THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ENBRIDGE ENERGY, LIMITED PARTNERSHIP

Exhibit 10.1

Execution Copy

 

 

 

THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ENBRIDGE ENERGY, LIMITED PARTNERSHIP

 

 

 

 

TABLE OF CONTENTS

 

 

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EXHIBITS

 

 

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THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED

PARTNERSHIP OF ENBRIDGE ENERGY, LIMITED PARTNERSHIP

THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP , dated as of July 31, 2009, is entered into by and among Enbridge Pipelines (Lakehead) L.L.C., a Delaware limited liability company (“ Lakehead GP ”), and Enbridge Pipelines (Wisconsin) Inc., a Wisconsin corporation (“ Wisconsin GP ”), each as a general partner of the Partnership with respect to the applicable Series as set forth opposite its name on Exhibit A and, in the case of Lakehead GP, as a general partner of the Partnership generally, and Enbridge Energy Company, Inc., a Delaware corporation (“ EECI ”), Enbridge Pipelines (Alberta Clipper) L.L.C., a Delaware limited liability company (“ EECI Sub ”), and Enbridge Energy Partners, L.P., a Delaware limited partnership (“ Enbridge Partners ”), each as a limited partner of the Partnership with respect to the applicable Series set forth opposite its name on Exhibit A , together with any other Persons who become Partners in the Partnership associated with any Series or the Partnership generally as provided herein.

WHEREAS, Lakehead GP, Wisconsin GP and Enbridge Partners entered into that Second Amended and Restated Agreement of Limited Partnership of Enbridge Energy, Limited Partnership on October 17, 2002, as amended on September 7, 2007 (as so amended, the “ Prior Agreement ”); and

WHEREAS, the parties hereto have determined it to be in their respective best interests to establish and designate two separate series of partnership interests and related assets and liabilities of the Partnership in accordance with Section 17-218 of the Delaware Act, one of which is related to the Alberta Clipper Project and the other of which is related to all other assets of the Partnership, and to amend and restate the Prior Agreement in its entirety;

NOW, THEREFORE, in consideration of the covenants, conditions and agreements contained herein, the parties hereto do hereby amend and restate the Prior Agreement to provide in its entirety as set forth below:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

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

“ 154-B Model ” means the FERC Opinion No. 154-B model estimate relating to the Alberta Clipper Surcharge on file with the FERC from time to time.

“ Additional Series AC Capital Contribution ” has the meaning assigned to such term in Section 5.4(a).

“ Adjusted Capital Account ” means the Series Capital Account maintained for a Partner with respect to a Series, (i) increased by any amounts that such Partner is obligated to restore or is treated as obligated to restore under Treasury Regulation Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by any amounts described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) with respect to such Partner.

 

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“ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. For the purposes of this Agreement, (i) with respect to Enbridge Partners and its Subsidiaries, the term “Affiliate” shall exclude Enbridge Inc. and each of its Subsidiaries (other than Enbridge Partners and its Subsidiaries) and (ii) with respect to Enbridge Inc. and its Subsidiaries (other than Enbridge Partners and its Subsidiaries), the term “Affiliate” shall exclude Enbridge Partners and each of its Subsidiaries.

“ Agreed Value ” of property contributed by a Partner to the Partnership with respect to a Series means the fair market value of such property or other consideration at the time of contribution as reasonably determined by the Managing General Partner of such Series. The Managing General Partner of such Series shall use such method as it determines to be appropriate to allocate the aggregate Agreed Value of properties contributed by a Partner to the Partnership with respect to a Series in a single or integrated transaction among each separate property on a basis proportional to the fair market value of each contributed property.

“ Agreement ” means this Third Amended and Restated Agreement of Limited Partnership of Enbridge Energy, Limited Partnership, including all exhibits hereto, as it may be amended, supplemented or restated from time to time.

“ Alberta Clipper Expansion Budget ” means a budget and forecast approved by a Majority in Interest of Series AC Partners and setting forth the anticipated revenues and expenses for any Alberta Clipper Expansion Project that has been designated as a Series AC Asset, including any anticipated growth capital expenditures, maintenance capital expenditures, revenues, Capital Contributions and distributions related to such Alberta Clipper Expansion Project.

“ Alberta Clipper Expansion Capital Requirement ” has the meaning assigned to such term in Section 5.6(b).

“ Alberta Clipper Expansion Project ” has the meaning assigned to such term in Section 5.6(a).

“ Alberta Clipper Expansion Project Terms ” has the meaning assigned to such term in Section 5.6(a).

“ Alberta Clipper Expansion Proposal ” has the meaning assigned to such term in Section 5.6(a).

“ Alberta Clipper Expansion Series ” has the meaning assigned to such term in Section 5.6(d).

 

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“ Alberta Clipper Project ” means (a) the U.S. segment of the proposed 36-inch diameter crude oil pipeline that will extend from Hardisty, Alberta to Superior, Wisconsin, with an initial annual capacity of 450,000 barrels per day and (b) related terminals, interconnections, tanks and pump stations located within the United States, each as more fully described in the FERC Settlement Offer.

“ Alberta Clipper Surcharge ” means the tariff surcharge related to the Alberta Clipper Project approved by the FERC by letter dated August 28, 2008 (124 FERC ¶ 61,200 (2008)) as described in the FERC Settlement Offer.

“ Book Value ” means, with respect to any property associated with a Series, such property’s adjusted basis for U.S. federal income tax purposes, except as follows:

(a) the initial Book Value of any property contributed by a Partner to the Partnership with respect to a Series shall be the Agreed Value of such property;

(b) the Book Values of all properties of a Series shall be adjusted to equal their respective fair market values as determined by the Managing General Partner of such Series in connection with (i) the acquisition of an interest in such Series by any new or existing Partner in exchange for more than a de minimis capital contribution, (ii) the distribution to a Partner of more than a de minimis amount of property of a Series as consideration for an interest in such Series, (iii) the grant of an interest in such Series (other than a de minimis interest) as consideration for the provision of services to or for the benefit of such Series by an existing Partner acting in a Partner capacity, or by a new Partner acting in a Partner capacity or in anticipation of becoming a Partner, (iv) the liquidation of the Partnership or any Series within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g)(1) (other than pursuant to Section 708(b)(1)(B) of the Code), or (v) any other event to the extent determined by the Managing General Partner of such Series to be necessary to properly reflect Book Values in accordance with the standards set forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(q);

(c) the Book Value of any property of a Series distributed to a Partner shall be the fair market value of such property as reasonably determined by the Managing General Partner of such Series; and

(d) the Book Values of all properties of a Series shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such property pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts attributable to such Series pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) and clause (f) of the definition of Profits and Losses or Section 6.1(b)(viii); provided , however , Book Value shall not be adjusted pursuant to this clause (d) to the extent the Managing General Partner of such Series reasonably determines that an adjustment pursuant to clause (b) hereof is necessary or appropriate in connection with the transaction that would otherwise result in an adjustment pursuant to this clause (d).

 

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If the Book Value of any property has been determined or adjusted pursuant to clauses (b) or (d) hereof, such Book Value shall thereafter be adjusted by the Depreciation taken into account with respect to such property for purposes of computing Profits and Losses and other items allocated pursuant to Article VI.

“ Business Day ” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of Texas shall not be regarded as a Business Day.

“ Capital Account ” means the capital account maintained for a Partner pursuant to Section 5.8.

“ Capital Contribution ” means, with respect to any Partner, the amount of money and the Net Agreed Value of any property contributed by such Partner to the Partnership with respect to a Series. Any reference in this Agreement to the Capital Contribution of a Partner shall include its pro rata share of any Capital Contribution of its predecessors in interest.

“ Certificate of Limited Partnership ” means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of the State of Delaware as referenced in Section 7.2, as such Certificate of Limited Partnership may be amended, supplemented or restated from time to time.

“ Claims ” has the meaning assigned to such term in Section 7.7(a).

“ Closing Date ” means July 31, 2009.

“ Code ” means the U.S. Internal Revenue Code of 1986, as amended from time to time. All references herein to sections of the Code shall include any corresponding provision or provisions of succeeding law.

“ Commission ” means the U.S. Securities and Exchange Commission.

“ Control Option ” has the meaning assigned to such term in Section 10.1(b).

