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TABLE OF CONTENTS

As filed with the Securities and Exchange Commission on July 8, 2002

Registration No. 333-89552
Registration No. 333-89588
Registration No. 333-89618

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 to
FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Enbridge Energy Management, L.L.C.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization) Applied For
(I.R.S. Employer Identification No.)

Amendment No. 1 to FORM S-3		Amendment No. 1 to FORM F-3
Enbridge Energy Partners, L.P. (Exact name of registrant as specified in its charter)		Enbridge Inc. (Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	39-1715850 (I.R.S. Employer Identification No.)	Alberta, Canada (State or other jurisdiction of incorporation or organization)	Not Applicable (I.R.S. Employer Identification No.)
Enbridge Energy Management, L.L.C. Enbridge Energy Partners, L.P. 1100 Louisiana, Suite 3300 Houston, Texas 77002 (713) 650-8900 (Address, including zip code, and telephone number, including area code, of registrants' principal executive offices)		Enbridge Inc. 3000, 425-1st Street SW Calgary, Alberta Canada T2P 3L8 (403) 231-3900 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Chris Kaitson
1100 Louisiana, Suite 3300
Houston, Texas 77002
(713) 650-8900
(Name, address, including zip code, and telephone
number, including area code, of agent for service)

Copies to:

William N. Finnegan IV
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2300
Houston, Texas 77002-6760
(713) 758-2222 Robert V. Jewell
Melinda H. Brunger
Andrews & Kurth
Mayor, Day & Caldwell L.L.P.
600 Travis, Suite 4200
Houston, Texas 77002
(713) 220-4200

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

        If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / /

        If any of the securities registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. / /

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /

The registrants hereby amend these registration statements on such date or dates as may be necessary to delay their effective date until the registrants shall file a further amendment which specifically states that these registration statements shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until these registration statements shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

        These registration statements contain a prospectus to be used in connection with the offer and sale of shares of Enbridge Energy Management, L.L.C. These registration statements also register:

•

the deemed offer and sale of Enbridge Energy Partners, L.P. i-units to be acquired by Enbridge Energy Management, L.L.C. with substantially all of the net proceeds of the offering of the shares of Enbridge Energy Management, L.L.C., pursuant to Rule 140 under the Securities Act of 1933; and



•

the obligation of Enbridge Inc. to purchase the shares of Enbridge Energy Management, L.L.C. under specified circumstances pursuant to the terms of an agreement between Enbridge Inc. and Enbridge Energy Management, L.L.C., for itself and for the express benefit of the holders of such shares.

Subject to Completion. Dated July 8, 2002.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statements filed with the Securities and Exchange Commission are effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

10,000,000 Shares

Representing Limited Liability Company Interests

ENERGY MANAGEMENT, L.L.C.

        This is an initial public offering of our shares representing limited liability company interests, a class of our equity with limited voting rights. We are offering 10,000,000 of our shares through the underwriters named below, including 500,000 shares to be offered to our affiliate, Enbridge Energy Company, Inc.

        Prior to this offering, there has been no public market for our shares. We expect our shares to be offered at a price within approximately 5% of the closing price of Enbridge Energy Partners, L.P. Class A common units prior to the determination of the offering price of our shares. The closing price of the Class A common units, which trade on the NYSE under the symbol "EEP," was $44.84 on July 2, 2002. We have applied to list our shares on the NYSE under the symbol "        ."

        (continued on following page)

        Investing in our shares involves risk. See "Risk Factors" beginning on page 30 to read about factors you should consider before buying our shares. These risks include, but are not limited to, the following:

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An active trading market for our shares may not develop, and even if such a market does develop, the market price of our shares may be less than the price you paid for your shares in this offering and less than the market price of the Class A common units of Enbridge Energy Partners, L.P.

•

Because our only assets will be i-units in Enbridge Energy Partners, L.P., our financial condition and results of operations will depend solely upon the performance of Enbridge Energy Partners, L.P.

•

Our management may have different interests than you and may not always conduct our business as you would wish.

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The fiduciary duties owed by our board of directors to our shareholders and the fiduciary duties owed by our board of directors and by the general partner of Enbridge Energy Partners, L.P. to its limited partners have been restricted or eliminated.

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As an owner of shares, you will have limited voting rights, and, therefore, will have little opportunity to influence or change our management.

•

Your shares are subject to optional and mandatory purchase provisions that could result in your having to sell your shares at a time or price that you do not like.

•

Our discretion in establishing cash reserves at Enbridge Energy Partners, L.P. gives us the ability to reduce the amount of cash available for distribution to the holders of its units, which will reduce the distributions on your shares.

•

Because Enbridge Energy Partners, L.P.'s Lakehead system depends upon shipments of crude oil and liquid petroleum from the Enbridge system, decisions by Enbridge Inc. with respect to the Enbridge system could adversely affect the level of deliveries on the Lakehead system.

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Because we depend upon Enbridge Inc. and its affiliates for employees to manage the business and affairs of Enbridge Energy Partners, L.P., its business could be adversely affected by a decrease in the availability of employees from Enbridge Inc. and its affiliates.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discount	$	$              (1)
Proceeds, before expenses, to Enbridge Energy Management, L.L.C.	$	$              (1)

(1)

No discount or commission is being paid on the sale of 500,000 shares being purchased by Enbridge Energy Company, Inc. Thus, the total underwriting discount does not include any discount on these shares, and the proceeds, before expenses, to Enbridge Energy Management, L.L.C. include the full per share initial public offering price of these shares.

        To the extent that the underwriters sell more than 10,000,000 shares, the underwriters have the option to purchase up to an additional 1,500,000 shares from us at the initial public offering price less the underwriting discount.

        The underwriters expect to deliver the shares against payment in New York, New York on              , 2002.

Goldman, Sachs & Co.

Prospectus dated            , 2002.

        We are a recently formed limited liability company that has elected to be treated as a corporation for U.S. federal income tax purposes. We will manage and control the business and affairs of Enbridge Energy Partners, L.P. and will use substantially all of the proceeds of this offering to acquire a new class of limited partner interests, referred to as i-units, in Enbridge Energy Partners, L.P.

        When Enbridge Energy Partners, L.P. makes cash distributions on its common units, the number of i-units we own will be increased, and we will make distributions on our shares in the form of additional shares. As an owner of our shares, you will receive a number of additional shares equal to the amount of cash you would have received had you owned Enbridge Energy Partners, L.P. common units, divided by the average market price of our shares. On May 15, 2002, Enbridge Energy Partners, L.P. paid a regular quarterly cash distribution of $0.90 per common unit, or $3.60 per common unit on an annualized basis.

[MAP OF NORTH AMERICA DEPICTING EXISTING SYSTEMS OWNED BY ENBRIDGE INC. AND ENBRIDGE PARTNERS AND THE MIDCOAST, NORTHEAST TEXAS AND SOUTH TEXAS SYSTEMS, WHICH ARE TO BE ACQUIRED BY ENBRIDGE PARTNERS FROM ENBRIDGE ENERGY COMPANY]

TABLE OF CONTENTS

			Page
PROSPECTUS SUMMARY			1
	Enbridge Management		1
	Enbridge Partners		1
	Enbridge Inc.		5
	Offices		5
	Summary of Risk Factors		6
	Organizational Structure		9
	Acquisition of the Midcoast, Northeast Texas and South Texas Systems		11
	The Offering		12
	Our Shares		13
	Summary Financial Information of Enbridge Partners		22
	Summary Financial Information of Enbridge Midcoast Energy		24
	Summary Pro Forma as Adjusted Financial Information of Enbridge Partners		26
	Enbridge Management Balance Sheet		29
RISK FACTORS			30
	Risks Related to Our Shares, the i-Units and Enbridge Management		30
		An active trading market for our shares may not develop, and even if such a market does develop, the market price of our shares may be less than the price you paid for your shares in this offering and less than the market price of the Class A common units of Enbridge Partners	30
		The value of the quarterly distribution of an additional fractional share that you will receive per share may be less than the quarterly distribution of cash that Enbridge Partners' common unitholders will receive per common unit	30
		If Enbridge Partners were treated as a corporation for U.S. federal income tax purposes, the value of our shares would be substantially reduced, and the owner of our voting shares would have the right to merge us into Enbridge Partners	30
		Enbridge Partners may issue additional common or other classes of units, and we may issue additional shares, which would dilute your ownership interest	31
		Because our only assets will be i-units in Enbridge Partners, our financial condition and results of operations will depend solely upon the performance of Enbridge Partners	31
		Your shares are subject to optional and mandatory purchase provisions that could result in your having to sell your shares at a time or price that you do not like	32
		The terms of our shares may be changed in ways you may not like, because our board of directors will have the power to change the terms of our shares in ways our board determines, in its sole discretion, are not materially adverse to you	32
		Enbridge Inc. may be unable to satisfy its obligation to purchase our shares upon the occurrence of a mandatory purchase event, including upon the liquidation of Enbridge Partners, which likely would result in a loss in value of our shares	32
		If we are not fully reimbursed or indemnified for obligations and liabilities we incur in managing the business and affairs of Enbridge Partners, we may be unable to pay those liabilities and the value of our shares could decline	33
		If a person or group, other than Enbridge Inc. and its affiliates, owns 20% or more of the aggregate number of issued and outstanding Enbridge Partners common units and our shares, that person or group may not vote its shares; as a result, you are less likely to receive a premium for your shares in a change of control situation	33
		The shares you own are not entitled to vote to elect our directors, and, therefore, you will have little or no opportunity to influence or change our management	33
		Our discretion in establishing cash reserves at Enbridge Partners gives us the ability to reduce the amount of cash available for distribution to holders of its units, which will reduce the distributions on your shares	33

i

Risks Related to Enbridge Partners' Business		34
	Enbridge Partners' pipeline systems might be used less if demand for, or supply of, crude oil, natural gas and/or NGLs decreases	34
	Changes in Enbridge Partners' tariff rates or challenges to its tariff rates could have a material adverse effect on Enbridge Partners' financial condition and results of operations	34
	Rate proceedings involving the Kansas pipeline system, if resolved adversely to Enbridge Partners, could adversely affect Enbridge Partners' results of operations	35
	Competition from other pipelines may reduce Enbridge Partners' revenues	35
	Enbridge Partners' gas marketing operations involve market risks	36
	Enbridge Partners' results may be adversely affected by commodity price volatility and risks associated with its hedging activities	36
	Natural gas transportation, delivery and sales contracts with a relatively small number of customers accounted for a significant portion of the gross margin attributable to the Midcoast system, and Enbridge Partners may not be able to renew or replace those contracts as they expire	36
	A decline in the availability of natural gas from the producing regions that supply the East Texas, Midcoast, Northeast Texas and South Texas systems may reduce utilization of capacity on those pipeline systems	37
	Compliance with environmental and operational safety regulations, including any remediation of soil or water pollution or hydrostatic testing of its pipeline systems, may increase Enbridge Partners' costs and reduce its revenues	37
	Failure of pipeline operations due to unforeseen interruptions or catastrophic events may adversely affect Enbridge Partners' business and financial condition	37
	Enbridge Partners' acquisition strategy may be unsuccessful if Enbridge Partners incorrectly predicts combined operating results, is unable to identify and complete future acquisitions and integrate acquired assets or businesses, or is unable to raise financing on acceptable terms	38
	Oil measurement losses on the Lakehead system can be materially impacted by changes in estimation, commodity price differentials, and other factors	38
Risks Related to Conflicts of Interest and Limitations on Fiduciary Duties		39
	The interests of Enbridge Inc. may differ from our interests, the interests of our shareholders and the interests of limited partners of Enbridge Partners, and our board of directors may consider the interests of all parties to a conflict, not just your interests, in making important business decisions	39
	Because Enbridge Partners' Lakehead system depends upon shipments of crude oil and liquid petroleum from the Enbridge system, Enbridge Partners' business could be adversely affected by a decrease in these shipments from the Enbridge system	40
	Because we depend upon Enbridge Inc. and its affiliates for employees to manage the business and affairs of Enbridge Partners, its business could be adversely affected by a decrease in the availability of employees from Enbridge Inc. and its affiliates	41
	Enbridge Inc. is not restricted from directly competing with Enbridge Partners in many circumstances, and this competition could have an adverse impact on Enbridge Partners' financial condition and results of operations	41
	Your ability to challenge the decisions of our board of directors will be limited, because our limited liability company agreement restricts or eliminates a number of the fiduciary duties that otherwise would be owed by our board of directors to our shareholders, and the partnership agreement of Enbridge Partners restricts or eliminates a number of the fiduciary duties that otherwise would be owed by our board of directors and by the general partner of Enbridge Partners to the limited partners of Enbridge Partners	42

