Document:

Exhibit
10.8

TRANSPORTATION SERVICE AGREEMENT

Contract
Identification FT5842

This Transportation Service Agreement (Agreement) is
entered into by Great Lakes Gas Transmission Limited Partnership (Transporter)
and TRANSCANADA PIPELINES LIMITED(Shipper).

WHEREAS, Shipper has requested Transporter to
transport Gas on its behalf and Transporter represents that it is willing to
transport Gas under the terms and conditions of this Agreement.

NOW, THEREFORE, Transporter and Shipper agree that the
terms below constitute the transportation service to be provided and the rights
and obligations of Shipper and Transporter.

1.                                      EFFECTIVE DATE: November 30, 2006

2.                                      CONTRACT IDENTIFICATION: FT5842

3.                                      RATE SCHEDULE: FT

4.                                      SHIPPER TYPE: Other

5.                                      STATE/PROVINCE OF INCORPORATION: Canada

6.                                      TERM: November 01, 2006 to October 31, 2008

7.                                      EFFECT ON PREVIOUS CONTRACTS:

 

This Agreement
supersedes, cancels and terminates, as of the effective date stated above, the
following contract(s):  Service Agreement
dated December 01, 2005 with Contract Identification FT5842.

Shipper’s and
Transporter’s obligations to each other arising for periods prior to the
effective date stated above, remain in effect and are not being terminated by
any provision of this Agreement.

8.                                      MAXIMUM DAILY QUANTITY (Dth/Day): 350,000

 

Please
see Appendix A for further detail.

9.                                      RATES:

Unless Shipper and
Transporter have agreed to a Discounted Rate, pursuant to Section 19.2 of the
General Terms and Conditions, or to a Negotiated Rate, pursuant to Section 4.5
of the Rate Schedule named above, rates shall be Transporter’s maximum rates
and charges plus all applicable surcharges in effect from time to time under
the applicable Rate Schedule (as stated above) on file with the Commission
unless otherwise agreed to by the parties in writing. Provisions governing a
Discounted Rate shall be set forth in this Paragraph 9. Provisions governing a
Negotiated Rate shall be set forth on Appendix B hereto.

Contract
Identification FT5842

10.                               POINTS
OF RECEIPT AND DELIVERY:

 

The primary
receipt and delivery points are set forth on Appendix A.

11.                               RELEASED
CAPACITY:

 

N/A

12.                               INCORPORATION
OF TARIFF INTO AGREEMENT:

 

This Agreement
shall incorporate and in all respects be subject to the “General Terms and
Conditions” and the applicable Rate Schedule (as stated above) set forth in
Transporter’s FERC Gas Tariff, Second Revised Volume No. 1, as may be revised
from time to time.  Transporter may file
and seek Commission approval under Section 4 of the Natural Gas Act (NGA) at
any time and from time to time to change any rates, charges or provisions set
forth in the applicable Rate Schedule (as stated above) and the “General Terms
and Conditions” in Transporter’s FERC Gas Tariff, Second Revised Volume No. 1,
and Transporter shall have the right to place such changes in effect in
accordance with the NGA, and this Agreement shall be deemed to include such
changes and any such changes which become effective by operation of law and
Commission Order, without prejudice to Shipper’s right to protest the same.

13.                               MISCELLANEOUS:

 

No waiver by
either party to this Agreement of any one or more defaults by the other in
the  performance of this Agreement shall
operate or be construed as a waiver of any continuing or future default(s),
whether of a like or a different character.

Any controversy
between the parties arising under this Agreement and not resolved by the
parties shall be determined in accordance with the laws of the State of
Michigan.

14.                               OTHER
PROVISIONS:

 

It is agreed that
no personal liability whatsoever shall attach to, be imposed on or otherwise be
incurred by any Partner, agent, management official or employee of the
Transporter or any director, officer or employee of any of the foregoing, for
any obligation of the Transporter arising under this Agreement or for any claim
based on such obligation and that the sole recourse of Shipper under this
Agreement is limited to assets of the Transporter.

Upon termination
of this Agreement, Shipper’s and Transporter’s obligations to each other
arising under this Agreement, prior to the date of termination, remain in
effect and are not being terminated by any provision of this Agreement.

 2
 

 

	
  15.

  	
   

  	
  NOTICES AND COMMUNICATIONS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All notices and communications with respect to this
  Agreement shall be in writing and sent to the addresses stated below or at
  any other such address(es) as may be designated in writing:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ADMINISTRATIVE MATTERS

  	
   

  	
   

  
	
   

  	
   

  	
  Great Lakes Gas
  Transmission Limited

  	
   

  	
  TRANSCANADA PIPELINES LIMITED

  
	
   

  	
   

  	
  Partnership

  	
   

  	
  450 - 1st Street S.W.

  
	
   

  	
   

  	
  5250 Corporate
  Drive

  	
   

  	
  Calgary, AB T2P 5H1

  
	
   

  	
   

  	
  Troy, MI 48098

  	
   

  	
  Canada

  
	
   

  	
   

  	
  Attn:
  Transportation Services

  	
   

  	
  Attn: Steve Pohlod

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PAYMENT
  BY ELECTRONIC TRANSFER

  	
   

  	
   

  
	
   

  	
   

  	
  Great Lakes Gas
  Transmission Limited

  	
   

  	
  TRANSCANADA PIPELINES LIMITED

  
	
   

  	
   

  	
  Partnership

  	
   

  	
  Attn: Adrea Morrical

  
	
   

  	
   

  	
  JPMorgan Chase
  Bank, Detroit, MI

  	
   

  	
   

  
	
   

  	
   

  	
  ABA No:      072000326

  	
   

  	
   

  
	
   

  	
   

  	
  Account
  No: 07308-43

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AGREED
  TO BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GREAT
  LAKES GAS TRANSMISSION

  	
   

  	
   

  
	
   

  	
   

  	
  LIMITED
  PARTNERSHIP

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  Great Lakes Gas Transmission Company

  	
   

  	
  TRANSCANADA
  PIPELINES LIMITED

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Operator and
  Agent for Great Lakes Gas

  	
   

  	
   

  
	
   

  	
   

  	
  Transmission
  Limited Partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Martin Wilde

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Martin Wilde

  	
   

  	
  By:

  	
  /s/ Max Feldman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director,
  Marketing & Business

  	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
  Operations

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Max Feldman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Please Print

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President, Canadian Pipelines

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Please Print

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Russell K. Girling

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Please Print

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Please Print

  
											

 

 3
 

APPENDIX
A

Contract Identification FT5842

Date:  November
30, 2006

Supersedes Appendix
Dated: December 01, 2005

Shipper: 
TRANSCANADA PIPELINES LIMITED

Maximum Daily Quantity (Dth/Day) per Location:

 

	
  Begin Date

  	
   

  	
  End Date

  	
   

  	
  Point(s) of Primary Receipt

  	
   

  	
  Point(s) of Primary Delivery

  	
   

  	
  MDQ

  	
   

  	
  (MAOP)

  	
   

  
	
  11/01/2006

  	
   

  	
  10/31/2008

  	
   

  	
  EMERSON

  	
   

  	
   

  	
   

  	
  350,000

  	
   

  	
  974

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11/01/2006

  	
   

  	
  10/31/2008

  	
   

  	
   

  	
   

  	
  ST. CLAIR

  	
   

  	
  350,000

  	
   

  	
  974

  	
   

  

 

 4Exhibit 10.9

 

AMENDED
AND RESTATED

AGREEMENT
OF LIMITED PARTNERSHIP

OF

GREAT LAKES GAS
TRANSMISSION

LIMITED PARTNERSHIP

 

TABLE OF CONTENTS

	
  

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I ORGANIZATIONAL MATTERS

  	
   

  
	
  1.1 Formation

  	
  1

  
	
  1.2 Name

  	
  1

  
	
  1.3 Purpose

  	
  1

  
	
  1.4 Registered Office;
  Principal Office

  	
  1

  
	
  1.5 Qualification in
  other Jurisdictions

  	
  2

  
	
  1.6 Term

  	
  2

  
	
   

  	
   

  
	
  ARTICLE II DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  ARTICLE III CAPITAL CONTRIBUTIONS

  	
   

  
	
  3.1 Capital
  Contributions

  	
  6

  
	
  3.2 Additional Capital
  Contributions and Issuances of Limited Partnership Interests and other
  Securities

  	
  6

  
	
  3.3 Capital Accounts

  	
  8

  
	
  3.4 No Preemptive
  Rights

  	
  10

  
	
  3.5 Interest

  	
  10

  
	
  3.6 No Withdrawal

  	
  10

  
	
  3.7 Loans from Partners

  	
  11

  
	
  3.8 Voluntary
  Contributions

  	
  11

  
	
   

  	
   

  
	
  ARTICLE IV ALLOCATIONS AND DISTRIBUTIONS

  	
   

  
	
  4.1 Allocations for
  Capital Account Purposes

  	
  11

  
	
  4.2 Allocations for Tax
  Purposes

  	
  13

  
	
  4.3 General Partners

  	
  14

  
	
  4.4 Distributions

  	
  14

  
	
   

  	
   

  
	
  ARTICLE V ACCOUNTING AND TAXATION

  	
   

  
	
  5.1 Fiscal Year

  	
  14

  
	
  5.2 Location of Records

  	
  14

  
	
  5.3 Books of Account

  	
  14

  
	
  5.4 Annual Financial
  Statements and Tax Information

  	
  14

  
	
  5.5 Taxation

  	
  15

  
	
  5.6 Governmental
  Reports

  	
  16

  
	
  5.7 Inspection of
  Facilities and Records

  	
  16

  
	
  5.8 Deposit and
  Withdrawal of Funds

  	
  16

  

 

 i
 

 

	
  

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE VI MANAGEMENT OF THE PARTNERSHIP

  	
   

  
	
  6.1 Control by General
  Partners

  	
  16

  
	
  6.2 Management
  Committee

  	
  17

  
	
  6.3 Management
  Officials

  	
  20

  
	
  6.4 Compensation and
  Reimbursement of the General Partners

  	
  22

  
	
  6.5 Outside Activity

  	
  22

  
	
  6.6 Dealings with the
  General Partners

  	
  22

  
	
  6.7 Indemnification

  	
  23

  
	
  6.8 Liability

  	
  24

  
	
  6.9 Other Matters
  Concerning the General Partners

  	
  25

  
	
  6.10 Title to
  Partnership Assets

  	
  25

  
	
   

  	
   

  
	
  ARTICLE VII LIMITATION OF LIABILITIES

  	
   

  
	
  7.1 Limitation of
  Liability of Limited Partners

  	
  26

  
	
  7.2 Limitation of
  Authority of Partners

  	
  26

  
	
  7.3
  Cross-Indemnification

  	
  26

  
	
  7.4 Limited Recourse

  	
  26

  
	
   

  	
   

  
	
  ARTICLE VIII TRANSFER OR PLEDGE OF PARTNERSHIP
  INTERESTS

  	
   

  
	
  8.1 Additional
  Definitions

  	
  27

  
	
  8.2 Transfer

  	
  28

  
	
  8.3 Right of First
  Refusal

  	
  29

  
	
  8.4 Mechanics of
  Transfer

  	
  29

  
	
  8.5 Further
  Restrictions on Transfer

  	
  30

  
	
   

  	
   

  
	
  ARTICLE IX ADMISSION OF PARTNERS

  	
   

  
	
  9.1 Admission of
  Additional Limited Partners

  	
  30

  
	
  9.2 Admission of
  Additional General Partners

  	
  30

  
	
  9.3 Admission of
  Successor General Partners

  	
  30

  
	
  9.4 Amendment of
  Agreement and of Certificate of Limited Partnership

  	
  30

  
	
   

  	
   

  
	
  ARTICLE X WITHDRAWAL AND REMOVAL OF PARTNERS

  	
   

  
	
  10.1 Withdrawal of
  General Partners

  	
  31

  
	
  10.2 Removal of General
  Partners

  	
  31

  
	
  10.3 Withdrawal of
  Limited Partners

  	
  31

  
	
  10.4 Liability of
  Withdrawing Partner

  	
  31

  
	
   

  	
   

  
	
  ARTICLE XI DISSOLUTION AND LIQUIDATION

  	
   

  
	
  11.1 Dissolution

  	
  31

  

 

 ii
 

 

	
  

  	
  Page

  
	
   

  	
   

  
	
  11.2 Winding Up and
  Liquidation

  	
  32

  
	
  11.3 Cancellation of
  Certificate of Limited Partnership

  	
  32

  
	
  11.4 Return of Capital

  	
  32

  
	
  11.5 Waiver of
  Partition

  	
  33

  
	
  11.6 Continuance of
  Partnership

  	
  33

  
	
  11.7 Termination
  Subject to Natural Gas Act

  	
  33

  
	
   

  	
   

  
	
  ARTICLE XII AMENDMENT OF PARTNERSHIP AGREEMENT;
  MEETINGS; RECORD DATE

  	
   

  
	
  12.1 Amendments to be
  Adopted Solely by the General Partners

  	
  34

  
	
  12.2 Amendment
  Procedures

  	
  35

  
	
   

  	
   

  
	
  ARTICLE XIII DISPUTE RESOLUTION

  	
   

  
	
  13.1 Agreement to
  Arbitrate

  	
  35

  
	
  13.2 Procedure

  	
  35

  
	
   

  	
   

  
	
  ARTICLE XIV GENERAL PROVISIONS

  	
   

  
	
  14.1 Notices

  	
  36

  
	
  14.2 Further Assurances

  	
  37

  
	
  14.3 Applicable Law

  	
  37

  
	
  14.4 Counterparts

  	
  37

  
	
  14.5 Headings

  	
  37

  
	
  14.6 Waiver

  	
  37

  
	
  14.7 Laws and
  Regulatory Bodies

  	
  37

  
	
  14.8 Section Numbers

  	
  37

  
	
  14.9 References to
  Money

  	
  37

  
	
  14.10 Severability

  	
  37

  
	
  14.11 Third Persons

  	
  38

  
	
  14.12 Binding Effect

  	
  38

  
	
  14.13 Integration

  	
  38

  
	
  14.14 Survival

  	
  38

  

 

 iii

AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP

OF

GREAT LAKES GAS TRANSMISSION LIMITED PARTNERSHIP

This AMENDED AND
RESTATED AGREEMENT OF LIMITED PARTNERSHIP is entered into by and among
TransCanada GL, Inc., a Delaware corporation, TC GL Intermediate Limited
Partnership, a Delaware limited partnership and Great Lakes Gas Transmission
Company, a Delaware corporation.