“ Damages ” has the meaning assigned to such term in Section 7.7(a).

“ Default Capital Contribution ” has the meaning assigned to such term in Section 5.4(e).

“ Defaulting Series AC Partner ” has the meaning assigned to such term in Section 5.4(e).

“ Defaulting Series AC Partner Obligation ” has the meaning assigned to such term in Section 5.4(e)(ii)(B).

“ Delaware Act ” means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section 17-101, et seq. , as amended, supplemented or restated from time to time, and any successor to such statute.

 

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“ Depreciation ” means, for each taxable year, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for U.S. federal income tax purposes with respect to property for such taxable year, except that with respect to any property the Book Value of which differs from its adjusted tax basis for U.S. federal income tax purposes, Depreciation for such taxable year shall be the amount of book basis recovered for such taxable year under the rules prescribed by Treasury Regulation Section 1.704-3(d)(2).

“ Economic Risk of Loss ” has the meaning assigned to such term in Treasury Regulation Section 1.752-2(a).

“ EECI ” has the meaning assigned to such term in the preamble to this Agreement.

“ EECI Sub ” has the meaning assigned to such term in the preamble to this Agreement.

“ Enbridge Inc. ” means Enbridge Inc., a Canadian corporation.

“ Enbridge Partners ” has the meaning assigned to such term in the preamble to this Agreement.

“ Enbridge Partners Long-Term Indebtedness ” has the meaning assigned to such term in Section 5.5(c).

“ Enbridge Pipelines Inc. ” means Enbridge Pipelines Inc., a Canadian corporation.

“ Entity ” means a corporation, firm, limited liability company, partnership (general or limited), joint venture, trust, business trust, unincorporated organization, cooperative, association or other legal entity.

“ Exclusive Series AC Assets ” means all assets and rights related exclusively to the Alberta Clipper Project, including the assets and rights set forth as “Exclusive Series AC Assets” on Exhibit B hereto.

“ Existing Indebtedness ” means Indebtedness of the Partnership or Enbridge Partners or both existing on the Closing Date.

“ Facility A1 ” means the credit facility designated as the A1 Credit Agreement, dated the Closing Date, by and between EECI and Enbridge Partners, as it may be amended, supplemented or restated from time to time.

“ Facility B1 ” means the credit facility designated as the B1 Credit Agreement, dated the Closing Date, by and between Enbridge Partners and the Partnership, on behalf of the Series AC, as it may be amended, supplemented or restated from time to time.

“ Facility C1 ” means the credit facility designated as the C1 Credit Agreement, dated the Closing Date, by and between Enbridge Partners and the Partnership, on behalf of Series AC, as it may be amended, supplemented or restated from time to time.

“ FERC ” means the U.S. Federal Energy Regulatory Commission.

 

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“ FERC Settlement Offer ” means the Offer of Settlement of the Partnership filed with the FERC, on June 27, 2008 in Docket No. OR08-12-000.

“ Fundamental Change ” has the meaning assigned to such term in Section 10.1(a).

“ General Partner ” means a general partner of the Partnership generally or any Series, as applicable.

“ General Partner Interest ” means the Partnership Interest of a General Partner in the Partnership generally or with respect to a Series (in its capacity as a General Partner without reference to any Limited Partner Interest held by it).

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“ In-Service Date ” means the “In-Service Date” (as such term is used in the Tariff Term Sheet) of the Alberta Clipper Project.

“ Indebtedness ” means (a) debt for money borrowed and similar monetary obligations evidenced by bonds (excluding surety and performance bonds), notes, debentures or other similar instruments, (b) reimbursement obligations with respect to letters of credit and (c) guaranties, endorsements and other contingent obligations whether direct or indirect in respect of liabilities of others of any of the types described in clauses (a) and (b) above (other than endorsements for collection or deposit in the ordinary course of business). For the avoidance of doubt, the term “Indebtedness” excludes trade accounts payable in the ordinary course of business.

“ Indemnified Series ” has the meaning assigned to such term in Section 7.8.

“ Indemnifying Series ” has the meaning assigned to such term in Section 7.8.

“ Indemnitee ” means, with respect to a Series, (a) any Person who is or was a General Partner of such Series or a General Partner of the Partnership generally, (b) any Person who is or was a delegate of any such General Partner, (c) any Person who is or was an Affiliate of any such General Partner or delegate, (d) any Person who is or was a member, partner, director, officer, fiduciary or trustee of any such General Partner or delegate and (e) any Person who is or was serving at the request of any such General Partner or delegate or any Affiliate of any such General Partner or delegate as an officer, director, member, partner, fiduciary or trustee of another Person; provided that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services.

“ Initial Debt Financing ” means the borrowings incurred under Facility B1 and Facility C1 on the Closing Date as described in Section 5.3(b).

“ Initial Series AC Capital Contribution ” has the meaning assigned to such term in Section 5.3(a).

 

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“ Intercompany Obligations ” means the Liabilities incurred, assumed or otherwise contracted for between Enbridge Partners or any Material Subsidiary of Enbridge Partners, on the one hand, and the Partnership generally or any Series, on the other hand.

“ Intercompany Preliminary Construction Cost Payable ” means outstanding Indebtedness of the Partnership arising from intercompany borrowings by the Partnership from Enbridge Partners in an aggregate principal amount equal to the Preliminary Alberta Clipper Construction Costs.

“ Lakehead GP ” has the meaning assigned to such term in the preamble to this Agreement.

“ Lakehead System ” means the crude oil and liquid petroleum pipeline, owned by the Partnership (and associated with one or more Series) and regulated by the FERC, that extends from the U.S.-Canadian border near Neche, North Dakota extending through the upper and lower Great Lakes region of the U.S. and re-entering Canada near Marysville, Michigan with an extension across the Niagara River into the Buffalo, New York area, as such pipeline may be extended or modified from time to time, including by the Alberta Clipper Project.

“ Lending Series AC Partner ” has the meaning assigned to such term in Section 5.4(e)(ii).

“ Liability ” means any debt, liability, expense or other obligation.

“ Limited Partner ” means any limited partner of the Partnership generally or of any Series, as applicable.

“ Limited Partner Interest ” means the Partnership Interest of a Limited Partner in the Partnership generally or with respect to a Series (in its capacity as a limited partner without reference to any General Partner Interest held by it).

“ Liquidation Date ” means (a) in the case of an event giving rise to the dissolution of the Partnership or termination of a Series of the type described in Sections 11.1(a)(iv), 11.1(a)(v) or 11.2(a)(iv), the date on which the applicable time period during which the Partners have the right to elect to continue the business of the Partnership or Series, as applicable, has expired without such an election being made and (b) in the case of any other event giving rise to the dissolution of the Partnership or termination of a Series, the date on which such event occurs.

“ Long-Term Debt Financing ” means the Indebtedness of the Series AC to Enbridge Partners on substantially the same terms as the Enbridge Partners Long-Term Indebtedness that is used to refinance the outstanding borrowings of the Series AC under Facility B1 and Facility C1 as described in Section 5.5(c) and (d).

“ Majority in Interest ” means, with respect to a Series, one or more Partners of such Series holding Partnership Interests in such Series that in the aggregate exceed fifty percent (50%) of all Percentage Interests owned by Partners of such Series.

“ Managing General Partner ” has the meaning assigned to such term in Section 7.14.

 

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“ Material Subsidiary of Enbridge Partners ” means any Subsidiary of Enbridge Partners that directly or through one or more of its Subsidiaries (i) owns assets with a book value equal to 10% or more of the book value of the consolidated assets of Enbridge Partners and its consolidated Subsidiaries, (ii) contributed 10% or more of consolidated operating income for any fiscal quarter during the four fiscal quarters most recently ended of Enbridge Partners and its Consolidated Unrestricted Subsidiaries (as defined in the Partnership’s Second Amended and Restated Credit Facility dated as of April 4, 2007, as amended), or (iii) is a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act as such Regulation is in effect on any date of determination.

“ Maximum Commitment ” means, with respect to a Series AC Partner, the amount set forth opposite such Series AC Partner’s name on Exhibit A in the column entitled “Maximum Commitment.”

“ Maximum Permitted Delegation ” has the meaning assigned to such term in Section 10.1(a).

