Exhibit 10.2




 




SECOND AMENDMENT




 




This Second

Amendment (this “Second Amendment”) is entered into as of September 30, 2002 by

and among TC PipeLines, LP, a Delaware limited partnership (the “Borrower”),

the Lenders party to the Credit Agreement referred to below, and Bank One, NA,

as agent for such Lenders.  The parties

hereto agree as follows:




 




WHEREAS, the

Borrower and Bank One, NA, individually and as Agent are parties to that

certain Credit Agreement dated as of August 22, 2000 and amended pursuant to a

First Amendment and Waiver dated as of April 15, 2002 (as so amended the

“Agreement”), pursuant to which the Lenders party thereto agreed to make

extensions of credit available to the Borrower on the terms and conditions set

forth therein; and




 




WHEREAS, the

Borrower has requested an extension of the Termination Date and the Lender is

prepared to agree to such an extension on the terms provided for in this Second

Amendment.




 




NOW,

THEREFORE, in consideration of the undertakings set forth herein and other good

and valuable consideration, the receipt of which is hereby acknowledged, the

Borrower, the Agent, and the Lenders hereby agree as follows:




 




Section 1. 

Defined Terms.  Capitalized terms used and not otherwise defined in this Second

Amendment shall have the meanings attributed to them in Article I of the

Agreement.




 




Section 2. 

Amendment of Agreement.  Upon the satisfaction of the conditions

precedent set forth in Section 4 of this Second Amendment but effective as of

the date hereof, the Agreement shall be amended as follows:




 




(a)  Article I of the Agreement is hereby amended

by adding thereto between the existing definitions of “Cash Equivalent

Investments” and “Closing Date” the following new definition of “Cash Generated

from Operations”:




 




“Cash Generated from Operations” means for any period the cash

generated from operations of the Borrower and its Subsidiaries calculated on a

consolidated basis for such period.




 




(b)  The definition of “Commitment” set forth in

Article I of the Agreement is hereby amended by deleting it in its entirety and

substituting in lieu thereof the following new definition of “Commitment”:




 




“Commitment” means, for each Lender, the obligation of such Lender to

make Loans not exceeding the amount set forth opposite its signature to the

Second Amendment, as it may be modified as a result of any assignment that has

become effective pursuant to Section 12.3.2, or as otherwise modified from time

to time pursuant to the terms hereof.”




 





























 




(c)  The definition of “Pricing Schedule” set

forth in Article I of the Agreement is hereby amended by deleting it in its

entirety and substituting in lieu thereof the following new definition of

“Pricing Schedule”:




 




“Pricing Schedule” means the Schedule attached to the Second Amendment

identified as such.”




 




(d)  Article I of the Agreement is hereby amended

by adding thereto between the existing definitions of “Schedule” and “Section”

the following new definition of “Second Amendment”:




 




“Second Amendment” means that certain Second Amendment dated as of September

30, 2002 among the Borrower, the Agent and the Lenders pursuant to which this

Agreement was amended as provided therein.”




 




(e)  The definition of “Termination Date” set

forth in Article I of the Agreement is hereby amended by deleting it in its

entirety and substituting in lieu thereof the following new definition of

“Termination Date”:




 




“Termination Date” means July 31, 2004 or any earlier date on which the

Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the

terms hereof.”




 




(f)  Section 6.15 of the Agreement is hereby

amended by deleting it in its entirety and substituting in lieu thereof the

following new Section 6.15:




 




“6.15.  Total Debt.  The Borrower will not permit Total Debt as

at the last day of any fiscal quarter to be more than the lesser of (i) 20% of

Capitalization as at the last day of such fiscal quarter, or (ii) 1.5 times the

Cash Generated from Operations for the period consisting of such fiscal quarter

and the three immediately preceding fiscal quarters.”




 




(g)  The Pricing Schedule attached to the

Agreement is hereby amended by deleting it in its entirety and substituting in

lieu thereof the Pricing Schedule attached to this Second Amendment.




 




Section 3. 

