Document:

EXHIBIT 10.1

Execution Version

REVOLVING CREDIT AND TERM LOAN AGREEMENT

dated as of December 12, 2006

among

TC
PIPELINES, LP

as Borrower

THE LENDERS FROM TIME TO TIME PARTY HERETO

SUNTRUST
BANK

as Administrative Agent

UBS SECURITIES LLC AND ROYAL BANK
OF CANADA

as
Co-Documentation Agents

BMO CAPITAL MARKETS FINANCING INC. AND THE ROYAL BANK OF
SCOTLAND PLC

as Co-Syndication
Agents

and

DEUTSCHE BANK AG NEW YORK BRANCH AND THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD.

as Managing Agents

SUNTRUST CAPITAL MARKETS, INC.,

as Arranger and Book Manager

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS; CONSTRUCTION

  	
   

  	
  1

  
	
  Section 1.1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2.

  	
   

  	
  Classifications of Loans and Borrowings

  	
   

  	
  23

  
	
  Section 1.3.

  	
   

  	
  Accounting Terms and Determination

  	
   

  	
  23

  
	
  Section 1.4.

  	
   

  	
  Terms Generally

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMOUNT AND TERMS OF THE COMMITMENTS

  	
   

  	
  24

  
	
  Section 2.1.

  	
   

  	
  General Description of Facilities

  	
   

  	
  24

  
	
  Section 2.2.

  	
   

  	
  Revolving Loans

  	
   

  	
  24

  
	
  Section 2.3.

  	
   

  	
  Procedure for Borrowings

  	
   

  	
  24

  
	
  Section 2.4.

  	
   

  	
  Swingline Commitment

  	
   

  	
  25

  
	
  Section 2.5.

  	
   

  	
  Term Loan Commitments

  	
   

  	
  26

  
	
  Section 2.6.

  	
   

  	
  Funding of Borrowings

  	
   

  	
  27

  
	
  Section 2.7.

  	
   

  	
  Interest Elections

  	
   

  	
  27

  
	
  Section 2.8.

  	
   

  	
  Optional Reduction and Termination of Commitments

  	
   

  	
  28

  
	
  Section 2.9.

  	
   

  	
  Repayment of Loans

  	
   

  	
  29

  
	
  Section 2.10.

  	
   

  	
  Evidence of Indebtedness

  	
   

  	
  29

  
	
  Section 2.11.

  	
   

  	
  Optional Prepayments

  	
   

  	
  30

  
	
  Section 2.12.

  	
   

  	
  Mandatory Prepayments

  	
   

  	
  30

  
	
  Section 2.13.

  	
   

  	
  Interest on Loans

  	
   

  	
  31

  
	
  Section 2.14.

  	
   

  	
  Fees

  	
   

  	
  31

  
	
  Section 2.15.

  	
   

  	
  Computation of Interest and Fees

  	
   

  	
  32

  
	
  Section 2.16.

  	
   

  	
  Inability to Determine Interest Rates

  	
   

  	
  33

  
	
  Section 2.17.

  	
   

  	
  Illegality

  	
   

  	
  33

  
	
  Section 2.18.

  	
   

  	
  Increased Costs

  	
   

  	
  34

  
	
  Section 2.19.

  	
   

  	
  Funding Indemnity

  	
   

  	
  35

  
	
  Section 2.20.

  	
   

  	
  Taxes

  	
   

  	
  35

  
	
  Section 2.21.

  	
   

  	
  Payments Generally; Pro Rata Treatment; Sharing of
  Set-offs

  	
   

  	
  37

  
	
  Section 2.22.

  	
   

  	
  Letters of Credit

  	
   

  	
  39

  
	
  Section 2.23.

  	
   

  	
  Increase of Commitments; Additional Lenders

  	
   

  	
  43

  
	
  Section 2.24.

  	
   

  	
  Mitigation of Obligations

  	
   

  	
  44

  
	
  Section 2.25.

  	
   

  	
  Replacement of Lenders

  	
   

  	
  44

  
	
  Section 2.26.

  	
   

  	
  Extensions of Maturity Date or Revolving Commitment
  Termination Date

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

  	
   

  	
  46

  
	
  Section 3.1.

  	
   

  	
  Conditions To Effectiveness

  	
   

  	
  46

  

 

 

 

	
  Section 3.2.

  	
   

  	
  Each Credit Event

  	
   

  	
  48

  
	
  Section 3.3.

  	
   

  	
  Delivery of Documents

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  49

  
	
  Section 4.1.

  	
   

  	
  Existence; Power

  	
   

  	
  49

  
	
  Section 4.2.

  	
   

  	
  Organizational Power; Authorization

  	
   

  	
  49

  
	
  Section 4.3.

  	
   

  	
  Governmental Approvals; No Conflicts

  	
   

  	
  49

  
	
  Section 4.4.

  	
   

  	
  Financial Statements

  	
   

  	
  49

  
	
  Section 4.5.

  	
   

  	
  Litigation and Environmental Matters

  	
   

  	
  50

  
	
  Section 4.6.

  	
   

  	
  Compliance with Laws and Agreements

  	
   

  	
  50

  
	
  Section 4.7.

  	
   

  	
  Investment Company Act, Etc.

  	
   

  	
  50

  
	
  Section 4.8.

  	
   

  	
  Taxes

  	
   

  	
  50

  
	
  Section 4.9.

  	
   

  	
  Margin Regulations

  	
   

  	
  51

  
	
  Section 4.10.

  	
   

  	
  ERISA

  	
   

  	
  51

  
	
  Section 4.11.

  	
   

  	
  Ownership of Property

  	
   

  	
  51

  
	
  Section 4.12.

  	
   

  	
  Disclosure

  	
   

  	
  52

  
	
  Section 4.13.

  	
   

  	
  Labor Relations

  	
   

  	
  52

  
	
  Section 4.14.

  	
   

  	
  Subsidiaries

  	
   

  	
  52

  
	
  Section 4.15.

  	
   

  	
  Insolvency

  	
   

  	
  52

  
	
  Section 4.16.

  	
   

  	
  OFAC

  	
   

  	
  52

  
	
  Section 4.17.

  	
   

  	
  Patriot Act

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AFFIRMATIVE COVENANTS

  	
   

  	
  53

  
	
  Section 5.1.

  	
   

  	
  Financial Statements and Other Information

  	
   

  	
  53

  
	
  Section 5.2.

  	
   

  	
  Notices of Material Events

  	
   

  	
  54

  
	
  Section 5.3.

  	
   

  	
  Existence; Conduct of Business

  	
   

  	
  54

  
	
  Section 5.4.

  	
   

  	
  Compliance with Laws, Etc.

  	
   

  	
  55

  
	
  Section 5.5.

  	
   

  	
  Payment of Obligations

  	
   

  	
  55

  
	
  Section 5.6.

  	
   

  	
  Books and Records

  	
   

  	
  55

  
	
  Section 5.7.

  	
   

  	
  Visitation, Inspection, Etc.

  	
   

  	
  55

  
	
  Section 5.8.

  	
   

  	
  Maintenance of Properties; Insurance

  	
   

  	
  55

  
	
  Section 5.9.

  	
   

  	
  Use of Proceeds and Letters of Credit

  	
   

  	
  56

  
	
  Section 5.10.

  	
   

  	
  Maintenance of Tax Status

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FINANCIAL COVENANTS

  	
   

  	
  56

  
	
  Section 6.1.

  	
   

  	
  Leverage Ratio

  	
   

  	
  56

  
	
  Section 6.2.

  	
   

  	
  Interest Coverage Ratio

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NEGATIVE COVENANTS

  	
   

  	
  57

  

 

 ii
 

 

 

	
  Section 7.2.

  	
   

  	
  Negative Pledge

  	
   

  	
  58

  
	
  Section 7.3.

  	
   

  	
  Fundamental Changes

  	
   

  	
  59

  
	
  Section 7.4.

  	
   

  	
  Investments, Loans, Etc

  	
   

  	
  60

  
	
  Section 7.5.

  	
   

  	
  Restricted Payments

  	
   

  	
  61

  
	
  Section 7.6.

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  61

  
	
  Section 7.7.

  	
   

  	
  Restrictive Agreements

  	
   

  	
  62

  
	
  Section 7.8.

  	
   

  	
  Sale and Leaseback Transactions

  	
   

  	
  62

  
	
  Section 7.9.

  	
   

  	
  Hedging Transactions

  	
   

  	
  62

  
	
  Section 7.10.

  	
   

  	
  Certain Amendments to Cash Distribution Policies and
  Partnership Agreements

  	
   

  	
  63

  
	
  Section 7.11.

  	
   

  	
  Accounting Changes

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT

  	
   

  	
  63

  
	
  Section 8.1.

  	
   

  	
  Events of Default

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE ADMINISTRATIVE AGENT

  	
   

  	
  66

  
	
  Section 9.1.

  	
   

  	
  Appointment of Administrative Agent

  	
   

  	
  66

  
	
  Section 9.2.

  	
   

  	
  Nature of Duties of Administrative Agent

  	
   

  	
  66

  
	
  Section 9.3.

  	
   

  	
  Lack of Reliance on the Administrative Agent

  	
   

  	
  67

  
	
  Section 9.4.

  	
   

  	
  Certain Rights of the Administrative Agent

  	
   

  	
  67

  
	
  Section 9.5.

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  67

  
	
  Section 9.6.

  	
   

  	
  The Administrative Agent in its Individual Capacity

  	
   

  	
  68

  
	
  Section 9.7.

  	
   

  	
  Successor Administrative Agent

  	
   

  	
  68

  
	
  Section 9.8.

  	
   

  	
  Authorization to Execute other Loan Documents

  	
   

  	
  69

  
	
  Section 9.9.

  	
   

  	
  Co-Documentation Agents; Co-Syndication Agents;
  Managing Agents

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
  69

  
	
  Section 10.1.

  	
   

  	
  Notices

  	
   

  	
  69

  
	
  Section 10.2.

  	
   

  	
  Waiver; Amendments

  	
   

  	
  72

  
	
  Section 10.3.

  	
   

  	
  Expenses; Indemnification

  	
   

  	
  73

  
	
  Section 10.4.

  	
   

  	
  Successors and Assigns

  	
   

  	
  74

  
	
  Section 10.5.

  	
   

  	
  Governing Law; Jurisdiction; Consent to Service of
  Process

  	
   

  	
  78

  
	
  Section 10.6.

  	
   

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  78

  
	
  Section 10.7.

  	
   

  	
  Right of Setoff

  	
   

  	
  79

  
	
  Section 10.8.

  	
   

  	
  Counterparts; Integration

  	
   

  	
  79

  
	
  Section 10.9.

  	
   

  	
  Survival

  	
   

  	
  79

  
	
  Section 10.10.

  	
   

  	
  Severability

  	
   

  	
  80

  
	
  Section 10.11.

  	
   

  	
  Confidentiality

  	
   

  	
  80

  
	
  Section 10.12.

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  80

  
	
  Section 10.13.

  	
   

  	
  Patriot Act

  	
   

  	
  81

  

 

 iii
 

 

 

	
  Section 10.14.

  	
   

  	
  Location of Closing

  	
   

  	
  81

  
	
  Section 10.15.

  	
   

  	
  Non-Recourse

  	
   

  	
  81

  

 

 iv
 

 

 

	
  Schedules

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule I

  	
   

  	
  -

  	
   

  	
  Applicable Margin and Applicable Percentage
  Revolving Loans

  
	
  Schedule II

  	
   

  	
  -

  	
   

  	
  Applicable Margin and Applicable Percentage Term
  Loans

  
	
  Schedule III

  	
   

  	
  -

  	
   

  	
  Commitment Amounts

  
	
  Schedule 4.5

  	
   

  	
  -

  	
   

  	
  Environmental Matters

  
	
  Schedule 4.14

  	
   

  	
  -

  	
   

  	
  Subsidiaries

  
	
  Schedule 7.1

  	
   

  	
  -

  	
   

  	
  Outstanding Indebtedness

  
	
  Schedule 7.2

  	
   

  	
  -

  	
   

  	
  Existing Liens

  
	
  Schedule 7.4

  	
   

  	
  -

  	
   

  	
  Existing Investments

  
	
  Schedule 7.6

  	
   

  	
  -

  	
   

  	
  Transactions with Affiliates

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  -

  	
   

  	
  Form of Revolving Credit Note

  
	
  Exhibit B

  	
   

  	
  -

  	
   

  	
  Form of Term Note

  
	
  Exhibit C

  	
   

  	
  -

  	
   

  	
  Form of Swingline Note

  
	
  Exhibit D

  	
   

  	
  -

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit 2.3(a)

  	
   

  	
  -

  	
   

  	
  Form of Notice of Term Loan Borrowing

  
	
  Exhibit 2.3(b)

  	
   

  	
  -

  	
   

  	
  Form of Notice of Revolving Borrowing

  
	
  Exhibit 2.4

  	
   

  	
  -

  	
   

  	
  Form of Notice of Swingline Borrowing

  
	
  Exhibit 2.7

  	
   

  	
  -

  	
   

  	
  Form of Notice of Continuation/Conversion

  
	
  Exhibit
  3.1(b)(iv)

  	
   

  	
  -

  	
   

  	
  Form of Secretary’s Certificate

  
	
  Exhibit
  3.1(b)(viii)

  	
   

  	
  -

  	
   

  	
  Form of Officer’s Certificate

  
	
  Exhibit 5.1(c)

  	
   

  	
  -

  	
   

  	
  Form of Compliance Certificate

  

 

 v

 

REVOLVING CREDIT AND TERM LOAN AGREEMENT

THIS
REVOLVING CREDIT AND TERM LOAN AGREEMENT (this “Agreement”) is
made and entered into as of December 12, 2006, by and among TC PIPELINES, LP, a
Delaware limited partnership (the “Borrower”), the several banks and
other financial institutions and lenders from time to time party hereto (the “Lend­ers”),
and SUNTRUST BANK, in its capacity as administrative agent for the Lenders (the
“Administrative Agent”), as issuing bank (the “Issuing Bank”) and
as swingline lender (the “Swingline Lender”).

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders
(a) establish a $30,000,000 revolving credit facility in favor of, and (b) make
term loans in an aggregate principal amount equal to $380,000,000 to, the Borrower; and

WHEREAS, subject to the terms and conditions of this
Agreement, the Lenders, the Issuing Bank and the Swingline Lender to the extent
of their respective Commitments as defined herein, are willing severally to
establish the requested revolving credit facility, letter of credit subfacility
and the swingline subfacility in favor of and severally to make the term loans
to the Borrower.

NOW,
THEREFORE, in
consideration of the premises and the mutual covenants herein contained, the
Borrower, the Lenders, the Administrative Agent, the Issuing Bank and the
Swingline Lender agree as follows:

ARTICLE I

DEFINITIONS;
CONSTRUCTION

Section 1.1.           Definitions.  In
addition to the other terms defined herein, the following terms used herein
shall have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):

“Additional
Commitment Amount” shall have the meaning given to such term in Section
2.23.

“Additional
Lender” shall have the meaning given to such term in Section 2.23.

“Adjusted Cash
Flow” shall mean, with reference to any period (i) the consolidated net
income (or loss) of the Borrower and its Subsidiaries for such period
calculated on a consolidated basis in accordance with GAAP, plus (ii) to the extent
taken into account in determining such consolidated net income (or loss), the
sum of interest expense, expense for taxes paid or accrued, depreciation,
amortization and extraordinary losses incurred other than in the ordinary
course of business, minus (iii) to the extent taken into account in determining
such consolidated net income (or loss), extraordinary gains realized other than
in the ordinary course of business, minus (iv) to
the extent taken into account in determining such consolidated net income (or
loss), equity earnings of any Person in which the Borrower or any of its
Subsidiaries has an interest (which interest does not cause the net income of
such Person to be consolidated

 

with the consolidated net income of the Borrower and
its Subsidiaries in accordance with GAAP), plus (v) the aggregate amount of all
cash dividends and other distributions of cash actually received by the
Borrower or any of its consolidated Subsidiaries during such period from any
Person in which the Borrower or any of its consolidated Subsidiaries has an
interest (which interest does not cause the Consolidated Net Income of such
other Person to be consolidated with the Consolidated Net Income of the
Borrower and its Subsidiaries in accordance with GAAP), plus (vi) any Material
Project EBITDA Adjustment; provided that for purposes of calculating
consolidated net income for any four fiscal quarter period, if at any time
during that period the Borrower or any Subsidiary shall have consummated an
acquisition, consolidated net income for such period shall be calculated after
giving pro  forma effect thereto as if such acquisition had
occurred on the first day of such period.

“Adjusted
LIBO Rate” shall mean, with respect to each Interest Period for a
Eurodollar Borrowing, the rate per annum ob­tained by dividing (i) LIBOR
for such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage.

“Administrative
Agent” shall have the meaning assigned to such term in the opening
paragraph hereof.

“Administrative
Questionnaire” shall mean, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to
the Administrative Agent duly completed by such Lender.

“Affiliate”
means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a
director or officer of such Person.  For
purposes of this definition the term “control” (including the terms
“controlling”, “controlled by” and “under common control with”) of a Person
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting stock, by contract or otherwise, provided, that, for
purposes of Section 7.6, each of Northern Border and Tuscarora shall be
deemed to be an Affiliate of the Borrower as long as it qualifies as a
Significant Subsidiary.

“Aggregate
Revolving Commitment Amount” shall mean the aggregate principal amount of
the Aggregate Revolving Commitments from time to time.  On the Closing Date, the Aggregate Revolving
Commitment Amount is $30,000,000.

“Aggregate
Revolving Commitments” shall mean, collectively, all Revolving Commitments
of all Lenders at any time outstanding.

“Applicable Lending
Office” shall mean, for each Lender and for each Type of Loan, the “Lending
Office” of such Lender (or an Affiliate of such Lender) designated for such
Type of Loan in the Administrative Questionnaire submitted by such Lender or
such other office of such Lender (or an Affiliate of such Lender) as such
Lender may from time to time specify to the Administrative Agent and the
Borrower as the office by which its Loans of such Type are to be made and
maintained.

 2
 

 

“Applicable
Margin” shall mean, as of any date, (a) with respect to interest on all
Revolving Loans outstanding on any date or the letter of credit fee, as the
case may be, a percentage per annum determined by reference to the applicable
Leverage Ratio in effect on such date as set forth on Schedule I and (b)
with respect to interest on all Term Loans outstanding on any date a percentage
per annum determined by reference to the applicable Leverage Ratio in effect on
such date as set forth on Schedule II; provided, that a change in
the Applicable Margin resulting from a change in the Leverage Ratio shall be
effective on the second Business Day after which the Borrower delivers the
financial statements required by Section 5.1(a) or (b) and the
Compliance Certificate required by Section 5.1(c); provided further,
that if at any time the Borrower shall have failed to deliver such financial
statements and such Compliance Certificate when so required, the Applicable
Margin shall be at Level V as set forth on Schedule I, in the case of
Revolving Loans, and Level V as set forth on Schedule II, in the case of
Term Loans, until such time as such financial statements and Compliance
Certificate are delivered, at which time the Applicable Margin shall be
determined as provided above. 
Notwithstanding the foregoing, the Applicable Margin from the Closing
Date until the financial statements and Compliance Certificate for the Fiscal
Quarter ending December 31, 2006 are required to be delivered shall be at Level
IV as set forth on Schedule I, in the case of Revolving Loans, and at
Level IV as set forth on Schedule II, in the case of Term Loans.  Notwithstanding anything to the contrary
contained herein, at any time that the Revolving Credit Exposure exceeds 50% of
the Aggregate Revolving Commitment Amount, then the Applicable Margin for
Eurodollar Loans for all pricing Levels listed on Schedule I shall
automatically increase by the Utilization Premium set forth on Schedule I.  In the event that any financial
statement or Compliance Certificate delivered pursuant to Section 5.1(a),
(b) or (c) is shown to be inaccurate (so long as such inaccuracy
is discovered within the first anniversary of the Termination Date), and such
inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin as set forth
on Schedule I, in the case of Revolving Loans, and as set forth on Schedule
II, in the case of Term Loans, for any period rather than the
Applicable Margin applied for such period, then (i) the Borrower shall
immediately deliver to the Administrative Agent a correct Compliance
Certificate for such period, (ii) the Applicable Margin shall be determined on
the basis of the corrected Compliance Certificate and (iii) the Borrowers shall
immediately pay to the Administrative Agent, for the account of the Lenders,
the accrued additional interest owing as a result of such increased Applicable
Margin for such period.  The provisions of this definition shall not limit
the rights of the Administrative Agent and the Lenders with respect to Section
2.13(c) or Article VIII.

“Applicable Percentage”
shall mean, as of any date, with respect to the facility fee or the commitment
fee as of any date, the percentage per annum determined by reference to the
applicable Leverage Ratio in effect on such date as set forth on Schedule I,
in the case of Revolving Loans, and on Schedule II, in the case of Term
Loans; provided, that a change in the Applicable Percentage resulting
from a change in the Leverage Ratio shall be effective on the second Business
Day after which the Borrower delivers the financial statements required by Section
5.1(a) or (b) and the Compliance Certificate required by Section
5.1(c); provided  further, that if at any time the Borrower
shall have failed to deliver such financial statements and such Compliance
Certificate, the Applicable Percentage shall be at Level V as set forth on Schedule
I, in the case of Revolving Loans, and at Level V as set forth on Schedule
II, in the case of Term Loans until such time as such financial statements
and Compliance Certificate are delivered, at which time the Applicable
Percentage shall be determined as provided above.  Notwithstanding

 3
 

 

the
foregoing, the Applicable Percentage for the facility fee or the commitment fee
from the Closing Date until the financial statements and Compliance Certificate
for the Fiscal Quarter ending December 31, 2006 are required to be delivered
shall be at Level IV as set forth on Schedule I, in the case of
Revolving Loans, and at Level IV as set forth on Schedule II, in the
case of Term Loans.  In the event
that any financial statement or Compliance Certificate delivered pursuant to Section
5.1(a), (b) or (c) is shown to be inaccurate (so long as such
inaccuracy is discovered within the first anniversary of the Termination Date),
and such inaccuracy, if corrected, would have led to the application of a
higher Applicable Percentage as
set forth on Schedule I, in the case of Revolving Loans, and as set
forth on Schedule II, in the case of Term Loans, for any period
rather than the Applicable Percentage applied
for such period, then (i) the Borrower shall immediately deliver to the
Administrative Agent a correct Compliance Certificate for such period, (ii) the
Applicable Percentage shall be
determined based upon the corrected Compliance Certificate and (iii) the
Borrowers shall immediately pay to the Administrative Agent, for the account of
the Lenders, the accrued additional interest owing as a result of such
increased Applicable Percentage for
such period.  The provisions of this definition shall not limit the rights
of the Administrative Agent and the Lenders with respect to Section 2.13(c)
or Article VIII.

 “Approved Fund” shall mean any Person
(other than a natural Person) that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business and that is administered or
managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.

“Assignment
and Acceptance” shall mean an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit D attached hereto or any other form approved by the
Administrative Agent.

“Availability
Period” shall mean the period from the Closing
Date to but excluding the Revolving Commitment Termination Date.

“Base
Rate” shall mean the higher of (i) the per annum rate which the
Administrative Agent publicly announces from time to time to be its prime
lending rate, as in effect from time to time, and (ii) the Federal Funds
Rate, as in effect from time to time, plus one-half
of one percent (0.50%).  The
Administrative Agent’s prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers.  The Administrative Agent may make commercial
loans or other loans at rates of inter­est at, above or below the
Administrative Agent’s prime lend­ing rate. 
Each change in the Administrative Agent’s prime lending rate shall be
effective from and including the date such change is publicly announced as
being effective.

“Borrower”
shall have the meaning in the introductory paragraph hereof.

“Borrower Partnership
Agreement” shall mean that certain Amended and Restated Agreement of
Limited Partnership of TC PipeLines, LP dated May 28, 1999, as amended.

 4
 

 

“Borrowing” shall mean a borrowing consisting of (i) Loans of the same
Class and Type, made, converted or continued on the same date and in the case
of Eurodollar Loans, as to which a single Interest Period is in effect, or (ii)
a Swingline Loan.

“Business
Day” shall mean (i) any day other than a Saturday, Sunday or other day on
which commercial banks in Atlanta, Georgia, Calgary, Canada and New York, New
York are authorized or required by law to close and (ii) if such day relates to
a Borrowing of, a payment or prepayment of principal or interest on, a
conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice
with respect to any of the foregoing, any day on which banks are not open for
dealings in dollar deposits are carried on in the London interbank market.

“Capital
Lease Obligations” of any Person shall mean all obligations of such Person
to pay rent or other amounts under any lease (or other arrangement conveying
the right to use) of real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

“Capital
Stock” shall mean any non-redeemable capital stock (or in the case of a
partnership or limited liability company, the partners’ or members’ equivalent
equity interest) of the Borrower or any of its Subsidiaries (to the extent
issued to a Person other than the Borrower), whether common or preferred.