“ Minimum Gain ” has the meaning assigned to the term “partnership minimum gain” in Treasury Regulation Section 1.704-2(d).

“ Monthly Capital Requirement ” has the meaning assigned to such term in Section 5.4(b).

“ Net Agreed Value ” means, (a) in the case of any property contributed by a Partner to the Partnership with respect to a Series, the Agreed Value of such property reduced by any liabilities either assumed by such Series upon such contribution or to which such property is subject when contributed and (b) in the case of any property of a Series distributed to a Partner, the Book Value of such property at the time such property is distributed, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution, in either case, as determined under Section 752 of the Code.

“ New AC Entity ” means a new Entity controlled by EECI or its designee, formed for the purpose of owning and operating the Series AC Assets following any exercise of the Separation Option.

“ Non-Defaulting Series AC Partner ” has the meaning assigned to such term in Section 5.4(e).

“ Nonrecourse Deductions ” has the meaning assigned to such term in Treasury Regulation Section 1.704-2(b).

“ Note Agreement ” has the meaning assigned to such term in Section 3.2(d).

“ Offered Interests ” has the meaning assigned to such term in Section 4.4(a).

“ Offering Partner ” has the meaning assigned to such term in Section 4.4(a).

“ Omnibus Agreement ” means the Omnibus Agreement, dated October 17, 2002, by and among EECI, Enbridge Partners and Enbridge Pipelines Inc.

 

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“ Partner Nonrecourse Debt ” has the meaning assigned to such term in Treasury Regulation Section 1.704-2(b)(4).

“ Partner Nonrecourse Debt Minimum Gain ” has the meaning assigned to such term in Treasury Regulation Section 1.704-2(i)(2).

“ Partner Nonrecourse Deductions ” has the meaning assigned to such term in Treasury Regulation Section 1.704-2(i)(1).

“ Partners ” means the General Partners and the Limited Partners.

“ Partnership ” means Enbridge Energy, Limited Partnership, a Delaware limited partnership, formed on October 9, 1991 pursuant to the Delaware Act upon the filing of the Certificate of Limited Partnership in the office of the Secretary of State of the State of Delaware and the entry into the Agreement of Limited Partnership of the Partnership dated October 9, 1991.

“ Partnership generally ” means, with respect to the Partnership, the “limited partnership generally” as such phrase is used in Section 17-218 of the Delaware Act.

“ Partnership Interest ” means a partnership interest in the Partnership generally or with respect to a Series, which shall include General Partner Interests and Limited Partner Interests.

“ Percentage Interest ” means, with respect to any Partner of a Series, the Percentage Interest set forth opposite such Partner’s name for such Series on Exhibit A . The Percentage Interests of the Partners of any Series shall be adjusted as follows:

(a) from time to time pursuant to Sections 5.4(e)(i) or 5.4(e)(ii)(E); and

(b) immediately following (i) the admission of any Person as a new Partner of such Series or (ii) any Capital Contribution to such Series that is not Pro Rata among the Partners of such Series (other than a Capital Contribution pursuant to Sections 5.4(e)(i) or 5.4(e)(ii)(E)), to reflect the quotient, expressed as a percentage, obtained by dividing (A) such Partner’s Series Capital Account balance with respect to such Series by (B) the sum of all Partners’ Series Capital Account balances with respect to such Series, in each case, taking into account any prior adjustments pursuant to clause (a) of this definition.

Upon the adjustment of the Percentage Interests in the manner set forth in this definition, Exhibit A will be amended to reflect such adjusted Percentage Interests. The Percentage Interest of any Partner of the Partnership generally shall at all times be zero.

“ Permitted Transferee ” means, with respect to any Person, an Affiliate of such Person; provided that the term “Permitted Transferee” shall not include any Affiliate that, at the date of determination, such Person or any of its Affiliates intends or expects to sell, assign, exchange or otherwise cease to own or control.

“ Person ” means an individual, Entity or government agency or political subdivision thereof.

 

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“ Preliminary Alberta Clipper Construction Costs ” means $425,142,514.25, which amount represents the sum of (1) all cash costs, expenses and liabilities actually paid by the Partnership prior to the Closing Date that are directly attributable to or properly allocable to the Series AC Assets and (2) all allowances for funds used during construction (AFUDC) that are directly attributable to or properly allocable to the Series AC Assets prior to the Closing Date.

“ Primary Obligor ” has the meaning assigned to such term in Section 3.4(c).

“ Prior Agreement ” has the meaning assigned to such term in the preamble to this Agreement.

“ Prior Budget ” has the meaning assigned to such term in Section 7.4(c).

“ Prior General Partner Interests ” means the general partner interests in the Partnership outstanding immediately prior to the effectiveness of this Agreement.

“ Prior Limited Partner Interests ” means the limited partner interests in the Partnership outstanding immediately prior to the effectiveness of this Agreement.

“ Pro Rata ” means apportioned among all Partners of a particular Series in accordance with their relative Percentage Interests in such Series.

“ Profits ” or “ Losses ” means, for each taxable year with respect to any Series, an amount equal to such Series’ taxable income or loss for such taxable year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

(a) any income of such Series that is exempt from U.S. federal income tax and not otherwise taken into account in computing Profits and Losses pursuant to this definition of “Profits” and “Losses” shall be added to such taxable income or loss;

(b) any expenditures of such Series described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be subtracted from such taxable income or loss;

(c) in the event the Book Value of any asset is adjusted pursuant to clause (b) or clause (c) of the definition of Book Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Book Value of the asset) or an item of loss (if the adjustment decreases the Book Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

(d) gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed by reference to the Book Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Book Value;

 

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(e) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such taxable year;

(f) to the extent an adjustment to the adjusted tax basis of any asset pursuant to Code Section 734(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Account balances for such Series as a result of a distribution other than in liquidation of a Partner’s Partnership Interest with respect to such Series, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or an item of loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and

(g) any items that are allocated pursuant to Sections 6.1(b) and 6.1(c) shall be determined by applying rules analogous to those set forth in clauses (a) through (g) hereof but shall not be taken into account in computing Profits and Losses.

“ Proportionate Share of Shared Liabilities ” has the meaning assigned to such term in Section 3.4(d).

“ Quarter ” means, unless the context requires otherwise, a fiscal quarter of the Partnership.

“ Regulatory Allocations ” means the allocations set forth in Sections 6.1(b)(i)-(iii) and 6.1(b)(v)-(vii).

“ Revenue Requirement ” means the Revenue Requirement as set forth in Section 3 “Revenue Requirement” of the Tariff Term Sheet.

“ Revised Tariff Structure ” has the meaning assigned to such term in Section 10.2(a).

“ ROFR Asset Closing Period ” has the meaning assigned to such term in Section 4.6(d).

“ ROFR Asset Expiration Date ” has the meaning assigned to such term in Section 4.6(b).

“ ROFR Asset Notice ” has the meaning assigned to such term in Section 4.6(a).

“ ROFR Asset Notice Date ” has the meaning assigned to such term in Section 4.6(a).

“ ROFR Asset Offer Price ” has the meaning assigned to such term in Section 4.6(a).

“ ROFR Closing Period ” has the meaning assigned to such term in Section 4.4(d).

“ ROFR Expiration Date ” has the meaning assigned to such term in Section 4.4(b).

“ ROFR Holder ” has the meaning assigned to such term in Section 4.4(a).

“ ROFR Notice ” has the meaning assigned to such term in Section 4.4(a).

 

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“ ROFR Notice Date ” has the meaning assigned to such term in Section 4.4(a).

“ ROFR Offer Price ” has the meaning assigned to such term in Section 4.4(a).

“ ROFR Offered Asset ” has the meaning assigned to such term in Section 4.6(a).

“ ROFR Proportionate Share ” has the meaning assigned to such term in Section 4.4(b).

“ Securities Act ” means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute.

“ Separation Option ” has the meaning assigned to such term in Section 10.1(c).

“ Series ” means the Series AC, the Series LH and any Alberta Clipper Expansion Series.

“ Series AC ” has the meaning assigned to such term in Section 3.1(a).

“ Series AC Annual Budget ” has the meaning assigned to such term in Section 7.4(a).

“ Series AC Assets ” means the assets identified as Series AC Assets in Section 3.2(a).