All capitalized terms used herein and not
otherwise defined are defined in Article II.

ARTICLE I

ORGANIZATIONAL MATTERS

1.1           Formation.  On April 5, 1990, the
Certificate of Limited Partnership was filed with the Secretary of State of the
State of Delaware in accordance with the Partnership Act, thereby forming the
Partnership. The General Partners shall execute and cause to be filed, as appropriate,
such further amendments to the Certificate of Limited Partnership and other
documents as are or become necessary or advisable, as determined by the General
Partners acting through the Management Committee.  The Partners hereby amend and restate the
Prior Agreement in its entirety. This amendment and restatement shall become
effective on the date of this Agreement.

1.2           Name.  The name of the
Partnership shall be, and the business of the Partnership shall be conducted
under the name of, “Great Lakes Gas Transmission Limited Partnership”.  The words “Limited Partnership” or the
abbreviation “L.P.” shall be included in the Partnership’s name where necessary
for the purposes of complying with the laws of any jurisdiction that so
requires.  The General Partners may
change the name of the Partnership upon written notice to the Partners, with
such variations thereof as may be necessary to comply with the laws of other
states, or Canadian provinces, within which the Partnership may do business.

1.3           Purpose.  The purpose and business
of the Partnership shall be any business that may lawfully be conducted by a
limited partnership organized pursuant to the Partnership Act, including,
without limitation, the management, operation and disposition of the Initial
Facilities and any Incremental Expansion; the carrying on of any business
relating thereto or arising therefrom; the entering into of any partnership,
joint venture or other similar arrangement to engage in any of the foregoing or
the ownership of interests in any entity engaged in any of the foregoing; and
anything incidental or necessary to the foregoing.

1.4           Registered
Office; Principal Office.  The address of the registered office of the Partnership in the
state of Delaware shall be Corporation Trust Company, 1209 Orange Street,
Wilmington, New Castle County, Delaware, and the registered agent for service
of process on the Partnership in the State of Delaware at such registered
office shall be The Corporation Trust Company. 
The principal office of the Partnership shall be 5250 Corporate Drive,
Troy, MI 48098, or such other place as the Management Committee may from time
to time determine.  Written notice of any
change in such offices shall be given to each Partner.

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

1.6           Term.  The Partnership
commenced upon the filing of the Certificate of Limited Partnership of the
Partnership in accordance with the Partnership Act and shall continue in
existence until April 5, 2040, or until the earlier termination of the
Partnership in accordance with the provisions of Article XI.

ARTICLE II

DEFINITIONS

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

Additional Limited
Partner.  A Partner
admitted to the Partnership as a Limited Partner pursuant to Section 9.2 and
shown as a Limited Partner on the books of the Partnership.

Adjusted Basis.  With respect to Partnership assets as of any
date of determination, the Partnership’s adjusted basis of such assets, as
determined for Federal income tax purposes, pursuant to Section 1011 of the
Code.

Adjusted Capital
Account Deficit.  With
respect to any Partner, the deficit balance, if any, in such Partner’s Capital
Account as of the end of the relevant fiscal year or other period, after giving
effect to the following adjustments:

(a)           Credit to such Capital Account any
amounts that such Partner is obligated to restore or is deemed to be obligated
to restore pursuant to the penultimate sentences of Treasury Regulation Section
1.704-1T(b)(4)(iv)(f) and 1.704-1T(b)(4)(iv)(h)(5), as the case may be;

(b)           Debit to such Capital Account the
items described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6), taking into account for purposes
of this third cited Treasury Regulation Section any offsetting increase
described in the proviso of Treasury Regulation Section
1.704-1T(b)(4)(iv)(e)(3); and

 2
 

(c)           Credit and debit to such Capital
Account, in the sole discretion of the Management Committee, any other items
required or permitted under Section 704(b) of the Code and Treasury Regulations
thereunder.

Adjusted Property.  A Partnership property, the Carrying Value of
which has been adjusted pursuant to Section 3.3(c).

Affiliate.  Any Person which, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with any Person, including, but not limited to: (a) a Parent of
a Partner; (b) a corporation more than 50% of the outstanding voting stock of
which is owned directly or indirectly by a Partner or a Parent of a Partner; or
(c) a corporation more than 50% of the outstanding voting stock of which is
owned directly or indirectly by a corporation more than 50% of the outstanding
voting stock of which is owned directly or indirectly by a Partner or by a
Parent of a Partner.  For the purposes of
this Agreement, no General Partner shall be considered to be an Affiliate of
any other General Partner.

Agreed Value.  With respect to any property contributed to
the Partnership or distributed by the Partnership to any Partner, the gross
fair market value of such property (i.e., without regard to any liabilities
assumed by the Partnership or to which such property is subject) as determined
in good faith by the Management Committee.

Agreement.  This Amended and Restated Agreement of
Limited Partnership, as it may be amended, supplemented or restated from time
to time.

Arbitrator.  Arbitrator shall have the applicable meaning
set forth in Section 13.2.

Capital Account.  The capital account maintained for a Partner
pursuant to Section 3.3.  The Capital
Accounts of the Partners established pursuant to this Agreement shall not be
deemed to be, nor have the same meaning as, the capital account of the
Partnership under the Natural Gas Act.

Capital
Contribution.  Any cash
or Contributed Property that a Partner has contributed to the Partnership as of
the date of this Agreement or will contribute to the Partnership pursuant to
Article III.

Carrying Value.  With respect to (a) any Contributed Property,
the Agreed Value of such property and (b) any property other than Contributed
Property, the Adjusted Basis of such property for Federal income tax purposes,
in both cases reduced (but not below zero) by all depreciation and cost
recovery deductions charged to the Partners’ Capital Accounts.  The Carrying Value of the Partnership
properties shall be adjusted from time to time in accordance with Section
3.3(c) and to reflect additions to basis and other adjustments deemed
appropriate by the Management Committee in accordance with the terms of this
Agreement.

Certificate of
Limited Partnership. 
The Certificate of Limited Partnership with respect to the Partnership
that was filed with the Secretary of State of the State of Delaware on April 5,
1990.

 3
 

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

Code.  The Internal Revenue Code of 1986, as amended
(and any successor thereto).

Contributed Property.  Each Contributing Partner’s interest in each
property (at the time of contribution to the Partnership) or other
consideration, in such form as may be permitted by the Partnership Act, but
excluding cash, contributed to the Partnership by such Contributing Partner,
including the Initial Facilities.

Contributing
Partner.  Each Partner
contributing a Contributed Property to the Partnership in exchange for a
Partnership Interest.

DOE.  The Department of Energy or any department,
commission, agency or other governmental body succeeding to the powers of such
department.

Event of
Withdrawal.  An event
of withdrawal as specified in Section 17-402 of the Partnership Act.

Facilities.  The Initial Facilities and any and all
Incremental Expansions.

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

General Partner.  TransCanada GP, TCGL GP or any successor to
either such Person in its respective capacity as a general partner of the
Partnership.

General
Partnership Interest. 
A Partnership Interest of a General Partner in its capacity as a General
Partner.

Great Lakes.  Great Lakes Gas Transmission Company, a
Delaware corporation.

Incremental
Expansion.  Any
facilities installed to modify, improve or expand the Facilities or any portion
thereof, except in connection with customary maintenance, to permit the
delivery capacity of the Initial Facilities to be increased after the date of
this Agreement.

Initial Facilities.  The real, personal and mixed property
(whether tangible or intangible) owned and operated by the Partnership for the
transmission of natural gas as of the date of this Agreement.

Limited Partner.  (a) Great Lakes, (b) any Additional Limited
Partner and (c) any Substituted Limited Partner, but excluding any Person who
transfers its Limited Partnership Interest to any Substituted Limited Partner
in accordance with the terms hereof.

Limited
Partnership Interest. 
A Partnership Interest of a Limited Partner in its capacity as a Limited
Partner.

 4
 

Majority Interest.  Limited Partners holding more than 50% of the
aggregate Percentage Interest of all Limited Partners.

Management
Committee.  The
Management Committee provided for in Article VI.

Minimum Gain.  Minimum Gain shall have the meaning set forth
in Section 4.1(c) hereof.

Net Agreed Value.  (a) In the case of any Contributed Property,
the Agreed Value of such property or other consideration reduced by any
indebtedness or liabilities either assumed by the Partnership upon such
contribution or to which such property is subject when contributed and (b) in
the case of any property distributed to a Partner pursuant to Article IV or
distributed to a Partner in liquidation of the Partnership pursuant to Article
XI, the fair market value of such property at the time such property is
distributed (as determined under such provisions of this Agreement) reduced by
any indebtedness either assumed by such Partner upon such distribution or to
which such property is subject when distributed.

Operating
Agreement.  The
Operating Agreement dated April 5, 1990 between Great Lakes and the
Partnership, as it may be amended, supplemented or restated from time to time
with the approval of the Management Committee.

Parent.  Any Person which owns, directly or
indirectly, more than 50% of the outstanding equity interests of a Partner.

Partner.  Each of the Persons executing this Agreement
(whether so executing as a General Partner or a Limited Partner), any
Substituted Limited Partner and any Additional Limited Partner, but excluding
any Person for whom another Person has been substituted as a Partner in the
Partnership pursuant to this Agreement.

Partnership.  The Delaware limited partnership formed
pursuant to Section 1.1 of this Agreement.

Partnership Act.  The Revised Uniform Limited Partnership Act
of the State of Delaware, as amended.

Partnership
Interest.  The interest
of a Partner in the Partnership.

Percentage
Interest.  As to each
Partner, the percentage set forth opposite the Partner’s name on the Schedule
of Percentage Interests attached hereto as Exhibit A (as such Exhibit may be
updated from time to time to account for any Additional Limited Partners or
Substituted Limited Partners).

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

Prior Agreement.  The Agreement of Limited Partnership of the
Partnership dated as of April 5, 1990.

 5
 

Recapture Income.  Any gain recognized upon the sale or other
taxable disposition of a Partnership asset that is not capital gain because
such gain represents the recapture of deductions previously taken for federal
income tax purposes with respect to the asset.

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

Section 754
Election.  An election
under Section 754 of the Code relating to the adjustment of the adjusted basis
of the Partnership Assets as provided in Sections 734 and 743 of the Code.

Substituted
Limited Partner.  A
Person who becomes a Limited Partner to the Partnership pursuant to Article
VIII in place of and with all the rights of a Limited Partner.

TCGL GP.  TC GL Intermediate Limited Partnership, a
Delaware limited partnership.

TransCanada GP.  TransCanada GL, Inc., a Delaware corporation.

Treasury
Regulations.  The
regulations promulgated under the Code, as such regulations may be amended from
time to time.

Unrealized Gain.  The excess, if any, of the fair market value
of Partnership property (as determined under Section 3.3(c)) as of the date of
determination over the Carrying Value of such property as of such date of
determination.

Unrealized Loss.  The excess, if Any, of the Carrying Value of
Partnership property (as determined under Section 3.3(c)) as of the date of
determination over the fair market value of such property as of such date of
determination.

