Exhibit 10.1


REPLACEMENT CAPITAL COVENANT, dated as of September
27, 2007 (this “Replacement Capital Covenant”), by ENBRIDGE ENERGY
PARTNERS, L.P., a Delaware limited partnership (the “Partnership”) in
favor of and for the benefit of each Covered Debtholder (as defined below).


RECITALS


A.                                   The
Partnership has duly authorized and desires to cause to be issued a series of
its debt securities designated the “8.05% Fixed/Floating Rate Junior
Subordinated Notes due 2067” (the “Subordinated Notes”) under the Subordinated
Indenture dated as of September 27, 2007 (the “Base Indenture”) between
the Partnership and U.S. Bank National Association, as trustee (the “Trustee”),
as supplemented by the First Supplemental Indenture dated as of September 27,
2007 (the “Supplemental Indenture” and, together with the Base
Indenture, the “Subordinated Indenture”) between the Partnership and the
Trustee.  On the date hereof, the
Partnership is issuing $400,000,000 aggregate principal amount of Subordinated
Notes pursuant to the Subordinated Indenture, and after the date hereof, the
Partnership may issue additional Subordinated Notes pursuant to the
Subordinated Indenture.  For the
avoidance of doubt, this Replacement Capital Covenant shall apply to any and
all Subordinated Notes so issued.


B.                                     This
Replacement Capital Covenant is the “Replacement Capital Covenant” referred to
in the Prospectus Supplement, dated September 27, 2007, relating to the
Subordinated Notes, which supplements the Partnership’s Prospectus, dated
January 17, 2006.


C.                                     The
Partnership, in entering into and disclosing the content of this Replacement
Capital Covenant in the manner provided below, is doing so with the intent that
the covenants provided for in this Replacement Capital Covenant be enforceable
by each Covered Debtholder and that the Partnership be estopped from breaching
or disregarding the covenants in this Replacement Capital Covenant, in each
case to the fullest extent permitted by applicable law.


D.                                    The
Partnership acknowledges that reliance by each Covered Debtholder upon the
covenants in this Replacement Capital Covenant is reasonable and foreseeable by
the Partnership, and that non-compliance by the Partnership with its covenants
in this Replacement Capital Covenant could result in damages to a Covered
Debtholder.


NOW, THEREFORE, the Partnership hereby covenants and
agrees as follows in favor of and for the benefit of each Covered Debtholder.


SECTION 1.                                Definitions.  Capitalized terms used in this Replacement
Capital Covenant (including the Recitals) have the meanings set forth in Schedule
I hereto.


SECTION 2.                                Limitations on
Repayment, Redemption and Purchase of Subordinated Notes.  The Partnership hereby promises and covenants
to and for the benefit of each Covered Debtholder that the Partnership shall
not repay, redeem or purchase, and shall not permit any Subsidiary of the
Partnership to purchase, all or any part of the Subordinated Notes, in each
case, on or before the Termination Date, except to the extent that the
principal amount repaid or the applicable redemption or purchase price does not
exceed the sum of the following amounts:



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(i)                                     the Applicable
Percentage of (a) the aggregate amount of the net cash proceeds the Partnership
and its Subsidiaries have received from the sale of Common Units and
Subordinated Units and Rights to acquire Units (including Common Units,
Subordinated Units and Rights to acquire Units sold pursuant to the Partnership’s
Unit reinvestment plan, direct Unit purchase plan or employee benefit plans)
and (b) the aggregate Market Value of any Common Units or Subordinated
Units that have been issued by the Partnership and its Subsidiaries in
connection with the conversion into or exchange for Common Units or
Subordinated Units of any convertible or exchangeable securities, other than,
in the case of clause (b), where the Partnership or any of its Subsidiaries has
received equity credit from any NRSRO with respect to such convertible or
exchangeable securities, in each of clauses (a) and (b) since the most recent
Measurement Date (without double counting proceeds received in any prior
Measurement Period); plus


(ii)                                  100% of the aggregate
amount of net cash proceeds the Partnership and its Subsidiaries have received
since the most recent Measurement Date (without double counting proceeds
received in any prior Measurement Period) from the sale of Replacement Capital
Securities (other than the securities set forth in clause (i) above);


in each case, to Persons other than the Partnership
and its Subsidiaries, within the applicable Measurement Period.  For purposes of this Replacement Capital
Covenant, the term “repay” or “repayment” includes the defeasance by the
Partnership of the Subordinated Notes as well as the satisfaction and discharge
of its obligations under the Subordinated Indenture with respect to the
Subordinated Notes.


SECTION 3.                              Covered
Debt.


(a)                                  The Partnership
represents and warrants that the Initial Covered Debt is Eligible Debt.


(b)                                 On or during the
30-day period immediately preceding any Redesignation Date with respect to the
Covered Debt then in effect, the Partnership shall identify the series of
Eligible Debt that will become the Covered Debt on and after such Redesignation
Date in accordance with the following procedures:


(i)                                     the Partnership
shall identify each series of then outstanding long-term indebtedness for money
borrowed that is Eligible Debt of the Partnership;


(ii)                                  if only one series of
such then outstanding long-term indebtedness for money borrowed is Eligible
Debt, such series shall become the Covered Debt commencing on such
Redesignation Date;


(iii)                               if the Partnership has
more than one outstanding series of long-term indebtedness for money borrowed
that is Eligible Debt, then the Partnership shall identify the series that has
the latest occurring final maturity date as of the date the Partnership is
applying the procedures in this Section 3(b) and such series shall become the
Covered Debt on such Redesignation Date;



 2
 









(iv)                              the series of outstanding
long-term indebtedness for money borrowed that is determined to be Covered Debt
pursuant to clause (ii) or (iii) above shall be the Covered Debt for purposes
of this Replacement Capital Covenant for the period commencing on such
Redesignation Date and continuing to but not including the Redesignation Date
as of which a new series of outstanding long-term indebtedness is next
determined to be the Covered Debt pursuant to the procedures set forth in this
Section 3(b); and


(v)                                 in connection with
such identification of a new series of Covered Debt, the Partnership shall give
the notice provided for in Section 3(c) within the time frame provided for in
such section.


Notwithstanding
any other provisions of this Replacement Capital Covenant, if a series of
Eligible Senior Debt of the Partnership has become the Covered Debt in
accordance with this Section 3(b), on the date on which the Partnership issues
a new series of Eligible Subordinated Debt, then immediately upon such issuance
such new series of Eligible Subordinated Debt shall become the Covered Debt and
the applicable series of Eligible Senior Debt shall cease to be the Covered
Debt.