“ Series AC Capital Contribution Notice ” has the meaning assigned to such term in Section 5.4(a).

“ Series AC Distribution ” has the meaning assigned to such term in Section 6.2(a).

“ Series AC Distribution Amount ” means, with respect to any Quarter (including any Quarter in which the liquidation of the Series AC is completed), an amount equal to (a) the sum of (i) the portion of the Series AC Revenue Entitlement that has been collected during such Quarter through the system-wide rates of the Lakehead System as either the facilities surcharge or the base rates as provided in Section 7.5 (prior to the expiration of the Surcharge Term) or as determined pursuant to Section 10.2 (following the expiration of the Surcharge Term), (ii) any other cash receipts attributable to or arising out of the ownership, operation, sale or other disposition of the Series AC Assets collected during such Quarter and (iii) any reduction during such Quarter in the amount of Series AC Reserves established in any prior Quarter that are not used by the Partnership, less (b) the sum of (i) all Series AC Expenses for such Quarter, (ii) all cash interest expenses (and principal reductions net of borrowings) of the Partnership for such Quarter attributable to Series AC Liabilities (other than any Intercompany Obligation for which the Series AC is not the Primary Obligor), (iii) any cash maintenance and pipeline integrity capital expenditures for such Quarter properly allocable to the Series AC, (iv) any other cash expenses for such Quarter constituting or attributable to or arising out of a Series AC Liability (other than any Intercompany Obligation for which the Series AC is not the Primary Obligor) or otherwise attributable to or arising out of the ownership or operation of the Series AC Assets and (iv) any increase in Series AC Reserves as shall be established by the Managing General Partner of the Series AC in respect of such Quarter in accordance with Section 7.3.

 

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“ Series AC Expansion Capital Expenditures ” means cash expenditures by the Series AC for:

(a) any transaction in which the Series AC acquires (through an asset acquisition, merger, stock acquisition or other form of investment) control over all or a portion of the assets, properties or business of another Person for the purpose of increasing for a period longer than the short-term the operating capacity of the Series AC Assets or operating income of the Series AC from the operating capacity of the Series AC Assets or operating income of the Series AC existing immediately prior to such transaction, or

(b) any (i) additions or improvements to the capital assets of the Series AC or (ii) acquisitions of existing, or the construction of new or the improvement or replacement of existing, capital assets, in each case if such additions, improvements, acquisitions, replacements or construction is made to increase for a period longer than the short-term the operating capacity of the Series AC Assets or operating income of the Series AC from the operating capacity of the Series AC Assets or operating income of the Series AC existing immediately prior to such addition, improvement, replacement, acquisition or construction.

The term “Series AC Expansion Capital Expenditures” shall not include Series AC Maintenance Capital Expenditures. For purposes of this definition, the term “short-term” generally refers to a period not exceeding 12 months.

“ Series AC Expenses ” means, for any period prior to the expiration of the Surcharge Term, the aggregate Series AC General and Administrative Expenses, Series AC Non-Mandatory Health and Safety Expenses, Series AC Operating Expenses, Series AC Pipeline Integrity Operating Expenses, Series AC Power Expenses and Series AC Property Taxes for such period. Following the expiration of the Surcharge Term, the Series AC Expenses will be determined pursuant to Section 10.2.

“ Series AC General and Administrative Expenses ” means, for any period, the cash general and administrative expenses attributable to the Series AC Assets determined by applying the allocation methodology used to determine the estimate of such expenses pursuant to Section 3(f)(i) of the Tariff Term Sheet to the actual general and administrative expenses of the Partnership for such period.

“ Series AC General Partner ” means any General Partner of the Series AC.

“ Series AC Liabilities ” means the Liabilities identified as Series AC Liabilities on the Series AC Records from time to time in accordance with this Agreement.

“ Series AC Limited Partner ” means any Limited Partner of the Series AC.

“ Series AC Maintenance Capital Expenditures ” means cash expenditures by the Series AC (including expenditures for the addition or improvement to or replacement of the capital assets of the Series AC or for the acquisition of existing, or the construction or development of, new capital assets) if such expenditures are made to maintain, including for a period longer than the short-term, the operating capacity of the Series AC Assets or operating income of the Series AC. The term “Series AC Maintenance Capital Expenditures” shall not include Series AC Expansion Capital Expenditures. For purposes of this definition, the term “short-term” generally refers to a period not exceeding 12 months.

 

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“ Series AC Non-Mandatory Health and Safety Expenses ” means, for any period, the non-mandatory health and safety cash expenses related to the Series AC Assets for such period.

“ Series AC Operating Expenses ” means, for any period, the cash operating expenses (excluding any cash expenses related to property taxes, power, pipeline integrity operating expenditures and non-mandatory health and safety expenditures) attributable to the Series AC Assets determined by applying the allocation methodology used to determine the estimate of such expenses pursuant to Section 3(f)(i) of the Tariff Term Sheet to the actual cash operating expenses (excluding any cash expenses related to property taxes, power, pipeline integrity operating expenditures and non-mandatory health and safety expenditures) of the Partnership for such period without regard to the estimated expenses included in the 154-B Model for such period.

“ Series AC Partners ” means the Series AC General Partners and the Series AC Limited Partners.

“ Series AC Pipeline Integrity Operating Expenses ” means, for any period, the cash pipeline integrity operating expenses related to the Series AC Assets for such period without regard to the allocation of such expenses pursuant to Section 3(f)(iii)(1) of the Tariff Term Sheet.

“ Series AC Power Expenses ” means, for any period, the cash expenses for power attributable to the Series AC Assets pursuant to Section 3(f)(ii) of the Tariff Term Sheet for such period.

“ Series AC Property Taxes ” means, for any period, the cash property tax payments attributable to the Series AC Assets determined by applying the allocation methodology used to determine the estimate of such payments pursuant to Section 3(f)(i) of the Tariff Term Sheet to the actual cash property tax payments of the Partnership for such period, without regard to the risk sharing provisions set forth in the second sentence of Section 3(f)(i)(4) of the Tariff Term Sheet.

“ Series AC Records ” means the records maintained for the Series AC in accordance with Section 3.1(b).

“ Series AC Reserves ” means any cash reserves established by the Managing General Partner of the Series AC with respect to the Series AC to provide for the proper conduct of the business of the Series AC, including reserves for future capital expenditures and anticipated credit needs of the Series AC, or otherwise comply with applicable law or any agreement or other obligation of the Series AC or to which any Series AC Assets are subject.

“ Series AC Revenue Entitlement ” means, prior to the expiration of the Surcharge Term, the Revenue Requirement (excluding any reduction attributable to the “Revenue Credit” provided for in Section 13 of the Tariff Term Sheet). The Series AC Revenue Entitlement will be calculated in accordance with the 154-B Model on file at such time. If the Partnership does not file a 154-B Model during any year prior to the expiration of the Surcharge Term, due to a

 

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change in the FERC’s regulatory requirements or otherwise, then the Series AC Revenue Entitlement shall be estimated in accordance with a model prepared as if a 154-B Model was required to be filed. Following the expiration of the Surcharge Term, the Series AC Revenue Entitlement will be determined pursuant to Section 10.2.

“ Series Capital Account ” means the capital account maintained for a Partner with respect to a Series pursuant to Section 5.8.

“ Series Indemnified Damages ” has the meaning assigned to such term in Section 7.8.

“ Series LH ” has the meaning assigned to such term in Section 3.1(a).

“ Series LH Assets ” means the assets identified as Series LH Assets in Section 3.3(a).

“ Series LH Distribution ” has the meaning assigned to such term in Section 6.3(a).

“ Series LH General Partner ” means any General Partner of the Series LH.

“ Series LH Liabilities ” means the Liabilities identified as Series LH Liabilities on the Series LH Records from time to time in accordance with this Agreement.

“ Series LH Limited Partner ” means any Limited Partner of the Series LH.

“ Series LH Partners ” means the Series LH General Partners and the Series LH Limited Partners.

“ Series LH Records ” means the records maintained for the Series LH in accordance with Section 3.1(b).

“ Shared Assets ” has the meaning assigned to such term in Exhibit C .

“ Short-Term Debt Financing ” means any borrowings incurred under Facility B1 and Facility C1.