ARTICLE III

CAPITAL CONTRIBUTIONS

3.1           Capital Contributions.  As of the execution of this Agreement, the
initial Percentage Interest of each Partner is as set forth in Exhibit A.  The General Partners shall from time to time
update Exhibit A to reflect any changes in Percentage Interests and/or any
Additional Limited Partners and Substituted Limited Partners, in each case as
contemplated by, and in accordance with the terms and conditions of, this
Agreement.

3.2           Additional Capital Contributions
and Issuances of Limited Partnership Interests and other Securities. In
order to raise additional capital or to acquire assets, to redeem or retire
Partnership debt, or for any other Partnership purposes, the Management
Committee is authorized (x) to cause the General Partners to make a capital
contribution to the Partnership, or (y) to cause the Partnership to issue
Limited Partnership Interests at any time or from time to time to any General
Partner, to Limited Partners or to other Persons and to admit them to the

 6
 

Partnership as Additional Limited Partners, all
without any consent or approval of the Limited Partners or any percentage
thereof.  With respect to any additional
capital contribution or issuance of Limited Partnership Interests hereunder,
the Management Committee shall have sole and complete discretion in determining
the resulting Percentage Interest of each Partner, the allocations of items of
Partnership income, gain, loss, deduction and credit to each Partner and the
consideration and terms and conditions with respect to any future issuance of
Limited Partnership Interests.  In
addition, the Management Committee shall have sole and complete discretion to
cause the Partnership to issue Limited Partnership Interests from time to time
in one or more classes, or one or more series of such classes, with such
designations, preferences and relative, participating, optional or other
special rights, powers and duties, including rights, powers and duties senior
to existing classes and series of Limited Partnership Interests, as shall be
fixed by the Management Committee in the exercise of its sole and complete
discretion, including, without limitation, (i) the allocation of items of
Partnership income, gain, loss, deduction and credit to each such class or
series of Limited Partnership Interests; (ii) the right of each such class or series
of Limited Partnership Interests to share in Partnership distributions; (iii)
the rights of each such class or series of Limited Partnership Interests upon
dissolution and liquidation of the Partnership; (iv) the price at which and the
terms and conditions upon which each such class or series of Limited
Partnership Interests may be redeemed by the Partnership; (v) the rate at which
and the terms and conditions upon which each such class or series of Limited
Partnership Interests may be converted into another class or series of Limited
Partnership Interests of the Partnership; (vi) the terms and conditions upon
which each such class or series of Limited Partnership Interests will be
issued, evidenced by certificates and assigned or transferred; and (vii) the
right of each such class or series of Limited Partnership Interests to vote on
Partnership matters, including matters relating to the relative rights,
preferences and privileges of each such class or series.  Upon or prior to the issuance of any class or
series of Limited Partnership Interests that shall not be identical to the
Limited Partnership Interests that have been issued to the then Limited
Partners, the General Partners, without the consent at the time of any Partner,
each Partner hereby consenting to any and each such amendment, may amend any
provision of this Agreement and the General Partners may execute, swear to,
acknowledge, deliver, file and record such documents as the General Partners
acting through the Management Committee may in their sole discretion determine
to be necessary or appropriate in connection therewith in order to reflect the
authorization and issuance of each such class or series of Limited Partnership
Interests and the relative rights and preferences as to the matters set forth
in the preceding sentence.  The
Management Committee is also authorized to cause the Partnership to issue any
other type of security (including, without limitation, secured and unsecured
debt obligations of the Partnership, debt obligations of the Partnership
convertible into any class or series of Limited Partnership Interests that may
be issued by the Partnership, or options, rights, warrants or appreciation
rights relating to any class or series of Limited Partnership Interests, any
debt obligations or any combination of any of the foregoing) from time to time
to any General Partner, Limited Partner or other Person on terms and conditions
established in the sole and complete discretion of the Management
Committee.  The Management Committee
shall do all things it deems to be appropriate or necessary to comply with the
Partnership Act and are authorized and directed to do all things they deem to
be necessary or advisable in connection with any such future issuance,
including compliance with any statute, rule, regulation or guideline of any
Federal, state or other governmental agency or any securities exchange on which
any such security is listed for trading.

 7
 

3.3           Capital Accounts.  (a) 
The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv).  Such Capital Account
shall be credited with (i) the amount of cash and Net Agreed Value of property
contributed to the Partnership pursuant to this Agreement and (ii) all items of
income and gain (including income and gain exempt from tax) computed in
accordance with this Section 3.3 and allocated pursuant to Section 4.1 and
debited by (iii) the cash distributions and the Net Agreed Value of all
distributions of property made with respect to a Partnership Interest and (iv)
all items of deduction and loss computed in accordance with this Section 3.3
and allocated pursuant to Section 4.1.

(b)           For purposes of computing the amount
of each item of income, gain, deduction or loss to be reflected in the Capital
Accounts of the Partners, the determination, recognition and classification of
such items shall be the same as its determination, recognition and
classification for Federal income tax purposes (including any method of depreciation,
cost recovery or amortization used for this purpose), provided that:

(i)            In accordance with Section 704(b) of
the Code, any deductions for depreciation, cost recovery or amortization
attributable to a Contributed Property shall be determined as if the Adjusted
Basis of such property on the date it was contributed to the Partnership was
equal to the Agreed Value of such property. 
Upon an adjustment pursuant to Section 3.3(c) to the Carrying Value of
any Partnership Property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation, cost recovery or
amortization attributable to such property shall be determined as if the
Adjusted Basis of such property was equal to the Carrying Value of such
property immediately following such adjustment. 
For any period, depreciation, cost recovery or amortization attributable
to any property described in this Section 3.3(b)(i) shall be an amount that
bears the same relationship to the Agreed Value (in the case of Contributed
Property) or Carrying Value (immediately following any adjustment referred to
in the preceding sentence), as the case may be, of such property at the
beginning of the period as the Federal income tax depreciation, cost recovery
or amortization deduction with respect to such property for the period bears to
the Adjusted Basis of such property at the beginning of the period; provided,
that if such property has a zero Adjusted Basis, the depreciation, cost
recovery or amortization may be determined under any reasonable method selected
by the Management Committee.  For all
purposes of this Section 3.3, depreciation, cost recovery or amortization shall
be in lieu of any Federal income tax depreciation, cost recovery or amortization
deductions with respect to such property.

(ii)           Any item of income, gain, loss or
deduction attributable to the taxable disposition of any Partnership asset
shall be determined by the Partnership as if the Adjusted Basis of such asset
as of such date of disposition was equal in amount to the Partnership’s
Carrying Value for such asset as of such date.

(iii)          If the Partnership’s Adjusted Basis in
any property subject to depreciation or cost recovery is reduced for Federal
income tax purposes pursuant

 8
 

to Section 48(q)(1) or
48(q)(3) of the Code, the amount of such reduction shall be treated as an
additional depreciation or cost recovery deduction in the year such property is
placed in service and shall be allocated among the Partners pursuant to Section
4.1.  Any restoration of such basis
pursuant to Section 48(q)(2) of the Code shall be treated as an item of income
or gain and allocated in the same manner to the Partners to whom such deemed
deduction was allocated.

(iv)          The computation of all items of
income, gain, loss and deduction shall be made without regard to any Section
754 Election which may be made by the Partnership (except to the extent
required by Treasury Regulation Section 1.704-1(b)(2)(iv)(m)) and, as to those
items described in Section 705(a)(1)(B) or Section 705(a)(2)(B) of the Code
(including items treated as Section 705(a)(2)(B) expenditures under Treasury
Regulation Section 1.704-1(b)(2)(iv)(i)), without regard to the fact that such
items are not includable in gross income or are neither currently deductible
nor capitalizable for Federal income tax purposes.

(c)           (i)            Upon
the acquisition of an additional interest in the Partnership by any new or
existing Partner in exchange for more than a de minimis Capital
Contribution, the Capital Accounts of all Partners (and the Carrying Values of
all Partnership properties) shall be adjusted upwards or downwards to reflect
any Unrealized Gain or Unrealized Loss attributable to the Partnership
properties as if such Unrealized Gain or Unrealized Loss has been recognized
upon an actual sale of such properties immediately prior to such issuance and
was allocated to the Partners, at such time, pursuant to Section 4.1.  In determining such Unrealized Gain or
Unrealized Loss, the fair market value of Partnership property shall be
determined by the Management Committee using such reasonable method of
valuation as it deems appropriate.

(ii)           Immediately prior to the distribution
of more than a de minimis amount of cash or any Partnership property as
consideration for an interest in the Partnership (whether in liquidation of the
Partnership or otherwise), the Capital Accounts of all Partners (and the
Carrying Value of all Partnership properties) shall, immediately prior to any
such distribution, be adjusted upwards or downwards to reflect any Unrealized
Gain or Unrealized Loss attributable to all Partnership properties as if such
Unrealized Gain or Unrealized Loss has been recognized upon an actual sale of
such properties immediately prior to such distribution and was allocated to the
Partners, at such time, pursuant to Section 4.1.  In determining such Unrealized Gain or
Unrealized Loss, the fair market value of Partnership property shall be
determined by the Management Committee using such reasonable method of
valuation as it deems appropriate.

(iii)          Notwithstanding anything to the
contrary in this Section 3.3(c), any adjustment pursuant to Section 3.3(c)(i)
or 3.3(c)(ii) shall be made only if the Management Committee reasonably
determines that such adjustment is necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership.

 9
 

(d)           The determination of the amount of
any liability for purposes of this Section 3.3 (including, without limitation,
the computation of Agreed Value, Unrealized Gain and Unrealized Loss) shall be
made in accordance with Section 752(c) of the Code and any other applicable
provisions of the Code and Treasury Regulations thereunder.

(e)           In the event all or a portion of an
interest in the Partnership is transferred in accordance with the terms of this
Agreement, the Capital Account of the transferee shall be determined in
accordance with Treasury Regulation Section l.704-1(b)(2)(iv)(1).

(f)            It is the intention of the Partners
that Capital Accounts shall be determined in a manner so that the allocations
in, this Agreement will have, or be deemed to have, substantial economic effect
under Section 704(b) of the Code and Treasury Regulations thereunder.  In the event that the Management Committee
determines that it is prudent to modify the manner in which Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities that are secured by contributed or distributed
property or that are assumed by the Partnership or the Partners or their Affiliates)
are computed in order to comply with such Treasury Regulations, the Management
Committee shall make such modification, but only if such modification is not
likely to have a material effect on the amounts distributable to the Partners
pursuant to Article XI.  In the event
that unanticipated events might otherwise cause this Agreement not to comply
with such Treasury Regulations, the Management Committee, consistent with the
prior sentence, shall make such modifications as it deems appropriate.

(g)           Negative Capital Accounts.  Subject to Section 11.4, no Partner shall be
required to pay to the Partnership or to any other Partner or other Person any
deficit or negative balance which may exist in such Partner’s Capital Account
upon liquidation of the Partnership or such Partner’s interest in the
Partnership.

3.4           No Preemptive Rights.  Except as otherwise provided in Articles X or
XI hereof, no Partner shall have any preemptive or preferential right,
including any such right with respect to (a) additional Capital Contributions;
(b) issuance or sale of Partnership Interests, whether unissued, held in the
treasury or thereafter created; (c) issuance of any obligations, evidences of
indebtedness or other securities of the Partnership convertible into or exchangeable
for, or carrying or accompanied by any rights to receive, purchase or subscribe
to, any such unissued Partnership Interests held in treasury; (d) issuance of
any right of, subscription to or right to receive, or any warrant or option for
the purchase of, any of the foregoing securities; or (e) issuance or sale of
any other securities that may be issued or sold by the Partnership.

3.5           Interest.  No interest shall be paid by the Partnership
on Capital Contributions or on balances in Partners’ Capital Accounts.

3.6           No Withdrawal.  Except as otherwise provided herein or
consented to by each of the General Partners, no Partner shall be entitled to
withdraw any part of his or its (or his or its predecessor’s) Capital
Contribution or Capital Account or to receive any distribution from the
Partnership.

 10
 

3.7           Loans from Partners.  Loans by a Partner to the Partnership shall
not be considered Capital Contributions. 
If any Partner shall advance funds to the Partnership in excess of the
amounts required hereunder to be contributed by him or it to the capital of the
Partnership, the making of such advances shall not result in any increase in
the amount of the Capital Account of such Partner. The amounts of any such
advances shall be a debt of the Partnership to such Partner and shall be
payable or collectible only out of the Partnership assets in accordance with
the terms and conditions upon which such advances are made.

3.8           Voluntary Contributions.  No Partner shall make any Capital
Contribution except pursuant to this Article III.

