PURCHASE AND SALEAGREEMENT among EL PASO GREAT LAKESCOMPANY, L.L.C., as Seller, and TC GL INTERMEDIATE LIMITED PARTNERSHIP and TRANSCANADA PIPELINE USA LTD., as Buyers, dated as of December 22, 2006

Exhibit 2.1

Execution Version

PURCHASE AND SALE AGREEMENT

among

EL PASO GREAT LAKES COMPANY, L.L.C.,

as Seller,

and

TC GL INTERMEDIATE LIMITED PARTNERSHIP

and

TRANSCANADA PIPELINE USA LTD.,

as Buyers,

dated as of December 22, 2006

TABLE OF CONTENTS

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of December 22, 2006, is among (i) El Paso Great Lakes Company, L.L.C., a Delaware limited liability company (“Seller”), (ii) TC GL Intermediate Limited Partnership, a Delaware limited partnership (“LP Buyer”), and (iii) TransCanada PipeLine USA Ltd., a Nevada corporation (“Corp Buyer”; LP Buyer and Corp Buyer are each referred to herein individually as a “Buyer” and collectively as the “Buyers”).  Seller and Buyers are referred to herein sometimes individually as a “Party” and collectively as the “Parties.”

Recitals:

A.            Seller directly owns beneficially and of record (i) 50% of the outstanding capital stock (the “GLGTCO Shares”) of Great Lakes Gas Transmission Company, a Delaware corporation (“GLGTCO”), and (ii) a 46.45% general partnership interest (the “GLGTLP GP Interest” and, together with the GLGTCO Shares, the “Purchased Interests”) in Great Lakes Gas Transmission Limited Partnership, a Delaware limited partnership (“GLGTLP”).

B.            Seller desires to sell to LP Buyer, and LP Buyer desires to purchase from Seller, the GLGTLP GP Interest, upon the terms and subject to the conditions in this Agreement.

C.            Seller desires to sell to Corp Buyer, and Corp Buyer desires to purchase from Seller, the GLGTCO Shares, upon the terms and subject to the conditions in this Agreement.

NOW, THEREFORE, Seller and Buyers agree as follows:

Article 1
DEFINITIONS

1.1           Certain Defined Terms.  As used in this Agreement, each of the following terms has the meaning given to it below:

“Acquired Companies” means GLGTCO, GLGTLP and the wholly owned subsidiaries of GLGTCO and GLGTLP listed in Schedule 1.1(a).

“Acquired Company” means any of the Acquired Companies.

“Acquired Company Insurance Policies” means those material policies of insurance which the Acquired Companies maintain with respect to their assets and operations, all of which are listed on Schedule 4.16(i).

“Acquired Company Plans” is defined in Section 4.14(a).

“Adjustment Statement” is defined in Section 2.5(b).

“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, such Person.  For the purposes of this definition, “control” means, when used with respect to any

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Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise, and the terms “controlling” and “controlled” have correlative meanings.

“Agreement” is defined in the Preamble.

“Applicable Environmental Laws” means any and all Applicable Laws (in effect as of the date of this Agreement) pertaining to protection of human health and the environment in any and all jurisdictions in which any Acquired Company conducts or has conducted operations.

“Applicable Law” means any statute, law, rule, or regulation, or any judgment, order, ordinance, or other documentary articulation of law, writ, injunction, or decree of any Governmental Entity to which a specified Person or its property is subject.

“Assumed Obligations” is defined in Section 2.6.

“Balance Sheet Date” means September 30, 2006.

“Buyer” is defined in the Preamble.

“Buyer Guarantors” means TransCanada Corporation and TransCanada PipeLine USA Ltd.

“Buyer Indemnitees” means, collectively, each Buyer and its Affiliates (including each of the Acquired Companies) and its and their officers, directors, employees, agents, and representatives.

“Buyer Protected Information” is defined in Section 7.2(c)(i).

“Buyers Guaranty” means a guaranty agreement in the form of Exhibit 7.12(a).

“Cash Balance Plan” is defined in Section 7.3(b).

“Closing” means the closing of the transactions contemplated hereby.

“Closing Date” means the date on which the Closing occurs.

“Code” means the Internal Revenue Code of 1986, as amended.

“commercially reasonable efforts” means efforts (i) in accordance with reasonable commercial practice and the terms, limitations, and restrictions of all applicable contracts and other agreements and (ii) without the incurrence of unreasonable expense.

“Confidentiality Agreement” means that certain confidentiality letter agreement, dated September 25, 2006, between TransCanada PipeLines Limited and El Paso.

“Corp Adjustment Amount” is defined in Section 2.5(a).

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“Corp Base Purchase Price” is defined in Section 2.2(b).

“Corp Buyer” is defined in the Preamble.

“Corp Estimated Adjustment Amount” means Seller’s good faith and reasonable estimate of the Corp Adjustment Amount, as of the date on which Seller delivers to Buyers the written statement contemplated by Section 2.4.

“Corp Interest Adjustment” means interest (calculated based on the actual number of days elapsed, assuming a 360-day year) on the Corp Base Purchase Price as adjusted by the Corp Estimated Adjustment Amount at the Prime Rate plus 1.0% from (and including) the Effective Date to (but excluding) the Closing Date.

“Data Site” means the online presentation of materials prepared by Seller, as the same exists as of the close of business, Houston, Texas time, of the day immediately preceding the date of this Agreement, to assist Buyers in their investigation of the Acquired Companies.

“Debt Documents” means the following:  (i) Note Agreement, dated as of March 29, 2000, among GLGTLP and certain purchasers relating to $100 million principal amount of 8.08% Senior Notes due January 29, 2030; (ii) Note Agreement, dated as of March 25, 1998, among GLGTLP and certain purchasers relating to $90 million principal amount 6.73% Series A Senior Notes due March 25, 2018 and $110 million principal amount of 6.95% Series B Senior Notes due March 25, 2028; and (iii) Note Agreement, dated as of October 15, 1991, among GLGTLP and certain purchasers relating to $100 million 8.74% Series A Senior Notes due October 30, 2011 and $100 million 9.09% Series B Senior Notes due October 30, 2021.

“Deductible Amount” means an amount equal to 1.0% of the Total Purchase Price.

“Direct Claim” means any claim by an Indemnitee on account of a Loss which does not result from a Third Party Claim.

“Disclosure Letter” means the letter, of even date herewith, of Seller or Buyers to which such party’s Schedules are attached.

“Dispute Deadline Date” is defined in Section 2.5(c).

“Effective Date” means the close of business on the last day of the month preceding the Closing Date.

“Effective Date Financial Statements” is defined in Section 2.5(b).

“Effective Date GLGTCO Financial Statements” is defined in Section 2.5(b).

“Effective Date GLGTLP Financial Statements” is defined in Section 2.5(b).

“El Paso” means El Paso Corporation, a Delaware corporation.

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“El Paso Marks” means the name “El Paso” and other similar trademarks, service marks, and trade names owned by Seller or its Affiliates (other than the Acquired Companies).

“Employee Plan” means any stock purchase, stock option, pension, profit sharing, bonus, deferred compensation, incentive compensation, severance or termination pay, hospitalization or other medical or dental, life or other insurance, supplemental unemployment benefits plan or agreement or policy or other arrangement providing employment-related compensation or benefits, including “employee benefit plans,” as defined in Section 3(3) of ERISA.

“Encumbrances” means liens, charges, pledges, options, rights of first refusal, reversionary rights, mortgages, deeds of trust, security interests, claims, leases, licenses, restrictions (whether on voting, sale, transfer, disposition, or otherwise), easements, encroachments and other encumbrances or limitations of every type and description, whether imposed by law, agreement, understanding, or otherwise.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Excluded Assets” is defined in Section 7.8.

“Excluded Information” is defined in Section 7.1(a).

“Exhibits” means the exhibits attached to this Agreement.

“FERC” means the Federal Energy Regulatory Commission.

“GLGTCO” is defined in the Recitals.

“GLGTCO Financial Statements” is defined in Section 4.7.

“GLGTCO Shares” is defined in the Recitals.