(c)                                  Notice.  In order to give effect to the intent of the
Partnership described in Recital C, the Partnership covenants that


(i)                                     simultaneously
with the execution of this Replacement Capital Covenant or as soon as
practicable after the date hereof, it shall (x) give notice to the Holders of
the Initial Covered Debt of this Replacement Capital Covenant and the rights
granted to such Holders hereunder by delivering (or causing to be delivered)
notice of the same to the trustee under the indenture relating to the Initial
Covered Debt and to each such Holder and, to the extent any such Holder holds
such Initial Covered Debt on behalf of any beneficial owner, appropriately
instruct such Holder to provide a copy of such notice to such beneficial owner,
and (y) file a copy of this Replacement Capital Covenant with the Commission as
an exhibit to a Current Report on Form 8-K (or any successor form) under
the Securities Exchange Act;


(ii)                                  so long as the
Partnership is a reporting issuer under the Securities Exchange Act, the
Partnership shall include in each Annual Report on Form 10-K (or any
successor form) filed after the date hereof with the Commission under the
Securities Exchange Act a description of the covenant set forth in Section 2
and identify the series of long-term indebtedness for money borrowed that is
Covered Debt as of the date such Annual Report on Form 10-K (or any
successor form) is filed with the Commission;


(iii)                               if a series of the
long-term indebtedness for money borrowed of the Partnership (1) becomes
Covered Debt or (2) ceases to be Covered Debt, the Partnership shall (x) give
notice of such occurrence within 30 days following such occurrence to the
Holders of such long-term indebtedness for money borrowed in the manner
provided for in the indenture or other instrument under which such



 3
 









long-term indebtedness for money borrowed was issued and (y) report
such change in a Current Report on Form 8-K (or any successor form), which must
incorporate by reference this Replacement Capital Covenant, and in the
Partnership’s next Quarterly Report on Form 10-Q (or any successor form)
or Annual Report on Form 10-K (or any successor form), as applicable;


(iv)                              if, and only if, the
Partnership ceases to be a reporting company under the Securities Exchange Act,
the Partnership shall (A) post on its website (or any other similar electronic
platform generally available to the public) the information otherwise required
to be included in Securities Exchange Act filings pursuant to clauses (ii) and
(iii) of this Section 3(c) and (B) cause a notice of the existence of this
Replacement Capital Covenant to be posted on the Bloomberg screen for the
Covered Debt or any successor Bloomberg screen and each similar third-party
vendor’s screen the Partnership reasonably believes is appropriate (each an “Investor
Screen”) and use its commercially reasonable efforts to cause a hyperlink
to a definitive copy of this Replacement Capital Covenant to be included on
each Investor Screen for each series of Covered Debt, in each case to the
extent permitted by Bloomberg or such similar third-party vendor, as the case
may be; and


(v)                                 promptly upon request
by any Holder of Covered Debt, the Partnership shall provide such Holder with a
definitive copy of this Replacement Capital Covenant.


(d)                                 If at any time the
Covered Debt is held by a trust or other special purpose vehicle, a holder of
capital securities of such trust or special purpose vehicle may institute a
legal proceeding directly against the Partnership for the enforcement of this
Replacement Capital Covenant, and such capital securities shall be deemed to be
“Covered Debt” so long as the Covered Debt held by such trust or other special
purpose vehicle remains Covered Debt.


SECTION 4.                              Termination,
Amendment and Waiver.


(a)                                  The obligations of
the Partnership pursuant to this Replacement Capital Covenant shall remain in
full force and effect until the earliest date (the “Termination Date”)
to occur of


(i)                                     the date on which
all of the Subordinated Notes have been redeemed, purchased or paid in full in
compliance with the terms of this Replacement Capital Covenant,


(ii)                                  the date, if any, on
which the Holders of a majority in principal amount of the then-outstanding
series of Covered Debt consent or agree in writing to terminate this
Replacement Capital Covenant and the obligations of the Partnership hereunder,



 4
 









(iii)                               the date on which the
Partnership ceases to have any series of outstanding Eligible Senior Debt or
Eligible Subordinated Debt (in each case without giving effect to the rating
requirement in clause (b) of the definition of each such term),


(iv)                              the date on which the
Subordinated Notes are accelerated as a result of an event of default under the
Subordinated Indenture, and


(v)                                 the date that is 10
years after the Scheduled Maturity Date.


From and after the
Termination Date, the obligations of the Partnership pursuant to this
Replacement Capital Covenant shall be of no further force and effect.


(b)                                 This Replacement
Capital Covenant may be amended or supplemented from time to time by a written
instrument signed by the Partnership with the consent of the Holders of at
least a majority in principal amount then outstanding of the then effective
series of Covered Debt, provided that this Replacement Capital Covenant
may be amended or supplemented from time to time by a written instrument signed
only by the Partnership (and without the consent of any Holders of the then
effective series of Covered Debt) if any of the following apply (it being
understood that any such amendment or supplement may fall into one or more of
the following):


(i)                                     such amendment or
supplement eliminates Common Units or Subordinated Units (or Rights to acquire
Units) as Replacement Capital Securities, if either (A) the Partnership has
been advised in writing by a nationally recognized independent accounting firm
or (B) an accounting standard or interpretive guidance of an existing
accounting standard by an organization or regulator that has responsibility for
establishing or interpreting accounting standards in the United States becomes
effective such that, in each case, there is more than an insubstantial risk
that the failure to do so would result in a reduction in the Partnership’s
earnings per Common Unit or Subordinated Unit as calculated in accordance with
generally accepted accounting principles in the United States,


(ii)                                  the effect of such
amendment or supplement is solely to impose additional restrictions on the
ability of the Partnership or any of its Subsidiaries to repay, redeem or
purchase the Subordinated Notes or to impose additional restrictions on, or to
eliminate certain of, the types of securities qualifying as Replacement Capital
Securities and the Partnership has delivered to the Holders of the then
effective series of Covered Debt in the manner provided for in the indenture or
other instrument with respect to such Covered Debt a written certificate to
that effect executed on its behalf by an officer of the Partnership or its
general partner, or


(iii)                               such amendment or
supplement is not adverse to the Covered Debtholders and the Partnership has
delivered to the Holders of the then effective series of Covered Debt in the
manner provided for in the indenture or other



 5
 









instrument with respect to such Covered Debt a written certificate
executed on its behalf by an officer of the Partnership or its general partner
stating that the Partnership has determined that such amendment or supplement
is not adverse to the Covered Debtholders. 
For the avoidance of doubt, an amendment or supplement that adds new
types of Replacement Capital Securities or modifies the requirements of the
Replacement Capital Securities described herein would not be adverse to the
rights of the Covered Debtholders if, following such amendment or supplement,
this Replacement Capital Covenant would satisfy clause (ii)(b) of the definition
of Qualifying Replacement Capital Covenant.


(c)                                  For purposes of
Sections 4(a) and 4(b), the Holders whose consent or agreement is required to
terminate, amend or supplement this Replacement Capital Covenant or the
obligations of the Partnership hereunder shall be the Holders of the then
effective Covered Debt as of a record date established by the Partnership that
is not more than 60 days prior to the date on which the Partnership proposes
that such termination, amendment or supplement becomes effective.


SECTION 5.                            Miscellaneous.


(a)                                  This Replacement Capital Covenant, and any claim
arising herefrom or relating hereto, shall be governed by and construed in
accordance with the law of the State of New York.