ARTICLE IV

ALLOCATIONS AND DISTRIBUTIONS

4.1           Allocations for Capital Account
Purposes.  (a)  For purposes of maintaining the Capital
Accounts and determining the rights of the Partners among themselves, the
Partnership items of income, gain, loss and deduction shall be computed as
provided in Section 3.3 and, except as provided below, shall be allocated among
the Partners in proportion to their respective Percentage Interests.  Notwithstanding the foregoing, if, upon the
sale or other taxable disposition of substantially all of the Partnership’s
property, the Capital Accounts of the Partners are not in the ratio of the
Percentage Interests of the Partners, gain or loss from such sale or
disposition shall be first allocated among the Partners to cause the Capital
Accounts to be in the ratio of such Percentage Interests, with the balance of
such gain or loss, if any, allocated among the Partners in proportion to their
respective Percentage Interests.

(b)           In the event that any Partner unexpectedly
receives an adjustment, allocation or distribution described in clauses (4),
(5) or (6) of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) that results in
such Partner having an Adjusted Capital Account Deficit, such Partner shall be
allocated Partnership items of income and gain in an amount and manner
sufficient to eliminate, to the extent required by such regulations, the
Adjusted Capital Account Deficit of such Partner as quickly as possible;
provided, that an allocation pursuant to this Section 4.1(b) shall be made only
if and to the extent that such Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Section 4.1 have been
tentatively made as if this Section 4.1(b) were not in this Agreement.  This Section 4.1(b) is intended to constitute
a “qualified income offset” within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(3) and shall be interpreted consistently with such
provisions.

(c)           In accordance with and pursuant to
Treasury Regulation Section 1.704-1T(b)(4)(iv)(e), (f) and (h), if there is a
net decrease in the Partnership’s Minimum Gain during any taxable year, all
Partners shall be allocated, before any other allocation is made of Partnership
items for such taxable year, items of income and gain for such year (and, if
necessary, subsequent years) in an amount equal to the greater of (a) each such
Partner’s share of the net decrease in Minimum Gain that is allocable to the
disposition of Partnership property subject to one or more nonrecourse
liabilities of the Partnership, as determined pursuant to Treasury Regulation
Section 1.704-1T(b)(4)(iv)(f) and (h), as

 11
 

applicable, or (b) if
such Partner would otherwise have an Adjusted Capital Account Deficit at the
end of such year, an amount sufficient to eliminate such Adjusted Capital
Account Deficit.  This Section 4.1(c) is
intended to comply with the “minimum gain chargeback” requirement in such
Treasury Regulations and shall be interpreted consistently therewith.

(d)           All items of loss, deduction or
expenditure that in accordance with the principles of Treasury Regulation
Section 1.704-1T(b)(4)(iv)(h)(3) are attributable to a Partner nonrecourse debt
(as defined in Treasury Regulation Section 1.704-1T(b)(4)(iv)(k)(4)) shall be
allocated to the Partner that bears the economic risk of loss with respect to
such Partner nonrecourse debt within the meaning of Treasury Regulation Section
1.704-1T(b)(4)(iv)(k)(1).

(e)           No allocation of loss or item thereof
shall be made to any Partner to the extent such allocation would create or
increase an Adjusted Capital Account Deficit of such Partner.  Any losses or items thereof that cannot be
allocated to Partners by reason of the prior sentence (the “Excess Loss”)
shall, subject to the prior sentence, be allocated to the other Partners in
proportion to such other Partners’ Percentage Interests, and this method of
allocation shall continue until such Excess Loss shall have been completely
allocated.

(f)            To the extent of any Recapture
Income resulting from the sale or other taxable disposition of a Partnership
asset, the amount of any gain allocated to each of the Partners shall be
Recapture Income to the extent such Partner (or a predecessor in interest) has
been allocated or has claimed any deduction directly or indirectly giving rise
to the treatment of such gain as Recapture Income.

(g)           Notwithstanding any other provision
of this Section 4.1 other than Sections 4.1(b) through 4.1(e) (the “Required
Allocations”), the Required Allocations shall be taken into account in making
the allocations under Section 4.1(a) (the “Agreed Allocations”) so that, to the
extent possible, the net amount of items of income, gain, loss and deduction
allocated to each Partner pursuant to the Required Allocations and the Agreed
Allocations, together, shall be equal to the net amount of such items that
would have been allocated to each Partner under the Agreed Allocations had the
Required Allocations not otherwise been provided for in this Section 4.1.

(h)           It is the intent of the parties to
this Agreement that the chargeback provisions and the limitation on loss
allocation provisions provided herein satisfy the “allocation of nonrecourse
deduction” rules provided in Treasury Regulation Section 1.704-1T(b)(4)(iv) and
the requirements of Treasury Regulation Section 1.704-1T(b)(2)(ii)(d) (relating
to the alternate test for economic effect and qualified income offset).  It is further intended that the allocations
under this Section shall effect an allocation for Federal income tax purposes
in a manner so that allocations in this Agreement will have, or be deemed to
have, substantial economic effect under Section 704(b) of the Code and the
Treasury Regulations promulgated thereunder. 
If for any reason the allocations contained in this Agreement shall
conflict with the Treasury Regulation promulgated under Section 704 of the Code,
the Management Committee may

 12
 

amend these provisions if
it receives an opinion of counsel that such an amendment is necessary to
reflect allocations consistent with such regulations.

(i)            The Partnership shall allocate items
of income, gain, loss, deduction and credit attributable to a Partnership
Interest that is assigned during a year between the assignor and assignee of
such Partnership Interest or to a newly issued Partnership interest in
accordance with any method that the Management Committee determines is likely
to be upheld under Section 706 of the Code.

4.2           Allocations for Tax Purposes.  (a)     For
Federal and state income tax purposes, except as otherwise provided in this
Section 4.2, each item of Partnership income, gain, loss and deduction shall be
allocated to the Partners consistent with the allocations of income, gain, loss
and deduction heretofore described in Section 4.1.

(b)           In accordance with Section 704(c) of
the Code and the Treasury Regulations thereunder (and any corresponding
provisions of applicable state law), income, gain, loss, and deduction with
respect to any property contributed to the capital of the Partnership shall,
solely for tax purposes, be allocated among the Partners so as to take account
of any variation between the adjusted basis of such property to the Partnership
for Federal income tax purposes and its Agreed Value.

In the event the Carrying
Value of any Partnership asset is adjusted pursuant to Section 3.3(c) hereof,
subsequent allocations of income, gain, loss, and deduction with respect to
such asset shall take into account any variation between adjusted basis of such
asset for Federal income tax purposes and its Carrying Value in the same manner
as under Section 704(c) of the Code and the Treasury Regulations thereunder.

(c)           All items of income, gain, loss,
deduction, credit and basis allocation recognized by the Partnership for
Federal income tax purposes and allocated to the Partners in accordance with
the provisions hereof shall be determined without regard to any election under
Section 754 of the Code that may be made by the Partnership; provided, that
such allocations, once made, shall be adjusted, as necessary or appropriate, to
take into account those adjustments permitted by Sections 734 and 743 of the
Code and, where appropriate, to provide only Partners recognizing gain on
Partnership distributions covered by Section 734 of the Code with the Federal
income tax benefits attributable to the increased basis in Partnership property
resulting from any election under Section 754 of the Code.

(d)           Any credits of the Partnership shall
be allocated to the Partners in accordance with their respective Percentage
Interests or as required by the Code and Treasury Regulations thereunder.

(e)           Allocations pursuant to this Section
4.2 are solely for Federal, state and local tax purposes and shall not affect,
or in any way be taken into account in computing, any Partner’s Capital Account
or share of income, gain, loss and deduction or distributions pursuant to any
provision of this Agreement.

 13
 

(f)            The Partners are aware of the income
and other tax consequences of the allocations made by this Article IV and
hereby agree to be bound by the provisions of this Article IV in reporting
their shares of items of Partnership income, gain, loss, deduction and credit.

4.3           General Partners.  Notwithstanding anything to the contrary that
may be expressed or implied in this Agreement, the interests of the General
Partners as General Partners, taken together, in each material item of
Partnership income, gain, loss, deduction or credit shall be equal to at least
1% of each such item at all times during the existence of the Partnership,
subject to the temporary allocations required under Section 704(b) and (c) of
the Code provided for in this Agreement.

4.4           Distributions.  (a) 
Within 75 days after the end of each of its fiscal years, the
Partnership shall distribute cash to the Partners in proportion to their
respective Percentage Interests in an aggregate amount equal to the Federal
taxable income of the Partnership allocated to the Partners multiplied by the
sum of the highest Federal corporate income tax rate (currently 35%) and an
assumed combined state and local income tax rate of 3%.

(b)           Other than the distributions required
to be made under Section 4.4(a) above, the Management Committee may from time
to time in its sole discretion cause the Partnership to distribute cash or
other property to the Partners in accordance with their respective Percentage
Interests.

(c)           No reimbursement for expenses made
pursuant to this Agreement and no payment described in Section 707(c) of the
Code shall be deemed to be distributions for purposes of this Agreement.

ARTICLE V

ACCOUNTING AND TAXATION

5.1           Fiscal Year.  The fiscal year of the Partnership shall be
the calendar year.

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

5.3           Books of Account.  The books of account for the Partnership
shall be:

(a)           Maintained on an accrual basis in
accordance with Required Accounting Practice; and

(b)           Audited by the Certified Public
Accountants at the end of each fiscal year.

5.4           Annual Financial Statements and
Tax Information.  As soon as
practicable following the end of each fiscal year of the Partnership, the
Management Committee shall cause to be prepared and delivered to each Partner:

 14
 

(a)           A profit and loss statement and a
statement of cash flow for such fiscal year and a balance sheet as of the end
of such fiscal year, together with a report thereon of the Certified Public
Accountants; and

(b)           Such Federal, state and local income
tax returns and such other accounting, tax information and schedules as shall
be necessary for the preparation by each Partner of its Federal, state and
local income tax returns for such fiscal year.

5.5           Taxation.  The Parties intend that the Partnership shall
be treated as a “partnership” for Federal and state tax purposes.  The Partnership’s state and Federal income
tax returns shall be approved by the Management Committee and subject to review
by the Certified Public Accountants, counsel or other Person or Persons
designated by the Management Committee for such purpose.  All of the Partnership elections for state
and Federal income tax purposes shall be determined by the Management
Committee.

(a)           Tax Controversies.  TransCanada GP is designated the “Tax Matters
Partner” (as defined in Section 6231 of the Code), and is authorized and
required to represent the Partnership (at the Partnership’s expense) in
connection with all examinations of the Partnership’s affairs by tax
authorities, including, without limitation, administrative and judicial
proceedings, and to expend Partnership funds for professional services and
costs associated therewith; provided, however, that the Tax Matters
Partner shall not take any action as such Tax Matters Partner unless such
action shall have been approved by the Management Committee.  Each Partner agrees to cooperate with the
Management Committee and to do or refrain from doing any and all things
reasonably required by the Management Committee to conduct such proceedings.

(b)           Withholding.  Notwithstanding any other provision of this
Agreement, the Management Committee is authorized to take any action that it
determines to be necessary or appropriate to cause the Partnership to comply
with any Federal, state and local withholding requirement with respect to any
allocation, payment or distribution by the Partnership to any Partner or other
Person.  All amounts so withheld shall be
treated as distributions to the Partners under Article IV or XI, as the case
may be.  If any such withholding
requirement with respect to any Partner exceeds the amount distributable to
such Partner under Article IV or XI, or if any such withholding requirement was
not satisfied with respect to any amount previously allocated or distributed to
such Partner under Article IV or XI, such Partner and any successor or assignee
with respect to such Partner’s interest in the Partnership hereby indemnifies
and agrees to hold harmless the General Partners and the Partnership for such
excess amount or such withholding requirement, as the case may be.

(c)           Tax Elections.  The Partnership shall make the election under
Section 754 of the Code in accordance with applicable Treasury Regulations
thereunder for the first
fiscal year in which such election could apply, subject to the reservation of
the right to seek to revoke any such election upon the Management
Committee’s determination that such revocation is in the best interests of the
Partners.  In addition to the foregoing,
the Management Committee shall, in its sole discretion, determine whether to
make any other

 15
 

available tax elections
and select any other appropriate tax accounting methods and conventions for any
purpose under this Agreement.