“GLGTCO Working Capital” is defined in Section 2.5(f).

“GLGTLP” is defined in the Recitals.

“GLGTLP GP Interest” is defined in the Recitals.

“GLGTLP Financial Statements” is defined in Section 4.7.

“GLGTLP Working Capital” is defined in Section 2.5(f).

“GL Financial Statements” is defined in Section 4.7.

“Governmental Entity” means any court or tribunal in any jurisdiction (domestic or foreign) or any federal, state, municipal, or local government or other governmental body, agency, authority, department, commission, board, bureau, instrumentality, arbitrator, or arbitral body (domestic or foreign).

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“HSR Measures” is defined in Section 7.2(a).

“Income Tax” means federal, state, local or foreign income or franchise Taxes or other similar Taxes measured in whole or part by income and any interest and penalties or additions thereon.

“Indemnifying Party” means a Party required to provide indemnification under Section 12.1.

“Indemnitee” means a Party entitled to receive indemnification under Section 12.1.

“IRS” means the Internal Revenue Service.

“knowledge” means, when used with respect to Seller or the Acquired Companies, that which is actually known by the individuals listed on Schedule 1.1(b), without due inquiry, and when used with respect to Buyers, that which is actually known by the individuals listed on Schedule 1.1(c), without due inquiry.

“Long Term Debt” means both the current and long-term portions of the outstanding principal amount of indebtedness as of the date of determination under the Debt Documents, and including the amount of unamortized debt discount under U.S. GAAP.

“Losses” means, collectively, any and all claims, liabilities, losses, causes of action, fines, penalties, litigation, lawsuits, administrative proceedings, administrative investigations, costs, and expenses, including reasonable attorneys’ fees, court costs, and other costs of suit.

“LP Adjustment Amount” is defined in Section 2.5(a).

“LP Base Purchase Price” is defined in Section 2.2(a).

“LP Buyer” is defined in the Preamble.

“LP Estimated Adjustment Amount” means Seller’s good faith and reasonable estimate of the LP Adjustment Amount, as of the date on which Seller delivers to Buyers the written statement contemplated by Section 2.4.

“LP Interest Adjustment” means interest (calculated based on the actual number of days assuming a 360-day year) on the LP Base Purchase Price, as adjusted by the LP Estimated Adjustment Amount at the Prime Rate plus 1.0% from (and including) the Effective Date to (but excluding) the Closing Date.

“Material Adverse Effect” means, any circumstance, change, or effect that is materially adverse to the financial condition, properties, operations, results of operations, assets or business of the Acquired Companies taken as a whole or that impedes or delays the ability of Seller to perform its obligations under this Agreement or the Related Agreements or to consummate the transactions contemplated hereby or thereby, other than (i) any adverse circumstance, change, or effect arising from or relating to general business or economic conditions in the industries or

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markets in which the Acquired Companies operate, including (A) changes in national or regional gathering and pipeline systems or (B) rules, regulations, or decisions of FERC or the courts affecting the interstate natural gas transportation industry as a whole, (ii) any adverse circumstance, change, or effect arising from weather conditions, including unexpected or harsh weather conditions, (iii) seasonal reductions in revenues or earnings of the Acquired Companies in the ordinary course of business consistent with past periods, (iv) national or international political, diplomatic, or military conditions, including any engagement in hostilities, whether or not pursuant to a declaration of war, or the occurrence of any military or terrorist attack not disproportionately affecting the Acquired Companies, (v) changes in U.S. GAAP, (vi) changes in Applicable Laws not disproportionately affecting the Acquired Companies, (vii) the taking of any action required or permitted by Section 7.8 of this Agreement, or the failure of Seller or the Acquired Companies to take any action for which Seller in good faith requests Buyers’ written consent under Section 6.1 or 6.2 and Buyers fail or refuse to provide such consent, (viii) any changes in prices for commodities, goods, or services, or the availability or costs of hedges or other derivatives, including fluctuations in interest rates, (ix) any matter that is expressly disclosed in the Schedules as of the date of execution of this Agreement, and (x) the execution and delivery or announcement of this Agreement.  The Parties agree that any determination as to whether a change, effect, event, or occurrence is a Material Adverse Effect shall be made after taking into account and considering all matters relevant to such analysis, including (y) all amounts, if any, recognized by the Person and its Affiliates, as applicable, under insurance or third-party indemnifications or similar agreements, and (z) all Tax Benefits with respect to such change, effect, event, or occurrence.

“NGA” is defined in Section 4.20.

“NLRB” is defined in Section 4.14(d).

“Notice” means any notice, request, demand, or other communications required or permitted to be given or made under this Agreement by either Party.

“Notice of Disagreement” is defined in Section 2.5(c).

“Party” is defined in the Preamble.

“Permits” means licenses, permits, franchises, consents, approvals, variances, exemptions, and other authorizations of or from Governmental Entities.

“Permitted Encumbrances” means (i) zoning, planning and building codes and ordinances; (ii) defects, imperfections or irregularities in title (including easements, rights-of-way, covenants, conditions, restrictions, and other matters affecting title to real property) that are not material in character, amount or extent with respect to the asset or assets to which they relate or, together with any other such defects, imperfections or irregularities, in the aggregate; (iii) Encumbrances created by or referenced in any of the Scheduled Contracts; (iv) Encumbrances created by Buyers, or their successors and assigns, (v) liens for Taxes not yet due and payable, (vi) statutory liens (including materialmen’s, mechanic’s, repairmen’s, landlord’s and other similar liens) arising in connection with the ordinary course of business

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securing payments not yet due and payable; (vii) Encumbrances arising under the Debt Documents; and (viii) Encumbrances that would not materially interfere with the operations of the Acquired Companies, as currently conducted, whether of record or not of record.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, enterprise, unincorporated organization, or Governmental Entity.

“Pipeline/Storage PSA” is defined in Section 8.4.

“Post-Effective Date Taxes” is defined in Section 11.1(d).

“Pre-Closing Taxes” is defined in Section 11.1(c).

“Prime Rate” means the prime interest rate reported in The Wall Street Journal on the Effective Date.

“Proceedings” means all proceedings, actions, claims, suits, investigations, and inquiries by or before any mediator, arbitrator, or Governmental Entity.

“Purchase Price” means (i) in the case of the GLGTLP GP Interest, the sum of the LP Base Purchase Price, as adjusted by the LP Adjustment Amount and the LP Interest Adjustment, and (ii) in the case of the GLGTCO Shares, the sum of the Corp Base Purchase Price, as adjusted by the Corp Adjustment Amount and the Corp Interest Adjustment.

“Purchase Price Allocation Schedule” is defined in Section 2.7.

“Purchased Interests” is defined in the Recitals.

“Related Agreements” means any document, agreement, certificate or instrument delivered in connection with the transactions contemplated by this Agreement, and with respect to Buyers only, the Buyers Guaranty, and with respect to Seller only, the Seller Guaranty.

“Savings Plan” is defined in Section 7.3(b).

“Scheduled Contracts” means any of the agreements or contracts listed on Schedule 4.13.

“Schedules” means the schedules attached to the Disclosure Letter of Seller or Buyers, as the case may be.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller” is defined in the Preamble.

“Seller Guarantor” means El Paso.

“Seller Guaranty” means a guaranty agreement in the form of Exhibit 7.12(b).

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“Seller Indemnitees” means, collectively, Seller and its Affiliates (other than the Acquired Companies) and each of their officers, directors, employees, agents, and representatives.

“Seller Protected Information” is defined in Section 7.2(c)(ii).

“Straddle Period” means a Tax period or year commencing before and ending after the Closing Date.

“Straddle Return” means a Tax Return for a Straddle Period.

“Tax Audit” is defined in Section 11.6(a).

“Tax Benefit” means an amount by which the current Tax liability of a Party (or group of corporations including the Party) is reduced (including by deduction, reduction of income by virtue of increased Tax basis or otherwise, entitlement of refund, credit, or otherwise).

“Tax Return” means any return or report, declaration, report, claim for refund, information return, or statement relating to Taxes, including any related schedules, attachments, or other supporting information, with respect to Taxes, and including any amendment thereto.

“Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, parking, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated tax or other tax of any kind whatsoever, including any interest, penalty or addition thereto, including such item for which a liability arises as a transferee or successor-in-interest.

“Taxing Authority” means any Governmental Entity responsible for the imposition or collection of any Tax.

“Third Party” means any Person other than (i) Seller or any of its Affiliates (including the Acquired Companies) and (ii) Buyers and their respective Affiliates.

“Third Party Claim” means any claim or the commencement of any claim, action, or proceeding made or brought by a Third Party.

“Total Purchase Price” means the sum of (i) the Purchase Price and (ii) 50% of the principal amount of the Long Term Debt outstanding as of the Closing.

“Transition Period” is defined in Section 7.10.

“U.S. GAAP” means generally accepted accounting principles in the United States of America, including interpretations, guidance, or bulletins issued in respect thereof, as in effect on the date to which the document or calculation to which it refers relates, applied on a consistent basis throughout the periods covered by such document or calculation.

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1.2           Construction.  In construing this Agreement, the following principles shall be followed:

(a)           the terms “herein,” “hereof,” “hereby,” “hereunder,” and other similar terms, refer to this Agreement as a whole and not only to the particular Article, Section, or other subdivision in which any such terms may be employed;

(b)           references to Articles, Sections, Schedules, Exhibits and other subdivisions and clauses refer to the Articles, Sections, Schedules, Exhibits and other subdivisions and clauses of this Agreement;

(c)           a reference to any Person shall include such Person’s predecessors and successors;

(d)           all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with U.S. GAAP;

(e)           all references herein to amounts in dollars or preceded by “$” shall constitute references to such amounts in U.S. currency;

(f)            no consideration shall be given to the captions of the Articles, Sections, subsections, or clauses, which are inserted for convenience in locating the provisions of this Agreement and not as an aid in its construction;

(g)           examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

(h)           the word “includes” and its syntactical variants mean “includes, but is not limited to” and corresponding syntactical variant expressions;

(i)            a defined term has its defined meaning throughout this Agreement, regardless of whether it appears before or after the place in this Agreement where it is defined;

(j)            the plural shall be deemed to include the singular, and vice versa; and

(k)           each Exhibit and Schedule to this Agreement is a part of this Agreement, but if there is any conflict or inconsistency between the main body of this Agreement and any Exhibit or Schedule, the provisions of the main body of this Agreement shall prevail.

Article 2
TERMS OF THE TRANSACTION

2.1           Agreement to Sell and to Purchase the Purchased Interests.

(a)           At the Closing, and on the terms and subject to the conditions in this Agreement, Seller shall sell, transfer, deliver, and convey to LP Buyer, and LP Buyer shall purchase and

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accept from Seller, the GLGTLP GP Interest, free and clear of all Encumbrances, other than restrictions on the transfer of securities under Applicable Laws or under the partnership agreement of GLGTLP.

(b)           At the Closing, and on the terms and subject to the conditions in this Agreement, Seller shall sell, transfer, deliver, and convey to Corp Buyer, and Corp Buyer shall purchase and accept from Seller, the GLGTCO Shares, free and clear of all Encumbrances, other than restrictions on the transfer of securities under Applicable Laws or under the certificate of incorporation or bylaws of GLGTCO.

2.2           Purchase Price and Payment.

(a)           In consideration of the sale of the GLGTLP GP Interest to LP Buyer, LP Buyer shall pay to Seller at the Closing, in immediately available funds by confirmed wire transfer to a bank account or accounts to be designated by Seller to LP Buyer not less than three business days prior to the Closing, an amount equal to $750,000,000.00 (the “LP Base Purchase Price”), as adjusted by the LP Estimated Adjustment Amount, plus the LP Interest Adjustment.

(b)           In consideration of the sale of the GLGTCO Shares to Corp Buyer, Corp Buyer shall pay to Seller at the Closing, in immediately available funds by confirmed wire transfer to a bank account or accounts to be designated by Seller to Corp Buyer not less than three business days prior to the Closing, an amount equal to $60,000,000.00 (the “Corp Base Purchase Price”), as adjusted by the Corp Estimated Adjustment Amount, plus the Corp Interest Adjustment.

2.3           [Intentionally omitted.]

2.4           Calculation of Closing Consideration.  Not later than five business days prior to the Closing Date, Seller shall deliver to Buyers a written statement from Seller setting forth the calculations of (i) the LP Base Purchase Price, LP Estimated Adjustment Amount and LP Interest Adjustment and (ii) the Corp Base Purchase Price, Corp Estimated Adjustment Amount and Corp Interest Adjustment, in each case, in reasonable detail, based on the best information available to Seller as of the date hereof, together with supporting work papers with respect to such calculations.  The LP Base Purchase Price shall be increased by the LP Estimated Adjustment Amount if the LP Estimated Adjustment Amount is positive or decreased by the LP Estimated Adjustment Amount if the LP Estimated Adjustment Amount is negative.  The Corp Base Purchase Price shall be increased by the Corp Estimated Adjustment Amount if the Corp Estimated Adjustment Amount is positive or decreased by the Corp Estimated Adjustment Amount if the Corp Estimated Adjustment Amount is negative.

2.5           Calculation and Payment of Adjustment Amounts.

(a)           Adjustment Amounts.  The “Corp Adjustment Amount” equals 50% of the net increase to, or net decrease from, the GLGTCO Working Capital between the Balance Sheet Date and the Effective Date.  The “LP Adjustment Amount” equals 50% of the net increase to, or net decrease from, the GLGTLP Working Capital between the Balance Sheet Date and the Effective Date.  For purposes of clarity, an increase in GLGTCO Working Capital or GLGTLP Working Capital shall be represented by a positive number

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and a decrease in GLGTCO Working Capital or GLGTLP Working Capital shall be represented by a negative number.

(b)           Effective Date Financial Statements and Adjustment Amount.  As promptly as practicable after the Closing Date, and in any event not later than 90 days after the Closing Date, Buyers shall prepare and deliver to Seller a consolidated balance sheet of GLGTCO as of the Effective Date (the “Effective Date GLGTCO Financial Statements”), a consolidated balance sheet of GLGTLP as of the Effective Date (the “Effective Date GLGTLP Financial Statements”, and collectively with the Effective Date GLGTCO Financial Statements, the “Effective Date Financial Statements”), in each case prepared in accordance with U.S. GAAP applied on the same basis as the balance sheet included in the GL Financial Statements have been prepared (except that the Effective Date Financial Statements shall be prepared using actual volumes and revenues and based on other best available information through the period ending upon the date the same is delivered to Seller), and (ii) a statement of Buyers (the “Adjustment Statement”) showing in reasonable detail their calculation of the LP Adjustment Amount and the Corp Adjustment Amount, together with supporting work papers.  Seller agrees, at no cost to Buyers, to give Buyers and their authorized representatives reasonable access to such employees, offices, and other facilities and such books and records of Seller and its Affiliates as are reasonably necessary to allow Buyers and their authorized representatives to prepare the Effective Date Financial Statements, the LP Adjustment Amount and the Corp Adjustment Amount in compliance with this Section 2.5.  Buyers, at no cost to Seller, shall give representatives of Seller reasonable access to the Acquired Companies’ premises, employees, and other facilities and to its and the Acquired Companies’ books and records as are reasonably necessary for purposes of reviewing, verifying, and auditing the calculations contained in the Effective Date Financial Statements and the Adjustment Statement.