“ Springing Guarantee ” has the meaning assigned to such term in Section 7.3(g).

“ Subsidiary ” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

 

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“ Surcharge Term ” means the primary term of the Alberta Clipper Surcharge and any extension thereof in accordance with the FERC Settlement Offer.

“ Tag-Along Notice ” has the meaning assigned to such term in Section 4.5(a).

“ Tag-Along Right ” has the meaning assigned to such term in Section 4.5(a).

“ Tag-Along Transferee ” has the meaning assigned to such term in Section 4.5(a).

“ Tag Offerees ” has the meaning assigned to such term in Section 4.5(a).

“ Tag Pro Rata Share ” means with respect to any Partner that holds Series AC Partnership Interests, a fraction (expressed as a percentage), the numerator of which equals such Partner’s Series AC Percentage Interest and the denominator of which equals (i) in a situation where the Tag Pro Rata Share is being calculated with respect to all Partners that hold Series AC Partnership Interests, 100% and (ii) in a situation where the Tag Pro Rata Share is being calculated with respect to a particular group of Partners that hold less than 100% of the Series AC Partnership Interests, the total Series AC Percentage Interests held by all the Partners of such group.

“ Tariff Term Sheet ” means the Alberta Clipper U.S. Term Sheet dated June 28, 2007 and approved by the FERC by the letter dated August 28, 2008 (124 FERC ¶ 61,200 (2008)), as the same may be amended from time to time.

“ Third Party ” means, with respect to any Partner, any Person that is not a Permitted Transferee with respect to such Partner.

“ Third Party Asset Offer ” has the meaning assigned to such term in Section 4.6(a).

“ Third Party Offer ” has the meaning assigned to such term in Section 4.4(a).

“ Transfer ” means, with respect to any Partnership Interest, a transaction (i) by which a General Partner assigns its General Partner Interest to another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or merger or otherwise or (ii) by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to another Person, and includes a sale, assignment, gift, exchange or any other disposition by law or merger or otherwise, in each case, including a pledge, encumbrance, hypothecation or mortgage of such Partnership Interest.

“ Transferor ” has the meaning assigned to such term in Section 4.5(a).

“ Wisconsin GP ” has the meaning assigned to such term in the preamble to this Agreement.

 

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Section 1.2 Construction.

Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) the terms “include,” “includes,” “including” or words of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms “hereof,” “herein” or “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement. The headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

ARTICLE II

ORGANIZATION

Section 2.1 Continuation.

Lakehead GP, Wisconsin GP and Enbridge Partners hereby continue the Partnership as a limited partnership under the Delaware Act and, together with EECI Sub and EECI, enter into this Agreement, which amends and restates the Prior Agreement in its entirety. This Agreement shall be effective as of the date set forth in the introductory paragraph of this Agreement. Except as modified in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution and termination of the Partnership or any Series shall be governed by the Delaware Act.

Section 2.2 Name.

The name of the Partnership shall continue to be “Enbridge Energy, Limited Partnership.” Subject to applicable law, the Partnership’s business may be conducted under any other name or names as determined by the Managing General Partner of the Partnership generally, including the name of such Managing General Partner. Each Series’ business shall be conducted under the name of the Partnership on behalf of such Series, the name of such Series or, subject to applicable law, any other name or names as determined by the Managing General Partner of such Series, including the name of such Managing General Partner. The words “Limited Partnership,” “LP” or similar words or letters shall be included in the Partnership’s or any Series’ name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. Without the consent of any Partner being required, the Managing General Partner of the Partnership generally may amend this Agreement and the Certificate of Limited Partnership to change the name of the Partnership at any time and from time to time and shall promptly notify the Partners of such change.

Section 2.3 Principal Office; Registered Office.

(a) The principal office of the Partnership and each Series shall be at 1100 Louisiana, Suite 3300, Houston, Texas 77002 or such other place as the Managing General Partner of the Partnership generally may from time to time designate. The Partnership and each Series may maintain offices at such other places as the Managing General Partner of the Partnership generally or such Series, as applicable, deems advisable.

 

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(b) The address of the Partnership’s registered office in the State of Delaware shall be 1209 Orange Street, Wilmington, Delaware 19801, and the Partnership’s registered agent for service of process on the Partnership in the State of Delaware shall be The Corporation Trust Company. Without the consent of any Partner being required, the Managing General Partner of the Partnership generally may amend this Agreement and the Certificate of Limited Partnership to change the address of the Partnership’s registered office or the Partnership’s registered agent for service of process at any time and from time to time and shall promptly notify the Partners of such change.

Section 2.4 Purpose and Business.

The purpose and nature of the business to be conducted by the Partnership and each Series shall be to engage in any lawful activity for which limited partnerships may be organized under the Delaware Act.

Section 2.5 Powers.

The Partnership and each Series shall be empowered to do any and all acts and things necessary or appropriate for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of the Partnership or any Series.

Section 2.6 Term.

The term of the Partnership shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XI. The existence of the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited Partnership as provided in the Delaware Act. Each Series shall have a perpetual existence until the earlier of the dissolution of the Partnership or the termination of such Series in accordance with the provisions of Article XI.

Section 2.7 Title to Partnership Assets.

Subject to applicable law, record title to any or all of the assets of any Series may be held in the name of the Partnership, such Series, the Managing General Partner of such Series or one or more nominees, as the Managing General Partner of such Series may determine. Each Managing General Partner hereby declares and warrants that the assets of any Series for which record title is held in the name of such Managing General Partner or one or more nominees shall be held in trust by such Managing General Partner or such nominee for the use and benefit of the applicable Series in accordance with the provisions of this Agreement.

ARTICLE III

ESTABLISHMENT AND DESIGNATION OF SERIES

Section 3.1 Establishment and Designation of Series.

(a) The Partners hereby establish two series of partnership interests in the Partnership, the “Series AC” and the “Series LH,” each of which shall constitute a separate series of partnership interests in accordance with Section 17-218 of the Delaware Act, having separate rights, powers, duties and obligations as set forth herein, with each such Series comprised of both General Partner Interests and Limited Partner Interests, as set forth in Article V.

 

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(b) Each Series shall be separate and distinct from each other Series, and separate and distinct records shall be maintained for each Series. The records maintained for each Series shall account for the assets and Liabilities associated with such Series separately from the assets and Liabilities associated with any other Series. Records maintained for a Series that reasonably identify its assets, including by specific listing, category, type, quantity, computational or allocational formula or procedure (including a percentage or share of any asset or assets) or by any other method where the identity of such assets is objectively determinable, will be deemed to account for the assets associated with such Series separately from the assets associated with any other Series. Except for the Intercompany Obligations and the Springing Guarantees or as may be expressly agreed to by a Series or the Partnership generally, no Liability of a Series shall be a Liability of any other Series or the Partnership generally. To the fullest extent permitted by applicable law, except for the Intercompany Obligations and the Springing Guarantees or as may be expressly agreed to by a Series or the Partnership generally, all of the Liabilities incurred, contracted for or otherwise now or hereafter existing with respect to a particular Series shall be enforceable against the assets of such Series only or a General Partner associated with such Series and not against the assets of any other Series or of the Partnership generally or any General Partner not associated with such Series, and, except for the Intercompany Obligations and the Springing Guarantees or as may be expressly agreed to by a Series or the Partnership generally, none of the Liabilities incurred, contracted for or otherwise existing with respect to any other Series shall be enforceable against the assets of such Series. The Certificate of Limited Partnership shall contain a notice of the limitation of liabilities of the Series in conformity with Section 17-218 of the Delaware Act.

(c) Each Series shall have the power and capacity to, in its own name, contract, hold title to assets (including real, personal and intangible property), grant liens and security interests and sue and be sued.

Section 3.2 Series AC.

(a) The following shall constitute the Series AC Assets:

(i) the Exclusive Series AC Assets;

(ii) all rights and interests of the Series AC set forth in Exhibit C with respect to the Shared Assets; and

(iii) all other assets identified as Series AC Assets on the Series AC Records.