“Change
in Control” shall mean the occurrence of one or more of the following
events: (i) any Person or two or more Persons acting in concert (other
than TransCanada Corporation or any of its Subsidiaries) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of voting stock of the General Partner (or other securities
convertible into such voting stock ) (A) representing 50% or more of the
combined voting power of all voting stock of the General Partner or (B)
representing the combined voting power of all voting stock of the General
Partner more than that owned, directly or indirectly, by TransCanada
Corporation; or (ii) any Person or two or more Persons acting in concert (other
than TransCanada Corporation or any of its Subsidiaries or any other Person
reasonably acceptable to the Required Lenders) shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of the power to exercise,
directly or indirectly, a controlling influence over the management or policies
of the General Partner; (iii) the General Partner shall for any reason cease to
be the managing general partner of the Borrower, (iv) the failure of the
Borrower to own, directly or indirectly, free and clear of all Liens, at least
50% of the partnership interests in Northern Border, or (v) the failure of the
Borrower to own, directly or indirectly, free and clear of all Liens, (x) prior
to the consummation of the Tuscarora Acquisition, at least 49% of the
partnership interests in Tuscarora and (y) after the consummation of the
Tuscarora Acquisition, at least 99% of the partnership interests in Tuscarora.

“Change in Law” shall
mean (i) the adoption of any applicable law, rule or regulation after the date
of this Agreement, (ii) any change in any applicable law, rule or regulation,
or any change in the interpretation or application thereof, by any Governmental

 5
 

 

Authority
after the date of this Agreement, or (iii) compliance by any Lender (or its
Applicable Lending Office) or the Issuing Bank (or for purposes of Section
2.18(b), by such Lender’s or the Issuing Bank’s parent corporation, if
applicable) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.

“Class”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Swingline Loans or Term Loans and when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Commitment, a Swingline
Commitment or a Term Loan Commitment.

“Closing
Date” shall mean the date on which the conditions precedent set forth in Section
3.1 and Section 3.2 have been satisfied or waived in accordance with
Section 10.2.

“Code”
shall mean the Internal Revenue Code of 1986, as amended and in effect from
time to time.

“Commercial
Operation Date” means the date on which a Material Project is substantially
complete and commercially operable.

“Commitment”
shall mean a Revolving Commitment, a Swingline Commitment or a Term Loan
Commitment or any combination thereof (as the context shall permit or require).

“Compliance
Certificate” shall mean a certificate executed by the principal executive
officer, the principal financial officer or the controller of the Borrower in
the form of, and containing the certifications set forth in, the certificate
attached hereto as Exhibit 5.1(c).

“Consolidated
Interest Expense” shall mean, for the Borrower and its Subsidiaries for any
period determined on a consolidated basis in accordance with GAAP, without
duplication, the sum of (i) total interest expense, including without
limitation the interest component of any payments in respect of Capital Lease
Obligations capitalized or expensed during such period (whether
or not actually paid during such period) plus (ii) the net amount payable (or minus
the net amount receivable) with respect to Hedging Transactions during such
period (whether or not actually paid or received during such period).

“Consolidated Net
Worth” shall mean,
for the Borrower and its Subsidiaries for any period, the aggregate
amount of Capital Stock, minority interests, and other equity accounts
(including, without limitation, retained earnings, paid in capital and
accumulated other comprehensive income or loss (but without giving effect to
any non-cash pension and other post-retirement benefits liability adjustments
recorded in accordance with GAAP)) of Borrower and its Subsidiaries at such
date determined on a consolidated basis in accordance with GAAP.

“Consolidated Total
Funded Debt” shall mean, as of any date, all Indebtedness of the Borrower
and its Subsidiaries measured on a consolidated basis as of such date, but
excluding Indebtedness of the type described in subsection (xi) of the
definition thereto.

 6
 

 

“Contractual
Obligation” of any Person shall mean any provision of any security issued
by such Person or of any agreement, instrument or undertaking under which such
Person is obligated or by which it or any of the property in which it has an
interest is bound.

“Default”
shall mean any condition or event that, with the giving of notice or the lapse
of time or both, would constitute an Event of De­fault.

“Defaulting
Lender” shall mean a Lender that (a) has failed to fund its portion of any
Borrowing or any participations in Letters of Credit or Swingline Loans that it
is required to fund under this Agreement and has continued in such failure for
three (3) Business Days after written notice from the Administrative Agent, (b)
has otherwise failed to pay over to the Administrative Agent or any other
Lender any other amount required to be paid by it hereunder within three (3)
Business Days of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.

“Default
Interest” shall have the meaning set forth in Section 2.13(c).

“Dollar(s)”
and the sign “$” shall mean lawful money of the United States of America.

“Environmental
Laws” shall mean all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters.

“Environmental
Liability” shall mean any liability, contingent or otherwise (including any
liability for damages, costs of environmental investigation and remediation,
costs of administrative oversight, fines, natural resource damages, penalties
or indemnities), of the Borrower or any Subsidiary directly or indirectly
resulting from or based upon (i) any actual or alleged violation of any
Environmental Law, (ii) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (iii) any actual or alleged
exposure to any Hazardous Materials, (iv) the Release or threatened Release of
any Hazardous Materials or (v) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

“ERISA”
shall mean the Employee Retirement Income Secu­rity Act of 1974, as amended
from time to time, and any successor statute.

“ERISA
Affiliate” shall mean any trade or business (whether or not incorporated),
which, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for the purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” shall mean (i) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (ii)
the existence with respect to any Plan of an

 7
 

 

“accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of
the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (iv) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (v) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator appointed
by the PBGC of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (vi) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(vii) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

“Eurodollar”
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, bears interest at a rate determined by
reference to the Adjusted LIBO Rate.

“Eurodollar
Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental,
special or other marginal reserves) expressed as a decimal (rounded upwards to
the next 1/100th of 1%)
in effect on any day to which the Administrative Agent is subject with respect
to the Adjusted LIBO Rate pursuant to regulations issued by the Board of
Governors of the Federal Reserve System (or any Governmental Authority
succeeding to any of its principal functions) with respect to eurocurrency
funding (currently referred to as “eurocurrency liabilities” under Regulation
D).  Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under Regulation D.  The Eurodollar Reserve Percentage shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

“Event
of Default” shall have the meaning provided in Article VIII.

“Existing
Credit Agreement” shall mean that certain Credit Agreement, dated as of
March 31, 2006, among Borrower, the banks, financial institutions and other
institutional lenders party thereto and Citibank, N.A., as agent for the lenders,
as amended through the Closing Date.

“Existing
Lenders” shall mean each of the lenders party to the Existing Credit
Agreement.

“Excluded Taxes” shall mean with respect to the
Administrative Agent, any Lender, the Issuing Bank or any other recipient of any
payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes in each case imposed on (or measured
by) its net income by the United States of America, any state or local taxing
authority in the United States of America or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in

 8
 

 

which its Applicable
Lending Office is located, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction in which
any Lender is located, (c) in the case of a Foreign Lender, any withholding tax
that (i) is imposed on amounts payable to such Foreign Lender under the law
applicable at the time such Foreign Lender becomes a party to this Agreement,
(ii) is imposed on amounts payable to such Foreign Lender under the law
applicable at any time that such Foreign Lender designates a new lending
office, other than taxes that have accrued prior to the designation of such
lending office that are otherwise not Excluded Taxes, or (iii) is attributable
to such Foreign Lender’s
failure to comply with Section 2.20(e), and (d) any backup withholding
tax imposed under Section 3406 of the Code.

“Federal
Funds Rate” shall mean, for any day, the rate per annum (rounded upwards,
if necessary, to the next 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with member banks of the Federal
Reserve System arranged by Federal funds brokers, as published by the Federal
Reserve Bank of New York on the next succeeding Business Day or if such rate is
not so published for any Business Day, the Federal Funds Rate for such day
shall be the average rounded upwards, if necessary, to the next 1/100th of 1%
of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

“Fee
Letter” shall mean that certain fee letter, dated as of November 3, 2006,
executed by SunTrust Capital Markets, Inc. and SunTrust Bank and accepted by
Borrower.

“Fiscal
Quarter” shall mean any fiscal quarter of the Borrower.

“Fiscal
Year” shall mean any fiscal year of the Borrower.

“Foreign
Lender” shall mean any Lender that
is not a United States person under Section 7701(a)(30) of the Code.

“General
Partner” shall mean TC PipeLines GP, Inc. a Delaware corporation.

“GAAP”
shall mean generally accepted accounting prin­ciples in the United States
applied on a consistent basis and subject to the terms of Section 1.3.

“Governmental
Authority” shall mean the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

“Guarantee” of or by
any Person (the “guarantor”) shall mean any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly and including any
obligation, direct or indirect, of the guarantor (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (ii) to purchase or lease property,
securities or

 9
 

 

services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (iii) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation
or (iv) as an account party in respect of any letter of credit or letter of
guaranty issued in support of such Indebtedness or obligation; provided,
that the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business. 
The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which
Guarantee is made or, if not so stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.  The term “Guarantee” used as a verb has a
corresponding meaning.

“Hazardous
Materials” shall mean all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all
other substances or wastes of any nature regulated pursuant to any
Environmental Law.

“Hedging
Obligations” of any Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii)
any and all cancellations, buy backs, reversals, terminations or assignments of
any Hedging Transactions and (iii) any and all renewals, extensions and
modifications of any Hedging Transactions and any and all substitutions for any
Hedging Transactions.

“Hedging
Transaction” of any Person shall mean any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by such
Person that is a rate swap, basis swap, forward rate transaction, commodity
swap, interest rate option, foreign exchange transaction, cap transaction,
floor transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these transactions)
or any combination thereof, whether linked to one or more interest rates,
foreign currencies, commodity prices, equity prices or other financial
measures.

“Hybrid
Securities” shall mean any trust preferred securities, or deferrable
interest subordinated debt with a maturity of at least 20 years, which provides
for the optional or mandatory deferral of interest or distributions, issued by
the Borrower, or any business trusts, limited liability companies, limited
partnerships or similar entities (i) substantially all of the common equity,
general partner or similar interests of which are owned (either directly or
indirectly through one or more wholly owned Subsidiaries) at all times by the
Borrower or any Subsidiaries, (ii) that have been formed for the purpose of
issuing such securities or deferrable interest subordinated debt, and (iii)
substantially all the assets of which consist of (A) subordinated debt of the
Borrower or any Subsidiary, and (B) payments made from time to time on the
subordinated debt.

“Indebtedness” of any
Person shall mean, without duplication, (i) all obligations of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,

 10
 

 

debentures,
notes or other similar instruments, (iii) all obligations of such Person in
respect of the deferred purchase price of property or services (other than
trade payables incurred in the ordinary course of business), (iv) all
obligations of such Person under any conditional sale or other title retention
agreement(s) relating to property acquired by such Person, (v) all Capital
Lease Obligations of such Person, (vi) all obligations, contingent or
otherwise, of such Person in respect of letters of credit, acceptances or
similar extensions of credit, (vii) all Guarantees of such Person of the type
of Indebtedness described in clauses (i) through (vi) above, (viii) all
Indebtedness of a third party secured by any Lien on property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (ix)
all obligations of such Person to purchase, redeem, retire or otherwise acquire
for value any common stock of such Person, (x) Off-Balance Sheet Liabilities
and (xi) all Hedging Obligations.  The
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer,
except to the extent that the terms of such Indebtedness provide that such
Person is not liable therefor.

“Indemnified
Taxes” shall mean Taxes other than Excluded Taxes.

“Information
Memorandum” shall mean the Confidential Information Memorandum dated
November 2006 (as amended) relating to the Borrower and the transactions
contemplated by this Agreement and the other Loan Documents.

“Interest
Coverage Ratio” shall mean, as of any date, the ratio of (i) Adjusted Cash
Flow for the four consecutive Fiscal Quarters ending on or immediately prior to
such date to (ii) Consolidated Interest Expense for the four consecutive Fiscal
Quarters ending on or immediately prior to such date.

“Interest Period” shall mean with respect to (i) any
Swingline Borrowing, such period as the Swingline Lender and the Borrower shall
mutually agree and (ii) any Eurodollar Borrowing, a period of one, two, three,
six and, subject to clause (iii) of this definition, nine or twelve months; provided,
that:

(i)            
the initial Interest Period for such Borrowing shall commence on the date of
such Borrowing (including the date of any conversion from a Borrowing of
another Type), and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;

(ii)            if
any Interest Period would otherwise end on a day other than a Business Day,
such Interest Pe­riod shall be extended to the next succeeding Business Day,
unless such Business Day falls in another calendar month, in which case such
Interest Period would end on the next preceding Business Day;

(iii)           the
Borrower shall not be entitled to select an Interest Period having duration of
nine or twelve months unless, by 2:00 P.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, each Lender
notifies the Administrative Agent that such Lender will be providing funding
for such Borrowing with such Interest Period (the failure of any Lender to so
respond by such time being deemed for all purposes of this Agreement as an
objection by such Lender to the

 11
 

 

requested duration of such Interest Period); provided that, if any or
all of the Lenders object to the requested duration of such Interest Period,
the duration of the Interest Period for such Borrowing shall be one, two, three
or six months, as specified by the Borrower requesting such Borrowing in the
applicable Notice of Borrowing as the desired alternative to an Interest Period
of nine or twelve months;

(iv)           any
Interest Period which begins on the last Business Day of a calendar month or on
a day for which there is no nu­merically corresponding day in the calendar
month at the end of such Interest Period shall end on the last Business Day of
such calendar month;

(v)            no
Interest Period may extend beyond the Revolving Commitment Termination Date,
unless on the Revolving Commitment Termination Date the aggregate outstanding
principal amount of Term Loans is equal to or greater than the aggregate
principal amount of Eurodollar Loans with Interest Periods expiring after such
date, and no Interest Period may extend beyond the Maturity Date.

“Issuing
Bank” shall mean SunTrust Bank or any other Lender, each in its capacity as
an issuer of Letters of Credit pursuant to Section 2.22.

“LC
Commitment” shall mean that portion of the Aggregate Revolving Commitment
Amount that may be used by the Borrower for the issuance of Letters of Credit
in an aggregate face amount not to exceed $30,000,000.

“LC
Disbursement” shall mean a payment made by the Issuing Bank pursuant to a
Letter of Credit.

“LC
Documents” shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.

“LC
Exposure” shall mean, at any time, the sum of (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time, plus (ii) the aggregate amount of all LC Disbursements
that have not been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender shall be its
Pro Rata Share of the total LC Exposure at such time.

“Lenders”
shall have the meaning assigned to such term in the opening paragraph of this
Agreement and shall include, where appropriate, the Swingline Lender and each
Additional Lender that joins this Agreement pursuant to Section 2.23.

“Letter
of Credit” shall mean any stand-by letter of credit issued pursuant to Section
2.22 by the Issuing Bank for the account of the Borrower pursuant to the LC
Commitment.

“Leverage Ratio” shall mean, as of any date, the ratio of (i)
Consolidated Total Funded Debt as of such date to (ii) Adjusted Cash Flow for
the four consecutive Fiscal Quarters ending on or immediately prior to such
date.

 12
 

 

“LIBOR”
shall mean, for any applicable Interest Period with respect to any Eurodollar
Loan, the British Bankers’ Association Interest Settlement Rate per annum for
deposits in Dollars for a period equal to such Interest Period appearing on the
display designated as Page 3750 on the Dow Jones Markets Service (or such other
page on that service or such other service designated by the British Bankers’
Association for the display of such Association’s Interest Settlement Rates for
Dollar deposits) as of 11:00 a.m. (London, England time) on the day that
is two Business Days prior to the first day of the Interest Period or if such
Page 3750 is un­available for any reason at such time, the rate which appears
on the Reuters Screen ISDA Page as of such date and such time; provided,
that if the Administrative Agent determines that the relevant foregoing sources
are unavailable for the relevant Interest Period, LIBOR shall mean the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at which
deposits in Dollars are offered to the Administrative Agent two (2) Business
Days preceding the first day of such Interest Period by leading banks in the
London interbank market as of 10:00 a.m. (New York time) for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of the Administrative Agent.

“Lien”
shall mean any mortgage, pledge, security inter­est, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit
arrangement, or other arrangement having the practical effect of the foregoing
or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having the same economic
effect as any of the foregoing).

“Loan
Documents” shall mean, collectively, this Agree­ment, the Notes (if any),
the LC Documents, the Fee Letter, all Notices of Borrowing, all Notices of
Conversion/Continuation, and all Compliance Certificates.

 “Loans” shall mean all Revolving Loans,
Swingline Loans and Term Loans in the aggregate or any of them, as the context
shall require.

“Material
Adverse Effect” shall mean, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singularly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related, a
material adverse change in, or a material adverse effect on, (i) the
business, results of operations, financial condition, assets, or liabilities of
the Borrower, its Subsidiaries, Northern Border and Tuscarora, taken as a
whole, (ii) the ability of the Borrower 
to perform any of its obligations under the Loan Documents, (iii) the
rights and remedies of the Administrative Agent, the Issuing Bank, Swingline
Lender, and the Lenders under any of the Loan Documents or (iv) the legality,
validity or enforceability of any of the Loan Documents.

“Material Indebtedness” shall mean Indebtedness (other than the
Loans and Letters of Credit) of the Borrower or any of its Subsidiaries,
individually or in an aggregate principal amount exceeding $15,000,000.

 13
 

 

“Material
Project” means the construction or expansion of any capital project of the
Borrower or any of its Subsidiaries, the aggregate capital cost of which
exceeds $25,000,000.

“Material
Project EBITDA Adjustment” means, with respect to each Material Project:

(A)          prior to the
Commercial Operation Date of a Material Project (but including the fiscal
quarter in which such Commercial Operation Date occurs), a percentage (based on
the then-current completion percentage of such Material Project) of an amount
to be approved by the Administrative Agent as the projected EBITDA of Borrower
and its Subsidiaries attributable to such Material Project for the first
12-month period following the scheduled Commercial Operation Date of such
Material Project (such amount to be determined based on customer contracts or
tariff-based customers relating to such Material Project, the creditworthiness
of the other parties to such contracts or such tariff-based customers, and
projected revenues from such contracts, tariffs, capital costs and expenses,
scheduled Commercial Operation Date, oil and gas reserve and production
estimates, commodity price assumptions and other factors deemed appropriate by
Administrative Agent), which may, at the Borrower’s option, be added to actual
EBITDA for the Borrower and its Subsidiaries for the fiscal quarter in which
construction of such Material Project commences and for each fiscal quarter
thereafter until the Commercial Operation Date of such Material Project
(including the fiscal quarter in which such Commercial Operation Date occurs,
but net of any actual EBITDA of the Borrower and its Subsidiaries attributable
to such Material Project following such Commercial Operation Date); provided
that if the actual Commercial Operation Date does not occur by the scheduled
Commercial Operation Date, then the foregoing amount shall be reduced, for
quarters ending after the scheduled Commercial Operation Date to (but
excluding) the first full quarter after its Commercial Operation Date, by the
following percentage amounts depending on the period of delay (based on the
period of actual delay or then-estimated delay, whichever is longer):  (i) 90 days or less, 0%, (ii) longer than 90
days, but not more than 180 days, 25%, (iii) longer than 180 days but not more
than 270 days, 50%, and (iv) longer than 270 days, 100%; and

(B)           beginning with the
first full fiscal quarter following the Commercial Operation Date of a Material
Project and for the three immediately succeeding fiscal quarters, an amount to
be approved by the Administrative Agent as the projected EBITDA of Borrower and
its Subsidiaries attributable to such Material Project (determined in the same
manner as set forth in clause (A) above) for the balance of the four full
fiscal quarter period following such Commercial Operation Date, which may, at
the Borrower’s option, be added to actual EBITDA for the Borrower and its
Subsidiaries for such fiscal quarters.

Notwithstanding
the foregoing:

(i)    no such additions shall be allowed with
respect to any Material Project unless:

(a)           not later than 30 days prior to the
delivery of any certificate required by the Reporting Requirements to the extent
Material Project EBITDA Adjustments will be made to EBITDA in determining
compliance with the Leverage Ratio, the Borrower shall

 14
 

 

have
delivered to the Administrative Agent written pro forma projections of EBITDA
of the Borrower and its Subsidiaries attributable to such Material Project, and

(b)           prior to the date
such certificate is required to be delivered, the Administrative Agent shall
have approved (such approval not to be unreasonably withheld) such projections
and shall have received such other information and documentation as the
Administrative Agent may reasonably request, all in form and substance
satisfactory to the Administrative Agent, and

(ii)           the aggregate
amount of all Material Project EBITDA Adjustments during any period shall be
limited to 20% of the total actual EBITDA of the Borrower and its Subsidiaries
for such period (which total actual EBITDA shall be determined without
including any Material Project EBITDA Adjustments).

“Maturity
Date” shall mean, with respect to the Term Loans, the earlier of (i)
December 12, 2011 or such later date approved by the Required Lenders in
accordance with Section 2.26 or (ii) the date on which the principal amount of
all outstanding Term Loans have been declared or automatically have become due
and payable (whether by acceleration or otherwise).

“Moody’s”
shall mean Moody’s Investors Service, Inc.

“Moody’s Equity Credit”
shall mean the percentage of equity credit ascribed to a Hybrid Security by
Moody’s as demonstrated by the Borrower to the reasonable satisfaction of the
Administrative Agent.

“Multiemployer
Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.

“Northern
Border” shall mean Northern Border Pipeline Company, a Texas general
partnership.

“Northern Border Partnership Agreement”
means that certain First Amended and Restated General Partnership Agreement
relating to the formation of Northern Border effective as of August 6, 2006, as
amended, supplemented, restated or otherwise modified from time to time.

“Notes”
shall mean, collectively, the Revolving Credit Notes, the Swingline Note and
the Term Notes.

“Notices
of Borrowing” shall mean, collectively, the Notices of Revolving Borrowing
and the Notices of Swingline Borrowing.

“Notice
of Conversion/Continuation” shall mean the
notice given by the Borrower to the Administrative Agent in respect of the
conversion or continuation of an outstanding Borrowing as provided in Section
2.7(b).

 15
 

 

“Notice
of Revolving Borrowing” shall have the meaning as set forth in Section 2.3.

“Notice
of Swingline Borrowing” shall have
the meaning as set forth in Section 2.4.

“Notice
of Term Loan Borrowing” shall have the meaning as set forth in Section 2.3.

“Obligations”
shall mean all amounts owing by the Borrower to the Administrative Agent, the
Issuing Bank or any Lender (including the Swingline Lender) pursuant to or in
connection with this Agreement or any other Loan Document, including without
limitation, all principal, interest (including any interest accruing after the
filing of any petition in bankruptcy or the commencement of any insolvency,
reorganization or like proceeding relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
all reimbursement obligations, fees, expenses, indemnification and
reimbursement payments, costs and expenses (including all reasonable fees and
expenses of counsel to the Administrative Agent, the Issuing Bank and any
Lender (including the Swingline Lender) incurred pursuant to this Agreement or
any other Loan Document), whether direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising hereunder or
thereunder, and all obligations and liabilities incurred in connection with
collecting and enforcing the foregoing, together with all renew­als,
extensions, modifications or refinancings thereof.

“Off-Balance
Sheet Liabilities” of any Person shall mean (i) any repurchase obligation
or liability of such Person with respect to accounts or notes receivable sold
by such Person, (ii) any liability of such Person under any sale and leaseback
transactions that do not create a liability on the balance sheet of such
Person, (iii) any Synthetic Lease Obligation or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheet of such Person.

“OSHA”
shall mean the Occupational Safety and Health Act of 1970, as amended from time
to time, and any successor statute.

“Other
Taxes” shall mean any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.

“Participant”
shall have the meaning set forth in Section 10.4(d).

“Payment
Office” shall mean the office of the Administrative Agent located at 303
Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as to
which the Administrative Agent shall have given written notice to the Borrower
and the other Lenders.

“PBGC” shall mean the
Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any
successor entity performing similar functions.

 16
 

 

“Permitted
Encumbrances” shall mean:

(i)             Liens
imposed by law for taxes, assessments or governmental charges not yet due or
which are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are being maintained in
accordance with GAAP;

(ii)            statutory
Liens of landlords, carriers, warehousemen, mechanics, materialmen and similar
Liens arising by operation of law in the ordinary course of business for amounts
overdue for a period of more than 30 days or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
are being maintained in accordance with GAAP;

(iii)           pledges
and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or
regulations;

(iv)           deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obli­gations of a like
nature, in each case in the ordinary course of business;

(v)            judgment
and attachment liens not giving rise to an Event of Default or Liens created by
or existing from any litigation or legal proceeding that are currently being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP;

(vi)           customary
rights of set-off, revocation, refund or chargeback under deposit agreements or
under the Uniform Commercial Code or common law of banks or other financial
institutions where Borrower or any of its Subsidiaries maintains deposits
(other than deposits intended as cash collateral) in the ordinary course of
business; and

(vii)          easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or materially interfere with the ordinary conduct of business
of the Borrower and its Subsidiaries taken as a whole;

provided,
that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.

“Permitted
Investments” shall mean:

(i)             direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States or Canada (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States or Canada), in each case maturing within one year from the
date of acquisition thereof;

 17
 

 

(ii)            commercial
paper rated at least A-1 (or its equivalent) by S&P or P-1 (or its
equivalent) by Moody’s at the time of acquisition thereof, and in either case
maturing within 360 days from the
date of acquisition thereof;

(iii)           certificates of deposit,
bankers’ acceptances and time deposits maturing within 180 days of the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States or any state thereof which
has (a) a combined capital and surplus and undivided profits of not less than
$500,000,000 or (b) has certificates of deposit or other debt obligations rated
at least A-1 (or its equivalent) by S&P or P-1 (or its equivalent) by
Moody’s;

(iv)           fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (i) above and entered into with a financial
institution satisfying the criteria described in clause (iii) above;

(v)            mutual
funds or similar funds that have at least 95% of their assets invested in any
one or more of the Permitted Investments described in clauses (i) through (iv)
above;

(vi)           demand
deposit accounts maintained in the ordinary course of business at a bank or
trust company satisfying the requirements specified in (a) or (b) of clause
(iii) above;

(vii)          any
other securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof, in each
case, maturing within one year from the date of acquisition thereof;

(viii)         investments
in any fund that invests exclusively in investments of the type described in
clauses (vii) which fund may also hold immaterial amounts of cash pending
investment and/or distribution; and

(ix)           other
cash equivalents and securities reasonably acceptable to the Administrative
Agent.