Representations and Warranties.  In order to induce the Lenders to execute

and deliver this Second Amendment, the Borrower hereby confirms, reaffirms and

restates as of the date hereof the representations and warranties set forth in

Article V of the Agreement provided that such representations and warranties shall

be and hereby are amended as follows: each reference therein to “this

Agreement” (including, without limitation, each such a reference included in

the term “Loan Documents” and all indirect references such as “hereby”,

“herein”, “hereof” and “hereunder”) shall be deemed to be a collective

reference to the Agreement, this Second Amendment and the Agreement as amended

by this Second Amendment. A Default under and as defined in the Agreement as

amended by this Second Amendment shall be deemed to have occurred if any

representation or warranty made pursuant to the foregoing sentence of this

Section 3 shall be materially false as of the date on which made.




 




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Section 4. Conditions Precedent.

This Second Amendment and the amendments provided for herein shall become

effective as of the date hereof on the date (the “Closing Date”) on which the

Agent shall have received all of the following:




 




(a)

Counterparts of this Second Amendment duly executed and delivered by the Agent,

the Lender and the Borrower.




 




(b) A copy ,

certified as of the Closing Date by the Secretary or an Assistant Secretary of

the General Partner, of the Partnership Agreement, together with all

amendments.




 




(c) A copy,

certified as of the Closing Date by the Secretary or an Assistant Secretary of

the General Partner, of resolutions of the General Partner’s Board of Directors

authorizing the General Partner’s execution and delivery on behalf of the

Borrower of this Second Amendment.




 




(d) An incumbency

certificate dated the Closing Date, executed by the Secretary of an Assistant

Secretary of the General Partner, which shall identify by name and title and

bear the signatures of the officers of the General Partner authorized to act on

behalf of the General Partner in its capacity as a general partner of the

Borrower, upon which certificate the Agent and the Lenders shall be entitled to

rely until informed of any change in writing by the Borrower.




 




(e) A written

opinion of counsel to the Borrower and the General Partner, dated the Closing

Date and addressed to the Lenders in substantially the form of Exhibit A to

this Second Amendment.




 




(f) The

Borrower shall have paid Bank One an extension fee equal to the greater of (i)

$25,000, and (ii) 0.10% of the Aggregate Commitment in effect on the Closing

Date.




 




Section 5. Effect on the Agreement.  Except to the extent of the specific

amendments provided for herein, all of the representations, warranties, terms,

covenants and conditions of the Agreement and the other Loan Documents (i)

shall remain unaltered, (ii) shall continue to be, and shall remain, in full

force and effect in accordance with their respective terms, and (iii) are

hereby ratified and confirmed in all respects. 

Upon the effectiveness of this Second Amendment, all references in the

Agreement (including references in the Agreement as amended by this Second

Amendment) to “this Agreement” (including, without limitation, each such a

reference included in the term “Loan Documents” and all indirect references

such as “hereby”, “herein”, “hereof” and “hereunder”) shall be deemed to be a

collective reference to the Agreement as amended by this Second Amendment.




 




Section 6. 

Expenses.  The Borrower shall reimburse the Agent for any and all reasonable

costs, internal charges and out-of-pocket expenses (including attorneys’ fees

and time charges of attorneys for the Agent, which attorneys may be employees

of the Agent) paid or incurred by the Agent in connection with the preparation,

review, execution and delivery of this Second Amendment.




 




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Section 7. Entire Agreement.

This Second Amendment, the Agreement as amended by this Second Amendment and

the other Loan Documents embody the entire agreement and understanding between

the parties hereto and supersede any and all prior agreements and

understandings between the parties hereto relating to the subject matter

hereof.




 




Section 8. Headings.

The headings, captions, and arrangements used in this Second Amendment are for

convenience only and shall not affect the interpretation of this Second

Amendment.




 




SECTION 9. GOVERNING LAW.  THIS SECOND AMENDMENT SHALL BE CONSTRUED IN

ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS

SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS

PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS

APPLICABLE TO NATIONAL BANKS LOCATED IN ILLINOIS.




 




Section 10. Counterparts.  This Second Amendment may be executed in any

number of counterparts, all of which taken together shall constitute one

agreement, and any of the parties hereto may execute this Second Amendment by

signing any such counterpart.




 




IN WITNESS

WHEREOF, the parties hereto have caused this Second Amendment to be duly

executed as of the date first above written.