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		We may increase the cash reserves of Enbridge Partners, which will decrease cash distributions on its common units and the value of distributions of additional shares we make to you			42
		Because Enbridge Inc. is a Canadian corporation and many of its and our officers and directors are Canadian citizens who reside in Canada, it may be difficult to serve legal process on them and enforce civil liabilities against them			42
INFORMATION REGARDING FORWARD LOOKING STATEMENTS					43
ACQUISITION OF THE MIDCOAST, NORTHEAST TEXAS AND SOUTH TEXAS SYSTEMS					44
USE OF PROCEEDS					46
DISTRIBUTION POLICY					47
	Our Policy Regarding Share Distributions				47
	Enbridge Partners' Distribution Policy				47
	Illustration of a Distribution of Cash from Operations				51
CAPITALIZATION OF ENBRIDGE PARTNERS					54
CAPITALIZATION OF ENBRIDGE INC.					55
CAPITALIZATION OF ENBRIDGE MANAGEMENT					56
SELECTED FINANCIAL INFORMATION OF ENBRIDGE PARTNERS					57
SELECTED FINANCIAL INFORMATION OF ENBRIDGE MIDCOAST ENERGY					59
SELECTED PRO FORMA AS ADJUSTED FINANCIAL INFORMATION OF ENBRIDGE PARTNERS					61
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS					64
	Enbridge Management				64
	Enbridge Partners				65
	Liquidity and Capital Resources				78
	Other Matters				79
	Quantitative and Qualitative Disclosures About Market Risk				81
BUSINESS					84
	Enbridge Management				84
	Enbridge Partners				84
		Business Strategy			84
		Competitive Strengths			85
		Properties and Operations			86
			Existing Systems		86
				Lakehead System	86
				North Dakota System	89
				East Texas System	90
			Systems to be Acquired from Enbridge Energy Company		91
				Midcoast System	91
				Northeast Texas System	94
				South Texas System	95
		Title to Properties			96
		Regulation			97
		Tariffs and Rate Cases			103
		Environmental and Safety Regulation			104
		Employees			108
		Insurance			108

iii

MANAGEMENT OF ENBRIDGE MANAGEMENT		109
	Directors and Executive Officers	109
	Committees of the Board of Directors	111
	Executive Compensation	111
	Director Compensation	111
	Security Ownership of Certain Beneficial Owners and Management	111
DESCRIPTION OF OUR SHARES		113
	Distributions	113
	Covenants	115
	Mandatory Purchase	117
	Optional Purchase	119
	Limited Voting Rights	120
	Merger	123
	Tax Indemnity of Enbridge Inc.	123
	Anti-dilution Adjustments	123
	Transfer Agent and Registrar	123
	Replacement of Share Certificates	124
	Fractional Shares	124
DESCRIPTION OF THE i-UNITS		125
	Voting Rights	125
	Distributions and Payments	126
	Merger, Consolidation or Sale of Assets	126
	U.S. Federal Income Tax Characteristics and Distribution Upon Liquidation of Enbridge Partners	126
COMPARISON OF ENBRIDGE PARTNERS' UNITS WITH OUR SHARES		128
LIMITED LIABILITY COMPANY AGREEMENT		133
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		139
	Our Relationship with Enbridge Inc. and Enbridge Partners	139
	Delegation of Control Agreement	141
	Contribution Agreement	142
	Amendments to Omnibus and Services Agreements	142
	Use of Proceeds to Retire Enbridge Midcoast Energy Debt	143
	Tax Indemnification and Purchase Agreement	144
	Additional Matters	144
CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITIES		145
	Conflicts of Interest	145
	Situations in which a Conflict of Interest Could Arise	145
	Fiduciary Duties Owed to Our Shareholders and to the Owners of Units	147
SHARES ELIGIBLE FOR FUTURE SALE		150
MATERIAL TAX CONSEQUENCES		151
	Legal Opinions	151
	U.S. Federal Income Tax Considerations Associated with the Ownership and Disposition of Shares	151
	U.S. Federal Income Tax Considerations Associated with the Ownership of i-Units	154
ERISA CONSIDERATIONS		157
UNDERWRITING		159
LEGAL MATTERS		162
EXPERTS		162
WHERE YOU CAN FIND MORE INFORMATION		163
INDEX TO FINANCIAL STATEMENTS		F-1

Until                  , 2002, all dealers that buy, sell or trade our shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligations to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

iv

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before buying shares in this offering. Therefore, you should read this entire prospectus carefully, including the risks discussed in the section titled "Risk Factors." This prospectus also contains and incorporates by reference important information about Enbridge Energy Partners, L.P. and Enbridge Inc., including information about their businesses and financial and operating data, all of which you should read carefully before buying shares in this offering.

As used in this prospectus, the term "Enbridge Management" and the terms "we," "our," "us" and similar terms refer to Enbridge Energy Management, L.L.C., unless the context otherwise requires. In addition, we refer to Enbridge Energy Partners, L.P. as "Enbridge Partners," and we refer to Enbridge Energy Company, Inc., the general partner of Enbridge Partners and a wholly owned subsidiary of Enbridge Inc., as "Enbridge Energy Company." As used in this prospectus, the term "common units" includes collectively the Class A common units and the Class B common units of Enbridge Partners, and the term "units" includes collectively the Class A common units, the Class B common units and the i-units of Enbridge Partners. The information presented in this prospectus assumes that the underwriters do not exercise their option to purchase additional shares from us.

For a description of the risks relating to an investment in our shares, please read "Summary of Risk Factors" beginning on page 6 of this prospectus and "Risk Factors" beginning on page 30 of this prospectus.

Enbridge Management

        We are a recently formed Delaware limited liability company that has elected to be treated as a corporation for U.S. federal income tax purposes. By agreement with Enbridge Energy Company, we will manage and control the business and affairs of Enbridge Partners. We will use substantially all of the proceeds of this offering to acquire i-units in Enbridge Partners, and we will have no assets or operations other than those related to our interest in Enbridge Partners. As a result, our financial condition and results of operations will be dependent upon the performance of Enbridge Partners.

        The shares that are being sold in this offering have limited voting rights and are not entitled to vote to elect our directors. All of our shares that are entitled to vote to elect our directors are owned by Enbridge Energy Company. We have applied to list the shares being sold in this offering on the New York Stock Exchange under the symbol "      ."

Enbridge Partners

        Enbridge Partners is a publicly traded Delaware limited partnership that owns and operates crude oil and liquid petroleum transportation assets and natural gas gathering, treating, processing, transmission and marketing assets in the United States. The Class A common units of Enbridge Partners are traded on the New York Stock Exchange under the symbol "EEP."

        Enbridge Partners was formed in 1991 by Lakehead Pipe Line Company, Inc., the predecessor of Enbridge Energy Company, to own and operate the Lakehead system, which is the U.S. portion of a crude oil and liquid petroleum pipeline system extending from western Canada through the upper and lower Great Lakes region of the United States to eastern Canada. On December 27, 1991, Enbridge Partners completed its initial public offering of 17,390,000 Class A common units at $21.50 per unit. The closing price of Enbridge Partners' Class A common units on the NYSE on July 2, 2002 was $44.84 per unit. Since Enbridge Partners' initial public offering, it has increased its

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quarterly cash distribution by 53% from $0.59 per unit to $0.90 per unit, or $3.60 per unit on an annualized basis.

        Prior to May 2001, Enbridge Partners was solely a transporter of crude oil and liquid petroleum through its Lakehead system. Enbridge Partners began to diversify geographically and operationally by acquiring a crude oil gathering and transportation system known as the North Dakota system in May 2001, and a natural gas gathering, treating, processing and transmission system known as the East Texas system in November 2001. In May 2002, Enbridge Partners agreed to acquire Enbridge Energy Company's Midcoast, Northeast Texas and South Texas systems. This acquisition represents Enbridge Partners' next step in diversifying its business, both geographically and operationally, and materially increases the scale of its business.

Existing Systems

        Enbridge Partners' existing business consists of the following three systems:

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Lakehead System:  The Lakehead system consists primarily of crude oil and liquid petroleum transportation and storage assets in the Great Lakes and Midwest regions of the United States. This system, together with the Enbridge system in Canada owned by Enbridge Inc., forms the longest, and one of the most sophisticated, crude oil and liquid petroleum pipeline systems in the world. The Enbridge/Lakehead system, which spans 3,100 miles, has been in operation for over 53 years and is the primary transporter of crude oil and liquid petroleum from western Canada to the United States. The Enbridge/Lakehead system serves all the major refining centers in the Great Lakes and Midwest regions of the United States and the Province of Ontario, Canada. Through its interconnection with the Enbridge system, the Lakehead system is well positioned to capitalize on expected increases in crude oil supplies over the next ten years from heavy crude oil and oil sands projects in the Province of Alberta, Canada announced by energy producers.



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East Texas System:  Enbridge Partners acquired the East Texas system on November 30, 2001 for approximately $230 million. This system includes approximately 2,000 miles of natural gas gathering and transmission pipelines, four natural gas treating plants, two of which are currently active, and three natural gas processing plants, two of which are currently active.



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North Dakota System:  Enbridge Partners acquired the North Dakota system from Enbridge Inc. on May 18, 2001 for approximately $35 million. This system includes approximately 330 miles of crude oil gathering lines connected to a transportation line that is approximately 620 miles long. The North Dakota system interconnects directly with the Lakehead system, which supplements and diversifies its access to crude oil supplies.

Midcoast, Northeast Texas and South Texas Systems

        Enbridge Partners has agreed to acquire the following three systems from Enbridge Energy Company for approximately $929 million at the same time that we close this offering:

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Midcoast System:  The Midcoast system was acquired by a subsidiary of Enbridge Energy Company on May 11, 2001 for approximately $625 million. Excluding the Canadian assets, which will be retained by Enbridge Energy Company, this system includes approximately 4,000 miles of natural gas gathering and transmission pipelines, with an aggregate throughput capacity of approximately four billion cubic feet per day, and natural gas treating and processing assets in the Mid-Continent and Gulf Coast regions of the United States. The portion of the Midcoast system Enbridge Partners will acquire includes:



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four interstate FERC regulated natural gas transmission pipeline systems;

2

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20 intrastate natural gas transmission and wholesale customer pipeline systems;



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 30 gathering and processing/treating systems, including three processing and two treating plants; and



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 98 trucks and trailers and 45 rail cars used for transporting natural gas liquids, or "NGLs," crude oil and carbon dioxide.



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Northeast Texas System:  The Northeast Texas system was acquired by a subsidiary of Enbridge Energy Company on March 1, 2002 for approximately $178 million. This system includes approximately 1,200 miles of natural gas gathering pipelines, seven natural gas treating plants, five of which are currently active, and five natural gas processing plants, three of which are currently active.



•

South Texas System:  The South Texas system was acquired by a subsidiary of Enbridge Energy Company on January 2, 2002 for approximately $9 million. This system includes approximately 175 miles of natural gas gathering pipelines, a hydrogen sulfide treating plant and an inactive natural gas processing plant. The South Texas gathering system also interconnects with a 500-mile natural gas transmission pipeline system that Enbridge Energy Company has the right to acquire for $41 million. Enbridge Partners will acquire this right from Enbridge Energy Company as part of the acquisition of the Midcoast, Northeast Texas and South Texas systems.

        These systems will significantly increase the scope and scale of Enbridge Partners' natural gas operations and provide a platform from which Enbridge Partners can pursue new growth opportunities. The Midcoast system has a strong track record of growth and provides an attractive combination of stable cash flows and potential earnings growth. The Northeast Texas system, which is located adjacent to Enbridge Partners' East Texas system, will increase Enbridge Partners' presence in the strategic Gulf Coast region and provide operational flexibility and cost efficiencies. The natural gas transmission pipeline system that Enbridge Partners will have the right to acquire connects with the South Texas system and would provide a stable base of revenues from existing contracts as well as capacity to capitalize on potential increased supply from nearby offshore and onshore natural gas fields.

        Subsidiaries of Enbridge Energy Company have completed approximately $83.6 million in enhancement capital expenditures to these three systems since they were acquired. These expenditures include:

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$49 million to construct the BamaGas pipeline in Alabama;



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$6 million to acquire an additional natural gas processing facility in Texas;



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$16 million in other enhancement capital expenditures; and



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$12.6 million to acquire compression assets on the Northeast Texas system that were previously under lease.

        In addition, Enbridge Energy Company plans to acquire an additional $8.4 million in compression assets on the Northeast Texas system that are currently under lease. The $929 million purchase price includes the purchase of these additional compression assets.

        The systems and assets described above that will be acquired by Enbridge Partners are sometimes referred to as the "acquired systems."

3

Business Strategy

        Enbridge Partners' objective is to continue to increase cash distributions to unitholders. To achieve this objective, Enbridge Partners intends to:

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Expand and increase the utilization of the Lakehead system's capacity to meet expected growing supply of and demand for crude oil and liquid petroleum in the markets it serves.



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Develop and acquire complementary energy delivery assets, particularly in the Gulf Coast region of the United States, and improve the financial performance and operating efficiency of acquired assets. Enbridge Partners anticipates increased availability of attractive acquisition targets and believes that it is well positioned to acquire additional assets.

Competitive Strengths

        Enbridge Partners' business strategy is driven by the following competitive strengths:

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Strategic Market Position:  The Lakehead system is the primary transporter of western Canadian crude oil to the Great Lakes and Midwest regions of the United States and the sole transporter of western Canadian crude oil to the Province of Ontario, Canada.



•

Diversified Business and Geographical Presence:  Following the acquisition of the acquired systems, Enbridge Partners' business will consist of a diverse group of energy delivery assets located in some of the most significant areas of hydrocarbon supply and demand.



•

Low Cost Operations:  The Enbridge/Lakehead system is among the lowest cost transporters of crude oil and liquid petroleum in North America, based on operating cost per barrel mile transported.



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Competitive Cost of Capital:  Enbridge Partners' cost of capital, due to its partnership structure, helps it compete more effectively in acquiring assets and expanding its existing systems.



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Enhanced Access to Capital Markets:  The institutional share/i-unit structure established in connection with this offering broadens Enbridge Partners' access to the equity capital markets.



•

Experienced Management:  Our management has substantial industry experience and a strong track record of growth through acquisitions, having completed over 30 acquisitions in the last five years.



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Beneficial Relationship with Enbridge Inc.:  Enbridge Partners is an integral part of Enbridge Inc.'s goal of being a leading North American energy delivery company and is its primary vehicle for acquiring mature energy delivery assets in the United States.

Recent Developments

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Increase in Distribution:  Enbridge Partners increased its regular quarterly distribution from $0.875 to $0.90 per common unit effective with the distribution it paid on February 15, 2002. On May 15, 2002, Enbridge Partners paid a regular quarterly cash distribution of $0.90 to its common unitholders, its second distribution at the rate of $0.90 per quarter, or $3.60 per common unit on an annualized basis.



•

Equity Offering:  In early 2002, Enbridge Partners closed a public offering of its Class A common units, which raised net proceeds of approximately $93 million. The net proceeds were used to repay approximately $75 million in debt owed to an affiliate of Enbridge Inc. and to repay a portion of Enbridge Partners' revolving credit facility.

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Enbridge Inc.

        Enbridge Inc., based in Calgary, Alberta, provides energy transportation, distribution and related services in North America and internationally and had assets of Cdn$13.1 billion as of December 31, 2001. Enbridge Inc. is the ultimate parent company of Enbridge Energy Company, the general partner of Enbridge Partners. In addition to its ownership of the Canadian portion of the Enbridge/Lakehead system, Enbridge Inc. also owns and operates Enbridge Consumers Gas, Canada's largest natural gas local distribution company based on number of customers, which provides distribution services in the provinces of Ontario and Quebec and the State of New York. Enbridge Inc.'s common stock is traded on The Toronto Stock Exchange and the New York Stock Exchange under the symbol "ENB."