(b)                                 This Replacement
Capital Covenant shall be binding upon the Partnership and its successors and
assigns (provided that, in the event that the Partnership sells, conveys,
transfers or otherwise disposes of all or substantially all its assets to any
person and (i) such person assumes all the obligations of the Partnership under
the indenture governing the then applicable Covered Debt and the Subordinated
Indenture, (ii) such person assumes all the obligations of the Partnership
under this Replacement Capital Covenant and (iii) the Partnership is released
from its obligations under the indenture governing the then applicable Covered
Debt and the Subordinated Indenture, the Partnership shall be released from all
its obligations hereunder) and shall inure to the benefit of the Covered
Debtholders as they exist from time to time (it being understood and agreed by
the Partnership that if any Person who is a Covered Debtholder initiates a
claim or proceeding to enforce its rights under this Replacement Capital
Covenant after the Partnership has violated one or more of its covenants in
Section 2 and before the series of long-term indebtedness for money borrowed
held by such Covered Debtholder is no longer Covered Debt, such Person’s rights
under this Replacement Capital Covenant shall not terminate by reason of such
series of long-term indebtedness for money borrowed ceasing to be Covered Debt
until the termination of such claim or proceeding).  Other than the Covered Debtholders as
provided in the previous sentence, no other Person shall have any rights under
this Replacement Capital Covenant or be deemed a third party beneficiary of or
entitled to rely on this Replacement Capital Covenant.  In particular, no holder of the Subordinated
Notes is a third party beneficiary of this Replacement Capital Covenant, it being
understood that the rights of the holders of the Subordinated Notes are set
forth in the Subordinated Indenture.



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(c)                                  All demands, notices,
requests and other communications to the Partnership under this Replacement
Capital Covenant shall be deemed to have been duly given and made if in writing
and


(i)                                     if served by
personal delivery upon the Partnership, on the day so delivered (or, if such
day is not a Business Day, the next succeeding Business Day),


(ii)                                  if delivered by
registered post or certified mail, return receipt requested, or sent to the
Partnership by a national or international courier service, on the date of
receipt by the Partnership (or, if such date of receipt is not a Business Day,
the next succeeding Business Day), or


(iii)                               if sent by telecopier,
on the day telecopied, or if not a Business Day, the next succeeding Business
Day, provided that the telecopy is promptly confirmed by telephone
confirmation thereof,


and in each case to the Partnership at the address set
forth below, or at such other address as the Partnership may thereafter notify
to Covered Debtholders or post on its website as the address for notices under
this Replacement Capital Covenant:


If to the Partnership, to:


Enbridge Energy Partners, L.P.


1100 Louisiana, Suite 3300


Houston, Texas 77002


Attn: Corporate Secretary


Telephone: 713-821-2000


Telecopy:  713-821-2229.


[Remainder of Page Intentionally Left Blank;
Signature Page Follows]



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IN WITNESS WHEREOF, the Partnership has caused this
Replacement Capital Covenant to be duly executed and delivered, as of the day
and year first above written.


	
  

  	
  ENBRIDGE ENERGY PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ENBRIDGE ENERGY MANAGEMENT, L.L.C.

  
	
   

  	
   

  	
  as delegate of Enbridge Energy Company, Inc.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARK A. MAKI

  	
   

  
	
   

  	
   

  	
  Name: Mark A. Maki

  
	
   

  	
   

  	
  Title: Vice President - Finance

  
	
   

  	
   

  	
  (Duly Authorized Officer)

  



 


Signature Page to Replacement Capital Covenant
















SCHEDULE I


Definitions


“Alternative Payment Mechanism” means, with
respect to any Qualifying Capital Securities, provisions in the related
transaction documents that require the Partnership, in its discretion, to issue
(or use Commercially Reasonable Efforts to issue) one or more types of APM
Qualifying Securities raising eligible proceeds at least equal to the deferred
Distributions on such Qualifying Capital Securities and to apply the proceeds
to pay unpaid Distributions on such Qualifying Capital Securities, commencing
on the earlier of (x) the first Distribution Date after commencement of a
deferral period on which the Partnership pays current Distributions on such
Qualifying Capital Securities and (y) the fifth anniversary of the commencement
of such deferral period, and that:


(a)                                  define “eligible
proceeds” to mean, for purposes of such Alternative Payment Mechanism, the
net proceeds (after underwriters’ or placement agents’ fees, commissions or
discounts and other expenses relating to the issuance or sale) that the
Partnership has received during the 180 days prior to the related Distribution
Date from the issuance of APM Qualifying Securities to Persons other than the
Partnership or any of its Subsidiaries, up to the Preferred Cap in the case of
APM Qualifying Securities that are Qualifying Preferred Units, subject to the
Common Cap, the Preferred Cap and the Share Cap, as applicable (each as defined
below);


(b)                                 permit the Partnership
to pay current Distributions on any Distribution Date out of any source of
funds but (x) require the Partnership to pay deferred Distributions only out of
eligible proceeds and (y) prohibit the Partnership from paying deferred
Distributions out of any source of funds other than eligible proceeds (other
than following an acceleration of such securities or the occurrence of the
final maturity thereof);


(c)                                  if deferral of
Distributions continues for more than one year (or such shorter period as is
provided in the terms of the Qualifying Capital Securities), require the
Partnership and its Subsidiaries not to redeem or purchase any securities that
rank pari passu with or junior to the most
senior issuable APM Qualifying Securities that the Partnership has issued to
settle deferred Distributions in respect to that deferral period until at least
one year after all deferred Distributions have been paid (a “Repurchase
Restriction”);


(d)                                 limit the obligation
of the Partnership to issue (or use Commercially Reasonable Efforts to issue)
APM Qualifying Securities to:


(i)                                     in
the case of APM Qualifying Securities that are Common Units or Subordinated
Units and Rights to acquire Units, either (x) during the first five years of
any deferral period or (y) with respect to deferred Distributions attributable
to the first five years of any deferral period (provided that such
limitation shall not apply after the ninth anniversary of the commencement of
any



 S-1
 









deferral period), to a number of Common Units, Subordinated Units and
Units purchasable upon the exercise of any Rights to acquire Units, which, in
the aggregate, does not exceed 2% of the outstanding number of Common Units and
Subordinated Units (the “Common Cap”); and


(ii)                                  in the case of APM
Qualifying Securities that are Qualifying Preferred Units, an amount from the
issuance thereof pursuant to the related Alternative Payment Mechanism
(including at any point in time from all prior issuances thereof pursuant to
such Alternative Payment Mechanism) equal to 25% of the liquidation or
principal amount of the Qualifying Capital Securities that are the subject of
the related Alternative Payment Mechanism (the “Preferred Cap”);


(e)                                  in the case of
Qualifying Capital Securities other than Qualifying Preferred Units, include a
Bankruptcy Claim Limitation Provision; and


(f)                                    permit the
Partnership, at its option, to provide that if the Partnership is involved in a
merger, consolidation, amalgamation, binding unit exchange or conveyance,
transfer or lease of all or substantially all of its assets to any other Person
or a similar transaction (a “business combination”) where immediately
after the consummation of the business combination more than 50% of the
surviving or resulting or transferee entity’s voting securities is owned by
Persons other than the equityholders in the Partnership immediately prior to
giving effect to the business combination, then clauses (a), (b) and (c) above
will not apply to any deferral period that is terminated on the next
Distribution Date following the date of consummation of the business
combination; provided (and it being understood) that:


(i)                                     the Alternative
Payment Mechanism may at the discretion of the Partnership include a unit cap
limiting the issuance of APM Qualifying Securities consisting of Common Units,
or Subordinated Units and Qualifying Warrants, in each case to a maximum
issuance cap to be set at the discretion of the Partnership; provided
that such maximum issuance cap will be subject to the Partnership’s agreement
to use commercially reasonable efforts to increase the maximum issuance cap
when reached and (x) simultaneously satisfy its future fixed or contingent
obligations under other securities and derivative instruments that provide for
settlement or payment in Common Units or Subordinated Units or (y) if the
Partnership cannot increase the maximum issuance cap as contemplated in the
preceding clause, by requesting the Board to adopt a resolution for unitholder
vote at a unitholders meeting to be held within the next 12 months to increase
the number of units of authorized Common Units or Subordinated Units for purposes
of satisfying its obligations to pay deferred Distributions;