(c)           Dispute Resolution.  The Adjustment Statement shall become final and binding on Seller and Buyers as to the LP Adjustment Amount and the Corp Adjustment Amount on the 90th day following the date the Adjustment Statement is received by Seller (the “Dispute Deadline Date”), unless prior to the Dispute Deadline Date, Seller delivers Notice to Buyers of its disagreement (“Notice of Disagreement”).  Seller’s Notice of Disagreement shall set forth all of Seller’s disputed items together with Seller’s proposed changes thereto, including an explanation in reasonable detail of the basis on which Seller proposes such changes.  If Seller has delivered a timely Notice of Disagreement, then Seller and Buyers shall use their good faith efforts to reach written agreement on the disputed items to determine the LP Adjustment Amount and the Corp Adjustment Amount.  If all of Seller’s disputed items have not been resolved by Seller and Buyers by the 120th day following Seller’s receipt of the Adjustment Statement, then Seller’s disputed items that are still disputed shall be submitted to binding arbitration by an independent nationally recognized accounting firm without any material financial relationship to either Seller or Buyers, as mutually selected by Seller and Buyers within 5 business days after the end of the foregoing 120-day period (or in the absence of agreement between Seller and Buyers by the close of business on such 5th business day as selected by the president of the American Arbitration Association or his designee).

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The arbitrator’s determination shall in no event be more favorable to Buyers than reflected on the Adjustment Statement prepared by Buyers nor more favorable to Seller than shown in the proposed changes delivered by Seller under its Notice of Disagreement.  The fees and expenses of such arbitration shall be borne 50% by Buyers and 50% by Seller.  The determination of the disputed items by such arbitration shall be final and binding upon Seller and Buyers as to such disputed items.

(d)           Final Date.  The LP Adjustment Amount and the Corp Adjustment Amount shall be deemed to be finally determined in the amounts set forth in the Adjustment Statement on the Dispute Deadline Date unless a Notice of Disagreement is timely given in accordance with Section 2.5(c) with respect to the calculation thereof.  If such a Notice of Disagreement is timely given, the LP Adjustment Amount and the Corp Adjustment Amount shall be deemed finally determined on the date that the selected accounting firm gives Notice to Buyers and Seller of its determination with respect to all disputed items regarding the calculation thereof, or, if earlier, the date on which Seller and Buyers agree in writing on the amount thereof, in which case the LP Adjustment Amount and the Corp Adjustment Amount shall be calculated in accordance with such determination or agreement, as the case may be.

(e)           Payments.

(i)            If the LP Adjustment Amount, as finally determined, exceeds the LP Estimated Adjustment Amount, then LP Buyer shall pay to Seller the amount of such excess, plus interest on the amount of such excess from (and including) the Effective Date to (but excluding) the date of payment at the Prime Rate plus 1.0%.  If the LP Adjustment Amount, as finally determined,  is less than the LP Estimated Adjustment Amount, then Seller shall pay to LP Buyer the amount of such deficiency, plus interest on the amount of such deficiency from (and including) the Effective Date to (but excluding) the date of payment at the Prime Rate plus 1.0%.

(ii)           If the Corp Adjustment Amount, as finally determined, exceeds the Corp Estimated Adjustment Amount, then Corp Buyer shall pay to Seller the amount of such excess, plus interest on the amount of such excess from (and including) the Effective Date to (but excluding) the date of payment at the Prime Rate plus 1.0%.  If the Corp Adjustment Amount, as finally determined, is less than the Corp Estimated Adjustment Amount, then Seller shall pay to Corp Buyer the amount of such deficiency, plus interest on the amount of such deficiency from (and including) the Effective Date to (but excluding) the date of payment at the Prime Rate plus 1.0%.

(iii)          Any payments due under this Section 2.5(e) shall be made within three business days of the date the LP Adjustment Amount and the Corp Adjustment Amount are deemed to be finally determined under Section 2.5(d).

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(f)            Definition.  The “GLGTCO Working Capital” and the “GLGTLP Working Capital,” in each case as of the Balance Sheet Date, are calculated as set forth on Schedule 2.5(f).  The “GLGTCO Working Capital” as of the Effective Date shall be calculated using the Effective Date GLGTCO Financial Statements and shall be equal to (1) the amount of current assets of GLGTCO, as reflected on the Effective Date GLGTCO Financial Statements, less (2) the amount of current liabilities of GLGTCO, as reflected on the Effective Date GLGTCO Financial Statements.  The “GLGTLP Working Capital” as of the Effective Date shall be calculated using the Effective Date GLGTLP Financial Statements and shall be equal to (1) the amount of current assets of GLGTLP, as reflected on the Effective Date GLGTLP Financial Statements, less (2) the amount of current liabilities of GLGTLP, as reflected on the Effective Date GLGTLP Financial Statements.  Notwithstanding the foregoing sentence, (i) for the purpose of calculating the GLGTCO Working Capital, none of the following have been or shall be included in either current assets or current liabilities: (A) assets or liabilities of GLGTCO relating to Taxes (including any deferred Tax assets or liabilities); (B) any assets or liabilities of GLGTCO relating to an intercompany account; (C) cash or cash equivalents on hand or accounts receivable constituting the proceeds of insurance received or receivable by GLGTCO in respect of a casualty loss experienced by GLGTCO after the Balance Sheet Date, which casualty loss involves an asset reflected as a non-current asset as of the Balance Sheet Date; and (D) any Excluded Assets and (ii) for the purpose of calculating the GLGTLP Working Capital, none of the following have been or shall be included in either current assets or current liabilities:  (A) assets or liabilities of GLGTLP relating to Taxes (including any deferred Tax assets or liabilities); (B) the current portion of any principal payment obligation with respect to Long-Term Debt; (C) cash or cash equivalents on hand or accounts receivable constituting the proceeds of insurance received or receivable by GLGTLP in respect of a casualty loss experienced by GLGTLP after the Balance Sheet Date, which casualty loss involves an asset reflected as a non-current asset as of the Balance Sheet Date; and (D) any Excluded Assets.  Except to the extent specifically contemplated above, Seller represents and warrants to Buyers that the GLGTCO Working Capital and GLGTLP Working Capital as of the Balance Sheet Date has been calculated in a manner consistent with the method for calculating GLGTCO Working Capital and GLGTLP Working Capital, respectively, as of the Effective Date as set forth in this Section 2.5(f).

2.6           Acknowledgement of Obligations.  For the avoidance of doubt, subject to the terms and conditions of this Agreement, including Sections 7.3 and 7.8 and Articles 11 and 12, (i) Buyers acknowledge and agree that, following the Closing, the Acquired Companies shall remain obligated for their liabilities and obligations, including the Long-Term Debt and accrued and unpaid interest thereon, outstanding as of the Closing (the “Assumed Obligations”), and (ii) the Acquired Companies shall pay, perform, and discharge the Assumed Obligations from and after the Closing in accordance with their terms.

2.7           Purchase Price Allocation.  Seller and Buyers agree that the Purchase Price shall be allocated among the Acquired Companies for Tax purposes in accordance with the allocation set forth on Schedule 2.7 (the “Purchase Price Allocation Schedule”).  The Purchase Price Allocation Schedule shall be revised to take into account subsequent adjustments under this

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Agreement to the Purchase Price after the Closing.  Seller and Buyers shall each report the Tax consequences of the purchase and sale contemplated hereby in a manner consistent with the Purchase Price Allocation Schedule and shall not take any inconsistent position on any Tax Returns unless required by Applicable Law.

Article 3
CLOSING

3.1           Closing.  Subject to fulfillment or waiver of the conditions in this Agreement, the Closing shall take place on the Closing Date.  The Closing shall take place at the offices of Andrews Kurth LLP, 600 Travis Street, Houston, Texas 77002 or such other place as the Parties may agree, at 10:00 a.m., Houston, Texas time, as promptly as practicable following the satisfaction or waiver of all conditions to Closing in Articles 8 and 9 (other than conditions that by their nature are to be satisfied at the Closing) or at such other time as the Parties may agree.  For the avoidance of doubt, the Parties agree that the Closing shall occur on the same business day as the Closing of the transactions under the Pipeline/Storage PSA.  Unless otherwise agreed, all Closing transactions shall be deemed to have occurred simultaneously.

3.2           Deliveries by Seller.  At the Closing, Seller will deliver the following documents to Buyers:

(a)           A certificate executed on behalf of Seller by the president, senior vice president, or vice president of Seller, dated the Closing Date, representing and certifying, in such detail as Buyers may reasonably request, that the conditions set forth in Sections 9.1 and 9.2 have been fulfilled.