(b) The following shall constitute the Series AC Liabilities (without duplication):

(i) all Liabilities associated with or arising from the ownership or operation of the Exclusive Series AC Assets, including Facility B1 and Facility C1;

(ii) the Series AC’s Proportionate Share of Shared Liabilities;

 

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(iii) the Intercompany Preliminary Construction Cost Payable;

(iv) the Intercompany Obligations;

(v) the Springing Guarantees; and

(vi) all other Liabilities identified as Series AC Liabilities on the Series AC Records.

(c) The Partners hereby acknowledge and agree that all Series AC Assets are available to satisfy the claims of all creditors in respect of any Series AC Liability, in each case, without priority of claims among such creditors, except as may be expressly set forth in the documents evidencing the obligations owed to any such creditor.

(d) The Partners hereby acknowledge and agree that all Series AC Assets will be available to satisfy the claims of holders of notes pursuant to the Note Agreement, dated December 12, 1991, related to the Partnership’s 9.15% First Mortgage Notes due December 15, 2011 (the “ Note Agreement ”).

Section 3.3 Series LH.

(a) The following shall constitute the Series LH Assets:

(i) all assets and rights of the Partnership that are not associated with any other Series;

(ii) all rights and interests of the Series LH set forth in Exhibit C with respect to the Shared Assets; and

(iii) all other assets identified as Series LH Assets on the Series LH Records.

(b) The following shall constitute the Series LH Liabilities (without duplication):

(i) all Liabilities of the Partnership that are not associated with any other Series;

(ii) the Series LH’s Proportionate Share of Shared Liabilities;

(iii) the Intercompany Obligations;

(iv) the Springing Guarantees; and

(v) all other Liabilities identified as Series LH Liabilities on the Series LH Records.

(c) The Partners hereby acknowledge and agree that all Series LH Assets are available to satisfy the claims of all creditors in respect of any Series LH Liability, in each case, without priority of claims among such creditors, except as may be expressly set forth in the documents evidencing the obligations owed to any such creditor.

 

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(d) The Partners hereby acknowledge and agree that all Series LH Assets will be available to satisfy the claims of holders of notes pursuant to the Note Agreement.

Section 3.4 Allocation Among Series.

(a) The Partnership may acquire assets only to the extent that they are acquired by the Partnership with respect to one or more particular Series and not with respect to the Partnership generally. To the extent commercially feasible, all Liabilities (other than any Intercompany Obligations or Springing Guarantees) contractually created or incurred or amended by any Series following the Closing Date shall be made expressly non-recourse to (i) the Partnership generally and any other Series and (ii) the Partners of the Partnership generally or any Series (in their respective capacities as such).

(b) The Managing General Partner of the Partnership generally shall establish procedures designed to ensure that, to the extent commercially feasible, all contracts of a Series (other than contracts relating to any Intercompany Obligations or Springing Guarantees) entered into or amended after the Closing Date, (i) expressly acknowledge the separateness of the Partnership generally and each Series, (ii) notify the contract counterparty of the identity of the obligor or obligors thereunder (and if more than one obligor, the obligation of each obligor, which obligation may be joint and several or may be several depending on the facts and circumstances) and (iii) are properly executed and delivered by a duly authorized Person on behalf of the Partnership generally and/or such Series, as applicable.

(c) The Partners (in their respective capacities as such) on the one hand, and Enbridge Partners (on behalf of itself and each Material Subsidiary of Enbridge Partners) on the other hand, acknowledge and agree that, for so long as any Existing Indebtedness (or refinancing thereof) requires, all Intercompany Obligations currently or hereafter existing are expressly recourse to the Partnership generally and to each Series, and expressly non-recourse to the Partners of the Partnership generally and to the Partners of each Series (in the case of Partners, in their respective capacities as such). The Managing General Partner of the Partnership generally shall designate each Intercompany Obligation as the primary obligation of the applicable Series (the “ Primary Obligor ”) with respect to which the Intercompany Obligation was incurred. The Series AC will be the Primary Obligor with respect to the Intercompany Preliminary Construction Cost Payable and Facility B1 and Facility C1 and any refinancing thereof, including the Long-Term Debt Financing, and the Series LH will be the Primary Obligor with respect to all other Intercompany Obligations existing on the Closing Date. As among each Series of the Partnership and the Partnership generally, the Primary Obligor with respect to an Intercompany Obligation shall have the primary responsibility for administering and discharging such obligation and shall have primary liability to the creditors or other obligees associated with such obligation.

(d) The Managing General Partner of the Partnership generally shall determine the portion of the Liabilities associated with or arising from the use, ownership or operation of the Shared Assets and that arise from events or circumstances occurring after the Closing Date to be designated as Series AC Liabilities or Series LH Liabilities (with respect to each Series, its “ Proportionate Share of Shared Liabilities ”) based on the following criteria (and the Managing

 

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General Partners of the Series AC and the Series LH shall maintain the Series AC Records and the Series LH Records, respectively, in a manner consistent with such determination):

(i) the relative use by the Series AC and the Series LH of the Shared Asset to which the Liability relates;

(ii) the relative benefit to the Series AC and the Series LH of the Shared Asset to which the Liability relates; and

(iii) if applicable, the relative fault of the Series AC and the Series LH with respect to the activities or events giving rise to the Liability related to such Shared Asset.

Section 3.5 No Transfer or Sale.

The Partners acknowledge and agree that neither the establishment of the Series AC and the Series LH, nor the designation of their respective assets as set forth in this Article III shall constitute a sale, transfer or other disposition of any asset of the Partnership.

ARTICLE IV

TRANSFER OF PARTNERSHIP INTERESTS;

RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS

Section 4.1 Transfers Generally.

(a) Transfers of Partnership Interests may only be made in strict compliance with all applicable terms of this Agreement, and any purported Transfer of Partnership Interests that does not so comply with all applicable provisions of this Agreement shall, to the fullest extent permitted by law, be null and void and of no force or effect, and no Managing General Partner acting on behalf of the Partnership generally or any Series shall recognize or be bound by any such purported Transfer or effect any such purported Transfer on the transfer books of the Partnership generally or any Series. The Partners agree that the restrictions contained in this Article IV are fair and reasonable and in the best interests of the Partnership, each Series and the Partners.

(b) Notwithstanding anything herein to the contrary, no Transfer by a Partner of all or any part of its Partnership Interest to another Person shall be permitted unless (i) the transferee agrees in writing to assume the rights and duties of such Partner under this Agreement and to be bound by the provisions of this Agreement and (ii) such transferee shall be admitted to the Partnership as a Partner with respect to the Partnership generally or a Series, as applicable, pursuant to Section 4.1(c) immediately prior to the transferor ceasing to be a Partner with respect to the transferred portion of the Partnership Interest, and the business of the Partnership and each Series shall continue without dissolution or termination, respectively.

(c) To effect the admission of any Partner to the Partnership generally or any Series, the Managing General Partner of the Partnership generally and each applicable Series shall take all steps necessary or appropriate under the Delaware Act to amend the records of the Partnership and the applicable Series to reflect such admission and, if necessary, notwithstanding Sections 12.1 or 12.2, to prepare and adopt as soon as practicable an amendment to this

 

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Agreement and, if required by law, the Managing General Partner of the Partnership generally shall prepare and file an amendment to the Certificate of Limited Partnership. The transferee shall be admitted to the Partnership with respect to the Partnership generally or the applicable Series, as the case may be, as a general partner or limited partner, as applicable, upon satisfaction of the requirements of Section 4.1(b) and this Section 4.1(c), without the consent of any other Partner being required.

(d) No Partner shall have any right to withdraw from the Partnership; provided , however , that when a transferee of a Partner’s Partnership Interest is admitted to the Partnership in accordance with Section 4.1(c) with respect to the Partnership Interest so transferred, the transferring Partner shall cease to be a Partner with respect to the Partnership Interest so transferred.

Section 4.2 General Restrictions on Transfers of Partnership Interests.

(a) Notwithstanding the other provisions of this Article IV, no Transfer of any Partnership Interests shall be made if such Transfer would (i) violate the then applicable federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such Transfer, (ii) terminate the existence or qualification of the Partnership or any Series under the laws of the State of Delaware or (iii) cause the Partnership or any Series to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for U.S. federal income tax purposes (to the extent not already so treated or taxed).