(ii)                                  the Partnership shall
not be obligated to issue (or use Commercially Reasonable Efforts to issue) APM
Qualifying Securities for so long as a Market Disruption Event has occurred and
is continuing;


(iii)                               if,
due to a Market Disruption Event or otherwise, the Partnership is able to raise
and apply some, but not all, of the eligible proceeds necessary to



 S-2
 









pay all deferred Distributions on any Distribution Date, the
Partnership will apply any available eligible proceeds to pay accrued and
unpaid Distributions on the applicable Distribution Date in chronological order
subject to the Common Cap, the Preferred Cap, and any maximum issuance cap
referred to above, as applicable; and


(iv)                              if the Partnership has
outstanding more than one class or series of securities under which it is
obligated to sell a type of APM Qualifying Securities and apply some part of
the proceeds to the payment of deferred Distributions, then on any date and for
any period the amount of net proceeds received by the Partnership from those
sales and available for payment of deferred Distributions on such securities
shall be applied to such securities on a pro rata basis up to the Common Cap,
the Preferred Cap and any maximum issuance cap referred to above, as
applicable, in proportion to the total amounts that are due on such securities.


“APM Qualifying Securities” means, with respect
to an Alternative Payment Mechanism, any Debt Exchangeable for Preferred Equity
or any Mandatory Trigger Provision, one or more of the following (as designated
in the transaction documents for any Qualifying Capital Securities that include
an Alternative Payment Mechanism or a Mandatory Trigger Provision or for any
Debt Exchangeable for Preferred Equity):


(a)                                  Common
Units or Subordinated Units; or


(b)                                 Qualifying
Warrants; and


(c)                                  Qualifying
Preferred Units;


in each case, of the Partnership;


provided that if the APM Qualifying
Securities for any Alternative Payment Mechanism, any Debt Exchangeable for
Preferred Equity or any Mandatory Trigger Provision include both Common Units,
Subordinated Units and Qualifying Warrants, such Alternative Payment Mechanism,
Debt Exchangeable for Preferred Equity or Mandatory Trigger Provision may
permit, but need not require, the Partnership to issue Qualifying Warrants.


“Applicable Percentage” means:


(a)                                  200%
with respect to any repayment, redemption or purchase prior to the Scheduled
Maturity Date; and


(b)                                 400%
with respect to any repayment, redemption or purchase on or after the Scheduled
Maturity Date.


“Bankruptcy
Claim Limitation Provision” means, with respect to any Qualifying Capital
Securities that have an Alternative Payment Mechanism or a Mandatory Trigger
Provision, provisions that, upon any liquidation, dissolution, winding up or
reorganization or in connection



 S-3
 









with any insolvency,
receivership or proceeding under any bankruptcy law with respect to the
Partnership, limit the claim of the holders of such Qualifying Capital
Securities to Distributions that accumulate during (a) any deferral period, in
the case of Qualifying Capital Securities that have an Alternative Payment
Mechanism, or (b) any period in which the Partnership fails to satisfy one or
more financial tests set forth in the terms of such securities or related
transaction agreements, in the case of Qualifying Capital Securities having a
Mandatory Trigger Provision, to:


(i)                                     in
the case of Qualifying Capital Securities having an Alternative Payment
Mechanism or Mandatory Trigger Provision with respect to which the APM
Qualifying Securities do not include Qualifying Preferred Units, 25% of the
stated or principal amount of such securities then outstanding; and


(ii)                                  in
the case of any other Qualifying Capital Securities, an amount not in excess of
the sum of (x) the amount of accumulated and unpaid Distributions (including
compounded amounts) that relate to the earliest two years of the portion of the
deferral period for which Distributions have not been paid and (y) an amount
equal to the excess, if any, of the Preferred Cap over the aggregate amount of
net proceeds from the sale of Qualifying Preferred Units that the Partnership
has applied to pay such Distributions pursuant to the Alternative Payment
Mechanism or the Mandatory Trigger Provision, provided that the holders
of such securities are deemed to agree that, to the extent the remaining claim
exceeds the amount set forth in subclause (x), the amount they receive in
respect of such excess shall not exceed the amount they would have received had
the claim for such excess ranked pari passu with
the interests of the holders, if any, of Qualifying Preferred Units.


“Base Indenture” has the meaning specified in
Recital A.


“Board” means the Board of Directors of the
General Partner or any authorized committee of the Board of Directors of the
General Partner or any directors and/or officers of the General Partner to whom
such Board of Directors or such committee shall have duly delegated its
authority to act hereunder.  If the
Partnership shall change its form of entity to other than a limited
partnership, the references to the Board of Directors of the General Partner
shall mean the Board of Directors (or other comparable governing body) of the
Partnership.


“Business Day” means each day other than (a) a
Saturday or Sunday or (b)(i) a day on which banking institutions in Houston,
Texas or The City of New York are authorized or required by law or executive
order to remain closed or, (ii) a day on or after October 1, 2017, that is not
a London business day.  A “London
business day” is any Business Day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.


“Commercially
Reasonable Efforts” means, for purposes of selling APM Qualifying
Securities, commercially reasonable efforts to complete the offer and sale of
APM Qualifying Securities to third parties that are not Subsidiaries of the
Partnership in public offerings or



 S-4
 









private placements.  The Partnership shall not be considered to
have made commercially reasonable efforts to effect a sale of APM Qualifying
Securities if the Partnership determines not to pursue or complete such sale
due to pricing, coupon, dividend rate or dilution considerations on such
securities.


“Commission” means the United States Securities
and Exchange Commission.


“Common Cap” has the meaning specified in the
paragraph (d)(i) of the definition of Alternative Payment Mechanism.


“Common Units” means (i) common limited
partnership interests of the Partnership, including, without limitation, those
interests described as Common Units, Class C Units or I-Units in the
Partnership’s partnership agreement, and (ii) interests of the Partnership
possessing substantially similar characteristics, provided that such
interests (A) are perpetual, with no prepayment obligation on the part of the
Partnership, whether at the election of the holder or otherwise, and (B) other
than any Subordinated Units, are (at the time of issuance and thereafter) the
most junior and subordinated securities issuable by the Partnership, with liquidation
rights limited to a share of the Partnership’s assets, if any, remaining after
satisfaction in full of all creditors and of all holders of any other equity
securities of the Partnership that rank senior to the Common Units.


“Covered Debt” means (a) at the date of this
Replacement Capital Covenant and continuing to but not including the first
Redesignation Date, the Initial Covered Debt and (b) thereafter, commencing
with each Redesignation Date and continuing to but not including the next succeeding
Redesignation Date, the Eligible Debt identified pursuant to Section 3(b) as
the Covered Debt for such period.


“Covered Debtholder” means each Person (whether
a Holder or a beneficial owner holding through a participant in a clearing
agency) that buys, holds or sells long-term indebtedness for money borrowed of
the Partnership of a series during the period that such series of long-term
indebtedness for money borrowed is Covered Debt and after the procedures
provided for in Sections 3(c)(i)(x) and 3(c)(iii)(1), or Section 3(c)(iv), as
applicable, have been completed with respect to the designation of such series
of long-term indebtedness for money borrowed as Covered Debt.