“Permitted
Subordinated Debt” shall mean any Indebtedness of the Borrower or any
Subsidiary (i) that is expressly subordinated to the Obligations and any
Hedging Obligations entered into with the Administrative Agent or any Lender on
terms satisfactory to the Administrative Agent and the Required Lenders in
their sole discretion, (ii) that matures by its terms no earlier than six
months after the later of the Revolving Commitment Termination Date or the
Maturity Date then in effect with no scheduled principal payments permitted
prior to such maturity, and (iii) that is evidenced by an indenture or other
similar agreement that is in a form satisfactory to the Administrative Agent
and the Required Lenders.

“Permitted Tax
Distributions” shall mean cash dividends or distributions to the partners
of the Borrower with respect to each taxable year during which the Borrower is
a partnership in an amount not to exceed the aggregate of the maximum federal
and state income tax liability of the partners of the Borrower (assuming that
all of such partners are taxed at the

 18
 

 

maximum
permissible federal and state rates of such partners or members) attributable
to the taxable income of the Borrower for such taxable year, computed in
accordance with the Code.

“Person”
shall mean any individual, partnership, firm, corporation, association, joint
venture, limited liability company, trust or other entity, or any Governmental
Authority.

“Plan” shall mean
any employee pension benefit plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or,
if such plan were terminated, would under Section 4069 of ERISA be deemed to
be) an “employer” as defined in Section 3(5) of ERISA

“Pro
Rata Share” shall mean (i) with respect to any Commitment of any Lender at
any time, a percentage, the numerator of which shall be such Lender’s
Commitment (or if such Commitments have been terminated or expired or the Loans
have been declared to be due and payable, such Lender’s Revolving Credit
Exposure or Term Loan, as applicable), and the denominator of which shall be
the sum of such Commitments of all Lenders (or if such Commitments have been
terminated or expired or the Loans have been declared to be due and payable,
all Revolving Credit Exposure or Term Loans, as applicable, of all Lenders) and
(ii) with respect to all Commitments of any Lender at any time, the numerator
of which shall be the sum of such Lender’s Revolving Commitment (or if such
Revolving Commitments have been terminated or expired or the Loans have been
declared to be due and payable, such Lender’s Revolving Credit Exposure) and
Term Loan and the denominator of which shall be the sum of all Lenders’
Revolving Commitments (or if such Revolving Commitments have been terminated or
expired or the Loans have been declared to be due and payable, all Revolving
Credit Exposure of all Lenders funded under such Commitments) and Term Loans.

“Regulation D”
shall mean Regulation D of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time, and any successor
regulations.

“Related
Parties” shall mean, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

“Release”
shall mean any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

“Required Lenders”
shall mean, at any time, Lenders holding more than 50% of the aggregate
outstanding Revolving Commitments and Term Loans at such time or if the Lenders
have no Commitments outstanding, then Lenders holding more than 50% of the
Revolving Credit Exposure and Term Loans. 
In each case, at any time any Lender is a Defaulting Lender, all
Defaulting Lenders shall be excluded in determining “Required Lenders” and
“Required Lenders” shall mean non-Defaulting Lenders otherwise meeting the
criteria set forth in this definition.

 19
 

 

“Requirement
of Law” for any Person shall mean the articles or certificate of
incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may
be, and other organizational and governing documents of such Person, and any
law, treaty, rule or regulation, or determination of a Governmental Authority,
in each case applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.

“Responsible
Officer” shall mean any of the president, the chief executive officer, the
chief operating officer, the chief financial officer, the treasurer or a vice
president of the Borrower or such other representative of the Borrower as may
be designated in writing by any one of the foregoing with the consent of the
Administrative Agent; and, with respect to the financial covenants only, the
chief financial officer, treasurer, vice president of finance or controller of
the Borrower.

“Restricted
Payment” shall have the meaning set forth in Section 7.5.

“Revolving
Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Revolving Loans to the Borrower and to acquire participations in
Letters of Credit and Swingline Loans in an aggregate principal amount not
exceeding the amount set forth with respect to such Lender on Schedule III,
as such schedule may be amended pursuant to Section 2.23, or in the case
of a Person becoming a Lender after the Closing Date, the amount of the
assigned “Revolving Commitment” as provided in the Assignment and Acceptance
executed by such Person as an assignee, 
or the joinder executed by such Person, in each case as such commitment
may subsequently be increased or deceased pursuant to terms hereof.

“Revolving
Commitment Termination Date” shall mean the earliest of (i) December 12,
2011 or such later date approved by the Required Lenders in accordance with
Section 2.26, (ii) the date on which the Revolving Commitments are terminated
pursuant to Section 2.8 and (iii) the date on which all amounts
outstanding under this Agreement have been declared or have automatically
become due and payable (whether by acceleration or otherwise).

“Revolving
Credit Exposure” shall mean, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans, LC
Exposure and Swingline Exposure.

“Revolving
Credit Note” shall mean a promissory note of the Borrower payable to the
order of a requesting Lender in the principal amount of such Lender’s Revolving
Commitment, in substantially the form of Exhibit A.

“Revolving
Loan” shall mean a loan made by a Lender (other than the Swingline Lender)
to the Borrower under its Revolving Commitment, which may either be a Base Rate
Loan or a Eurodollar Loan.

“S&P”
shall mean Standard & Poor’s, a Division of the McGraw-Hill Companies.

“Significant Subsidiary”
has the meaning specified in Article 1, Rule 1-02(w) of Regulation S-X of the
Securities Exchange Act of 1934 as of the Effective Date, provided,
that,

 20
 

 

even
if Northern Border and Tuscarora would not otherwise constitute a Subsidiary of
the Borrower, each of Northern Border and Tuscarora shall be deemed to be a
Significant Subsidiary of the Borrower if it would otherwise qualify as a
Significant Subsidiary under Article 1, Rule 1-02(w) of Regulation S-X as of
the Closing Date.

“Subsidiary”
shall mean, with respect to any Person (the “parent”), any corporation,
partnership, joint venture, limited liability company, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date, as well as any other
corporation, part­nership, joint venture, limited liability company,
association or other entity (i) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power, or in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (ii) that is, as of such date, otherwise controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.  Unless otherwise
indicated, all references to “Subsidiary” hereunder shall mean a Subsidiary of
the Borrower.  For the avoidance of
doubt, neither Northern Border nor Tuscarora is a Subsidiary of the Borrower as
of the Closing Date.

“Swingline
Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed $5,000,000.

“Swingline
Exposure” shall mean, with respect to each Lender, the principal amount of
the Swingline Loans in which such Lender is legally obligated either to make a
Base Rate Loan or to purchase a participation in accordance with Section 2.4,
which shall equal such Lender’s Pro Rata Share of all outstanding Swingline
Loans.

“Swingline
Lender” shall mean SunTrust Bank, or any other Lender that may agree to
make Swingline Loans hereunder.

“Swingline
Loan” shall mean a loan made to the Borrower by the Swingline Lender under
the Swingline Commitment.

“Swingline
Note” shall mean the promissory note of the Borrower payable to the order
of the Swingline Lender in the principal amount of the Swingline Commitment,
substantially the form of Exhibit C.

“Swingline
Rate” shall mean the Base Rate, or such other interest rate (and
with respect to a Swingline Loan that is a Eurodollar Loan, for any Interest
Period) as may be mutually agreed between the Swingline Lender and the
Borrower.

“Synthetic Lease”
shall mean a lease transaction under which the parties intend that (i) the
lease will be treated as an “operating lease” by the lessee pursuant to
Statement of Financial Accounting Standards No. 13, as amended and (ii) the
lessee will be entitled to various tax and other benefits ordinarily available
to owners (as opposed to lessees) of like property.

 21
 

 

“Synthetic
Lease Obligations” shall mean, with respect to any Person, the sum of (i)
all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the
lease property at the end of the lease term.

“Taxes”
shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“TC
PipeLines ILP” means TC PipeLines Intermediate Limited Partnership, a
Delaware limited partnership.

“TC
PipeLines ILP Agreement” means that certain Amended and Restated Agreement
of Limited Partnership relating to the formation of TC PipeLines ILP effective
as of May 28, 1999, as amended, supplemented, restated or otherwise modified
from time to time.

“Termination
Date” the date that no Loan, Note or LC Exposure remains outstanding and
unpaid, no amount remains available to be drawn under any Letter of Credit
(unless such Letter of Credit is cash collateralized or supported by a letter
of credit on terms and in amount acceptable to the Administrative Agent), no
other amount is owing to any Lender or the Administrative Agent hereunder or
under any of the other Loan Documents and the Revolving Commitments and Term
Loan Commitments have been terminated.

 “Term Loan” shall have the meaning set
forth in Section 2.5.

“Term
Loan Commitment” shall mean,
with respect to each Lender, the obligation of such Lender to make a Term Loan
hereunder in a principal amount not exceeding the amount set forth with respect
to such Lender on Schedule III. 
The aggregate principal amount of all Lenders’ Term Loan Commitments is
$380,000,000.

“Term Loan Commitment
Availability Period” shall
mean the period from the Closing Date through the sixth month anniversary of
the Closing Date.

“Term
Note” shall mean a promissory note of the Borrower payable to the order of
a requesting Lender in the principal amount of such Lender’s Term Loan
Commitment, in substantially the form of Exhibit B.

“Total Capitalization”
shall mean at any date, the sum of Consolidated Net Worth and Consolidated
Total Funded Debt of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.

“Tuscarora”
shall mean Tuscarora Gas Transmission Company, a Nevada general partnership.

“Tuscarora Acquisition”
means that acquisition described in detail in the General Partnership Interest
Purchase Agreement dated as of November 1, 2006 by and between Tuscarora Gas
Pipeline Company and TC Tuscarora Intermediate Limited Partnership.

 22

 

“Tuscarora
Intermediate Partnership” shall mean TC Tuscarora Intermediate Limited
Partnership, a Delaware limited partnership.

“Tuscarora
Intermediate Partnership Agreement” means that certain Agreement of Limited
Partnership relating to the formation of Tuscarora Intermediate Partnership
effective as of July 19, 2000, as amended supplemented, restated or otherwise
modified from time to time.

“Tuscarora
Partnership Agreement” means that certain General Partnership Agreement
relating to the formation of Tuscarora effective as of June 11, 1993, as
amended, supplemented, restated or otherwise modified from time to time.

“Type”,
when used in reference to a Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBO Rate or the Base Rate.

“Withdrawal
Liability” shall mean liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.2.           Classifications
of Loans and Borrowings.  For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g. a “Revolving
Loan” or “Term Loan”) or by Type (e.g. a “Eurodollar Loan” or “Base Rate Loan”)
or by Class and Type (e.g. “Revolving Eurodollar Loan”).  Borrowings also may be classified and
referred to by Class (e.g. “Revolving Borrowing”) or by Type (e.g. “Eurodollar
Borrowing”) or by Class and Type (e.g. “Revolving Eurodollar Borrowing”).

Section 1.3.           Accounting
Terms and Determination.  Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP
as in effect from time to time, applied on a basis consistent with the most
recent audited consolidated financial statement of the Borrower delivered
pursuant to Section 5.1(a); provided, that if the Borrower
notifies the Administrative Agent that the Borrower wishes to amend any
covenant in Article VI to eliminate the effect of any change in GAAP on
the operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Article VI for such
purpose), then the Borrower’s compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.

Section 1.4.           Terms
Generally.  The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  In the computation of periods
of time from a specified date to a later specified date, the word “from” means
“from and including” and the word “to” means “to but excluding”.  Unless the context requires otherwise (i) any
definition of or reference to any agreement, instrument or other 

 23
 

 

document
herein shall be construed as referring to such agreement, instrument or other document
as it was originally executed or as it may from time to time be amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and permitted assigns, (iii) the words “hereof”, “herein” and
“hereunder” and words of similar import shall be construed to refer to this
Agreement as a whole and not to any particular provision hereof, (iv) all
references to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles, Sections, Exhibits and Schedules to this
Agreement and (v) all references to a specific time shall be construed to refer
to the time in the city and state of the Administrative Agent’s principal
office, unless otherwise indicated.  All
actions required to be undertaken by the Borrower under the Loan Documents
shall be undertaken by the Borrower through the General Partner.

ARTICLE
II

AMOUNT
AND TERMS OF THE COMMITMENTS

Section 2.1.           General
Description of Facilities.  Subject to and upon the terms
and conditions herein set forth, (i) the Lenders hereby establish in favor
of the Borrower a revolving credit facility pursuant to which each Lender
severally agrees (to the extent of such Lender’s Revolving Commitment) to make
Revolving Loans to the Borrower in accordance with Section 2.2, (ii) the
Issuing Bank agrees to issue Letters of Credit in accordance with Section 2.22, (iii) the Swingline Lender
agrees to make Swingline Loans in accordance with Section 2.4, (iv) each
Lender agrees to purchase a participation interest in the Letters of Credit and
the Swingline Loans pursuant to the terms and conditions hereof; provided,
that in no event shall the aggregate principal amount of all outstanding
Revolving Loans, Swingline Loans and outstanding LC Exposure exceed at any time
the Aggregate Revolving Commitment Amount from time to time in effect; and (v)
each Lender severally agrees to make a Term Loan to the Borrower in a principal
amount not exceeding such Lender’s Term Loan Commitment on the Closing Date.

Section 2.2.           Revolving
Loans.  Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans, ratably in
proportion to its Pro Rata Share, to the Borrower, from time to time during the Availability Period, in an aggregate
principal amount outstanding at any time that will not result in (a) such
Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Commitment
or (b) the aggregate Revolving Credit Exposures of all Lenders exceeding the
Aggregate Revolving Commitment Amount. 
During the Availability Period, the Borrower shall be entitled to
borrow, prepay and reborrow Revolving Loans in accordance with the terms and
conditions of this Agreement; provided, that the Borrower may not borrow
or reborrow should there exist a Default or Event of Default or any of the
other conditions in Section 3.2 shall not have been satisfied.

Section 2.3.           Procedure
for Borrowings.

The Borrower shall give the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of each
Term Loan Borrowing substantially in the form of Exhibit 2.3(a) (a “Notice
of Term Loan Borrowing”) and each Revolving Borrowing 

 24
 

 

substantially in the form
of Exhibit 2.3(b) (a “Notice of Revolving Borrowing”, and with
the Notice of Term Loan Borrowing, each a “Notice of Borrowing”), each
such Notice of Borrowing to be delivered (x) prior to 11:00 a.m. (New York time) on the requested date of each Base Rate
Borrowing and (y) prior to 11:00 a.m. (New York time) three (3) Business Days prior to the
requested date of each Eurodollar Borrowing. 
Each Notice of Borrowing shall be irrevocable and shall specify: (i) the
aggregate principal amount of such Borrowing, (ii) the date of such Borrowing
(which shall be a Business Day), (iii) the Type of such Revolving Loan
comprising such Borrowing and (iv) in the case of a Eurodollar Borrowing, the
duration of the initial Interest Period applicable thereto (subject to the
provisions of the definition of Interest Period).  Each Revolving Borrowing shall consist
entirely of Base Rate Loans or Eurodollar Loans, as the Borrower may
request.  The aggregate principal amount
of each Eurodollar Borrowing shall be not less than $5,000,000 or a larger
multiple of $1,000,000, and the aggregate principal amount of each Base Rate
Borrowing shall not be less than $1,000,000 or a larger multiple of $100,000; provided,
that Base Rate Loans made pursuant to Section 2.4 or Section 2.22(d)
may be made in lesser amounts as provided therein.  At no time shall the total number of
Eurodollar Borrowings outstanding at any time exceed six.  Promptly following the receipt of a Notice of
Borrowing in accordance herewith, the Administrative Agent shall advise each
Lender of the details thereof and the amount of such Lender’s Revolving Loan to
be made as part of the requested Revolving Borrowing.

Section 2.4.           Swingline
Commitment.

(a)   Subject
to the terms and conditions set forth herein, the Swingline Lender agrees to
make Swingline Loans to the Borrower, from time to time during the Availability
Period, in an aggregate principal amount outstanding at any time not to exceed
the lesser of (i) the Swingline Commitment then in effect and (ii) the
difference between the Aggregate Revolving Commitment Amount and the aggregate
Revolving Credit Exposures of all Lenders; provided, that the Swingline
Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan.  The Borrower
shall be entitled to borrow, repay and reborrow Swingline Loans in accordance
with the terms and conditions of this Agreement.

(b)   The Borrower shall give the Administrative
Agent written notice (or telephonic notice promptly confirmed in writing) of
each Swingline Borrowing substantially in the form of Exhibit 2.4
attached hereto (“Notice of Swingline Borrowing”) prior to 12:00 p.m. (New
York time) on the requested date of each Swingline Borrowing.  Each Notice of Swingline Borrowing shall be
irrevocable and shall specify: (i) the principal amount of such Swingline Loan,
(ii) the date of such Swingline Loan (which shall be a Business Day) and (iii)
the account of the Borrower to which the proceeds of such Swingline Loan should
be credited.  The Administrative Agent
will promptly advise the Swingline Lender of each Notice of Swingline
Borrowing.  Each Swingline Loan shall
accrue interest at the Swingline Rate and shall have an Interest Period
(subject to the definition thereof) as agreed between the Borrower and the
Swingline Lender.  The aggregate
principal amount of each Swingline Loan shall be not less than $100,000 or a larger multiple of $50,000,
or such other minimum amounts agreed to by the Swingline Lender and the
Borrower.  The Swingline Lender will make
the proceeds of each Swingline Loan available to the Borrower in Dollars in
immediately available funds at the account specified by the Borrower in the
applicable Notice of Swingline Borrowing not later than 1:00 p.m. (New
York time) on the requested date of such Swingline Loan.

 25
 

 

(c)   The Swingline Lender, at any time and from time to time in its
sole discretion, may, on behalf of the Borrower (which hereby irrevocably
authorizes and directs the Swingline Lender to act on its behalf), give a
Notice of Revolving Borrowing to the Administrative Agent requesting the
Lenders (including the Swingline Lender) to make Base Rate Loans in an amount
equal to the unpaid principal amount of any Swingline Loan.  Each Lender will make the proceeds of its
Base Rate Loan included in such Borrowing available to the Administrative Agent
for the account of the Swingline Lender in accordance with Section 2.6,
which will be used solely for the repayment of such Swingline Loan.

(d)   If for any reason a Base Rate Borrowing may not be (as determined
in the sole discretion of the Administrative Agent), or is not, made in
accordance with the foregoing provisions, then each Lender (other than the
Swingline Lender) shall purchase an undivided participating interest in such
Swingline Loan in an amount equal to its Pro Rata Share thereof on the date
that such Base Rate Borrowing should have occurred.  On the date of such required purchase, each
Lender shall promptly transfer, in immediately available funds, the amount of
its participating interest to the Administrative Agent for the account of the
Swingline Lender.  If such Swingline Loan
bears interest at a rate other than the Base Rate, such Swingline Loan shall
automatically become a Base Rate Loan on the effective date of any such participation
and interest shall become payable on demand.

(e)   Each Lender’s obligation to make a Base Rate Loan pursuant to Section 2.4(c)
or to purchase the participating interests pursuant to Section 2.4(d)
shall be absolute and unconditional and shall not be affected by any
circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that such Lender or any other Person may
have or claim against the Swingline Lender, the Borrower or any other Person
for any reason whatsoever, (ii) the existence of a Default or an Event of
Default or the termination of any Lender’s Revolving Commitment, (iii) the
existence (or alleged existence) of any event or condition which has had or
could reasonably be expected to have a Material Adverse Effect, (iv) any breach
of this Agreement or any other Loan Document by the Borrower, the
Administrative Agent or any Lender or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.  If such amount is not in fact made available
to the Swingline Lender by any Lender, the Swingline Lender shall be entitled
to recover such amount on demand from such Lender, together with accrued
interest thereon for each day from the date of demand thereof (i) at the
Federal Funds Rate until the second Business Day after such demand and (ii) at
the Base Rate at all times thereafter. 
Until such time as such Lender makes its required payment, the Swingline
Lender shall be deemed to continue to have outstanding Swingline Loans in the
amount of the unpaid participation for all purposes of the Loan Documents.  In addition, such Lender shall be deemed to
have assigned any and all payments made of principal and interest on its Loans
and any other amounts due to it hereunder, to the Swingline Lender to fund the
amount of such Lender’s participation interest in such Swingline Loans that
such Lender failed to fund pursuant to this Section 2.4, until such
amount has been purchased in full.

Section 2.5.           Term
Loan Commitments.  Subject to the terms and conditions set forth
herein, each Lender having a Term Loan Commitment severally agrees to
make Term Loans, ratably in proportion to its Pro Rata Share, to the Borrower,
on the Closing Date in the principal amount of $280,000,000 and on one
additional date during the Term Loan
Commitment 

 26
 

 

Availability Period, in an aggregate principal amount outstanding at
any time that will not result in (a) such Lender’s aggregate Term Loans
exceeding such Lender’s Term Loan Commitment or (b) the aggregate Term Loans of
all Lenders exceeding the aggregate Term Loan Commitment Amount.  During the Term Loan Commitment Availability
Period, the Borrower shall be entitled to borrow and prepay Term Loans in
accordance with the provisions hereof, but once repaid or prepaid, Term Loans
may not be reborrowed.  The Term Loans may be, from
time to time, Base Rate Loans or Eurodollar Loans or a combination thereof.

Section 2.6.           Funding
of Borrowings.

(a)   Each Lender will make available each Loan to be made by it
hereunder on the proposed date thereof by wire transfer in immediately
available funds by 11:00 a.m. (New York time) to the
Administrative Agent at the Payment Office; provided, that the Swingline
Loans will be made as set forth in Section 2.4.  The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts that it receives,
in like funds by 1:00 pm (New York time) on such proposed date, to an account
maintained by the Borrower with the Administrative Agent or at the Borrower’s
option, by effecting a wire transfer of such amounts to an account designated
by the Borrower to the Administrative Agent.

(b)   Unless the Administrative Agent shall have been notified by any
Lender prior to 5:00 p.m. (New York time)
one (1) Business Day prior to
the date of a Borrowing in which such Lender is to participate that such Lender
will not make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date, and the
Administrative Agent, in reliance on such assumption, may make available to the
Borrower on such date a cor­responding amount. 
If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender on the date of such Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender to­gether with interest at the Federal Funds Rate until
the second Business Day after such demand and thereafter at the Base Rate.  If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor,
the Administrative Agent shall promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent together
with interest at the rate specified for such Borrowing.  Nothing in this subsection shall be deemed to
relieve any Lender from its obligation to fund its Pro Rata Share of any
Borrowing hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

(c)   All Revolving Borrowings shall be made by the Lenders on the basis
of their respective Pro Rata Shares.  No
Lender shall be responsible for any default by any other Lender in its
obligations hereunder, and each Lender shall be obligated to make its Loans
provided to be made by it hereunder, regardless of the failure of any other
Lender to make its Loans hereunder.

Section 2.7.           Interest
Elections.

(a)   Each Borrowing initially
shall be of the Type specified in the applicable Notice of Borrowing, and in
the case of a Eurodollar Borrowing, shall have an initial Interest 

 27
 

 

Period as specified in such
Notice of Borrowing.  Thereafter, the
Borrower may elect to convert such Borrowing into a different Type or to
continue such Borrowing, and in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section 2.8.  The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.  This
Section shall NOT apply to Swingline Borrowings, which may not be converted or
continued.

(b)   To make an election pursuant to this Section 2.7, the
Borrower shall give the Administrative Agent prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing
substantially in the form of Exhibit 2.7 attached hereto (a “Notice
of Conversion/Continuation”) that is to be converted or continued, as the
case may be, (x) prior to 10:00 a.m. (New York time) on the
requested date of a conversion into a Base Rate Borrowing and (y) prior to
11:00 a.m. (New York time) three (3) Business Days prior to a
continuation of or conversion into a Eurodollar Borrowing.  Each such Notice of Conversion/Continuation
shall be irrevocable and shall specify (i) the Borrowing to which such Notice
of Continuation/Conversion applies and if different options are being elected
with respect to different portions thereof, the portions thereof that are to be
allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) shall be specified for each
resulting Borrowing); (ii) the effective date of the election made pursuant to
such Notice of Continuation/Conversion, which shall be a Business Day, (iii)
whether the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing; and (iv) if the resulting Borrowing is to be a Eurodollar Borrowing,
the Interest Period applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of “Interest
Period”.  If any such Notice of
Continuation/Conversion requests a Eurodollar Borrowing but does not specify an
Interest Period, the Borrower shall be deemed to have selected an Interest
Period of one month.  The principal
amount of any resulting Borrowing shall satisfy the minimum borrowing amount
for Eurodollar Borrowings and Base Rate Borrowings set forth in Section 2.3.