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

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

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

ARTICLE VI

MANAGEMENT OF THE PARTNERSHIP

6.1           Control by General Partners.  The General Partners through the operation of
the Management Committee shall conduct, direct and exercise full control over
all activities of the Partnership. 
Except as otherwise expressly provided in this Agreement, all management
powers over the business and affairs of the Partnership shall be exclusively
vested in the General Partners which powers shall be exercised solely through
the operation of the Management Committee, and no Limited Partner shall have
any management power over the business and affairs of the Partnership.  The General Partners through the operation of
the Management Committee shall have full power and authority to do or cause the
Partnership to do all things deemed necessary or desirable by them, in their
sole discretion, in connection with or to conduct the business of the
Partnership, including, without limitation, (A) the establishing of reserves,
the making of any expenditures, the lending of money, the borrowing of money,
the guaranteeing or assumption of indebtedness and other liabilities, the
issuance of indebtedness and other liabilities, the issuance of evidences of
indebtedness, and the securing of the same by mortgage, deed of trust, or other
lien or encumbrance, and the incurring of any obligations it deems necessary
for the conduct of the activities of the Partnership, (B) the acquisition,
disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or
all of the assets of the Partnership and the merger of the Partnership with or
into another entity, (C) the use of the assets of the Partnership (including,
without limitation, cash on hand) for any purpose and on any terms it sees fit,
including, without limitation, the financing of the conduct of the operations
of the Partnership, the lending of funds to other Persons and the repayment of
obligations of the Partnership, (D) the negotiation and execution on any terms
deemed desirable in its sole

 16
 

discretion and the performance of any contracts,
conveyances or other instruments that it considers useful or necessary to the
conduct of the Partnership’s operations or the implementation of its powers
under this Agreement, (E) the distribution of Partnership cash, (F) the
selection and dismissal of employees and outside attorneys, accountants,
consultants and contractors and the determination of their compensation and
other terms of employment or hiring, (G) the maintenance of insurance and the
adoption of fringe benefit plans for the benefit of the Partnership, the
Partners and officers, employees and agents of the Partnership as it deems
necessary, (H) the formation of any further limited or general partnerships,
joint ventures or other relationships that it deems desirable, (I) the control
of any matters affecting the rights and obligations of the Partnership,
including, without limitation, the conduct of litigation, the incurring of
legal expenses and the settlement of claims and litigation, (J) the issuance,
purchase, sale or other acquisition or disposition of Partnership Interests or
any security of the Partnership, and the cancellation of acquired Partnership
Interests or any security of the Partnership, at such times and on such terms
as they deem to be in the best interest of the Partnership and the Partners and
(K) the acts necessary to enter into leases for real or personal property or
agreements in connection with sale and leaseback transactions.  No General Partner shall have the power to
bind the Partnership or otherwise undertake any action on behalf of the Partnership
without the consent of or at the direction of the Management Committee.

6.2           Management Committee.  (a) The General Partners hereby designate a
Management Committee to consist of six individual members; three of whom shall
be designated by TCGL GP (the “TCGL Committee Members”) and three of whom shall
be designated by TransCanada GP (the “TransCanada Committee Members”) (The TCGL
Committee Members and the TransCanada Committee Members are sometimes
hereinafter referred to as the “Committee Members”).  The business of the Partnership shall be
managed by the General Partners through the Management Committee which shall
exercise all of the powers of the General Partners.  Each member of the Management Committee shall
be a duly authorized officer or representative of the entity that so designated
him and shall be duly authorized to act on behalf of and bind such entity in
its capacity as a general partner of the Partnership.  All actions taken by the members of the
Management Committee shall be taken by such individuals in their capacity as duly
authorized agents for the General Partners. 
Each Committee Member shall remain a member of the Management Committee
until his successor has been duly designated, or upon his earlier resignation
or removal.  Any Committee Member may
resign at any time upon notice to the Partnership and the General
Partners.  The TCGL Committee Members and
the TransCanada Committee Members may be removed with or without cause only by
TCGL GP or TransCanada GP, respectively. 
Vacancies resulting from the removal, resignation or other incapacity of
a TCGL Committee Member or a TransCanada Committee Member may be filled only by
TCGL GP or TransCanada GP, respectively.

(b)           The Management Committee may hold
meetings, both regular and special, either within or without the State of
Delaware, as follows:

(i)            The Management Committee shall hold
regular meetings without notice at such time and at such place as may from time
to time be determined by the Management Committee.

 17
 

(ii)           At all meetings of the Management
Committee, the presence of four Committee Members shall constitute a quorum for
the transaction of business and the unanimous act of the Committee Members
present at any meeting at which there is a quorum shall be the act of the
Management Committee.  If a quorum shall
not be present at any meeting of the Management Committee, the Management
Committee members present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present.

(iii)          Any action required or permitted to be
taken at any meeting of the Management Committee may be taken without a
meeting, if all the members of the Management Committee consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Management Committee.

(iv)          Committee Members may participate in a
meeting of the Management Committee by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in such a meeting shall
constitute presence in person at such meeting.

(c)           Without the requisite approval of the
Management Committee, the General Partners, the Management Committee and other
committees of the Partnership, and the management officials, employees and
agents of the Partnership, shall not, nor shall any of them permit, allow or
cause the Partnership to:

(i)            amend, modify or waive any of the
terms or conditions of this Agreement;

(ii)           admit any Person to the Partnership
as a general or limited partner or permit any Person to make a capital
contribution to the Partnership;

(iii)          change rate schedules in effect or
proposed at any time;

(iv)          execute any gas purchase, gas sale or
transportation contract;

(v)           enter into, execute, amend, modify or
waive any of the terms or conditions of the Operating Agreement or any
replacement Operating Agreement;

(vi)          approve entering into of any contract
with an Affiliate of a Partner pursuant to Section 6.6(b);

(vii)         undertake any proposed Incremental
Expansion, or any other construction project or execute any construction
contract which involves expenditures or commitments by the Partnership in
excess of $500,000;

(viii)        determine any tax or accounting election
or policy;

 18
 

(ix)           arrange for insurance, applications
for insurance policies and authorization of insurance contracts with respect to
any property of the Partnership;

(x)            finance or refinance the Partnership
or authorize, issue and/or sell General or Limited Partnership Interests or
other securities of the Partnership or create any lien on or security interest
in any of the assets of the Partnership in connection therewith; provided that
the Partnership may, in the normal course of business, borrow on an unsecured
basis from commercial banks up to $1,000,000 at any one time outstanding
without the approval of the Management Committee as herein required;

(xi)           grant any bonuses or options or make
other arrangements for the sale of Partnership Interests to officers or
employees, all employee pension or other benefit plans and arrangements;

(xii)          redeem or purchase Partnership
Interests or other outstanding securities of the Partnership or distribute cash
or other assets of the Partnership to the Partners;

(xiii)         appoint or retain counsel, independent
auditors and consultants;

(xiv)        file any application or other request
for authority (including any material amendments thereto) with any governmental
authority with respect to any of the foregoing including:

(A)          file any application
for, or commence any proceeding with respect to, obtaining any certificate of
public convenience and necessity or other certificate of authority from FERC or
from any other governmental authority having jurisdiction over the Partnership,
its business or assets,

(B)           file any application
to FERC or any other governmental authority having jurisdiction for any
increase, decrease or other change in the Partnership’s rates or other tariff
provisions, and

(C)           file any
application, declaration or registration statement to be filed with the
Securities and Exchange Commission; and

(xv)         file any suit, appeal or other court
proceeding in connection with any of the foregoing.

(d)           The General Partners hereby designate
an Executive Committee which shall consist of three members:  one TCGL Committee Member, one TransCanada
Committee Member and the President of the Partnership, who shall be a
non-voting member of the Executive Committee and shall provide assistance to
the other members.  The Management Committee
may designate other committees, each such committee to consist of at least one
TCGL Committee Member and one TransCanada Committee Member.  To the extent provided by the Management
Committee, the Executive

 19
 

Committee and any other
committee shall have and may exercise any or all of the powers of the
Management Committee in the management of the business of the Partnership,
including the power to approve any or all of the designated actions set forth
in Section 6.2(c), provided that with respect to any action set forth in
Section 6.2(c) which is taken by a subcommittee, such action may be taken only
with the unanimous consent of each voting member of the subcommittee.

6.3           Management Officials.  (a)    Other than as
expressly set forth in this Agreement, the Management Committee is hereby authorized
to (i) create titles for management officials of the Partnership; (ii)
establish the power and authority associated with such titles to act as the
agent of the General Partners to represent the Partnership in dealings with
third parties, provided that the General Partners shall have no power to grant
to any management official any control over the affairs of the Partnership,
which control shall remain solely vested in the General Partners; (iii) elect,
appoint and remove such management officials to and from the positions so
created; and (iv) indemnify and hold harmless such management officials against
any loss, expense or damage suffered by reason that such Person was a
management official of the Partnership. 
The appointment of such management officials shall not constitute such
management officials as general partners of the Partnership and shall not
affect the rights, duties and obligations of the General Partners as general
partners, or the Management Committee under this Agreement.  All Persons elected as management officials
of the Partnership shall report to the Management Committee which, on behalf of
the General Partners, in all respects shall retain the ultimate management
authority and control over the affairs of the Partnership.  All officials of the Partnership other than
the management officials shall report to the management officials.

(b)           The management officials of the
Partnership shall be a President, a Vice President and a Secretary.  The Management Committee in its discretion
may also choose a Chairman, additional Vice Presidents, one or more Assistant
Secretaries, a Treasurer, one or more Assistant Treasurers and other management
officials.  Any number of positions may
be held by the same Person, unless otherwise prohibited by law or this
Agreement.  The Management Committee
shall elect the management officials of the Partnership (other than the
President who shall be appointed by TransCanada GP in its sole discretion) who
shall hold their positions for such terms and shall exercise such powers and
perform such duties, as shall be determined from time to time by the Management
Committee; and all management officials of the Partnership shall hold such
position until their successors are chosen and qualified, or until their
earlier resignation or removal.  Any
management official elected by the Management Committee may be removed at any
time by the Management Committee.  Any
vacancy occurring in any position of the Partnership shall be filled by the
Management Committee (or, in the case of the President, by TransCanada
GP).  The salaries of all management
officials of the Partnership, if any, shall be fixed by the Management
Committee.  The responsibilities and duties
of the management officials are as follows:

(i)            The President shall be the chief
executive officer of the Partnership and, subject to the Management Committee,
on behalf of the General Partners, having full and complete control over the
business and affairs of the Partnership, each shall have general supervision of
the business of the Partnership and shall see that all orders and resolutions
of the Management Committee are carried into

 20

effect.  The President may execute all bonds,
mortgages, contracts and other instruments of the Partnership, except where
required or permitted by law to be otherwise signed and executed and except
that the other management officials of the Partnership may sign and execute
documents when so authorized by the Management Committee.  The President shall also perform such other
duties and may exercise such other powers as from time to time may be assigned
to him or her by the Management Committee.

(ii)           At the request of the President or in
his absence or in the event of his inability or refusal to act, the Vice
President so designated by the Management Committee shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. 
Each Vice President shall perform such other duties and have such other
powers as the Management Committee from time to time may prescribe.

(iii)          The Secretary shall attend all
meetings of the Partners of the Partnership and the Management Committee and
record all the proceedings thereat in a book or books to be kept for that
purpose; the Secretary shall also perform like duties for any standing
committees when required.  The Secretary
shall give, or cause to be given, notice of all meetings of the Partners of the
Partnership and shall perform such other duties as may be prescribed by the
Management Committee under whose supervision he shall be.  If the Secretary shall be unable or shall
refuse to cause to be given notice of all meetings of the Partners of the
Partnership, and if there shall be no Assistant Secretary, then the Management
Committee may choose another management official to cause such notice to be
given.  The Secretary shall see that all
books, reports, statements, certificates and other documents and records
required by law to be kept or filed are properly kept or filed, as the case may
be.

(iv)          The Treasurer shall have the custody
of the Partnership funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Partnership
and shall deposit all moneys and other valuable effects in the name and to the
credit of the Partnership in such depositories as may be designated by the
Management Committee.  The Treasurer
shall disburse the funds of the Partnership as may be ordered by the Management
Committee, taking proper vouchers for such disbursements, and shall render to
the President and the Management Committee an account of all his transactions
as Treasurer and of the financial condition of the Partnership.  If required by the Management Committee, the
Treasurer shall give the Partnership a bond in such sum and with such surety or
sureties as shall be satisfactory to the Management Committee for the faithful
performance of the duties of his office and for the restoration to the
Partnership, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Partnership.

(v)           Other Management Officials.
Such other management officials as the Management Committee may choose shall perform
such duties and have such

 21
 

powers as from time to
time may be assigned to them by the Management Committee.

6.4           Compensation and Reimbursement of
the General Partners.  (a)   Except
as provided in this Section 6.4 and elsewhere in this Agreement, no General
Partner shall be compensated for his or its services as General Partner to the
Partnership.

(b)           Subject to approval by the Management
Committee, each General Partner shall be reimbursed for all expenses,
disbursements and advances incurred or made in connection with the
qualification of the Partnership and the General Partners to do business, and
any issuance of Partnership Interests or other securities by the Partnership.

