Exhibit 10.6

 

Execution Version

 

THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

 

OF

 

IROQUOIS GAS TRANSMISSION SYSTEM, L.P.

 

Dated as of: May 1, 2016

 

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TABLE OF CONTENTS

 

1.

Partners

2

 

 

 

2.

Definitions

2

 

 

 

3.

Intentionally Deleted

11

 

 

 

4.

Formation and Purpose of the Limited Partnership

11

 

 

 

5.

Percentage Interests; Capital Contributions

15

 

 

 

6.

Allocation of Profits and Losses

24

 

 

 

7.

Distributions

27

 

 

 

8.

Accounting And Taxation

28

 

 

 

9.

Management Of The Partnership

31

 

 

 

10.

Limitation Of Liabilities

40

 

 

 

11.

Transfer Or Pledge Of Partnership Interests

41

 

 

 

12.

Termination And Right Of Withdrawal

45

 

 

 

13.

General

49

 

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THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

 

This Third Amended and Restated Limited Partnership Agreement (this
“Agreement”), dated as of May 1, 2016, is made by and among the following
parties (each, a “Partner” and, collectively, the “Partners”): (i) TransCanada
Iroquois Ltd. (hereinafter called “TCIL”), a corporation organized under the
laws of the State of Delaware, with its principal offices and address at 700
Louisiana Street, Suite 700, Houston, Texas 77002-2700; (ii) TCPL Northeast Ltd.
(hereinafter called “TCPL”), a corporation organized under the laws of the State
of Delaware, with its principal offices and address at 700 Louisiana Street,
Suite 700, Houston, Texas 77002-2700; (iii) Dominion Iroquois, Inc. (“Dominion
Iroquois”), a corporation organized under the laws of the State of Delaware,
with its principal offices and address at 445 West Main Street, Clarksburg, West
Virginia 26302; and (iv) Iroquois GP Holding Company, LLC (hereinafter called
“DMLP”), a limited liability company organized under the laws of the State of
Delaware, with its principal offices and address at 120 Tredegar Street,
Richmond, VA 23219.

 

RECITALS

 

A.                                    The Partnership was formed as a limited
partnership on December 11, 1989 upon the filing of the Certificate of Limited
Partnership with the Secretary of State of the State of Delaware. To govern the
Partnership, the then partners executed the Limited Partnership Agreement dated
as of November 30, 1989 (as amended, the “Original LP Agreement”), pursuant to
the Revised Uniform Limited Partnership Act of the State of Delaware, as amended
(the “Partnership Act”).

 

B.                                    The Original LP Agreement was amended and
restated pursuant to the Amended and Restated Limited Partnership Agreement
dated as of February 28, 1997, as amended by a first amendment thereto dated as
of January 27, 1999, a second amendment thereto dated as of May 4, 2001 and a
third amendment thereto dated as of September 1, 2005 (as amended, the “Restated
LP Agreement”).

 

C.                                    The Restated LP Agreement was amended and
restated pursuant to the Second Amended and Restated Limited Partnership
Agreement dated as of September 28, 2015 (the “Second Restated LP Agreement”).

 

D.                                    Prior to the execution of this Agreement,
(i) the general and limited partnership interests of the Partnership held by TEN
Transmission Company were transferred to TCPL, and (ii) a 0.65% partnership
interest of the Partnership held by Dominion Iroquois was transferred to TCPL.

 

E.                                     The Partners now desire to amend and
restate the Second Restated LP Agreement in its entirety as set forth in this
Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Partners hereby agree that the Second Restated LP
Agreement is hereby amended and restated in its entirety as follows:

 

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1.                         Partners. The Partners of the Partnership are as
follows:

 

1.1               The General Partners of the Partnership are TCIL and DMLP.

 

1.2               The Limited Partners of the Partnership are TCIL, TCPL,
Dominion Iroquois and DMLP.

 

2.                          Definitions. Unless otherwise required by the
context, the terms defined in this Section 2 shall, for all purposes of this
Agreement, have the respective meanings set forth below:

 

Additional Commitment Date.        The date on which the Management Committee
votes to commit the Partnership to an Incremental Expansion pursuant to
Section 4.9.

 

Additional Necessary Regulatory Approvals.                             All
licenses, certificates, permits, approvals and determinations (all of which must
be final and non-appealable) from United States and Canadian authorities having
jurisdiction as may be required in connection with (a) the construction or
acquisition and operation of an Incremental Expansion, other than those
licenses, certificates, permits, approvals and determinations of a nature not
customarily obtained prior to commencement of construction or acquisition of
facilities of the nature of the Incremental Expansion and (b) the export, import
and transportation if any, of the gas to be transported as a result of such
Incremental Expansion.

 

Additional Partner.                       A Partner under this Agreement
admitted in accordance with the provisions of Section 11.4.

 

Adjusted Capital Account.                             The Capital Account
maintained for each Partner (a) increased by any amounts that the Partner is
obligated to contribute or restore to the Partnership pursuant to the
penultimate sentences of Treasury Regulations Sections 1.704-2(g)(l) and
1.704-2(i)(5), and (b) decreased by any amounts described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) with respect to such
Partner.

 

The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

 

Adjusted Capital Account Deficit.                                      The
deficit balance, if any, in the Adjusted Capital Account of a Partner.

 

Affiliate.                             Any Person which, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with any Person. For purposes of the foregoing, “control” and its
derivatives, with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership or control of voting
securities or general partnership interests, by contract or otherwise. For the
avoidance of doubt, as of the date hereof, (i)

 

2

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Dominion Iroquois and DMLP shall be deemed Affiliates of each other and of
Dominion Midstream Partners, LP, and (ii) TCPL and TCIL shall be deemed
Affiliates of each other and of TC PipeLines, LP.

 

Agreement. “Agreement” has the meaning set forth in the first paragraph hereof.

 

Available Cash. The sum, determined as of the end of each fiscal quarter, of:

 

(i)                                     All cash and cash equivalents of the
Partnership on hand at the end of such fiscal quarter; less

 

(ii)                                  the amount of any cash reserves
established by the Management Committee:

 

(a)                                to provide for the proper conduct of the
business of the Partnership (including cash reserves necessary for the
Partnership to fund future contemplated capital expenditures set forth in an
approved capital expenditure plan) subsequent to the fiscal quarter in which
Available Cash is being computed; or

 

(b)                                to comply with applicable law or any loan
agreement, security agreement, mortgage, debt instrument or other agreement or
obligation to which the Partnership is a party or by which it is bound or its
assets are subject.

 

Capital Account.                                             The capital account
maintained for each Partner on the Partnership’s books and records in accordance
with the following provisions:

 

(i)                                    To each Partner’s Capital Account there
shall be added (i) such Partner’s Capital Contributions, (ii) such Partner’s
allocable share of Profits and any items of income or gain that are specially
allocated to such Partner pursuant to Section 6.2 or Section 6.3 hereof or other
provisions of this Agreement, and (iii) the amount of any Partnership
liabilities assumed by such Partner or which are secured by any property
distributed to such Partner.

 

(ii)                                 From each Partner’s Capital Account there
shall be subtracted (i) the amount of (A) cash and (B) the Gross Asset Value of
any Partnership assets (other than cash) distributed to such Partner pursuant to
any provision of this Agreement, (ii) such Partner’s allocable share of Losses
and any other items in the nature of expenses or losses that are specially
allocated to such Partner pursuant to Section 6.2 or Section 6.3 hereof or other
provisions of this Agreement, and (iii) liabilities of such Partner assumed by
the Partnership or which are secured by any property contributed by such Partner
to the Partnership.

 

(iii)                               In the event any Interest is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
Interest.

 

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(iv)                              In determining the amount of any liability for
purposes of subparagraphs (i) and (ii) above, there shall be taken into account
Code Section 752(c) and any other applicable provisions of the Code and
Regulations.

 

(v)                                The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 and
shall be interpreted and applied in a manner consistent with such Treasury
Regulations. In the event that the Tax Matters Partner believes that it would be
prudent to modify the manner in which the Capital Accounts, or any additions
thereto or subtractions therefrom, are computed in order to comply with such
Regulations, after consultation in good faith with all Partners and the
Partnership’s tax advisors, the Tax Matters Partner may make such modification,
provided that it is not likely to have a material effect on the amounts
distributable to any Partner pursuant to Section 12.5.1 hereof upon the
dissolution of the Partnership. The Tax Matters Partner also shall, in good
faith and on a commercially reasonable basis, (i) make any adjustments to the
Capital Accounts that are necessary or appropriate to maintain equality between
the aggregate Capital Accounts of the Partners and the amount of capital
reflected on the Partnership’s balance sheet, as computed for book purposes, in
accordance with Treasury Regulations Section 1.704-l(b)(2)(iv)(q) and (ii) make
any appropriate modifications to the Capital Accounts in the event unanticipated
events might otherwise cause this Agreement not to comply with Treasury
Regulations Section 1.704-1(b).

 

Capital Contribution.           The aggregate amount of cash and the initial
Gross Asset Value of any property other than cash contributed to the Partnership
pursuant to Section 5 hereof by such Partner. Any reference in this Agreement to
a Capital Contribution of a Partner shall include a Capital Contribution
contributed by its predecessors in interest.

 

Certified Public Accountants.                A firm of independent public
accountants selected from time to time by the Management Committee.

 

Code.                                               The Internal Revenue Code of
1986 and any successor statute, as amended from time to time.

 

Cost of an Incremental Expansion.                                All costs and
expenses, including any allowance for funds used during construction (commonly
referred to as an “AFUDC”), incurred, assumed or paid by the Partnership for the
acquisition, planning, design, engineering, financing, construction and start-up
of an Incremental Expansion, and securing Additional Necessary Regulatory
Approvals therefor.

 

Deadlock.                          A deadlock in the Management Committee over
any decision with respect to the Partnership or its operations which, pursuant
to the terms of this Agreement, is within the authority of the Management
Committee to decide.

 

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Defaulted Contribution.                                           “Defaulted
Contribution” has the meaning set forth in Section 5.5.3(a).

 

Defaulting Partner.                        A Partner which is in default of any
of its material obligations hereunder, including, without limitation, (a) its
failure to make Capital Contributions on or before the date such payments are
due as set forth in a request delivered to such Partner pursuant
Section 5.3.2(d), or (b) its failure to perform its indemnification obligation
pursuant to Section 10.4.

 

Depreciation.  An amount determined for each fiscal year or other period for
which the Partnership is required to make allocations pursuant to Section 6, and
equal to the depreciation, amortization or other cost recovery deduction
allowable for federal income tax purposes with respect to an asset for such
fiscal year or other period; provided, however, if the Gross Asset Value of an
asset differs from its adjusted basis for federal income tax purposes at the
beginning of such fiscal year or other period, Depreciation for such fiscal year
or other period shall be determined pursuant to the “remedial” method under the
rules prescribed by Treasury Regulations Section 1.704-3(d).

 

Dispute.                                   Any dispute, controversy or claim,
whether based on contract, tort, statute or other legal or equitable theory
(including but not limited to any claim of fraud, misrepresentation or
fraudulent inducement or any question of validity or effect of this Agreement),
arising out of, or related in any way, directly or indirectly, to this
Agreement, including the breach or termination thereof.

 

Dominion Iroquois.                                       “Dominion Iroquois” has
the meaning set forth in the first paragraph hereof.

 

Economic Risk of Loss.                                               “Economic
Risk of Loss” has the meaning set forth in Treasury Regulations
Section 1.752-2(a).

 

Estimated Cost of an Incremental
Expansion.                                                                              
The total estimated Cost of an Incremental Expansion as approved from time to
time by vote of the members of the Management Committee.

 

Extended Cure Period.                                                  “Extended
Cure Period” has the meaning set forth in Section 5.3.4(a).

 

Facilities.                             The real, personal and mixed property
(whether tangible or intangible) owned and operated by the Partnership for the
transmission of natural gas or otherwise, as such property may exist from time
to time, with such changes in such property as may be approved by the Management
Committee (including, but not limited to, Incremental Expansions approved by the
Management Committee pursuant to Section 4.9).

 

FERC.                                           The Federal Energy Regulatory
Commission or any commission, agency or other governmental body succeeding to
the powers of such commission.

 

5

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Financing Commitment. Definitive agreements between financial institution(s) and
the Partnership or the Financing Corporation pursuant to which such financial
institution(s) agree, subject to the conditions set forth therein, to lend money
to, or purchase securities of, the Partnership or the Financing Corporation, the
proceeds of which shall be used to finance all or a portion of the Facilities or
of an Incremental Expansion. It is the intention of the Partnership to ensure
that the terms of Financing Commitments shall limit the claim of the parties
thereunder to the assets of the Partnership and shall waive any rights of such
parties and other beneficiaries to proceed against the Partners individually. No
Financing Commitment may require a Partner to cause its Affiliate to undertake
any obligation in connection with any Financing Commitment without said
Affiliate’s consent. No Financing Commitment may bind any Limited Partner unless
such Financing Commitment expressly recognizes the limitations of liability of a
Limited Partner set forth in Section 10.2 of this Agreement.

 

Financing Corporation. A corporation wholly owned by the Partnership which may
be organized for the purpose of issuing securities, the proceeds from which are
to be advanced directly or indirectly to the Partnership to finance in whole or
in part the cost of the Facilities or the Cost of an Incremental Expansion.

 

Gas Transportation Contracts. The gas transportation contracts by and between
the Partnership and the Shippers for the transportation of natural gas.

 

General Partner. Each of the Partners designated as a General Partner in
Section 1.1, or any Additional Partner admitted to the Partnership as a General
Partner pursuant to Section 11 or any Person substituted as a General Partner
pursuant to this Agreement.

 

Gross Asset Value. The adjusted basis of an asset as determined for federal
income tax purposes, except as follows:

 

(i)                                     the initial Gross Asset Value of any
asset contributed by a Partner to the Partnership shall be the gross fair market
value of such asset, as agreed to by the Partners;

 

(ii)                                  the Gross Asset Value of all Partnership
assets shall be adjusted to equal their respective gross fair market values, as
determined by the Partners, in connection with: (i) the acquisition of an
additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis Capital Contribution (including in
connection with any Capital Contributions made pursuant to a Capital Call with
respect to which there is a Capital Call Default and irrespective of whether any
Default Contributions are made with respect to such Capital Call Default) or in
exchange for the performance of more than a de minimis amount of services to or
for the benefit of the Partnership; (ii) the distribution by the Partnership to
a Partner of more than a de minimis amount of Partnership assets as
consideration for an interest in the Partnership; (iii) the liquidation of the
Partnership within

 

6

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the meaning of Treasury Regulations Section 1.704-l(b)(2)(ii)(g) (other than
pursuant to Code Section 708(b)(l)(B)); (iv) the acquisition of an interest in
the Partnership by any new or existing Partner upon the exercise of a
non-compensatory option or warrant in accordance with Treasury Regulations
Section 1.704-l(b)(2)(iv)(s); (v) upon the contribution by an existing Partner
of an interest in the Partnership to another partnership; or (vi) any other
event to the extent determined by the Partners to be necessary to properly
reflect the Gross Asset Values in accordance with the standards set forth in
Treasury Regulations Section 1.704-l(b)(2)(iv)(q); provided, however,
adjustments pursuant to clause (i) and clause (ii) of this sentence shall be
made only if the Partners reasonably determine that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership; and provided, further, that, consistent with the
immediately preceding proviso, no adjustments will be made pursuant to clause
(i) of this sentence in connection with Capital Contributions made pursuant to a
Capital Call with respect to which there is no Capital Call Default. If any
non-compensatory options or warrants are outstanding upon the occurrence of an
event described in clauses (i)-(v) of this subparagraph (ii), the Partnership
shall adjust the Gross Asset Values of its properties in accordance with
Treasury Regulations Sections 1.704- 1(b)(2)(iv)(f)(l) and
1.704-1(b)(2)(iv)(h)(2);

 

(iii)                              the Gross Asset Value of any Partnership
asset distributed to any Partner shall be the gross fair market value of such
asset on the date of distribution, as determined by the distributee Partner and
the other Partners; and

 

(iv)                              the Gross Asset Values of Partnership assets
shall be adjusted to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 734(b) (including pursuant to Treasury
Regulations Section 1.734- 2(b)(l), but only to the extent that such adjustments
are taken into account in determining Capital Accounts pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset
Value shall not be adjusted pursuant to this subparagraph (iv) to the extent
that an adjustment pursuant to subparagraph (ii) above is made in connection
with a transaction that would otherwise result in an adjustment pursuant to this
subparagraph (iv).