(c)   If, on the expiration of any Interest Period in respect of any
Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/ Continuation, then, unless such Borrowing is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Borrowing
to a Base Rate Borrowing.  No Borrowing
may be converted into, or continued as, a Eurodollar Borrowing if a Default or
an Event of Default exists, unless the Administrative Agent and each of the
Lenders shall have otherwise consented in writing.   No conversion of any Eurodollar Loans shall
be permitted except on the last day of the Interest Period in respect thereof.

(d)   Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender of the details thereof
and of such Lender’s portion of each resulting Borrowing.

Section 2.8.           Optional
Reduction and Termination of Commitments.

(a)   Unless previously
terminated, all Revolving Commitments, Swingline Commitments and LC Commitments
shall terminate on the Revolving Commitment Termination 

 28
 

 

Date.  The Term Loan Commitments shall terminate (i)
on the Closing Date, with respect to $280,000,000 of the Term Loan Commitments
upon the making of the Term Loans pursuant to Section 2.5 in such amount
on the Closing Date and (b) on the sixth month anniversary of the Closing Date,
with respect to $100,000,000 of the Term Loan Commitments.

(b)   Upon at least three (3) Business Days’ prior written notice (or
telephonic notice promptly confirmed in writing) to the Administrative Agent
(which notice shall be irrevocable), the Borrower may reduce the Aggregate
Revolving Commitments or the Term Loan Commitments in part or terminate the
Aggregate Revolving Commitments or the Term Loan Commitments in whole; provided,
that (i) any partial reduction shall apply to reduce proportionately and permanently
the Revolving Commitment or the Term Loan Commitment of each Lender, (ii) any
partial reduction pursuant to this Section 2.8 shall be in an amount of
at least $5,000,000 and any larger multiple of $1,000,000, and (iii) no such
reduction shall be permitted which would reduce the Aggregate Revolving
Commitment Amount or the Term Loan Commitment to an amount less than the
outstanding Revolving Credit Exposures or the Term Loans of all Lenders.  Any such reduction in the Aggregate Revolving
Commitment Amount below the sum of the principal amount of the Swingline
Commitment and the LC Commitment shall result in a proportionate reduction
(rounded to the next lowest integral multiple of $100,000) in the Swingline
Commitment and the LC Commitment.

Section 2.9.           Repayment
of Loans.

(a)   The outstanding principal amount of all Revolving Loans shall be
due and payable (together with accrued and unpaid interest thereon) on the
Revolving Commitment Termination Date.

(b)   The principal amount of each Swingline Borrowing shall be due and
payable (together with accrued and unpaid interest thereon) on the earlier of
(i) the last day of the Interest Period applicable to such Borrowing and (ii)
the Revolving Commitment Termination Date.

(c)   The outstanding balance of all Term Loans
shall be due and payable (together with accrued and unpaid interest thereon) on
the Maturity Date.

Section 2.10.        Evidence
of Indebtedness.  (a) 
Each Lender shall maintain in accordance with its usual practice
appropriate records evidencing the Indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable thereon and paid to such Lender from
time to time under this Agreement.  The
Administrative Agent shall maintain appropriate
records in which shall be recorded
(i) the Revolving Commitment and Term Loan Commitment of each Lender, (ii) the
amount of each Loan made hereunder by each Lender, the Class and Type thereof
and the Interest Period applicable thereto, (iii) the date of each continuation
thereof pursuant to Section 2.7, (iv) the date of each conversion of all
or a portion thereof to another Type pursuant to Section 2.7, (v) the
date and amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder in respect of such Loans
and (vi) both the date and amount of any sum received by the Administrative
Agent hereunder from the Borrower in respect of the Loans 

 29
 

 

and
each Lender’s Pro Rata Share thereof. 
The entries made in such records shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, that the failure
or delay of any Lender or the Administrative Agent in maintaining or making
entries into any such record or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Loans (both principal and
unpaid accrued interest) of such Lender in accordance with the terms of this
Agreement.

(b)   At the request of any Lender (including the Swingline Lender) at
any time, the Borrower agrees that it will execute and deliver to such Lender a
Revolving Credit Note  and/or a Term Loan
Note and, in the case of the Swingline Lender only, a Swingline Note, payable
to the order of such Lender.

Section 2.11.        Optional
Prepayments.  The Borrower
shall have the right at any time and from time to time to prepay any Borrowing,
in whole or in part, without premium or penalty, by giving irrevocable written
notice (or telephonic notice promptly confirmed in writing) to the
Administrative Agent no later than (i) in the case of prepayment of any
Eurodollar Borrowing, 11:00 a.m. (New York time)  not less than three (3) Business Days prior
to any such prepayment, (ii) in the case of any prepayment of any Base Rate
Borrowing, not less than one Business Day prior to the date of such prepayment,
and (iii) in the case of Swingline Borrowings, prior to 11:00 a.m. (New York time) on the date of such prepayment.  Each such notice shall be irrevocable and
shall specify the proposed date of such prepayment and the principal amount of
each Borrowing or portion thereof to be prepaid.  Upon receipt of any such notice, the
Administrative Agent shall promptly notify each affected Lender of the contents
thereof and of such Lender’s Pro Rata Share of any such prepayment.  If such notice is given, the aggregate amount
specified in such notice shall be due and payable on the date designated in
such notice, together with accrued interest to such date on the amount so
prepaid in accordance with Section 2.13(d); provided, that if a
Eurodollar Borrowing is prepaid on a date other than the last day of an
Interest Period applicable thereto, the Borrower shall also pay all amounts
required pursuant to Section 2.19. 
Each partial prepayment of any Loan (other than a Swingline Loan) shall
be in an amount that would be permitted in the case of an advance of a
Revolving Borrowing of the same Type pursuant to Section 2.2 or in the
case of a Swingline Loan pursuant to Section 2.4.  Each prepayment of a Borrowing shall be
applied ratably to the Loans comprising such Borrowing, and in the case of a
prepayment of a Term Loan Borrowing, to principal installments in inverse order
of maturity.

Section 2.12.        Mandatory
Prepayments.  If at any
time the Revolving Credit Exposure of all Lenders exceeds the Aggregate
Revolving Commitment Amount, as reduced pursuant to Section 2.8 or
otherwise, the Borrower shall immediately repay Swingline Loans and Revolving
Loans in an amount equal to such excess, together with all accrued and unpaid
interest on such excess amount and any amounts due under Section 2.19.  Each prepayment shall be applied first to the
Swingline Loans to the full extent thereof, second to the Base Rate Loans to
the full extent thereof, and finally to Eurodollar Loans to the full extent
thereof.  If after giving effect to
prepayment of all Swingline Loans and Revolving Loans, the Revolving Credit
Exposure of all Lenders exceeds the Aggregate Revolving Commitment Amount, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Issuing Bank and the
Lenders, an amount in cash equal to such excess plus any accrued and unpaid
fees thereon to be held as collateral for the LC Exposure.  Such account shall be administered in
accordance with Section 2.22(g) hereof.

 30
 

 

Section 2.13.        Interest
on Loans.

(a)   The Borrower shall pay interest on each Base Rate Loan at the Base
Rate in effect from time to time and on each Eurodollar Loan at the Adjusted
LIBO Rate for the applicable Interest Period in effect for such Loan, plus, in each case, the Applicable Margin in effect from
time to time.

(b)   The Borrower shall pay interest on each Swingline Loan at the
Swingline Rate in effect from time to time.

(c)   While an Event of Default exists or after acceleration, at the
option of the Required Lenders, the Borrower shall pay interest (“Default
Interest”) with respect to all Eurodollar Loans at the rate otherwise
applicable for the then-current Interest Pe­riod plus
an additional 2% per annum until the last day of such Interest Period, and
thereafter, and with respect to all Base Rate Loans and all other Obligations
hereunder (other than Loans), at the rate in effect for Base Rate Loans, plus an additional 2% per annum.

(d)   Interest on the principal amount of all Loans shall accrue from
and includ­ing the date such Loans are made to but excluding the date of any
repay­ment thereof.  Interest on all
outstanding Base Rate Loans shall be payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Commitment
Termination Date or the Maturity Date, as the case may be.  Interest on all outstanding Eurodollar Loans
shall be payable on the last day of each Interest Period applicable thereto,
and, in the case of any Eurodollar Loans having an Interest Period in excess of
three months or 90 days, respectively, on each day which occurs every three
months or 90 days, as the case may be, after the initial date of such Interest
Period, and on the Revolving Commitment Termination Date or the Maturity Date,
as the case may be.  Interest on each
Swingline Loan (other than a Swingline Loan that is a Base Rate Loan
which shall be payable as set forth above) shall be payable on the maturity date of such Loan, which shall be the
last day of the Interest Period applicable thereto, and on the Revolving
Commitment Termination Date.  Interest on
any Loan which is converted into a Loan of another Type or which is repaid or
prepaid shall be payable on the date of such conversion or on the date of any
such repayment or prepayment (on the amount repaid or prepaid) thereof.  All Default Interest shall be payable on
demand.

(e)   The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder and shall promptly notify the Borrower and
the Lenders of such rate in writing (or by telephone, promptly con­firmed in
writing).  Any such determination shall
be conclusive and binding for all purposes, absent manifest error.

Section 2.14.        Fees.

(a)   The Borrower shall pay to the Administrative Agent for its own
account fees in the amounts and at the times previously agreed upon in writing
by the Borrower and the Administrative Agent.

(b)   The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a facility fee, which shall accrue at the Applicable
Percentage per annum (determined daily in accordance with Schedule I) on
the daily amount of the Revolving 

 31
 

 

Commitment (whether used or
unused) of such Lender during the Availability Period; provided, that if
such Lender continues to have any Revolving Credit Exposure after the Revolving
Commitment Termination Date, then the facility fee shall continue to accrue on the
daily amount of such Revolving Credit Exposure from and after the Revolving
Commitment Termination Date to the date that all of such Lender’s Revolving
Credit Exposure has been paid in full.

(c)   The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at the Applicable
Percentage per annum (determined daily in accordance with Schedule I) on
the daily amount of the unused Term Loan  Commitment of such Lender during the Term
Loan Commitment Availability Period.

(d)   The Borrower agrees to pay (i) quarterly in arrears to the
Administrative Agent, for the account of each Lender, a letter of credit fee
with respect to its participation in each Letter of Credit, which shall accrue
at a rate per annum equal to the Applicable Margin for Eurodollar Loans then in
effect on the average daily amount of such Lender’s LC Exposure attributable to
such Letter of Credit during the period from and including the date of issuance
of such Letter of Credit to but excluding the date on which such Letter of
Credit expires or is drawn in full (including without limitation any LC
Exposure that remains outstanding after the Revolving Commitment Termination
Date) and (ii) to the Issuing Bank for its own account a fronting fee, which
shall accrue at the rate of 0.125% per annum on the average daily amount of the
LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the Availability Period (or until the date that such
Letter of Credit is irrevocably cancelled, whichever is later), as well as the
Issuing Bank’s standard fees with respect to issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.  Notwithstanding the foregoing, if the
Required Lenders elect to increase the interest rate on the Loans to the
Default Interest pursuant to Section 2.13(c), the rate per annum used to
calculate the letter of credit fee pursuant to clause (i) above shall
automatically be increased by an additional 2% per annum.

(e)   The Borrower shall pay to the Administrative Agent, for the
ratable benefit of each Lender, the upfront fee previously agreed upon by the
Borrower and the Administrative Agent, which shall be due and payable on the
Closing Date.

(f)    Accrued fees under paragraphs (b), (c) and above shall be payable
quarterly in arrears on the last day of each March, June, September and
December, commencing on December 31, 2006 and on the Revolving Commitment
Termination Date (and if later, the date the Loans and LC Exposure shall be
repaid in their entirety); provided  further, that any such fees
accruing after the Revolving Commitment Termination Date shall be payable on
demand.

Section 2.15.        Computation
of Interest and Fees.

All computations of interest
based on the Base Rate shall be made by the Administrative Agent on the basis
of a year of 365 days, as the case may be, and all computations of interest
based on LIBOR or the Federal Funds Rate and of fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including
the first day but excluding the last day) occurring in the period for which
such interest or fees are payable (to the extent computed on the basis of days
elapsed).  Each determination by the
Administrative 

 32
 

 

Agent
of an interest amount or fee hereunder shall be made in good faith and, except
for manifest error, shall be final, con­clusive and binding for all purposes.

Section 2.16.        Inability
to Determine Interest Rates.  If prior to the commencement
of any Interest Period for any Eurodollar Borrowing,

(i)        the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant interbank market, ad­equate means
do not exist for ascertaining LIBOR for such Interest Period, or

(ii)       the Administrative Agent shall have received notice from the
Required Lenders that the Adjusted LIBO Rate does not adequately and fairly
reflect the cost to such Lenders (or Lender, as the case may be) of making,
funding or maintaining their (or its, as the case may be)  Eurodollar Loans for such Interest Period,

the Administrative Agent
shall give written notice (or telephonic notice, promptly confirmed in writing)
to the Borrower and to the Lenders as soon as practicable thereafter.  Until the Administrative Agent shall notify
the Borrower and the Lenders that the circumstances giv­ing rise to such notice
no longer exist, (i) the obligations of the Lenders to make Eurodollar Revolving
Loans or to continue or convert outstanding Loans as or into Eurodollar Loans
shall be suspended and (ii) all such affected Loans shall be converted into
Base Rate Loans on the last day of the then current Interest Period applicable
thereto unless the Borrower prepays such Loans in accordance with this
Agreement.  Unless the Borrower notifies
the Administrative Agent at least one Business Day before the date of any
Eurodollar Revolving Borrowing for which a Notice of Revolving Borrowing has
previously been given that it elects not to borrow on such date, then such
Revolving Borrowing shall be made as a Base Rate Borrowing.

Section 2.17.        Illegality.  If, after the date of this Agreement, any Change in Law shall make it
unlawful or impossible for any Lender to make, maintain or fund any Eurodollar
Loan and such Lender shall so promptly notify the Administrative Agent, the
Administrative Agent shall promptly give notice thereof to the Borrower and the
other Lenders, whereupon until such Lender notifies the Administrative Agent
and the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligation of such Lender to make Eurodollar Revolving Loans,
or to continue or convert outstanding Loans as or into Eurodollar Loans, shall
be suspended.  In the case of the making
of a Eurodollar Revolving Borrowing, such Lender’s Revolving Loan shall be made
as a Base Rate Loan as part of the same Revolving Borrowing for the same
Interest Period and if the affected Eurodollar Loan is then outstanding, such
Loan shall be converted to a Base Rate Loan either (i) on the last day of the
then current Interest Period applicable to such Eurodollar Loan if such Lender
may lawfully continue to maintain such Loan to such date or (ii) immediately if
such Lender shall determine that it may not lawfully continue to maintain such
Eurodollar Loan to such date. 
Notwithstanding the foregoing, the affected Lender shall, prior to
giving such notice to the Administrative Agent, designate a different
Applicable Lending Office if such designation would avoid the need for giving
such notice and if such designation would not otherwise be disadvantageous to
such Lender in the good faith exercise of its discretion.

 33
 

 

Section 2.18.        Increased
Costs.

(a)   If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit or
similar requirement that is not otherwise included in the determination of the
Adjusted LIBO Rate hereunder against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

(ii)   impose on any Lender or on the Issuing Bank or the eurodollar
interbank market any other condition affecting this Agreement or any Eurodollar
Loans made by such Lender or any Letter of Credit or any participation therein;

and the result of either
of the foregoing is to increase the cost to such Lender of making, converting
into, continuing or maintaining a Eurodollar Loan or to increase the cost to
such Lender or the Issuing Bank of participating in or issuing any Letter of
Credit or to reduce the amount received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or any other amount),
then the Borrower shall promptly pay, upon written notice from and demand by
such Lender on the Borrower (with a copy of such notice and demand to the
Administrative Agent), to the Administrative Agent for the account of such
Lender, within five Business Days after the date of such notice and demand,
additional amount or amounts sufficient to compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered; provided, that amounts paid under this Section
2.18(a) shall be without duplication of amounts paid under Section 2.20
and shall not include Excluded Taxes.

 

(b)   If any Lender or the Issuing Bank shall have determined that on or
after the date of this Agreement any Change in Law regarding capital
requirements has or would have the ef­fect of reducing the rate of return on
such Lender’s or the Issuing Bank’s capital (or on the capital of such Lender’s
or the Issuing Bank’s parent corporation) as a consequence of its obligations
hereunder or under or in respect of any Letter of Credit to a level below that
which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s
parent corporation could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Bank’s policies or the policies of
such Lender’s or the Issuing Bank’s parent corporation with respect to capital
adequacy) then, from time to time, within five (5) Business Days after receipt
by the Borrower of written de­mand by such Lender (with a copy thereof to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s parent corporation for any such reduction suffered.

(c)   A certifi­cate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or
such Lender’s or the Issuing Bank’s parent corporation, as the case may be,
specified in paragraph (a) or (b) of this Section 2.18 shall be delivered
to the Borrower (with a copy to the Administrative Agent) and shall be
conclusive, absent manifest error.  The
Borrower shall pay any such Lender or the Issuing Bank, as the case may be,
such amount or amounts within 10 days after receipt thereof.

 34
 

 

(d)   Except as provided in Section 2.18(e), failure or delay on the
part of any Lender or the Issuing Bank to demand compensation pursuant to this Section
2.18 shall not constitute a waiver of such Lender’s or the Issuing Bank’s
right to demand such compensation;

(e)   Notwithstanding anything to the contrary in
this Section 2.18, the Borrower shall not be required to compensate a Lender or
the Issuing Bank pursuant to this Section 2.18 for any amounts incurred prior
to the date that such Lender or the Issuing Bank notifies the Borrower of such
Lender’s or the Issuing Bank’s intention to claim compensation therefor;
provided that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.

Section 2.19.        Funding
Indemnity.  In the event of (a) the payment of any
principal of a Eurodollar Loan other than on the last day of the Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion or continuation of a Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, or (c) the failure by the Borrower
to borrow, prepay, convert or continue any Eurodollar Loan on the date
specified in any applicable notice (regardless of whether such notice is
withdrawn or revoked), then, in any such event, the Borrower shall compensate
each Lender, within five (5) Business Days after written demand from such
Lender, for any loss, cost or expense attributable to such event.  In the case of a Eurodollar Loan, such loss,
cost or expense shall be deemed to include an amount determined by such Lender
to be the excess, if any, of (A) the amount of interest that would have accrued
on the principal amount of such Eurodollar Loan if such event had not occurred
at the Adjusted LIBO Rate applicable to such Eurodollar Loan for the period
from the date of such event to the last day of the then current Interest Period
therefor (or in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Eurodollar Loan) over
(B) the amount of interest that would accrue on the principal amount of such
Eurodollar Loan for the same period if the Adjusted LIBO Rate were set on the date
such Eurodollar Loan was prepaid or converted or the date on which the Borrower
failed to borrow, convert or continue such Eurodollar Loan.  A certificate as to any additional amount
payable under this Section 2.19 submitted to the Borrower by any
Lender (with a copy to the Administrative Agent) shall be conclusive, absent
manifest error.

Section 2.20.        Taxes.

(a)   Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided, that if the Borrower
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.20) the Administrative
Agent, any Lender or the Issuing Bank (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

(b)   In addition, the Borrower
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

 35
 

 

(c)   The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within five (5) Business Days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted
on or attributable to amounts payable under this Section 2.20) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or
the Issuing Bank, shall be conclusive absent manifest error.

(d)   As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(e)   Any Foreign Lender that is
entitled to an exemption from or reduction of withholding tax under the Code or
any treaty to which the United States is a party, with respect to payments
under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate. 
Without limiting the generality of the foregoing, each Foreign Lender
agrees that it will deliver to the Administrative Agent and the Borrower (or in
the case of a Participant, to the Lender from which the related participation
shall have been purchased), as appropriate, two (2) duly completed copies of
(i) Internal Revenue Service Form W-8 ECI, or any successor form thereto,
certifying that the payments received from the Borrower hereunder are
effectively connected with such Foreign Lender’s conduct of a trade or business
in the United States; or (ii) Internal Revenue Service Form W-8 BEN, or any
successor form thereto, certifying that such Foreign Lender is entitled to
benefits under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest; or (iii) Internal
Revenue Service Form W-8 BEN, or any successor form prescribed by the Internal
Revenue Service, together with a certificate (A) establishing that the payment
to the Foreign Lender qualifies as “portfolio interest” exempt from U.S.
withholding tax under Code section 871(h) or 881(c), and (B) stating that (1)
the Foreign Lender is not a bank for purposes of Code section 881(c)(3)(A), or
the obligation of the Borrower hereunder is not, with respect to such Foreign
Lender, a loan agreement entered into in the ordinary course of its trade or
business, within the meaning of that section; (2) the Foreign Lender is not a
10% shareholder of the Borrower within the meaning of Code section 871(h)(3) or
881(c)(3)(B); and (3) the Foreign Lender is not a controlled foreign
corporation that is related to the Borrower within the meaning of Code section
881(c)(3)(C); or (iv) such other Internal Revenue Service forms as may be
applicable to the Foreign Lender, including Forms W-8 IMY or W-8 EXP.  Each such Foreign Lender shall deliver to the
Borrower and the Administrative Agent such forms on or before the date that it
becomes a party to this Agreement (or in the case of a Participant, on or before
the date such Participant purchases the related participation).  In addition, each such Foreign Lender shall
deliver such 

 36
 

 

forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Foreign
Lender.  Each such Foreign Lender shall
promptly notify the Borrower and the Administrative Agent at any time that it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the Internal Revenue Service for such purpose).

(f)    For any period with respect to which a
Foreign Lender has failed to provide the Borrower with the appropriate form,
certificate or other document described in Section 2.20(e) (other than
if such failure is due to a Change in Law, occurring subsequent to the date on
which a form, certificate or other document originally was required to be
provided, or if such form, certificate or other document otherwise is not
required under subsection (e) above), such Foreign Lender shall not be entitled
to the additional payment or indemnification under Section 2.20(a) or (c) with
respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Lender become subject to Taxes because of its
failure to deliver a form, certificate or other document required hereunder,
the Borrower shall take such steps as the Foreign Lender shall reasonably
request to assist the Foreign Lender to recover such Taxes.

(g)   If the Administrative Agent or any Lender determines, in
its sole discretion, that it has received a refund of any Taxes or Other Taxes
as to which it has been indemnified by the Borrower or with respect to which
the Borrower has paid amounts pursuant to this Section 2.20, it shall
pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
2.20 with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent or such Lender
and without interest (other than any interest paid by the relevant governmental
authority with respect to such refund); provided, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant governmental authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such governmental authority.  This paragraph shall not be construed to
require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

Section 2.21.        Payments
Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)   The Borrower shall make each
payment required to be made by it hereunder (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Sections
2.18, 2.19 or 2.20, or otherwise) prior to 12:00 noon (New
York time) on the date when due, in immediately
available funds, free and clear of any defenses, rights of set-off,
counterclaim, or withholding or deduction of taxes.  Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments
shall be made to the Administrative Agent at the Payment Office, except
payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.18,
2.19 and 2.20 and 10.3 shall be made directly to the
Persons entitled thereto.  The Administrative
Agent shall distribute any such 

 37
 

 

payments received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment
hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be made payable for
the period of such extension.  All
payments hereunder shall be made in Dollars.

(b)   If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.

(c)   If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements or Swingline
Loans that would result in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements and Swingline Loans of other Lenders to
the extent necessary so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Loans and participations in LC
Disbursements and Swingline Loans; provided, that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements or Swingline Loans to any assignee or participant, other
than to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). 
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

(d)   Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders
or the Issuing Bank hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
or amounts due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand 

 38
 

 

the amount so distributed to
such Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.

(e)   If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.4(c) and (d), 2.6(a), 2.21(d),
2.22(d) or (e) or 10.3(d), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender’s obligations under such Sections until all
such unsatisfied obligations are fully paid.

Section 2.22.        Letters
of Credit.

(a)   During the Availability Period, the Issuing Bank, in reliance upon
the agreements of the other Lenders pursuant to Section 2.22(d), agrees
to issue, at the request of the Borrower, Letters of Credit for the account of
the Borrower on the terms and conditions hereinafter set forth; provided,
that (i) each Letter of Credit shall expire on the earlier of (A) the date one
year after the date of issuance of such Letter of Credit (or in the case of any
renewal or extension thereof, one year after such renewal or extension) and (B)
the date that is five (5) Business Days prior to the Revolving Commitment
Termination Date; (ii) each Letter of Credit shall be in a stated amount of at
least $100,000; and (iii) the Borrower may not request any Letter of Credit,
if, after giving effect to such issuance (A) the aggregate LC Exposure would
exceed the LC Commitment or (B) the aggregate Revolving Credit Exposure of all
Lenders would exceed the Aggregate Revolving Commitment Amount.  Each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Bank without recourse a participation in each
Letter of Credit equal to such Lender’s Pro Rata Share of the aggregate amount
available to be drawn under such Letter of Credit on the date of issuance with
respect to all other Letters of Credit. 
Each issuance of a Letter of Credit shall be deemed to utilize the
Revolving Commitment of each Lender by an amount equal to the amount of such
participation.