 




	

   


  	

  TC PIPELINES

  LP


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  TC Pipelines

  GP. Inc.,


  
	

   


  	

   


  	

  its general

  partner


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

    /s/ Russell K. Girling


  	

   


  
	

   


  	

   


  
	

   


  	

  Title:  Chief Financial Officer


  
	

   


  	

   


  
	

   


  	

  By:


  	

    /s/ Paul F. MacGregor


  	

   


  
	

   


  	

   


  
	

   


  	

  Title:  Vice-President, Business Development


  
	

  Commitments


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  $20,000,000


  	

  BANK ONE,

  NA.


  
	

   


  	

   Individually and as Agent


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Kenneth

  J. Fatur


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  Title:


  	

  Director,

  Capital Markets


  	

   


  





 




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PRICING SCHEDULE




 








	

  APPLICABLE

  MARGIN


  	

   


  
	

  LEVEL I STATUS


  	

   


  	

  125.0


  	

  %


  
	

  LEVEL II STATUS


  	

   


  	

  137.5


  	

  %


  










 




The Applicable Margin shall be

determined in accordance with the foregoing table based on the Borrower’s

Status as reflected in the then most recent Financials.  Adjustments, if any, to the Applicable

Margin shall be effective five business days after the Agent has received the

applicable Financials.  If the Borrower

fails to deliver the Financials to the Agent at the time required pursuant to

the Credit Agreement, then the Applicable Margin shall be the highest

Applicable Margin and Applicable Fee Rate set forth in the foregoing table

until five days after such Financials are so delivered.




 








	

  APPLICABLE

  FEE RATE


  	

   


  
	

  USAGE £ 25%


  	

   


  	

  0.375


  	

  %


  
	

  USAGE > 25% and £ 75%


  	

   


  	

  0.300


  	

  %


  
	

  USAGE > 75%


  	

   


  	

  0.250


  	

  %


  










 




The Applicable Fee Rate shall

be determined daily in accordance with the foregoing table based on the Usage

on such day.




 




For the purposes of this

Pricing Schedule, the following terms have the following meanings, subject to

the first paragraph of this Pricing Schedule:




 




“Financials”

means the annual or quarterly financial statements of the Borrower and its

consolidated Subsidiaries, if any, delivered pursuant to the Credit Agreement.




 




“Level I

Status” exists at any date if, as of the last day of the fiscal quarter of the

Borrower referred to in the most recent Financials, Total Debt is less than 15%

of Capitalization.




 




“Level II

Status” exists at any date if, as of the last day of the fiscal quarter of the

Borrower referred to in the most recent Financials, the Borrower has not

qualified for Level I Status.




 




“Status” means

Level I Status or Level II Status.




 




“Usage” means,

as of any date, the percent of the Aggregate Commitment then in effect

represented by the aggregate principal amount of all Advances then outstanding

under the Agreement.




 




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EXHIBIT A




to Second Amendment




 




FORM OF OPINION




 




	

   


  	

  September

       , 2002


  





 




The Agent and the Lenders who

are parties to the 


Credit Agreement described below.




 




Ladies and Gentlemen:




 




On behalf of

TC PipeLines, LP, a Delaware limited partnership (the “Borrower”), and TC

PipeLines GP, Inc., a Delaware corporation which is the general partner of the

Borrower (the “General Partner”), I, Kristine L. Delkus, Vice-President, Power

and Regulatory Law, of TransCanada Pipelines Limited, licensed to practice law

in the State of New York, have agreed to provide an in-house legal opinion

on certain matters pursuant to Section 4(e) of the Second Amendment dated as of

September 30, 2002 (the “Second Amendment”) to that certain Credit Agreement

dated as of August 22, 2000 and amended pursuant a First Amendment and Waiver

dated as of April 15, 2002 (as so amended, the “Agreement”) among the Borrower,

the Lenders named therein; and Bank One, NA, as Agent, which provides for

Advances in an aggregate principal amount not exceeding $20,000,000 at any one

time outstanding.  All capitalized terms

used in this opinion and not otherwise defined herein shall have the meanings

attributed to them in the Agreement.




 




I am qualified

to practice law only in the State of New York. 

For purposes of this opinion I have assumed that the laws of the State

of Illinois are the same as the laws of the State of New York.  I made no investigation of the laws of any

jurisdiction other than, and the opinions herinafter expressed are confined to,

the laws of the Sate of New York and the federal laws of the United States.