 

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (i), (ii) or (iv) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.

 

Incremental Expansion. Any facilities installed or acquired to modify, improve
or expand the Facilities or any portion thereof, or gas transportation or
delivery facilities installed or acquired, except in connection with customary
maintenance, to permit the delivery capacity and/or throughput of the Facilities
to be increased.

 

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Interest. “Interest” has the meaning set forth in Section 11.1.1.

 

Limited Partner. Each of the Partners designated as a Limited Partner in
Section 1.2, or any Additional Partner admitted to the Partnership as a Limited
Partner pursuant to Section 11 or any Person which becomes a transferee of all
or part of the Percentage Interest of a Limited Partner or is otherwise
substituted as a Limited Partner pursuant to this Agreement

 

Management Committee.                                   The Management Committee
provided for in Section 9.

 

Majority Vote.                                      The affirmative vote,
approval or consent of Representatives representing Partners who, in the
aggregate, own greater than 60% of the Percentage Interests in the Partnership.

 

Minimum Gain.                                             “Minimum Gain” has the
meaning set forth m Treasury Regulations Section 1.704-2(d).

 

Non-Defaulting Partner.                                           
“Non-Defaulting Partner” has the meaning set forth in Section 5.3.4(a).

 

Nonrecourse Deductions. “Nonrecourse Deductions” has the meaning set forth in
Treasury Regulations Section 1.704-2(b).

 

Operating Agreement. The Amended and Restated Operating Agreement dated as of
February 28, 1997, between the Partnership and the Operator, as the same may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof and thereof.

 

Operator. Iroquois Pipeline Operating Company, a Delaware corporation.

 

Original LP Agreement. “Original LP Agreement” has the meaning set forth in the
Recitals.

 

Parent.                       Any Person which owns directly or indirectly more
than 50% of the outstanding voting interests or general partnership interests of
a Partner.

 

Partner. Each of the Persons executing this Agreement, whether so executing as a
General Partner or a Limited Partner, and any Person substituted for an original
Partner and any Additional Partner which is admitted to the Partnership pursuant
to Section 11, excluding any Withdrawn Partner or any Person for whom another
Person has been substituted as a Partner in the Partnership pursuant to this
Agreement.

 

Partner Loans. “Partner Loans” has the meaning set forth in Section 5.5.3(b).

 

Partner Nonrecourse Debt. “Partner Nonrecourse Debt” has the meaning set forth
in Treasury Regulations Section 1.704-2(b)(4).

 

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Partner Nonrecourse Debt Minimum Gain. “Partner Nonrecourse Debt Minimum Gain”
has the meaning set forth in Treasury Regulations Section 1.704-2(i)(2).

 

Partner Nonrecourse
Deductions.                                                           “Partner
Nonrecourse Deductions” has the meaning set forth in Treasury Regulations
Section 1.704-2(i)(l).

 

Partnership.                                    Iroquois Gas Transmission
System, L.P., a Delaware limited partnership.

 

Partnership Act. “Partnership Act” has the meaning set forth in the Recitals.

 

Percentage Interest. That percentage interest for each Partner determined in
accordance with Section 5.1. The initial total Percentage Interest of each
Partner, and the Percentage Interest of each Partner as either a General Partner
or a Limited Partner, shall be as set forth on Schedule A hereto. To the extent
that the Percentage Interest of any Partner as a General Partner or a Limited
Partner immediately prior to the effectiveness of this Agreement differs from
such Percentage Interest as set forth on Schedule A hereto, the initial
Percentage Interest of such Partner as a General Partner or a Limited Partner
shall become, upon the effectiveness of this Agreement, the Percentage Interest
as a General Partner or a Limited Partner as set forth on Schedule A hereto.
Upon any transfer or allocation of all or part of the Percentage Interest of a
Limited Partner to any Person in accordance with the provisions of this
Agreement, the Person to which such transfer or allocation is made shall hold
the transferred or allocated Percentage Interest as a Limited Partner.

 

Person.                       An individual, corporation, voluntary association,
joint stock company, business trust, partnership or other entity.

 

“Profits” or “Losses”. An amount determined for each fiscal year or other period
for which the Partnership is required to make allocations pursuant to Section 6
and that is equal to the Partnership’ s taxable income or loss for such fiscal
year or other period, determined in accordance with Code Section 703(a) (but
including in taxable income or loss, for this purpose, all items of income,
gain, loss or deduction required to be stated separately pursuant to Code
Section 703(a)(l)), with the following adjustments:

 

(i)                                     any income of the Partnership exempt
from federal income tax and not otherwise taken into account in computing
Profits or Losses pursuant to this definition shall be added to such taxable
income or loss;

 

(ii)                                  any expenditures of the Partnership
described in Code Section 705(a)(2)(b) (or treated as expenditures described in
Code Section 705(a)(2)(b) pursuant to Treasury Regulations
Section 1.704-l(b)(2)(iv)(i)) and not otherwise taken into account in computing
Profits or Losses pursuant to this definition shall be subtracted from such
taxable income or loss;

 

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(iii)                              in the event the Gross Asset Value of any
Partnership asset is adjusted in accordance with subparagraph (ii) or (iii) of
the definition of “Gross Asset Value,” the amount of such adjustment shall be
taken into account as gain (if the adjustment increases the Gross Asset Value of
the Partnership asset) or loss (if the adjustment decreases the Gross Asset
Value of the Partnership asset) from the disposition of such asset for purposes
of computing Profits or Losses;

 

(iv)                             gain or loss resulting from any disposition of
any Partnership asset with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the asset disposed of, notwithstanding that the adjusted tax basis of
such asset differs from its Gross Asset Value;

 

(v)                                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 fiscal
year or other period, computed in accordance with the definition of
“Depreciation”;

 

(vi)                             to the extent an adjustment to the adjusted tax
basis of any asset pursuant to Code Section 734(b) is required, pursuant to
Treasury Regulations Section 1.704-l(b)(2)(iv)(m)(4), to be taken into account
in determining Capital Account balances as a result of a distribution other than
in liquidation of a Partner’s interest in the Partnership, 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

 

(vii)                           notwithstanding any other provisions of this
definition, any items which are specially allocated pursuant to Section 6.2 or
Section 6.3 shall not be taken into account in computing Profits or Losses.

 

Related Party Contract. “Related Party Contract” has the meaning set forth in
Section 9.5.

 

Representative.                           The individual designated by a Partner
or Partners to serve as a member of the Management Committee.

 

Required Accounting Practice. The accounting rules and regulations, if any, at
the time prescribed by the regulatory body or bodies under the jurisdiction of
which the Partnership is at the time operating and, to the extent of matters not
covered by such rules and regulations, generally accepted accounting principles
as practiced in the United States at the time prevailing for companies engaged
in a business similar to that of the Partnership.

 

Restated LP Agreement. “Restated LP Agreement” has the meaning set forth in the
Recitals.

 

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Retained Voting Rights.   Matters requiring a Super-Majority Vote in accordance
with (i) subparagraphs (b), (e), (j), (k), (l) and (m) of Section 9.2.7; (ii)
Subparagraphs (f) and (i) of Section 9.2.7 unless such actions are proposed to
be taken in order to satisfy the obligations of a Defaulting Partner; and
(iii) subparagraph (n) of Section 9.2.7 with respect to the foregoing items
only.

 

Second Restated LP Agreement.  “Second Restated LP Agreement” has the meaning
set forth in the Recitals.

 

Section 5.5.3(a)Notice. “Section 5.5.3(a) Notice” has the meaning set forth in
Section 5.5.3(a).

 

Section 5.5.3(c)Notice. “Section 5.5.3(c) Notice” has the meaning set forth in
Section 5.5.3(c).

 

Shippers. Those Persons which, with the approval of the Management Committee,
propose to enter into or have entered into a Gas Transportation Contract with
the Partnership for the transportation of gas through the Facilities.

 

Successor Partnership.   “Successor Partnership” has the meaning set forth in
Section 12.6.1.

 

Super-Majority Vote. The affirmative vote, approval or consent of
Representatives representing Partners who, in the aggregate, own greater than
85% of the Percentage Interests in the Partnership.

 

Tax Matters Partner. The Partner designated as the tax matters Partner pursuant
to Section 8.6.2 of this Agreement.

 

TCIL. “TCIL” has the meaning set forth in the first paragraph hereof.

 

TCPL. “TCPL” has the meaning set forth in the first paragraph hereof.

 

Treasury Regulations.      The income tax regulations, including temporary
regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

 

Withdrawn Partner. A Person who is deemed to have permanently withdrawn from the
Partnership pursuant to Section 12.3 of this Agreement.

 

3.                          Intentionally Deleted.

 

4.                          Formation and Purpose of the Limited Partnership.

 

4.1             Formation. Partnership Act, etc. The Partners hereby continue
the Partnership as a limited partnership, pursuant to the Partnership Act, for
the purposes stated herein. The rights and liabilities of all Partners currently
existing or hereafter admitted shall be as provided in the Partnership Act,
except as herein otherwise expressly

 

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provided. Contemporaneously with the execution of this Agreement, the General
Partners have executed and caused to be filed an Amended and Restated
Certificate of Limited Partnership in accordance with the provisions of the
Partnership Act (which certificate, among other things, identifies the name and
mailing address of each General Partner), and shall execute and cause to be
filed, as appropriate, such further amendments to such certificate and other
documents as are or become necessary or advisable, as determined by the General
Partners.

 

4.2             Name. The name of the Partnership shall be the Iroquois Gas
Transmission System, L.P., or such other name as the General Partners may
designate, upon written notice to the Partners, with such variations thereof as
may be necessary to comply with the laws of other states, or Canadian provinces,
within which the Partnership may do business.

 

4.3             Purpose. The Partnership shall plan, design, construct, own and
operate the Facilities.

 

4.4             Regulatory Status. The Partners acknowledge that the Partnership
will be a “natural gas company” under the Natural Gas Act.

 

4.5             Representations and Warranties Concerning Formation of the
Partnership.

 

4.5 .1                              General Representations and Warranties. Each
Partner, at the time of its execution of this Agreement, represents and warrants
that, the execution and delivery of this Agreement, the formation or
continuation of the Partnership, as the case may be, and the performance of its
obligations hereunder will not contravene or conflict with any provision of law
or of the charter or bylaws of such Partner, or contravene, conflict with or
constitute a default under, any indenture, mortgage, instrument or other
agreement of such Partner or any order, rule or regulation of any court,
commission or governmental agency applicable to such Partner. Each Partner
further represents, warrants and covenants that (a) it is, and for so long as it
is a Partner hereunder it will do or cause to be done all things necessary to
continue to be, a corporation, limited liability company, or partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of formation, and (b) the execution and delivery of this Agreement
has been duly authorized, and this Agreement, when executed and delivered by
such Partner, will be its valid and binding agreement, enforceable in accordance
with the terms hereof.

 

4.6             Offices. The principal offices of the Partnership shall be at
One Corporate Drive, Shelton, Connecticut 06484, or at such place as the
Management Committee may from time to time determine. Written notice of any
change in such offices shall be given to each Partner. The registered office of
the Partnership in the State of Delaware shall be c/o Corporation Service
Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle,
Delaware 19808 and the registered agent

 

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of the Partnership for the service of process shall be Corporation Service
Company at the same address.

 

4.7             Qualification In Other Jurisdictions. The General Partners shall
cause the Partnership to be qualified or registered under assumed or fictitious
names or foreign limited partnership statutes or similar laws, or take other
appropriate action, in any jurisdiction in which the Partnership owns property
or transacts business if such qualification, registration or other appropriate
action is reasonably necessary or reasonably anticipated to be necessary, or
reasonably requested by any Limited Partner, in order to protect the limited
liability of the Limited Partner(s), or to permit the Partnership lawfully to
own property or transact business in such jurisdiction. The General Partners
shall execute and cause to be filed and published all such certificates,
notices, statements or other instruments reasonably necessary or reasonably
anticipated to be necessary, or reasonably requested by any Limited Partner, to
permit the Partnership to conduct business as a limited partnership in all
jurisdictions where the Partnership elects to do business and to maintain the
limited liability of the Limited Partner(s).

 

4.8             Incremental Expansion.

 

4.8.1                                 Any Partner or Partners (or the Operating
Company) proposing that the Partnership construct or acquire an Incremental
Expansion shall notify the other Partners and the Management Committee of the
amount of additional capacity requested and the date on which such capacity is
requested to be available, and shall provide a detailed explanation of the
reasons why such capacity is being requested.

 

4.8.2                                 As soon as possible after providing such
notice, the Partner or Partners or the Operating Company proposing an
Incremental Expansion shall prepare and mail to each Partner:

 

(a)                    an estimate of the cost of the proposed Incremental
Expansion and, if available, the proposed financing plan; and

 

(b)                    appropriate engineering data, flow diagrams and maps
describing such Incremental Expansion in such detail as is required for filing
as exhibits to the related application to PERC for authorization to construct or
acquire and operate the proposed Incremental Expansion.

 

The Partnership shall reimburse the Partner or Partners proposing an Incremental
Expansion for the cost of preparing and mailing the above materials, if and when
the Management Committee votes to commit to construct or acquire the Incremental
Expansion or a modified version thereof, pursuant to Section 4.9.

 

4.8.3                                 Within 60 days after the information
described in Section 4.8.2 has been received by each Partner, the Management
Committee shall vote on

 

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Whether to proceed with the development of the proposed Incremental Expansion as
set forth in Section 4.8.2. Upon the vote of the Management Committee to proceed
with the development of the proposed Incremental Expansion, which shall be the
same vote required in Section 4.9 to commit to construct or acquire an
Incremental Expansion, the Partnership shall proceed with such development,
including but not limited to the acquisition of Additional Necessary Regulatory
Approvals and Financing Commitments. A vote to proceed with the development of
an Incremental Expansion shall be without prejudice to the vote on whether the
Partnership shall be committed to construct or acquire such Incremental
Expansion under Section 4.9.2.

 

4.9             Commitment To Construct Or Acquire An Incremental Expansion.

 

4.9.1                                 Except as provided in Section 5.2.1, the
Partnership shall not incur any material costs or obligations with respect to an
Incremental Expansion or be obligated under any Financing Commitment relating to
an Incremental Expansion (except for a normal financing commitment fee) until
(a) the Additional Necessary Regulatory Approvals have been obtained, (b) such
Financing Commitments, if any, as may be required in the opinion of the
Management Committee for such Incremental Expansion have been obtained, (c) gas
transportation contracts for the use of the capacity of the Incremental
Expansion have been executed by the Partnership and by one or more shippers
approved by the Management Committee, (d) the Estimated Cost of an Incremental
Expansion has been determined and (e) the Management Committee has approved a
commitment to construct or acquire such Incremental Expansion as provided in
Section 4.9.2.

 

4.9.2                                  Immediately following the last to occur
of the events referred to in clauses (a), (b) and (d) of Section 4.9.1, and the
satisfaction of all conditions set forth in the precedent agreements for
execution of the gas transportation contracts by the shippers which will utilize
the capacity of the Incremental Expansion (other than the vote of the Management
Committee to commit to construct or acquire the Incremental Expansion), or at
such time as determined by the Management Committee, the Management Committee
shall vote on whether the Partnership shall be committed to construct or acquire
the Incremental Expansion. The vote required for a commitment to construct or
acquire an Incremental Expansion, or for a waiver of the conditions precedent to
such a commitment, shall be (i) a Super-Majority Vote if the estimated cost of
such Incremental Expansion as determined pursuant to Section 4.8.2(a) exceeds
Ten Million Dollars, and (ii) a Majority Vote if the estimated cost of such
Incremental Expansion as determined pursuant to Section 4.8.2(a) is Ten Million
Dollars or less.