(b)   To request the issuance of a
Letter of Credit (or any amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall give the Issuing Bank and the
Administrative Agent irrevocable written notice at least three (3) Business
Days prior to the requested date of such issuance specifying the date (which
shall be a Business Day) such Letter of Credit is to be issued (or amended,
extended or renewed, as the case may be), the expiration date of such Letter of
Credit, the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit.  In addition to the satisfaction of the
conditions in Article III, the issuance of such Letter of Credit (or any
amendment which increases the amount of such Letter of Credit) will be subject
to the further conditions that such Letter of Credit shall be in such form and
contain such terms as the Issuing Bank shall approve and that the Borrower
shall have executed and delivered any additional applications, agreements and
instruments relating to such Letter of Credit as the Issuing Bank shall
reasonably require; provided, that in the event of any conflict between
such applications, agreements or instruments and this Agreement, the terms of
this Agreement shall control.

 39
 

 

(c)   At least two Business Days prior to the issuance of any Letter of
Credit, the Issuing Bank will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received such notice
and if not, the Issuing Bank will provide the Administrative Agent with a copy
thereof.  Unless the Issuing Bank has
received notice from the Administrative Agent on or before the Business Day
immediately preceding the date the Issuing Bank is to issue the requested
Letter of Credit (1) directing the Issuing Bank not to issue the Letter of
Credit because such issuance is not then permitted hereunder because of the
limitations set forth in Section 2.22(a) or that one or more conditions
specified in Article III are not then satisfied, then, subject to the
terms and conditions hereof, the Issuing Bank shall, on the requested date,
issue such Letter of Credit in accordance with the Issuing Bank’s usual and
customary business practices.

(d)   The Issuing Bank shall examine all documents purporting to
represent a demand for payment under a Letter of Credit promptly following its
receipt thereof.  The Issuing Bank shall
notify the Borrower and the Administrative Agent of such demand for payment and
whether the Issuing Bank has made or will make a LC Disbursement thereunder; provided,
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Lenders with
respect to such LC Disbursement.  The
Borrower shall be irrevocably and unconditionally obligated to reimburse the
Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of
such drawing, without presentment, demand or other formalities of any
kind.  Unless the Borrower shall have
notified the Issuing Bank and the Administrative Agent prior to 11:00 a.m.
(New York time) on the Business Day immediately prior to the
date on which such drawing is honored that the Borrower intends to reimburse
the Issuing Bank for the amount of such drawing in funds other than from the
proceeds of Revolving Loans, the Borrower shall be deemed to have timely given
a Notice of Revolving Borrowing to the Administrative Agent requesting the
Lenders to make a Base Rate Borrowing on
the date on which such drawing is honored in an exact amount due to the Issuing
Bank; provided, that for purposes solely of such Borrowing, the
conditions precedent set forth in Section 3.2 hereof shall not be
applicable.  The Administrative Agent
shall notify the Lenders of such Borrowing in accordance with Section 2.3,
and each Lender shall make the proceeds of its Base Rate Loan included in such
Borrowing available to the Administrative Agent for the account of the Issuing
Bank in accordance with Section 2.6. 
The proceeds of such Borrowing shall be applied directly by the
Administrative Agent to reimburse the Issuing Bank for such LC Disbursement.

(e)   If for any reason a Base
Rate Borrowing may not be (as determined in the sole discretion of the Administrative
Agent), or is not, made in accordance with the foregoing provisions, then each
Lender (other than the Issuing Bank) shall be obligated to fund the
participation that such Lender purchased pursuant to subsection (a) in an
amount equal to its Pro Rata Share of
such LC Disbursement on and as of the date which such Base Rate Borrowing
should have occurred.  Each Lender’s obligation to fund
its participation shall be absolute and unconditional and shall not be affected
by any circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that such Lender or any other Person may
have against the Issuing Bank or any other Person for any reason whatsoever,
(ii) the existence of a Default or an Event of Default or the termination of
the Aggregate Revolving Commitments, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower or any of its Subsidiaries, (iv) any
breach of this Agreement by the Borrower or any other 

 40
 

 

Lender, (v) any amendment,
renewal or extension of any Letter of Credit or (vi) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.  On the date that such
participation is required to be funded, each Lender shall promptly transfer, in
immediately available funds, the amount of its participation to the
Administrative Agent for the account of the Issuing Bank.  Whenever, at any time after the Issuing Bank
has received from any such Lender the funds for its participation in a LC Disbursement,
the Issuing Bank (or the Administrative Agent on its behalf) receives any
payment on account thereof, the Administrative Agent or the Issuing Bank, as
the case may be, will distribute to such Lender its Pro Rata Share of such
payment; provided, that if such payment is required to be returned for
any reason to the Borrower or to a trustee, receiver, liquidator, custodian or
similar official in any bankruptcy proceeding, such Lender will return to the
Administrative Agent or the Issuing Bank any portion thereof previously
distributed by the Administrative Agent or the Issuing Bank to it.

(f)    To the extent that any Lender shall fail to pay any amount
required to be paid pursuant to paragraphs (d) or (e) of this Section on the
due date therefor, such Lender shall pay interest to the Issuing Bank (through
the Administrative Agent) on such amount from such due date to the date such
payment is made at a rate per annum equal to the Federal Funds Rate; provided,
that if such Lender shall fail to make such payment to the Issuing Bank within
three (3) Business Days of such due date, then, retroactively to the due date,
such Lender shall be obligated to pay interest on such amount at the rate set
forth in Section 2.13(d).

(g)   If any Event of Default
shall occur and be continuing, on the Business Day that the Borrower receives
notice from the Administrative Agent or the Required Lenders demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Issuing Bank and the Lenders,
an amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid fees thereon; provided, that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or notice of any kind, upon the
occurrence of any Event of Default with respect to the Borrower described in
clause (g) or (h) of Section 8.1. 
Such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the obligations of the Borrower under this
Agreement.  The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account.  Borrower
agrees to execute any documents and/or certificates to effectuate the intent of
this paragraph.  Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the
Borrower’s risk and expense, such deposits shall not bear interest.  Interest and profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it had not been
reimbursed and to the extent so applied, shall be held for the satisfaction of
the reimbursement obligations of the Borrower for the LC Exposure at such time
or, if the maturity of the Loans has been accelerated, with the consent of the
Required Lenders, be applied to satisfy other obligations of the Borrower under
this Agreement and the other Loan Documents. 
If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not so applied as aforesaid) shall be returned to the Borrower
within three Business Days after all Events of Default have been cured or
waived.

 41
 

 

(h)   Promptly following the end of each calendar quarter, the Issuing
Bank shall deliver (through the Administrative Agent) to each Lender and the
Borrower a report describing the aggregate Letters of Credit outstanding at the
end of such Fiscal Quarter.  Upon the
request of any Lender from time to time, the Issuing Bank shall deliver to such
Lender any other information reasonably requested by such Lender with respect
to each Letter of Credit then outstanding.

(i)    The Borrower’s obligation to reimburse LC Disbursements hereunder
shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement under all circumstances
whatsoever and irrespective of any of the following circumstances:

(i)    Any lack of validity or enforceability of any Letter of Credit or
this Agreement;

(ii)   The existence of any claim, set-off, defense or other right which
the Borrower or any Subsidiary or Affiliate of the Borrower may have at any
time against a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such beneficiary or transferee may be acting),
any Lender (including the Issuing Bank) or any other Person, whether in
connection with this Agreement or the Letter of Credit or any document related
hereto or thereto or any unrelated transaction;

(iii)  Any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect;

(iv)  Payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document to the Issuing Bank that does not
comply with the terms of such Letter of Credit;

(v)   Any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this Section
2.22, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrower’s obligations hereunder; or

(vi)  The existence of a Default or an Event of Default.

Neither
the Administrative Agent, the Issuing Bank, the Lenders nor any Related Party
of any of the foregoing shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to above), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank; provided,
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any actual direct damages (as
opposed to special, indirect (including claims for lost profits or other
consequential damages), or punitive damages, claims in respect of which are
hereby waived by the Borrower to 

 42
 

 

the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise due care when determining whether drafts or other documents
presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree, that in
the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised due care in each such
determination.  In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented that appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(j)    Unless otherwise expressly agreed by the Issuing Bank and the
Borrower when a Letter of Credit is issued and subject to applicable laws,
performance under Letters of Credit by the Issuing Bank, its correspondents,
and the beneficiaries thereof will be governed by (i) either (x) the rules of
the “International Standby Practices 1998” (ISP98) (or such later revision as
may be published by the Institute of International Banking Law & Practice
on any date any Letter of Credit may be issued) or (y) the rules of the
“Uniform Customs and Practices for Documentary Credits” (1993 Revision),
International Chamber of Commerce Publication No. 500 (or such later revision
as may be published by the International Chamber of Commerce on any date any
Letter of Credit may be issued) and (ii) to the extent not inconsistent
therewith, the governing law of this Agreement set forth in Section 10.5.

Section 2.23.        Increase
of Commitments; Additional Lenders.

(a)   So long as no Event of Default has occurred and is continuing,
from time to time after the Closing Date, Borrower may, upon at least 30 days’
written notice to the Administrative Agent (who shall promptly provide a copy
of such notice to each Lender),  propose
to increase the Commitments up to an aggregate amount of Commitments not to
exceed $510,000,000 (the amount of any such increase, the “Additional
Commitment Amount”).  Each Lender
shall have the right for a period of 15 days following receipt of such notice,
to elect by written notice to the Borrower and the Administrative Agent to
increase its Commitment by a principal amount equal to its Pro Rata Share of
the Additional Commitment Amount.  No
Lender (or any successor thereto) shall have any obligation to increase its
Commitment or its other obligations under this Agreement and the other Loan
Documents, and any decision by a Lender to increase its Commitment shall be made
in its sole discretion independently from any other Lender.

(b)   If any Lender shall not
elect to increase its Commitment pursuant to subsection (a) of this Section
2.23, the Borrower may designate another bank or other financial
institution (which may be, but need not be, one or more of the existing
Lenders) which at the time agrees to, in the case of any such Person that is an
existing Lender, increase its Revolving Commitment and in the case of any other
such Person (an “Additional Lender”), become a party to this Agreement; provided,
however, that any new bank or financial institution must be acceptable
to the Administrative Agent, which acceptance will not be unreasonably withheld
or delayed.  The sum of the increases in
the Commitments of the existing Lenders pursuant to this 

 43
 

 

subsection (b) plus the
Commitments of the Additional Lenders shall not in the aggregate exceed the
unsubscribed amount of the Additional Commitment Amount.

(c)   An increase in the aggregate amount of the Commitments pursuant to
this Section 2.23 shall become effective upon the receipt by the
Administrative Agent of an supplement or joinder in form and substance
satisfactory to the Administrative Agent executed by the Borrower, by each
Additional Lender and by each other Lender whose Revolving Commitment is to be
increased, setting forth the new Commitments of such Lenders and setting forth
the agreement of each Additional Lender to become a party to this Agreement and
to be bound by all the terms and provisions hereof, together with Notes
evidencing such increase in the Commitments, and such evidence of appropriate
corporate authorization on the part of the Borrower with respect to the
increase in the Commitments and such opinions of counsel for the Borrower with
respect to the increase in the Commitments as the Administrative Agent may
reasonably request.

(d)   Upon the acceptance of any such supplement or joinder by the
Administrative Agent, the Commitments shall automatically be increased by the
amount of the Commitments added through such supplement or joinder and Schedule
III shall automatically be deemed amended to reflect the Commitments of all
Lenders after giving effect to the addition of such Commitments.

(e)   Upon any increase in the aggregate amount of the Commitments pursuant
to this Section 2.23 that is not pro rata among all Lenders, (x) within
five Business Days, in the case of any Base Rate Loans then outstanding, and at
the end of the then current Interest Period with respect thereto, in the case
of any Eurodollar Loans then outstanding, the Borrower shall prepay such Loans
in their entirety and, to the extent the Borrower elects to do so and subject
to the conditions specified in Article III, the Borrower shall reborrow
Loans from the Lenders in proportion to their respective Commitments after
giving effect to such increase, until such time as all outstanding Loans are
held by the Lenders in proportion to their respective Commitments after giving
effect to such increase and (y) effective upon such increase, the amount of the
participations held by each Lender in each Letter of Credit then outstanding
shall be adjusted automatically such that, after giving effect to such
adjustments, the Lenders shall hold participations in each such Letter of
Credit in proportion to their respective Commitments.

Section 2.24.        Mitigation
of Obligations.  If any Lender requests compensation under Section
2.18, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section
2.20, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the sole judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable under Section 2.18
or Section 2.20, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.  The
Borrower hereby agrees to pay all costs and expenses incurred by any Lender in
connection with such designation or assignment.

Section 2.25.        Replacement
of Lenders.  If any Lender requests compensation under Section
2.18, or if the Borrower is required to pay any additional amount to any
Lender or any 

 44
 

 

Governmental
Authority of the account of any Lender pursuant to Section 2.20, or if
any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions set forth in Section
10.4(b) all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender); provided, that (i) the Borrower shall have received the prior
written consent of the Administrative Agent with respect to the proposed
assignee, which consent shall not be unreasonably withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal
amount of all Loans and participations in Letters of Credit owed to it, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (in the case of such outstanding principal and accrued
interest) and from the Borrower (in the case of all other amounts) and (iii) in
the case of a claim for compensation under Section 2.18 or payments
required to be made pursuant to Section 2.20, such assignment will
result in a reduction in such compensation or payments.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

Section 2.26.        Extensions
of Maturity Date or Revolving Commitment Termination Date.

After the first
anniversary of the Closing Date and at least 45 days prior to the scheduled
Maturity Date and Revolving Commitment Termination Date then in effect, the
Borrower may (but in no event more than once per year or twice during the term
of this Agreement), by written notice to the Administrative Agent, request that
the scheduled Maturity Date and Revolving Commitment Termination Date then in
effect be extended for a twelve-month period, effective as of a date selected
by the Borrower (the “Extension Effective Date”); the Extension
Effective Date shall be at least 45 days, but not more than 60 days, after the
date such extension request is received by the Administrative Agent (the “Extension
Request Date”).  Upon receipt of the
extension request, the Administrative Agent shall promptly notify each Lender
thereof, and approval by the Required Lenders shall be necessary for the
extension to become effective.  If a
Lender agrees, in its individual and sole discretion, to so extend its
Revolving Credit Commitment or Maturity Date, as applicable, (an “Extending Lender”), it shall deliver to the
Administrative Agent a written notice of its agreement to do so no later than
15 days after the Extension Request Date (or such later date to which the
Borrower and the Administrative Agent shall agree), and the Administrative
Agent shall promptly thereafter notify the Borrower of such Extending Lender’s
agreement to extend its Revolving Credit Commitment or Maturity Date, as
applicable, (and such agreement shall be irrevocable until the Extension
Effective Date).  The Revolving Credit
Commitment or Term Loan Commitment of any Lender that fails to accept or
respond to the Borrower’s request for extension of the Maturity Date and
Revolving Commitment Termination Date (a “Declining
Lender”) shall be terminated on the Maturity
Date and Revolving Commitment Termination Date then in effect for such Lender
(without regard to any extension by other Lenders) and on such Maturity Date
and Revolving Commitment Termination Date the Borrower shall pay in full the
unpaid principal amount of all Loans owing to such Declining Lender, together
with all accrued and unpaid interest thereon and all fees accrued and unpaid
under this Agreement to the date of such payment of principal and all other
amounts due to such Declining Lender under this Agreement.  The Administrative Agent shall promptly
notify each Extending Lender of the aggregate Commitments of the Declining
Lenders.

 45
 

 

Each Extending Lender may
offer to increase its respective Commitment by an amount not to exceed the
aggregate amount of the Declining Lenders’ Commitments, and such Extending
Lender shall deliver to the Administrative Agent a notice of its offer to so
increase its Commitment no later than 30 days after the Extension Request Date
(or such later date to which the Borrower and the Administrative Agent shall
agree), and such offer shall be irrevocable until the Extension Effective
Date.  To the extent the aggregate amount
of additional Commitments that the Extending Lenders offer pursuant to the
preceding sentence exceeds the aggregate amount of the Declining Lenders’
Commitments, such additional Commitments shall be reduced on a pro rata
basis.  To the extent the aggregate amount
of Commitments that the Extending Lenders have so offered to extend is less
than the aggregate amount of Commitments that the Borrower has so requested to
be extended, the Borrower shall have the right but not the obligation to
require any Declining Lender to (and any such Declining Lender shall) assign in
full its rights and obligations under this Agreement to one or more banks or other financial institutions (which
may be, but need not be, one or more of the Extending Lenders) which at the
time agree to, in the case of any such Person that is an Extending Lender,
increase its Commitment and in the case of any other such Person (a “New Lender”) become a
party to this Agreement;  provided that (i) such assignment is
otherwise in compliance with Section 10.04, (ii) such Declining Lender
receives payment in full of the unpaid principal amount of all Loans owing to
such Declining Lender, together with all accrued and unpaid interest thereon
and all fees accrued and unpaid under this Agreement to the date of such
payment of principal and all other amounts due to such Declining Lender under
this Agreement and (iii) any such assignment shall be effective on the date on
or before such Extension Effective Date as may be specified by the Borrower and
agreed to by the respective New Lenders and Extending Lenders, as the case may
be, and the Administrative Agent.  If,
but only if, Extending Lenders and New Lenders, as the case may be, have agreed
to provide Commitments in an aggregate amount greater than 50% of the aggregate
amount of the Commitments outstanding immediately prior to such Extension
Effective Date and the conditions precedent in Section 3.2 are met, the
Termination Date in effect with respect to such Extending Lenders and New
Lenders shall be extended by twelve months.

ARTICLE
III

CONDITIONS
PRECEDENT TO LOANS AND LETTERS OF CREDIT

Section 3.1.           Conditions
To Effectiveness.
The obligations of the Lenders (including the Swingline Lender) to make Loans
and the obligation of the Issuing Bank to issue any Letter of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 10.2).

(a)   The Administrative Agent
shall have received all fees and other amounts due and payable on or prior to
the Closing Date, including reimbursement or payment of all out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel to
the Administrative Agent) required to be reimbursed or paid by the Borrower
hereunder, under any other Loan Document and under any agreement with the
Administrative Agent or SunTrust Capital Markets, Inc., as Arranger.

 46

 

(b)         The Administrative Agent (or its
counsel) shall have received the following:

(i)          a counterpart of this Agreement signed by or on behalf of
each party hereto or written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement;

(ii)         duly executed Revolving Credit and Term Notes payable to
such Lender and the Swingline Note payable to the Swingline Lender, in each
case, only if requested by such Lender at least one (1) Business Day prior to
the Closing Date;

(iii)        copies of duly executed payoff letters, in form and substance
satisfactory to Administrative Agent, executed by each of the Existing Lenders
or the agent thereof;

(iv)        a certificate of the Secretary or Assistant Secre­tary of the
General Partner in the form of Exhibit 3.1(b)(iv), attaching and
certifying copies of its bylaws and of the resolutions of its board of
directors, the partnership agreement, or comparable organizational documents
and authorizations of the Borrower, authorizing the execution, delivery and
performance of the Loan Documents to which the Borrower is a party, and
attaching true and correct copies of the TC PipeLines ILP Agreement, the Tuscarora
Intermediate Partnership Agreement, and the Northern Border Partnership
Agreement;

(v)         certified copies of the articles or certificate of
incorporation, certificate of organization or limited partnership, or other
registered organizational documents of the Borrower and its General Partner,
together with certificates of good standing or existence, as may be avail­able
from the Secretary of State of the jurisdiction of organization of the Borrower
and its General Partner, and each other jurisdiction where the Borrower is
required to be qualified to do business as a foreign corporation;

(vi)        a certificate dated as of the Closing Date and signed by a
responsible officer, certifying the name, title and true signature of each
officer of the General Partner executing the Loan Documents on behalf of the
Borrower to which the Borrower is a party;

(vii)       a favorable written opinion of Orrick, Herrington &
Sutcliffe LLP, counsel to the Loan Parties, addressed to the Administrative
Agent and each of the Lend­ers, and covering such matters relating to the Loan
Parties, the Loan Documents and the transactions contemplated therein as the
Administrative Agent or the Required Lenders shall reasonably request;

(viii)      a certificate in the form of Exhibit
3.1(b)(viii), dated the Closing Date and signed by a Responsible Officer,
certifying that (x) no Default or Event of Default exists, (y) all
representations and warranties of the Borrower set forth in the Loan Documents
are true and correct and (z) since the date of the financial statements of the
Borrower described in Section 4.4, there shall have been no change which
has had or could reasonably be expected to have a Material Adverse Effect;

 47
 

 

(ix)        a duly executed Notice of Borrowing;

(x)         a duly executed funds disbursement agreement,
together with a report setting forth the sources and uses of the proceeds
hereof;

(xi)        a certificate dated as of the Closing Date and signed by a
responsible officer, attaching true and correct copies of all consents,
approvals, authorizations, registrations and filings and orders required or
advisable to be made or obtained under any Requirement of Law, or by any
Contractual Obligation of the Borrower, in connection with the execution,
delivery, performance, validity and enforceability of the Loan Documents or any
of the transactions contemplated thereby, and such consents, approvals,
authorizations, registrations, filings and orders shall be in full force and
effect and all applicable waiting periods shall have expired, and no
investigation or inquiry by any governmental authority regarding the
Commitments or any transaction being financed with the proceeds thereof shall
be ongoing;

(xii)       copies of (A) the internally prepared quarterly financial
statements of Borrower and its Subsidiaries on a consolidated basis for the
Fiscal Quarter ending on September 30, 2006, and (B) the audited consolidated
financial statements for Borrower and its Subsidiaries for the Fiscal Years
ended 2003, 2004 and 2005; and

(xiii)      certificates of insurance issued on behalf
of insurers of the Borrower, describing in reasonable detail the types and
amounts of insurance (property and liability) maintained by the Borrower.

Section 3.2.           Each
Credit Event.  The
obligation of each Lender to make a Loan and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit is subject to the satisfaction of
the following conditions:

(a)         at the time of and immediately after
giving effect to such Borrowing or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, no Default or Event of
Default shall exist;

(b)         at the time of and immediately after
giving effect to such Borrowing or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, all representations and
warranties of the Borrower set forth in the Loan Documents (other than the
representation and warranty set forth in Section 4.4(b)) shall be true and
correct in all material respects on and as of the date of such Borrowing or the
date of issuance, amendment, extension or renewal of such Letter of Credit, in
each case before and after giving effect thereto;

(c)         the Borrower shall have delivered the
required Notice of Borrowing; and

(d)         with respect to any Term Loan Borrowing
made after the Closing Date, the proceeds of such Borrowing shall be used
solely to finance the Tuscarora Acquisition.

Each Loan and each issuance,
amendment, extension or renewal of any Letter of Credit shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a), (b) and (c) of this Section 3.2.

 48
 

 

Section
3.3.           Delivery of Documents.  All of the Loan Documents, certificates,
legal opinions and other documents and papers referred to in this Article
III, unless otherwise specified, shall be delivered to the Administrative
Agent for the account of each of the Lenders and, except for the Notes, in
sufficient counterparts or copies for each of the Lenders and shall be in form
and substance reasonably satisfactory in all respects to the Administrative
Agent.

 

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES

The Borrower represents and
warrants to the Administrative Agent and each Lender as follows:

Section 4.1.           Existence;
Power.  The Borrower and each of its Subsidiaries (i)
is duly orga­nized, validly existing and in good standing as a corporation,
partnership or limited liability company under the laws of the jurisdiction of
its organization, (ii) ­has all requisite power and authority to carry on its
business as now conducted, and (iii) is duly qualified to do business, and
is in good standing, in each jurisdiction where such qualification is required,
except where a failure to be so qualified could not reasonably be expected to
result in a Material Adverse Effect.

Section 4.2.           Organizational
Power; Authorization.  The execution, delivery and performance by
the Borrower of the Loan Documents to which it is a party are within the
Borrower’s organizational powers and have been duly authorized by all necessary
organizational, and if required, general partner action. This Agreement has
been duly executed and delivered by the Borrower, and constitutes, and each other Loan Document to which the
Borrower is a party, when executed and delivered by the Borrower, will
constitute, valid and binding obligations of the Borrower, en­forceable against
it in accordance with their re­spective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.

Section 4.3.           Governmental
Approvals; No Conflicts.  The execution, delivery and
performance by the Borrower of this Agreement, and of the other Loan Documents
to which it is a party (a) do not require any consent or approval of,
registration or filing with, or any action by, any Governmental Authority,
except those as have been obtained or made and are in full force and effect,
(b) will not violate any Requirements of Law applicable to the Borrower or any
of its Subsidiaries or any judgment, order or ruling of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
material agreement or other material instrument binding on the Borrower or any
of its Subsidiaries or any of its assets or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries, except Liens (if any) created under
the Loan Documents.

Section 4.4.           Financial
Statements.

(a)         The Borrower has
furnished to each Lender (i) the audited consolidated balance sheet of the
Borrower and its Subsidiaries as of December 31, 2005 and the related
consolidated statements of income, partners’ equity and cash flows for the
Fiscal Year then

 49
 

 

ended audited
by KPMG LLP and (ii) the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as of September 30, 2006, and the related
unaudited consolidated statements of in­come and cash flows for the Fiscal
Quarter and year-to-date period then ending, certified by a Responsible
Officer.  Such financial statements
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries as of such dates and the consolidated results of op­erations for
such periods in conformity with GAAP consistently applied, subject to year end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii).

(b)         Since December 31,
2005, there have been no changes with respect to the Borrower, its
Subsidiaries, Northern Border and Tuscarora which have had or could reasonably
be expected to have, singly or in the aggregate, a Material Adverse Effect.

Section 4.5.           Litigation
and Environmental Matters.