Offices

        The principal executive offices of Enbridge Management and Enbridge Partners are located at 1100 Louisiana, Suite 3300, Houston, Texas 77002 and the telephone number is (713) 650-8900. The principal executive offices of Enbridge Inc. are located at 3000, 425 - 1st Street SW, Calgary, Alberta T2P 3L8, and the telephone number is (403) 231-3900.

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Summary of Risk Factors

        You should be aware that there are risks relating to an investment in our shares. For more information about these risks, see "Risk Factors." You should carefully consider these risk factors together with all of the other information appearing elsewhere or incorporated by reference in this prospectus before you invest in our shares.

Risks Related to Our Shares, the i-Units and Enbridge Management

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An active trading market for our shares may not develop, and even if such a market does develop, the market price of our shares may be less than the price you paid for your shares in this offering and less than the market price of the Class A common units of Enbridge Partners.



•

The value of the quarterly distribution of an additional fractional share that you will receive per share may be less than the quarterly distribution of cash that Enbridge Partners' common unitholders will receive per common unit.



•

If Enbridge Partners were treated as a corporation for U.S. federal income tax purposes, the value of our shares would be substantially reduced, and the owner of our voting shares would have the right to merge us into Enbridge Partners.



•

Enbridge Partners may issue additional common or other classes of units, and we may issue additional shares, which would dilute your ownership interest.



•

Because our only assets will be i-units in Enbridge Partners, our financial condition and results of operations will depend solely upon the performance of Enbridge Partners.



•

Your shares are subject to optional and mandatory purchase provisions that could result in your having to sell your shares at a time or price that you do not like.



•

The terms of our shares may be changed in ways you may not like, because our board of directors will have the power to change the terms of our shares in ways our board determines, in its sole discretion, are not materially adverse to you.



•

Enbridge Inc. may be unable to satisfy its obligation to purchase our shares upon the occurrence of a mandatory purchase event, including upon the liquidation of Enbridge Partners, which likely would result in a loss in value of our shares.



•

If we are not fully reimbursed or indemnified for obligations and liabilities we incur in managing the business and affairs of Enbridge Partners, we may be unable to pay those liabilities and the value of our shares could decline.



•

If a person or group, other than Enbridge Inc. and its affiliates, owns 20% or more of the aggregate number of issued and outstanding Enbridge Partners common units and our shares, that person or group may not vote its shares; as a result, you are less likely to receive a premium for your shares in a change of control situation.



•

The shares you own are not entitled to vote to elect our directors, and, therefore, you will have little or no opportunity to influence or change our management.



•

Our discretion in establishing cash reserves at Enbridge Partners gives us the ability to reduce the amount of cash available for distribution to holders of its units, which will reduce the distributions on your shares.

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Risks Related to Enbridge Partners' Business

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Enbridge Partners' pipeline systems might be used less if demand for, or supply of, crude oil, natural gas and/or NGLs decreases.



•

Changes in Enbridge Partners' tariff rates or challenges to its tariff rates could have a material adverse effect on Enbridge Partners' financial condition and results of operations.



•

Rate proceedings involving the Kansas pipeline system, if resolved adversely to Enbridge Partners, could adversely affect Enbridge Partners results of operations.



•

Competition from other pipelines may reduce Enbridge Partners' revenues.



•

Enbridge Partners' gas marketing operations involve market risks.



•

Enbridge Partners' results may be adversely affected by commodity price volatility and risks associated with its hedging activities.



•

Natural gas transportation, delivery and sales contracts with a relatively small number of customers accounted for a significant portion of the gross margin attributable to the Midcoast system, and Enbridge Partners may not be able to renew or replace those contracts as they expire.



•

A decline in the availability of natural gas from the producing regions that supply the East Texas, Midcoast, Northeast Texas and South Texas systems may reduce utilization of capacity on those pipeline systems.



•

Compliance with environmental and operational safety regulations, including any remediation of soil or water pollution or hydrostatic testing of its pipeline systems, may increase Enbridge Partners' costs and reduce its revenues.



•

Failure of pipeline operations due to unforeseen interruptions or catastrophic events may adversely affect Enbridge Partners' business and financial condition.



•

Enbridge Partners' acquisition strategy may be unsuccessful if Enbridge Partners incorrectly predicts combined operating results, is unable to identify and complete future acquisitions and integrate acquired assets or businesses, or is unable to raise financing on acceptable terms.



•

Oil measurement losses on the Lakehead system can be materially impacted by changes in estimation, commodity price differentials, and other factors.

Risks Related to Conflicts of Interest and Limitations on Fiduciary Duties

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The interests of Enbridge Inc. may differ from our interests, the interests of our shareholders and the interests of limited partners of Enbridge Partners, and our board of directors may consider the interests of all parties to a conflict, not just your interests, in making important business decisions.



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Because Enbridge Partners' Lakehead system depends upon shipments of crude oil and liquid petroleum from the Enbridge system, decisions by Enbridge Inc. with respect to the Enbridge system could adversely affect the level of deliveries on the Lakehead system.



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Because we depend upon Enbridge Inc. and its affiliates for employees to manage the business and affairs of Enbridge Partners, its business could be adversely affected by a decrease in the availability of employees from Enbridge Inc. and its affiliates.

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•

Enbridge Inc. is not restricted from directly competing with Enbridge Partners in many circumstances, and this competition could have an adverse impact on Enbridge Partners' financial condition and results of operations.



•

Your ability to challenge the decisions of our board of directors will be limited, because our limited liability company agreement restricts or eliminates a number of the fiduciary duties that otherwise would be owed by our board of directors to our shareholders, and the partnership agreement of Enbridge Partners restricts or eliminates a number of the fiduciary duties that otherwise would be owed by our board of directors and by the general partner of Enbridge Partners to the limited partners of Enbridge Partners.



•

We may increase the cash reserves of Enbridge Partners, which will decrease cash distributions on its common units and the value of distributions of additional shares we make to you.



•

Because Enbridge Inc. is a Canadian corporation and many of its and our officers and directors are Canadian citizens who reside in Canada, it may be difficult to serve legal process on them and enforce civil liabilities against them.

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Organizational Structure

        The following charts depict a simplified organizational structure of Enbridge Inc. and Enbridge Partners immediately prior to this offering and the acquisition of the Midcoast, Northeast Texas and South Texas systems and the organizational structure following the offering and the acquisition.

Prior to the Offering and Acquisition

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Following the Offering and Acquisition

	Ownership of Enbridge Energy Partners, L.P. and its subsidiaries after the offering:
i-units owned by Enbridge Energy Management, L.L.C.			21.7%
Class A common units owned by the public			67.8%
Class B common units owned by Enbridge Energy Company			8.5%
General partner interest			2.0%
		Total	100.0%

        Following this offering, subsidiaries of Enbridge Inc. are expected to own collectively 11.6% of Enbridge Partners through their ownership of our shares and general and limited partner interests in Enbridge Partners.

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Acquisition of the Midcoast, Northeast Texas and South Texas Systems

        On May 16, 2002, Enbridge Partners agreed to acquire the Midcoast, Northeast Texas and South Texas systems from Enbridge Energy Company. Enbridge Energy Company owns these systems through its ownership of Enbridge Midcoast Energy, Inc. and its subsidiaries. In this prospectus, we refer to Enbridge Midcoast Energy, Inc. as "Enbridge Midcoast Energy."

        Prior to the contribution of Enbridge Midcoast Energy and its subsidiaries that own the acquired systems to Enbridge Partners, Enbridge Midcoast Energy and certain of these subsidiaries will merge with or convert into limited partnerships and limited liability companies. Enbridge Energy Company will contribute these limited partnerships and limited liability companies to Enbridge Partners in exchange for the consideration discussed below, but will retain the Canadian assets owned by Enbridge Midcoast Energy.

        The consideration to be received by Enbridge Energy Company for the contribution of the acquired systems is $929.1 million. Enbridge Partners will fund this consideration through the assumption of $900.0 million in debt related to these systems, payment of $18.8 million in cash and issuance of an additional $10.3 million equity interest in Enbridge Partners. This additional equity interest will satisfy Enbridge Energy Company's obligation to maintain its 2% general partner interest in Enbridge Partners, primarily related to the issuance of i-units to us. The cash portion of the purchase price will be funded by Enbridge Partners by borrowings under its existing credit facility or from affiliates of Enbridge Inc. The debt to be assumed by Enbridge Partners is owed to affiliates of Enbridge Inc. The purchase price is subject to adjustment at closing for working capital, capital expenditures and other items.

        The purchase price of the acquired systems approximates their book value and reflects the retention by Enbridge Energy Company of the deferred tax liability related to the contribution of the acquired systems to Enbridge Partners.

        A committee of independent members of the board of directors of Enbridge Energy Company, the general partner of Enbridge Partners, negotiated the purchase price and the terms of the acquisition on behalf of Enbridge Partners and recommended that the board of directors of the general partner approve the acquisition on behalf of Enbridge Partners.

        One of the conditions to the closing of this offering will be the successful closing of the acquisition by Enbridge Partners of the acquired systems. Enbridge Partners will use the proceeds it receives from the sale of i-units to us to repay a portion of the debt owed to affiliates of Enbridge Inc. that it will assume in connection with the acquisition.

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The Offering

Shares offered		10,000,000 shares representing limited liability company interests in Enbridge Management
	Shares offered to the public	9,500,000 shares representing limited liability company interests in Enbridge Management
	Shares offered to Enbridge Energy Company	500,000 shares representing limited liability company interests in Enbridge Management
Shares outstanding immediately after this offering		•	10,000,000 shares representing limited liability company interests in Enbridge Management; and
		•	one voting share of Enbridge Management owned by Enbridge Energy Company.
Use of proceeds		We will use substantially all of the net proceeds of the offering of our shares, expected to be approximately $424.1 million based on an estimated public offering price of $44.84 per share, which was the closing price of the Class A common units on the NYSE on July 2, 2002, as follows:
		•	$500,000 to compensate Enbridge Inc. for its purchase obligation and tax indemnities; and
		•	the remainder to purchase a number of i-units, a new class of limited partner interests, from Enbridge Partners that will equal the number of our shares that will be outstanding immediately following this offering.
		Enbridge Partners will use the proceeds it receives from the sale of i-units to us to repay a portion of the debt owed to affiliates of Enbridge Inc. that it will assume in connection with the acquisition of the acquired systems.
		Enbridge Inc. and its affiliates will use the aggregate proceeds they receive from us and from Enbridge Partners for general corporate purposes, including the repayment of commercial paper borrowings.
Exchange listing		We have applied to list the shares being sold in this offering on the NYSE under the symbol "      ."

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Our Shares

Enbridge Management	We are a Delaware limited liability company recently formed to manage and control the business and affairs of Enbridge Partners. Our shares represent limited liability company interests in us. We will be a limited partner in Enbridge Partners owning i-units and will, by agreement with Enbridge Partners and its general partner, manage and control its business and affairs.
U.S. federal income tax matters associated with our shares	Because we will be treated as a corporation for U.S. federal income tax purposes, an owner of our shares will not report on its U.S. federal income tax return any of our items of income, gain, loss and deduction. An owner of our shares will not receive a Schedule K-1 and will not be subject to state tax filings in the various states in which Enbridge Partners conducts business, as a result of owning our shares.
	A tax-exempt investor's ownership or sale of our shares will not generate income derived from an unrelated trade or business regularly carried on by the tax-exempt investor, which generally is referred to as unrelated business taxable income, or "UBTI," unless its ownership of our shares is debt financed by it.
	The ownership or sale of our shares by a regulated investment company, or mutual fund, will generate qualifying income to it. Furthermore, the ownership of our shares by a mutual fund will be treated as a qualifying asset.
	There will not be any withholding taxes imposed on quarterly or other distributions of additional shares to a non-U.S. person or generally on gain from the sale of our shares by a non-U.S. person provided it has owned no more than 5% of our shares and our shares continue to be traded on a nationally recognized securities exchange.
U.S. federal income tax matters associated with i-units	Although we will be subject to U.S. federal income taxes on our taxable income, Enbridge Partners will not allocate taxable income or gain to the i-units we own until such time as there is a liquidation of Enbridge Partners. Therefore, until a liquidation of Enbridge Partners, we do not anticipate that we generally will have taxable income resulting from our ownership of the i-units. In the event that we do have taxable income, Enbridge Inc. has agreed to indemnify us for the related tax liability to the extent that the liability exceeds the cash we receive relating to that income.

