this
clause (ii) shall not result in interruptions that could materially and
adversely affect the business operations of the Series AC, Series EA, Series ME,
the Series L3R or Series LH without the consent of the affected Series’ Shared
Asset Manager; and

 

(iii)third, in the proportions required by the Series AC, the Series EA, the
Series ME, the Series L3R and the Series LH to conduct their respective
operations, provided that in the event of a conflict limiting the ability of one
or more Series to make use of a particular Shared Asset to the extent desired by
such Series, the Managing General Partner of the Partnership generally shall
determine priority of use for each Series based on the needs of each Series in
respect of such Shared Asset.

 

(e)          Standard of Care. Each Series shall act with respect to the Shared
Assets (i) in a professional manner and in accordance with generally accepted
industry standards, (ii) in accordance with the Partnership’s policies,
procedures and requirements, as determined by the Managing General Partner of
the Partnership generally, and (iii) in accordance with applicable law in all
material respects. Each Series shall use commercially reasonable efforts to do
or cause to be done all such things as shall be necessary and proper with
respect to the Shared Assets to ensure that the rights of the other Series in
respect of the Shared Assets shall be preserved for the benefit of such Series.

 

F-4

 

 

4.2          Management of Shared Assets.

 

(a)          Managers. Each Series hereby appoints the Managing General Partner
of such Series (each a “Shared Asset Manager”) to serve as the primary point of
contact for communications between the Series relating to the day-to-day
operations of the Shared Assets, to have overall responsibility for managing and
coordinating the performance of the appointing Series’ obligations under this
Exhibit F, and to be authorized to act for and on behalf of the appointing
Series concerning all matters relating to this Exhibit F.

 

(b)          Decisions.

 

(i)All decisions in respect of the Shared Assets shall require the unanimous
decision of the Shared Asset Managers of each Series unless otherwise required
by the terms of this Agreement. The Shared Asset Managers shall act reasonably,
taking into account the considerations of each Series, in connection with all
decisions regarding the Shared Assets.

 

(ii)In the event of a conflict between the Shared Asset Managers of any Series,
then (1) if one Series has priority of use pursuant to Section 4.1(d) of this
Exhibit F, then such Series shall prevail and (2) other decisions shall be made
by the Shared Asset Manager of the Series that is reasonably likely to bear the
greater proportion of the costs relating to such matter.

 

(iii)If the Shared Asset Managers are not the same Person, then notwithstanding
the foregoing, the following actions shall require the prior written consent of
a Majority in Interest of each of the Series AC and Series LH and a
Supermajority Interest of the Series EA, Series ME and Series L3R:

 

(A)the disposition, transfer, sale, conveyance or exchange of any Shared Asset
in excess of $25,000,000, in each case; or

 

(B)material modifications of the Shared Contracts, Shared Real Property Rights
or Shared Permits.

 

(c)          Meetings. The Shared Asset Managers agree to have meetings if
called at any time upon five Business Days prior written notice by a Shared
Asset Manager. Each Series shall make available at such meetings their personnel
who are familiar with the details of the particular Shared Assets under review.

 

F-5

 

 

4.3          Capital Improvements.

 

(a)          A Series (the “Improvement Series”) may submit from time to time to
each other Series written requests to undertake capital expenditures or capital
improvement projects relating to the Shared Assets (each, a “Capital Improvement
Project”). Any such requests shall specify in reasonable detail the Capital
Improvement Project, any permits that may be required, the estimated cost of
such Capital Improvement Project, any proposed changes to this Exhibit F, and
any other relevant information relating to such Capital Improvement Project.
Each Series agrees that it will consider in good faith any such request, but a
Series shall have no obligation to agree to undertake any Capital Improvement
Project and may reject any request by the other Series. If the Series agree to
undertake any Capital Improvement Project, the Series shall cooperate in good
faith to reach agreement on the allocation of responsibility for all costs
associated with such Capital Improvement Project.

 

(b)          A rejecting Series (the “Rejecting Series”) shall provide to each
other Series a written explanation for the rejection of any request to undertake
a Capital Improvement Project. If the Improvement Series, together with any
other Series that does not reject the request to undertake the Capital
Improvement Project (collectively, the “Non-Rejecting Series”), desires to
undertake a Capital Improvement Project relating to the Shared Assets despite
the Rejecting Series’ rejection, then the Non-Rejecting Series (i) may undertake
such Capital Improvement Project, (ii) shall share the entire cost and Liability
associated with such Capital Improvement Project, (iii) shall be entitled to all
the benefits and rights of use associated with such Capital Improvement Project
and (iv) shall develop such Capital Improvement Project in a manner that does
not interfere unreasonably with the operations of any Rejecting Series or the
Partnership generally.