(b)           The certificates, instruments, and documents listed below:

(i)            An assignment or other transfer document for the transfer of the GLGTLP GP Interest to LP Buyer in a form acceptable to Buyers, free and clear of all Encumbrances.

(ii)           The stock certificates representing all of the GLGTCO Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, and otherwise in form acceptable to Buyers for transfer of the GLGTCO Shares to Corp Buyer free and clear of all Encumbrances.

(iii)          The written resignations of the directors and officers appointed or designated by Seller or any of its Affiliates to the Acquired Companies, such resignations to be effective concurrently with the Closing on the Closing Date.

(c)           An agreement in form and substance mutually satisfactory to Seller and Buyers pursuant to which each of Buyers and any other Affiliate of Buyers that is a party to or is otherwise bound by the agreements referenced below, and each of Seller; American Natural Resources Company; ANR Pipeline Company; El Paso CNG Company, L.L.C.; ANR Capital Corporation; Seafarer US Pipeline System, Inc. and any other Affiliate of Seller that is a party to or is otherwise bound by the agreements

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referenced below, is released from, and waives any rights it may have under, (i) the Capital Contribution Agreement, dated as of April 5, 1990, as amended, among American Natural Resources Company, Seller, Corp Buyer, TransCanada GL, Inc. and GLGTCO, including any consents, assignments, assumptions, waivers or other instruments related thereto, (ii) the Corporate Agreement, date as of August 20, 1965, as amended, between American Natural Resources Company and TransCanada PipeLines Limited, including any consents, assignments, assumptions, waivers or other instruments related thereto, or (iii) Article VII of the Agreement of Limited Partnership of GLGTLP dated as of April 5, 1990 among TransCanada GL Inc., Coastal Great Lakes, Inc. and GLGTCO, as amended including any consents, assignments, assumptions, waivers or other instruments related thereto.

(d)           Such other certificates, instruments of conveyance, and documents as may be reasonably requested by Buyers prior to the Closing Date to carry out the intent and purposes of this Agreement.

3.3           Deliveries by Buyers.  At the Closing, Buyers will deliver the following documents to Seller:

(a)           A certificate executed by the president, senior vice president, or vice president of the Corp Buyer and a similar officer of the general partner of the LP Buyer, in each case dated the Closing Date, representing and certifying, in such detail as Seller may reasonably request, that the conditions set forth in Sections 8.1 and 8.2 have been fulfilled.

(b)           Such other certificates, instruments, and documents as may be reasonably requested by Seller prior to the Closing Date to carry out the intent and purposes of this Agreement.

(c)           Payment of the sum of the LP Base Purchase Price, as adjusted by the LP Estimated Adjustment Amount, and the LP Interest Adjustment by LP Buyer, in immediately available funds to the bank account or accounts designated by Seller under Section 2.2.

(d)           Payment of the sum of the Corp Base Purchase Price, as adjusted by the Corp Estimated Adjustment Amount, and the Corp Interest Adjustment by Corp Buyer, in immediately available funds to the bank account or accounts designated by Seller under Section 2.2.

(e)           An executed counterpart of the agreement specified in Section 3.2(c).

Article 4
REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Schedules (it being understood that a representation or warranty shall not be deemed to be qualified by any item disclosed or described in any Schedule unless it

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is reasonably apparent that such item is applicable to such representation or warranty), Seller represents and warrants to Buyers as follows:

4.1           Corporate Organization.  Seller is a limited liability company duly organized, validly existing, and in good standing under the laws of Delaware.

4.2           Acquired Companies.

(a)           List of Acquired Companies.  Except as set forth on Schedule 4.2, to the Seller’s knowledge, the Acquired Companies do not own, directly or indirectly, any capital stock or other equity securities of any corporation or have any direct or indirect equity or ownership interest in any other Person.  Schedule 4.2 lists (i) each Acquired Company, the jurisdiction of incorporation or formation of each Acquired Company, and the authorized (in the case of capital stock) and outstanding capital stock or other equity interests held or owned by Seller in each Acquired Company (including the owners thereof), and (ii) to Seller’s knowledge, each of the other entities in which the Acquired Companies own any equity interests.  To Seller’s knowledge, each corporate Acquired Company is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation and each other Acquired Company is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation.  To Seller’s knowledge, each Acquired Company has all requisite corporate or other power and authority, as applicable, to own, lease, and operate its assets and properties and to carry on its business as now being conducted.  To Seller’s knowledge, no actions or proceedings to dissolve any Acquired Company are pending.

(b)           No Encumbrances.  Except as otherwise indicated on Schedule 4.2, the Purchased Interests constitute the only equity interests in the Acquired Companies owned by Seller and such Purchased Interests are owned directly or indirectly by Seller free and clear of all Encumbrances, other than (i) restrictions on transfer that may be imposed by federal or state securities laws, (ii) those that arise by virtue of any actions taken by or on behalf of either Buyer or its respective Affiliates, or (iii) the restrictions on transfer that may be imposed under the certificate of incorporation, bylaws, or other organizational documents of the Acquired Companies.  All outstanding shares of capital stock of each corporate Acquired Company owned directly or indirectly by Seller have been validly issued and are fully paid and nonassessable.  All equity interests of each other Acquired Company owned directly or indirectly by Seller have been validly issued and are fully paid.  None of the shares of capital stock or other equity interests of any Acquired Company owned directly or indirectly by Seller are subject to, or were issued in violation of, any preemptive or similar rights.

(c)           No Options.  Except for equity interests in the Acquired Companies that are owned by Affiliates of the Corp Buyer as set forth in Section 5.9 or as set forth on Schedule 4.2, there are outstanding (i) to Seller’s knowledge, no shares of capital stock or other equity securities of any Acquired Company, (ii) to Seller’s knowledge, no securities of any Acquired Company convertible into or exchangeable for shares of capital stock or other equity securities of any Acquired Company, (iii) no options or other rights to

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acquire from Seller or, to Seller’s knowledge, any Acquired Company, and no obligation of Seller or, to Seller’s knowledge, any Acquired Company to issue or sell, any shares of capital stock or other equity securities, and (iv) to Seller’s knowledge, no equity equivalent, interests in the ownership or earnings, or other similar rights of or with respect to any Acquired Company or any securities convertible into or exchangeable for such capital stock or equity securities.  There are no outstanding obligations of Seller or, to Seller’s knowledge, any Acquired Company to repurchase, redeem, or otherwise acquire any of the foregoing shares, securities, options, equity equivalents, interests, or rights.

(d)           Qualification.  To Seller’s knowledge, each of the Acquired Companies is duly qualified or licensed to do business as a corporation, foreign corporation, limited partnership, or limited liability company, as applicable, and the Acquired Companies are each in good standing in each of the jurisdictions set forth opposite its name on Schedule 4.2, which are all the jurisdictions in which the assets or property owned, leased, or operated by it or the conduct of its business requires such qualification or licensing, except jurisdictions in which the failure to be so qualified or licensed would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

4.3           Charter and Bylaws.  To Seller’s knowledge, Seller has made available to Buyers in the Data Site accurate and complete copies of the certificate of incorporation and bylaws (or equivalent organizational documents) as currently in effect for each Acquired Company.

4.4           Authority Relative to this Agreement.  Seller has full power and authority to execute, deliver, and perform this Agreement and the Related Agreements.  The execution, delivery, and performance by Seller of this Agreement and the Related Agreements, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by all necessary action on the part of Seller and no other action on the part of Seller or any Affiliate or member of Seller is necessary to authorize such execution, delivery and performance.  This Agreement has been duly executed and delivered by Seller and constitutes, and each Related Agreement has been, or when executed will be, duly executed and delivered by Seller and constitutes, or when executed and delivered will constitute, valid and legally binding obligations of Seller, enforceable against Seller in accordance with its terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors’ rights generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.