(c)           Subject to approval by the Management
Committee, each General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partners may determine in their sole discretion, for
all direct expenses it incurs or makes on behalf of the Partnership (including
amounts paid to any Person to perform services to the Partnership). The General
Partners shall determine the expenses which are allocable to the Partnership in
any reasonable manner. Such reimbursements shall be in addition to any
reimbursement to a General Partner as a result of indemnification pursuant to
Section 6.7.

(d)           Any amount reimbursed to a General
Partner pursuant to Sections 6.4(b) or 6.4(c) which is disallowed by FERC shall
be reimbursed to the Partnership by such General Partner.

6.5           Outside Activity.  (a)  Neither of the General
Partners shall enter into or conduct any business except in connection with its
performance of its duties and obligations as a General Partner under the terms
of this Agreement.

(b)           Any Affiliate of a General Partner
and any equity holder, director, officer or employee of a General Partner may
have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities which
conflict with or are in direct competition with the Partnership for his or its
own account and for the account of others, and may own interests in the same
properties as those in which the Partnership owns an interest, without having
or incurring any obligation to offer any interest in such properties,
businesses or activities to the Partnership or any Partner, and, except as
specified in Section 6.5(a), no other provision of this Agreement shall be
deemed to prohibit any such Person from conducting such other businesses and
other activities.  Neither the
Partnership nor any of the Partners shall have any rights by virtue of this
Agreement or the partnership relationship created hereby in any business
ventures of any such Person or any of the revenues, profits or losses derived
therefrom.

6.6           Dealings with the General Partners.  (a)        Any
General Partner or Affiliate thereof with the consent of the General Partners
may lend to the Partnership funds needed by the Partnership for such periods of
time as the General Partners may determine; provided, however,
that such General Partner or Affiliate may not charge the Partnership interest
at a rate greater

 22
 

than the rate (including points or other financing
charges or fees) that would be charged the Partnership (without reference to
the General Partner’s financial abilities or guaranties) by unrelated lenders
on comparable loans.  The Partnership
shall reimburse such General Partner or Affiliate for any costs incurred by him
or it in connection with the borrowing of funds obtained by such General
Partner or Affiliate and loaned to the Partnership.

(b)           Either of the General Partners may
itself, or may enter into an agreement with an Affiliate to, render services to
the Partnership.  Any service rendered to
the Partnership by a General Partner or any such Affiliate shall be on terms
that are fair and reasonable to the Partnership.  Approval by the Management Committee of the
terms of any such agreement shall constitute an acknowledgement that the terms
contained in such agreement are fair and reasonable to the Partnership.  The General Partner, other than the General
Partner or the Affiliate thereof which is providing the services, shall have
the right to require the Partnership to conduct an audit of such services.  The provisions of Section 6.4 shall apply to
the rendering of services described in this Section 6.6(b).

(c)           Neither any General Partner nor any
Affiliate thereof shall sell, transfer or convey any property to, or purchase
any property from, the Partnership, directly or indirectly, except pursuant to
transactions that are fair and reasonable to the Partnership.

6.7           Indemnification.  (a)   To the fullest extent
permitted by law, the Partnership shall indemnify any Person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative and whether formal or informal, by reason of the fact that the
Person is or was a General Partner or an equity holder, director or officer of
a General Partner or management official of the Partnership, or is or was
serving at the request of a General Partner or the Partnership as an equity
holder, director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including
any employee benefit plan), against all expense, liability and loss (including attorneys’
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such Person in connection with
such action, suit or proceeding, unless such Person failed to act in good faith
and in a manner that such Person actually believed to be in or not opposed to
the best interests of the Partnership. 
This indemnification shall continue as to any Person who has ceased to
serve in any or all of the foregoing capacities and shall inure to the benefit
of the heirs, executors and administrators of any deceased Person.  The right to this indemnification shall be
deemed a contract right and shall include the right to be advanced currently
the expenses incurred in connection with any such action, suit or proceeding.

(b)           If a claim under paragraph (a) of
this Section is not paid in full by the Partnership within 60 days after a
written claim has been received by the Partnership, except in the case of a
claim for the advancement of expenses incurred in connection with any action,
suit or proceeding in which case the applicable period shall be 20 days, the
indemnitee may at any time thereafter bring suit against the Partnership to
recover the unpaid amount of the claim. 
If successful in whole or in part in any suit or in a suit brought by
the Partnership to recover the advancement of expenses incurred in connection
with any action, suit or proceeding, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such a claim.  In any action brought by the

 23
 

indemnitee to enforce a
right to indemnification hereunder or by the Partnership to recover the
advancement of expenses incurred in connection with any action, suit or
proceeding, the Partnership shall have the burden of proving by clear and
convincing evidence that the indemnitee is not entitled to be indemnified under
this Section or otherwise.  No unilateral
determination by the Partnership that the indemnitee has not met the standard
of conduct set forth in paragraph (a) of this Section shall create a
presumption that the indemnitee has not met that standard of conduct or, in the
case of an action brought by the indemnitee under this paragraph (b), be a
defense to the action.

(c)           The right to indemnification and the
advancement of expenses conferred in this Section shall not be exclusive of any
other right that any Person may have or hereafter acquire under any statute,
agreement or otherwise.

(d)           The Partnership may maintain
insurance, at its expense, to protect any Person against any expense, liability
or loss, whether or not the Partnership would have the power to indemnify such
Person against such expense, liability or loss under the Partnership Act.

(e)           The Partnership may, to the extent
authorized from time to time by the Management Committee, grant rights to
indemnification and the advancement of expenses to any employee or agent of the
Partnership lesser than or coextensive with the rights set forth above in this
Section.

(f)            In no event may an indemnitee
subject the Limited Partners to personal liability by reason of these
indemnification provisions.

(g)           An indemnitee shall not be denied
indemnification in whole or in part under this Section 6.7 because the
indemnitee had an interest in the transaction with respect to which the indemnification
applies if the transaction was otherwise permitted by the terms of this
Agreement.

6.8           Liability.  (a)   Neither any General
Partner nor any equity holder, director or officer of a General Partner or any
management official of the Partnership (the “Management Group”) shall be liable
to the Partnership, any General Partner, any Limited Partner for monetary
damages as a result of any loss, costs, damage or other injury suffered by such
Person as a result of the act or omission of a member of the Management Group
(including a breach of fiduciary duty or duty of care to any of the foregoing),
unless the Partnership, a General Partner, Limited Partner satisfies his or its
burden of proof to show by clear and convincing evidence that the Person sought
to be held liable (i) breached a duty of loyalty to the Partnership, (ii) acted
in bad faith or engaged in intentional misconduct or a knowing violation of law
or (iii) derived an improper personal benefit.

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

 24
 

(c)           Whenever in this Agreement any
General Partner is permitted or required to make a decision (i) in his or its “sole
discretion” or “discretion,” with “complete discretion” or under a grant of
similar authority or latitude, such General Partner shall be entitled to
consider only such interests and factors as he or it desires and shall have no
duty or obligation to give any consideration to any interest of or factors
affecting the Partnership, the Limited Partners, or (ii) in his or its “good
faith” or under another express standard, such General Partner shall act under
such express standard and shall not be subject to any other or different
standards imposed by this Agreement or any other agreement contemplated
herein.  Each Limited Partner hereby
agrees that any standard of care or duty imposed in this Agreement or any other
agreement contemplated herein or under the Partnership Act or any other applicable
law, rule or regulation shall be modified, waived or limited in each case as
required to permit each General Partner to act under this Agreement or any
other agreement contemplated herein and to make any decision pursuant to the
authority prescribed in this Section 6.8(c).

6.9           Other Matters Concerning the
General Partners.  (a)     Each General Partner may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture, or other paper or document believed by him or it to be genuine and
to have been signed or presented by the proper party or parties.

(b)           When any provision in this Agreement
requires any action by or approval or consent of the General Partners, each of
the General Partners must agree to take such action or give or deny such
approval or consent.

(c)           Each General Partner may consult with
legal counsel, accountants, appraisers, management consultants, investment
bankers, and other consultants and advisers selected by it, and any opinion of
such Person as to matters which such General Partner believes to be within such
Person’s professional or expert competence shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by such General Partner hereunder in good faith and in accordance with
such opinion.

6.10         Title to Partnership Assets.  All Partnership assets, whether real,
personal or mixed, tangible or intangible, shall be owned by the Partnership as
an entity, and no Partner, individually or collectively, shall have any
ownership interest in such or all of the Partnership assets as may be held in
the name of the Partnership or one or more nominees, as the General Partners
may determine.  Each General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of a General Partner shall be held in trust by such General
Partner for the sole use and benefit of the Partnership in accordance with the
terms and provisions of this Agreement. 
All the Partnership assets shall be recorded as the property of the
Partnership on its books and records, irrespective of the name in which legal
title to such Partnership assets is held.

 25
 

ARTICLE VII

LIMITATION OF LIABILITIES

7.1           Limitation of Liability of Limited
Partners.  No Limited Partner shall
be liable for or subject to any obligations, losses, debts or liabilities of
the Partnership at any time in excess of the sum of (a) the amount of such
Limited Partner’s Capital Account at such time, and (b) as specifically
required by the Partnership Act.

7.2           Limitation of Authority of
Partners.  Except as otherwise
provided in the Operating Agreement, no Partner shall have the authority to act
for, or assume any obligation or responsibility on behalf of, any other
Partner, without the prior written approval of such other Partner.

7.3           Cross-Indemnification.  Each Partner (for purposes of this Section
7.3, the “indemnitor”) shall indemnify and hold harmless each of the other
Partners (for purposes of this Section 7.3, the “indemnitee”) and the
Affiliates, directors, officers, partners (other than the Partners to this
Agreement), employees, agents and representatives of the indemnitee from and
against any costs, losses, claims, damages and liabilities arising out of any
act of the indemnitor or any of its Affiliates, directors, officers, partners
(other than the Partners to this Agreement), employees, agents or
representatives which has the effect of binding the indemnitee, or which has
the effect of making the indemnitee liable without its consent, or arising out
of any assumption of any obligation or responsibility by the indemnitor or any
of its Affiliates, directors, officers, partners (other than the Partners to
this Agreement), employees, agents or representatives which has the effect of
binding the indemnitee, or which has the effect of making the indemnitee liable
without its consent (including, without limitation, sales or other acts
entirely on its part which may give rise to product liability claims);
provided, however, that this Section 7.3 shall have no application with respect
to any actions taken (a) on behalf of the Partnership by, or on behalf of, the
Management Committee in conformance with this Agreement, (b) on behalf of one
Partner by another Partner in conformance with this Agreement or (c) by, or on
behalf of, the Operator (as that term is defined in the Operating Agreement) in
conformance with the Operating Agreement.

7.4           Limited Recourse.  Unless otherwise consented to by the Management
Committee, all agreements entered into by or on behalf of the Partnership,
including any indenture, note or other evidence of indebtedness, shall provide
that no personal liability whatsoever shall attach to, be imposed on or
otherwise be incurred by any Partner, agent, management official or employee of
the Partnership or any director, officer or employee of any of the foregoing
for any obligation of the Partnership under such agreement or for any claim
based on such obligation and that the sole recourse of other parties to such
agreements shall be limited to the assets of the Partnership.

 26
 

ARTICLE VIII

TRANSFER OR PLEDGE OF PARTNERSHIP INTERESTS

8.1           Additional Definitions.  The following definitions shall apply for
purposes of this Article VIII:

Beneficial Owner.  Any “Beneficial Owner” within the meaning of
Rule 13d-3 of the Exchange Act.

Change of Control
Transaction.  A change
in the beneficial ownership of the equity interests of the subject Person or a
change in management of the subject Person as follows:

(a)           any Exchange Act Person (other than
(i) the subject Person, (ii) any entity owned, directly or indirectly, by the
equityholders of the subject Person in substantially the same proportions as
their ownership of equity of the subject Person, and (iii) any trustee or other
fiduciary holding securities under an employee benefit plan of the subject
Person or its Affiliates or such proportionately owned entity) becomes, through
acquisitions of securities of the subject Person after the date of this
Agreement, the Beneficial Owner, directly or indirectly, of securities of the
subject Person representing 50% or more of the then-outstanding equity
interests of the subject Person;

(b)           a merger or consolidation of the
subject Person with any other Person, other than (i) a merger or consolidation
which would result in the equity interests of the subject Person outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into equity interests of the surviving
entity) more than 50% of the equity interests of the subject Person or such
surviving entity outstanding immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a recapitalization of the
subject Person (or similar transaction) in which no Person acquires more than
15% of the then outstanding equity interests of the subject Person;

(c)           the consummation of a plan of
complete liquidation of the subject Person or the sale or disposition by the
subject Person of all or substantially all of the assets of the subject Person
(or any transaction having a similar effect);

(d)           if the subject Person has a Managing
Board, during any 24 month period, individuals who at the beginning of such
period constitute the Managing Board of the subject Person, and any new members
of the Managing Board (other than members of the Managing Board designated by a
Person who has entered into an agreement with the subject Person to effect a
transaction described in paragraph (a), (b) or (c) above) whose election by the
Managing Board or nomination for election by the equityholders of the subject
Person was approved by a vote of at least two-thirds of the members of the
Managing Board then still in office who either were members of the Managing
Board at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority thereof; or

 27
 

(e)           if the subject Person does not have a
Managing Board, a change in the Person or group of Persons, or any combination
thereof, which controls directly or indirectly the subject Person unless (i)
such Person or Persons acquiring control are Affiliates of the Persons or group
of persons giving up control or (ii) such Person or Persons giving up control
are widely held and publicly-traded.