(a)         No litigation, investigation or
proceeding of or before any arbitra­tors or Governmental Authorities is pending
against or, to the knowledge of the Borrower, threatened against the Borrower
or any of its Subsidiaries (i) as to which there is a reasonable likelihood of
an adverse determination that could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or (ii) which in
any manner draws into question the validity or enforceability of this Agreement
or any other Loan Document.

(b)         Except for the matters set forth on Schedule
4.5 and except as could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, neither the
Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.

Section 4.6.           Compliance
with Laws and Agreements.  The Borrower and each
Subsidiary is in compliance with (a) all Requirements of Law and all judgments,
decrees and orders of any Governmental Authority and (b) all indentures,
agreements or other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.

Section 4.7.           Investment
Company Act, Etc.  Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company” or is “controlled” by an
“investment company”, as such terms are defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, or (b) otherwise subject
to any other regulatory scheme limiting its ability to incur debt or requiring
any approval or consent from or registration or filing with, any Governmental
Authority in connection therewith, except those as have been obtained or made
and are in full force and effect.

Section 4.8.           Taxes.  The
Borrower and its Subsidiaries and each other Person for whose taxes the
Borrower or any Subsidiary is liable have timely filed or caused to be filed
all Federal income tax returns and all other material tax returns that are re­quired
to be filed by them, and have paid all taxes shown to be due and payable on
such returns or on any assessments made

 50
 

 

against
it or its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority, except where the same are
currently being contested in good faith by ap­propriate proceedings and for
which the Borrower or such Subsidiary, as the case may be, has set aside on its
books adequate reserves in accordance with GAAP.  The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of such taxes are
adequate, and no tax liabilities that could be materially in excess of the
amount so provided are anticipated.

Section 4.9.           Margin
Regulations.  None of the pro­ceeds of any of the Loans or
Letters of Credit will be used, directly or indirectly, for “purchasing” or
“carrying” any “margin stock” with the respective meanings of each of such
terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect or for any purpose that
violates the provisions of the Regulation U. 
Neither the Borrower nor its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying “margin stock.”

Section 4.10.        ERISA.  No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect.  With respect to the Plans, (a)
the present value of all accumulated benefit obligations under each Plan (based
on the assumptions used for purposes of Statement of Financial Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of such Plan, and (b)
the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans, where the liability, if any, in (a) or (b) above
could reasonably be expected to result in a Material Adverse Effect.

Section 4.11.        Ownership
of Property.  Except as could not reasonably be expected to
result in a Material Adverse Effect:

(a)         Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all of its
real and personal property material to the operation of its business, including
all such properties reflected in the most recent audited consolidated balance
sheet of the Borrower referred to in Section 4.4 or purported to have
been acquired by the Borrower or any Subsidiary after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case free
and clear of Liens prohibited by this Agreement.  All leases that individually or in the
aggregate are material to the business or operations of the Borrower and its
Subsidiaries are valid and subsisting and are in full force.

(b)         Except as could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, each of the Borrower and its Subsidiaries owns, or is licensed, or
otherwise has the right, to use, all patents, trademarks, service marks, trade
names, copyrights and other intellectual property material to its business, and
the use thereof by the Borrower and its Subsidiaries does not infringe in any
material respect on the rights of any other Person.

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(c)         The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies, in such amounts with such deductibles and covering such risks of
loss or damage of the kinds customarily carried by companies in the same or
similar businesses operating in the same or similar locations, which may
include self-insurance, if determined by the Borrower to be reasonably prudent
and consistent with business practices as in effect on the date hereof.

Section 4.12.        Disclosure.  The
Borrower has disclosed to the Lenders all agreements, instruments, and
corporate or other restrictions to which the Borrower or any of its
Subsidiaries is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  Neither the
Information Memorandum nor any of the reports (including without limitation all
reports that the Borrower is required to file with the Securities and Exchange
Commission), financial statements, certificates or other information furnished
by or on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation or syndication of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, taken as a whole, in light of the circumstances under which they were
made, not materially misleading;

Section 4.13.        Labor
Relations.  There are no strikes, lockouts or other
material labor disputes or grievances against the Borrower or any of its
Subsidiaries, or, to the Borrower’s knowledge, threatened against or affecting
the Borrower or any of its Subsidiaries, and no significant unfair labor
practice, charges or grievances are pending against the Borrower or any of its
Subsidiaries, or to the Borrower’s knowledge, threatened against any of them
before any Governmental Authority. All payments due from the Borrower or any of
its Subsidiaries pursuant to the provisions of any collective bargaining
agreement have been paid or accrued as a liability on the books of the Borrower
or any such Subsidiary, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

Section 4.14.        Subsidiaries.  Schedule
4.14 sets forth the name of, the ownership interest of the Borrower in, the
jurisdiction of incorporation or organization of, and the type of, each
Subsidiary, in each case as of the Closing Date.

Section 4.15.        Insolvency. 
After giving effect to the execution and delivery of the Loan Documents,
the making of the Loans under this Agreement, neither the Borrower nor its
Subsidiaries will be “insolvent,” within the meaning of such term as defined in
§ 101 of Title 11 of the United States Code, as amended from time to time, or
be unable to pay its debts generally as such debts become due, or have an
unreasonably small capital to engage in any business or transaction, whether
current or contemplated.

Section 4.16.        OFAC.  The Borrower (i) is not a person whose
property or interest in property is blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) does not knowingly engage
in any dealings or transactions prohibited by Section 2 of such executive
order, or is not otherwise knowingly associated with any such person in any
manner violative of Section 2, or (iii) is

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not a person on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S.
Department of Treasury’s Office of Foreign Assets Control regulation or
executive order.

Section 4.17.        Patriot
Act.  The Borrower is in
compliance, in all material respects, with (i) the Trading with the Enemy
Act, as amended, and each of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
and any other enabling legislation or executive order relating thereto, and
(ii) the Uniting And Strengthening America By Providing Appropriate Tools
Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of the Loans will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

ARTICLE V

AFFIRMATIVE
COVENANTS

Until the Termination Date,
the Borrower covenants and agrees that:

Section 5.1.           Financial
Statements and Other Information.  The Borrower will deliver to
the Administrative Agent and each Lender:

(a)         as soon as available and in any event
within 105 days after the end of each Fiscal Year of Borrower, a copy of the
annual audited financial statements for such Fiscal Year for the Borrower and
its Subsidiaries, containing a consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such Fiscal Year and the related consolidated
statements of income, partners’ equity and cash flows (together with all
footnotes thereto) of the Borrower and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year, all in reasonable detail and reported on by KPMG LLP or other
independent public accountants of nationally recognized standing (without a
“going concern” or like qualification, exception or explanation and without any
qualification or exception as to scope of such audit) to the effect that such
financial statements present fairly in all material respects the financial
condition and the results of operations of the Borrower and its Subsidiaries
for such Fiscal Year on a consolidated basis in accordance with GAAP and that
the exami­nation by such accountants in connection with such consoli­dated
financial statements has been made in accordance with generally accepted
auditing standards;

(b)         as soon as available and in any
event within 45 days after the end of each of the first three Fiscal Quarters
of any Fiscal Year of the Borrower, an unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and the related
unaudited consolidated and consolidating statements of in­come and cash flows
of the Borrower and its Subsidiaries for such Fiscal Quarter and the then
elapsed portion of such Fiscal Year, setting forth in each case in comparative
form the figures for the corresponding quarter and the corresponding portion of
Borrower’s previous Fiscal Year;

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(c)         concurrently with the delivery of the
financial statements referred to in clauses (a) and (b) above, a Compliance
Certificate; and

(d)         promptly following any request
therefor, such other information regarding the results of operations, business
affairs and financial condition of the Borrower or any Subsidiary as the
Administrative Agent or any Lender may reasonably request.

So
long as the Borrower is required to file periodic reports under Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934, as amended, the
Borrower’s obligation to deliver the financial statements referred to in
clauses (a) and (b) shall be deemed satisfied upon the filing of such financial
statements in the EDGAR system and the giving by the Borrower of notice to the
Lenders and the Administrative Agent as to the public availability of such
financial statements from such source.

Section 5.2.           Notices
of Material Events.  The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a)         the occurrence of any Default or Event
of Default;

(b)         the filing or commencement of any
action, suit or proceeding by or before any arbitrator or Governmental
Authority against the Borrower or any Subsidiary which could reasonably be
expected to result in a Material Adverse Effect;

(c)         the occurrence of any event or any
other development by which the Borrower or any of its Subsidiaries (i) fails to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii)
becomes subject to any Environmental Liability, (iii) receives notice of any
claim with respect to any Environmental Liability, or (iv) becomes aware of any
basis for any Environmental Liability and in each of the preceding clauses,
which individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect;

(d)         the occurrence of any ERISA Event that
alone, or together with any other ERISA Events that have occurred, since the
Closing Date, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $15,000,000; and

(e)         the occurrence of any default or event
of default, or the receipt by Borrower or any of its Subsidiaries of any
written notice of an alleged default or event of default, in respect of any
Material Indebtedness of the Borrower or any of its Subsidiaries.

Each notice delivered under this Section 5.2
shall be accompanied by a written statement of a Responsible Officer setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.

Section 5.3.           Existence;
Conduct of Business.  The Borrower will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and maintain in full force and effect its (a) legal existence; provided,
that nothing in this Section 5.3(a) shall prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 7.3
and

 54
 

 

(b)
its respective rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names except for any failure to preserve,
renew or maintain any such right, license, permit, privilege, franchise,
patent, copyright, trademark or trade name as could not reasonably be expected
to result in a Material Adverse Effect.

Section 5.4.           Compliance
with Laws, Etc.
The Borrower will, and will cause each of its Subsidiaries to, comply with all
laws, rules, regulations and requirements of any Governmental Authority
applicable to its business and properties, including without limitation, all
Environmental Laws, ERISA and OSHA, except where the failure to do so, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

Section 5.5.           Payment of Obligations.  The
Borrower will, and will cause each of its Subsidiaries to, pay and discharge at
or before maturity, all of its obligations and liabilities (including without
limitation all taxes, assessments and other governmental charges, levies and
all other claims that could result in a statutory Lien) before the same shall
become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings and the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP or (b) the failure to make any such
payment could not reasonably be expected to result in a Material Adverse
Effect.

Section 5.6.           Books
and Records. The
Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full,
true and correct entries shall be made of all dealings and transactions in
relation to its business and activities to the extent necessary to prepare the
consolidated financial statements of Borrower in conformity with GAAP.

Section 5.7.           Visitation,
Inspection, Etc.  The Borrower will, and will cause each of its
Subsidiaries to, permit at any reasonable time and from time to time and upon
reasonable notice, the Administrative Agent or any of its agents or
representatives, to (i) permit the Administrative Agent or any representatives
thereof to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any of its Subsidiaries with any of their officers or directors and (ii)
use commercially reasonable efforts to provide for the Administrative Agent or
any representatives thereof (in the presence of representatives of the Borrower)
to meet with the independent certified public accountants; provided, however, if an Event of Default
has occurred and is continuing, no prior notice 
of such visit or inspection shall be required of the Borrower and its
Subsidiaries; provided, that any such visits or inspections shall be
subject to such conditions as the Borrower and each of its Subsidiaries shall
deem necessary based on reasonable considerations of safety and security; and provided,
further, that neither the Borrower nor any Subsidiary shall be required
to disclose to the Administrative Agent or any representatives thereof any
information which is subject to the attorney-client privilege or attorney
work-product privilege properly asserted by the applicable Person to prevent
the loss of such privilege in connection with such information or which is
prevented from disclosure pursuant to a confidentiality agreement with third
parties.

Section 5.8.           Maintenance
of Properties; Insurance.  The
Borrower will, and will cause each of its Subsidiaries to, (a) keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, except as could not

 55
 

 

reasonably
be expected to have a Material Adverse Effect, and (b) maintain with
financially sound and reputable insurance companies, insurance with respect to
its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against
by companies in the same or similar businesses operating in the same or similar
locations, which may include self-insurance, if determined by the Borrower to
be reasonably prudent and consistent with business practices as in effect on
the date hereof.

Section 5.9.           Use
of Proceeds and Letters of Credit.  The Borrower will use the
proceeds of all Loans to refinance existing debt, to finance working capital
needs and the Tuscarora
Acquisition, and for other general corporate purposes of the Borrower and its
Subsidiaries.  No part of the proceeds of
any Loan will be used, whether directly or indirectly, for any purpose that
would violate any rule or regulation of the Board of Governors of the Federal
Reserve System, including Regulations T, U or X.  All Letters of Credit will be used for
general corporate purposes.

Section 5.10.        Maintenance of Tax Status.  The Borrower
shall take all action necessary to prevent the Borrower from being, and will
take no action which would have the effect of causing the Borrower to be,
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes.

ARTICLE
VI

FINANCIAL
COVENANTS

Until the Termination Date,
the Borrower covenants and agrees that:

Section 6.1.           Leverage
Ratio.  The Borrower and its Subsidiaries will
maintain on a consolidated basis as of the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending December 31, 2006, a Leverage Ratio
of not greater than 4.75:1.00, provided, however, that if the
Borrower consummates one or more acquisitions permitted under this Agreement in
which the aggregate purchase price of all such acquisitions is $25,000,000 or
more, then the permitted Leverage Ratio shall be increased to 5.50 to 1.00 for
the first three full fiscal reporting periods during any 12-month period
immediately following the consummation of such acquisitions.  The Borrower’s compliance with this
requirement shall be calculated on a rolling four quarter basis, measured on
the last day of each fiscal quarter.  For
purposes of the foregoing, to the extent Consolidated Total Funded Debt
includes outstanding amounts under Hybrid Securities, then a portion of the
amount of such Hybrid Securities not to exceed a total of 15% of Total
Capitalization may be excluded from Consolidated Total Funded Debt (the “Excluded
Hybrid Securities”).

Section 6.2.           Interest Coverage Ratio.  The Borrower and its Subsidiaries will
maintain on a consolidated basis as of the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending December 31, 2006, an Interest
Coverage Ratio of not less than 3.00:1.00. 
For the purposes of the foregoing, to the extent
Consolidated Interest Expense includes interest expense under Excluded Hybrid
Securities, then an amount equal to such interest expense multiplied by the
Moody’s Equity Credit  shall be excluded
from Consolidated Interest Expense.

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ARTICLE VII

NEGATIVE
COVENANTS

Until the Termination Date,
the Borrower covenants and agrees that:

Section 7.1.           The Borrower will not permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Indebtedness,
except (“Permitted Indebtedness”):

(a)           Indebtedness of the
Subsidiaries of the Borrower listed in Schedule 7.1(a) and existing on the date
of this Agreement and extensions, renewals, refinancings and replacements
thereof; provided that (A) the principal amount of any such refinancing does
not exceed the principal amount of the Indebtedness being refinanced plus the
amount of fees, expenses, premiums and accrued interest paid in connection with
such refinancing and (B) the final maturity of such refinancing debt is not
shorter than the maturity of the Indebtedness being replaced;

(b)           endorsements of
checks or drafts in the ordinary course of business;

(c)           Indebtedness
of the Subsidiaries of the Borrower resulting from loans made by a Subsidiary
to another Subsidiary or the Borrower;

(d)           other Indebtedness
of the Subsidiaries of the Borrower (excluding Indebtedness otherwise permitted
in this Section 7.1) which does not exceed $35,000,000 outstanding at
any time in the aggregate;

(e)           Permitted
Subordinated Debt;

(f)            Guarantees
of the Subsidiaries of the Borrower in respect of Permitted Indebtedness of
other Subsidiaries of the Borrower or Guarantees of the Subsidiaries of the
Borrower in respect of Indebtedness of the Borrower permitted by this
Agreement;

(g)           Indebtedness of any
Person which becomes a Subsidiary of the Borrower after the Closing Date and
extensions, renewals, refinancings and replacements thereof; provided
that (A) the principal amount of any such refinancing does not exceed the
principal amount of the Indebtedness being refinanced plus the amount of
reasonable fees, expenses, premiums and accrued interest paid in connection
with such refinancing and (B) the final maturity of such refinancing debt is
not shorter than the maturity of the Indebtedness being replaced; provided
further, that (1) such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created or incurred in contemplation of or in
connection with such Person becoming a Subsidiary and (2) no Default or Event
of Default exists at the time such Person becomes a Subsidiary and immediately
after such Person becomes a Subsidiary.

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provided, however,
no Indebtedness otherwise permitted under
this Section 7.1 shall be permitted if, after giving effect to the
incurrence thereof, any Default or Event of Default shall have occurred and be
continuing.

Borrower will not, and will
not permit any Subsidiary to, issue any preferred shares or other preferred
partnership, limited liability company or other equity interests that (i)
mature or are mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (ii) are or may become redeemable or repurchaseable by Borrower or
such Subsidiary at the option of any holders thereof, in whole or in part or
(iii) are convertible or exchangeable at the option of any holders thereof for
Indebtedness not permitted by this Agreement, on or prior to, in the case of
clause (i), (ii) or (iii), the first anniversary of the Revolving Commitment
Termination Date.

Section 7.2.           Negative
Pledge.  The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
on any of its assets or property now owned or hereafter acquired, except:

(a)           Permitted
Encumbrances;

(b)           any Liens on any
property or asset of the Borrower or any Subsidiary existing on the Closing
Date set forth on Schedule 7.2; provided, that such Lien shall
not apply to any other property or asset of the Borrower or any Subsidiary;

(c)           purchase money Liens
upon or in any fixed or capital assets to secure the purchase price or the cost
of construction or improvement of such fixed or capital assets or to secure
Indebtedness incurred solely for the purpose of financing the acquisition,
construction or improvement of such fixed or capital assets (including Liens
securing any Capital Lease
Obligations); provided, that (i) such Lien secures Indebtedness
permitted by this Agreement, (ii) such Lien attaches to such asset concurrently
or within 90 days after the acquisition, improvement or completion of the
construction thereof; (iii) such Lien does not extend to any other asset; and
(iv) the Indebtedness secured thereby does not exceed the original cost of
acquiring, constructing or improving such fixed or capital assets;

(d)           any Lien (i)
existing on any asset of any Person at the time such Person becomes a
Subsidiary of the Borrower, (ii) existing on any asset of any Person at the
time such Person is merged with or into the Borrower or any Subsidiary of the
Borrower or (iii) existing on any asset prior to the acquisition thereof by the
Borrower or any Subsidiary of the Borrower; provided, that any such Lien
was not created in the contemplation of any of the foregoing and any such Lien
secures only those obligations which it secures on the date that such Person
becomes a Subsidiary or the date of such merger or the date of such
acquisition;

(e)           extensions,
renewals, or replacements of any Lien referred to in paragraphs (a) through (f)
of this Section 7.2; provided, that the principal amount of the
Indebtedness secured thereby is not increased and that any such extension,
renewal or replacement is limited to the assets originally encumbered thereby;

(f)            any right which any
municipal or governmental body or agency may have by virtue of any franchise,
license, contract or status to purchase or designate a purchaser of, or order
the sale of, any property of the Borrower or any Subsidiary upon payment of
reasonable

 58
 

 

compensation therefor or to terminate any franchise, license or other
rights or to regulate the property and business of the Borrower or any
Subsidiary;

(g)           Liens
on cash and cash equivalents granted pursuant to master netting agreements
entered into in the ordinary course of business in connection with Hedging
Transactions; provided that (i) the transactions secured by such Liens are
governed by standard International Swaps and Derivatives Association, Inc.
(“ISDA”) documentation, and (ii) such Hedging Transactions consist of derivative
transactions contemplated to be settled in cash and not by physical delivery
and are designed to minimize the risk of fluctuations in oil and gas prices,
interest rates or foreign currency rates with respect to the Borrower’s and its
Subsidiaries’ operations in the ordinary course of its business;

(h)           Liens
pursuant to master netting agreements entered into in the ordinary course of
business in connection with Hedging Transactions, in each case pursuant to
which the Borrower or any Subsidiary of the Borrower, as a party to such master
netting agreement and as pledgor, pledges or otherwise transfers to the other
party to such master netting agreement, as pledgee, in order to secure the
Borrower’s or such Subsidiary’s obligations under such master netting agreement,
a Lien upon and/or right of set off against, all right, title, and interest of
the pledgor in any obligations of the pledgee owed to the pledgor, together
with all accounts and general intangibles and payment intangibles in respect of
such obligations and all dividends, interest, and other proceeds from time to
time received, receivable, or otherwise distributed in respect of, or in
exchange for, any or all of the foregoing;

(i)            Liens
securing Indebtedness permitted under Section 7.1(g); and

(j)            After
consummation of the Tuscarora Acquisition, Liens not otherwise permitted by
this Section 7.2 if at the time of, and after giving effect to, the
creation or assumption of any such Lien, the aggregate of all obligations of
the Borrower and its Subsidiaries secured by any Liens not otherwise permitted
hereby does not exceed five percent (5%) of the sum of (i) the consolidated
owners’ equity, determined in accordance with GAAP, of the Borrower and its
Subsidiaries, and (ii) Consolidated Total Funded Debt.

Section 7.3.           Fundamental
Changes.

(a)           The Borrower will not, and will not
permit any Subsidiary to, merge into or consolidate into any other Person, or
permit any other Person to merge into or consolidate with it, or sell, lease,
transfer or otherwise dispose of (in a single transaction or a series of
transactions) all of its assets (in each case, whether now owned or hereafter
acquired) or all or substantially all of the Capital Stock of its Subsidiaries (in each case, whether now owned or
hereafter acquired) or liquidate
or dissolve; provided, that if at
the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing, then (i) the Borrower
or any Subsidiary may merge with a Person if the Borrower (or such Subsidiary
if the Borrower is not a party to such merger) is the surviving Person, (ii)
any Subsidiary may merge into another Subsidiary; (iii) any Subsidiary may
sell, transfer, lease or otherwise dispose of all or substantially all of its assets
to the Borrower or to another Subsidiary, and (iv) any Subsidiary may sell,
lease, transfer or otherwise dispose of (in a single transaction or a series of
transactions) all of its assets (in each case, whether now owned or hereafter
acquired)

 59
 

 

or
all or substantially all of the stock of or other equity interest or may
liquidate or dissolve if no Default or Event of Default has occurred and is
continuing or would result therefrom, and the Borrower determines in good faith
that such sale, lease, transfer, disposition, liquidation or dissolution is in
the best interests of the Borrower and is not materially disadvantageous to the
Lenders; provided, however,
that in no event shall any such merger, consolidation, sale, transfer, lease or
other disposition whether or not otherwise permitted by this Section 7.3
have the effect of releasing the Borrower from any of its obligations and
liabilities under this Agreement or the other Loan Documents.

(b)           So
long as Northern Border is a Significant Subsidiary of the Borrower, the
Borrower shall not provide its consent to, or vote to, permit Northern Border
to lease, sell or otherwise dispose of its assets to any other Person except:
(i) sales of inventory, investments, and other assets in the ordinary
course of business, (ii) leases, sales or other dispositions of its assets
that, together with all other assets of Northern Border previously leased, sold
or disposed of (other than disposed of pursuant to this Section 7.3(b))
during the twelve-month period ending with the month in which any such lease,
sale or other disposition occurs, do not constitute a substantial portion of
the assets of Northern Border, (iii) sales of assets which are
concurrently leased back, (iv) dispositions of assets which are obsolete
or no longer used or useful in the business of Northern Border, and (v) as
permitted pursuant to the Northern Border Partnership Agreement as in effect on
the Closing Date.

(c)           So
long as Tuscarora is a Significant Subsidiary of the Borrower, the Borrower
shall not provide its consent to, or vote to, permit Tuscarora to lease, sell
or otherwise dispose of its assets to any other Person except: (i) sales
of inventory, investments, and other assets in the ordinary course of business,
(ii) leases, sales or other dispositions of its assets that, together with
all other assets of Tuscarora previously leased, sold or disposed of (other
than disposed of pursuant to this Section 7.3(b)) during the
twelve-month period ending with the month in which any such lease, sale or other
disposition occurs, do not constitute a substantial portion of the assets of
Tuscarora, (iii) sales of assets which are concurrently leased back,
(iv) dispositions of assets which are obsolete or no longer used or useful
in the business of Tuscarora, and (v) as permitted pursuant to the Tuscarora
Partnership Agreement as in effect on the Closing Date.

(d)           The
Borrower shall not engage in any business activity except (i) the direct or
indirect ownership of a limited partner interest in TC PipeLines Intermediate Limited Partnership
and Tuscarora Intermediate Partnership, (ii) the ownership or operation of
energy infrastructure assets and/or (iii) such activities as may be incidental
or related thereto.  Neither TC PipeLines Intermediate Limited Partnership
nor Tuscarora Intermediate Partnership shall, and the Borrower shall not permit
any of its Subsidiaries to, engage, directly or indirectly, in any business
activity not related to the ownership or operation of energy infrastructure
assets.