(b) The Managing General Partner of the Partnership generally may impose restrictions on the Transfer of Partnership Interests if it receives an opinion of counsel that such restrictions are necessary to avoid a significant risk of the Partnership or any Series becoming taxable as a corporation or otherwise becoming taxable as an entity for U.S. federal income tax purposes. Notwithstanding Sections 12.1 and 12.2, the Managing General Partner of the Partnership generally may impose such restrictions by amending this Agreement.

(c) For so long as the Partnership is a partnership for U.S. federal income tax purposes, in no event may any Transfer of any Partnership Interests by any Partner be made if such Transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code or if such Transfer would otherwise result in the Partnership or any Series being treated as a “publicly traded partnership,” as such term is defined in Section 7704(b) of the Code and the regulations promulgated thereunder.

Section 4.3 Additional Restrictions on Transfers of Partnership Interests.

(a) Series AC Partnership Interests . No Transfer of a Series AC Partnership Interest may be made unless (i) such Transfer complies with the provisions of Section 4.1 and Section 4.2 and (ii) unless such Transfer is to a Permitted Transferee of the transferring Partner, such Transfer is made in accordance with Sections 4.4 and 4.5.

(b) Series LH Partnership Interests . No Transfer of a Series LH Partnership Interest may be made unless (i) such Transfer complies with the provisions of Section 4.1 and Section 4.2 and (ii) unless such Transfer is to a Permitted Transferee of the transferring Partner, such Transfer is made in accordance with Section 4.4.

 

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Section 4.4 Right of First Refusal.

(a) If any Partner receives a bona fide written offer from a Third Party (a “ Third Party Offer ”) for the Transfer of all or a part of (i) in the case of EECI, EECI Sub and their respective Permitted Transferees, such Partner’s Partnership Interests in any Series or (ii) in the case of Enbridge Partners, Lakehead GP, Wisconsin GP and their respective Permitted Transferees, such Partner’s Partnership Interests in the Partnership generally or any Series, and such Partner (the “ Offering Partner ”) desires to accept and is otherwise permitted to effect such proposed Transfer pursuant to this Article IV, such Offering Partner shall deliver written notice of such Third Party Offer (the “ ROFR Notice ”) to the Managing General Partner of the Partnership generally as soon as reasonably practicable, but in no event less than 35 days prior to the date of the proposed Transfer. The date that the ROFR Notice is received by the Managing General Partner of the Partnership generally shall constitute the “ ROFR Notice Date .” Within five Business Days following the ROFR Notice Date, the Managing General Partner of the Partnership generally shall send a copy of the ROFR Notice along with a letter indicating the ROFR Notice Date to all other Partners holding Series AC Partnership Interests (each such Partner, a “ ROFR Holder ”). The ROFR Notice shall set forth the identity of the Third Party (including, (x) if such information is not publicly available, information about the identity of the Third Party, (y) the identity of Affiliates of the Third Party and (z) if the Third Party is making the Third Party Offer as a nominee of another Person, the identity of such other Person and its Affiliates), the amount and the Partnership Interests to be sold (the “ Offered Interests ”), the proposed purchase price for the Offered Interests (the “ ROFR Offer Price ”), all details of the payment terms and all other material terms and conditions, including the nature of the representations and warranties to be made and the indemnities to be given, in connection with the proposed Transfer. The ROFR Offer Price shall be expressed in U.S. dollars, whether or not the form of consideration in the Third Party Offer is wholly or partially cash or cash equivalents.

(b) Each ROFR Holder shall have the right, but not the obligation, to purchase up to that amount of the Offered Interests equal to the product of (i) the amount of the Offered Interests and (ii) a fraction (the “ ROFR Proportionate Share ”), the numerator of which shall be the Series AC Percentage Interest of such ROFR Holder and the denominator of which shall be the sum of all of the Series AC Percentage Interests held by all ROFR Holders. Within 25 days after the ROFR Notice Date, each such ROFR Holder may deliver a written notice to the Offering Partner, the Managing General Partner of the Partnership generally and each other ROFR Holder of its election to purchase such Offered Interests. Any ROFR Holder whose written notice has not been received by the Managing General Partner of the Partnership generally within such 25-day period shall be deemed to have elected not to exercise its right of first refusal in connection with such Transfer. To the extent any such ROFR Holder does not elect to purchase its full ROFR Proportionate Share of such Offered Interests, each ROFR Holder that has elected to purchase its full ROFR Proportionate Share shall be entitled, by delivering written notice to the Offering Partner and the Managing General Partner of the Partnership generally within five Business Days following the end of such 25-day period (such fifth Business Day, the “ ROFR Expiration Date ”), to purchase up to all of the remaining Offered Interests. If there is an oversubscription, the oversubscribed amount shall be allocated among the

 

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ROFR Holders fully exercising their rights to purchase such remaining Offered Interests pro rata based on the Series AC Percentage Interest owned by each fully-electing ROFR Holder. The delivery of a notice of election under this Section 4.4(b) shall constitute an irrevocable commitment to purchase such Offered Interests. If the ROFR Holders shall have elected to purchase all but not less than all of the Offered Interests, the Managing General Partner of the Partnership generally shall thereafter set a reasonable place and time for the closing of the purchase and sale of the Offered Interests, which shall be not less than 10 days nor more than 60 days after the ROFR Expiration Date (subject to extension to the extent necessary to pursue any required regulatory or Partner approvals, including to allow for the expiration or termination of all waiting periods under the HSR Act) unless otherwise agreed by all of the parties to such transaction.

(c) The purchase price and terms and conditions for the purchase of the Offered Interests pursuant to this Section 4.4 shall be the purchase price and terms and conditions set forth in the applicable Third Party Offer (or the cash equivalent thereof); provided that the purchase price shall be the ROFR Offer Price and shall be payable in immediately available U.S. dollars; and provided further that the Offering Partner shall at a minimum make customary representations and warranties concerning (i) such Offering Partner’s valid title to and ownership of the Offered Interests, free and clear of all liens, claims and encumbrances (excluding those arising hereunder and under applicable securities laws), (ii) such Offering Partner’s authority, power and right to enter into and consummate the sale of the Offered Interests, (iii) the absence of any violation, default or acceleration of any agreement or obligation to which such Offering Partner is subject or by which its assets are bound as a result of the sale of the Offered Interests and (iv) the absence of, or compliance with, any governmental or third party consents, approvals, filings or notifications required to be obtained or made by such Offering Partner in connection with the sale of the Offered Interests. The Offering Partner and participating ROFR Holders shall use commercially reasonable efforts to close the purchase of the Offered Interests as soon as reasonably practicable following the ROFR Expiration Date and shall each execute and deliver such instruments and documents and take such actions, including obtaining all applicable approvals and consents and making all applicable notifications and filings, as the other parties may reasonably request in order more effectively to implement the purchase and sale of the Offered Interests hereunder.

(d) Notwithstanding the foregoing, if (i) the ROFR Holders (A) shall have elected to purchase less than all of the Offered Interests or (B) shall not have elected to purchase any of the Offered Interests on or prior to the ROFR Expiration Date, and the Offering Partner has fully complied with the provisions of this Section 4.4, then the Offering Partner may sell all, but not less than all, of the Offered Interests within 90 days after the ROFR Expiration Date (subject to extension for a reasonable amount of time to the extent necessary to obtain any required regulatory or Partner approvals, including to allow for the expiration of all waiting periods under the HSR Act) or (ii) if the ROFR Holders fail to consummate the closing of the purchase and sale of the Offered Interests within the time period provided in the last sentence of Section 4.4(b) (such period, the “ ROFR Closing Period ”) and the Offering Partner has fully complied with the provisions of this Section 4.4, then the Offering Partner may sell all, but not less than all, of the Offered Interests within 90 days after the expiration of the ROFR Closing Period to the Third Party, in each case subject to the provisions of Section 4.2. Any such sale shall not be at less than the purchase price or upon terms and conditions more favorable in any material respect,

 

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individually or in the aggregate, to the purchaser than those specified in the Third Party Offer. If the Offered Interests are not so transferred within the applicable time periods specified in this Section 4.4(d), the Offering Partner may not sell any of the Offered Interests without again complying in full with the provisions of this Article IV.

(e) Each of EECI and Enbridge Partners shall be entitled to assign any rights it has to purchase Offered Interests pursuant to this Section 4.4 to any of its Permitted Transferees.