Exchange Act.  The Securities Exchange Act of 1934, as
amended.

Exchange Act Person.  Any “Person” within the meaning of Sections
3(a)(9), 13(d) and 14(d)(2) of the Exchange Act.

Managing Board.  The board of directors or similar management
board or committee, if any, of the subject Person.

8.2           Transfer.  (a)   From and after the date
hereof, no Partner shall, and each Partner shall cause each of their respective
Affiliates not to:

(i)            directly sell, assign, transfer,
give, hypothecate, pledge, encumber or otherwise dispose of, whether
voluntarily or by operation of law or otherwise (a “Direct Transfer”); or

(ii)           effect or be subject to a Change of
Control Transaction that results in an indirect sale, assignment, transfer,
gift, hypothecation, pledge, encumbrance or otherwise disposition of, whether
voluntarily or by operation of law or otherwise,

all or any portion of the
Partnership Interests of such Partner (the transactions described in the
foregoing clauses (i) and (ii)  being
collectively referred to herein as a “Transfer”) without the prior consent of
the Management Committee (“Management Committee Consent”), and any Transfer or
attempt to effect a Transfer without such consent shall be void; provided that
notwithstanding the foregoing, Management Committee Consent shall not be
required in connection with a Transfer (A) effected in accordance with the
provisions of Sections 8.2(b) or 8.3, or (B) resulting from a Change in Control
Transaction involving (x) in the case of Great Lakes or TransCanada GP,
TransCanada Corporation (or any successor thereto), (y) in the case of TCGL GP,
TC PipeLines, LP (or any successor thereto), and (z) in the case of any other
Partner, the then-existing ultimate Parent entity of such Partner.

(b)           A Partner or any of its respective
Affiliates may, without receiving Management Committee Consent and without
complying with Section 8.3 (if applicable) but subject to compliance with
Sections 8.4 and 8.5 (if applicable), at any time effect a Transfer of its
Partnership Interest to any Affiliate (which for such purposes means, in
respect of any Person, an Affiliate which, directly or indirectly, owns
completely, or is owned completely, or shares common ownership completely in
respect of such Person).  Any Partner who
effects a Direct Transfer of a Partnership Interest in accordance with this
Section 8.2(b) shall, upon the consummation of such Direct Transfer, cease to
have any further rights or obligations with respect to such Partnership
Interest.

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8.3           Right of First Refusal.  (a)   In
the event a Partner (the “Transferring Partner”) accepts a bona fide
offer to effect a Direct Transfer of all of its Partnership Interest (the “Subject
Interest”) to a Person (the “Offeror”) in exchange for cash by entering into a
written agreement with the Offeror with respect to such offer (the “Third Party
Agreement”), then, prior to consummating the transactions contemplated by the
Third Party Agreement, the Transferring Partner shall give written notice
thereof (the “Disposition Notice”) to the other Partners enclosing a true and
complete copy of the Third Party Agreement, which Third Party Agreement (i)
must contain all of the terms and conditions of the proposed transaction
between the Transferring Partner and the Offeror (the “Proposed Transaction”),
and (ii) cannot provide for the Transfer of, or otherwise address or take into
account, any assets or liabilities of the Transferring Partner or any of its
Affiliates other than the Subject Interest.

(b)           The Partners other than the
Transferring Partner shall have a right of first refusal, exercisable for a
period beginning on the date of the delivery of the Disposition Notice and
ending on the 90th day after delivery of the Disposition Notice
(the “Exercise Period”), to purchase the Subject Interest on the terms set
forth in the Third Party Agreement (with only those changes as are necessary to
reflect that the applicable Partner, as opposed to the Offeror, is the buyer of
the Subject Interests), on a pro rata basis
(determined by dividing each such non-Transferring Partner’s Percentage
Interest by the sum of the Percentage Interests of all the Partners other than
the Transferring Partner).

(c)           If more than one Partner elects to
purchase any portion of the Subject Interest, such Partners may allocate the
purchase of the Subject Interest among themselves on a basis unanimously agreed
to by such Partners, provided that such Partners collectively agree to purchase
100% of the Subject Interest and failing agreement shall purchase their pro rata share of the Subject Interest.

(d)           If no Partner makes a timely election
to exercise its right of first refusal in accordance with this Section 8.3, the
Transferring Partner shall thereafter be free to complete the Subject
Transaction with the Offeror on the terms set forth in the Third Party
Agreement.  If the Transferring Partner
does not complete the Subject Transaction within 90 days after the expiration
of the Exercise Period, the Transferring Partner shall be prohibited from
completing with Proposed Transaction without again complying with the terms of
this Section 8.3.

8.4           Mechanics of Transfer.  (a)    Any Person (other
than a Partner) who is the transferee of Partnership Interests pursuant to a
Direct Transfer in compliance with the terms and conditions of this Article
VIII shall, in order to validly effect the Direct Transfer in accordance with
this Article VIII, agree in writing to be bound by this Agreement (as modified
to reflect any changes that, in the determination of the Management Committee,
may be necessary or reasonably appropriate to give effect to such Direct
Transfer and the addition of such Person as a Partner)  and,
in doing so, shall be deemed to have: (i) agreed to comply with and be bound by
and to have executed this Agreement, (ii) represented and warranted that such
transferee has authority to enter into this Agreement, (iii) appointed each
General Partner attorney-in-fact to execute any document that either of them
may deem necessary or appropriate to be executed in connection with such
transfer, and (iv) made the consents and waivers contained herein.

 29
 

(b)           Each distribution in respect of
Partnership Interests shall be paid by the Partnership, directly or through its
agent, only to the Partner of record. 
Such payment shall constitute full payment and satisfaction of the
Partnership’s liability in respect of such payment, regardless of any claim of
any Person who may have an interest in such payment by reason of an assignment
or otherwise.

8.5           Further Restrictions on Transfer.  In addition to the other limitations on
Transfers set forth in this Article VIII and elsewhere in this Agreement to the
contrary, no Partner shall, and each Partner shall cause their respective
Affiliates not to, effect a Transfer of any Partnership Interest if such
Transfer would (a) violate the then applicable Federal and state securities
laws or rules and regulations of the Securities and Exchange Commission, any
state securities commission or any other governmental authorities with
jurisdiction over such transfer, (b) result in the Partnership being treated as
a corporation for Federal income tax purposes (including Section 7704 of the
Code) or being terminated under Section 708(b) of the Code, unless in the case
of a termination under Section 708(b) of the Code, such termination would not
have a material adverse effect on any non-transferring Partner’s present or
future allocable share of Partnership taxable income or loss with respect to
its Partnership Interest (also taking into account any recapture of credits) as
compared to its present or future allocable share of Partnership taxable income
or loss if there had not been such a termination, or (c) affect the Partnership’s
existence or qualification as a limited partnership under the Partnership Act.

ARTICLE IX

ADMISSION OF PARTNERS

9.1           Admission of Additional Limited
Partners.  A Person (other than Great
Lakes) who makes a Capital Contribution to the Partnership shall be admitted to
the Partnership as an Additional Limited Partner upon furnishing to the
Management Committee (a) acceptance, in form satisfactory to the Management
Committee, of all the terms and conditions of the Agreement and (b) such other
documents or instruments as may be required in order to effect his admission as
a Limited Partner, and such admission shall become effective on the date that
the Management Committee determines in its sole discretion that such conditions
have been satisfied and when any such admission is shown on the books and
records of the Partnership.

9.2           Admission of Additional General
Partners.  The General Partners may
admit to the Partnership one or more additional General Partners at any time
and from time to time and shall establish the rights, powers and privileges of
such additional General Partners.

9.3           Admission of Successor General
Partners.  A successor General
Partner selected pursuant to Section 10.1 shall be admitted to the Partnership
as a General Partner, effective immediately prior to the withdrawal of a General
Partner pursuant to Section 10.1.

9.4           Amendment of Agreement and of
Certificate of Limited Partnership. 
For the admission to the Partnership of any additional or successor
General Partner (including in respect of a transfer of a General Partner Interest
in accordance with Article VIII), the General Partners shall take all steps
necessary and appropriate to prepare and file as soon as practical an amendment
of this Agreement and, if required by law, the Certificate of Limited
Partnership.

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ARTICLE X

WITHDRAWAL AND REMOVAL OF PARTNERS

10.1         Withdrawal of General Partners.  Each General Partner covenants and agrees
that, without the consent of the other General Partners, it will not withdraw
as a General Partner.  The foregoing
notwithstanding, a Person will cease to be a General Partner and will be deemed
to have withdrawn as a General Partner upon the occurrence of an Event of
Withdrawal.  Upon the withdrawal by a
General Partner upon the occurrence of an Event of Withdrawal or otherwise in
violation of this Agreement, the Partnership shall terminate and dissolve
unless the remaining General Partners agree to continue the Partnership.  If the remaining General Partners so agree,
the Partnership shall be continued, without dissolution, the withdrawing general
partner shall not be entitled to receive any distribution from the Partnership
except as otherwise provided in Article XI, the Partnership Interests of the
withdrawing General Partner shall immediately be converted into that of a
Limited Partner, and all rights, powers and privileges of the withdrawing
General Partner under this Agreement shall be vested in the remaining General
Partners.  Prior to the effective date of
such a withdrawal, if any, the remaining General Partners may select a
successor General Partner to the withdrawing General Partner with such rights,
powers and privileges as designated by the remaining General Partner.  If a successor General Partner is selected,
it shall be admitted immediately prior to the withdrawal of the withdrawing
General Partner.  Upon withdrawal of the
last remaining General Partner, the Partnership shall be dissolved pursuant to
Section 11.1.

10.2         Removal of General Partners.  A General Partner may not be removed by the
other General Partners or the Limited Partners.

10.3         Withdrawal of Limited Partners.  No Limited Partner shall have any right to
withdraw from the Partnership; provided, however, that upon a
permitted transfer of a Limited Partnership Interest, such Limited Partner
shall cease to be a Limited Partner with respect to the Partnership Interest so
transferred.  No Limited Partner shall be
entitled to the return of its Capital Contribution, except to the extent, if
any, that distributions made pursuant to this Agreement or upon termination of
the Partnership may be considered as such by law and then only to the extent
provided for in this Agreement.

10.4         Liability of Withdrawing Partner.  A Partner who has withdrawn from the
Partnership shall remain liable for all of its obligations or liabilities as of
the date of withdrawal whether known or unknown or fixed or contingent at that
time.

ARTICLE XI

DISSOLUTION AND LIQUIDATION

11.1         Dissolution.  Except as otherwise provided below, the
Partnership shall not be dissolved by the admission of Additional Limited
Partners or Substituted Limited Partners, by the admission of additional
General Partners or successor General Partners or by the removal of a General
Partner in accordance with the terms of this Agreement.  The Partnership shall dissolve, and its affairs
shall be wound up, upon:

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(a)           the expiration of its term as
provided in Section 1.6;

(b)           the withdrawal with respect to the
last remaining General Partner or the withdrawal of a General Partner as
provided in Section 10.1, unless the remaining General Partners agree to
continue the Partnership, provided that the Partnership shall not be dissolved
and shall not be required to be wound up by reason of such withdrawal if,
within 90 days after the withdrawal all remaining Partners agree in writing to
continue the business of the Partnership; or

(c)           an election to dissolve the
Partnership by the General Partners.

11.2         Winding Up and Liquidation.  Upon the dissolution of the Partnership, the
Management Committee shall continue to exercise its powers under this Agreement
for the purpose of winding up the business of tie Partnership and liquidating
its assets in an orderly manner, but the Partnership shall engage in no new
business during the period of such winding up.

(a)           The assets of the Partnership
remaining after the payment, or provision for payment, of all the liabilities
of the Partnership shall be distributed to the Partners in accordance with the
positive balances in their respective Capital Accounts, after taking all
adjustments to Capital Accounts for all periods, provided, however, that if the
Capital Accounts of the Partners, as adjusted for all periods, are not in the
ratio of the Percentage Interests of the Partners, then first to such Partners
to cause the Capital Accounts to be in such Percentage Interests.