“Debt Exchangeable for Equity” means Debt
Exchangeable for Common Equity or Debt Exchangeable for Preferred Equity.


“Debt Exchangeable for Common Equity” means a
security or combination of securities (together in this definition, “such
securities”) that:


(a)                                  gives the holder a
beneficial interest in (i) a fractional interest in a unit purchase contract
for a Common Unit or Subordinated Unit that will be settled in three years or
less, with the number of Common Units or Subordinated Units purchasable
pursuant to such unit purchase contract to be within a range established at the
time of issuance of such securities, subject to customary anti-dilution
adjustments and (ii) debt



 S-5
 









securities of
the Partnership that are not redeemable at the option of the Partnership or the
holder thereof prior to the settlement of the unit purchase contracts;


(b)                                 provides
that the investors directly or indirectly grant to the Partnership a security
interest in such debt securities and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the investors’
direct or indirect obligation to purchase Common Units or Subordinated Units
pursuant to such unit purchase contracts;


(c)                                  includes
a remarketing feature pursuant to which such debt securities are remarketed to
new investors commencing not later than 30 days prior to the settlement date of
the purchase contract; and


(d)                                 provides
for the proceeds raised in the remarketing to be used to purchase Common Units
or Subordinated Units under the unit purchase contracts and, if there has not
been a successful remarketing by the settlement date of the purchase contract,
provides that the unit purchase contracts will be settled by the Partnership
exercising its remedies as a secured party with respect to its debt securities
or other collateral directly or indirectly pledged by investors in the Debt
Exchangeable for Common Equity.


“Debt Exchangeable for Preferred Equity” means
a security or combination of securities (together in this definition, “such
securities”) that:


(a)                                  gives the holder a
beneficial interest in (i) subordinated debt securities of the Partnership that
include a provision requiring the Partnership to issue (or use Commercially
Reasonable Efforts to issue) one or more types of APM Qualifying Securities
raising proceeds at least equal to the deferred Distributions on such
subordinated debt securities commencing not later than the fifth anniversary of
the commencement of such deferral period and that are the most junior
subordinated debt of the Partnership (or rank pari passu with
the most junior subordinated debt of the Partnership) (in this definition, “subordinated
debt”) and (ii) a fractional interest in a unit purchase contract for a
share of Qualifying Preferred Units of the Partnership that ranks pari passu with or junior to all other preferred units of
the Partnership (in this definition, “preferred units”);


(b)                                 provides that the
investors directly or indirectly grant to the Partnership a security interest
in such subordinated debt securities and their proceeds (including any
substitute collateral permitted under the transaction documents) to secure the
investors’ direct or indirect obligation to purchase preferred units of the
Partnership pursuant to such unit purchase contracts;


(c)                                  includes a
remarketing feature pursuant to which the subordinated debt of the Partnership
is remarketed to new investors commencing not later than the first Distribution
Date that is at least five years after the date of issuance of securities or
earlier in the event of an early settlement event based on: (i) the dissolution
of the Partnership or (ii) one or more financial tests set forth in the terms
of the instrument governing such debt exchangeable for preferred equity;



 S-6
 









(d)                                 provides for the
proceeds raised in the remarketing to be used to purchase preferred units of
the Partnership under the unit purchase contracts and, if there has not been a
successful remarketing by the first Distribution Date that is six years after
the date of issuance of such securities, provides that the unit purchase
contracts will be settled by the Partnership exercising its remedies as a
secured party with respect to its subordinated debt securities or other
collateral directly or indirectly pledged by investors in the Debt Exchangeable
for Preferred Equity;


(e)                                  is subject to a
Qualifying Replacement Capital Covenant that will apply to such securities and
preferred units, and will not include Debt Exchangeable for Equity as a
Replacement Capital Security; and


(f)                                    after the issuance
of such preferred units, provides the holders of such securities with a beneficial
interest in such preferred units.


“Distribution Date” means, as to any securities
or combination of securities, the dates on which periodic Distributions on such
securities are scheduled to be made.


“Distribution Period” means, as to any
securities or combination of securities, each period from and including the
issue date or a Distribution Date, as applicable, for such securities to but
not including the next succeeding Distribution Date for such securities.


“Distributions” means, as to a security or
combination of securities, interest payments or other income distributions to
the holders thereof that are not Subsidiaries of the Partnership.


“Eligible Debt” means, at any time, Eligible
Subordinated Debt or, if no Eligible Subordinated Debt is then outstanding,
Eligible Senior Debt.


“Eligible Senior Debt” means, at any time, each
series of outstanding unsecured long-term indebtedness for money borrowed of
the Partnership that (a) upon a bankruptcy, liquidation, dissolution or winding
up of the Partnership, ranks most senior among the Partnership’s then
outstanding classes of unsecured indebtedness for money borrowed, (b) is then
assigned a rating by at least one NRSRO (provided that this clause (b) shall
apply on a Redesignation Date only if on such date the Partnership has
outstanding senior long-term indebtedness for money borrowed that satisfies the
requirements of clauses (a), (c), (d), (e) and (f) that is then assigned a
rating by at least one NRSRO), (c) has an outstanding principal amount of not
less than $100,000,000, (d) was issued through or with the assistance of a
commercial or investment banking firm or firms acting as underwriters, initial
purchasers or placement or distribution agents, (e) has a remaining life to
maturity of not less than five years and (f) is not issued pursuant to, or
governed by, an instrument that contains any provisions that would preclude the
holder thereof from relying upon the promise in the Replacement Capital
Covenant.  For purposes of this
definition as applied to securities with a CUSIP number, each issuance of
long-term indebtedness for money borrowed that has (or, if such indebtedness is
held by a trust or other intermediate entity established directly or indirectly
by the Partnership, the securities of such intermediate entity that have) a
separate CUSIP number shall be deemed to be a series of the Partnership’s
long-term indebtedness for money borrowed that is separate from each other
series of such indebtedness.



 S-7
 









“Eligible Subordinated Debt” means, at any time,
each series of the Partnership’s then-outstanding unsecured long-term
indebtedness for money borrowed that (a) upon a bankruptcy, liquidation,
dissolution or winding up of the Partnership, ranks senior to the Subordinated
Notes and subordinate to the Partnership’s then outstanding series of unsecured
indebtedness for money borrowed that ranks most senior, (b) is then assigned a
rating by at least one NRSRO (provided that this clause (b) shall apply on a
Redesignation Date only if on such date the Partnership has outstanding
subordinated long-term indebtedness for money borrowed that satisfies the
requirements in clauses (a), (c), (d), (e) and (f) that is then assigned a
rating by at least one NRSRO), (c) has an outstanding principal amount of not
less than $100,000,000, (d) was issued through or with the assistance of a
commercial or investment banking firm or firms acting as underwriters, initial
purchasers or placement or distribution agents, (e) has a remaining life to
maturity of not less than five years and (f) is not issued pursuant to, or
governed by, an instrument that contains any provisions that would preclude the
holder thereof from relying upon the promise in the Replacement Capital
Covenant.  For purposes of this
definition as applied to securities with a CUSIP number, each issuance of
long-term indebtedness for money borrowed that has (or, if such indebtedness is
held by a trust or other intermediate entity established directly or indirectly
by the Partnership, the securities of such intermediate entity that have) a
separate CUSIP number shall be deemed to be a series of the Partnership’s
long-term indebtedness for money borrowed that is separate from each other
series of such indebtedness.