 

4.10      Regulatory And Financing Decisions With Respect To Incremental
Expansions. All votes on regulatory and financial matters with respect to an
Incremental Expansion, including without limitation the filing of applications
for Additional

 

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Necessary Regulatory Approvals or amendments thereto, acceptance of all such
approvals and amendments, the filing of any tariff or tariff revisions relating
to an Incremental Expansion, and execution of financing agreements and
commitments related to an Incremental Expansion, shall be subject to the same
voting standard set forth in Section 4.9 for approval of the commitment to
construct or acquire; provided, however, that approval of the Management
Committee shall not be required in the case of the acceptance by the Operator,
pursuant to Section 3.1.2 of the Operating Agreement, of Additional Necessary
Regulatory Approvals and amendments thereto if the terms of such approvals do
not vary materially from the authorizations sought in the related regulatory
applications.

 

4.11      Notwithstanding Sections 4.8, 4.9 or 4.10, Management Committee
approval to develop or construct or acquire an Incremental Expansion shall not
be required in the case of Incremental Expansions or other capital facilities
which (!) do not exceed in any one instance a cost of one million dollars
($1,000,000); (2) will be constructed pursuant to the Partnership’s blanket
certificate; and (3) have been included in the most recent budget approved by
the Management Committee pursuant to Section 5.2 of the Operating Agreement, and
all regulatory and financing decisions with respect to the same shall be made by
the Operator without further approval of the Management Committee.

 

5.                          Percentage Interests; Capital Contributions.

 

5.1             Percentage Interests. Each Partner’s Percentage Interest as of
any date shall equal the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of such Partner’s Capital Contributions to the
Partnership as of such date, and the denominator of which is the total amount of
Capital Contributions made by all of the Partners to the Partnership as of such
date; provided that, for purposes of this Section 5.1, the initial Capital
Contribution of each Partner shall be deemed to equal the amount of its Capital
Account as of the date hereof. As of the date hereof, each Partner’s Percentage
Interest is set forth on Schedule A to this Agreement. Unless otherwise agreed
by unanimous consent of the Partners, in the event of (a) the withdrawal of a
Partner pursuant to Section 12.3 or (b) a transfer of a Partner’s Interest
pursuant to Section 11 or Section 5.5.3(c), or (c) the implementation of the
remedy set forth in Section 5.5.3(a) in connection with a Defaulted
Contribution, the Percentage Interests set forth on Schedule A shall be adjusted
accordingly, rounded to the nearest ten-thousandth of one percent.

 

5.2             Additional Capital Contributions.

 

5.2.1                                 Whenever the Management Committee shall
vote to proceed with the development of a proposed Incremental Expansion as
provided in Section 4.8.3, the Management Committee shall cause to be prepared
and filed on behalf of the Partnership appropriate applications for Additional
Necessary Regulatory Approvals. Each Partner shall make a cash Capital
Contribution to the Partnership, as provided in Section 5.3, in an amount equal
to its Percentage Interest of that portion, if any, of the Estimated

 

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Cost of an Incremental Expansion relating to the preparation and prosecution of
the application(s) for Additional Necessary Regulatory Approvals and the
acquisition of the Financing Commitments determined from time to time by the
Management Committee as being required to be paid from Capital Contributions
made by the Partners prior to the Additional Commitment Date relating thereto.

 

5.2.2                                 After any Additional Commitment Date
relating to an Incremental Expansion approved pursuant to Section 4.9, each
Partner shall make a cash Capital Contribution to the Partnership, as provided
in Section 5.3, in an amount, if any, equal to its Percentage Interest of the
Estimated Cost of an Incremental Expansion, less (a) any amount relating to such
Incremental Expansion previously contributed by such Partner to the Cost of an
Incremental Expansion, (b) its Percentage Interest of the amount committed under
the Financing Commitments, if any, relating to such Incremental Expansion and
(c) its Percentage Interest of the amount, if any, the Management Committee may
determine from time to time is available from the Partnership to finance such
Incremental Expansion.

 

5.2.3                                 In the event that, at any time or times,
the Management Committee determines, by the applicable vote provided for in
Section 9.2, that the Partnership requires additional capital for operations
(other than the capital provided for under Sections 5.2.1 and 5.2.2), each
Partner shall, as provided in Section 5.3, contribute to the capital of the
Partnership an amount equal to its Percentage Interest multiplied by the
aggregate amount of Capital Contributions determined to be required for such
purpose by the Management Committee. In the event that the Management Committee
approves the operating or capital budget for the Partnership for any year
pursuant to Section 9.2.6(b) and the Available Cash as of the end of a fiscal
quarter, together with the Partnership’s anticipated net cash flow for the
following fiscal quarter, is insufficient to fund the portion of such operating
or capital budget allocable to such following fiscal quarter, then each
Representative on the Management Committee shall vote to approve a capital call
equal to the anticipated cash shortfall for such following quarter.

 

5.2.4                                 If the Operator determines that additional
capital is required in order to avoid material imminent violations of law or to
cure existing material violations of law, or to prevent or cure a material
imminent risk to the health or safety of workers at the Facilities or to the
health or safety of the community in which the Facilities is located, then,
within fifteen (15) days after the Partnership receives notice from the Operator
indicating that the Operator has made such determination and including the
Operator’s estimate of the cost of the work required to prevent or cure such
risk or violation, each Representative on the Management Committee shall vote to
approve a capital call equal to such estimated cost.

 

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5.3             Payment Of Capital Contributions.

 

5.3.1                                The Management Committee shall issue or
cause to be issued a written request to each Partner for payment of each
installment of Capital Contributions to be made in accordance with Section 5.2,
at such times and in such amounts (a) in the case of Capital Contributions to be
made in accordance with Section 5.2.2 as shall be consistent with the schedule
of Capital Contributions contained in the acquisition or construction fund
schedule most recently approved by the Management Committee (by Majority Vote or
Super-Majority Vote, as applicable) as provided in this Agreement, subject only
to such variations in timing of such payments as may be necessitated by the cash
requirements of the Partnership, and (b) in the case of Capital Contributions to
be made in accordance with Sections 5.2.1, 5.2.3 and 5.2.4, as the Management
Committee shall approve (by Majority Vote or Super-Majority Vote, as applicable)
as provided in this Agreement. All Capital Contributions received by the
Partnership pursuant to this Section 5.3, whether received prior to, on or after
the date specified in Section 5.3.2(d), shall be credited to the respective
Partner’s Capital Account as of such specified date. All Capital Contributions
received from a Partner after the date specified in Section 5.3.2(d) shall be
accompanied by interest on such overdue amounts, which interest shall be payable
to the Partnership and shall accrue from and after such specified date at a rate
equal to the lesser of (x) 2% over the per annum rate of interest established
from time to time by JP Morgan Chase Bank, NA at its principal office in New
York, NY, as its prime rate, or (y) the maximum interest rate allowed for this
purpose pursuant to the laws of the State of New York. Any such interest paid
with respect to a Capital Contribution shall be credited to the respective
Capital Accounts of all the Partners, on a pro rata basis in accordance with
their respective Percentage Interests as of the date such payment is made to the
Partnership after giving effect to the payment of the Capital Contribution with
respect to which such interest accrued.

 

5.3.2                                 Each written request issued pursuant to
Section 5.3.1 shall contain the following information:

 

(a)                    The total amount of Capital Contributions requested from
all Partners;

 

(b)                    The amount of Capital Contribution requested from the
Partner to whom the request is addressed, such amount to be in accordance with
the Percentage Interest of such Partner;

 

(c)                     The purpose for which the funds are to be applied in
such reasonable detail as the Management Committee shall direct; and

 

(d)                    The date on which payments of the Capital Contribution
shall be made (which date shall not be less than 30 days, nor more than 90 days,
following the date the request is given except in the case of a capital call
pursuant to Section 5.2.4, in which case the date may be

 

17

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Such shorter time as the Management Committee deems reasonably appropriate under
the circumstances but in no event less than seven (7) days following the date
the request is given) and the method of payment, provided that such date and
method shall be the same for each of the Partners.

 

5.3.3                                Each Partner agrees that it shall make
payments of its respective Capital Contributions in accordance with requests
issued pursuant to Sections 5.3.1 and 5.3.2.

 

5.3.4                                 Default Provisions.

 

(a)                    In the event a Partner shall default in the performance
of any of its obligations to make any Capital Contribution to the Partnership in
accordance with the terms of this Agreement, it shall become a Defaulting
Partner hereunder. In the event such default shall continue uncured for a period
of 30 days after the giving of notice to all of the Partners of such default by
the Partnership or by any of the Partners other than the Defaulting Partner
(each, a “Non-Defaulting Partner”) or for such extended cure period (an
“Extended Cure Period”) as may be approved by affirmative vote of members of the
Management Committee representing more than 50% of the total Percentage
Interests of the Partners other than the Defaulting Partner and its Affiliates,
then such Defaulting Partner shall be deemed to have temporarily withdrawn from
the Partnership effective as of the 31st day after such notice or the day after
expiration of the extended cure period, as the case may be, unless and until:
(i) such default shall be cured as provided in Section 5.3.4(c), (ii) such
Defaulting Partner has had its Percentage Interest in the Partnership diluted
pursuant to Section 5.5.3(a), (iii) a Partner Loan which may have been made to
such Defaulting Partner pursuant to Section 5.5.3(b) has been fully repaid, or
(iv) such Defaulting Partner shall have had its interest in the Partnership
purchased by one or more Non- Defaulting Partners pursuant to Section 5.5.3(c).
During the period the Defaulting Partner is deemed to have temporarily withdrawn
from the Partnership, no distributions shall be made under Section 7 to the
Defaulting Partner. Notwithstanding the above, the foregoing distributions
otherwise payable to a Defaulting Partner shall be retained by the Partnership
until such time as (x) the Defaulting Partner is no longer treated as having
temporarily withdrawn from the Partnership pursuant to this
Section 5.3.4(a) (other than clause (iv) above), at which time the funds so
retained shall be (1) distributed in their entirety to the Defaulting Partner if
the period of its temporary withdrawal terminated as provided in clauses (i) or
(iii) above, or (2) if the period of its temporary withdrawal terminated as
provided in clause (ii) above, distributed to the Defaulting Partner in an
amount equal to the product of (A) the amount of the retained distribution times
(B) a fraction, the

 

18

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numerator of which is its Percentage Interest as diluted and re-determined
pursuant to Section 5.5.3(a) and the denominator of which is its Percentage
Interest prior to such dilution and redetermination, and the remaining amount of
the retained distributions shall be paid to the Non-Defaulting Partners in
proportion to their relative Percentage Interests as re-determined pursuant to
Section 5.5.3(a), or (y) the Defaulting Partner has permanently become a
Withdrawn Partner pursuant to Section 12.3 of this Agreement or if the period of
its temporary withdrawal terminated as provided in clause (iv) above, at which
time the funds so retained shall remain Partnership property.

 

(b)                   After the receipt of a notice of default pursuant to
Section 5.3.4(a) and until the later of (i) the date on which such default is
cured as provided in Section 5.3.4(c) of this Agreement or such Defaulting
Partner is no longer treated as having temporarily withdrawn from the
Partnership pursuant to Section 5.3.4(a), as applicable, and (ii) six (6) months
after receipt of the last notice of default pursuant to Section 5.3.4(a) in the
event the Defaulting Partner has defaulted in the performance of any of its
obligations to make any Capital Contributions to the Partnership on more than
one occasion over a rolling 12 month period (provided that past defaults of a
Defaulting Partner shall not apply to a third party transferee of such
Defaulting Partner’s Interest), (A) the Representatives of such Defaulting Party
shall not have any vote in matters to be acted upon by the Management Committee
other than Retained Voting Rights, and the Percentage Interest of such
Defaulting Partner shall not be considered in determining the total Percentage
Interests of the Partners for the purpose of any vote of the Management
Committee other than Retained Voting Rights, and (B) the Defaulting Partner
shall continue to be obligated to make all Capital Contributions approved or
required to be made pursuant to the terms hereof and based on its Percentage
Interest at the time of default.

 

(c)                     A Partner shall cease being a Defaulting Partner, if it
fulfills its obligations to make all payments then due under this Section 5.3
prior to the end of the thirty (30) day period for cure (or, if applicable,
prior to the end of the Extended Cure Period) as provided in Section 5.3.4(a).
If a Defaulting Partner seeks to cure a default after such thirty (30) day
period (or, if applicable, after the end of the Extended Cure Period), such cure
shall not be deemed effective to cure the default in question if the Management
Committee has given a Section 5.5.3(a) Notice or a Partner has given a
Section 5.5.3(c) Notice, unless such cure is accepted by the affirmative vote of
members of the Management Committee representing more than 50% of the total
Percentage Interests of the Partners other than the Defaulting Partner and its
Affiliates.

 

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5.4                              Voluntary Contributions. No Partner shall make
any Capital Contributions to the Partnership except pursuant to this Section 5.

 

5.5                               Effect of Permanent or Temporary Withdrawal.

 

5.5.1                                Consequences of Permanent Withdrawal.

 

(a)                    A Withdrawn Partner shall be entitled to receive payment
from the Partnership, at a time or times when the Management Committee
determines in good faith that such payment may be made without undue hardship to
the Partnership or any Partner, of an amount equal to its positive Capital
Account balance on the date of withdrawal (increased by the amount of any
liability paid by such Withdrawn Partner after the date of withdrawal pursuant
to Section 5.5.2), payable either in a lump sum or in installments as determined
by the Management Committee, in its sole discretion. To the extent that the
Management Committee does not determine to make such a payment, a Withdrawn
Partner shall be entitled only to such amounts as may be distributed pursuant to
Section 12.5. From and after the date of its withdrawal, the former Capital
Account balance of such a Withdrawn Partner shall be recorded as a “Special
Contingent Obligation” of the Partnership as provided in Section 12.5.1, and not
as a Partner’s Capital Account.

 

(b)                    The rights of a Withdrawn Partner set forth in
Section 5.5.1(a) shall (I) be subordinate to the rights of any other creditor of
the Partnership, (2) not impair in any way the rights of continuing Partners to
receive distributions pursuant to Section 7, (3) not include any right on the
part of the Withdrawn Partner to receive any interest or other amounts with
respect thereto, (4) not be a personal obligation of any Partner and (5) be paid
as provided for in Section 12.5 in the event of dissolution.

 

5.5.2                                 Further Effect of Permanent Withdrawal. A
Withdrawn Partner which has withdrawn from the Partnership pursuant to
Section 12.3 or in contravention of this Agreement shall have only those rights
specifically set forth in this Agreement, such Partner’s status as a Partner
shall automatically terminate, and shall not have any vote in matters to be
acted upon by the Management Committee and the Percentage Interest of such
Partner shall not be considered in determining the total Percentage Interests of
the Partners for the purpose of any vote of the Management Committee. Except as
provided in Sections 12.2.3 and 12.6, withdrawal by one or more General Partners
as described in the preceding sentence shall not effect a dissolution of the
Partnership. A Withdrawn Partner shall remain obligated for all liabilities
attributable to its respective interest in the Partnership accruing prior to the
date of its withdrawal, including any such liabilities maturing after such
withdrawal but originating from actions taken prior thereto.

 

20

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5.5.3                                 Additional Remedies.