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Distributions	We will make distributions on our shares only in additional shares, except upon our liquidation. The fraction of an additional share distributed each quarter per share outstanding will be calculated by dividing the amount of the cash distribution paid by Enbridge Partners on each common unit for that quarter by the average market price of one of our shares as determined for a 10-trading day period ending on the trading day immediately prior to the ex-dividend date for our shares.
Our Covenants	Our limited liability company agreement provides that our activities will be limited to being a limited partner in Enbridge Partners and managing and controlling its business and affairs. It also requires that our issuance of classes of shares, other than the class of shares being sold in this offering and the class of voting shares currently owned by Enbridge Energy Company, be approved by the owners of our outstanding shares and further includes covenants that prohibit us from:
	•	borrowing money or issuing debt;
	•	selling, pledging or otherwise transferring any i-units;
	•	issuing options, warrants or other securities entitling the holder to purchase our shares;
	•	purchasing any of our shares, including voting shares; or
	•	liquidating, merging or recapitalizing.
	These provisions can be amended or waived by the owners of our shares as described under "—Voting Rights" below.
Covenant of Enbridge Inc.	Under our limited liability company agreement, Enbridge Inc. has agreed that neither it nor any of its affiliates will take any action that would result in Enbridge Inc. and its affiliates ceasing to be the beneficial owners of more than 50% of the total voting power of the general partner of Enbridge Partners, unless:
	•	prior to taking such action it has notified us and Enbridge Partners that, upon the occurrence of such action, Enbridge Inc. will acquire all of our shares as more fully described under "—Mandatory Purchase" below; or
	•	following the occurrence of such action another person will become the beneficial owner of more than 50% of the total voting power of the general partner of Enbridge Partners, and such person:
		—	is organized under the laws of a state in the United States;
		—	has long term unsecured debt with an investment grade credit rating (as determined by Moody's and Standard & Poor's) immediately prior to the closing of the transaction; and

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		—	assumes all of Enbridge Inc.'s obligations under the purchase provisions and the tax indemnification agreement.
	This covenant can be amended or waived by the owners of our shares as described under "—Voting Rights" below.
Covenants of Enbridge Partners	Upon the closing of this offering, the Enbridge Partners partnership agreement will be amended to provide that Enbridge Partners will not:
	•	issue any of its i-units to any person other than us;
	•	except in liquidation, make a distribution on an i-unit other than in additional i-units or a security that has in all material respects the same rights and privileges as the i-units;
	•	make a distribution on a common unit other than in cash, additional common units or a security that has in all material respects the same rights and privileges as the common units;
	•	make a tender offer for common units unless the consideration payable in such tender offer:
		—	is exclusively cash; and
		—	together with any cash payable in respect of any other tender offer by Enbridge Partners for the common units concluded within the preceding 360 days and the aggregate amount of any cash distributions to all owners of common units made within the preceding 360-day period is less than 12% of the aggregate average market value of all classes of units of Enbridge Partners determined on the trading day immediately preceding the commencement of the tender offer;
	•	allow an owner of common units to receive any consideration other than cash, common units or a security that has in all material respects the same rights and privileges as the common units, or allow us, as the owner of the i-units, to receive any consideration other than additional i-units or a security that has in all material respects the same rights and privileges as the i-units, in either case, in a:
		—	merger transaction, if the unitholders of Enbridge Partners immediately prior to the transaction own more than 50% of the common equity securities of the survivor immediately after the transaction; or
		—	recapitalization, reorganization or similar transaction;
	•	be a party to a merger, sell all or substantially all of its assets to another person or enter into similar transactions, if:
		—	the survivor of the merger or the other person is to be controlled by Enbridge Inc. or its affiliates after the transaction; and

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	—	the transaction would result in the occurrence of a special event described under "—Mandatory Purchase" below; or
•	take any action that would result in the occurrence of either of the events described below, unless prior to the occurrence of the event Enbridge Inc. has notified us and Enbridge Partners that upon the occurrence of the event Enbridge Inc. will acquire all of our outstanding shares as more fully described under "—Mandatory Purchase" below:
	—	aggregate distributions or other payments by Enbridge Partners on its common units, other than in common units or in securities that have in all material respects the same rights and privileges as common units but including pursuant to an issuer tender offer by Enbridge Partners, during a 360-day period exceeding 50% of the average market price of a common unit for the 10-trading day period ending on the trading day immediately prior to the beginning of that 360-day period;
	—	the merger of Enbridge Partners with another entity where Enbridge Partners is not the surviving entity, or the sale of all or substantially all of Enbridge Partners' assets, unless in the transaction:
		—	the only consideration that we receive in exchange for our i-units is a security that has in all material respects the same rights and privileges as the i-units; and
		—	the only consideration that the owners of common units receive in exchange for their common units is a security that has in all material respects the same rights and privileges as the common units and/or cash, and the amount of cash received per common unit does not exceed 331/3% of the average market price of a common unit for the 10-trading day period ending on the trading day immediately prior to the date of execution of the definitive agreement for the transaction.
These covenants can be amended or waived by the owners of the i-units as described under "—Voting Rights" below.

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Mandatory Purchase	Enbridge Inc. will be required to purchase all of our shares if, prior to the occurrence of any of the events described below, it notifies us and Enbridge Partners that the occurrence of any of such events will trigger a mandatory purchase obligation. These events, which we refer to as "special events," include:
	•	aggregate distributions or other payments by Enbridge Partners on its common units, other than in common units or in securities that have in all material respects the same rights and privileges as common units but including pursuant to an issuer tender offer by Enbridge Partners, during a 360-day period that exceed 50% of the average market price of a Class A common unit for the 10 trading days ending on the trading day immediately prior to the beginning of that 360-day period;
	•	the merger of Enbridge Partners with another entity where Enbridge Partners is not the surviving entity, or the sale of all or substantially all of Enbridge Partners' assets, unless in the transaction:
		—	the only consideration that we receive in exchange for our i-units is a security that has in all material respects the same rights and privileges as the i-units; and
		—	the only consideration that the owners of common units receive in exchange for their common units is a security that has in all material respects the same rights and privileges as the common units and/or cash, and the amount of cash received per common unit does not exceed 331/3% of the average market price of a Class A common unit for the 10-trading day period ending on the trading day immediately prior to the date of execution of the definitive agreement for the transaction; or
	•	Enbridge Inc. or its affiliates taking any action that would result in Enbridge Inc. and its affiliates ceasing to be the beneficial owners of more than 50% of the total voting power of the general partner of Enbridge Partners, unless, following the occurrence of such action, another person will become the beneficial owner of more than 50% of the total voting power of the general partner of Enbridge Partners, and such person:
		—	is organized under the laws of a state in the United States;
		—	has long term unsecured debt with an investment grade credit rating (as determined by Moody's and Standard & Poor's) immediately prior to the closing of the transaction; and

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		—	assumes all of Enbridge Inc.'s obligations under the purchase provisions and the tax indemnification agreement.
	The purchase price for our shares in the event of a mandatory purchase by Enbridge Inc. will be equal to the higher of the average market price of the shares and the Class A common units as determined for a 10-trading day period ending on the trading day immediately prior to the date of the applicable event.
	Enbridge Inc.'s mandatory purchase obligation will automatically terminate upon:
	•	the removal of the general partner of Enbridge Partners by the limited partners of Enbridge Partners; or
	•	the occurrence of any of the special events described above that does not also trigger a mandatory purchase obligation of Enbridge Inc.
	For purposes of the mandatory and optional purchase provisions, which are part of our limited liability company agreement, Enbridge Inc. will be deemed to include Enbridge Inc., its successors by merger and any entity that succeeds to Enbridge Inc.'s obligations under the purchase provisions and the tax indemnification agreement in connection with an acquisition of all or substantially all of the assets of Enbridge Inc.
Optional Purchase	In addition to its mandatory purchase obligation, Enbridge Inc. has the option, which it may assign to any of its affiliates, to purchase all, but not less than all, of our shares not owned by it or its affiliates in two circumstances:
	•	when Enbridge Inc. and its affiliates own 80% or more of our shares; and
	•	when Enbridge Inc. and its affiliates own a number of our shares and the common units that equals 85% or more of our shares and the common units on a combined basis; provided, however, that in this second circumstance, the general partner of Enbridge Partners must also elect to purchase all of the common units not owned by Enbridge Energy Company or its affiliates.
	In these two circumstances, the purchase price per share is calculated differently. If the first circumstance described above exists and Enbridge Inc. elects to purchase our shares, the purchase price per share will equal 110% of the higher of:
	•	the average closing price for our shares for the 10 consecutive trading days ending on the fifth trading day prior to the date on which the notice of the purchase is given; and

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	•	the highest price Enbridge Inc. or its affiliates paid for our shares during the 90 days prior to the date on which the notice of purchase is given.
	If the second circumstance described above exists and Enbridge Inc. and its affiliates elect to purchase both our shares and the common units, the purchase price per share and the purchase price per common unit will both equal the higher of:
	•	the average closing price for our shares or Class A common units, whichever is higher, for the 20 consecutive trading days ending on the fifth trading day prior to the date on which the notice of the purchase is given; and
	•	the highest price Enbridge Inc. or its affiliates paid either for our shares or the Class A common units during the 90 days prior to the date on which the notice of purchase is given.
	Enbridge Inc. and its affiliates currently own approximately 11.1% of the common units. Following this offering, Enbridge Inc. and its affiliates are expected to own 5% of our shares and 9.8% of our shares and the common units on a combined basis.
Voting Rights	Owners of the class of shares being sold in this offering will have no right to elect our directors. Enbridge Energy Company owns all of the shares of the class that elects our directors, which we refer to as "voting shares." Owners of the class of shares issued in this offering, other than Enbridge Energy Company and its affiliates, may vote on the following matters:
	•	amendments to our limited liability company agreement (including the purchase provisions), the Enbridge Inc. tax indemnification agreement and the delegation of control agreement, but only if the amendment would have a material adverse effect on us or the owners of our shares, as determined in the sole discretion of our board of directors, or would reduce the time for any notice to which the owners of our shares are entitled;
	•	an amendment or waiver of Enbridge Inc.'s covenant regarding its continued ownership of more than 50% of the total voting power of the general partner of Enbridge Partners;
	•	an amendment or waiver of our covenants that prohibit us from:
		—	borrowing money or issuing debt,
		—	selling, pledging or otherwise transferring any i-units,
		—	issuing options, warrants or other securities entitling the holder to purchase our shares,
		—	purchasing our shares, or

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	—	liquidating, merging or recapitalizing;
•	our issuance of classes of shares other than shares of the class being sold in this offering and the class of voting shares currently owned by Enbridge Energy Company; and
•	our dissolution.
In addition, on matters submitted by Enbridge Partners for a vote of the i-units, the i-units will be voted proportionately to the number of affirmative and negative votes cast by the owners of our shares, including our voting shares. In general, the i-units vote together as a single class with the common units on matters on which the common units vote. However, the i-units vote as a separate class on the following matters:
•	amendments to the Enbridge Partners partnership agreement that, in the sole discretion of the general partner of Enbridge Partners, would have a material adverse effect on the i-units in relation to other classes of units;
•	amendments or waivers of the covenants in the Enbridge Partners partnership agreement described above under "—Covenants of Enbridge Partners" that are not permitted to be made by the general partner of Enbridge Partners alone;
•	removal of the general partner of Enbridge Partners and the election of a successor general partner;
•	the transfer by the general partner of Enbridge Partners of its general partner interest to a non-affiliated person and the admission of that person as a general partner of Enbridge Partners; and
•	any proposed action that would cause Enbridge Partners to be treated as a corporation for U.S. federal income tax purposes.
Except for votes in connection with actions that would cause Enbridge Partners to be treated as a corporation for U.S. federal income tax purposes, Enbridge Energy Company and its affiliates are not entitled to vote any shares owned by them, including the voting shares, on the matters described above on which the i-units vote as a separate class.
If a person or group owns 20% or more of the aggregate number of issued and outstanding common units and our shares, they cannot vote the shares that they own on any matter. This particular limitation does not apply to Enbridge Inc. and its affiliates. However, as described above and as further described under "Description of Our Shares — Limited Voting Rights," beginning on page 120, there are a number of circumstances in which Enbridge Inc. and its affiliates are not entitled to vote the shares that they own.

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	When Enbridge Inc. and its affiliates or a person or group owning 20% or more of the aggregate number of common units and our shares are not entitled to vote as described above, the shares that they own will be treated as if they are not outstanding for all purposes of that vote.
Anti-dilution Adjustments	Through the combined effect of the provisions in the Enbridge Partners partnership agreement and the provisions of our limited liability company agreement, the number of our outstanding shares and the number of i-units we own always will be equal.

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Summary Financial Information of Enbridge Partners

        You should read the following summary financial information of Enbridge Partners in connection with the financial statements and related notes appearing elsewhere or incorporated by reference in this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Enbridge Partners — Results of Operations" beginning on page 65. The historical results of Enbridge Partners are not necessarily indicative of results to be expected in future periods.

        Enbridge Partners acquired the North Dakota system on May 18, 2001 and the East Texas system on November 30, 2001. The summary financial information of Enbridge Partners as of and for the year ended December 31, 2001 and the three months ended March 31, 2002 reflects the inclusion of these systems since the dates they were acquired.

			Year Ended December 31,															Three Months Ended March 31,
			1997			1998			1999			2000			2001			2001			2002
																		(unaudited)
			(dollars in millions, except per unit amounts)
Income Statement Data:
Operating revenue			$	282.1		$	287.7		$	312.6		$	305.6		$	340.4		$	71.9		$	181.3
Operating and administrative expenses				133.9			140.9			124.5			128.0			180.7			31.8			131.0
Depreciation and amortization				40.1			41.4			57.8			61.1			63.8			15.4			18.3
Operating income				108.1			105.4			130.3			116.5			95.9			24.7			32.0
Interest and other income				9.7			6.0			3.4			4.8			2.8			0.7			0.6
Interest expense				(38.6	)		(21.9	)		(54.1	)		(60.4	)		(59.3	)		(15.2	)		(14.7	)
Minority interest				(0.9	)		(1.0	)		(0.9	)		(0.7	)		(0.5	)		(0.1	)		(0.2	)
Net income			$	78.3		$	88.5		$	78.7		$	60.2		$	38.9		$	10.1		$	17.7
Net income per common unit(1)			$	3.02		$	3.07		$	2.48		$	1.78		$	0.98		$	0.27		$	0.43
Cash distributions paid per common unit				2.92			3.36			3.485			3.50			3.50			0.875			0.90
Financial Position Data: (at period end)
Property, plant and equipment, net			$	850.3		$	1,296.2		$	1,321.3		$	1,281.9		$	1,486.6		$	1,268.9		$	1,498.5
Total assets				1,063.2			1,414.4			1,413.7			1,376.7			1,649.2			1,369.8			1,682.6
Long-term debt				463.0			814.5			784.5			799.3			715.4			799.3			683.4
Partners' capital:
	Class A common unitholders			461.6			453.4			533.1			488.6			577.0			473.2			647.1
	Class B common unitholder			36.7			37.3			47.4			42.1			48.8			40.1			53.4
	General Partner			3.5			4.3			5.6			5.2			6.5			5.1			7.7
	Accumulated other comprehensive income (loss)			—			—			—			—			11.9			(1.0	)		(2.6	)
		Total	$	501.8		$	495.0		$	586.1		$	535.9		$	644.2		$	517.4		$	705.6
Other Financial Data:
EBITDA(2)			$	148.2		$	146.8		$	188.1		$	177.6		$	159.7		$	40.1		$	50.3
Cash flow from operating activities				106.6			103.6			101.6			117.3			122.3			46.7			52.2
Cash flow used in investing activities				(101.7	)		(427.9	)		(91.1	)		(20.7	)		(299.1	)		(6.3	)		(29.1	)
Cash flow from (used in) financing activities				24.1			252.7			(17.5	)		(99.4	)		179.8			(28.0	)		(1.0	)
Acquisitions included in investing activities				—			—			—			—			265.0			—			—
Capital expenditures included in investing activities				126.9			487.3			82.9			21.7			35.0			2.4			30.0

22

			Year Ended December 31,					Three Months Ended March 31,
			1997	1998	1999	2000	2001	2001	2002
								(unaudited)
Operating Data:
Lakehead system
	Barrel miles (billions)(3)		389	391	350	341	333	83	86
	Deliveries (thousands of bpd)(4)
		United States	960	992	898	976	960	980	906
		Ontario	552	570	471	362	355	367	408
			1,512	1,562	1,369	1,338	1,315	1,347	1,314
East Texas system(5)
	Average daily volume
		(MMBtu/day)(6)	—	—	281	362	394	399	388

(1)

The general partner's allocation of net income with respect to its general partner interest in the following amounts has been deducted before calculating net income per common unit: 1997, $4.4 million; 1998, $8.0 million; 1999, $9.1 million; 2000, $8.8 million; 2001, $9.1 million; and the three months ended March 31, 2001 and 2002, $2.1 million and $3.2 million, respectively. The weighted average number of outstanding common units for each period is as follows: 1997, 24.4 million; 1998, 26.2 million; 1999, 28.0 million; 2000, 28.9 million; 2001, 30.2 million and the three month periods ended March 31, 2001 and 2002, 28.9 million and 33.7 million, respectively.