Section 7.4.           Investments,
Loans, Etc.  The Borrower will not, and will not permit
any of its Subsidiaries to, purchase, hold or acquire (including pursuant to
any merger with any Person that was not a wholly-owned Subsidiary prior to such
merger), any common stock, evidence of indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other

 60
 

 

Person
(all of the foregoing being collectively called “Investments”), or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person that constitute a business unit, or create or form
any Subsidiary, except:

(a)           Investments (other
than Permitted Investments) existing on the date hereof and set forth on Schedule
7.4 (including Investments in Subsidiaries);

(b)           Permitted
Investments;

(c)           Guarantees
constituting Indebtedness permitted by Section 7.1;

(d)           Loans or advances to
employees, officers or directors of the Borrower or any Subsidiary in the
ordinary course of business for travel, relocation and related expenses; provided, however, that the aggregate amount of all such
loans and advances does not exceed $1,000,000 at any time;

(e)           Accounts
receivable or other indebtedness and extensions of trade credit which arose in
the ordinary course of such Person’s business;

(f)            Prepaid
expenses of such Person incurred and prepaid in the ordinary course of
business;

(g)           Endorsements
of instruments for deposit or collection in the ordinary course of business;

(h)           Hedging Transactions
permitted by Section 7.9;

(i)            Investments
permitted by Section 7.3(d); and

(j)            Investments
made as part of the Tuscarora Acquisition.

Section 7.5.           Restricted
Payments.  The Borrower will not, and will not permit its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any dividend on any class of its Capital Stock, or make any payment
on account of, or set apart assets for a sinking or other analogous fund for,
the purchase, redemption, retirement, defeasance or other acquisition of, any
shares of Capital Stock or Indebtedness subordinated to the Obligations of the
Borrower or any Guarantee thereof or any options, warrants, or other rights to
purchase such Capital Stock or such Indebtedness, whether now or hereafter
outstanding (each, a “Restricted Payment”), except for (i) dividends
payable by Subsidiaries of the Borrower solely in shares of any class of its
Capital Stock, (ii) Restricted Payments made by any Subsidiary to the
Borrower or to another Subsidiary, on at least a pro rata basis with any other
holders of its Capital Stock if such Subsidiary is not wholly owned by the Borrower
and other wholly owned Subsidiaries, (iii) distributions on the Limited
Partnership Units and General Partners’ interests in accordance with the
Borrower Partnership Agreement and (iv)
Permitted Tax Distributions.

Section 7.6.           Transactions
with Affiliates.  Except as set forth in Schedule 7.6,
the Borrower will not, and will not permit any of its Subsidiaries to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets

 61
 

 

from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) any
Restricted Payment permitted by Section 7.5 and (c) any Investment
permitted by Section 7.4.

Section 7.7.           Restrictive
Agreements.  The Borrower will not, and will not permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur or permit any Lien
upon any of its assets or properties, whether now owned or hereafter acquired,
to secure any obligations owing under the Loan Documents, except by
indentures or other agreements governing Indebtedness of the Borrower requiring
that such Indebtedness be secured by an equal and ratable Lien with any Lien
that may be granted to secure any obligations owing under the Loan Documents,
or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to its Capital Stock, to make or repay loans or
advances to the Borrower or any other Subsidiary, to Guarantee Indebtedness of
the Borrower or any other Subsidiary or to transfer any of its prop­erty or
assets to the Borrower or any Subsidiary of the Borrower; provided, that
the foregoing shall not apply to (i) restrictions or conditions imposed by law
or by this Agreement or any other Loan Document or any loan or credit
agreement governing Indebtedness permitted by this Agreement,
(ii) customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such restrictions
and conditions apply only to the Subsidiary that is sold and such sale is
permitted hereunder, (iii) customary provisions in leases restricting the
assignment thereof, (iv) any such covenant contained in a Contractual
Obligation granting or relating to a particular Lien permitted by this
Agreement which affects only the property that is the subject of such Lien, (v)
restrictions which are not more
restrictive than those contained in this Agreement and are contained in any
documents governing any Indebtedness incurred after the Closing Date and
permitted in accordance with the provisions of this Agreement, (vi) in the case
of any joint venture, customary restrictions in such person’s organizational or
governing documents or pursuant to any joint venture agreement or stockholders
agreement or (vii) any agreement in effect at the time a Person first became a
Subsidiary, so long as such agreement was not entered into solely in
contemplation of such Person becoming a Subsidiary and such agreement only applies
to Subsidiaries of such Person.

Section 7.8.           Sale
and Leaseback Transactions.  The Borrower will not, and
will not permit any of the Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.

Section 7.9.           Hedging
Transactions.  The Borrower will not, and will not permit
any of the Subsidiaries to, enter into any Hedging Transaction, other than
Hedging Transactions entered into in the ordinary course of business to hedge
or mitigate risks to which the Borrower or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities.  Solely for the avoidance of doubt, the
Borrower acknowledges that a Hedging Transaction entered into for speculative
purposes or of a speculative nature (which shall be

 62
 

 

deemed
to include any Hedging Transaction under which the Borrower or any of the
Subsidiaries is or may become obliged to make any payment (i) in connection
with the purchase by any third party of any common stock or any Indebtedness or
(ii) as a result of changes in the market value of any common stock or any
Indebtedness but shall be deemed to exclude any Hedging Transaction in which
the Borrower hedges the issuance price of its Limited Partnership Units in
connection with an anticipated offering of additional Limited Partnership
Units) is not a Hedging Transaction entered into in the ordinary course of
business to hedge or mitigate risks.

Section 7.10.        Certain Amendments to Cash Distribution Policies
and Partnership Agreements.   The Borrower agrees that
it shall not consent to, vote in favor of or permit any amendment of
(a) the cash distribution policies of the Borrower, TC PipeLines Intermediate Limited Partnership,
Tuscarora Intermediate Partnership, Northern Border or Tuscarora in any manner
which would materially adversely affect the rights and remedies of Lenders
under and in connection with this Agreement, the Notes or any other Loan
Document; or (b) the Borrower Partnership Agreement, the TC PipeLines Intermediate Limited Partnership
Agreement, the Tuscarora Intermediate Partnership Agreement, the Northern
Border Partnership Agreement or the Tuscarora Partnership Agreement in any
manner which would (i) have a material adverse effect on the rights and
remedies of Lenders under and in connection with this Agreement, the Notes or
any other Loan Document; or (ii) result in a Material Adverse Effect.

Section 7.11.        Accounting
Changes.  The Borrower will not, and will not permit
any of its Subsidiaries to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the fiscal year
of the Borrower or of any of its Subsidiaries, except to change the fiscal year
of a Subsidiary to conform its fiscal year to that of the Borrower.

ARTICLE
VIII

EVENTS OF
DEFAULT

Section 8.1.           Events
of Default.  If any of the following events (each an “Event
of Default”) shall occur:

(a)   the Borrower shall fail to
pay any principal of any Loan or of any reimbursement obligation in respect of
any LC Disbursement when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment or otherwise; or

 

(b)   the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount payable under clause (a) of this Section
8.1) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days; or

(c)   any representation or warranty made or deemed made by or on behalf
of the Borrower in or in connection with this Agreement or any other Loan
Document and any amendments or modifications hereof shall prove to be incorrect in any material respect when made or deemed made or submitted; or

 63
 

 

(d)   the Borrower shall fail to observe or perform any covenant or
agreement contained in Sections 5.1, 5.2, or 5.3(a)
or Articles VI or VII; or

(e)   the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in clauses
(a), (b) and (d) above) or any other Loan Document, and such failure shall
remain unremedied for 30 days after the earlier of (i) any
Responsible Officer of the Borrower becomes aware of such failure, or (ii)
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or

(f)    the Borrower or any of its Significant Subsidiaries (whether as
primary obligor or as guarantor or other surety) shall fail to pay any
principal of, or premium or interest on, (i) any Material Indebtedness that is
outstanding, when and as the same shall become due and payable (whether at
scheduled maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument evidencing or governing such
Indebtedness; or any other event shall occur or condition shall exist under any
agreement or instrument relating to such Indebtedness and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such event or condition is to accelerate, or permit the
acceleration of, the maturity of such Indebtedness; (ii) any such Indebtedness
shall be declared to be due and payable, or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or any offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof; or (iii) (A) there occurs under any Hedging Transaction an
Early Termination Date (as defined in such Hedging Transaction) resulting from
an event of default under such Hedging Transaction as to which the Borrower or
any of its Significant Subsidiaries is the Defaulting Party (as defined in such
Hedging Transaction) and the value owed by the Borrower or any of its  Significant Subsidiaries as a result thereof
is greater than (individually or collectively) $15,000,000 and such amount is
not paid when due under such Hedging Transaction, or (B) there occurs under any
Hedging Transaction an Early Termination Date (as defined in such Hedging
Transaction) resulting from any Termination Event (as so defined) under such
Hedging Transaction as to which the Borrower or any of its Significant
Subsidiaries is an Affected Party (as defined in such Hedging Transaction) and
the value owed by the Borrower or any of its 
Significant Subsidiaries as a result thereof is greater than
(individually or collectively) $15,000,000 and such amount is not paid when due
under such Hedging Transaction; or

(g)   the General Partner, the Borrower or any of its Significant
Subsidiaries shall (i) commence a voluntary case or other proceeding or file
any petition seeking liquidation, reorganization or other relief under any
federal, state or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a custodian, trustee, receiver,
liquidator or other similar official of them or any substantial part of their
property, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (i) of
this Section 8.1, (iii) apply for or consent to the appointment of a
custodian, trustee, receiver, liquidator or other similar official for the
General Partner, the Borrower or any of its Significant Subsidiaries or for a
substantial part of their assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, or (vi) take any partnership
action for the purpose of effecting any of the foregoing; or

 64
 

 

(h)   an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the General Partner, the Borrower or any of its Significant
Subsidiaries or their debts, or any substantial part of their assets, under any
federal, state or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect or (ii) the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the General Partner, the Borrower or
any of its Significant Subsidiaries or for a substantial part of their assets,
and in any such case, such proceeding or petition shall remain undismissed for
a period of 60 days or an order or decree approving or ordering any of the
foregoing shall be entered; or

(i)    the General Partner, the Borrower or any of its Significant
Subsidiaries shall admit in writing its inability to pay, or shall fail to pay,
its debts as they become due; or

(j)    an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with other ERISA Events that have
occurred, could reasonably be expected to result in liability to the Borrower
or any of its Significant Subsidiaries in an aggregate amount exceeding
$15,000,000; or

(k)   any judgment or order
for the payment of money in excess of $15,000,000 in the aggregate shall be
rendered against the Borrower or any of its Significant Subsidiaries, and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be a period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
provided, however, that any such judgment or order shall not be an Event of
Default under this Section 8.1(k) if and for so long as (i) the amount of such
judgment or order is covered (subject to customary deductibles) by a valid and
binding policy of insurance between the defendant and the insurer covering payment
thereof and (ii) such insurer, which shall be rated at least “A-” by A.M. Best
Company, has been notified of, and has not denied coverage of, the amount of
such judgment or order; or

(l)    any non-monetary judgment or order shall be rendered
against the Borrower or any of its Significant Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, and there shall be a
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

(m)  a Change in Control shall occur or exist;

then, and in every such event (other than an event
with respect to the General Partner, the Borrower or any of its Significant
Subsidiaries described in clause (g) or (h) of this Section 8.1) and at
any time thereafter during the continuance of such event, the Administrative
Agent may, and upon the written request of the Required Lenders shall, by
notice to the Borrower, take any or all of the follow­ing actions, at the same
or different times: (i) terminate the Commitments, whereupon the
Commitment of each Lender shall terminate immediately, (ii) declare the
principal of and any accrued interest on the Loans, and all other Obligations
owing hereunder, to be, whereupon the same shall become, due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower, 

 65
 

 

(iii) exercise all remedies
contained in any other Loan Document, and (iv) exercise any other remedies
available at law or in equity; and that, if an Event of Default specified in
either clause (g) or (h) shall occur, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon, and all fees, and all other Obligations shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE
IX

THE
ADMINISTRATIVE AGENT

Section 9.1.           Appointment
of Administrative Agent.

(a)   Each Lender irrevocably appoints SunTrust Bank as the
Administrative Agent and authorizes it to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent under this
Agreement and the other Loan Documents, together with all such actions and
powers that are reasonably incidental thereto. 
The Administrative Agent may perform any of its duties hereunder or
under the other Loan Documents by or through any one or more sub-agents or
attorneys-in-fact appointed by the Administrative Agent.  The Administrative Agent and any such
sub-agent or attorney-in-fact may perform any and all of its duties and
exercise its rights and powers through their respective Related Parties.  The exculpatory provisions set forth in this
Article shall apply to any such sub-agent or attorney-in-fact and the Related
Parties of the Administrative Agent, any such sub-agent and any such
attorney-in-fact and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.

(b)   The Issuing Bank shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith
until such time and except for so long as the Administrative Agent may agree at
the request of the Required Lenders to act for the Issuing Bank with respect
thereto; provided, that the Issuing Bank shall have all the benefits and
immunities (i) provided to the Administrative Agent in this Article with
respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term “Administrative Agent” as used in
this Article included the Issuing Bank with respect to such acts or omissions
and (ii) as additionally provided in this Agreement with respect to the Issuing
Bank.

Section 9.2.           Nature
of Duties of Administrative Agent.  The Administrative Agent shall
not have any duties or obligations except those expressly set forth in this
Agreement and the other Loan Documents. 
Without limiting the generality of the foregoing, (a) the Administrative
Agent shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default or an Event of Default has occurred and is continuing, (b)
the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except those discretionary rights
and powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.2), and (c) except as

 66
 

 

expressly
set forth in the Loan Documents, the Administrative Agent shall not have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the Administrative Agent or any of its
Affiliates in any capacity.  The
Administrative Agent shall not be li­able for any action taken or not taken by
it, its sub-agents or attorneys-in-fact with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 10.2)
or in the absence of its own gross negli­gence or willful misconduct.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any sub-agents or
attorneys-in-fact selected by it with reasonable care.  The Administrative Agent shall not be deemed
to have knowledge of any Default or Event of Default unless and until written
notice thereof (which notice shall include an express reference to such event
being a “Default” or “Event of Default” hereunder) is given to the
Administrative Agent by the Borrower or any Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements, or other terms and conditions set forth in any Loan Document, (iv)
the validity, enforceability, effectiveness or genuineness of any Loan Document
or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article III or elsewhere in any Loan Document,
other than to confirm receipt of items expressly required to be delivered to
the Administrative Agent.  The
Administrative Agent may consult with legal counsel (including counsel for the
Borrower) concerning all matters pertaining to such duties.

Section 9.3.           Lack
of Reliance on the Administrative Agent.  Each
of the Lenders, the Swingline Lender and the Issuing Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each of the Lenders, the
Swingline Lender and the Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed
appropriate, continue to make its own decisions in taking or not taking of any
action under or based on this Agreement, any related agreement or any document
furnished hereunder or thereunder.

Section 9.4.           Certain
Rights of the Administrative Agent.  If the Administrative Agent
shall request instructions from the Required Lenders with re­spect to any
action or ac­tions (including the failure to act) in connection with this
Agreement, the Administrative Agent shall be entitled to refrain from such act
or taking such act, unless and until it shall have received instructions from
such Lend­ers; and the Administrative Agent shall not incur liability to any
Person by rea­son of so refraining. 
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting hereunder in ac­cordance with the
instructions of the Required Lenders where required by the terms of this
Agreement.

Section 9.5.           Reliance
by Administrative Agent.  The Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, posting or other
distribution) believed by it to be
genuine and to have been signed, sent or

 67
 

 

made
by the proper Person.  The Administrative
Agent may also rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person and shall not incur any
liability for relying thereon.  The
Administrative Agent may consult with legal counsel (including counsel for the
Borrower), indepen­dent public accountants and other experts selected by it and
shall not be liable for any action taken or not taken by it in accordance with
the advice of such counsel, accountants or experts.

Section 9.6.           The
Administrative Agent in its Individual Capacity.  The
bank serving as the Administrative Agent shall have the same rights and powers
under this Agreement and any other Loan Document in its capacity as a Lender as
any other Lender and may exercise or refrain from exercising the same as though
it were not the Administrative Agent; and the terms “Lenders”, “Required
Lenders”, “holders of Notes”, or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity.  The bank acting as the
Administrative Agent and its Affiliates may accept de­posits from, lend money
to, and generally engage in any kind of business with the Borrower or any
Subsidiary or Affiliate of the Borrower as if it were not the Administrative
Agent hereunder.

Section 9.7.           Successor
Administrative Agent.

(a)   The Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower. 
Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Administrative Agent, subject to the approval by the
Borrower provided that no Default or Event of Default shall exist at such
time.  If no suc­cessor Administrative
Agent shall have been so appointed, and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent, which
shall be a commercial bank organized under the laws of the United States of
America or any state thereof or a bank which maintains an office in the United
States, having a combined capital and surplus of at least $500,000,000.

(b)   Upon the acceptance of its appointment as the
Administrative Agent hereunder by a successor, such successor Administrative
Agent shall there­upon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents.  If within 45 days after written notice is
given of the retiring Administrative Agent’s resignation under this Section
9.7 no successor Administrative Agent shall have been appointed and shall
have accepted such appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent
shall thereupon be discharged from its duties and obligations under the Loan
Documents and (iii) the Required Lenders shall thereafter perform all duties of
the retiring Administrative Agent under the Loan Documents until such time as
the Required Lenders appoint a successor Administrative Agent as provided
above.  After any retir­ing
Administrative Agent’s resignation hereunder, the provi­sions of this Article
shall continue in effect for the benefit of such retiring Administrative Agent
and its representatives and agents in respect of any ac­tions taken or not
taken by any of them while it was serving as the Administrative Agent.

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Section 9.8.           Authorization
to Execute other Loan Documents.  Each Lender hereby authorizes
the Administrative Agent to execute on behalf of all Lenders all Loan Documents
other than this Agreement.

Section 9.9.           Co-Documentation
Agents; Co-Syndication Agents; Managing Agents.  Each Lender hereby designates UBS Securities
LLC and Royal Bank of Canada as Co-Documentation Agents and agrees that the
Co-Documentation Agents shall have no duties or obligations under any Loan
Documents to any Lender or the Borrower. 
Each Lender hereby designates BMO
Capital Markets Financing Inc. and The Royal Bank of Scotland plc as
Co-Syndication Agents and agrees that the Co-Syndication Agents shall have no
duties or obligations under any Loan Documents to any Lender or the Borrower.  Each Lender hereby designates Deutsche Bank AG New York Branch and The Bank of Tokyo-Mitsubishi UFJ, Ltd.
as Managing Agents and agrees that the Managing Agents shall have no duties or
obligations under any Loan Documents to any Lender or the Borrower.

ARTICLE X

MISCELLANEOUS

Section 10.1.        Notices.

(a)         Written Notices.

(i)          Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications to any party herein to be effective shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:

	
  

  	
  To the Borrower:

  	
  TC PipeLines, LP

  
	
   

  	
   

  	
  c/o TC PipeLines GP

  
	
   

  	
   

  	
  450-1 Street SW

  
	
   

  	
   

  	
  Calgary, AB T2P5H1

  
	
   

  	
   

  	
  Attention: Corporate Secretary

  
	
   

  	
   

  	
  Telecopy Number: 403.920.2467

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  TC PipeLines, LP

  
	
   

  	
   

  	
  c/o TC PipeLines GP

  
	
   

  	
   

  	
  450-1 Street SW

  
	
   

  	
   

  	
  Calgary, AB T2P5H1

  
	
   

  	
   

  	
  Attention: Vice President and Treasurer

  
	
   

  	
   

  	
  Telecopy Number: 403.920.2358

  

 69
 

 

 

	
  

  	
  To the Administrative Agent

  or Swingline Lender:

  	
  SunTrust Bank

  
	
   

  	
   

  	
  303 Peachtree Street, N. E.

  
	
   

  	
   

  	
  Atlanta, Georgia 30308

  
	
   

  	
   

  	
  Attention: David Edge

  
	
   

  	
   

  	
  Telecopy Number:

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  SunTrust Bank

  
	
   

  	
   

  	
  Agency Services

  
	
   

  	
   

  	
  303 Peachtree Street, N. E./ 25th Floor

  
	
   

  	
   

  	
  Atlanta, Georgia 30308

  
	
   

  	
   

  	
  Attention: Ms. Dorris Folsom

  
	
   

  	
   

  	
  Telecopy Number: (404) 658-4906

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  King & Spalding LLP

  
	
   

  	
   

  	
  1180 Peachtree Street, N.W.

  
	
   

  	
   

  	
  Atlanta, Georgia 30309

  
	
   

  	
   

  	
  Attention: W. Todd Holleman

  
	
   

  	
   

  	
  Telecopy Number: (404) 572-5100

  
	
   

  	
   

  	
   

  
	
   

  	
  To the Issuing Bank:

  	
  SunTrust Bank

  
	
   

  	
   

  	
  25 Park Place, N. E./Mail Code 3706

  
	
   

  	
   

  	
  Atlanta, Georgia 30303

  
	
   

  	
   

  	
  Attention: John Conley

  
	
   

  	
   

  	
  Telecopy Number: (404) 588-8129

  
	
   

  	
   

  	
   

  
	
   

  	
  To the Swingline Lender:

  	
  SunTrust Bank

  
	
   

  	
   

  	
  Agency Services

  
	
   

  	
   

  	
  303 Peachtree Street, N.E./25th Floor

  
	
   

  	
   

  	
  Atlanta, Georgia 30308

  
	
   

  	
   

  	
  Attention: Ms. Dorris Folsom

  
	
   

  	
   

  	
  Telecopy Number: (404) 658-4906

  
	
   

  	
   

  	
   

  
	
   

  	
  To any other Lender:

  	
  the address set forth in the Administrative
  Questionnaire or the Assignment and Acceptance Agreement executed by such
  Lender

  

 70
 

 

Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the other parties hereto.  All such notices and other communications
shall, when transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon the third Business Day
after the date deposited into the mail or if delivered, upon delivery;
provided, that any Notices of Borrowing, any Notices of
Conversion/Continuation, and any notices provided under Section 5.2 or 5.3
delivered to the Administrative Agent, the Issuing Bank or the Swingline Lender
shall not be effective until actually received by such Person at its address
specified in this Section 10.1.

(ii)         Any agreement of the Administrative Agent and the
Lenders herein to receive certain notices by telephone or facsimile is solely
for the convenience and at the request of the Borrower.  The Administrative Agent and the Lenders
shall be entitled to rely on the authority of any Person believed by it to be a
Person authorized by the Borrower to give such notice and the Administrative
Agent and Lenders shall not have any liability to the Borrower or other Person
on account of any action taken or not taken by the Administrative Agent or the
Lenders in reliance upon such telephonic or facsimile notice.  The obligation of the Borrower to repay the
Loans and all other Obligations hereunder shall not be affected in any way or
to any extent by any failure of the Administrative Agent and the Lenders to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Administrative Agent and the Lenders of a confirmation which is
at variance with the terms understood by the Administrative Agent and the
Lenders to be contained in any such telephonic or facsimile notice.

(b)         Electronic
Communications.

(i)          Notices and other communications to
the Lenders and the Issuing Bank hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or the Issuing Bank
pursuant to Article 2 unless such Lender, the Issuing Bank, as
applicable, and Administrative Agent have agreed to receive notices under such
Section by electronic communication and have agreed to the procedures governing
such communications. Administrative Agent or Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

(ii)         Unless Administrative Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from
the intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or intranet
website shall be deemed received upon 

 71
 

 

the deemed
receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

Section 10.2.        Waiver;
Amendments.

(a)         No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or any other Loan Document, and no course of dealing between
the Borrower and the Administrative Agent or any Lender, shall oper­ate as a waiver thereof, nor
shall any single or partial exercise of any such right or power or any
abandonment or discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exer­cise of any other right or
power hereunder or thereunder.  The
rights and remedies of the Administrative Agent, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclu­sive of any rights or remedies provided by law.  No waiver of any provision of this Agreement
or any other Loan Document or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 10.2, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.  Without limiting the generality
of the foregoing, the making of a Loan or the issuance of a Letter of Credit
shall not be construed as a waiver of any Default or Event of Default, regardless
of whether the Administrative Agent, any Lender or the Issuing Bank may have
had notice or knowledge of such Default or Event of Default at the time.

(b)         No amendment or waiver of any
provision of this Agreement or the other Loan Documents, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Borrower and the Required Lenders or
the Borrower and the Administrative Agent with the consent of the Required
Lenders and then such waiver or consent shall be effective only in the specific
instance and for the spe­cific purpose for which given; provided, that
no amendment or waiver shall: (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the date fixed for any payment of any princi­pal
of, or interest on, any Loan or LC Disbursement or interest thereon or any fees
hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
2.21(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, or (v)
change any of the provisions of this Section 10.2 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders which are re­quired to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the consent of
each Lender; provided further, that no such agreement shall amend,
modify or otherwise affect the rights, duties or obligations of the
Administrative Agent, the Swingline Lender or the Issuing Bank without the
prior written consent of such Person. 
Notwithstanding anything contained herein to the contrary, this
Agreement may be amended and restated without the consent of any Lender (but
with the consent of the Borrower and the Administrative Agent) if, upon giving
effect to

 72
 

 

such amendment
and restatement, such Lender shall no longer be a party to this Agreement (as
so amended and restated), the Commitments of such Lender shall have terminated
(but such Lender shall continue to be entitled to the benefits of Sections
2.18, 2.19, 2.20 and 10.3), such Lender shall have no
other commitment or other obligation hereunder and shall have been paid in full
all principal, interest and other amounts owing to it or accrued for its
account under this Agreement.

Section 10.3.        Expenses;
Indemnification.