 

(a)             In the event any Partner is deemed to have temporarily withdrawn
from the Partnership pursuant to the provisions of Section 5.3.4 of this 
Agreement, if members of the Management Committee representing more than 50% of
the total Percentage Interests of the Partners other than the Defaulting Partner
and its Affiliates determines that an amount equal to the whole or any portion
of the amount of Capital Contributions which such Partner failed to pay when due
(the “Defaulted Contribution”) should be contributed to the Partnership by the
Non-Defaulting Partners in order to meet the cash needs of the Partnership, it
shall promptly provide written notice (a “Section 5.5.3(a) Notice”) of such
determination to each Non-Defaulting Partner, which Section 5.5.3(a) Notice
shall state the amount of the Defaulted Contribution. Each Non-Defaulting
Partner shall have the right to elect (by written notice to the other remaining
Partners within ten days of the date of the Section 5.5.3(a) Notice from the
Management Committee) to contribute (i) it’s pro rata share of such Defaulted
Contribution calculated as the percentage determined by dividing the Percentage
Interest of such Non-Defaulting Partner by the sum of the Percentage Interests
of all Non-Defaulting Partners, or (ii) a portion of such Defaulted Contribution
determined on any other basis unanimously approved by the Partners other than
the Defaulting Partner. In the event the Non-Defaulting Partners, as a whole,
elect to contribute an amount less than I 00% of the  Defaulted Contribution
(the  “Unelected Percentage”), the Partnership may use cash on hand or any other
available source of funds to meet its obligations associated with the Unelected
Percentage.  Nothing herein shall be construed as preventing admission of a new
Partner or Partners to the Partnership in accordance with Section 11 in order to
meet the cash needs of the Partnership resulting from the withdrawal of a
Partner or Partners. To the extent that any Partner contributes any portion of a
Capital Contribution pursuant to this Section 5.5.3, the Percentage Interests of
the Partners shall be adjusted to reflect such Capital Contributions. In
addition, in the event the Non-Defaulting Partners have not elected and
exercised any of the remedies set forth in this Section 5.5.3(a) within 30 days
after the date on which the Defaulting Partner is deemed to have temporarily
withdrawn from the Partnership, the Percentage Interests of the Partners shall
be adjusted to reflect the failure of the Defaulting Partner to make its Capital
Contribution and the satisfaction by the Non-Defaulting Partners of their
obligation to make their Capital Contributions. For purposes of Section 6 and
Section 7 of this Agreement, the Percentage Interests as re-determined pursuant
to this Section 5.5.3(a) shall be effective as of the first day of the fiscal
quarter during which the Defaulting Partner defaulted With respect to its
obligation to make its Capital Contribution.

 

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(b)             In the event any Partner shall be deemed to have temporarily
withdrawn from the Partnership pursuant to the provisions of Section 5.3.4 of
this Agreement, in lieu of calling for Capital Contributions to fund a Defaulted
Contribution as set forth in Section 5.5.3(a), the Management Committee, by
members representing more than 50% of the total Percentage Interests of the
Partners other than the Defaulting Partner and its Affiliates, may elect to call
for the Defaulted Contribution to be funded by loans (“Partner Loans”) from the
Non-Defaulting Partners. The amount, timing and procedure for Partner Loans, and
each Partner’s share of such Partner Loans, shall be the same as for Capital
Contributions made pursuant to Section 5.5.3(a) or as otherwise unanimously
approved by the Partners other than the Defaulting Partner. If the Management
Committee calls for Partner Loans to fund a Defaulted Contribution, then:
(i) any sum thus advanced by a Partner shall be deemed to be a loan from such
Partner to the Defaulting Partner and a contribution of such sum to the
Partnership by the Defaulting Partner (but such contribution shall not be deemed
to cure the default by the Defaulting Partner); (ii) the principal balance of
such loan and all accrued unpaid interest thereon shall be, unless earlier
prepaid by the Defaulting Partner, due and payable in whole within thirty (30)
days after written demand therefor has been given to the Defaulting Partner (and
to each other Partner) by the Management Committee or by any Non-Defaulting
Partner which made such advance; (iii) each Partner Loan shall bear interest at
the lesser of (A) 11% over LIBOR and the (B) maximum amount permitted by law,
from the date that the Partner Loan was made until the date that such Loan,
together with all interest accrued thereon, is repaid to the Non-Defaulting
Partner which made such advance; (iv) an amount equal to the distributions from
the Partnership that would otherwise be made to the Defaulting Partner (whether
before or after dissolution of the Partnership) shall be deemed to be paid to
the Defaulting Partner for purposes of adjusting its Capital Account but shall,
instead, be paid to the Non-Defaulting Partners which made such Partner Loans
until the Partner Loans and all interest accrued thereon have been repaid in
full (with all such payments being applied first to interest earned and unpaid
and then to principal); and (v) any Non-Defaulting Partner who made a Partner
Loan shall have the right, in addition to the other rights and remedies granted
to it pursuant to this Agreement or available to it at law or in equity, to take
such action (including, without limitation, the filing of a lawsuit) as any such
Non-Defaulting Partner deems appropriate to obtain payment by the Defaulting
Partner of the principal balance of such loan and all accrued and unpaid
interest thereon, at the cost and expense (including attorneys’ fees) of the
Defaulting Partner.

 

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(c)              In the event any Partner is deemed to have temporarily
withdrawn from the Partnership pursuant to the provisions of Section 5.3.4 of
this Agreement, then any Non-Defaulting Partner may give notice (a
“Section 5.5.3(c) Notice”) to the Management Committee that it desires to
purchase I 00% of the Interest of the Defaulting Partner. Within sixty (60) days
after the date of such Section 5.5.3(c) Notice, the Management Committee shall
give notice (the “Default Purchase Notice”) to the Defaulting Partner and to
each other Non-Defaulting Partner of such proposed purchase. Such Default
Purchase Notice shall include the Management Committee’s good faith Majority
Vote determination of the fair market value of the Partnership taking into
account, among other things, the prices paid for other comparable pipelines and
shall indicate an amount (the “Default Purchase Price”) equal to the product of
(i) the Management Committee’s good faith determination of the fair market value
of the Partnership as determined above, multiplied by (ii) 75%, multiplied by
(iii) the Percentage Interest of the Defaulting Partner. Within 15 calendar days
after delivery of the Default Purchase Notice, each Non-Defaulting Party
electing to purchase such Interest shall so notify the Management Committee and
the other Partners in writing, and if more than one Non-Defaulting Partner so
elects, then each such Non-Defaulting Partner shall be deemed to have elected to
purchase such Non-Defaulting Partner’s pro rata share of the Interest of the
Defaulting Partner, calculated as the percentage determined by dividing the
Percentage Interest of such Non-Defaulting Partner by the sum of the Percentage
Interests of all Non-Defaulting Partners electing to purchase the Interest of
the Defaulting Partner. The closing on all such purchases shall occur thereafter
at the principal office of the Partnership during normal business hours on a
date that is reasonably scheduled in a written notice delivered by the
Partnership to each purchaser, and shall be deemed effective as of 12:00:01
a.m. on such date. At the closing the Defaulting Partner shall transfer its
entire Partnership Interest to the applicable purchasers in accordance with
their purchase elections. Each such transfer shall be made free and clear of all
liens and other encumbrances.     In exchange, each purchaser shall deliver such
purchaser’s pro rata portion of the Default Purchase Price (based on the extent
or amount of the Interest purchased by such purchaser) to the Defaulting
Partner; provided, however, if the Defaulting Partner has any unpaid obligations
due and owing to the Partnership or any unpaid Partner Loans outstanding, such
obligations shall be satisfied at or prior to closing.

 

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6.         Allocation of Profits and Losses.

 

6.1        Profits and Losses.

 

After giving effect to the special allocations set forth in Section 6.2, all
Profits and Losses from operations for each fiscal year (or part thereof) shall
be allocated to the Partners in accordance with their Percentage Interests;
provided that no Losses shall be allocated to any Partner that holds only a
Limited Partnership interest to the extent that such Losses would result in that
Limited Partner having an Adjusted Capital Account Deficit. To the extent Losses
allocated to a Partner holding only a Limited Partner interest would cause such
Partner to have an Adjusted Capital Account Deficit at the end of any fiscal
year, the Losses will be reallocated to Partners holding General Partner
interests in proportion to their relative Percentage Interests as General
Partner. If any General Partner receives an allocation of Losses otherwise
allocable to a Limited Partner in accordance with this Section 6, such General
Partner shall be allocated Profits in subsequent fiscal years necessary to
reverse the effect of such allocation of Losses. Such allocation of Profits (if
any) shall be made before any other Profit allocations under this Section 6.

 

6.2                               Special Allocations.

 

6.2.1                     Partnership Minimum Gain Chargeback. Notwithstanding
any other provision of this Agreement, if there is a net decrease in Minimum
Gain during any taxable year, each Partner shall be allocated items of
Partnership income and gain for such year (and, if necessary, subsequent taxable
years) in the manner and amounts provided in Treasury Regulations Sections
1.704-2(f)(6), (g)(2) and U)(2)(i). For purposes of this Section 6.2, each
Partner’s Capital Account 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 6.2.1 with respect to such taxable year.
This Section 6.2.1 is intended to comply with the partner minimum gain
chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith.

 

6.2.2                     Partner Nonrecourse Debt Minimum Gain Chargeback.
Notwithstanding the other provisions of this Agreement (other than Section 6.2.1
above), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
during any taxable year, any Partner with a share of Partner Nonrecourse Debt
Minimum Gain at the beginning of such taxable year shall be allocated items of
Partnership income and gain for such year (and, if necessary, subsequent taxable
years) in the manner and amounts provided in Treasury Regulations
Section 1.704-2(i)(4) and Gl(2)(ii). For purposes of this Section 6.2, 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, other than
Section 6.2.1, with respect to such taxable

 

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year. This Section 6.2.2 is intended to comply with the partner nonrecourse debt
minimum gain chargeback requirement in Treasury Regulations
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

6.2.3                     Qualified Income Offset. Except as provided in
Section 6.2.1 and Section 6.2.2 above, in the event any Person holding only a
Limited Partner Interest unexpectedly receives an adjustment, allocation or
distribution described in Treasury Regulations Sections 1.704-l(b)(2)(ii)(d)(4),
(5) or (6), items of Partnership income and gain shall be allocated to such
Partner in an amount and manner sufficient to eliminate, to the extent required
by such Treasury Regulation, its Adjusted Capital Account Deficit created by
such adjustment, allocation or distribution as quickly as possible unless such
Adjusted Capital Account Deficit balance is otherwise eliminated pursuant to
Section 6.2.1 or Section 6.2.2. This Section 6.2.3 is intended to constitute a
qualified income offset described in Treasury Regulations
Section 1.704-l(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

6.2.4                     Gross Income Allocation. In the event any Partner has
an Adjusted Capital Account Deficit at the end of any fiscal year, such Partner
shall be allocated items of Partnership gross income and gain in the amount of
such Adjusted Capital Account Deficit as quickly as possible; provided, an
allocation pursuant to this Section 6.2.4 shall be made only if and to the
extent that such Partner would have an Adjusted Capital Account Deficit after
all other allocations provided in Section 6.2 (other than Section 6.2.3) have
been tentatively made as if Section 6.2.3 and this Section 6.2.4 were not in
this Agreement.

 

6.2.5                     Nonrecourse Deductions. Nonrecourse Deductions for any
taxable year shall be allocated to the Partners in accordance with their
Percentage Interests.

 

6.2.6                     Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions 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 Regulations 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 6.2.6 is intended to comply with the provisions of
Treasury Regulations Section 1.704-2(i) and shall be interpreted consistently
therewith.

 

6.2.7                     To the extent an adjustment to the adjusted tax basis
of any Partnership asset, pursuant to Code Section 734(b) (including pursuant to
Treasury

 

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Regulations Section 1.734-2(b)(l)) or Code Section 743(b) is required, pursuant
to Treasury Regulations Section 1.704-l(b)(2)(iv)(m)(2) or
Section 1.704-l(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete liquidation of
such Partner’s interest in the Partnership, the amount of such adjustment to
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 gain or loss shall be specially allocated to the Partners in
accordance with their interests in the Partnership in the event Treasury
Regulations Section 1.704-l(b)(2)(iv)(m)(2) applies, or to the Partner to whom
such distribution was made in the event Treasury Regulations
Section 1.704-1(b)(2)(iv)(m)( 4) applies.

 

6.3                               Regulatory Allocations. The allocations set
forth in Section 6.2 (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 shall be
offset either with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss or deduction pursuant to this
Section 6.3. Therefore, notwithstanding any other provision of this Section 6
(other than the Regulatory Allocations), but subject to the Code and the
Treasury Regulations, the Tax Matters Partner shall make such offsetting special
allocations of Partnership income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
Partner’s Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of this Agreement. In making such determination, the
Tax Matters Partner shall take into account future Regulatory Allocations that,
although not yet made, are likely to offset other Regulatory Allocations
previously made.

 

6.4                               Income Tax Allocations.

 

6.4.1                                 Except as provided in this Section 6.4,
each item of income, gain, loss and deduction of the Partnership for federal
income tax purposes shall be allocated among the Partners in the same manner as
such items are allocated for book purposes under Section 6.1, Section 6.2, and
Section 6.3.

 

6.4.2                                 In accordance with Code Section 704(c) and
the applicable Treasury Regulations thereunder, income, gain, loss and deduction
with respect to any property contributed to the Partnership shall, solely for
tax purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its Gross Asset Value at the time of its
contribution to the Partnership. If the Gross Asset Value of any Partnership
property is adjusted in accordance with subparagraph (ii) or (iv) of the
definition of Gross Asset Value, then subsequent allocations of

 

26

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Income, gain, loss and deduction shall take into account any variation between
the adjusted basis of such property for federal income tax purposes and its
Gross Asset Value as provided in Code Section 704(c) and the related Treasury
Regulations. For purposes of such allocations, the Partnership shall elect the
remedial allocation method described in Treasury Regulations Section 1.704-3(d).

 

6.4.3                                 All items of income, gain, loss, deduction
and credit allocated to the Partners in accordance with the provisions hereof
and basis allocations recognized by the Partnership for federal income tax
purposes shall be determined without regard to any election under Code
Section 754 which may be made by the Partnership.

 

6.5                               Other Rules.

 

6.5.1                                 Profits, Losses, and any other items of
income, gain, loss, or deduction will be allocated to the Partners pursuant to
this Section 6 as of the last day of each fiscal year, provided that Profits,
Losses, and the other items will also be allocated at any time the Gross Asset
Values of the Partnership’s assets are adjusted pursuant to subparagraph (ii) of
the definition of Gross Asset Value.

 

6.5.2                                 In the event Partners are admitted to the
Partnership pursuant to this Agreement on different dates, the Profits (or
Losses) allocated to the Partners for each fiscal year during which Partners are
so admitted shall be allocated among the Partners in proportion to their
Percentage Interests during such fiscal year in accordance with Code
Section 706, using any convention permitted by law and selected by the Tax
Matters Partner that takes into account the varying interests of the Partners
during such fiscal year.

 

6.5.3                                 For purposes of determining the Profits,
Losses or any other items allocable to any period, Profits, Losses and any such
other items shall be determined on a daily, monthly or other basis, as
determined by the Tax Matters Partner using any method that is permissible under
Code Section 706 and the Treasury Regulations thereunder.

 

6.5.4                                 The Partners are aware of the income tax
consequences of the allocations made by this Section 6 and hereby agree to be
bound by the provisions of this Section 6 in reporting their shares of
Partnership income and loss for income tax purposes.

 

7.                          Distributions.

 

7.1                               Quarterly Distributions. Except as otherwise
provided in Section 7.2 or Section 12.5, within 35 days after the end of each
fiscal quarter, the Management Committee shall make distributions of Available
Cash to all Partners (other than a Defaulting Partner) in proportion to their
respective Percentage Interests.

 

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7.2                              Limitations on Distributions. Notwithstanding
anything in this Agreement to the contrary, the Partnership will make no
distributions that are prohibited by the Partnership Act.

 

8.                          Accounting And Taxation.

 

8.1                              Fiscal Year. The fiscal year of the Partnership
shall be the calendar year or such other annual period as is selected by the
Management Committee and approved (to the extent necessary) by requisite
governmental authorities for financial or tax reporting purposes.

 

8.2                              Location Of Records. The books of account for
the Partnership shall be kept and maintained at the principal office of the
Partnership or at such other place as the Management Committee shall determine.

 

8.3                              Books Of Account. The books o{ account for the
Partnership shall be:

 

8.3.1                                 Maintained on an accrual basis in
accordance with Required Accounting Practice; and

 

8.3.2                                 Audited by the Certified Public
Accountants at the end of each fiscal year.

 

8.4                              Annual Financial Statements And Tax
Information. The Management Committee shall cause to be prepared and delivered
to each Partner:

 

8.4.1                                 Within 55 calendar days after the end of
each fiscal year, a profit and loss statement and a statement of changes in
financial position for such fiscal year, a balance sheet and a statement of each
Partner’s Capital Account as of the end of such fiscal year, together with a
report thereon of the Certified Public Accountants; and

 

8.4.2                                 Within 45 calendar days after the end of
each fiscal year, at the expense of the Partnership: (i) such information as is
necessary (including a statement for the previous fiscal year of each Partner’s
share of items of net income, net gains, net losses and other items of the
Partnership and distributions of cash made) for the preparation by the Partners
of their federal, state and local income and other tax returns and (ii) a copy
of all supporting schedules for the foregoing information, including those items
required to be separately stated on Schedule K-1 submitted to the Partners.