(2)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides a basis for management to assess liquidity and measure performance over time and in relation to companies who own similar assets.

(3)

"Barrel miles" is a measurement of how fully a pipeline is used over its length and is calculated by multiplying the amount of each individual delivery (measured in barrels) by the distance it is shipped (measured in miles) and then adding the results so obtained for all deliveries.

(4)

"Deliveries" means the amount of liquid hydrocarbons delivered by a pipeline to certain points along the system and is quantified using a barrel as a unit of measure. "Barrels per day" (or "bpd") delivery data is a measurement of average deliveries for the indicated period and is computed by dividing the number of barrels delivered for the period by the number of days in the period.

(5)

East Texas system operating statistics for 1999, 2000 and 2001 are shown on a full-year basis for informational purposes. Enbridge Partners acquired the East Texas system on November 30, 2001.

(6)

In millions of British thermal units per day, or "MMBtu/day."

23

Summary Financial Information of Enbridge Midcoast Energy

        You should read the following summary financial information of Enbridge Midcoast Energy in connection with the financial statements and related notes appearing elsewhere in this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Enbridge Midcoast Energy — Results of Operations" beginning on page 71. The historical results of Enbridge Midcoast Energy are not necessarily indicative of results to be expected in future periods.

        Summary financial information for the year ended December 31, 2001 is presented as two separate periods due to the acquisition of Enbridge Midcoast Energy by Enbridge Energy Company on May 11, 2001. The acquisition was accounted for using the purchase method of accounting effective May 1, 2001.

        Enbridge Midcoast Energy acquired the South Texas system on January 2, 2002 and acquired the Northeast Texas system on March 1, 2002. The summary financial information of Enbridge Midcoast Energy as of and for the three months ended March 31, 2002 reflects the inclusion of these systems since the dates they were acquired.

        The summary financial information for all periods beginning after April 30, 2001 reflect the financial performance of the assets under the ownership and management of Enbridge Energy Company.

		Year Ended December 31,												Four Months Ended April 30,			Eight Months Ended December 31,			Four Months Ended April 30,			Three Months Ended March 31,
		1997			1998			1999			2000			2001			2001			2002			2001			2002
		(dollars in millions)
																							(unaudited)
Statement of Operations Data:
Operating revenue		$	112.7		$	234.1		$	391.6		$	792.3		$	407.0		$	438.5		$	279.3		$	333.2		$	191.1
Operating expenses:
	Energy marketing expenses		100.3			211.0			330.5			682.5			390.9			364.7			236.0			320.9			158.5
	Operating and administration		3.5			6.3			30.0			48.6			29.5			37.1			23.2			13.5			15.9
	Unusual charges		—			—			2.7			—			—			—			—			—			—
	Depreciation and amortization		1.6			3.2			7.5			15.7			5.7			15.5			7.0			4.3			5.0
Total operating expenses			105.4			220.5			370.7			746.8			426.1			417.3			266.2			338.7			179.4
Operating income (loss)			7.3			13.6			20.9			45.5			(19.1	)		21.2			13.1			(5.5	)		11.7
Interest and other income			(0.1	)		0.2			(0.1	)		1.8			0.6			0.1			(0.5	)		0.2			(0.5	)
Interest expense			(1.1	)		(3.3	)		(6.5	)		(18.4	)		(9.4	)		(14.0	)		(6.4	)		(7.2	)		(4.4	)
Minority interest			(0.2	)		(0.1	)		(0.1	)		(0.1	)		(0.1	)		—			—			—			—
Income (loss) before income taxes and extraordinary item			5.9			10.4			14.2			28.8			(28.0	)		7.3			6.2			(12.5	)		6.8
Provision for income taxes			(0.1	)		(1.3	)		(2.2	)		(7.4	)		9.4			(4.2	)		(2.2	)		4.2			(2.5	)
Income (loss) before extraordinary item			5.8			9.1			12.0			21.4			(18.6	)		3.1			4.0			(8.3	)		4.3
Extraordinary item, net of income tax			—			—			(0.6	)		—			—			—			—			—			—
Cumulative effect of change in accounting principle, net of income tax			—			—			—			—			(0.9	)		—			—			—			—
Net income (loss)		$	5.8		$	9.1		$	11.4		$	21.4		$	(19.5	)	$	3.1		$	4.0		$	(8.3	)	$	4.3
Financial Position Data: (at period end)

24

Property, plant and equipment, net			$	97.6		$	154.2		$	393.0		$	416.0					$	482.1					$	415.4		$	656.0
Goodwill and other assets				1.4			2.5			23.0			26.3						217.0						25.7			246.4
Total assets				128.0			191.3			478.4			599.3						787.7						552.3			1,033.2
Long-term debt				28.9			78.1			240.0			256.0						—						261.1			—
Due to affiliates				—			—			—			—						319.2						—			540.6
Shareholder's equity:
	Common stock			0.1			0.1			0.1			0.1						—						0.1			—
	Paid-in capital			80.7			81.0			166.0			166.0						368.0						166.3			368.0
	Retained earnings (deficit)			(19.3	)		(12.0	)		(2.9	)		14.9						3.1						5.5			7.4
	Accumulated other comprehensive income			—			—			0.1			—						(7.7	)					(0.7	)		(15.8	)
	Treasury stock			—			(2.8	)		(2.6	)		(3.2	)					—						(3.3	)		—
		Total shareholders' equity	$	61.5		$	66.3		$	160.7		$	177.8					$	363.4					$	167.9		$	359.6
Other Financial Data:
EBITDA(1)			$	8.9		$	16.8		$	28.4		$	61.2		$	(13.4	)	$	36.7		$	20.1		$	(1.2	)	$	16.7
EBITDA net of Canadian assets(2)			$	8.9		$	16.8		$	27.2		$	57.4		$	(14.4	)	$	35.1		$	19.5		$	0.4		$	16.4
Cash flow from (used in) operating activities			$	3.8		$	17.2		$	16.7		$	26.0		$	(0.5	)	$	(21.8	)	$	11.5		$	(4.4	)	$	19.0
Cash flow used in investing activities			$	(62.5	)	$	(61.3	)	$	(254.3	)	$	(40.4	)	$	(11.4	)	$	(51.4	)	$	(216.8	)	$	(3.3	)	$	(207.4	)
Cash flow from financing activities			$	57.8		$	44.0		$	239.7		$	16.7		$	9.6		$	72.7		$	221.4		$	4.6		$	221.4
Acquisitions included in investing activities			$	60.8		$	52.1		$	238.1		$	22.8		$	—		$	1.2		$	189.6		$	—		$	189.6
Capital expenditures included in investing activities			$	1.4		$	7.8		$	16.6		$	16.5		$	10.8		$	50.2		$	27.2		$	2.8		$	17.8
Operating Data:
Average daily volume (MMBtu/day)(3)				401.0			606.8			752.9			884.1			1,222.7			1,102.5			1,251.6			1,233.3			1,258.4

(1)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides a basis for management to assess liquidity and measure performance over time and in relation to companies who own similar assets.

(2)

Excludes EBITDA attributable to the operation of the Canadian assets, which have a book value of approximately $25 million, that will not be contributed to Enbridge Partners.

(3)

In millions of British thermal units per day, or "MMBtu/day." Includes all active pipeline mileage in which Enbridge Midcoast Energy owns an interest.

25

Summary Pro Forma as Adjusted Financial Information of Enbridge Partners

        The tables on the following pages show summary pro forma as adjusted financial information for Enbridge Partners for the year ended December 31, 2001 and the three months ended March 31, 2002 combined with the Midcoast, Northeast Texas and South Texas systems for the same periods. The pro forma as adjusted financial information excludes the Canadian assets that are owned by Enbridge Midcoast Energy, which are being retained by Enbridge Energy Company.

        The summary pro forma as adjusted financial information gives effect to the following as of the beginning of the fiscal year presented:

•

the acquisition by Enbridge Partners of the acquired systems for $929.1 million, consisting of the assumption of $900.0 million in debt related to the acquired systems, payment of $18.8 million in cash and issuance of an additional $10.3 million equity interest in Enbridge Partners to Enbridge Energy Company; and



•

the receipt by Enbridge Partners of $423.6 million in proceeds from the sale of its i-units to us, which assumes that we sell 10,000,000 shares at $44.84 per share, net of the underwriting discount, expected expenses and $500,000 paid by us to Enbridge Inc. in respect of its purchase obligation and tax indemnities, and the use by Enbridge Partners of these proceeds to repay a portion of the debt it assumed in connection with the acquisition.

        Enbridge Midcoast Energy acquired the South Texas system on January 2, 2002 and the Northeast Texas system on March 1, 2002. The pro forma as adjusted financial information reflects the results of operations of these systems as of the beginning of the fiscal year presented.

        Enbridge Partners acquired the North Dakota system on May 18, 2001 and the East Texas system on November 30, 2001. The historical and pro forma as adjusted financial information for Enbridge Partners as of and for the 12 months ended December 31, 2001 and as of and for the three months ended March 31, 2002, reflects the results of operations of these systems as of the dates they were acquired.

        The summary pro forma as adjusted financial information has been prepared using the purchase method of accounting. The purchase price allocated in the summary pro forma as adjusted financial information is based on Enbridge Partners' estimate of the fair market values of assets acquired and liabilities assumed. The summary pro forma as adjusted financial information includes assumptions and adjustments as described in the notes to the pro forma as adjusted combined financial statements appearing elsewhere in this prospectus and should be read in conjunction with the historical financial statements and related notes of Enbridge Partners and Enbridge Midcoast Energy appearing elsewhere in this prospectus.

        The summary pro forma as adjusted financial information may not be indicative of the results that would have occurred if the acquisition of the acquired systems had been consummated as of the beginning of the fiscal year presented or that will be obtained in the future.

26

Summary Pro Forma as Adjusted Financial Information for the Year Ended December 31, 2001

	Enbridge Partners			Pro Forma Adjustments			Pro Forma as Adjusted
	(historical)			(unaudited)			(unaudited)
	(in millions, except per unit amounts)
Income Statement Data:
Operating revenue	$	340.4		$	991.9		$	1,332.3
Power		49.9			—			49.9
Cost of natural gas		26.3			858.6			884.9
Operating and administrative expenses		104.5			84.7			189.2
Depreciation and amortization		63.8			24.1			87.9
Operating income		95.9			24.5			120.4
Interest and other income		2.8			0.8			3.6
Interest expense		(59.3	)		(34.6	)		(93.9	)
Income before minority interest		39.4			(9.3	)		30.1
Minority interest		(0.5	)		(0.1	)		(0.6	)
Net income	$	38.9		$	(9.4	)	$	29.5
Net income per unit	$	0.98		$	(1.28	)	$	0.41
Weighted average units outstanding		30.2			10.0			40.2
General partner's net income allocation	$	9.1		$	3.9		$	13.0
Common unitholders' net income allocation	$	29.8		$	(13.3	)	$	16.5
Other Financial Data:
EBITDA(1)	$	159.7		$	48.6		$	208.3

(1)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides one basis for management to assess liquidity and measure performance over time and in relation to competitors who own similar assets.

27

Summary Pro Forma as Adjusted Financial Information for the Three Months Ended
March 31, 2002

	Enbridge Partners			Pro Forma Adjustments			Pro Forma as Adjusted
	(unaudited)			(unaudited)			(unaudited)
	(in millions, except per unit amounts)
Income Statement Data:
Operating revenue	$	181.3		$	207.0		$	388.3
Power		13.6			—			13.6
Cost of natural gas		89.6			171.5			261.1
Operating and administrative expenses		27.8			17.9			45.7
Depreciation and amortization		18.3			4.9			23.2
Operating income		32.0			12.7			44.7
Interest and other income		0.6			(0.7	)		(0.1	)
Interest expense		(14.7	)		(8.6	)		(23.3	)
Income before minority interest		17.9			3.4			21.3
Minority interest		(0.2	)		—			(0.2	)
Net income	$	17.7		$	3.4		$	21.1
Net income per unit	$	0.43		$	0.24		$	0.39
Weighted average units outstanding		33.7			10.0			43.7
General partner's net income allocation	$	3.2		$	1.0		$	4.2
Common unitholders' net income allocation	$	14.5		$	2.4		$	16.9
Financial Position Data (at end of period):
Current assets	$	143.4		$	90.7		$	234.1
Net property, plant and equipment		1,498.5			684.1			2,182.6
Goodwill		15.0			251.3			266.3
Other assets		25.7			11.5			37.2
Total assets	$	1,682.6		$	1,037.6		$	2,720.2
Current liabilities	$	158.6		$	90.7		$	249.3
Short-term debt		130.0			18.8			148.8
Long-term debt		683.4			477.9			1,161.3
Other liabilities		1.6			16.3			17.9
Minority interest		3.4			—			3.4
Partners' capital		705.6			433.9			1,139.5
Total liabilities and partners' capital	$	1,682.6		$	1,037.6		$	2,720.2
Other Financial Data:
EBITDA(1)	$	50.3		$	17.6		$	67.9

(1)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides one basis for management to assess liquidity and measure performance over time and in relation to competitors who own similar assets.