“Final Repayment Date” means the “Final
Repayment Date” as defined in and as determined under the Subordinated
Indenture (including after giving effect to any extension election by the
Partnership pursuant to the extension provisions in Section 2.2(b) of the
Supplemental Indenture).


“General Partner” means Enbridge Energy
Company, Inc., a Delaware corporation, and its successors as general partner of
the Partnership or Enbridge Energy Management, L.L.C., a Delaware limited
liability company, as the delegate of the power to manage and control the
business and affairs of the Partnership pursuant to the Delegation of Control
Agreement, dated October 17, 2001, among Enbridge Energy Management, L.L.C. and
Enbridge Energy Company, Inc., as the same may be amended from time to time,
and successors of Enbridge Energy Management, L.L.C. as delegate of the General
Partner.


“Holder” means, as to the Covered Debt then in
effect, each record holder of such Covered Debt as reflected on the securities
register maintained by or on behalf of the Partnership with respect to such Covered
Debt and each beneficial owner of such Covered Debt holding such Covered Debt
through a participant in a clearing agency.


“Initial Covered Debt” means the Partnership’s
6.30% senior notes due 2034.


“Intent-Based
Replacement Disclosure” means, as to any security or combination of
securities, that the issuer has publicly stated its intention, either in the
prospectus or other offering document under which such securities were
initially offered for sale or in filings with the Commission made by the issuer
under the Securities Exchange Act prior to or contemporaneously with the
issuance of such securities, that the issuer or its Subsidiaries will redeem or
purchase such securities only with the proceeds (or an applicable percentage of



 S-8
 









proceeds) or Market Value
of replacement capital securities that have terms and provisions at the time of
redemption or purchase that receive as much or more equity credit than the
securities then being redeemed or purchased, raised within 180 days prior to
the applicable redemption or purchase date.


“Investor Screen” has the meaning specified in
Section 3(c)(iv).


“Mandatory Trigger Provision” means, as to any
Qualifying Capital Securities, provisions in the terms thereof or of the
related transaction agreements that:


(a)                                  require, or at its
option in the case of non-cumulative perpetual preferred units, permit, the
issuer of such Qualifying Capital Securities to make payment of Distributions
on such securities only pursuant to the issue and sale of APM Qualifying
Securities within two years of a failure of the issuer to satisfy one or more
financial tests set forth in the terms of such Qualifying Capital Securities or
related transaction agreements (for the avoidance of doubt, payment of such
Distributions with cash from any source other than APM Qualifying Securities is
not permitted immediately following the failure of the issuer to satisfy such
financial test(s)), in an amount such that the net proceeds of such sale are at
least equal to the amount of unpaid Distributions on such Qualifying Capital
Securities (including without limitation all deferred and accumulated amounts),
and in either case require the application of the net proceeds of such sale to
pay such unpaid Distributions, provided that (i) such Mandatory Trigger Provision
shall limit the issuance and sale of Common Units, Subordinated Units and
Qualifying Warrants the proceeds of which may be applied to pay such
Distributions pursuant to such provision to the Common Cap, unless the
Mandatory Trigger Provision requires such issuance and sale within one year of
such failure, and (ii) the amount of Qualifying Preferred Units the net
proceeds of which the issuer may apply to pay such Distributions pursuant to
such provision may not exceed the Preferred Cap;


(b)                                 other than in the case
of non-cumulative preferred units, if the provisions described in clause (a) do
not require such issuance and sale within one year of such failure, prohibit
the issuer and any of its Subsidiaries from repurchasing any securities that
are pari passu with or junior to its
respective APM Qualifying Securities, the proceeds of which were used to pay
deferred Distributions since such failure before the date six months after the
issuer applies the net proceeds of the sales described in clause (a) to pay
such unpaid Distributions in full;


(c)                                  other than in the
case of non-cumulative perpetual preferred units, include a Bankruptcy Claim
Limitation Provision; and


(d)                                 prohibit the issuer of
such securities from redeeming or purchasing any of its securities ranking upon
the liquidation, dissolution or winding up of the issuer junior to or pari passu with any APM Qualifying Securities the proceeds
of which were used to settle deferred interest during the relevant deferral
period prior to the date six months after the issuer applies the net proceeds
of the sales described in clause (a) above to pay such deferred Distributions
in full;



 S-9
 









provided (and it being understood)
that:


(a)                                  the issuer will not
be obligated to issue (or use Commercially Reasonable Efforts to issue) any
such APM Qualifying Securities for so long as a Market Disruption Event has
occurred and is continuing;


(b)                                 if, due to a Market
Disruption Event or otherwise, the issuer is able to raise and apply some, but
not all, of the eligible proceeds necessary to pay all deferred Distributions
on any Distribution Date, the issuer will apply any available eligible proceeds
to pay accrued and unpaid Distributions on the applicable Distribution Date in
chronological order subject to the Common Cap and Preferred Cap, as applicable;
and


(c)                                  if the issuer has
outstanding more than one class or series of securities under which it is
obligated to sell a type of any such APM Qualifying Securities and applies some
part of the proceeds to the payment of deferred Distributions, then on any date
and for any period the amount of net proceeds received by the issuer from those
sales and available for payment of deferred Distributions on such securities
shall be applied to such securities on a pro rata basis up to the Common Cap
and the Preferred Cap, as applicable, in proportion to the total amounts that
are due on such securities.


No remedy other than Permitted Remedies will arise by
the terms of such securities or related transaction agreements in favor of the
holders of such securities as a result of the issuer’s failure to pay
Distributions because of the Mandatory Trigger Provision or as a result of the
issuer’s exercise of its rights under an Optional Deferral Provision until
Distributions have been deferred for one or more Distribution Periods that
total together at least ten years.


“Market Disruption Event” means the occurrence
or existence of any of the following events or sets of circumstances:


(a)                                  the Partnership would
be required to obtain the consent or approval of its unitholders or a
regulatory body (including, without limitation, any securities exchange) or
governmental authority to issue or sell APM Qualifying Securities and such
consent or approval has not yet been obtained notwithstanding the Partnership’s
commercially reasonable efforts to obtain such consent or approval, or a
regulatory authority instructs the Partnership not to sell or offer for sale
APM Qualifying Securities at such time;


(b)                                 trading in securities
generally (or in the Partnership’s Common Units or any preferred units of the
Partnership) on the New York Stock Exchange or any other national securities
exchange or over-the-counter market on which the Common Units and/or the
Partnership’s preferred units are then listed or traded shall have been
suspended or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such
exchange or market by the Commission, by the relevant exchange or by any other
regulatory body or governmental body having jurisdiction, and the establishment
of such minimum prices materially disrupts or otherwise has a material adverse
effect on trading in, or the issuance and sale of, Common Units and/or such
preferred units;



 S-10
 









(c)                                  a banking moratorium
shall have been declared by the federal or state authorities of the United
States and such moratorium materially disrupts or otherwise has a material
adverse effect on trading in, or the issuance and sale of, the APM Qualifying
Securities;


(d)                                 a material disruption
shall have occurred in commercial banking or securities settlement or clearance
services in the United States and such disruption materially disrupts or
otherwise has a material adverse effect on trading in, or the issuance and sale
of, the APM Qualifying Securities;