(a)         The Borrower shall pay (i) all
reasonable, out-of-pocket costs and expenses of the Administrative Agent and
its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and its Affiliates, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof (whether or not
the transactions contemplated in this Agreement or any other Loan Document
shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by
the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket costs and expenses (including, without limitation, but
limited to the reasonable fees, charges and disbursements of one outside
counsel for the Administrative Agent, the Issuing Bank and the Lenders)
incurred by the Administrative Agent, the Issuing Bank or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section 10.3, or in
connection with the Loans made or any Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

(b)         The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing
Bank, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all
fees and time charges and disbursements for attorneys who may be employees of
any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Borrower arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or Release of Hazardous Materials
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower, and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee,
be available to the extent

 73
 

 

that such
losses, claims, damages, liabilities or related expenses (x) are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower has obtained a final judgment in its favor
on such claim as determined by a court of competent jurisdiction.

(c)         The Borrower shall pay, and hold the
Administrative Agent and each of the Lenders harmless from and against, any and
all present and future stamp, documentary, and other similar taxes with re­spect
to this Agreement and any other Loan Documents, any collateral described
therein, or any payments due thereunder, and save the Administrative Agent and
each Lender harmless from and against any and all liabilities with respect to
or resulting from any delay or omission to pay such taxes.

(d)         To the extent that the Borrower fails
to pay any amount required to be paid to the Administrative Agent, the Issuing
Bank or the Swingline Lender under clauses (a), (b) or (c) hereof, each Lender
severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s Pro Rata Share (determined
as of the time that the unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided, that the unreimbursed expense or
indemnified payment, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, the
Issuing Bank or the Swingline Lender in its capacity as such.

(e)         To the extent permitted by applicable
law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to actual or direct damages) arising out of, in
connection with or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the transactions contemplated therein, any Loan
or any Letter of Credit or the use of proceeds thereof.

(f)          All amounts due under this Section
10.3 shall be payable promptly after written demand therefor.

Section 10.4.        Successors
and Assigns.

(a)         The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender,
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
paragraph (b) of this Section, (ii) by way of participation in accordance with
the provisions of paragraph (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of paragraph (f)
of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void).  Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in paragraph (d) of this
Section and, to the extent expressly

 74
 

 

contemplated
hereby, the Related Parties of each of the Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b)         Any Lender may at any time
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it); provided  that any such assignment shall be subject to the following
conditions:

(i)  Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned; and

(B) in any case not described in paragraph (b)(i)(A) of this Section,
the aggregate amount of the Commitment (which for this purpose includes Loans
and Revolving Credit Exposure outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the
Loans and Revolving Credit Exposure of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent or, if “Trade
Date” is specified in the Assignment and Acceptance, as of the Trade Date)
shall not be less than $1,000,000, unless each of the Administrative Agent and,
so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed).

(ii)  Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans, Revolving Credit
Exposure or the Commitment assigned.

(iii)  Required Consents.  No consent shall be required for any
assignment except to the extent required by paragraph (b)(i)(B) of this Section
and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably
withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such
assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or
an Approved Fund;

(B) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments to a Person
that is not a Lender with a Commitment; and

(C) the consent of the Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of 

 75
 

 

Credit (whether or not then outstanding), and the consent of the
Swingline Lender (such consent not to be unreasonably withheld or delayed)
shall be required for any assignment in respect of the Revolving Credit
Commitments.

(iv)  Assignment and Acceptance.  The parties to each assignment shall deliver
to the Administrative Agent (A) a duly executed Assignment and Acceptance, (B)
a processing and recordation fee of $3,500,
(C) an Administrative Questionnaire unless the assignee is already a Lender and
(D) the documents required under Section 2.20 if such assignee is a
Foreign Lender.

(v)  No Assignment to Borrower.  No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.

(vi)  No Assignment to Natural Persons.  No such assignment shall be made to a natural
person.

Subject to acceptance and recording thereof by the Administrative Agent
pursuant to paragraph (c) of this Section 10.4, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto)
but shall continue to be entitled to the benefits of Sections 2.18,
2.19, 2.20 and 10.3 with respect to facts and
circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this paragraph
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d)
of this Section 10.4.

(c)         The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and Revolving Credit Exposure owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”).  Information contained in the Register with respect to any Lender shall
be available for inspection by such Lender at any reasonable time and from time
to time upon reasonable prior notice; information contained in the Register
shall also be available for inspection by the Borrower at any reasonable time
and from time to time upon reasonable prior notice.  In establishing and maintaining the Register,
Administrative Agent shall serve as Company’s agent solely for tax purposes and
solely with respect to the actions described in this Section, and the
Borrower hereby agrees that, to the extent SunTrust Bank serves in such
capacity, SunTrust Bank and its officers, directors, employees, agents,
sub-agents and affiliates shall constitute “Indemnitees.”

(d)         Any Lender may
at any time, without the consent of, or notice to, the Borrower, the
Administrative Agent, the Swingline Lender or the Issuing Bank sell
participations

 76
 

 

to any Person
(other than a natural person, the Borrower or any of the Borrower’s Affiliates
or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Lenders, Issuing Bank and Swingline Lender shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.

(e)         Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any  provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver with respect to the following to the extent affecting such Participant:  (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the date fixed for any payment of any principal of, or
interest on, any Loan or LC Disbursement or interest thereon or any fees
hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
2.21(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section 10.4 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders which are required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the consent of
each Lender; or (vi) release all or substantially all collateral (if any)
securing any of the Obligations.  Subject
to paragraph (e) of this Section 10.4, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.18, 2.19,
and 2.20 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 10.4.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.7
as though it were a Lender, provided such Participant agrees to be subject to Section
2.21 as though it were a Lender.

(f)          A Participant
shall not be entitled to receive any greater payment under Section 2.18
and Section 2.20 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant, after disclosure of such greater
payment, is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.20 unless the Borrower is notified of the participation sold
to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.20(e)
as though it were a Lender.

(g)         Any Lender may
at any time pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Lender, including
without limitation any pledge or assignment to secure obligations to a Federal
Reserve Bank;

 77
 

 

provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

Section 10.5.        Governing
Law; Jurisdiction; Consent to Service of Process.

(a)         This Agreement and the
other Loan Documents shall be construed in accordance with and be governed by the
law (without giving effect to the conflict of law principles thereof except for
Sections 5-1401 and 5-1402 of the New York General Obligations Law) of the
State of New York.

(b)         The Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of the United States District Court of the Southern District of New York, and
of  the Supreme Court of the State of New
York sitting in New York county and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or any
other Loan Document or the transactions contemplated hereby or thereby, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York state
court or, to the extent permitted by applicable law, such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.

(c)         The Borrower
irrevocably and unconditionally waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
described in paragraph (b) of this Section 10.5 and brought in any court
referred to in paragraph (b) of this Section 10.5.  Each of the parties hereto irrevocably
waives, to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d)         Each party to this
Agreement irrevocably consents to the service of process in the manner provided
for notices in Section 10.1. 
Nothing in this Agreement or in any other Loan Document will affect the
right of any party hereto to serve process in any other manner permitted by
law.

Section 10.6.        WAIVER
OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE

 78
 

 

FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 10.7.        Right
of Setoff.  In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
each Lender and the Issuing Bank shall have the right, at any time or from time
to time upon the occurrence and during the continuance of an Event of Default,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, to set off and apply
against all deposits (general or special, time or demand, provisional or final)
of the Borrower at any time held or other obligations at any time owing by such
Lender or any of its Affiliates and the Issuing Bank to or for the credit or
the account of the Borrower against any and all Obligations held by such Lender
or the Issuing Bank, as the case may be, irrespective of whether such Lender or
the Issuing Bank shall have made demand hereunder and although such Obligations
may be unmatured.  Each Lender and the
Issuing Bank agree promptly to notify the Administrative Agent and the Borrower
after any such set-off and any application made by such Lender and the Issuing
Bank, as the case may be; provided, that the failure to give such notice
shall not affect the validity of such set-off and application.  Each Lender and the Issuing Bank
agrees to apply all amounts collected from any such set-off to the Obligations
before applying such amounts to any other Indebtedness or other obligations
owed by the Borrower and any of its Subsidiaries to such Lender or Issuing
Bank.

Section 10.8.        Counterparts;
Integration.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.  This Agreement, the Fee Letter, the other
Loan Documents, and any separate letter agreement(s) relating to any fees
payable to the Administrative Agent constitute the entire agreement among the
parties hereto and thereto regarding the subject matters hereof and thereof and
supersede all prior agreements and understandings, oral or written, regarding
such subject matters.

Section 10.9.        Survival.  All
covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon
by the other parties hereto and shall survive the execution and delivery of
this Agreement and the making of any Loans and issuance of any Letters of
Credit, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent, the Issuing Bank or
any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated.  The provisions of Sections 2.18, 2.19,
2.20, and 10.3 and Article IX shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof provided that the provisions of Sections
2.18, 2.19, and 2.20 shall only survive and remain in full
force and effect until the first anniversary of the Termination Date.  All representations and warranties made
herein, in the cer­tifi­cates, reports, notices, and other documents delivered
pursu­ant

 79
 

 

 to this Agreement shall survive the execution
and delivery of this Agreement and the other Loan Documents, and the making of
the Loans and the issuance of the Letters of Credit.

Section 10.10.      Severability.  Any
provision of this Agreement ­or any other Loan Document held to be illegal,
invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction,
be ineffective to the extent of such illegality, invalidity or unenforceability
without affecting the legality, validity or enforceability of the remaining
provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

Section 10.11.      Confidentiality.  Each
of the Administrative Agent, the Issuing Bank and each Lender agrees to take
normal and reasonable precautions to maintain the confidentiality of any
confidential information provided to it by the Borrower or any Subsidiary,
except that such information may be disclosed (i) to any Related Party of the
Administrative Agent, the Issuing Bank or any such Lender, including without
limitation accountants, legal counsel and other advisors with a reasonable need
for such information (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential on
substantially the same terms as provided herein), (ii) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(iii) to the extent requested by any regulatory agency or authority or
self-regulatory body having or claiming authority to regulate or oversee any
aspect of the Administrative Agent’s or any Lender’s business or businesses,
(iv) to the extent that such information becomes publicly available other than
as a result of a breach of this Section 10.11, or which becomes available
to the Administrative Agent, the Issuing Bank, any Lender or any Related Party
of any of the foregoing on a non-confidential basis from a source other than
the Borrower, (v) in connection with the exercise of any remedy hereunder or
any suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, and (ix) subject to provisions substantially similar to this Section
10.11, to any actual or prospective assignee or Participant, or (vi) with
the consent of the Borrower.  Any Person
required to maintain the confidentiality of any information as provided for in
this Section 10.11 shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such information as such Person would accord
its own confidential information; provided that, in the case of clauses (ii) or
(iii), with the exception of disclosure to bank regulatory authorities, the
Administrative Agent, the Issuing Bank and each Lender agree, to the extent
practicable and legally permissible, to give the Borrower prompt prior notice
so that it may seek a protective order or other appropriate remedy.

Section 10.12.      Interest
Rate Limitation.  Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all
fees, charges and other amounts which may be treated as interest on such Loan
under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate of interest (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by a Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section 10.12 shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal

 80
 

 

Funds
Rate to the date of repayment (to the extent permitted by applicable law),
shall have been received by such Lender.

Section 10.13.      Patriot
Act.   The Administrative
Agent and each Lender hereby notifies the Loan Parties that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify
and record information that identifies the Borrower, which information includes
the name and address of the Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Patriot Act.  The
Borrower shall, and shall cause each of its Subsidiaries to, provide to the
extent commercially reasonable, such information and take such other actions as
are reasonably requested by the Administrative Agent or any Lender in order to
assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot
Act.

Section 10.14.      Location
of Closing.  Each Lender
acknowledges and agrees that it has delivered, with the intent to be bound, its
executed counterparts of this Agreement to Agent, c/o King & Spalding LLP,
1185 Avenue of the Americas, New York, New York 
10036.  Borrower acknowledges and
agrees that it has delivered, with the intent to be bound, its executed
counterparts of this Agreement and each other Loan Document, together with all
other documents, instruments, opinions, certificates and other items required
under Section 3.1, to Administrative Agent, c/o King & Spalding LLP,
1185 Avenue of the Americas, New York, New York 
10036.  All parties agree that
closing of the transactions contemplated by this Credit Agreement has occurred
in New York.

Section 10.15.      Non-Recourse
to the General Partner and Associated Persons. 
The Administrative Agent, the Issuing Bank and each Lender agrees on
behalf of itself and its successors, assigns and legal representatives, that
neither the General Partner nor any Person which is a partner, shareholder,
member, owner, officer, director, supervisor, trustee or other principal
(collectively, “Associated Persons”) of the Borrower, the General Partner, or
any of their respective successors or assigns, shall have any personal
liability for the payment or performance of any of the Borrower’s obligations
hereunder or under any of the Notes and no monetary or other judgment shall be
sought or enforced against the General Partner or any of such Associated
Persons or any of their respective successors or assigns.  Notwithstanding the foregoing, neither the
Administrative Agent, the Issuing Bank nor any Lender shall be deemed barred by
this Section 10.15 from asserting any claim against any Person based upon an
allegation of fraud or misrepresentation.

(remainder of page left intentionally
blank)

 81

 

IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed under seal in the
case of the Borrower by their respective authorized officers as of the day and
year first above written.

	
  

  	
  TC PIPELINES, LP

  
	
   

  	
  By: TC PipeLines GP, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Mark
  Zimmerman

  
	
   

  	
   

  	
  Name: Mark A.P. Zimmerman

  
	
   

  	
   

  	
  Title: Vice-President, Business Development

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Donald R.
  Marchand

  
	
   

  	
   

  	
  Name: Donald R. Marchand

  
	
   

  	
   

  	
  Title: Vice-President and Treasurer

  

 

 

	
  

  	
  SUNTRUST BANK

  
	
   

  	
  as Administrative Agent, as Issuing Bank, as 

  Swingline Lender and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Peter Panos

  
	
   

  	
   

  	
  Name: Peter Panos

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

	
  

  	
  BMO CAPITAL MARKETS FINANCING

  INC., as Co-Syndication Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kristina
  Burden

  
	
   

  	
  Name: Kristina Burden

  
	
   

  	
  Title: Vice President

  

 

 

 

[SIGNATURE PAGE TO

REVOLVING CREDIT AND TERM LOAN
AGREEMENT]

 

 

	
  

  	
  THE ROYAL BANK OF SCOTLAND PLC, as 

  Co-Syndication Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Kevin Howard

  
	
   

  	
  Name: Kevin Howard

  
	
   

  	
  Title: Managing Director

  

 

 

 

	
  

  	
  UBS SECURITIES LLC, as Co-Documentation 

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Richard L. Tavrow

  
	
   

  	
  Name: 

  	
  Richard L. Tavrow

  
	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  	
   

  	
  Banking Products
  Services, US

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Barbara Ezell-McMichael

  
	
   

  	
  Name: 

  	
  Barbara Ezell-McMichael

  
	
   

  	
  Title:

  	
  Associate Director

  
	
   

  	
   

  	
   

  	
  Banking Products Services, US

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UBS LOAN FINANCE LLC, as a Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Richard L. Tavrow

  
	
   

  	
  Name: 

  	
  Richard L. Tavrow

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
  Banking Products Services, US

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Christopher M. Aitkin

  
	
   

  	
  Name: 

  	
  Christopher M. Aitkin

  
	
   

  	
  Title:

  	
  Associate Director

  
	
   

  	
   

  	
   

  	
  Banking Products Services, US

  
					

 

 

 

	
  

  	
  ROYAL BANK OF CANADA, as

  Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
      /s/
  Dustin Craven

  
	
   

  	
  Name: 

  	
  Dustin Craven

  
	
   

  	
  Title: 

  	
  Attorney-in-Fact

  
				

 

 

 

	
  

  	
  DEUTSCHE BANK AG NEW YORK 

  BRANCH, as Managing Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Marcus
  Tarkington

  
	
   

  	
  Name: Marcus Tarkington

  
	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Rainer Meier

  
	
   

  	
  Name: Rainer Meier

  
	
   

  	
  Title: Vice President

  
				

 

 

 

	
  

  	
  THE BANK OF TOKYO-MITSUBISHI UFJ, 

  LTD., as Managing Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John W.
  McGhee

  
	
   

  	
  Name: John W. McGhee

  
	
   

  	
  Title: Vice President & Manager

  
				

 

 

 

	
  

  	
  CITICORP NORTH AMERICA, INC., as a 

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ David B.
  Lawrence

  
	
   

  	
  Name: David B. Lawrence, III

  
	
   

  	
  Title: Attorney-in-Fact

  

 

 

 

	
  

  	
  MIZUHO CORPORATE BANK, LTD., as a 

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Leon Mo

  
	
   

  	
  Name: Leon Mo

  
	
   

  	
  Title: Senior Vice President

  

 

 

 

	
  

  	
  BNP PARIBAS, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Larry
  Robinson

  
	
   

  	
  Name: Larry Robinson

  
	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Greg
  Smothers

  
	
   

  	
  Name: Greg Smothers

  
	
   

  	
  Title: Vice President

  

 

 

 

	
  

  	
  WELLS FARGO BANK N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Richard Gan

  
	
   

  	
  Name: Richard Gan

  
	
   

  	
  Title: Vice President/Loan Team Manager

  

 

 

 

	
  

  	
  BANK HAPOALIM B.M., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Marc Bosc

  
	
   

  	
  Name: Marc Bosc

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Charles
  McLaughlin

  
	
   

  	
  Name: Charles McLaughlin

  
	
   

  	
  Title: Senior Vice President

  

 

 

 

	
  

  	
  BANK OF COMMUNICATIONS CO., LTD.,

  NEW YORK BRANCH, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Shelly He

  
	
   

  	
  Name:

  	
  Shelly He

  
	
   

  	
  Title:

  	
  Deputy General Manager

  
				

 

 

Schedule I

 

APPLICABLE MARGIN AND APPLICABLE PERCENTAGE FOR
REVOLVING LOANS

	
  Pricing

  Level

  	
   

  	
  Leverage

  Ratio

  	
   

  	
  Applicable

  Margin for

  Revolver

  Eurodollar

  Loans

  	
   

  	
  Applicable

  Margin for

  Revolver Base

  Rate Loans

  	
   

  	
  Applicable

  Percentage for 

  Facility Fee

  	
   

  	
  Utilization

  Premium

  
	
  I

  	
   

  	
  Less than or equal to

  1.50:1.00

  	
   

  	
  0.21% per

  annum

  	
   

  	
  0.0% per

  annum

  	
   

  	
  0.065% per

  annum

  	
   

  	
  0.10% per

  annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  Less than or equal to 2.50:1.00 but greater than 1.50:1.00

  	
   

  	
  0.27% per

  annum

  	
   

  	
  0.0% per

  annum

  	
   

  	
  0.08% per

  annum

  	
   

  	
  0.10% per

  annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  Less than or equal to

  3.50:1.00 but greater than 2.50:1.00

  	
   

  	
  0.35% per

  annum

  	
   

  	
  0.0% per

  annum

  	
   

  	
  0.10% per

  annum

  	
   

  	
  0.10% per

  annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  Less than or equal to 4.50:1.00 but greater than 3.50:1.00

  	
   

  	
  0.50% per

  annum

  	
   

  	
  0.0% per

  annum

  	
   

  	
  0.125% per

  annum

  	
   

  	
  0.10% per

  annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V

  	
   

  	
  Greater than 4.50:1.00

  	
   

  	
  0.575% per

  annum

  	
   

  	
  0.25% per

  annum

  	
   

  	
  0.175% per

  annum

  	
   

  	
  0.10% per

  annum

  

 

 

Schedule II

 

APPLICABLE MARGIN AND APPLICABLE PERCENTAGE FOR TERM
LOANS

	
  Pricing

  Level

  	
   

  	
  Leverage

  Ratio

  	
   

  	
  Applicable

  Margin for

  Eurodollar

  Term Loans

  	
   

  	
  Applicable

  Margin for

  Base Rate

  Term Loans

  	
   

  	
  Applicable

  Percentage for

  Commitment

  Fee

  
	
  I

  	
   

  	
  Less than or equal
  to 1.50:1.00

  	
   

  	
  0.375% per annum

  	
   

  	
  0.0% per annum

  	
   

  	
  0.065% per annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  Less than or equal
  to 2.50:1.00 but greater than 1.50:1.00

  	
   

  	
  0.45% per annum

  	
   

  	
  0.0% per annum

  	
   

  	
  0.08% per annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  Less than or equal
  to 3.50:1.00 but greater than 2.50:1.00

  	
   

  	
  0.55% per annum

  	
   

  	
  0.0% per annum

  	
   

  	
  0.10% per annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  Less than or equal
  to 4.50:1.00 but greater than 3.50:1.00

  	
   

  	
  0.725% per annum

  	
   

  	
  0.0% per annum

  	
   

  	
  0.125% per annum

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V

  	
   

  	
  Greater than 4.50:1.00

  	
   

  	
  0.85% per annum

  	
   

  	
  0.25% per annum

  	
   

  	
  0.175% per annum

  

 

 II-2

 

Schedule III

 

COMMITMENT AMOUNTS

	
  Lender

  	
   

  	
  Revolving

  Commitment Amount

  	
   

  	
  Term Loan

  Commitment Amount

  	
   

  
	
  SunTrust Bank

  	
   

  	
  $

  	
  3,292,682.92

  	
   

  	
  $

  	
  41,707,317.08

  	
   

  
	
  BMO Capital Markets
  Financing Inc.

  	
   

  	
  $

  	
  2,926,829.27

  	
   

  	
  $

  	
  37,073,170.73

  	
   

  
	
  The Royal Bank of
  Scotland plc

  	
   

  	
  $

  	
  2,926,829.27

  	
   

  	
  $

  	
  37,073,170.73

  	
   

  
	
  UBS Loan Finance LLC

  	
   

  	
  $

  	
  2,926,829.27

  	
   

  	
  $

  	
  37,073,170.73

  	
   

  
	
  Royal Bank of Canada

  	
   

  	
  $

  	
  2,926,829.27

  	
   

  	
  $

  	
  37,073,170.73

  	
   

  
	
  Deutsche Bank AG New
  York Branch

  	
   

  	
  $

  	
  2,926,829.27

  	
   

  	
  $

  	
  37,073,170.73

  	
   

  
	
  The Bank of
  Tokyo-Mitsubishi UFJ, Ltd.

  	
   

  	
  $

  	
  2,926,829.27

  	
   

  	
  $

  	
  37,073,170.73

  	
   

  
	
  Citicorp North America,
  Inc.

  	
   

  	
  $

  	
  2,012,195.12

  	
   

  	
  $

  	
  25,487,804.88

  	
   

  
	
  Mizuho Corporate Bank,
  Ltd.

  	
   

  	
  $

  	
  2,012,195.12

  	
   

  	
  $

  	
  25,487,804.88

  	
   

  
	
  BNP Paribas

  	
   

  	
  $

  	
  2,012,195.12

  	
   

  	
  $

  	
  25,487,804.88

  	
   

  
	
  Wells Fargo Bank N.A.

  	
   

  	
  $

  	
  1,646,341.46

  	
   

  	
  $

  	
  20,853,658.54

  	
   

  
	
  Bank Hapoalim B.M.

  	
   

  	
  $

  	
  1,097,560.98

  	
   

  	
  $

  	
  13,902,439.02

  	
   

  
	
  Bank of Communications Co., Ltd., New York Branch

  	
   

  	
  $

  	
  365,853.66

  	
   

  	
  $

  	
  4,634,146.34

  	
   

  

 

 

SCHEDULE 4.5

ENVIRONMENTAL MATTERS

None

 

SCHEDULE
4.14

 

SUBSIDIARIES

	
  1. TC PipeLines ILP, a Delaware limited
  partnership and wholly-owned subsidiary of the Borrower

  
	
   

  
	
   

  
	
  2. Tuscarora Intermediate Partnership, a Delaware
  limited partnership and wholly-owned subsidiary of the Borrower

  

 

 

SCHEDULE 7.1

OUTSTANDING INDEBTEDNESS

None

 

SCHEDULE 7.2

EXISTING LIENS

1.  NEC Financial Services, Inc. has a lien on
certain telephone equipment that the Borrower leases, which lien is more
particularly described on UCC-1 financing statement 43586700 filed on December
15, 2004.

 

SCHEDULE 7.4

EXISTING INVESTMENTS

1.  Northern Border

2.  TC PipeLines ILP

3.  Tuscarora

4.  Tuscarora Intermediate Partnership

 

SCHEDULE 7.6

TRANSACTIONS WITH AFFILIATES

1.
 Tuscarora Acquisition

2.  Borrower Partnership AgreementExhibit 10.19

BASE SALARIES OF
EXECUTIVE OFFICERS OF THE COMPANY

As of October 1, 2006, the following
are the base salaries (on an annual basis) of the executive officers of Network
Engines, Inc.:

	
  Name and Title

  	
   

  	
  Base Salary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Gregory A. Shortell

  	
   

  	
  $

  	
  350,000

  	
   

  
	
  President, Chief Executive Officer and Director

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kevin J. Murphy Jr.

  	
   

  	
  $

  	
  170,000

  	
   

  
	
  Chief Technology Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Douglas G. Bryant

  	
   

  	
  $

  	
  210,000

  	
   

  
	
  Vice President of Finance and
  Administration, Chief Financial Officer, Treasurer and Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Richard P. Graber

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Vice President of Engineering
  and Operations

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Hugh W. Kelly

  	
   

  	
  $

  	
  180,000

  	
   

  
	
  Vice President of Worldwide
  Marketing

  	
   

  	
   

  	
   

  

 

 1

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