28

Enbridge Management Balance Sheet

        You should read the following financial information together with the financial statements and related notes appearing elsewhere in this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Enbridge Management" beginning on page 64.

        The unaudited as adjusted balance sheet information as of May 23, 2002 gives effect to the receipt of net proceeds of $424.1 million, which assumes that we sell 10,000,000 shares at $44.84 per share, net of the underwriting discount and expected expenses, and that we use $500,000 of the net proceeds to compensate Enbridge Inc. for its purchase obligation and tax indemnities and use $423.6 million of the net proceeds to purchase a number of i-units from Enbridge Partners equal to the number of our outstanding shares.

		As of May 23, 2002
		Historical		As Adjusted for the Offering
				(unaudited)
		(in thousands)
Assets
Cash		$	1	$	1
i-units and purchase rights associated with our shares and the tax indemnity			—		424,101
Total assets		$	1	$	424,102
Liabilities and Equity
Liabilities			—		—
Equity
	Voting shares	$	1	$	1
	Non-voting shares		—		424,101
Total liabilities and equity		$	1	$	424,102

29

RISK FACTORS

An investment in our shares involves risks. You should carefully consider the following risk factors together with all of the other information included in this prospectus in evaluating an investment in our shares.

If any of the following risks were actually to occur, the business, financial condition or results of operations of us or Enbridge Partners could be adversely affected. In that case, the trading price of our shares could decline and you could lose all or part of your investment.

Risks Related to Our Shares, the i-Units and Enbridge Management

An active trading market for our shares may not develop, and even if such a market does develop, the market price of our shares may be less than the price you paid for your shares in this offering and less than the market price of the Class A common units of Enbridge Partners.

        Prior to this offering, you could not buy or sell our shares. An active public trading market for our shares may not develop or continue after this offering. Even if such a market does develop, the market price of our shares after this offering may be less than the market price of Enbridge Partners' Class A common units as a result of any of the following factors, some of which are beyond our control:

•

the complexity of the terms of our shares, including the optional and mandatory purchase features and the tax indemnity;



•

changes to the terms of our shares that our board of directors may make in its sole discretion;



•

the failure of Enbridge Inc. to fulfill its mandatory purchase obligation upon the occurence of a mandatory purchase event;



•

liabilities or obligations we may incur in connection with our management and control of the business and affairs of Enbridge Partners for which Enbridge Partners or Enbridge Energy Company are either unwilling or unable to reimburse or indemnify us; and



•

liabilities that we may incur, such as for violations of laws like the U.S. federal securities laws, or acts we may commit in bad faith, for which we may not be entitled to indemnification from Enbridge Partners or Enbridge Energy Company.

The value of the quarterly distribution of an additional fractional share that you will receive per share may be less than the quarterly distribution of cash that Enbridge Partners' common unitholders will receive per common unit.

        The fraction of a share to be issued per share outstanding with each quarterly distribution will be based on the average closing price of our shares for the ten consecutive trading days preceding the ex-dividend date for our shares. Because the market price of our shares may vary substantially over time, the market value on the date you receive a distribution of additional shares may vary substantially from the cash you would have received had you owned common units of Enbridge Partners instead of our shares.

If Enbridge Partners were treated as a corporation for U.S. federal income tax purposes, the value of our shares would be substantially reduced, and the owner of our voting shares would have the right to merge us into Enbridge Partners.

        The anticipated benefit of an investment in our shares depends largely on the continued treatment of Enbridge Partners as a partnership for U.S. federal income tax purposes. Enbridge Partners has not requested, and does not plan to request, a ruling from the U.S. Internal Revenue

30

Service on this or any other matter affecting Enbridge Partners. Current law requires Enbridge Partners to derive at least 90% of its annual gross income from specific activities to continue to be treated as a partnership for U.S. federal income tax purposes. Enbridge Partners may not find it possible, regardless of its efforts, to meet this income requirement or may inadvertently fail to meet this income requirement. Current law could change so as to cause Enbridge Partners to be treated as a corporation for U.S. federal income tax purposes without regard to its sources of income or otherwise subject Enbridge Partners to entity-level taxation.

        If Enbridge Partners were to be treated as a corporation for U.S. federal income tax purposes, it would pay U.S. federal income tax on its income at the corporate tax rate, which currently is a maximum of 35%, and would pay state income taxes at varying rates. The additional i-units that we will own after each quarterly distribution of cash to holders of common units generally would be taxed. Because a tax would be imposed upon Enbridge Partners as a corporation, the cash available for distribution to its common unitholders would be substantially reduced, which would reduce the value of the i-units we own and the value of your shares.

        Under the provisions of our limited liability company agreement and Enbridge Partners' partnership agreement, if Enbridge Partners were to be treated as a corporation for U.S. federal income tax purposes, the owner of our voting shares would have the right to cause us to merge into it or one of its subsidiaries, provided that the merger is currently non-taxable to holders of our shares, based upon an opinion of counsel or a ruling from the U.S. Internal Revenue Service. In such event, you would receive common units or other securities substantially similar to the common units in exchange for your shares.

Enbridge Partners may issue additional common or other classes of units, and we may issue additional shares, which would dilute your ownership interest.

        The issuance of additional common or other classes of units by Enbridge Partners or shares by us, other than our quarterly distributions to you, may have the following effects:

•

the amount available for distributions on each share may decrease;



•

the relative voting power of each previously outstanding share may decrease; and



•

the market price of shares may decline.

        Additionally, the public sale by Enbridge Energy Company of a significant portion of the 3,912,750 Class B common units that it currently owns could reduce the market price of the Class A common units and, indirectly, the shares. Enbridge Partners' partnership agreement allows the general partner to cause Enbridge Partners to register for public sale any units held by the general partner or its affiliates. A public sale of the Class B common units currently held by Enbridge Energy Company could absorb some of the trading market demand for the outstanding Class A common units, which indirectly could reduce the market price of the shares. In addition, Enbridge Energy Company may sell its Class B common units in private transactions at any time, which could have a similar effect on the market for the outstanding Class A common units and, indirectly, the shares.

Because our only assets will be i-units in Enbridge Partners, our financial condition and results of operations will depend solely upon the performance of Enbridge Partners.

        After this offering we will be a limited partner in Enbridge Partners and our only asset will be the i-units we own. If Enbridge Partners decreases the cash distributions it pays to common unitholders, the value of distributions of shares to holders of our shares will decrease as well.

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Your shares are subject to optional and mandatory purchase provisions that could result in your having to sell your shares at a time or price that you do not like.

        If either of the optional purchase rights are exercised by Enbridge Inc., or if there is a mandatory purchase event, you will be required to sell your shares at a time or price that may be undesirable, and you could receive less than you paid for your shares. Any sale of our shares, to Enbridge Inc. or otherwise, for cash will be a taxable transaction to the owner of the shares sold. Accordingly, a gain or loss will be recognized on the sale equal to the difference between the cash received and the owner's tax basis in the shares sold.

The terms of our shares may be changed in ways you may not like, because our board of directors will have the power to change the terms of our shares in ways our board determines, in its sole discretion, are not materially adverse to you.

        As an owner of our shares, you may not like the changes made to the terms of our shares, if any, and you may disagree with our board of directors' decision that the changes are not materially adverse to you as a shareholder. Your recourse if you disagree will be limited because our limited liability company agreement gives broad latitude and discretion to our board of directors and eliminates or reduces the fiduciary duties that our board of directors otherwise would owe to you.

Enbridge Inc. may be unable to satisfy its obligation to purchase our shares upon the occurrence of a mandatory purchase event, including upon the liquidation of Enbridge Partners, which likely would result in a loss in value of our shares.

        The obligations of Enbridge Inc. to purchase our outstanding shares upon the occurrence of a mandatory purchase event is dependent upon Enbridge Inc.'s financial ability to meet its obligations. There is no requirement for Enbridge Inc. to secure its obligations or comply with financial covenants to ensure its performance of these obligations.

        If Enbridge Partners is liquidated and Enbridge Inc. does not satisfy its obligation to purchase your shares, then the value of your shares will depend on the after tax amount of the liquidating distribution received by us as the owner of i-units. The terms of the i-units provide that no allocations of income, gain, loss or deduction will be made in respect of the i-units until such time as there is a liquidation of Enbridge Partners. If there is a liquidation of Enbridge Partners, it is intended that we will be allocated income and gain in an amount necessary for the capital account attributable to each i-unit to be equal to that of a common unit. As a result, we likely will realize taxable income upon the liquidation of Enbridge Partners. However, there may not be sufficient amounts of income and gain to cause the capital account attributable to each i-unit to be equal to that of a common unit. If they are not equal, we and, therefore, you will receive less value than would be received by an owner of common units. In that event, the liquidating distribution per common unit will exceed the liquidating distribution per i-unit.

        Further, the tax indemnity provided to us by Enbridge Inc. only indemnifies us for our tax liabilities to the extent we have not received sufficient cash in the transaction generating the tax liability to pay the associated tax. Prior to any liquidation of Enbridge Partners, we do not expect to receive cash in a taxable transaction. If a liquidation of Enbridge Partners occurs, however, we likely would receive cash which we would use, at least in part, to pay taxes. As a result, our residual value and the value of our shares will likely be less than the value of the common units upon the liquidation of Enbridge Partners.

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If we are not fully reimbursed or indemnified for obligations and liabilities we incur in managing the business and affairs of Enbridge Partners, we may be unable to pay those liabilities and the value of our shares could decline.

        Under the delegation of control agreement, we have been delegated management and control of Enbridge Partners and its operating subsidiaries. We may have unlimited liability, including with respect to environmental liabilities, for our obligations to the same extent as a general partner under partnership laws as a result of our management and control of Enbridge Partners. To the extent we incur liabilities or other obligations in connection with our performance under the delegation of control agreement, we are entitled to be reimbursed or indemnified by Enbridge Partners or Enbridge Energy Company. In the event Enbridge Partners and Enbridge Energy Company are either unwilling or unable to reimburse or indemnify us, we likely will be unable to satisfy these liabilities or obligations. Additionally, our right to reimbursement or indemnification is limited under certain circumstances, including:

•

if we act in bad faith; or



•

if we violate laws, like the U.S. federal securities laws, where indemnification may be against public policy.

For more information about the delegation of control agreement, please read "Relationships and Related Party Transactions" beginning on page 139.

If a person or group, other than Enbridge Inc. and its affiliates, owns 20% or more of the aggregate number of issued and outstanding Enbridge Partners common units and our shares, that person or group may not vote its shares; as a result, you are less likely to receive a premium for your shares in a change of control situation.

        If a person or group owns 20% or more of the aggregate number of issued and outstanding common units and our shares, that person or group may not vote its shares. This limitation does not apply to Enbridge Inc. and its affiliates. This provision may discourage a person or group from attempting to take over control of us or Enbridge Partners and reduce the price at which our shares will trade under certain circumstances.

The shares you own are not entitled to vote to elect our directors, and, therefore, you will have little or no opportunity to influence or change our management.

        You will have little or no opportunity to influence or change our management, because Enbridge Energy Company owns all of our voting shares eligible to vote in the election of our directors. For a description of the limited voting rights you will have as an owner of shares, see "Description of Our Shares — Limited Voting Rights" beginning on page 120.

        Upon the closing of this offering, Enbridge Energy Company will delegate to us substantially all of its rights and powers to manage and control the business and affairs of Enbridge Partners, subject to Enbridge Energy Company's right to approve specified actions. For a more detailed description of these approval rights, please read "Relationships and Related Party Transactions" beginning on page 139.

Our discretion in establishing cash reserves at Enbridge Partners gives us the ability to reduce the amount of cash available for distribution to holders of its units, which will reduce the distributions on your shares.

        We may establish cash reserves at Enbridge Partners that in our reasonable discretion are necessary to fund Enbridge Partners' future operating expenditures, provide for the proper conduct of Enbridge Partners' business, comply with applicable law or agreements to which Enbridge

33

Partners is a party or to provide funds for future distributions to partners. These cash reserves affect the amount of cash available for distribution to holders of Enbridge Partners' common units and, consequently, the distributions on your shares.

Risks Related to Enbridge Partners' Business

Enbridge Partners' pipeline systems might be used less if demand for, or the supply of, crude oil, natural gas and/or NGLs decreases.

        Enbridge Partners' financial performance depends to a large extent on the volume of products transported on its pipeline systems. The volume of shipments on the Lakehead system depends on adequate supplies of western Canadian crude oil. Insufficient supplies could adversely affect Enbridge Partners' business by limiting shipments on its Lakehead system. Crude oil deliveries on the Lakehead system have declined from the prior year in each of the last three calendar years.

        Enbridge Partners' ability to increase deliveries to expand its Lakehead system in the future depends on increased supplies of western Canadian crude oil. Enbridge Partners expects that growth in future supplies of western Canadian crude oil will come from oil sands projects in the Province of Alberta, Canada. If Enbridge Partners' current estimates of future crude oil production from oil sands projects prove to be materially incorrect, lower supplies of western Canadian crude oil may result in reduced deliveries of crude oil from the Lakehead system. Furthermore, full utilization of additional capacity as a result of Enbridge Partners' current and future expansions of the Lakehead system, including the Terrace expansion program, will largely depend on these anticipated increases in crude oil production from oil sands projects. If these anticipated production increases do not occur, Enbridge Partners' financial condition and results of operations could be adversely affected.

        In addition, the volume of shipments on the East Texas, Midcoast, Northeast Texas and South Texas systems depends on the supply of natural gas and NGLs available for shipment on those systems which is directly affected by the level of natural gas and NGL production from the producing regions that supply these systems.

        The volume of crude oil that Enbridge Partners transports on its Lakehead and North Dakota systems also depends largely on the demand for crude oil in the Great Lakes and Midwest regions of the United States and the delivery by others of crude oil and refined products into the Great Lakes and Midwest regions of the United States and the Province of Ontario. Existing pipeline capacity for the delivery of crude oil to the Great Lakes and Midwest regions of the United States exceeds current refining capacity. Volumes shipped on the East Texas and acquired systems likewise are affected by demand for natural gas and NGLs in the markets these systems serve.