 

8.5                              Interim Financial Statements. Within 35 days
after the end of each fiscal quarter, the Management Committee shall cause to be
prepared and delivered to each Partner, with an appropriate certificate of the
Person authorized to prepare the same:

 

8.5.1                                 A profit and loss statement and a
statement of changes in financial position for such quarter (including
sufficient information to permit the Partners to calculate their tax accruals),
for the portion of the fiscal year then ended and for the twelve-month period
then ended;

 

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8.5.2                                 A balance sheet and a statement of each
Partner’s Capital Account as of the end of such fiscal quarter; and

 

8.5.3                                 A statement comparing the actual financial
status and results of the Partnership as of the end of or for such fiscal
quarter and the portion of the fiscal year then ended with the budgeted or
forecasted status and results as of the end of or for such respective periods.

 

8.6                               Taxation.

 

8.6.1                                 The Parties intend that the Partnership
shall be treated as a “partnership” for Federal and state income tax purposes.
The Partnership’s Federal and state income tax returns shall be approved by the
Management Committee and subject to review by the Certified Public Accountants,
counsel or other Person or Persons designated by the Management Committee for
such purpose. All of the Partnership elections for Federal and state income tax
purposes shall be determined by Super-Majority Vote of the Management Committee,
except those specifically reserved by the Code to be made by the individual
Partners.

 

8.6.2                                 The Management Committee shall designate a
“tax matters Partner”, under Section 6231 of the Code (the “Tax Matters
Partner”), which Partner shall be a General Partner and a U.S. Entity. The Tax
Matters Partner as of the date of this Agreement shall be TCIL. The Tax Matters
Partner and the partnership representative (as defined below), as applicable,
shall promptly notify the Partners if any state or Federal income tax return or
report of the Partnership is audited or if any adjustments are proposed by any
governmental authority. In addition, the Tax Matters Partner and the partnership
representative, as applicable, shall promptly furnish to the Partners all
notices concerning administrative or judicial actions relating to Federal and
state tax matters. During the pendency of any such administrative or judicial
actions, the Tax Matters Partner and the partnership representative, as
applicable, shall furnish to the Partners periodic reports, not less often than
monthly, concerning the status of any such action. Without the consent of each
Partner, the Tax Matters Partner and the partnership representative, as
applicable, shall not extend the statute of limitations, file a request for
administrative adjustment, file suit concerning any tax refund or deficiency
relating to any Partnership administrative adjustment or enter into any
settlement agreement relating to any Partnership item of income, gain, loss,
deduction or credit for any fiscal year of the Partnership. Any reasonable,
documented cost or expense incurred by the Tax Matters Partner or the
partnership representative, as applicable, in connection with its duties,
including the preparation for or pursuance of administrative or judicial
proceedings, shall be paid by the Partnership. Notwithstanding anything herein
to the contrary, for allocation periods and tax years beginning on or after
January I, 2018, the Tax Matters Partner shall act as the “partnership

 

29

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representative” for the Partnership pursuant to Section 6223 of the Code (as
enacted and/or adopted by Section 1101 of the Bipartisan Budget Act of 2015, as
amended from time to time (the “Budget Act”)) and shall adopt, subject to the
mutual consent of the Partners, amendments to this Section 8.6.2 that comply
with and implement the provisions of Section 1101 of the Budget Act. If the
Partnership receives a notice of final partnership adjustment from the Internal
Revenue Service to which the provisions of Section 1101 of the Budget Act are
applicable, the partnership representative shall cause the Partnership to
(a) elect the application of Section 6226 of the Code, as amended by
Section 1101 of the Budget Act, with respect to any imputed underpayment arising
from such adjustment, and (b) furnish to each Partner a statement of such
Partner’s share of any adjustment to income, gain, loss, deduction, or credit
(as determined in the notice of final partnership adjustment). Notwithstanding
anything herein to the contrary, the Partnership shall not make any election
pursuant to Section ll0l (g) of the Budget Act to cause Sections 6221-6241 of
the Code (as amended by the Budget Act) to apply to any tax year of the
Partnership beginning prior to January 1, 2018.

 

8.6.3                                 The Tax Matters Partner may engage, on
behalf of the Partnership, independent tax advisors with master limited
partnership experience to assist in the performance of its duties as determined
by the Management Committee.

 

8.7                             Governmental Reports. Under the direction of the
Management Committee, the Partnership shall prepare and file, or cause to be
prepared and filed, all reports prescribed by the FERC and any other commission
or governmental agency having jurisdiction.

 

8.8                              Inspection Of Facilities And Records. Each
Partner shall have the right at all reasonable times during usual business hours
to inspect the facilities of the Partnership and to audit, examine and make
copies of the books of account and other records of the Partnership. Such right
may be exercised through any agent or employee of such Partner designated in
writing by it or by an independent public accountant, petroleum engineer,
attorney or other consultant so designated. The Partner making the request shall
bear all costs and expenses incurred in any inspection, examination or audit
made at such Partner’s behest.

 

8.9                              Deposit And Withdrawal Of Funds. Funds of the
Partnership shall be deposited in such banks, or other depositories as shall be
designated from time to time by the Management Committee. All withdrawals from
any such depository shall be made only as authorized by the Management Committee
or by the Operator pursuant to the Operating Agreement and shall be made only by
check, wire transfer, debit memorandum or other written instruction.

 

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9.                          Management Of The Partnership.

 

9.1                               General Management Structure.

 

9.1.1                                 The major policies of the Partnership
shall be established by the Management Committee, which, except as otherwise
provided in this Agreement, shall have exclusive authority with respect to
managing the affairs of the Partnership, including supervising the management of
the affairs of the Partnership by the Operator and reviewing the Operator’s
performance of its management duties. No General Partner, except as specified in
the Operating Agreement, shall have authority to act for, or assume any
obligation or responsibility on behalf of, the Partnership without the prior
written approval of the Management Committee, and no Limited Partner shall have
any authority whatsoever to act for, or assume any obligation or responsibility
on behalf of, the Partnership.

 

9.1.2                                 The day-to-day management of the affairs
of the Partnership, including maintenance of the financial and other records and
books of account of the Partnership, supervision and construction of the
Facilities, and activities reasonably related thereto, shall be the
responsibility of the Operator, whose performance of such duties shall be
subject to supervision and review by the Management Committee.

 

9.1.3                                 The Partnership is the sole shareholder of
the share(s) of the Operator. So long as the Partnership continues to be the
sole shareholder of the share(s) of the Operator, (i) each Partner shall
nominate one Director of the Operator and the Partnership shall vote the
share(s) of the Operator so as to elect the Directors so nominated; (ii) the
Chairman of the Partnership Management Committee shall be the Chairman of the
Board of Directors of the Operator; (iii) in the event of the resignation or
removal of a Director nominated by a Partner, the Partnership shall vote the
share(s) of the Operator so as to elect a new Director nominated by such
Partner; and (iv) the affirmative vote of Partners representing 85% or more of
the total Percentage Interests of the Partners shall be required to vote the
share(s) of the Operator with respect to all other matters.

 

9.2                                           Management Committee.

 

9.2.1                                 The members of the Management Committee
shall be two Representatives of each Partner designated from time to time by
such Partner by written notice to each other Partner and the Partnership. Only
one Representative of each Partner shall be entitled to vote at Management
Committee meetings or on actions taken by the Management Committee without a
meeting. Each Partner shall, by notice to the Management Committee, designate
which of its Representatives is its voting Representative for the purposes of
any meeting of the Management Committee or action taken without a meeting and,
if applicable, whether its other Representative or

 

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an Alternative Representative is entitled to vote in the absence of its
designated voting Representative. A Partner may, in its sole discretion, from
time to time change the Representative designated to vote on its behalf. In
addition to a notice given pursuant to Section 13.2 hereof, notice of its
designated voting Representative given by a Partner in person at a Management
Committee meeting at which a quorum is present shall constitute sufficient
notice of such Partner’s designated voting Representative for such meeting. By
like notice, each Partner may designate one or more Alternate Representatives
who shall have authority to act in the absence of any of its Representatives.
Nothing shall preclude two or more Partners from designating the same
Representative or Alternate Representative. Any Partner may at any time, by
written notice to all other Partners and to the Partnership, remove any of its
Representatives or Alternate Representatives on the Management Committee and
designate a new Representative or Alternate Representative. Each Representative
shall serve on the Management Committee until his successor shall be duly
designated or until his death, resignation or removal by the Partner or Partners
which appointed him. Any action taken by the Partnership in compliance with the
direction of the Management Committee pursuant to its authority hereunder shall
be binding on the Partnership and each Partner, whether such direction was
approved by the regular members of the Management Committee in accordance with
the provisions hereof or one or more of the Alternate Representatives, and the
participation and acts (including the execution of any documents) by any
Alternate Representative of a Partner shall be deemed to be the act of the
Representative for which such Alternate Representative is acting without, in the
case of any written document, any evidence of the absence or unavailability of
such Representative.

 

9.2.2                                 The Chairman of the Management Committee
shall be a Representative on the Management Committee, and shall be elected by
the Management Committee annually. The office of Chairman shall be rotated
annually between a Representative appointed by DMLP or its Affiliates and a
Representative appointed by TCIL or its Affiliates. There shall be a Secretary
of the Management Committee who may or may not be a voting member thereof.

 

9.2.3                                The Chairman shall preside at all meetings
of the Management Committee, which shall meet quarterly subject to less frequent
meetings upon approval of the Management Committee by a Majority Vote. Notice of
and an agenda for all Management Committee meetings shall be provided by the
Chairman to all Representatives at least ten days prior to the date of such
meetings.

 

(a)                     Special meetings of the Management Committee may be
called at such times and places, and in such manner, as any Partner deems
necessary. Any Partner calling for any such special meeting or for

 

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any other meeting of the Partnership shall notify the Chairman who in turn shall
notify all Representatives or Partners, as appropriate, of the date and agenda
for such meeting(s) at least ten (10) days prior to the date of such meetings.
The Chairman may shorten the ten day notice period only in extraordinary
circumstances. Written minutes of all meetings shall be maintained.

 

(b)                    Any action required or permitted to be taken by the
Management Committee may be taken without prior written notice thereof, by
written consent in lieu of meeting if signed by the designated voting
Representatives of all of the Partners. Any action required or permitted to be
taken by the Management Committee also may be taken, upon ten (10) business
days’ written notice thereof to each Partner, by written consent in lieu of
meeting if signed by the designated voting Representatives of Partners whose
Percentage Interests aggregate not less than the Percentage Interests required
for approval of such action under this Agreement if voted on at a meeting of the
Management Committee. If the action authorized by written consent has not been
taken within sixty (60) days of the effective date set forth in the written
consent, such consent shall be deemed to have expired. Written notice of the
taking of an action authorized by written consent shall be given to the
Representatives of all Partners within five (5) business days of such action
being taken.

 

9.2.4                                 The Management Committee may, by
Super-Majority Vote, create such committees for the management of the
Partnership as it may deem necessary or appropriate. If the Management Committee
creates any such new committee, it shall issue one or more written delegations
of authority for such committee. Any such delegation of authority may be valid
for the specific periods of time set forth therein or may be valid until revoked
or amended. In all cases, any delegation of authority shall be considered a
temporary grant of authority and the Management Committee may, by Super-Majority
Vote, at any time and from time to time, amend or revoke any such delegation of
authority.

 

9.2.5                                 Except for those actions specified in this
Agreement as requiring a Super-Majority Vote, the Management Committee shall act
upon a Majority Vote. Subject to Section 5.3.4, for this purpose each designated
voting Representative shall have a number of votes equal to the Percentage
Interest(s) of the Partner or Partners(s) he represents at the time any such
matters are voted on; and a majority of such votes shall be the vote of a
majority of the Percentage Interests.

 

9.2.6                                 The approval of the Management Committee
by Majority Vote shall be necessary as provided in this Agreement and before any
of the following actions can be taken on behalf of the Partnership:

 

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(a)                    Entering into or making a commitment to construct or
acquire an Incremental Expansion, or agreeing to a waiver of any of the
conditions precedent to such a commitment, if the estimated cost of such
Incremental Expansion as determined pursuant to Section 4.8.2(a) is equal to or
less than Ten Million Dollars.

 

(b)                    Approval of the operating and capital budgets for the
Facilities (other than as provided in Section 9.2.7(a) for certain Incremental
Expansions) and the establishment of cash reserves; provided, however, if the
Management Committee fails to approve the operating budget for the Facilities
for any fiscal year, then the most recent annual operating budget approved by
the Management Committee, adjusted for inflation by the increase, if any, in the
Producer Price Index since the first day of the fiscal year for which such last
operating budget was approved, and excepting out Non-recurring or non-routine
costs, but with additions for estimated expenditures for scheduled Facilities
maintenance or turnaround or as required by good operating practices in the gas
pipeline business and the contractual obligations of the Partnership, shall
continue in effect as the approved operating budget for the next fiscal year or
until a new approved operating budget is adopted by the Management Committee;

 

(c)                     Execution of interim and permanent financing agreements
and commitments relating to the Facilities and any amendments thereto other than
as provided in Section 4.10 with respect to financing commitments for certain
Incremental Expansions;

 

(d)                    Timing and amounts of Capital Contributions of Ten
Million Dollars ($10,000,000) or less to be made by the Partners in accordance
with the provisions of Section 5.2.3 or 5.2.4;

 

(e)                      Timing and amounts of cash distributions to Partners
that are within the scope of the Partnership’s then existing cash distribution
plan;

 

(f)                       Creation of a Financing Corporation related to
financing, determination of the state of incorporation thereof and approval of
the form and content of such Financing Corporation’s certificate or articles of
incorporation and bylaws;

 

(g)                     Selection and retention of counsel and the Certified
Public Accountants; provided, however, that the Director of Legal Services of
the Operator shall, upon advice to the Chairman of the Management Committee and
without further approval of the Management Committee, be authorized to retain
counsel for services to be performed at a cost of no more than $50,000 annually;

 

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(h)                    Any change in the authority and responsibility of the
Operator for the management of the Partnership’s affairs pursuant to this
Agreement;

 

(i)                         Payments of amounts due to Withdrawn Partners, or to
Partners while they are deemed to have temporarily withdrawn from the
Partnership pursuant to the terms of this Agreement;

 

(j)                        Filing of the Partnership’s Tariff or any amendment
thereto, relating to the Facilities with the FERC; provided, however, that
approval of the Management Committee shall not be required in the case of
(I) tariff compliance filings filed by the Operator pursuant to Section 3.1.2 of
the Operating Agreement and (2) revisions to rates, fees and tariff provisions,
which will not affect annual revenues by more than $100,000 which are filed by
the Operator pursuant to Section 5.4 of the Operating Agreement;

 

(k)                    Selection of a successor Operator, if such becomes
necessary;

 

(I)                      Amendment or termination of any Gas Transportation
Contracts and the execution, amendment or termination of any successor agreement
thereto; provided, however, that approval of the Management Committee shall not
be required in the case of Gas Transportation Contracts or other service
contracts executed by the Operator pursuant to Section 2.2 of the Operating
Agreement;

 

(m)                Approval of the initial size, general design requirements and
location of the Facilities and any material changes thereto (except as otherwise
provided in Section 4.9); and

 

(n)                   Except for actions by the Management Committee which
require a Super-Majority Vote by the express terms of this Agreement, any other
actions by the Management Committee under this Agreement.