 

4.4          Nature of Right to Use. The right to use the Shared Assets as
provided in this Exhibit F (i) is an integral, non-severable part of the
Agreement, (ii) is an integral part of the Partnership Interests of the Series
and the assets of the Series designated under the Agreement and (iii) shall not
be deemed to be an executory contract or agreement that can be rejected or
otherwise terminated in any bankruptcy, receivership or similar proceeding of
the Partnership.

 

4.5          Valuation. In any valuation of the assets of a Series, the value of
such assets shall include the continuing right to use the Shared Assets as
provided in this Exhibit F.

 

ARTICLE V
FORCE MAJEURE

 

5.1          Force Majeure Event.

 

(a)          Subject to the following provisions of this Article V, a Series
shall not be in default hereunder or responsible for any loss or damage to the
other Series resulting from any delay in performing or failure to perform any
obligation of such Series under this Exhibit F (other than payment obligations)
to the extent such failure or delay is caused by a Force Majeure Event.

 

(b)          “Force Majeure Event” means the following events, conditions and
circumstances, except to the extent any of the following is within the
reasonable control of, could be sufficiently alleviated by the reasonable
efforts of, or caused by the negligence, breach, default or misconduct of the
Series claiming the Force Majeure Event:

 

F-6

 

 

(i)any act of God or the public enemy, fire, explosion, perils of the sea,
flood, drought, war, terrorism, riot, sabotage or embargo, and any interruption
of or delay in transportation, or any inadequacy or shortage or failure or
breakdown of supply of raw materials or equipment resulting from the foregoing;

 

(ii)any labor disputes from whatever cause arising and whether or not the
demands of the employees involved are within the power of the claiming Series to
concede; or

 

(iii)compliance with any order, action, direction or request of any Governmental
Authority or with any applicable law not brought about by any action or omission
on the part of the Series claiming the Force Majeure Event.

 

5.2          Force Majeure Notice. The Series whose ability to perform is
affected by a Force Majeure Event must, as a condition to its right to suspend
its obligations under Section 5.1 of this Exhibit F, (i) be actually prejudiced
by such Force Majeure Event and (ii) promptly give the other Series notice
setting forth the particulars of the Force Majeure Event and, to the extent
possible, the expected duration of the Force Majeure Event. Such notice shall
also include a description of the steps taken and proposed to be taken to lessen
and cure the Force Majeure Event. The cause of the Force Majeure Event shall so
far as commercially reasonable be remedied with all reasonable dispatch, except
that no Series shall be obligated to resolve any labor disputes other than as it
shall determine to be in its best interests.

 

ARTICLE VI
MISCELLANEOUS

 

6.1          Conflict with Agreement. The terms of the Agreement, excluding this
Exhibit F, shall govern to the extent of any inconsistency or conflict between
the terms of the Agreement, excluding this Exhibit F, and this Exhibit F.

 

6.2          Amendments. The terms of this Exhibit F shall be amended to the
extent required to conform with any amendment or modification to the other terms
of the Agreement.

 

6.3          Governing Law. This Exhibit F shall be governed by and construed
under the laws of the State of Delaware (without regard to conflict of laws
principles), all rights and remedies being governed by said laws.

 

F-7

 

 

Schedule 1

 

Shared Contracts

 

1.CAPP contracts that are related to or necessary for the operation of the
Alberta Clipper System, the Eastern Access Project, the Mainline Expansion
Project, the Line 3 Replacement Project and the assets or operations of the
Series LH.

 

2.Power supply contracts that are related to or necessary for the operation of
the Alberta Clipper System, the Eastern Access Project, the Mainline Expansion
Project, the Line 3 Replacement Project and the assets or operations of the
Series LH.

 

3.Communication contracts that are related to or necessary for the operation of
the Alberta Clipper System, the Eastern Access Project, the Mainline Expansion
Project, the Line 3 Replacement Project and the assets or operations of the
Series LH.

 

4.Emergency response contracts that are related to or necessary for the
operation of the Alberta Clipper System, the Eastern Access Project, the
Mainline Expansion Project, the Line 3 Replacement Project and the assets or
operations of the Series LH.

 

F-8

 

 

EXHIBIT G

 

Sample Illustration of Purchase Price Mechanics

 

The following calculations are for illustrative purposes to demonstrate how the
purchase price to be paid for the EA Call Option Interest, the ME Call Option
Interest or the L3R Call Option Interest would be calculated pursuant to
sections 4.10(c), 4.12(c) or 4.14(c), respectively. For purposes of this
example, it is assumed that the EA Call Option has been exercised pursuant to
Section 4.10.

 

Assumptions:

 

Portion of up to 15% EA Call Option to be Exercised   10% Total capital
contributed by all parties into Series EA at time of exercise  $2,000,000,000 
AFUDC on Series EA at time of exercise  $75,000,000  Accumulated depreciation at
time of exercise  $50,000,000 

 

Sample Calculation:

 

[img01pg142_ex10-1.jpg]

 

G-1