        Because Enbridge Partners' revenues depend to a large extent on the volume of products transported, decreases in volume will directly and adversely affect Enbridge Partners' revenues.

Changes in Enbridge Partners' tariff rates or challenges to its tariff rates could have a material adverse effect on Enbridge Partners' financial condition and results of operations.

        The tariff rates charged by several of Enbridge Partners' existing pipeline systems and the acquired systems are regulated by the Federal Energy Regulatory Commission, or "FERC," and/or various state regulatory agencies. The FERC regulates the tariff rates Enbridge Partners is permitted to charge its customers for interstate transportation of crude oil and natural gas. If the tariff rates Enbridge Partners is permitted to charge its customers for use of its regulated pipelines are lowered by the FERC on its own initiative or as a result of challenges by third parties, the profitability of its pipeline businesses may suffer. Even if the FERC allows Enbridge Partners to raise its tariff rates for a particular pipeline, there may be significant delay between the time the FERC approves the tariff rate increase and the time that the rate increase actually goes into effect, which delay could further

34

reduce Enbridge Partners' cash flow. Furthermore, competition from other pipeline systems may prevent Enbridge Partners from raising its tariff rates even if the FERC permits Enbridge Partners to do so. In addition, the FERC periodically proposes and implements new rules and regulations, terms and conditions of services and rates subject to its jurisdiction. New FERC initiatives or orders may adversely affect the tariff rates charged for services by Enbridge Partners.

        In a 1995 decision involving the Lakehead system, the FERC partially disallowed the inclusion of income taxes in its cost of service. In another FERC proceeding involving an unrelated oil pipeline limited partnership, the FERC ruled that the oil pipeline limited partnership could not claim an income tax allowance for income attributable to non-corporate limited partners, both individuals and non-corporate entities. These decisions might adversely affect Enbridge Partners' FERC-regulated pipelines and/or services in connection with future rate increases and in defending its existing rates against challenges by its customers. Any significant difficulty in increasing or defending its rates could adversely affect the results of operations of Enbridge Partners.

Rate proceedings involving the Kansas pipeline system, if resolved adversely to Enbridge Partners, could adversely affect Enbridge Partners' results of operations.

        Enbridge Pipelines (KPC), the Midcoast system subsidiary that owns the Kansas pipeline system, is currently involved in ongoing rate disputes with two of its major natural gas customers. These disputes are in varying stages of litigation and administrative proceedings. These customers are not paying the full FERC-approved rates currently in effect on the Kansas pipeline system. The aggregate monthly amount of underpayments by these customers is approximately $800,000. If these underpayments continue and Enbridge Pipelines (KPC) ultimately is unable to collect these deficiencies or if these disputes are resolved adversely to Enbridge Pipelines (KPC), revenues from the Kansas pipeline system will be less than historical revenues, adversely affecting Enbridge Partners' results of operations.

        Enbridge Midcoast Energy sought a rate increase for the KPC pipeline based on a cost of service of approximately $34 million but has not yet elected to charge these rates. If KPC had elected to charge the $34 million cost of service rate, amounts collected would be subject to refund. By not charging that rate and continuing to charge the approved initial rate based on a $31 million cost of service, no refund obligation exists. The FERC suspended the rate increase and set the matter for hearing. The proposed rate increase to $34 million was heard before an administrative law judge who issued a decision that Enbridge Midcoast Energy should recover rates based on a cost of service of approximately $20 million. The FERC is not bound by the administrative law judge's decision, and, regardless of the rate it orders, the initial rate based on a $31 million cost of service will continue in effect until the FERC decision is made and will not be subject to refund. Moreover, even if the FERC issues an order based on a cost of service below $31 million, such decision will only be effective on a prospective basis and the historical rates would not be subject to refund.

Competition from other pipelines may reduce Enbridge Partners' revenues.

        The Lakehead system faces competition for transporting western Canadian crude oil from other pipelines, which may reduce its revenues. The Lakehead system competes with other crude oil and refined product pipelines and other methods of delivering crude oil and refined products to the refining centers of Minneapolis-St. Paul, Minnesota; Chicago, Illinois; Detroit, Michigan; Toledo, Ohio; Buffalo, New York; and Sarnia, Ontario and the refinery market and pipeline hub located in the Patoka/Wood River area of southern Illinois. Refineries in the markets served by the Lakehead system compete with refineries in western Canada, the Province of Ontario and the Rocky Mountain region of the United States for supplies of western Canadian crude oil.

        Enbridge Partners also encounters competition in its natural gas gathering, processing and transmission businesses. Many of the large wholesale customers served by the Midcoast system's

35

transmission and wholesale customer pipelines have multiple pipelines connected or adjacent to their facilities. Thus, many of these wholesale customers have the ability to purchase natural gas directly from a number of pipelines and/or from third parties that may hold capacity on the various pipelines. Likewise, most natural gas producers and owners have alternate gathering and processing facilities available to them. In addition, they have other alternatives, such as building their own gathering facilities or, in some cases, selling their natural gas supplies without processing. Some of Enbridge Partners' natural gas marketing competitors have greater financial resources and access to larger supplies of natural gas than those available to Enbridge Partners. These resources could allow those competitors to price their services more aggressively than Enbridge Partners does, which also could adversely affect Enbridge Partners' financial condition and results of operations.

Enbridge Partners' gas marketing operations involve market risks.

        As part of its gas marketing activities, Enbridge Partners purchases natural gas at prices determined by prevailing market conditions. Following its purchase of natural gas, Enbridge Partners generally resells natural gas at a higher price under a sales contract that is comparable in terms to its purchase contract, including any price escalation provisions. The profitability of Enbridge Partners' natural gas marketing operations may be affected by the following factors:

•

its responsiveness to changing markets and its ability to timely negotiate natural gas purchase and sales agreements in changing markets;


•

reluctance of wholesale customers to enter into long-term purchase contracts;


•

consumers' willingness to use other fuels when natural gas prices increase significantly;


•

timing of imbalance or volume discrepancy corrections and their impact on financial results; and


•

the ability of its customers to make timely payment.

Enbridge Partners' results may be adversely affected by commodity price volatility and risks associated with its hedging activities.

        Enbridge Partners buys and sells natural gas in connection with its marketing activities. Commodity price exposure is inherent in gas purchase and resale activities and in gas processing. To the extent that Enbridge Partners engages in hedging activities to reduce its commodity price exposure, it may be prevented from realizing the benefits of price increases above the level of the hedges. Further, hedging contracts are subject to the credit risk that the other party may prove unable or unwilling to perform its obligations under such contracts.

Natural gas transportation, delivery and sales contracts with a relatively small number of customers accounted for a significant portion of the gross margin attributable to the Midcoast system, and Enbridge Partners may not be able to renew or replace those contracts as they expire.

        Enbridge Partners may not be able to renew or replace the current natural gas transportation and delivery contracts and natural gas sales contracts with Midcoast system customers as those contracts expire. Many of these contracts are with a relatively small number of customers but account for a significant portion of the gross margin attributable to the Midcoast system. The renewal or replacement of these contracts at rates sufficient to maintain current gross margin depends on a number of factors beyond Enbridge Partners' control, including competition from other natural gas pipelines and the price of, and demand for, natural gas in markets served by the Midcoast system. Additionally, if these customers fail to perform their contractual obligations and Enbridge Partners is unable to recontract the natural gas on the Midcoast system or collect monies

36

owed by these customers, its financial condition and results of operations could be adversely affected.

A decline in the availability of natural gas from the producing regions that supply the East Texas, Midcoast, Northeast Texas and South Texas systems may reduce utilization of capacity on those pipeline systems.

        Enbridge Partners' long-term financial condition will be dependent on the continued availability of natural gas for transportation to the markets served by the East Texas, Midcoast, Northeast Texas and South Texas systems. If the availability of natural gas from the Mid-Continent, Gulf Coast and East Texas producing regions were to decline, and if the cost of transporting natural gas from other producing regions through other pipelines into the East Texas, Midcoast, Northeast Texas or South Texas systems were to render the delivered cost of natural gas uneconomical, existing customers may not extend their contracts and Enbridge Partners' may be unable to find additional customers to replace the lost demand or transportation fees.

Compliance with environmental and operational safety regulations, including any remediation of soil or water pollution or hydrostatic testing of its pipeline systems, may increase Enbridge Partners' costs and reduce its revenues.

        Enbridge Partners' pipeline operations are subject to federal and state laws and regulations relating to environmental protection and operational safety. Pipeline operations always involve the risk of costs or liabilities related to environmental protection and operational safety matters. As a result, Enbridge Partners may incur costs or liabilities of this type in the future. It is also possible that Enbridge Partners will have to pay amounts in the future because of changes in environmental and safety laws or enforcement policies or claims for environmentally related damage to persons or property. If Enbridge Partners cannot recover these costs from insurance or through higher tariffs, it could be adversely affected and could have less cash to distribute to its common unitholders, causing us to own fewer additional i-units and causing you to receive fewer shares.

        Enbridge Partners has hydrostatically tested parts of its Lakehead system in the past, which means that it has tested the structural integrity of its pipelines by filling them with water at high pressures. Enbridge Partners may decide that it needs to do hydrostatic testing on its crude oil and liquid petroleum transportation systems or natural gas transmission systems in the future, or a regulatory authority may require such testing. If this testing occurs, it could result in significant expense arising out of treatment and disposal of the test water and lost transportation revenues while the pipelines are being tested. In addition, if Enbridge Inc. performs hydrostatic testing on the Enbridge system in Canada, this could reduce deliveries into the Lakehead system because lower volumes would be received from western Canada during testing periods.

Failure of pipeline operations due to unforeseen interruptions or catastrophic events may adversely affect Enbridge Partners' business and financial condition.

        Operation of a complex pipeline system involves many risks, hazards and uncertainties, such as operational hazards and unforeseen interruptions caused by events beyond the control of Enbridge Partners. These events include adverse weather conditions, accidents, the breakdown or failure of equipment or processes, the performance of the facilities below expected levels of capacity and efficiency and catastrophic events such as explosions, fires, earthquakes, hurricanes, floods, landslides or other similar events beyond Enbridge Partners' control. A casualty occurrence might result in injury or loss of life or extensive property or environmental damage.

        For example, the East Texas, Northeast Texas and South Texas systems transport large quantities of hydrogen sulfide, a highly toxic gas, through their pipelines. Some of these pipelines are located in or near densely populated areas. A major release of hydrogen sulfide from one of

37

these pipelines could result in many severe injuries or deaths as well as severe environmental damage. Liabilities incurred and interruptions to the operation of the pipeline caused by such an event could reduce gross margin, thereby adversely affecting Enbridge Partners' cash flow and financial position. Insurance proceeds may not be adequate to cover all liabilities incurred or lost gross margin.

        Additionally, the United States was the target of terrorist attacks of unprecedented scale on September 11, 2001. Since those attacks, the United States government has issued warnings that energy assets, specifically the United States' pipeline infrastructure, may be the future target of terrorist organizations. These developments have subjected Enbridge Partners' operations to increased risks. Any future terrorist attack on Enbridge Partners' facilities, those of its customers and, in some cases, those of other pipelines, could have a material adverse effect on Enbridge Partners' business.

Enbridge Partners' acquisition strategy may be unsuccessful if Enbridge Partners incorrectly predicts combined operating results, is unable to identify and complete future acquisitions and integrate acquired assets or businesses, or is unable to raise financing on acceptable terms.

        The acquisition of complementary assets or businesses with risk profiles similar to that of its current crude oil and liquid petroleum transportation and natural gas transmission businesses is a focus of Enbridge Partners' strategic plan. Any acquisition, including its acquisition of the acquired systems, may present various risks and challenges, including:

•

the risk of incorrect assumptions regarding the future combined results of the then-existing and acquired operations;



•

the risk of failing to identify and complete future acquisitions and integrate the operations or management of acquired assets or businesses or a significant delay in such integration; and



•

diversion of management's attention from existing operations.

In addition, Enbridge Partners may be unable to consummate any acquisitions in the future or be unable to raise, on terms acceptable to it, any debt or equity financing that may be required for any such acquisition.

        Upon its initial acquisition of Midcoast Energy Resources, Inc. in 2001, Enbridge Energy Company experienced challenges and costs associated with its integration of the Midcoast assets into Enbridge Energy Company's existing operations. Enbridge Partners may experience integration costs and challenges in connection with its integration of the Northeast Texas and South Texas systems similar to those experienced by Enbridge Energy Company in its initial acquisition of the Midcoast system in 2001. If Enbridge Partners is unsuccessful in integrating the Northeast Texas and South Texas systems or other future acquisitions, or if Enbridge Partners materially underestimates the costs of such integration, it may have an adverse impact on its financial condition and results of operations.

Oil measurement losses on the Lakehead system can be materially impacted by changes in estimation, commodity price differentials, and other factors.

        Oil measurement losses occur as part of the normal operating conditions associated with Enbridge Partners' liquid petroleum pipelines. The three types of oil measurement losses include:

•

physical losses, which occur through evaporation, shrinkage, differences in measurement between receipt and delivery locations and other operational incidents;

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•

degradation losses, which result from mixing at the interface between higher quality light crude oil and lower quality heavy crude oil in pipelines; and



•

revaluation losses, which are a function of crude oil prices, the level of the carrier's inventory and the inventory positions of customers.

        There are inherent difficulties in quantifying oil measurement losses because physical measurements of volumes are not practical due to the fact that products constantly move through the pipeline and virtually all of the pipeline system is located underground. Accordingly, Enbridge Partners utilizes engineering-based models and operational assumptions to estimate product volumes in its system and associated oil measurement losses.

        During 2001, a modification was made to the calculation methodology as a result of refinements in the estimation process and improvements in the accuracy of measuring these losses through the development of new software applications. This modification resulted in an increase of $5 million in the value of the oil balance due to shippers in 2001. Enbridge Partners does not anticipate any additional changes to its oil measurement loss estimation process in the near future. However, additional experience may result in refinements to the estimation process and periodic adjustments to the oil inventory balance.