 

9.2.7                                  The approval of the Management Committee
by Super-Majority Vote shall be necessary as provided in this Agreement and
before any of the following actions can be taken on behalf of the Partnership:

 

(a)                    Entering into or making a commitment to construct or
acquire an Incremental Expansion, or agreeing to a waiver of any of the
conditions precedent to such a commitment, if the estimated cost of such
Incremental Expansion as determined pursuant to Section 4.8.2(a) exceeds Ten
Million Dollars;

 

(b)                    Changes to, or suspension of, the cash distribution plan
of the Partnership as in effect on the date of this Agreement and the timing and
amounts of cash distributions to Partners that are not within the scope of the
Partnership’s then existing cash distribution plan;

 

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(c)                     Timing and amounts of Capital Contributions exceeding
Ten Million Dollars ($10,000,000) to be made by the Partners in accordance with
the provisions of Section 5.2.3 or 5.2.4;

 

(d)                   Establishment of Partnership tax policies and
determination of Partnership tax elections and any modifications thereof;

 

(e)                     Any change in the authority and responsibility delegated
in this Agreement to the Management Committee, any change in the vote required
to approve any action by the Management Committee, and any change in the voting
procedures and voting mechanics of the Management Committee;

 

(f)                      Creation of any liens on or security interests in any
of the assets of the Partnership;

 

(g)                     The settlement of any cases brought pursuant to Sections
Four (4) or Five (5) of the Natural Gas Act and the acceptance of regulatory
orders approving any such settlement;

 

(h)                    The settlement of any litigation or other adversarial
proceeding that would require payments by the Partnership totaling in excess of
$10,000,000;

 

(i)                        The admission of any Person as a Partner of the
Partnership pursuant to Section 11 hereof, if Management Committee approval is
required for such admission;

 

(j)                       Approval of any voluntary Capital Contributions to the
Partnership except as otherwise expressly provided for in this Agreement;

 

(k)                    Consolidation or merger of the Partnership with or into
any other Person; any purchase or other acquisition by the Partnership of all or
substantially all of the assets or equity ownership interests of any Person; any
recapitalization or reorganization of the Partnership; any conversion of the
Partnership into a different business entity or type of business entity; or
entering into any joint venture or other business combination;

 

(I)                      Any sale or other disposition of all or substantially
all of the assets of the Partnership in one transaction or a series of
transactions;

 

(m)                Commencement of or consent to any dissolution or liquidation
proceeding with respect to the Partnership under any bankruptcy, insolvency,
reorganization, arrangement, dissolution or liquidation law or similar statute;

 

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(n)                    Making or entering into any agreement to do or undertake
any of the actions contained in this Section 9.2.7; and

 

(o)                    Any other action for which the approval of the Management
Committee by Super-Majority Vote is expressly required by this Agreement.

 

9.2.8                                 Without modification of its general
authority under Section 9.1.1, the Management Committee is hereby specifically
authorized to cause to be initiated and made any eminent domain takings
permitted by state or Federal law and required for the construction,
acquisition, operation and maintenance of the Facilities, and the Partners agree
to join in any such takings to the extent permitted or required by Federal or
state law; provided, however, that a Limited Partner shall be entitled to
abstain from taking any action otherwise required under this Section 9.2.8 in
its sole discretion.

 

9.2.9                                 A Limited Partner may cause its
Representative (or Alternate Representative, as the case may be) on the
Management Committee (or any other committee provided for herein) to abstain
from voting on any issues before, or participating in any other activities of,
such committee, in such Limited Partner’s sole discretion.

 

9.3                               Audit Committee.

 

9.3.1                                 The Management Committee shall appoint an
Audit Committee and the members thereof. Each member of the Audit Committee
shall be a Representative or an employee of a Partner or its Affiliate. The
Audit Committee shall consist of not less than two and not more than five
members; provided that a Representative of each General Partner, or an employee
of each General Partner or its Affiliate, will be members of the Audit
Committee. The Management Committee shall designate one member of the Audit
Committee to serve as Chairman of the Audit Committee. Decisions of the Audit
Committee shall be by majority vote of the members. Each member shall serve on
the Committee for a two year term, unless his successor shall earlier be duly
appointed or until his earlier death, ineligibility to serve, resignation or
removal by the Management Committee.

 

9.3.2                                 The Audit Committee shall meet twice
annually subject to less frequent meetings upon the Majority Vote of the
Management Committee, and at such other times as called by its Chairman, or by
any two members of the Committee by notice to the Chairman. The Chairman shall
designate the time and place of all Audit Committee meetings and shall provide
notice of and an agenda for each meeting at least five days prior to the time
fixed for such meeting, unless such notice is waived by all committee members.
Meetings shall be conducted in accordance with the scope of authority

 

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and/or committee charter of the Audit Committee as determined by the Management
Committee, as the same may be revised by the Management Committee from time to
time. Written minutes of each meeting shall be maintained.

 

9.3.3                                 The Audit Committee shall, on behalf of
the Partnership:

 

(a)                     Consult with internal and external auditors;

 

(b)                     Review and monitor the internal audit coverage and plans
for coverage;

 

(c)                      Analyze and approve internal audit operating
philosophies and strategies;

 

(d)                    Review the results of all financial audits;

 

(e)                      Review the results of all recommendations for
corrective action; and

 

(f) Perform such other responsibilities as are set forth in the committee
charter of the Audit Committee, as the same may be revised by the Management
Committee from time to time.

 

9.3.4                                 The Audit Committee shall report fully to
the Management Committee at the request of the Management Committee and at such
times and places as the Management Committee deems advisable.

 

9.4                               Design And Construction Of The Facilities. The
Partnership may enter into such service contracts and other appropriate
agreements as shall be prepared and negotiated by the Operator, subject to
review and approval by the Management Committee, with any Person (including,
without limitation, any Partner or Affiliate of any Partner) for the
acquisition, planning, design and construction of the Facilities.

 

9.5                              Related Party Contracts. Any contract between
the Partnership and one or more Partners and/or their respective Affiliates
shall be considered a “Related Party Contract.” The Partners hereby acknowledge
that each of the Partners or their respective Affiliates may, from time to time,
enter into one or more Related Party Contracts with the Partnership (the Partner
who is, or whose Affiliate is, a party to a Related Party Contract with the
Partnership is herein referred to as the “Related Party Partner” and the other
Partners (other than any Affiliate of the Related Party Partner) are herein
referred to as the “Independent Partners”). The Partnership’s administration,
supervision and enforcement of all Related Party Contracts shall be undertaken
on behalf of the Management Committee exclusively by the Representatives
appointed by the Independent Partners. Additionally, all Partnership decisions
with respect to a Related Party Contract shall be made on behalf of the
Management Committee exclusively by the Representatives appointed by the
Independent Partners. For the avoidance of doubt, the Representatives

 

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appointed by the Independent Partners shall, upon written notice to the
Representatives appointed by the Related Party Partner (but without receiving
the consent of such Representatives), have the exclusive right on behalf of the
Management Committee to cause the Partnership, to make any decisions with
respect to a Related Party Contract (provided such decisions are not
inconsistent with the terms of such Related Party Contract), and to exercise any
rights or remedies available to the Partnership under any Related Party
Contract, including the right to: (i) terminate any Related Party Contract in
accordance with its terms; (ii) enforce the terms of any Related Party Contract
on behalf of the Partnership against the Related Party Partner in accordance
with its terms; or (iii) seek damages or other relief on behalf of the
Partnership for any breach by a Related Party Partner of any Related Party
Contract in accordance with its terms. The negotiation of any future Related
Party Contracts shall be undertaken on behalf of the Management Committee
exclusively by the Representatives appointed by the Partners that will be the
Independent Partners if the contract is entered into. The Partnership will only
enter into such future Related Party Contracts that are approved on behalf of
the Management Committee by the Representatives appointed by the Partners that
will be the Independent Partners if the contract is entered into. Any dispute
between a Related Party Partner and the Representatives appointed by the
Independent Partners regarding: (y) the interpretation of a Related Party
Contract; or (z) whether the Independent Partners in exercising its/their rights
under this Section 9.5 acted in accordance with the terms of a Related Party
Contract, shall be resolved in accordance with the dispute resolution procedures
set forth in the relevant Related Party Contract. For the avoidance of doubt,
actions taken under this Section 9.5 by or on behalf of the Management Committee
with respect to a Related Party Contract shall require the affirmative vote,
approval or consent of Representatives representing Independent Partners who, in
the aggregate, own greater than 50% of the Percentage Interests in the
Partnership owned by Independent Partners.

 

9.6                             Limitation Of Authority. The Partners, the
Management Committee, the Representatives, the committees (if any) appointed by
the Management Committee pursuant hereto and the Operator shall not have
authority to take any action inconsistent with the terms of this Agreement, the
Partnership Act or any other applicable law, rule or regulation.

 

9.7                             Indemnification. The Partnership shall indemnify
and save harmless the Representatives appointed to the Management Committee and
the members of any committee established hereunder or by the Management
Committee pursuant hereto, against all actions, claims, demands, costs and
liabilities arising out of the acts (or failure to act) of such Persons in good
faith within the scope of their authority in the course of the Partnership’s
business, and such Persons shall not be liable for any obligations, liabilities
or commitments incurred by or on behalf of the Partnership as a result of any
such acts (or failure to act).

 

9.8                             Operation of the Facilities. The Operator shall
perform its duties under Section 9.1.2 of this Agreement pursuant to and in
accordance with the terms of the Operating Agreement. All of the terms and
provisions of the Operating Agreement,

 

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Including, without limitation, Sections 15.12 and 15.13 thereof, are approved,
ratified and confirmed by all the Partners. The Management Committee may, by
Majority Vote, at any time agree to an amendment to the Operating Agreement or,
in the event that the Operating Agreement is terminated pursuant to the terms
thereof or the Operator is removed as hereinafter provided, select a new
Operator or Operators. The Management Committee may remove the Operator, with or
without cause, by Majority Vote; provided, however, that if the Operating
Agreement is a Related Party Contract, then the terms of Section 9.5 shall
control with respect to actions taken by the Management Committee with respect
to such Operating Agreement. It is not intended that ownership of the Operator
by the Partnership shall cause any Partner to be deemed to be an Affiliate of
the Operator. A vote on removal of the Operator may be held only after the
Operator has been given reasonable notice of, and an opportunity to be heard on,
a call for its removal by one or more Partners. Termination of the Operating
Agreement pursuant to the terms thereof shall also result in automatic removal
of the Operator. Any successor Operator selected pursuant to this Section 9.8
shall execute and be bound by an operating agreement substantially in the form
of the original Operating Agreement entered into by the Partnership, unless the
Management Committee otherwise provides for amendment of such form of Operating
Agreement.

 

9.9                             Other Positions Or Representations. Any
Representative on the Management Committee and any member of any committee
established hereunder or by the Management Committee pursuant hereto, may also
be an officer, director or employee of a Partner or one or more Affiliates of a
Partner.

 

10.                 Limitation Of Liabilities.

 

10.1                     Limitation On Liability Of Partners Generally. Subject
to the provisions of applicable law, no Partner shall be liable to third Persons
for Partnership losses, debts, liabilities or obligations, except as otherwise
expressly agreed to in writing by such Partner, unless the assets of the
Partnership shall first be exhausted.

 

10.2                      Limitation On Liability Of Limited Partners. In no
event shall any Limited Partner or any Representative of any Limited Partner be
expected or required to take any action, directly or indirectly, which, in the
sole judgment of such Limited Partner, may subject it to liability or potential
liability.

 

10.3                      Limitation Of Authority Of Partners. Except as
specified in the Operating Agreement, no Partner shall have the authority to act
for, or assume any obligation or responsibility on behalf of, any other Partner,
without the prior written approval of such other Partner. No Limited Partner
shall, in any event, have any authority whatsoever to act for or assume any
responsibility on behalf of the Partnership.

 

10.4                      Cross-Indemnification. Each Partner (for purposes of
this Section 10.4, the “indemnitor”) shall indemnify and hold harmless each of
the other Partners (for purposes of this Section 10.4, the “indemnitee”) and the
Affiliates, directors, officers, partners (other than the Partners to this
Agreement), employees, agents and

 

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representatives of the indemnitee from and against any costs, losses, claims,
damages and liabilities arising out of any act of or any assumption of any
obligation or responsibility by the indemnitor or any of its Affiliates,
directors, officers, partners (other than the Partners to this Agreement),
employees, agents or representatives which act is performed or obligation is
assumed in connection with the indemnitor’s status as a Partner in the
Partnership and (a) has the effect of binding the indemnitee, or (b) has the
effect of making the indemnitee liable without its consent (including, without
limitation, sales or other acts entirely on its part which may give rise to
product liability claims); provided, however, that this Section 10.4 shall have
no application with respect to any actions taken (i) on behalf of the
Partnership by, or on behalf of, the Management Committee in conformance with
this Agreement, (ii) on behalf of one Partner by another Partner in conformance
with this Agreement or (iii) by, or on behalf of, the Operator in conformance
with the Operating Agreement. Notwithstanding the foregoing, the liability of
any Limited Partner pursuant to this Section 10.4 shall not exceed (A) the
amount of such Limited Partner’s Percentage Interest in the Partnership, which
liability shall be subject to satisfaction only out of such Percentage Interest,
and (B) the amount of any unpaid installment of Capital Contributions
theretofore requested in writing by the Management Committee in accordance with
Section 5.3, plus accrued interest thereon to the extent provided in said
Section 5.3.

 

11.                  Transfer or Pledge of Partnership Interests.

 

11.1                      Limitation on Right To Transfer Partner’s Interest.

 

11.1.1                        Subject to (a) the right of first refusal herein
provided, (b) the requirements of Section 11.1.2, and (c) the prior approval of
the Management Committee (which shall not be unreasonably withheld) to the
extent such approval is required by this Section 11.1.1, a Partner (the
“Transferring Partner”) may sell, assign or otherwise transfer all or any part
of its right, title or interest in the Partnership or all or any part of its
right, title or interest in any evidence of indebtedness of the Partnership (the
“Interest”) to any other Person which has made a valid and binding offer in cash
or cash equivalents to purchase the Interest (the “Offeror”) and which has
agreed to assume by operation of law or by express agreement with the
Partnership (as provided herein or otherwise in form and substance reasonably
satisfactory to the Management Committee) all of the obligations of the
Transferring Partner under this Agreement to the extent of the Interest
transferred. The affirmative vote of members of the Management Committee
representing more than 50% of the total Percentage Interests of the Partners
other than the Transferring Partner and its Affiliates, not to be unreasonably
withheld, that the transfer of the Interest will not adversely affect the
financial and operating integrity of the Partnership shall also be required
unless the long-term senior unsecured non-credit enhanced debt securities of the
Offeror, or of any guarantor of the Offeror’s obligations under the Partnership
Agreement, are rated BBB- or better by Standard & Poor’s or are rated Baa3 or
better

 

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by Moody’s Investors Services. Forthwith after acceptance of an offer from an
Offeror to purchase the Interest (conditioned on the satisfaction of the
requirements of this Section), the Transferring Partner shall give notice in
writing thereof to all of the other Partners enclosing a true copy of the offer.
If the offer includes non-cash consideration for the transferred Interest, such
notice shall set forth the Transferring Partner’s reasonable determination of
the cash equivalent value of such non-cash consideration and shall indicate in
reasonable detail the basis for such calculation. If the offer contemplates an
Indirect Transfer (as defined below), such notice shall set forth the
Transferring Partner’s reasonable determination of the portion of the offered
price attributable to the Transferring Partner’s Interest in the Partnership
(the “Interest Indirect Transfer Price”) and shall indicate in reasonable detail
the basis for such calculation. The other Partners shall have a right of first
refusal, exercisable within 30 days of receipt of such notice, to purchase the
Interest on the same terms and conditions as such offer (or, if all of the other
Partners so elect, on the basis of the cash equivalent value of such offer) on a
pro rata basis (determined by dividing each such Partner’s Percentage Interest
by the sum of the Percentage Interests of all the Partners other than the
Transferring Partner). The Partners which elect in the first election round to
purchase any portion of their respective pro rata shares of the Interest may
allocate the purchase of the Interest among such Partners on a basis unanimously
agreed to by such Partners, provided that such Partners collectively agree to
purchase I 00% of the Interest. If any such Partner does not elect to purchase
its full pro rata share of the Interest in such election round, the Partners
which elected to purchase their respective full pro rata shares in the election
round (“fully-electing Partners”) shall have the right to elect to purchase the
remaining portion of the Interest on a pro rata basis (determined by dividing
each such fully electing Partner’s Percentage Interest by the sum of the
Percentage Interests of all such fully-electing Partners) which right must be
exercised within five days after the expiration of the election round. If the
Partners after compliance with the procedures specified above in this
Section II. I.I do not elect to purchase 100% of the Interest and if the
Management Committee has given its approval as specified in this Section 11.1.1,
then the Transferring Partner shall thereafter be free to complete the transfer
of 100% of the Interest to the Offeror; provided, however, that such transfer
may not be effectuated unless it is strictly in accordance with the terms and
conditions of the offer of which the other Partners were previously given notice
as provided herein and, in compliance with any applicable Federal or state
registration requirements or exemption(s) therefrom. If the transfer of the
Interest to the Offeror is not consummated within 90 days after the expiration
of the last election round referred to above, no transfer by the Transferring
Partner to the Offeror or any other Person may be made without again complying
with this Section 11.1.1. A transfer of any or all of the ownership of a
Partner, or a transfer of any or all of the ownership of a

 

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direct or indirect Parent of a Partner the majority of the value of whose assets
are represented by the value of its indirect ownership interest in the
Partnership, shall be deemed to be a transfer (an “Indirect Transfer”) of all of
such Partner’s interest in the Partnership (including the indebtedness or equity
thereof) for purposes of this Section 11.1.1 and shall be subject to the rights
of first refusal provided for herein. For the purposes of the rights of first
refusal provided for herein, in the case of any such Indirect Transfer, and
notwithstanding anything to the contrary set forth herein, the Partner whose
interest is subject to such Indirect Transfer shall be deemed to be the
“Transferring Partner,” the interest in the Partnership owned by such Partner
shall be deemed to be the “Interest” being transferred and the Interest Indirect
Transfer Price shall be deemed to be the applicable offer for the purposes
hereof and for the rights of first refusal provided for herein to the same
extent as if such offer had been made directly for such Partner’s interest in
the Partnership.

