**Exhibit 10.1**

 

**FIRST AMENDMENT AND WAIVER**

 

This FirstAmendment and Waiver (this “First Amendment”) is entered into as of April 15,2002 by and among TC PipeLines, LP, a Delaware limited partnership (the“Borrower”), the Lenders party to the Credit Agreement referred to below, andBank One, NA, as agent for such Lenders. The parties hereto agree as follows:

 

WHEREAS, theBorrower and Bank One, NA, individually and as Agent, entered into that certainCredit Agreement dated as of August 22, 2000 (the “Agreement”), pursuant towhich the Lenders party thereto agreed to make extensions of credit availableto the Borrower on the terms and conditions set forth therein; and

 

WHEREAS, theBorrower has requested that the Lenders remove from the Agreement the requirementthat its accountants report on the existence of Defaults under the Agreement.

 

NOW,THEREFORE, in consideration of the undertakings set forth herein and other goodand valuable consideration, the receipt of which is hereby acknowledged, theBorrower, the Agent, and the Lenders hereby agree as follows:

 

**Section 1. Defined Terms.**  Capitalized terms used and not otherwise defined in this FirstAmendment shall have the meanings attributed to them in Article I of theAgreement.

 

**Section 2. Amendment of Agreement.**  Upon the satisfaction of the conditionsprecedent set forth in Section 5 of this First Amendment but effective as ofthe date hereof, the Agreement shall be amended by deleting in its entiretySection 6.1(a) of the Agreement and substituting in lieu thereof the followingnew Section 6.1(a):

 

“(a)  Within 105 days after theclose of each of its fiscal years, an unqualified (except for qualificationsrelating to changes in accounting principles or practices reflecting changes inGAAP and required or approved by the Borrower’s independent certified publicaccountants) audit report certified by independent chartered accountantsacceptable to the Lenders, prepared in accordance with GAAP for itself and itsconsolidated Subsidiaries, if any, including a balance sheet as of the end ofsuch period, a related profit and loss statement, and related statements ofchanges in partner’s capital and cash flows, accompanied by any managementletter prepared by said accountants.”

 

**Section 3. Waiver.** By its signature below each of the undersigned Lenders herebyspecifically waives any violation of Section 6.1(a) of the Agreement and anyDefault or Unmatured Default caused thereby to the extent such violation orDefault or Unmatured Default was caused by the Borrower’s failure to deliverthe report of its accountants required by clause (ii) of Section 6.1(a) of theAgreement with respect to the Borrower’s fiscal years ended December 31, 2000and December 31, 2001.  This specific waiveris limited to the express circumstances described herein and shall not beconstrued to constitute (i) a waiver of any other event, circumstance orcondition or of any other right or remedy available to the Agent or any Lenderpursuant to the Agreement, or (ii) a consent to any departure by the Borroweror any Subsidiary from any other term or requirement under the Agreement.

 

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**Section 4. Representations and Warranties.**  In order to induce the Lenders to executeand deliver this First Amendment, the Borrower hereby confirms, reaffirms andrestates as of the date hereof the representations and warranties set forth inArticle V of the Agreement provided that such representations and warrantiesshall be and hereby are amended as follows: each reference therein to “thisAgreement” (including, without limitation, each such a reference included inthe term “Loan Documents” and all indirect references such as “hereby”,“herein”, “hereof” and “hereunder”) shall be deemed to be a collectivereference to the Agreement, this First Amendment and the Agreement as amendedby this First Amendment.  A Defaultunder and as defined in the Agreement as amended by this First Amendment shallbe deemed to have occurred if any representation or warranty made pursuant tothe foregoing sentence of this Section 4 shall be materially false as of thedate on which made.

 

**Section 5. Conditions Precedent.**  This First Amendment and the amendment andwaiver provided for herein shall become effective as of the date hereof on thedate on which this First Amendment shall have been duly executed and deliveredby the Agent and the Borrower on one counterpart.

 

**Section 6. Effect on the Agreement.**  Except to the extent of the specificamendment and waiver provided for herein, all of the representations,warranties, terms, covenants and conditions of the Agreement and the other LoanDocuments (i) shall remain unaltered, (ii) shall continue to be, and shallremain, 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 FirstAmendment, all references in the Agreement (including references in theAgreement as amended by this First 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 asamended by this First Amendment.

 

**Section 7. Expenses.**  The Borrower shall reimburse the Agent for any and all reasonablecosts, internal charges and out-of-pocket expenses (including attorneys’ feesand time charges of attorneys for the Agent, which attorneys may be employeesof the Agent) paid or incurred by the Agent in connection with the preparation,review, execution and delivery of this First Amendment.

 

**Section 8. Entire Agreement.**  This First Amendment, the Agreement asamended by this First Amendment and the other Loan Documents embody the entireagreement and understanding between the parties hereto and supersede any andall prior agreements and understandings between the parties hereto relating tothe subject matter hereof.

 

**Section 9. Headings.**  The headings, captions, and arrangements used in this FirstAmendment are for convenience only and shall not affect the interpretation ofthis First Amendment.

 

**SECTION 10. GOVERNING LAW.  THIS FIRSTAMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING,WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUTREGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVINGEFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS LOCATED IN ILLINOIS.**

 

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**Section 11. Counterparts.**  This First Amendment may be executed in any number ofcounterparts, all of which taken together shall constitute one agreement, andany of the parties hereto may execute this First Amendment by signing any suchcounterpart.

 

IN WITNESSWHEREOF, the parties hereto have caused this First Amendment and Waiver to beduly executed as of the date first above written.

 
|   | TC PIPELINES  LP                |
|--------|---------------------------------|
|   |                            |   |
|   | By:                             | TC PipeLines  GP, Inc., |
|   |                            | its general  partner |
|   |                            |   |
|   | By:                             |   /s/ Russell K. Girling |   |
|   |                            |   | Name:  Russell K. Girling |
|   | Title: Chief  Financial Officer |
|   |                            |   |
|   | By:                             |   /s/ Rhondda E. S. Grant |   |
|   | Name:  Rhondda E. S. Grant      |
|   | Title:  Secretary               |
|   |                            |   |
|   |                            |   |
|   | BANK ONE,  NA,                  |
|   | Individually  and as Agent      |
|   |                            |   |
|   | By:                             |   /s/ Kenneth J. Fatur |   |
|   |                            | Kenneth J. Fatur |
|   | Title:                          | Director,  Capital Markets |   |
|        |                                 |  |  |  |  |

 

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