(f) This Section 4.4 shall not apply to any Transfer or proposed Transfer of Partnership Interests to a Permitted Transferee.

Section 4.5 Tag-Along Rights.

(a) If a Series AC Partner (the “ Transferor ”) proposes to Transfer all or a part of its Series AC Partnership Interests to a Third Party (the “ Tag-Along Transferee ”), then such Transferor shall send written notice of such proposed Transfer (the “ Tag-Along Notice ”) to the other Series AC Partners (the “ Tag Offerees ”) at least 30 days prior to effecting such Transfer. Such Tag-Along Notice may be combined with a ROFR Notice and may be conditioned upon the ROFR Holders not exercising the right of first refusal contained in Section 4.4. The Tag-Along Notice shall set forth the identity of the Tag-Along Transferee (including, if such information is not publicly available, information about the identity of the Tag-Along Transferee and its Affiliates), the amount and the Series AC Partnership Interests to be Transferred, the proposed purchase price expressed in U.S. dollars (whether or not the form of consideration is wholly or partially cash or cash equivalents), all details of the payment terms, the time and place for the closing and all other material terms and conditions, including the nature of the representations and warranties to be made and the indemnities to be given, in connection with the proposed Transfer. Each of the Tag Offerees shall then have the irrevocable right (a “ Tag-Along Right ”), exercisable by delivery of an irrevocable notice to the Transferor at any time within 20 days after receipt of the Tag-Along Notice, to participate in such Transfer by selling to the Tag-Along Transferee a pro rata portion of such Tag Offeree’s Series AC Partnership Interests, based on the respective Tag Pro Rata Share of the Transferor and the other Tag Offerees that exercise their Tag-Along Right, on the same terms (including with respect to representations, warranties and indemnification) as the Transferor; provided , however , that (i) any representations and warranties relating specifically to any such Tag Offeree shall only be made by such Tag Offeree; (ii) any indemnification provided by the Transferor and any such Tag Offeree (other than with respect to the representations referenced in the foregoing subsection (i)) shall be based on the Series AC Percentage Interest being sold by each party in the proposed sale, either on a several, not joint, basis or solely with recourse to an escrow (such escrow not to exceed 25% of the proceeds received by the Tag Offerees that exercise their Tag-Along Right without the consent of such Tag Offerees) established for the benefit of the proposed purchaser (each party’s contributions to such escrow to be on a pro rata basis in accordance with the proceeds received from such sale), it being understood and agreed that any such indemnification obligation of any such Tag Offeree shall in no event exceed the net proceeds to such Tag Offeree from such proposed Transfer; and (iii) the form of consideration to be received by the Transferor in connection with the proposed sale shall be the same as that received by such Tag Offeree.

 

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(b) If any Tag Offeree has exercised its Tag-Along Rights and the Tag-Along Transferee is unwilling to purchase all of the Series AC Partnership Interests proposed to be Transferred by the Transferor and each exercising Tag Offeree, then the Transferor and the exercising Tag Offerees shall reduce, on a pro rata basis, based on their respective Tag Pro Rata Share, the amount of such Series AC Partnership Interests that each otherwise would have sold so as to permit the Transferor and the exercising Tag Offerees to sell the portion of Series AC Partnership Interests (determined in accordance with such Tag Pro Rata Share) that the proposed Tag-Along Transferee is willing to purchase.

(c) Each Tag Offeree and the Transferor shall sell to the Tag-Along Transferee all of the Series AC Partnership Interests proposed to be Transferred by them, at not less than the purchase price payable in immediately available U.S. dollars and upon terms and conditions, if any, not more favorable in any material respect, individually and in the aggregate, to the Tag-Along Transferee than those in the Tag-Along Notice at the time and place provided for the closing in the Tag-Along Notice, or at such other time and place as the Tag Offerees, the Transferor and the Tag-Along Transferees shall agree.

(d) The Transferor shall have the right to require the Managing General Partner of the Series AC and the Managing General Partner of the Partnership generally to cooperate fully with potential acquirors of its Series AC Partnership Interests by taking all customary and other actions reasonably required by the Transferor or such potential acquirors, including making the records and assets of each Series and the Partnership generally reasonably available for inspection by such potential acquirors and making the officers and employees who manage the business of the Partnership and the Series reasonably available for interviews; provided that the potential acquirer has entered into a customary confidentiality agreement with the Partnership and the applicable Series. Neither the Managing General Partner of any Series nor the Managing General Partner of the Partnership generally shall be required to disclose to any potential acquirer (i) any information that such Managing General Partner reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which such Managing General Partner reasonably believes (A) could damage the Partnership or any Series or their respective businesses or (B) that the Partnership or any Series is required by law or by agreement to keep confidential.

Section 4.6 Transfers of Certain Partnership Assets—ROFR.

(a) If the Partnership or any Series receives a bona fide written offer from a Third Party (a “ Third Party Asset Offer ”) for the transfer of any Series asset or group of related assets with a fair market value in excess of $5.0 million, and the Managing General Partner of the Series associated with such assets desires to accept and is otherwise permitted to effect such proposed transfer pursuant to this Section 4.6, such Managing General Partner shall deliver written notice of such Third Party Asset Offer (the “ ROFR Asset Notice ”) to EECI no less than 30 days prior to the date of the proposed Transfer. The date that the ROFR Asset Notice is received by EECI shall constitute the “ ROFR Asset Notice Date .” The ROFR Asset Notice shall set forth the identity of the Third Party (including, if such information is not publicly available, information about the identity of the Third Party and its Affiliates), a description of the Series asset or group of related assets to be transferred (the “ ROFR Offered Asset ”), the proposed purchase price for the ROFR Offered Asset (the “ ROFR Asset Offer Price ”), all details of the

 

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payment terms and all other material terms and conditions, including the nature of the representations and warranties to be made and the indemnities to be given, in connection with the proposed transfer. The ROFR Asset Offer Price shall be expressed in U.S. dollars, whether or not the form of consideration in the Third Party Asset Offer is wholly or partially cash or cash equivalents.

(b) For so long as EECI or any of its Affiliates is a holder of a Partnership Interest, EECI shall have the right, but not the obligation, to purchase the ROFR Offered Asset. Within 25 days after the ROFR Asset Notice Date (such 25th day, the “ ROFR Asset Expiration Date ”), EECI may deliver a written notice to the Managing General Partner of the applicable Series of its election to purchase such ROFR Offered Asset. The delivery of a notice of election under this Section 4.6 shall constitute an irrevocable commitment to purchase such ROFR Offered Asset. Such Managing General Partner shall thereafter set a reasonable place and time for the closing of the purchase and sale of the ROFR Offered Asset, which shall be not less than 10 days nor more than 60 days after the ROFR Asset Expiration Date (subject to extension to the extent necessary to pursue any required regulatory or Partner approvals, including to allow for the expiration or termination of all waiting periods under the HSR Act) unless otherwise agreed by all of the parties to such transaction.

(c) The purchase price and terms and conditions for the purchase of the ROFR Offered Asset pursuant to this Section 4.6 shall be the purchase price and terms and conditions set forth in the applicable Third Party Asset Offer; provided that the purchase price shall be the ROFR Asset Offer Price and shall be payable in immediately available U.S. dollars; and provided further that the applicable Series shall at a minimum make customary representations and warranties concerning (i) the Series’ valid title to and ownership of the ROFR Offered Asset, free and clear of all liens, claims and encumbrances (excluding those arising hereunder and under applicable securities laws), (ii) the Series’ authority, power and right to enter into and consummate the sale of the ROFR Offered Asset, (iii) the absence of any violation, default or acceleration of any agreement to which the Series is subject or by which its assets are bound as a result of the agreement to sell and the sale of the ROFR Offered Asset and (iv) the absence of, or compliance with, any governmental or third party consents, approvals, filings or notifications required to be obtained or made by the Series in connection with the sale of the ROFR Offered Asset. The Managing General Partner of such Series and EECI shall use commercially reasonable efforts to close the purchase of the ROFR Offered Asset as soon as reasonably practicable following the giving of the ROFR Asset Notice and shall execute and deliver such instruments and documents and take such actions, including obtaining all applicable approvals and consents and making all applicable notifications and filings, a