 




I have

examined the Partnership Agreement, the certificate of incorporation and

by-laws of the General Partner, resolutions of the Board of Directors of the

General Partner, the Agreement, the Second Amendment and such other matters of

fact and law which I have deemed necessary or relevant in order to render this

opinion.  In reviewing these documents,

I have assumed, as to all parties other than the General Partner and the

Borrower, the genuineness of all signatures, the legal capacity at all relevant

times of any natural persons signing any documents, the authenticity of all

documents submitted to me as originals, the conformity to authentic originals

of all documents submitted to me as certified or true copies or as

reproductions (including documents received by facsimile machine) and the

accuracy of all certificates of public officials and corporate officers.  Based upon and subject to the foregoing, and

to the qualifications hereinafter expressed, it is my opinion that:




 




1.  The Borrower is a limited

partnership duly and properly organized, validly existing and in good standing

under the laws of the State of Delaware.




 




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2.  The Partnership Agreement is

in full force and effect, and the Borrower has full power and authority under

the Partnership Agreement and the laws of the State of Delaware to own its

property, to conduct the business in which it is currently engaged, and to

perform its obligations under the Second Amendment and the Agreement as amended

by the Second Amendment.




 




3.  The General Partner is a

corporation duly and properly organized, validly existing and in good standing

under the laws of the State of Delaware.




 




4.  The General Partner has full

corporate power and authority to be the general partner of the Borrower and to

execute and deliver the Second Amendment on behalf of the Borrower, and the execution

and delivery by the General Partner on behalf of the Borrower of the Second

Amendment has been duly authorized by proper corporate proceedings on the part

of the General Partner.




 




5.  The execution and delivery

by the General Partner on behalf of the Borrower of the Second Amendment and

the performance by the Borrower of its obligations under the Second Amendment

and the Agreement as amended by the Second Amendment have been duly authorized

in accordance with the Partnership Agreement and will not:




 




(a)  require any consent of the

General Partner’s shareholders;




 




(b)  require any consent of the

Borrower’s limited partners;




 




(c)  violate (i) any law, rule,

regulation, order, writ, judgment, injunction, decree or award binding on the

Borrower or the General Partner, or (ii) the Partnership Agreement, or (iii)

the certificate of incorporation or by-laws of the General Partner, or (iv) the

provisions of any indenture, instrument or agreement to which the Borrower or

the General Partner is a party or is subject, or by which the Borrower or the

General Partner, or any Property of the Borrower or the General Partner, is

bound, or conflict with or constitute a default thereunder; or




 




(d)  result in, or require, the

creation or imposition of any Lien in, of or on the Property of the Borrower

pursuant to the terms of any indenture, instrument or agreement binding upon

the Borrower.




 




6.  The Second Amendment has

been duly executed and delivered by the General Partner on behalf of the

Borrower and the Second Amendment and the Agreement as amended by the Second

Amendment constitute legal, valid and binding obligations of the Borrower

enforceable against the Borrower in accordance with their terms except to the

extent the enforcement thereof may be limited by bankruptcy, insolvency or

similar laws affecting the enforcement of creditors’ rights generally and

subject also to the availability of equitable remedies if equitable remedies

are sought.




 




7.  There is no litigation,

arbitration, governmental investigation, proceeding or inquiry pending or, to

the best of our knowledge after due inquiry, threatened against the




 




7





























 




Borrower or

the General Partner which, if adversely determined, could reasonably be

expected to have a Material Adverse Effect.




 




8.  No order, consent,

adjudication, approval, license, authorization, or validation of, or filing,

recording or registration with, or exemption by, or other action in respect of

any governmental or public body or authority, or any subdivision thereof, which

has not been obtained by the Borrower or the General Partner, is required to be

obtained by the Borrower or the General Partner in connection with the

execution and delivery of the Second Amendment, the borrowings under the Agreement

as amended by the Second Amendment, the payment and performance by the Borrower

of the Obligations, or the legality, validity, binding effect or enforceability

of the Second Amendment or the Agreement as amended by the Second Amendment.




 




This opinion

may be relied upon by the Agent, the Lenders and their participants, assignees

and other transferees, and only in connection with the transaction described

above, and should not otherwise be referred to in any other document without

prior written consent.




 




	

  Very truly yours,


  





 




 




 




 




 




 




 




 




 




 




 




 




 




 




 




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