(b)           No termination or dissolution of the
Partnership shall relieve a Partner from any obligation accruing or accrued to
the date of such termination or dissolution.

11.3         Cancellation of Certificate of
Limited Partnership.  Upon the
completion of the distribution Partnership property as provided in Section
11.2, the Partnership shall be terminated, and the Management Committee (or the
General Partners and Limited Partners if necessary) shall cause the
cancellation of the Certificate of Limited Partnership and all qualifications
of the Partnership as a foreign limited partnership in jurisdictions other than
the State of Delaware and shall take such other actions as may be necessary to
terminate the Partnership.

11.4         Return of Capital.  Upon dissolution of the Partnership, the
General Partners shall contribute to the Partnership an amount equal to the
lesser of: (i) any deficit balances in their Capital Accounts; or (ii) the
excess of 1.01% of the sum of the cash amount and Net Agreed Value of all Capital
Contributions of the Limited Partners as limited partners of the Partnership
over the sum of the cash amount and the Net Agreed Value of all Capital
Contributions previously contributed by the General Partners as general
partners of the Partnership.  Other than
as provided in the preceding sentence, no General Partner shall be personally
liable for the return of the Capital Contributions of the Limited Partners, or
any portion thereof, it being expressly understood that (x) any such return
shall be made solely from Partnership assets and (y) neither a deficit in a
Partner’s Capital Account, nor the General Partners’ obligation to contribute
amounts to the Partnership pursuant to this Section 11.4, shall constitute a
Partnership asset.

 32
 

11.5         Waiver of Partition.  Each Partner hereby waives any right to
partition of the Partnership property.

11.6         Continuance of Partnership.  If, notwithstanding Section 11.1 of this
Agreement, the Partnership is at any time deemed by operation of law and other
than pursuant to Section 10.1 or 10.2 to be dissolved, each of the Partners
hereby covenants and agrees with the other Partners as follows:

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

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

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

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

(e)           Each of the Partners waives and
releases, to the full extent it may lawfully do so, all rights to a winding up
or liquidation of the business of the Partnership, notwithstanding that the
dissolution of the Partnership may be caused wrongfully or otherwise in
contravention of this Agreement by such Partner or any other Partner, and
further notwithstanding that, at the time of such dissolution, such Partner
shall be, or be deemed to be or thereby become, a withdrawing Partner pursuant
to this Agreement; and

(f)            As used in this Section 11.6, the
term “Partnership,” at any point in time, shall mean the Partnership originally
formed pursuant to this Agreement or the Successor Partnership which at such
time is continuing the business and affairs of the Partnership originally so
formed.

11.7         Termination Subject to Natural Gas
Act.  The right and power to
terminate the Partnership shall at all times be subject to the obligations and
duties of the Partnership as a “natural gas company” under the Natural Gas Act
or any successor or parallel statutes and the jurisdiction of the FERC thereunder,
and no termination shall be effected unless all provisions of such Act shall
have been complied with and any transfer of the Partnership’s business and
assets, including all certificates of public convenience and necessity issued
under such Act, shall have been validly consummated or abandoned under the
provisions of such Act and other applicable law.

 33
 

ARTICLE XII

AMENDMENT OF PARTNERSHIP AGREEMENT;

MEETINGS; RECORD DATE

12.1         Amendments to be Adopted Solely by
the General Partners.  The General
Partners through the Management Committee, without the consent of any Partner,
may amend any provision of this Agreement, and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect or effectuate:

(a)           a change in the name of the
Partnership; the location of the principal place of business of the
Partnership; the registered office of the Partnership in the State of Delaware
or the registered agent for service of process on the Partnership in the State
of Delaware;

(b)           the continuance of the Partnership in
accordance with the provisions of this Agreement;

(c)           any necessary or appropriate changes
to satisfy any requirements or conditions of applicable law;

(d)           any changes required, contemplated or
expressly permitted by this Agreement;

(e)           the admission, substitution, removal
or withdrawal of Partners in accordance with this Agreement;

(f)            the cure of any ambiguity, or the
correction or supplementation of any provision of this agreement which may be
inconsistent with any other provision herein, or the correction of any
stenographic or clerical errors or omissions in order that this Agreement shall
accurately reflect the agreement among the Partners;

(g)           a change that the General Partners in
their sole discretion have determined to be reasonable and necessary or
appropriate to qualify or continue the qualification of the Partnership as a
limited partnership or a partnership in which the Limited Partners have limited
liability under the laws of any state or that is necessary or advisable in the
opinion of the General Partners to ensure that the Partnership will not be
treated as an association taxable as a corporation for Federal income tax
purposes;

(h)           a change (i) that in the sole
discretion of the General Partners does not adversely affect the other Partners
in any material respect, (ii) that is necessary or desirable to satisfy any
requirements, conditions or guidelines contained in any opinion, directive,
order, ruling or regulation of any Federal or state agency or judicial
authority or contained in any Federal or state statute or that is necessary or
desirable to facilitate the registration of any of the securities of the
Partnership under the Securities Act of 1933, or comply with any rule, regulation,
guideline or requirement of any securities exchange on which such securities
are or will be listed for trading, compliance with any of which the

 34
 

General Partners deem to
be in the best interests of the Partnership and the other Partners, or (iii)
that is required or contemplated by this Agreement;

(i)            an amendment that is necessary, in
the opinion of counsel to the Partnership, to prevent the Partnership, any
General Partner or any equity holder, director, officer or employee of a
General Partner from in any manner being subjected to the provisions of the
Investment Company Act of 1940, as amended, the Investment Advisers Act of
1940, as amended, or “plan asset” regulations adopted under the Employee
Retirement Income Security Act of 1974, as amended, whether or not
substantially similar to plan asset regulations currently applied or proposed
by the United States Department of Labor;

(j)            an amendment that in the sole
discretion of the General Partners is necessary or desirable in connection with
additional Capital Contributions made by the General Partners or the issuance
of any class or series of Partnership Interests pursuant to Section 3.2;

(k)           any amendment described in Section
9.5; or

(l)            any other amendments similar to the
foregoing.

Any Person (including the
Partnership or any Partner) seeking legal or equitable relief concerning any
such amendment by the General Partners shall have the burden of proving by
clear and convincing evidence that the amendment falls outside the scope of the
foregoing provisions of this Section 12.1.

12.2         Amendment Procedures.  Except as provided in Section 9.5, all
amendments to this Agreement shall be made in accordance with the following
requirements.  Amendments of this
Agreement may be proposed only by the General Partners.  If an amendment is proposed, the General
Partners shall seek the written consent of a Majority Interest or call a
meeting of the Limited Partners to consider and vote on the proposed amendment.  A proposed amendment shall be effective upon
its approval by a Majority Interest.  The
General Partners shall notify all Partners upon final adoption of any proposed
amendment.

ARTICLE XIII

DISPUTE RESOLUTION

13.1         Agreement to Arbitrate.  In the event that any dispute, difference or
question arises between any Partners as to the meaning or interpretation of any
provision of this Agreement or as to the performance of a Partner of its
obligations hereunder, whether before or after the termination of this
Agreement, and upon which such Partners cannot agree, then every such dispute,
difference or question shall be referred to arbitration in accordance with the
provisions of Section 13.2.  No action
may be brought by any Partner with respect to any such matter but the same
shall be determined only by arbitration.

13.2         Procedure.  If any Partner wishes to submit a dispute,
difference or question to arbitration as provided in Section 13.2, it shall do
so by giving notice of arbitration to the other

 35
 

Partners, setting out in such notice the dispute,
difference or question to be determined by arbitration.  Upon receipt of such notice by the other
Partners, the Partners party to the dispute (the “Disputing Partners”) shall
proceed to appoint a single arbitrator (the “Arbitrator”).  If the Disputing Partners do not agree on the
appointment of a single arbitrator within 20 days after the receipt of notice
of arbitration by the Disputing Partner(s) to whom such notice is given, or
within such greater period as the Disputing Partners may agree in writing, any
Disputing Partner may appoint an arbitrator and give notice to the other
Disputing Partner(s) of the appointment of such arbitrator.  The Disputing Partner receiving such notice
within 20 days thereafter shall appoint a second arbitrator; if such party
fails to name a second arbitrator within the said period of 20 days, a second
arbitrator may be appointed by the first Disputing Partner.  The two arbitrators so appointed shall
appoint a third arbitrator.  If the two
arbitrators are unable to agree as to the third arbitrator, any of the
Disputing Partners may request the Chief Justice of the Ontario Court of
Justice, General Division or the Senior Federal District Judge of the United
States District Court, Eastern District of Michigan, to appoint a third
arbitrator and the person so appointed by the Chief Justice of the Ontario
Court of Justice, General Division or by the Senior Federal District Judge of
the United States District Court, Eastern District of Michigan, shall be the
third arbitrator (in such case, such panel of three arbitrators shall be the “Arbitrator”).  The decision of the Arbitrator shall be final
and binding, and the Partners agree that judgment on the Arbitrator’s award may
be entered by any circuit court of the State of Michigan or by any other court
of competent jurisdiction.  Except as
otherwise provided herein or required by law, the arbitration shall be
conducted under the rules of the American Arbitration Association.

ARTICLE XIV

GENERAL PROVISIONS

14.1         Notices.  Notice to all Partners shall be deemed to be
notice to the Partnership.  If any
Partner receives a notice to or on behalf of the Partnership, such Partner
shall immediately transmit such notice to all Partners.  Any notice or other communication required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given upon hand delivery or on the first business day following
delivery to a nationally recognized United States or Canadian overnight courier
service, fee prepaid, return receipt or other confirmation of delivery
requested, or on the third business day following delivery to the United States
or Canadian Postal Service as certified or registered mail return receipt
requested, postage prepaid, if addressed to the Partnership and each Partner at
the addresses set forth below, or when telecopied or sent by facsimile
transmission to the numbers designated in writing by each Partner to be
followed within three (3) business days by delivery of written copy of such
communication:

(a)           To each of the Partners at the
address as shown in the records of the Partnership or at such other address as
may be designated from time to time by any Partner by written notice to each
other Partner and the Partnership; and

(b)           To the Partnership at its principal
office or such other address as may be designated from time to time by written
notice to each of the Partners.  Any
Partner may request that copies of notices be given to any Affiliate at such
address designated by such Partner by written notice to each other Partner and
to the Partnership, provided that any

 36
 

failure to give such
notice shall not affect the validity of any notice given to any Partner or the
Partnership in accordance with this Section 14.1.  Each of the Partners agrees to give such
notice to any such Affiliate.

14.2         Further Assurances.  Each of the Partners agrees to execute and
deliver all such other and additional instruments and documents and to do such
other acts and things as may be reasonably necessary more fully to effectuate
this Partnership and carry on the Partnership business in accordance with this
Agreement.

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

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

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

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

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

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

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

14.10       Severability.  Should any provision of this Agreement be
deemed in contradiction with the laws of any jurisdiction in which it is to be
performed or unenforceable for any reason, such provision shall be deemed null
and void, but this Agreement shall remain in force in all

 37
 

other respects. 
Should any provision of this Agreement be or become ineffective because
of changes in applicable laws or interpretations thereof, should this Agreement
fail to include a provision that is required as a matter of law, the validity
of the other provisions of this Agreement shall not be affected thereby.  If such circumstances arise, the parties
hereto shall negotiate in good faith appropriate modifications to this
Agreement to reflect those changes that are required by law.

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

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

14.13       Integration.  This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.

14.14       Survival.  All indemnities and reimbursement obligations
made pursuant to this Agreement shall survive dissolution and liquidation of
the Partnership until expiration of the longest applicable statute of
limitations (including extensions and waivers) with respect to the matter for
which a party would be entitled to be indemnified or reimbursed, as the case
may be.

*        *       
*

 38

IN WITNESS WHEREOF, the Partners have caused this
Agreement to be executed by their respective duly authorized officers as of
February 22, 2007.

	
  

  	
  TRANSCANADA GL, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald L. Cook

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald J. DeGrandis

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TC GL INTERMEDIATE LIMITED

  PARTNERSHIP, by its general partner, TC

  PIPELINES GP INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald L. Cook

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald J. DeGrandis

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT LAKES GAS TRANSMISSION

  COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lee G. Hobbs

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  

 

EXHIBIT A

PERCENTAGE INTERESTS

	
  Partner

  	
   

  	
  Percentage Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TransCanada GL, Inc.

  	
   

  	
  46.45

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  TC GL Intermediate
  Limited Partnership

  	
   

  	
  46.45

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Great Lakes Gas Transmission Company

  	
   

  	
  7.10

  	
  %

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]