(e)                                  the United States
shall have become engaged in hostilities, there shall have been an escalation
in hostilities involving the United States, there shall have been a declaration
of a national emergency or war by the United States or there shall have
occurred any other national or international calamity or crisis and such event
materially disrupts or otherwise has a material adverse effect on trading in,
or the issuance and sale of, the APM Qualifying Securities;


(f)                                    there shall have
occurred such a material adverse change in general domestic or international
economic, political or financial conditions, including without limitation as a
result of terrorist activities, and such change materially disrupts or
otherwise has a material adverse effect on trading in, or the issuance and sale
of, the APM Qualifying Securities;


(g)                                 an event occurs and is
continuing as a result of which the offering document for such offer and sale
of APM Qualifying Securities would, in the reasonable judgment of the
Partnership, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and either (a) the disclosure of that event at such
time, in the reasonable judgment of the Partnership, is not otherwise required
by law and would have a material adverse effect on the business of the
Partnership or (b) the disclosure relates to a previously undisclosed proposed
or pending material business transaction, the disclosure of which would impede
the ability of the Partnership to consummate such transaction, provided
that no single suspension period contemplated by this paragraph (g) shall
exceed 90 consecutive days and multiple suspension periods contemplated by this
paragraph (g) shall not exceed an aggregate of 180 days in any 360-day period;
or


(h)                                 the Partnership
reasonably believes, for reasons other than those referred to in paragraph (g)
above, that the offering document for such offer and sale of APM Qualifying
Securities would not be in compliance with law or a rule or regulation of the
Commission and the Partnership is unable to comply with such law or rule or
regulation or such compliance is unduly burdensome, provided that no
single suspension period contemplated by this paragraph (h) shall exceed 90
consecutive days and multiple suspension periods contemplated by this paragraph
(h) shall not exceed an aggregate of 180 days in any 360-day period.


The definition of “Market
Disruption Event” as used in any Qualifying Capital Securities may include
less than all of the paragraphs outlined above, as determined by the
Partnership at



 S-11
 









the time of issuance of
such securities, and in the case of clauses (a), (b), (c) and (d), as
applicable to a circumstance where the Partnership would otherwise endeavor to
issue preferred units, shall be limited to circumstances affecting markets
where the preferred units of the Partnership trade or where a listing for its
trading is being sought.


“Market Value” means, on any date, the closing
sale price per Common Unit (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on that date as reported
in composite transactions by the New York Stock Exchange or, if the Common
Units are not then listed on the New York Stock Exchange, as reported by the
principal U.S. securities exchange on which the Common Units are traded or
quoted; if the Common Units are not either listed or quoted on any U.S.
securities exchange on the relevant date, the Market Value will be the average
of the mid-point of the bid and ask prices for the Common Units on the relevant
date submitted by at least three nationally recognized independent investment
banking firms selected by the Partnership for this purpose or, in the event
such bid and ask prices are not available and in the case of Subordinated Units
and Rights to acquire Units, a value determined by a nationally recognized
independent investment banking firm selected by the Board for this purpose.


“Measurement Date” means, with respect to any
payment, redemption or purchase of Subordinated Notes (a) on or prior to the
Scheduled Maturity Date, the date that is 180 days prior to delivery of notice
of such payment or redemption or prior to the date of such purchase and (b)
after the Scheduled Maturity Date, the date that is 90 days prior to delivery
of notice of such payment or redemption or prior to the date of such purchase.


“Measurement Period”  means the period from the
Measurement Date to the related notice date or purchase date.  Measurement Periods cannot run concurrently.


“Non-Cumulative” means, with respect to any
securities, that the Partnership may elect not to make any number of periodic
Distributions without any remedy arising under the terms of the securities or
related agreements in favor of the holders, other than one or more Permitted
Remedies.  Securities that include an
Alternative Payment Mechanism shall also be deemed to be Non-Cumulative
for all purposes of this Replacement Capital Covenant.


“NRSRO” means any nationally recognized
statistical rating organization within the meaning of Section 3(a)(62) of the
Securities Exchange Act.


“Optional Deferral Provision” means, as to any
securities, a provision in the terms thereof or of the related transaction
agreements to the effect that either:


(a)                                  (i) the issuer of
such securities may, in its sole discretion, defer in whole or in part payment
of Distributions on such securities for one or more consecutive Distribution
Periods of up to five years or, if a Market Disruption Event is continuing, ten
years, without any remedy other than Permitted Remedies and (ii) such
securities are subject to an Alternative Payment Mechanism (provided
that such Alternative Payment Mechanism need not apply during the first five
years of any deferral period and need not include a Common Cap, Preferred Cap,
Bankruptcy Claim Limitation Provision or Repurchase Restriction); or



 S-12
 









(b)                                 the issuer of such securities
may, in its sole discretion, defer or skip in whole or in part payment of
Distributions on such securities for one or more consecutive Distribution
Periods up to at least ten years, without any remedy other than Permitted
Remedies.


“Partnership” has the meaning specified in the
introduction to this instrument.


“Permitted Remedies” means, with respect to any
securities, one or more of the following remedies:


(a)                                  rights
in favor of the holders of such securities permitting such holders to elect one
or more directors of the issuer (including any such rights required by the
listing requirements of any securities exchange on which such securities may be
listed or traded), or


(b)                                 complete
or partial prohibitions on the issuer paying Distributions on or repurchasing
Common Units, Subordinated Units or other securities that rank pari passu with or junior as to Distributions to such
securities for so long as Distributions on such securities, including unpaid
Distributions, remain unpaid.


“Person” means any individual, corporation,
partnership, joint venture, trust, limited liability company, corporation or
other entity, unincorporated organization or government or any agency or
political subdivision thereof.


“Preferred Cap” has the meaning specified in
paragraph (d)(ii) of the definition of Alternative Payment Mechanism.


“Qualifying Capital Securities” means
securities or combinations of securities (other than Common Units, Subordinated
Units or Rights to acquire Units and securities convertible into or exchangeable
for Common Units or Subordinated Units) that in the determination of the Board,
reasonably construing the definitions and other terms of this Replacement
Capital Covenant, meet one of the following criteria:


(i)                                     in
connection with any repayment, redemption or purchase of Subordinated Notes on
or prior to the date that is 50 years prior to the Final Repayment Date:


(A)                              securities
issued by the Partnership that (1) rank pari
passu with or junior to the Subordinated Notes upon the liquidation,
dissolution or winding up of the Partnership, (2) have no maturity or a
maturity of at least 55 years and (3) either (x) are subject to a Qualifying
Replacement Capital Covenant and have an Optional Deferral Provision, or (y)
have an Optional Deferral Provision and a Mandatory Trigger Provision;


(B)                                securities
issued by the Partnership that (1) rank pari
passu with or junior
to other preferred units of the Partnership, (2) have no maturity or a maturity
of at least 40 years, (3) are subject to Intent-Based Replacement Disclosure
and (4) have a Mandatory Trigger Provision and an Optional Deferral Provision;
or



 S-13
 









(C)                                securities
issued by the Partnership that (1) would rank junior to all of the senior and
subordinated debt of the Partnership other than the Subordinated Notes, (2)
have a Mandatory Trigger Provision and an Optional Deferral Provision and (3)
have no maturity or a maturity of at least 55 years and are subject to
Intent-Based Replacement Disclosure;


(D)                               cumulative
preferred units issued by the Partnership that (1) has no prepayment obligation
on the part of the issuer thereof, whether at the election of the holders or
otherwise, and (2)(a) has no maturity or a maturity of at least 55 years and
(b) is subject to a Qualifying Replacement Capital Covenant; or