 

11.1.2                         Subject to Section 11.4, additional Persons may
become parties to this Agreement and Additional Partners of the Partnership
under this Section 11 only upon the following conditions:

 

(a)                     Such admission shall be in compliance with any
agreements with security holders of the Partnership or others that may require
the consent of such security holders or other parties to the admission of
Additional Partners;

 

(b)                     Such admission shall be in compliance with all
applicable requirements of law, including the Natural Gas Act, the applicable
rules and regulations of the FERC and, any applicable Federal or state
securities laws, rules and regulations; and

 

(c)                      Such Person’s admission shall be subject to the prior
written approval of the Management Committee to the extent required by
Section 11.1.1.

 

11.1.3                         Notwithstanding anything herein to the contrary,
the provisions of Section 11.1.1 and 11.1.2(c) shall not be applicable to
transfers, direct or indirect, between or among Affiliates.

 

11.2                      Legend On Evidences Of Indebtedness Held By Partners.
As long as this Agreement shall remain in effect, all evidences of indebtedness
of the Partnership to any of the Partners or their Affiliates shall bear an
appropriate legend to indicate that it is held subject to, and may be assigned
or transferred only in accordance with, the terms and conditions of this
Agreement.

 

11.3                      Transfers By Partners. Notwithstanding anything to the
contrary contained in this Section 11 (other than the terms of Sections
11.1.2(a) and J:hl), a Partner may

 

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Undertake without the consent of the Management Committee or any other Partner,
and the terms of Section 11. U and 11.1.2(c) shall be inapplicable to:

 

11.3.1                         The transfer by any Partner of all or any part of
its right, title and interest in the Partnership (including indebtedness
thereof) and in this Agreement to an Affiliate of the transferor, provided that
the terms of Sections 11.1.2(a) and .(hl are satisfied and such Affiliate
assumes by operation of law or express agreement with the Partnership in
accordance with the terms hereof or otherwise in form and substance reasonably
satisfactory to the Management Committee all of the obligations of the
transferor under this Agreement to the extent of the interest transferred.

 

11.3.2                         The transfer (by operation of law or otherwise)
by any Partner of all of its right, title and interest in the Partnership
(including indebtedness thereof) and in this Agreement, in connection with a
sale of all or substantially all of the equity ownership interests or assets of
a direct or indirect Parent of such Partner, or a merger of such direct or
indirect Parent into or with another Person, in either case in a transaction in
which a majority of the value of the assets included in such transaction are
unrelated to the Partnership.

 

11.3.3                         An assignment, pledge or other transfer creating
a security interest (and any transfer made in foreclosure or other enforcement
of such security interest) in all or any portion of a Partner’s right, title or
interest in the Partnership and in this Agreement, under any mortgage,
indenture, deed of trust or security agreement (the “Assigned Interest”) created
by any Partner; provided, however, that (a) the assignee, pledgee, mortgagee,
trustee or secured party shall hold the same subject to all of the terms of this
Agreement; (b) such assignee, pledgee, mortgagee, trustee or secured party, or
any transferee of such Assigned Interest (the “Secured Party”), shall not become
a substitute Partner unless the terms of Sections 11.1.2(a) and 11.1.2(b) are
satisfied; and (c) unless and until such Secured Party becomes a substitute
Partner in accordance with the foregoing clause (b), it shall not have any voice
in the management of the Partnership as a result of any such transfer and shall
have no right to enforce any provision of this Agreement against any Partner.

 

11.4                      Effect of Permitted Transfers. No sale, assignment,
pledge or other transfer (including a transfer creating a security interest)
pursuant to this Section 11 shall give rise to a right in any Partner or
Partners to dissolve the Partnership. Except as provided in this Section 11.4,
no such sale, assignment, pledge or other transfer shall give rise to a right in
any transferee to become a Partner in the Partnership Upon any direct transfer
permitted by Section 11.1.1, 11.3.1 or 11.3.2, as applicable, upon satisfaction
of the terms thereof and the applicable conditions of Section 11.1.2, the
transferee shall be automatically admitted as a Partner in substitution for, or
in the case of a partial transfer, in addition to, the transferor Partner, upon
execution of a counterpart of this Agreement. In the event of such a

 

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Transfer, the Percentage Interests of the transferee and transferor Partners
shall be modified in accordance with Section 5.1.

 

11.5                    Effect of Prohibited Transfers. Any transfer of an
interest in the Partnership by a Partner in violation of the terms of this
Agreement shall be void and shall not be recognized by the Partnership. Any such
transfer shall not cause a dissolution of the Partnership but shall result in
the forfeiture of the transferor Partner’s right to participate in the
management of the Partnership, and the voting rights and requirements under this
Agreement shall be appropriately modified; provided, however, that nothing
herein shall be deemed to limit any right or remedies that the Partnership or
any other Partner may have against such transferor Partner.

 

11.6                    Tax Election. In the event that the interest of a
Partner is transferred with the consent of the Management Committee, or
otherwise as permitted by this Section 11, the Partnership will make an election
pursuant to Code Section.754.

 

11.7                    Pledge Of Interest. Except as permitted by the
provisions of Section 11.3.3, no Partner shall be permitted to pledge or
otherwise grant a security interest in and to its Interest.

 

11.8                     General Partner as a Limited Partner. A General Partner
may also be a Limited Partner to the extent that it becomes the transferee of
all or part of the Percentage Interest previously held by a Limited Partner. A
Partner which is both a General Partner and a Limited Partner shall have the
rights and powers, and shall be subject to the restrictions and liabilities, of
a General Partner under this Agreement and shall, to the extent of the
Percentage Interest held by such Partner as a Limited Partner, have the rights
and powers, and shall be subject to the restrictions, of a Limited Partner under
this Agreement. Notwithstanding any other provision in this Agreement to the
contrary, in the event a General Partner owns a Percentage Interest in the
Partnership as a General Partner and as a Limited Partner, the obligation of
such Partner to the Partners and/or the Partnership, whether pursuant to its
obligations to make Capital Contributions, indemnification or contribution
available under applicable law, shall be measured by such Partner’s combined
Percentage Interests in the Partnership as a General and a Limited Partner, and
not merely by its General Partner Percentage Interest.

 

12.                 Termination And Right Of Withdrawal.

 

12.1                      Term Of Partnership; Voluntary Dissolution. Subject to
the other terms and conditions of this Agreement, including, without limitation,
the provisions of Section 12.2, the Partnership and this Agreement shall
continue in existence until October 31, 2089 and from year to year thereafter;
provided, however, that a Partner may elect to dissolve the Partnership and
terminate this Agreement as of October 31, 2089 or as of the end of any
succeeding extended annual period by giving the other Partners written notice of
such election not less than one year prior to the date such dissolution is to
take effect.

 

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12.2                      Automatic Dissolution. The Partnership shall be
automatically and without notice dissolved upon the happening of any of the
following events:

 

12.2.1                         The sale or abandonment of all or substantially
all of the Partnership’s business and assets; provided, however, that any such
sale or abandonment may only be made pursuant to a Super-Majority Vote of the
Management Committee;

 

12.2.2                         Any event which shall make it unlawful for the
business of the Partnership to be carried on; or

 

12.2.3                         Any event which, under the Partnership Act or any
other applicable law, rule or regulation requires or results in dissolution of
the Partnership.

 

12.3                      Automatic Withdrawal. A Partner, upon the happening of
any of the following events, shall be deemed to have withdrawn from the
Partnership and be entitled to receive payment only as specified in Section 5.5
of this Agreement:

 

12.3.1                         The entry by a court of competent jurisdiction of
a decree or order for relief, un-stayed on appeal or otherwise and in effect for
90 days, in respect of such Partner in an involuntary case under the Federal
bankruptcy laws, or any such order adjudicating such Partner as bankrupt or
insolvent under any other applicable bankruptcy, insolvency or liquidation law;

 

12.3.2                         The entry by a court of competent jurisdiction of
a decree or order appointing a receiver, custodian, assignee, trustee,
liquidator, sequestrate or other similar official of such Partner or of any
substantial part of the property of such Partner, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
un-stayed on appeal or otherwise and in effect for 90 days, or the commencement
by such Partner of a voluntary case under the Federal bankruptcy laws, or under
any other bankruptcy or insolvency law, seeking reorganization, liquidation,
arrangement, adjustment or composition of such Partner under the bankruptcy laws
or any similar statute;

 

12.3.3                         The making by such Partner of an assignment for
the benefit of creditors; or the failure of such Partner generally to pay its
debts as they become due; or the consenting by such Partner to the appointment
of or taking possession                             by a receiver, assignee,
custodian, trustee, liquidator, sequestrate or other similar official of it or
of any substantial part of its property, or the taking of corporate or
partnership action by such Partner in furtherance of any such action;

 

12.3.4                         The filing by a Partner for dissolution under the
laws of the jurisdiction of its incorporation or the entering of a final order
dissolving that Partner by any court of competent jurisdiction; or

 

46

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12.3.5                         Any event (other than an event of the nature
specified in Section 12.2.2) which shall make it unlawful (a) in the case of a
General Partner, for that General Partner to carry on the business of the
Partnership in the form of a partnership, or (b) in the case of a Limited
Partner, for that Limited Partner to continue to hold an interest in the
Partnership.

 

12.4                      Other Withdrawals. Except as provided in Section 12.3
of this Agreement, or upon the admission of a substitute Partner in accordance
with the provisions of Section 11.4, no Partner shall be entitled to withdraw
from the Partnership.

 

12.5                      Winding Up And Liquidation. After the Partnership
shall be dissolved pursuant to the provisions of Sections 12.1 or 12.2, the
Management Committee shall continue to exercise its powers under this Agreement
for the purpose of winding up the business of the Partnership and liquidating
its assets in an orderly manner, but the Partnership shall engage in no new
business during the period of such winding up.

 

12.5.1                         The assets of the Partnership remaining after the
payment, or provision for payment, of all the liabilities of the Partnership
(other than any Special Contingent Obligations as hereinafter defined) shall
first be paid in satisfaction                                          of
Special Contingent Obligations to any applicable Withdrawn Partners, and any
remaining assets of the Partnership shall be distributed to the Partners in
accordance with their positive Capital Account balances after giving effect to
all contributions, distributions, and allocations for all periods. As used in
this Section 12.5.1, “Special Contingent Obligations” shall mean all contingent
obligations of the Partnership with respect to any Withdrawn Partner pursuant to
Section 5.5 and shall equal, with respect to any Withdrawn Partner, the sum of
(i) such Withdrawn Partner’s former Capital Account (as of the date immediately
prior to its withdrawal), plus (ii) the amount of any liabilities of the
Partnership paid by such Withdrawn Partner after withdrawal pursuant to
Section 5.5.2, minus (iii) all payments made to such Withdrawn Partner after its
withdrawal pursuant to Section 5.5.1.

 

All distributions pursuant to this Section 12.5.1 shall be made by the end of
the Partnership’s taxable year in which the liquidation occurs or 90 days after
the liquidation, whichever occurs later. To the extent deemed advisable by the
Management Committee (or the Trustee in Liquidation, if applicable), appropriate
arrangements (including the use of a liquidating trust) may be made to assure
that adequate funds are available to pay any contingent debts or obligations. If
any General Partner has a deficit balance in its Capital Account following the
distributions pursuant to this Section 12.5.1, as determined after taking into
account all Capital Account adjustments for the tax year during which the
Partnership terminates other than those made as a result of contributions
pursuant to this sentence, such General Partner shall contribute to the
Partnership cash equal to the amount of such deficit balance by the end of such
tax year, or 90 days after the date of such liquidation, whichever occurs later,
and such cash

 

47

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shall be paid to creditors of the Partnership, if any, or distributed to the
other Partners in accordance with the preceding paragraph of this
Section 12.5.1.

 

12.5.2                         No termination or dissolution of the Partnership
shall relieve a Partner from any obligation accruing or accrued to the date of
such termination or dissolution; provided, however, that a Limited Partner’s
liabilities for Partnership obligations shall be solely as set forth in
Section 10.2.

 

12.6                      Continuance Of Partnership. Except as provided in
Sections 12.1 and 12.2, it is understood and agreed by each of the Partners that
the relationship of partnership among them is intended to continue without
interruption until such relationship is either specifically dissolved by
Super-Majority Vote of the Management Committee or by the occurrence of any
event specified in Sections 12.1 or 12.2 as an event of dissolution, and each
Partner waives and releases, to the extent permitted by Jaw, its right to
dissolve or obtain dissolution of the Partnership in any other manner or for any
other reason. In this connection, the Partners agree and intend that the
Partnership shall not be dissolved by the admission of a new Partner pursuant to
Section 11.4 or by the withdrawal of one or more General Partners, provided that
there is at least one remaining General Partner in the Partnership. If,
notwithstanding the foregoing understanding, agreements and intentions of the
Partners, the Partnership may at any time or from time to time be deemed by
operation of Jaw and otherwise than pursuant to Section 12.1 or 12.2 to be
dissolved (for example, upon the bankruptcy or withdrawal of a Partner), each of
the Partners hereby covenants and agrees with the other Partners as follows:

 

12.6.1                         The business and affairs of the Partnership shall
continue without interruption and be carried out by a new partnership (the
“Successor Partnership”);

 

12.6.2                         The General Partners and Limited Partner(s) of
the Successor Partnership shall be the Persons who were General Partners and
Limited Partner(s), respectively, hereunder at the time of such dissolution;

 

12.6.3                         The Successor Partnership and the Partners
thereof shall be governed by the terms of this Agreement as if the Successor
Partnership were the Partnership;

 

12.6.4                         Each of the Partners covenants and agrees to
execute such further agreements, including (without limitation) notes, novation,
and accommodations, as may be necessary to continue the business of the
Partnership and to protect and perfect any lien or security interest granted by
the Partnership;

 

12.6.5                         Each of the Partners waives and releases, to the
full extent it may lawfully do so, all rights to a winding up or liquidation of
the business of the Partnership, notwithstanding that the dissolution of the
Partnership may be

 

48

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caused wrongfully or otherwise in contravention of this Agreement by such
Partner or any other Partner, and further notwithstanding that, at the time of
such dissolution, such Partner shall be, or be deemed to be or thereby become, a
Withdrawn Partner pursuant to this Agreement; and

 

12.6.6                        As used in this Section 12.6, the term
“Partnership,” at any point in time, shall mean the Partnership originally
formed pursuant to this Agreement or the Successor Partnership which at such
time is continuing the business and affairs of the Partnership originally so
formed.