4.5           No Conflict.  The execution, delivery, and performance by Seller of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby or thereby do not and will not (x) violate or breach the certificate of incorporation or by-laws (or equivalent organizational documents) of (i) Seller or (ii) to Seller’s knowledge, GLGTCO, GLGTLP or any other Acquired Company, (y) violate or breach any Applicable Law binding upon Seller or, to Seller’s knowledge, any Acquired Company, or any of their respective assets or properties, or (z) to Seller’s knowledge, violate or result in any breach of, or constitute a

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default (or event which with the giving of notice or lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of any Acquired Company under, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise, or other instrument relating to such assets or properties to which any Acquired Company is a party or by which any of such assets or properties is bound or affected, except in the case of clauses (y) and (z) as would not, individually or in the aggregate, have or reasonably be expected to have, a Material Adverse Effect.

4.6           Consents, Approvals, and Licenses.  No consent, approval, authorization, license, order or Permit of, or declaration, filing or registration with, or notification to, any Governmental Entity, or any other Person, is required to be made or obtained by Seller or, to Seller’s knowledge, any Acquired Company in connection with the execution, delivery, and performance of this Agreement or the Related Agreements and the consummation of the transactions contemplated hereby or thereby, except: (a) as set forth on Schedule 4.6; (b) where the failure to obtain such consents, approvals, authorizations, licenses, orders, or Permits of, or to make such declarations, filings, or registrations or notifications, would not, individually or in the aggregate, have or reasonably be expected to have, a Material Adverse Effect; and (c) as may be necessary as a result of any facts or circumstances relating solely to Buyers.

4.7           Financial Statements and Reports.  Schedule 4.7(a) contains (i)(A) an audited consolidated balance sheet of GLGTCO as of December 31, 2005 and an unaudited consolidated balance sheet of GLGTCO as of September 30, 2006, (B) an audited consolidated statement of income of GLGTCO for the year ended December 31, 2005 and an unaudited consolidated statement of income of GLGTCO for the nine-month period ended September 30, 2006, and (C) an audited consolidated statement of cash flow of GLGTCO for the year ended December 31, 2005 (collectively, the “GLGTCO Financial Statements”), and (ii)(A) an audited consolidated balance sheet of GLGTLP as of December 31, 2005 and an unaudited consolidated balance sheet of GLGTLP as of September 30, 2006, (B) an audited consolidated statement of income of GLGTLP for the year ended December 31, 2005 and an unaudited consolidated statement of income of GLGTLP for the nine-month period ended September 30, 2006, and (C) an audited consolidated statement of cash flow of GLGTLP for the year ended December 31, 2005 (collectively, the “GLGTLP Financial Statements” and with the GLGTCO Financial Statements, the “GL Financial Statements”).  To Seller’s knowledge, the GL Financial Statements have been prepared in accordance with U.S. GAAP, except as set forth in the notes thereto, consistently applied throughout the periods covered thereby.  To Seller’s knowledge, the GL Financial Statements are consistent with the books and records of GLGTCO and GLGTLP, as the case may be, and fairly present, in all material respects, the financial position, results of operations, and cash flows of GLGTCO or GLGTLP, as the case may be, as of the date and for the period indicated.  To Seller’s knowledge, except as disclosed on Schedule 4.7, there are no significant deficiencies, including material weaknesses in the design or operation of internal controls over the Acquired Companies’ financial reporting.

4.8           Absence of Certain Changes.  Except as disclosed on Schedule 4.8, as contemplated by other provisions of this Agreement, or as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, since the Balance

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Sheet Date, to Seller’s knowledge, (i) there has not been any adverse change in the assets, liabilities, business, operations, results of operation, or financial condition of the Acquired Companies, (ii) the businesses of the Acquired Companies have been conducted only in the ordinary course consistent with past practice, (iii) none of the Acquired Companies has incurred any liability or entered into any agreement, in each case, outside the ordinary course of business consistent with past practice, (iv) none of the Acquired Companies has suffered any unrepaired loss, damage, destruction, or other casualty to any of its property, plant, equipment, or inventories (whether or not covered by insurance), and (v) the Acquired Companies have not made any change in compensation levels of their senior executives, any changes in the manner in which other employees of the Acquired Companies are generally compensated, or any provision of additional or supplemental benefits for employees of the Acquired Companies generally, except normal periodic increases or promotions effected in the ordinary course of business consistent with past practice.

4.9           Undisclosed Liabilities.  To Seller’s knowledge, the Acquired Companies do not have any liability or obligation, except (i) liabilities or obligations reflected on the GL Financial Statements, (ii) liabilities or obligations which have arisen since the Balance Sheet Date in the ordinary course of business consistent with past practice, (iii) liabilities or obligations reflected on Schedule 4.9, (iv) liabilities or obligations with respect to the Tax and environmental matters, which are addressed by the representations and warranties set forth in Section 4.10 and 4.15, respectively, and (v) other liabilities or obligations which, individually or in the aggregate, have not had and would not be reasonably expected to have a Material Adverse Effect.

4.10         Tax Matters.  Except as disclosed on Schedule 4.10:

(a)           to Seller’s knowledge, all material Tax Returns required to be filed by or with respect to the Acquired Companies (including consolidated, combined, or unitary Tax Returns in which the Acquired Companies are members), have been timely filed with the appropriate Taxing Authorities in all jurisdictions in which such Tax Returns are required to be filed;

(b)           to Seller’s knowledge, such Tax Returns were correct and complete in all material respects as to the Acquired Companies, and all Taxes due and payable on such Tax Returns have been paid in full or adequate reserves (determined in accordance with U.S. GAAP) have been provided for, on the GLGTCO Financial Statements and on the GLGTLP Financial Statements as to the Acquired Companies;

(c)           to Seller’s knowledge, there are no outstanding agreements or waivers extending the statutory period of limitations applicable to any material Tax Returns filed by or with respect to, the Acquired Companies;

(d)           to Seller’s knowledge, none of the Tax Returns of or with respect to any of the Acquired Companies, is currently being audited or examined by any Taxing Authority;

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(e)           to Seller’s knowledge, no material deficiency for any Taxes has been assessed with respect to any of the Acquired Companies, that has not been abated, paid in full, or adequately provided for on the GL Financial Statements;

(f)            to Seller’s knowledge, there is no material dispute or material claim concerning any Tax liability of any of the Acquired Companies, claimed or raised by any Taxing Authority in writing;

(g)           all material Taxes that, to Seller’s knowledge, any of the Acquired Companies is or was required to withhold or collect have been duly withheld or collected, and to the extent required, have been paid to the proper Taxing Authority;

(h)           to Seller’s knowledge, no payments are due or will become due by any of the Acquired Companies, under any Tax sharing agreement or similar arrangement;

(i)            each of the Acquired Companies is and has been since its inception classified for federal tax purposes in the manner described in Treasury Regulations Sections ###-###-####-2 and -3(b) (and any comparable provision of Applicable Law of state and local jurisdictions that permit such treatment);

(j)            to Seller’s knowledge, a valid election under Section 754 of the Code is or will be in effect for each of the Acquired Companies classified as a partnership for federal tax purposes for the taxable year in which Buyers acquire the Purchased Interests of the Company; and

(k)           to Seller’s knowledge, none of the Acquired Companies is required to indemnify any other party for taxes owed by any other party.

4.11         Compliance With Laws.  To Seller’s knowledge, the Acquired Companies are in compliance with all Applicable Laws (other than Applicable Environmental Laws, as to which Seller’s sole representations and warranties are set forth in Section 4.15, and Taxes, as to which Seller’s sole representations and warranties are set forth in Section 4.10), except (i) as disclosed on Schedule 4.11 or (ii) for noncompliance with such Applicable Laws that would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.  Since January 1, 2004, to Seller’s knowledge, none of the Acquired Companies (x) has received written notice of any material violation of any Applicable Law (other than (I) Applicable Environmental Laws, as to which Seller’s sole representations and warranties are set forth in Section 4.15, (II) Taxes, as to which Seller’s sole representations and warranties are set forth in Section 4.10 and (III) such notices that have been resolved with the applicable Governmental Entity without liability or cost to the Acquired Companies after the Closing or (y) is in default in any material respect under any judgment, order, writ, injunction or decree of any Governmental Entity applicable to the Acquired Companies or any of their respective assets, properties or operations.