(E)                                 Non-Cumulative
Qualifying Preferred Units; or


(ii)                                  in
connection with any repayment, redemption or purchase of Subordinated Notes
after the date that is 50 years prior to the Final Repayment Date:


(A)                              all
securities described under clause (i) of this definition;


(B)                                securities
issued by the Partnership that (1) rank pari
passu with or junior to the Subordinated Notes upon a liquidation,
dissolution or winding up of the Partnership, (2) have an Optional Deferral
Provision, (3) have no maturity or a maturity of at least 55 years and (4) are
subject to Intent-Based Replacement Disclosure;


(C)                                securities
issued by the Partnership that (1) rank pari
passu with or junior to the Subordinated Notes upon a liquidation,
dissolution or winding-up of the Partnership, (2) have no maturity or a
maturity of at least 35 years and (3)(a) have an Optional Deferral Provision
and are subject to a Qualifying Replacement Capital Covenant or (b) have a
Mandatory Trigger Provision and an Optional Deferral Provision; or


(D)                               other
securities issued by the Partnership that (1) rank upon a liquidation,
dissolution or winding-up of the Partnership either (a) pari
passu with or junior to the Subordinated
Notes or (b) pari  passu
with the claims of the Partnership’s trade creditors and junior to all of the
Partnership’s long-term indebtedness for money borrowed (other than the
Partnership’s long-tern indebtedness for money borrowed from time to time
outstanding that by its terms ranks pari  passu with such securities on a liquidation, dissolution or
winding-up of the Partnership), and (2) either (a) have no maturity or a
maturity of at least 40 years, are subject to Intent-Based Replacement
Disclosure and have a Mandatory Trigger Provision and an Optional Deferral
Provision or (b) have no maturity or a maturity of at least 25 years, are
subject to a Qualified Replacement Capital Covenant and have a Mandatory
Trigger Provision and an Optional Deferral Provision;


provided,
however, that if any of the securities described in the foregoing
clauses (i) and (ii) is structured at the time of issuance with a distribution
rate step-up (whether interest or dividend) of more than 25 basis points prior
to the 25th anniversary of such issuance, then such security shall



 S-14
 









be subject to a replacement capital covenant that will
remain in effect until at least the Scheduled Maturity Date and that is
otherwise substantially similar to this Replacement Capital Covenant.


It is acknowledged that, as of the date hereof,
securities issued by a master limited partnership containing an Alternative
Payment Mechanism or a Mandatory Trigger Provision have not been approved as
Qualifying Capital Securities by all of the NRSROs.  As a result, such securities will not be
issued or considered as Qualifying Capital Securities until there is prior
written approval from all NRSROs then maintaining a credit rating on such
issuer.


“Qualifying Preferred Units” means
non-cumulative perpetual preferred units issued by the Partnership that (a)
contractually rank pari passu with
or junior to all other preferred units of the Partnership and contain no
remedies as a consequence of non-payment of Distributions other than Permitted
Remedies and (b) either (i) are subject to Intent-Based Replacement Disclosure
and have a provision that prohibits the Partnership from paying any
Distributions thereon upon its failure to satisfy one or more financial tests
set forth therein or (ii) are subject to a Qualifying Replacement Capital
Covenant; provided, however, that if such preferred units include
Intent-Based Replacement Disclosure and are structured at the time of issuance
with a distribution rate step-up of more than 25 basis points prior to the 25th
anniversary of such issuance, then such preferred units shall, in lieu of
Intent-Based Replacement Disclosure, be subject to a replacement capital
covenant that will remain in effect until at least the Scheduled Maturity Date
and that is otherwise substantially similar to this Replacement Capital
Covenant.


“Qualifying Replacement Capital Covenant” means
(i) a replacement capital covenant substantially similar to this Replacement
Capital Covenant or (ii) a replacement capital covenant, as identified by the
Board, acting in good faith and in its reasonable discretion and reasonably
construing the definitions and other terms of this Replacement Capital
Covenant, (a) entered into by the Partnership at a time when the Partnership is
a reporting company under the Securities Exchange Act and (b) that restricts
the Partnership and its Subsidiaries from repaying, redeeming or purchasing
identified securities except to the extent of the applicable percentage of the
net proceeds (or Market Value) of specified replacement capital securities that
have terms and provisions at the time of repayment, redemption or purchase that
receive as much or more equity credit than the securities then being repaid,
redeemed or purchased, raised within the 180 day period prior to the applicable
repayment, redemption or purchase date.


“Qualifying Warrants” means net settled
warrants to purchase Common Units or Subordinated Units that have an exercise
price greater than the current Market Value of the Partnership’s Common Units
or Subordinated Units as of their date of issuance, that do not entitle the
Partnership to redeem for cash and the holders of such warrants are not
entitled to require the Partnership to repurchase for cash in any circumstance.


“Redesignation
Date” means, as to the Covered Debt in effect at any time, the earliest of
(a) the date that is two years prior to the final maturity date of such Covered
Debt, (b) if such Covered Debt is to be repaid, redeemed or purchased by the
Partnership or any Subsidiary of the Partnership either in whole or in part
with the consequence that, after giving effect to such repayment, redemption or
purchase, the outstanding principal amount of such Covered Debt is less than
$100,000,000, the applicable repayment, redemption or purchase date and (c) if
such



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Covered Debt is not
Eligible Subordinated Debt, the date on which the Partnership issues Eligible
Subordinated Debt.


“Replacement Capital Covenant” has the meaning
specified in the introduction to this instrument.


“Replacement Capital Securities” means


(a)                                  Common Units,
Subordinated Units and Rights to acquire Units;


(b)                                 Debt Exchangeable for
Equity; and


(c)                                  Qualifying Capital
Securities.


“Repurchase Restriction” has the meaning
specified in paragraph (c) of the definition of Alternative Payment Mechanism.


“Rights to acquire Units” includes any right to
acquire Common Units or Subordinated Units.


“Scheduled Maturity Date” means the “Scheduled
Maturity Date” as defined in and as determined under the Subordinated Indenture
(including after giving effect to any extension election(s) by the Partnership
pursuant to the extension provisions in Section 2.2(a) of the Supplemental
Indenture.


“Securities Exchange Act” means the Securities
Exchange Act of 1934, as amended.


“Subordinated Indenture” has the meaning
specified in Recital A.


“Subordinated Notes” has the meaning specified
in Recital A.


“Subordinated Units” means limited partnership
interests of the Partnership that rank pari passu with
or junior to the Common Units of the Partnership either upon the liquidation,
dissolution or winding up of the Partnership or with respect to distributions
from the Partnership, provided that such interests are perpetual, with
no prepayment obligation on the part of the Partnership, whether at the
election of the holder or otherwise.


“Subsidiary” means, at any time, any Person the
units, shares of stock or other ownership interests of which having ordinary
voting power to elect a majority of the board of directors or other managers of
such Person are at the time owned, or the management or policies of which are
otherwise at the time controlled, directly or indirectly through one or more
intermediaries (including other Subsidiaries) or both, by another Person.


“Supplemental Indenture” has the meaning
specified in the introduction to this instrument.


“Termination Date” has the meaning specified in
Section 4(a).



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“Units” means Common Units or Subordinated
Units, or any combination of the foregoing, as applicable.



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