 

13.                 General.

 

13. 1                   Effect Of Agreement. From and after the date of this
Agreement, this Agreement reflects the whole and entire agreement among the
Partners and supersedes all prior agreements among the Partners related to the
subject matter hereof, including, without limitation, the Project Participation
Memorandum Of Understanding, the Iroquois Gas Transmission System general
partnership formed by agreement of the General Partners under the laws of the
State of New York on January 10, 1989, and all amendments thereto, the Original
LP Agreement, the Restated LP Agreement and the Second Restated LP Agreement.
This Agreement can be amended, restated or supplemented only by the vote and
written agreement of all Partners acting individually and not as members of the
Management Committee; provided, however, that any Additional Partner may be
admitted to the Partnership in accordance with the provisions of Section 11.4
(and any appropriate adjustment in the Percentage Interests of the Partners on
Schedule A hereto as a result of such admission may be effected) by the
execution of a counterpart of this Agreement by such Additional Partner.

 

13.2                      Notices. Notice to all Partners shall be deemed to be
notice to the Partnership. If any Partner receives a notice to or on behalf of
the Partnership, such Partner shall immediately transmit such notice to all
Partners. Any notice hereunder shall be in writing and shall be delivered (as
applicable) by hand, by nationally recognized overnight carrier service, by
e-mail confirmed by another method of notice provided for herein, or by first
class, certified or registered mail, to the parties at the addresses shown
below:

 

If to TCIL:

 

TransCanada Iroquois Ltd.
700 Louisiana Street

Suite 700

Houston, Texas 77002-2700

Attention: Corporate Secretary

E-mail: jon_ dobson @transcanada.com

 

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If to TCPL:

 

TCPL Northeast Ltd.

700 Louisiana Street

Suite 700

Houston, Texas 77002-2700

Attention: Corporate Secretary

E-mail: jon_ dobson @transcanada.com

 

If to Dominion Iroquois:

Dominion Iroquois, Inc.

c/o Dominion Resources, Inc.

120 Tredegar Street

Richmond, Virginia 23220

Attention: General Counsel

Facsimile: 804-819-2202

E-mail: mark.webb@dom.com

 

If to DMLP:

 

Iroquois GP Holding Company, LLC

c/o Dominion Midstream GP, LLC

120 Tredegar Street

Richmond, Virginia 23220

Attention: General Counsel

Facsimile: 804-819-2202

E-mail: mark.webb@dom.com

 

Each notice that satisfies the above requirements shall be deemed to have been
properly given or delivered: (a) on the day when delivered by hand; (b) on the
first business day after being deposited with a nationally recognized overnight
courier; (c) on the day when transmitted by e-mail; or (d) on the third business
day after being mailed by United States first class mail, certified mail or
registered mail, return receipt requested, postage prepaid. A party may elect to
receive notices at a different address by notifying the other parties in
accordance with the preceding requirements. Any Partner may request that copies
of notices be given to any Affiliate at such address designated by such Partner
by written notice to each other Partner and to the Partnership, provided that
any failure to give such notice shall not affect the validity of any notice
given to any Partner or the Partnership in accordance with this Section 13.2.
Each of the Partners agrees to give such notice to any such Affiliate.

 

13.3                      Further Assurances. Each of the Partners and Withdrawn
Partners agrees to execute and deliver all such other and additional instruments
and documents and to do such other acts and things as may be reasonably
necessary more fully to effectuate this

 

50

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Partnership and carry on the Partnership business m accordance with this
Agreement.

 

13.4                      Applicable Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Delaware without
regard to the principles of conflicts of laws. In the event that any provision
of this Agreement shall be deemed to conflict with any provision of the
Partnership Act, the provisions of the Partnership Act shall to the extent
required by the Partnership Act, be controlling.

 

13.5                      Counterparts. This Agreement may be executed in
counterparts (including counterparts provided for the execution by an Additional
Partner), each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

13.6                      Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.

 

13.7                      Waiver. No waiver by any Person of any default by any
Partner or Partners in the performance of any provision, condition or
requirement herein shall be deemed to be a waiver of, or in any manner release
the said Partner or Partners from performance of any other provision, condition
or requirement herein; nor shall such waiver be deemed to be a waiver of, or in
any manner a release of, said Partner or Partners from future performance of the
same provision, condition or requirement. Any delay or omission of any Partner
to exercise any right hereunder shall not impair the exercise of any such right,
or any like right, accruing to it thereafter. No waiver of a right created by
this Agreement by one or more Partners shall constitute a waiver of such right
by the other Partners except as may otherwise be required by law with respect to
Persons not parties hereto. The failure of one or more Partners to perform its
or their obligations hereunder shall not release the other Partners from the
performance of such obligations.

 

13.8                      Partition. The Partners expressly waive and release
any right to have their interest, individually or collectively, in the
Partnership partitioned or sold for the purpose of dividing the proceeds of such
sale for the period during which the Partnership or any Successor Partnership
shall remain in existence.

 

13.9                      Laws and Regulatory Bodies. This Agreement and the
obligations of the Partners hereunder are subject to all applicable laws, rules,
orders and regulations of governmental authorities having jurisdiction and, in
the event of conflict, such laws, rules, orders and regulations of governmental
authorities having jurisdiction shall control.

 

13.10               Partnership Opportunity. Participation in the Partnership
shall not in any way restrain any Partner’s officers, directors, shareholders,
employees or Affiliates in other present or future business activities, whether
or not any such activity is competitive with the business of the Partnership, or
in any way preclude or restrict any of them from entering into a joint venture,
partnership or other business

 

51

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arrangement with the Partnership. None of any Partner’s officers, directors,
shareholders, employees or Affiliates shall under any circumstances be obligated
or bound to offer or present to the Partnership any business opportunity offered
to such officers, directors, shareholders, employees or Affiliates as a
prerequisite to the acquisition of or investment in such business opportunity by
any of them.

 

13.11               Section Numbers. Unless otherwise indicated, references to
section numbers are to sections of this Agreement.

 

13.12               Confidentiality.

 

13.12.1                    Except as hereinafter provided, the Partnership and
each Partner shall treat as confidential, and not disclose to any third party
(excluding Affiliates) not authorized by the Management Committee to receive
confidential information, any information obtained either directly or indirectly
from any other Partner pursuant to this Agreement and designated by such Partner
as confidential, or other confidential information developed or acquired by the
Management Committee, or by the Operator during performance of its obligations
under the Operating Agreement on behalf of the Partnership, unless such
confidential information (a) was already in the possession of the receiving
Partner, or an Affiliate thereof; at the time it obtained such confidential
information hereunder, (b) was or is published or otherwise is or becomes
generally available to the public through no fault of such receiving Partner or
its Affiliate, (c) was or is made available to such partner or its Affiliate
without restriction by any Person or entity which is not bound by, and does not
impose, an obligation of confidentiality or use with respect thereto or (d) was
or is required to be disclosed by operation of law or regulation. Further,
neither the Partnership nor any Partner shall (i) use any such confidential
information (other than its own) for any purpose other than in connection with
the activities of the Partnership pursuant to this Agreement or (ii) disclose,
reveal or otherwise make any such confidential information (other than its own)
available to any unauthorized third party without the prior written consent of
the other Partners hereunder, unless such disclosure is required by operation of
law or regulation. The Partners and the Management Committee shall establish and
enforce reasonable procedures for the protection of confidential information and
shall restrict disclosure of such information to as few as possible of the
employees, officers, agents and Affiliates of each Partner and the Partnership,
and only to those who need to know such information in connection with the
purposes of the Partnership as set forth herein. Each Partner and the Management
Committee shall take such reasonable and prudent steps and precautionary
measures as are required to ensure compliance with this Section 13.12 by such of
their employees, officers, agents, Affiliates and other Persons as shall be
given access to such confidential information and shall be responsible for
compliance by their employees, officers, agents and Affiliates. The obligations
of the Partners and Withdrawn Partners

 

52

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pursuant to this Section 13.12 shall survive the term of this Agreement for a
period of five years. The Partners agree that no adequate remedy at law exists
for a material breach or threatened material breach of any of the provisions of
this Section 13.12, the continuation of which un-remedied will cause the injured
Partner to suffer irreparable harm. Accordingly, the Partners agree that the
injured party shall be entitled, in addition to other remedies which may be
available to it, to immediate injunctive relief from any material breach of any
of the provisions of this Section 13.12 and to specific performance of its
rights hereunder, as well as to any other remedies available at law or in
equity. The Operating Agreement shall include similar provisions for the
protection of confidential information.

 

13.12.2                   Notwithstanding the terms of Section 13.12.1, nothing
contained in such Section 13.12.1 shall be construed to restrict a Partner or
its Affiliate from disclosing information with respect to the Partnership or to
such Partner’s or its Affiliate’s investment in the Partnership, (a) in the
ordinary course of business pertaining to its investment in the Partnership,
(b) to prospective transferees of such Partner’s or its Affiliate’s investment
in the Partnership (provided that such transferees enter into a confidentiality
agreement with such Partner or its Affiliate, as the case may be, on terms
comparable in scope to those contained in this Section 13.12), (c) pursuant to
such Partner’s or its Affiliate’s customary investor relations process or (d) in
order to comply with any requirements of law or regulation; provided, however,
the Partners hereby agree to notify each other in advance with respect to any
disclosure of material non-public information pertaining to the Partnership or
the Partnership’s financial or operational performance (other than information
consistent with that set forth in the financial statements of the Partnership),
that a Partner knows, or should reasonably be expected to know, would have a
material adverse effect on another Partner or would trigger additional
disclosures or compliance filings by another Partner.

 

13.12.3                   In addition to the rights described in Section 8.8, a
Partner shall have the right to cause the Partnership and its subsidiaries to
reasonably cooperate with such Partner in connection with such Partner’s or its
Affiliate’s compliance with any applicable financial reporting requirements of
any governmental authority, including any filings that may be required by the
Securities and Exchange Commission or under state or federal securities laws
applicable to such Partner or its Affiliate. In connection therewith, such
Partner shall have the right to cause the Partnership and its subsidiaries to
(i) make available to such Partner, upon reasonable advance notice, all books
and records and financial and other information in the Company’s or its
subsidiaries’ possession or control that are reasonably required in order to
prepare financial statements or financial information meeting the requirements
of Regulation S-X under the Securities Act, along with any documentation
reasonably related thereto required to complete any audit of such financial
statements required by

 

53

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Regulation S-X, and to cooperate with such Partner, and its representatives,
including its independent auditors, in connection with any audit of any
financial statements of such Partner.

 

13.13               Deadlocks and Dispute Resolution.

 

13.13.1                   In the event of any Deadlock or Dispute, by notice to
the other Representatives (a “Deadlock/Dispute Notice”), any Representative on
the Management Committee may request that the Partners seek to resolve such
Deadlock or Dispute including, if requested by such requesting Representative, a
special meeting of the Management Committee to discuss and attempt to resolve
such Deadlock or Dispute. The Partners and, if applicable, the Representatives
on the Management Committee, shall diligently and in good faith attempt to
resolve the matter in question within thirty (30) days of the date the
Deadlock/Dispute Notice. is given (the “Initial Resolution Period”) including,
if so requested, at a special meeting of the Management Committee at which they
attend in person or by teleconference or video conference.

 

13.13.2                   If the Deadlock or Dispute is not resolved within the
Initial Resolution Period, any Representative or Partner may, upon written
notice (a “2nd Deadlock/Dispute Notice”) to the other Partners or
Representatives given within thirty (30) days after the expiration of the
Initial Resolution Period, request that the Deadlock or Dispute be elevated to
senior executives of each Partner, which senior executives shall be at least the
most senior executive of a business unit of a Partner (or a direct or indirect
Parent company of such Partner) who shall have the authority from such Partner
(or, as applicable, such Parent) to resolve the Deadlock or Dispute. These
senior executives shall meet as promptly as possible, but in no event later than
thirty (30) days after the 2nd Deadlock/Dispute Notice is given, and shall use
reasonable efforts to resolve the Deadlock or Dispute within thirty (30) days
after such initial meeting.

 

13.13.3                   If the Deadlock or Dispute relates to an operational
or technical issue that is not resolved by the procedures described in Sections
13.3.1 or 13.3.2, then the Partners may, if they mutually agree to do so, submit
the disagreement to an independent third party with relevant expertise for the
issue in dispute, and may agree (a) on the procedures for presenting each
Partner’s position with regard to the Deadlock or Dispute to such expert, (b) on
the allocation of the costs and expenses associated with such expert and the
resolution of the Deadlock or Dispute and (c) that the decision by such expert
shall be binding and enforceable against the Partners. For clarification, all
the Partners involved in any Deadlock or Dispute must mutually agree in advance
to the submission of any Deadlock or Dispute to such third party and/or for any
binding arbitration with respect thereto.

 

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13.13.4                   If the Deadlocked Decision is not resolved by the
procedures described in Sections 13.3.1, 13.3.2 or 13.3.3, then the Partners
shall be entitled to exercise any other remedies available to them under this
Agreement or applicable law in order to resolve such Deadlock or Dispute.

 

13.13.5                   For purposes of this Section 13.13, any resolution of
a Deadlock or Dispute pursuant to Sections 13.3.1, 13.3.2 or, if so agreed by
the Partners, 13.3.3(c), shall be binding on the Partnership and the Management
Committee as if made by the Management Committee pursuant to Section 9.2. Each
of the Representatives, executives and senior executives of the Partners who
participate in the efforts to reach a resolution of any Deadlock or Dispute
pursuant to this Section 13.13 shall undertake such efforts on a timely and
diligent basis.

 

13.14               References To Money. All references in this Agreement to,
and transactions hereunder in, money shall be to or in Dollars of the United
States of America.

 

13.15               Severability. Should any provision of this Agreement be
deemed in contradiction with the laws of any jurisdiction in which it is to be
performed or unenforceable for any reason, such provision shall be deemed null
and void, but this Agreement shall remain in force in all other respects. Should
any provision of this Agreement be or become ineffective because of changes in
applicable laws or interpretations thereof, or should this Agreement fail to
include a provision that is required as a matter of law, the validity of the
other provisions of this Agreement shall not be affected thereby. If such
circumstances arise, the parties hereto shall negotiate in good faith
appropriate modifications to this Agreement to reflect those changes that are
required by law.

 

13.16               Third Persons. Except as expressly provided in this
Agreement, nothing herein expressed or implied is intended or shall be construed
to confer upon or to give any Person not a party hereto any rights or remedies
under or by reason of this Agreement.

 

[Signature Page Follows.]

 

55

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IN WITNESS WHEREOF, the Partners have caused this Third Amended and Restated
Limited Partnership Agreement to be executed by their respective duly authorized
officers as of date first written above.

 

TRANSCANADA IROQUOIS LTD.

 

TCPL NORTHEAST LTD.

 

 

 

 

By:

/s/ Stephen M. V. Clark

 

By:

/s/ Stephen M. V. Clark

Name:

Stephen M. V. Clark

 

Name:

Stephen M. V. Clark

Title:

Canadian & Eastern U.S. Natural Gas Pipelines

 

Title:

Canadian & Eastern U.S. Natural Gas Pipelines

 

 

 

 

 

By:

/s/ Jon A. Dobson

 

By:

/s/ Jon A. Dobson

Name:

Jon A. Dobson

 

Name:

Jon A. Dobson

Title:

Corporate Secretary

 

Title:

Corporate Secretary

 

 

 

DOMINION IROQUOIS, INC.

 

IROQUOIS GP HOLDING COMPANY, LLC

 

 

 

By:

/s/ Donald R. Raikes

 

By:

/s/ James R. Chapman

Name:

Donald R. Raikes

 

Name:

James R. Chapman

Title:

SVP — Customer Service and Bus. Dev.

 

Title:

Senior Vice President and Treasurer

 

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SCHEDULE A

 

PERCENTAGE INTERESTS

 

PARTNERSHIP INTERESTS

 

 

 

 

 

Percentae:e Interest

 

Partner

 

Affiliation

 

General

 

Limited

 

Total

 

TransCanada Iroquois Ltd.

 

TransCanada PipeLines Limited

 

25.00

 

4.00

 

29.00

 

TCPL Northeast Ltd.

 

TransCanada PipeLines Limited

 

0.00

 

21.00

 

21.00

 

Dominion Iroquois, Inc.

 

Dominion Resources, Inc.

 

0.00

 

24.07

 

24.07

 

Iroquois GP Holding Company. LLC

 

Dominion Midstream Partners, LP

 

25.00

 

0.93

 

25.93

 

 

 

Total:

 

50.00

 

50.00

 

100.00

 

 

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