4.12         Legal Proceedings.  Except as disclosed on Schedule 4.12, to Seller’s knowledge, there are no material Proceedings pending or threatened against or involving any of the Acquired Companies or any properties of any of the Acquired Companies.  Except (i) as disclosed on

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Schedule 4.12 and (ii) for judgments, orders, writs, injunctions or decrees issued by FERC, to Seller’s knowledge, none of the Acquired Companies is subject to any material judgment, order, writ, injunction, or decree of any Governmental Entity.  Except as set forth in Schedule 4.12, to Seller’s knowledge, no Acquired Company is subject to any judgment, order, writ, injunction, or decree issued by FERC that would, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect.  Except as disclosed on Schedule 4.12, there are no Proceedings pending or, to Seller’s knowledge, threatened, seeking to restrain, prohibit, or obtain damages or other relief from Seller or the Acquired Companies in connection with this Agreement, the Related Agreements or the transactions contemplated hereby or thereby.

4.13         Acquired Company Agreements.

(a)           List of Agreements.  To Seller’s knowledge, set forth on Schedule 4.13 is a list of the following agreements and contracts to which any Acquired Company is a party or by which any Acquired Company is otherwise bound:

(i)            any commitment, agreement or purchase order that could, in accordance with its terms, involve aggregate payments by any Acquired Company of more than $5,000,000 within the remaining term of such agreement;

(ii)           any note, loan, evidence of indebtedness, letter of credit or guarantee of the indebtedness or performance of any obligations of another Person;

(iii)          any lease under which any Acquired Company is the lessor or lessee of real or personal property, which lease (A) cannot be terminated by any Acquired Company without penalty upon not more than 180 calendar days’ notice and (B) involves an annual base rental during 2006 in excess of $5,000,000;

(iv)          any contracts or agreements containing covenants limiting the freedom of any Acquired Company or any Acquired Company and its Affiliates, in any material respect, after the Closing Date to engage in any line of business or compete with any Person (other than the partnership agreement, certificate of incorporation or other governing document of any of the Acquired Companies);

(v)           any pending sale or lease of real or personal property of any Acquired Company (other than sales of natural gas, natural gas liquids, or other items of inventory in the ordinary course of business) in excess of $5,000,000;

(vi)          any gas purchase contracts, gas sales contracts, gas processing agreements, transportation agreements, natural gas liquids sales contracts, operational balancing agreements, storage agreements and gathering agreements involving payments to or from any Acquired Company during calendar year 2006 in excess of $5,000,000;

(vii)         any contract requiring a capital expenditure or a commitment for a capital expenditure in excess of $5,000,000;

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(viii)        any material obligation to make future payments, contingent or otherwise, arising out of or relating to the acquisition or disposition of any business, assets, or stock of any Acquired Company or of any other Person by any Acquired Company;

(ix)           any joint venture, joint development or partnership agreement (other than the partnership or limited liability company operating agreements of the Acquired Companies);

(x)            documents granting any power of attorney to any officer or employee of Seller or any of its Affiliates (other than the Acquired Companies) with respect to the material affairs of any Acquired Company;

(xi)           any material agreement between any Acquired Company, on the one hand, and a Seller or any Affiliate of a Seller (other than an Acquired Company), on the other hand, including agreements with respect to the purchase, sale, transportation, or storage of natural gas, including operational balancing and measurement agreements; and

(xii)          all material amendments, modifications, extensions or renewals of any of the foregoing.

(b)           No Violations.  To Seller’s knowledge, except as disclosed in Schedule 4.13, none of the Acquired Companies is in material breach or material violation of, or material default under, any of the Scheduled Contracts.  To Seller’s knowledge, each Scheduled Contract, in all material respects, is a valid agreement, arrangement, or commitment of the Acquired Company which is a party thereto, enforceable against such Acquired Company in accordance with its terms and, in all material respects, is a valid agreement, arrangement, or commitment of each other party thereto, enforceable against such party in accordance with its terms, except in each case (i) where enforceability may be limited by bankruptcy, insolvency, or other similar laws affecting creditors’ rights generally and except where enforceability is subject to the application of equitable principles or remedies, or (ii) where such Scheduled Contract has expired or been terminated by its terms.  To Seller’s knowledge, true and complete electronic copies of the Scheduled Contracts were made available to Buyers on the Data Site.

4.14         Employee Plans and Labor Matters

(a)           Disclosure.  To the extent the following are available to Seller, Seller has heretofore provided to Buyers or made available on the Data Site (i) a true and complete copy of each material Employee Plan that the Acquired Companies contribute to or participate in (the “Acquired Company Plans”) (each of which is listed on Schedule 4.14(a)) and any accompanying summary plan description, (ii) each trust agreement relating to such plan, (iii) the most recent IRS Form 5500 for such plan, and

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(iv) the most recent determination letter issued by the IRS with respect to any such plan intended to be qualified under Section 401(a) of the Code.

(b)           ERISA.  To Seller’s knowledge, (i) except as set forth in Schedule 4.14(b), none of the Acquired Company Plans, is a “multiemployer pension plan,” as described in Section 3(37) of ERISA, or a “multiple employer pension plan,” as defined in Section 4063 of ERISA, and (ii) no material liability under Title IV of ERISA has been incurred by the Acquired Companies or any Acquired Company Plan that has not been satisfied in full, other than liability for premiums that are not yet due and payable to the Pension Benefit Guaranty Corporation.  To Seller’s knowledge, no Acquired Company Plan has an “accumulated funding deficiency” (within the meaning of Section 302 of ERISA and Section 412 of the Code). To Seller’s knowledge, full payment has been made, or will be made in accordance with Section 404(a)(6) of the Code, of all contributions which any Acquired Company is required to pay under the terms of each of the Acquired Company Plans and Section 412 of the Code.

(c)           Qualification.  To Seller’s knowledge, each Acquired Company Plan intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that it is so qualified, and to Seller’s knowledge, nothing has occurred since the date of such letter to adversely affect the qualified status of each such plan.  To Seller’s knowledge, each Acquired Company Plan has been operated in all material respects in accordance with its terms and the requirements of Applicable Law.  To Seller’s knowledge, there have been no non-exempt “prohibited transactions” within the meaning of Section 4975 of the Code or Section 406 of ERISA with respect to any Acquired Company Plan subject to 401(a) of the Code to which either of those sections may apply that could reasonably be expected to result in a material liability to any of the Acquired Companies.

(d)           Labor Matters.  Except as set forth in Schedule 4.14(d), to Seller’s knowledge, none of the Acquired Companies is or has been during the past three years (i) a party to, or bound by, any collective bargaining agreement with a labor union or labor organization, or (ii) the subject of any formal proceeding asserting that any Acquired Company has committed an unfair labor practice or is seeking to compel it to bargain with any labor organization as to wages or conditions of employment.  To the Seller’s knowledge, there are no organizational efforts presently being made or threatened by or on behalf of any labor union with respect to employees of any Acquired Company.  To Seller’s knowledge, there is no pending or, to the knowledge of Seller, threatened grievance, arbitration demand, charge, complaint, or other legal action against any Acquired Company by the National Labor Relations Board (the “NLRB”) or any comparable agency of any state of the United States.  To Seller’s knowledge, none of the Acquired Companies has taken any action with respect to the transactions contemplated hereby that could constitute a “mass layoff” or “plant closing” within the meaning of the Worker Adjustment and Retraining Notification (WARN) Act of 1989 or that could otherwise trigger any notice requirement or liability under any local or state plant closing notice law.

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4.15         Environmental Matters; Pipeline Matters

(a)           Environmental Matters.  Except as set forth on Schedule 4.15, to Seller’s knowledge, (i) the Acquired Companies and their respective operations are in compliance with all Applicable Environmental Laws in all material respects, (ii) none of the Acquired Companies is the subject of any outstanding order or judgment from a Governmental Entity under Applicable Environmental Laws requiring remediation or payment of a fine in an amount in excess of $5,000,000 individually or in the aggregate, (iii) since January 1, 2004, neither Seller nor any Acquired Company has received any written notice of any material liability or material violation from any Governmental Entity under any Applicable Environmental Law, other than such notices that have been resolved with the applicable Governmental Entity without any liability or cost of the Acquired Companies related thereto after the Closing Date, and (iv) except for actions or conditions which have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, no condition exists on any property currently owned or leased by the Acquired Companies which would subject any Acquired Company or such property to any remedial obligations or liabilities (including liabilities to Third Parties or to private tort plaintiffs) under any Applicable Environmental Laws that does not have an adequate reserve (as determined in accordance with U.S. GAAP) on the GL Financial Statements.

(b)           Pipeline Matters.  As of the date of this Agreement, to Seller’s knowledge, there have been no ruptures of any pipelines or related facilities of the Acquired Companies resulting in significant injury, loss of life, or material property damage, except to the extent that any liabilities or costs arising as a result of such pipeline ruptures have been substantially resolved so that Seller does not reasonably expect that the Acquired Companies will incur material liabilities or costs related thereto after the Closing Date.

4.16         Insurance.  To Seller’s knowledge, set forth on Schedule 4.16(i) is a list of all Acquired Company Insurance Policies.  Except as set forth on Schedule 4.16(ii), Seller and its Affiliates (other than the Acquired Companies) do not maintain any insurance policy with respect to any of the assets or operations of any Acquired Company.  To Seller’s knowledge, all premiums due and payable with respect to the Acquired Company Insurance Policies have been timely paid.

4.17         Title to Assets.  To Seller’s knowledge, except (i) for the Excluded Assets, or (ii) as shown in Schedule 4.17, each of the Acquired Companies has good and valid title to its material property interests and the material assets used or necessary to conduct the business of such Acquired Company as presently conducted, free and clear of Encumbrances, other than Permitted Encumbrances.

4.18         Intellectual Property Rights.  Except (i) for the assets described in Section 7.8 or listed on Schedule 7.8, and (ii) for commercially available software, to the Seller’s knowledge (a) the Acquired Companies own or have the right to use under a license, sublicense, other agreement all material intellectual property necessary for the businesses conducted by the

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Acquired Companies, (b) each item of material intellectual property owned or used by the Acquired Companies as of the Balance Sheet Date will be in all material respects owned or available for use by the Acquired Companies on substantially the same terms and conditions immediately subsequent to the Closing, (c) such material intellectual property is not the subject of any Encumbrance or claim of license or ownership of any Third Party that would materially adversely affect the Acquired Companies’ rights in, or ability to use or exploit, such intellectual property, (d) since January 1, 2004, the Acquired Companies have not received any written notice, claim, or demand alleging any misappropriation or infringement of any material intellectual property rights of Third Parties, (e) the Acquired Companies have not engaged in any conduct, or omitted to perform any necessary act, the result of which is reasonably likely to invalidate or adversely affect the enforceability of any material intellectual property rights and (f) there is no infringement, misappropriation or improper use of the Acquired Companies’ rights in such material intellectual property by any Third Party.

4.19         Permits.  To Seller’s knowledge, each of the Acquired Companies possesses all Permits necessary for it to own its assets and operate its business as currently conducted, except where the failure to hold any such Permit would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Acquired Companies taken as a whole.  To Seller’s knowledge, all such Permits are in full force and effect and, except as reflected in Schedule 4.19, none of the Acquired Companies has received any written notifications concerning violations of any such Permits.  To Seller’s knowledge, there are no Proceedings pending or threatened before any Governmental Entity, arbitrator, or mediator that seek the revocation, cancellation, suspension, or adverse modification thereof, except for such matters as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

4.20         Regulatory Matters.  To Seller’s knowledge, each of the Acquired Companies is in compliance in all material respects with (i) all applicable provisions of the Natural Gas Act (the “NGA”) and (ii) all applicable orders and regulations of FERC that pertain to the business or operations of that Acquired Company.  No approval of FERC is required in connection with execution of this Agreement by Seller or the consummation of the transactions contemplated hereby with respect to Seller or, to Seller’s knowledge, the Acquired Companies.

4.21         [Intentionally Omitted]

4.22         Brokerage Fees.  Except as set forth on Schedule 4.22, neither Seller nor any of its Affiliates (other than the Acquired Companies) or, to Seller’s knowledge, any Acquired Company has retained any financial advisor, broker, agent, or finder or paid or agreed to pay any financial advisor, broker, agent, or finder on account of this Agreement or the transactions contemplated hereby for which Buyers or any Acquired Company shall have any responsibility or liability.

4.23         Transactions with Directors, Officers, Employees and Affiliates.  Except for the Purchased Interests or as set forth on Schedule 4.23, Seller and its Affiliates (other than the Acquired Companies) do not own or have any rights (other than transportation rights on the

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facilities of the Acquired Companies) in or to any of the material assets, properties or rights used by the Acquired Companies.

4.24         Long-Term Debt.  To Seller’s knowledge, (a) the Acquired Companies have no other indebtedness for borrowed money that would be treated as long-term debt under U.S. GAAP (including the amount of unamortized debt discount, if any) other than the Long-Term Debt and (b) set forth on Schedule 4.24 is the principal amount outstanding under each of the items listed in the definition of Long-Term Debt (on a per item basis) as of the date hereof.

4.25         Limitations.  Except as and to the extent set forth in this Agreement, Seller makes no representations or warranties whatsoever to Buyers and hereby disclaim all liability and responsibility for any representation, warranty, statement, or information made, communicated, or furnished (orally or in writing) to Buyers or their representatives (including any opinion, information, projection, or advice that may have been or may be provided to Buyers by any director, officer, employee, agent, consultant, or representative of Seller or any Affiliate thereof, including those in the Data Site or in the Confidential Memorandum dated September 2006).  Seller makes no representations or warranties to Buyers regarding the probable success or profitability of the businesses of the Acquired Companies.

Article 5
REPRESENTATIONS AND WARRANTIES OF BUYERS

Each Buyer (with respect to itself, but not with respect to the other Buyer) represents and warrants to Seller as follows:

5.1           Organization.  Corp Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.  LP Buyer is a limited partnership duly formed, validly existing, and in good standing under the laws of the jurisdiction of its formation.

5.2           Authority Relative to This Agreement.  Such Buyer has full power and authority to execute, deliver, and perform this Agreement and any Related Agreements to which it is a party.  The execution, delivery, and performance by such Buyer of this Agreement and such Related Agreements and the consummation by such Buyer of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or limited partnership action of such Buyer, and no other action on the part of such Buyer, its Affiliates or any shareholder or partner of such Buyer is necessary to authorize such execution, delivery and performance.  This Agreement has been duly executed and delivered by such Buyer and constitutes, and each such Related Agreement executed or to be executed by such Buyer has been, or when executed will be, duly executed and delivered by such Buyer and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of such Buyer, enforceable against such Buyer in accordance with their terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors’ rights generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in

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certain instances.

5.3           No Conflict.  The execution, delivery and performance of this Agreement and the Related Agreements by such Buyer and the consummation by such Buyer of the transactions contemplated hereby or thereby do not and will not (a) violate or breach the certificate of incorporation or by-laws of (or other organizational documents) of such Buyer, (b) violate or breach any Applicable Law binding upon such Buyer, or (c) violate or result in any breach of, or constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of such Buyer under, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument relating to such assets or properties to which such Buyer is a party or by which any of such assets or properties is bound or affected, except in the case of clauses (b) and (c) as would not, individually or in the aggregate, reasonably be expected to materially impede or delay such Buyer’s ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

5.4           Consents, Approvals, and Licenses.  No consent, approval, authorization, license, order, or Permit of, or declaration, filing, or registration with, or notification to, any Governmental Entity, or any other Person, is required to be made or obtained by such Buyer or any of its Affiliates in connection with the execution, delivery, and performance of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby or thereby, except (a) as may be necessary as a result of any facts or circumstances relating solely to Seller, or (b) where the failure to obtain such consent, approval, authorization, license, order, or Permit, or to make such declaration, filing, registration or notification would not, individually or in the aggregate, reasonably be expected to materially impede or delay such Buyer’s ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.