        The magnitude of oil measurement losses is also dependent upon price differences between light and heavy crude oil. The price differential is determined by the demand and supply factors for light and heavy crude oil in the market. Generally, a larger differential between light and heavy crude oil prices will result in a larger financial impact on oil losses from degradation or mixing of heavy crude with light crude oil. During 2001, the differential reached near record high levels, which resulted in higher oil measurement losses for Enbridge Partners than in previous years.

        Enbridge Partners may not be able to recover the costs associated with these oil measurement losses through its tariff rates. As a result, Enbridge Partners has experienced fluctuations in results of operations in the past due to oil measurement losses and may continue to incur significant oil measurement losses in the future.

Risks Related to Conflicts of Interest and Limitations on Fiduciary Duties

The interests of Enbridge Inc. may differ from our interests, the interests of our shareholders and the interests of limited partners of Enbridge Partners, and our board of directors may consider the interests of all parties to a conflict, not just your interests, in making important business decisions.

        Enbridge Inc. indirectly owns all of the stock of the general partner of Enbridge Partners and elects all of its directors. The general partner of Enbridge Partners owns all of our voting shares and elects all of our directors. Furthermore, some of our directors and officers are also directors and officers of Enbridge Inc. and the general partner of Enbridge Partners and have fiduciary duties to manage the businesses of Enbridge Inc. and Enbridge Partners in a manner that may not be in the best interest of our shareholders. Enbridge Inc. has a number of interests that differ from the interests of our shareholders and the interests of Enbridge Partners' unitholders.

        Our limited liability company agreement and Enbridge Partners' partnership agreement limit the fiduciary duties of our board of directors and the general partner of Enbridge Partners to our shareholders and to Enbridge Partners' unitholders. These restrictions allow our board of directors and the general partner of Enbridge Partners to resolve conflicts of interest by considering the interests of all the parties to the conflict, including our interests and the interests of Enbridge Partners and Enbridge Energy Company. Additionally, these limitations reduce the rights of our shareholders under our limited liability company agreement and the rights of Enbridge Partners' unitholders under Enbridge Partners' partnership agreement to sue our board of directors or the

39

general partner of Enbridge Partners should either of them act in a way that, were it not for these limitations of liability, would constitute breaches of their fiduciary duties.

        These limited duties are very different from the more familiar fiduciary duties of a corporate board of directors under Delaware law, which must always act in the best interests of the corporation and its stockholders. Without these modifications of fiduciary duties, our board of directors' and the general partner of Enbridge Partners' ability to make decisions involving conflicts of interest would be restricted under Delaware law. As discussed above, these modifications could be detrimental to our shareholders and Enbridge Partners' unitholders because they restrict the remedies available to shareholders and unitholders for actions that, without those limitations, would constitute breaches of fiduciary duties.

        Consequently, conflicts of interest could arise from time to time among our shareholders, Enbridge Partners' unitholders and Enbridge Inc. Our board of directors may consider the interests of all parties to a conflict in making important business decisions and may not make those decisions in the best interests of our shareholders or Enbridge Partners' unitholders. The following situations, among others, could give rise to conflicts of interest:

•

We have the sole discretion to determine whether Enbridge Partners will issue additional units or other equity securities or whether it will purchase outstanding units, and we may decide not to do so even when such issuance or purchase would be in the best interests of our shareholders and Enbridge Partners.



•

We have the sole discretion to determine whether we issue additional shares, and we may decide not to do so even when such issuance would be in the best interests of our shareholders and Enbridge Partners.



•

We control payments to Enbridge Inc. for any services rendered for Enbridge Partners' benefit, subject to the limitations described in "Conflicts of Interest and Fiduciary Responsibilities" beginning on page 145.



•

We determine which costs are reimbursable by Enbridge Partners.



•

We control the enforcement of obligations owed to Enbridge Partners by us and the general partner.



•

We decide whether to retain separate counsel, accountants or others to perform services for Enbridge Partners.

        In these situations, our shareholders, Enbridge Partners' unitholders and Enbridge Inc. may have interests that are adverse to one another, and we may consider all of these interests in deciding to take a particular course of action.

Because Enbridge Partners' Lakehead system depends upon shipments of crude oil and liquid petroleum from the Enbridge system, decisions by Enbridge Inc. with respect to the Enbridge system could adversely affect the level of deliveries on the Lakehead system.

        Nearly all of the crude oil and other products shipped on the Lakehead system come from the Enbridge system in Canada, and shipments on the Lakehead system are scheduled by Enbridge Inc. in coordination with Enbridge Partners. Any decrease in these shipments could adversely affect Enbridge Partners.

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Because we depend upon Enbridge Inc. and its affiliates for employees to manage the business and affairs of Enbridge Partners, its business could be adversely affected by a decrease in the availability of employees from Enbridge Inc.

        Neither Enbridge Partners nor we have any employees. In operating its pipeline systems, we and Enbridge Partners rely solely on employees of Enbridge Inc. and its affiliates, who act on behalf of and as agents for us and Enbridge Partners. Any change in Enbridge Inc.'s policies regarding the provision of employees could adversely affect Enbridge Partners.

Enbridge Inc. is not restricted from directly competing with Enbridge Partners in many circumstances, and this competition could have an adverse impact on Enbridge Partners' financial condition and results of operations.

        Enbridge Inc. has agreed with Enbridge Partners that, so long as an affiliate of Enbridge Inc. is the general partner of Enbridge Partners, Enbridge Inc. and its subsidiaries may not engage in or acquire any business that is in direct material competition with the businesses of Enbridge Partners, subject to the following material exceptions:

•

Enbridge Inc. and its subsidiaries are not restricted from continuing to engage in businesses, including the normal development of such businesses, in which they were engaged at the time of Enbridge Partners' initial public offering in December 1991;



•

such restriction is limited geographically only to those routes and products for which Enbridge Partners provided transportation at the time of Enbridge Partners' initial public offering;



•

Enbridge Inc. and its subsidiaries are not prohibited from acquiring any competitive business as part of a larger acquisition, so long as the majority of the value of the business or assets acquired, in Enbridge Inc.'s reasonable judgment, is not attributable to the competitive business; and



•

Enbridge Inc. and its subsidiaries are not prohibited from acquiring any competitive business if that business is first offered for acquisition to Enbridge Partners and Enbridge Partners fails to approve, after submission to a vote of unitholders, the making of the acquisition.

        Because Enbridge Partners was not engaged in any aspect of the natural gas business at the time of its initial public offering, Enbridge Inc. and its subsidiaries are not restricted from competing with Enbridge Partners in all aspects of the natural gas business. In addition, Enbridge Inc. and its subsidiaries would be permitted to transport crude oil and liquid petroleum over routes that are not the same as the Lakehead system even if such transportation is in direct material competition with the business of Enbridge Partners.

        This agreement also expressly permitted the reversal by Enbridge Inc. in 1999 of one of its pipelines that extends from Sarnia, Ontario to Montreal, Quebec. As a result of this reversal, Enbridge Inc. competes with Enbridge Partners to supply crude oil to the Ontario, Canada market. This competition from Enbridge has reduced Enbrige Partners' deliveries of crude oil to Ontario.

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Your ability to challenge the decisions of our board of directors will be limited, because our limited liability company agreement restricts or eliminates a number of the fiduciary duties that otherwise would be owed by our board of directors to our shareholders, and the partnership agreement of Enbridge Partners restricts or eliminates a number of the fiduciary duties that otherwise would be owed by our board of directors and by the general partner of Enbridge Partners to the limited partners of Enbridge Partners.

        Modifications of state law standards of fiduciary duties may significantly limit the ability of our shareholders and Enbridge Partners' unitholders to successfully challenge the actions of our board of directors and the general partner of Enbridge Partners, respectively, that might otherwise be a breach of their fiduciary duties. Because we will control and manage substantially all of the business and affairs of Enbridge Partners under the delegation of control agreement with its general partner, we could be held to have fiduciary duties similar to those of the general partner. These state laws standards include the highest duties of good faith, fairness and loyalty to the shareholders and to the unitholders, as applicable. The duty of loyalty generally would prohibit our board of directors or the general partner of Enbridge Partners from taking any action or engaging in any transaction as to which it has a conflict of interest. Our limited liability company agreement restricts or eliminates a number of the fiduciary duties that would otherwise be owed by our board of directors to our shareholders, and the partnership agreement of Enbridge Partners restricts or eliminates a number of the fiduciary duties that would otherwise be owed by us or by the general partner of Enbridge Partners to the unitholders of Enbridge Partners.

        Our limited liability company agreement provides that none of our directors or officers will be liable to us or any other person for any act or omission taken or omitted in the reasonable belief that the act or omission is in or is not contrary to our best interests and is within his scope of authority, so long as the act or omission does not constitute fraud, willful misconduct, bad faith or gross negligence.

We may increase the cash reserves of Enbridge Partners, which will decrease cash distributions on its common units and the value of distributions of additional shares we make to you.

        Under the delegation of control agreement that we will enter into with the general partner of Enbridge Partners, we will have broad discretion in establishing cash reserves for the proper conduct of Enbridge Partners' business. These cash reserves include reserves for future capital expenditures. If we increase cash reserves, the amount of cash that Enbridge Partners can distribute to its common unitholders will decrease, which would decrease the number and value of the additional shares we distribute to you.

Because Enbridge Inc. is a Canadian corporation and many of its and our officers and directors are Canadian citizens who reside in Canada, it may be difficult to serve legal process on them and enforce civil liabilities against them.

        Because Enbridge Inc. is a Canadian corporation and many of its, and our, officers and directors are Canadian citizens and reside in Canada, it might be difficult for you to serve legal process on these persons. You might want to serve legal process on them if you are suing them for civil liabilities under U.S. federal securities laws. Additionally, it might be difficult for you to enforce judgments of U.S. courts based on civil liability provisions of the U.S. federal securities laws in a Canadian court against Enbridge Inc., us or any of our or Enbridge Inc.'s non-U.S. resident executive officers or directors or to bring an original action in a Canadian court to enforce liabilities based on the federal securities laws against such persons. Our Canadian lawyers, McCarthy Tétrault LLP, have told us that it may not be possible to enforce U.S. judgments against our officers and directors if those judgments are based solely on U.S. federal securities laws.

42

INFORMATION REGARDING FORWARD LOOKING STATEMENTS

        This prospectus and the documents of Enbridge Inc. and Enbridge Partners incorporated in this prospectus by reference include forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. They use words such as "anticipate," "believe," "continue," "estimate," "expect," "forecast," "intend," "may," "plan," "position," "projection," "strategy" or "will" or the negative of those terms or other variations of them or by comparable terminology. In particular, statements, expressed or implied, concerning future actions, conditions or events or future operating results or the ability to generate sales, income or cash flow are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond our ability and the ability of Enbridge Inc. and Enbridge Partners and our and their affiliates to control or predict. Specific factors that could cause actual results to differ from those in the forward-looking statements, include:

•

demand for, the supply of, changes in forecast data for, and price trends related to crude oil, liquid petroleum, natural gas and NGLs in the United States, which are affected by economic activity, capital expenditures by energy producers, weather, alternative energy sources, conservation and technological advances;

•

Enbridge Partners' dependence on throughput levels and rates, which could be affected by a number of factors beyond the control of us, Enbridge Inc. or Enbridge Partners;

•

changes in or challenges to Enbridge Partners' tariff rates;

•

Enbridge Partners' ability to successfully identify and consummate strategic acquisitions, make cost saving changes in operations and integrate acquired assets or businesses into its existing operations;

•

shut-downs or cutbacks at gas processing or treatment facilities of Enbridge Partners or refineries, petrochemical plants, utilities or other businesses for which Enbridge Partners transports crude oil, natural gas or other products or to whom Enbridge Partners sells natural gas;

•

changes in laws or regulations to which Enbridge Partners is subject;

•

Enbridge Partners' inability to borrow or otherwise access funds needed for operations, expansions or capital expenditures as a result of existing debt agreements that contain restrictive financial covenants;

•

loss of key personnel;

•

the effects of competition, in particular, by other pipeline systems;

•

hazards and operating risks that may not be covered fully by insurance;

•

the condition of the capital markets in the United States;

•

the political and economic stability of the oil producing nations of the world; and

•

the inability or failure of Enbridge Inc. to satisfy its obligation to purchase our shares upon the occurrence of a mandatory purchase event, including upon the liquidation of Enbridge Partners, or to satisfy its obligations under the tax indemnification agreement.

You should not put undue reliance on any forward-looking statements.

        When considering forward-looking statements, please review the risk factors described under "Risk Factors" in this prospectus.

43

ACQUISITION OF THE MIDCOAST, NORTHEAST TEXAS AND SOUTH TEXAS SYSTEMS

Overview

        On May 16, 2002, Enbridge Partners agreed to acquire the Midcoast, Northeast Texas and South Texas systems from Enbridge Energy Company. Enbridge Energy Company owns these systems through its ownership of Enbridge Midcoast Energy and its subsidiaries.

        Prior to the contribution of Enbridge Midcoast Energy and its subsidiaries that own the acquired systems to Enbridge Partners, Enbridge Midcoast Energy and certain of these subsidiaries will merge with or convert into limited partnerships and limited liability companies. Enbridge Energy Company will contribute those limited partnerships and limited liability companies to Enbridge Partners in exchange for the consideration discussed below, but will retain the Canadian and certain other assets not relating to the acquired systems owned by Enbridge Midcoast Energy.

        The consideration to be received by Enbridge Energy Company for the contribution of the acquired systems is $929.1 million. Enbridge Partners will fund this consideration through the assumption of $900.0 million in debt related to these systems, payment of $18.8 million in cash and issuance of an additional $10.3 million equity interest in Enbridge Partners. This additional equity interest will satisfy Enbridge Energy Company's obligation to maintain its 2% general partner interest in Enbridge Partners, primarily related to the issuance of i-units to us. The cash portion of the purchase price will be funded by Enbridge Partners by borrowings under its existing credit facility or from affiliates of Enbridge Inc. The debt to be assumed by Enbridge Partners is owed to affiliates of Enbridge Inc. The purchase price is subject to adjustment at closing for working capital, capital expenditures and other items.

        The purchase price of the acquired systems approximates their book value and reflects the retention by Enbridge Energy Company of the deferred tax liability related to the contribution of the acquired systems to Enbridge Partners.

        One of the conditions to the closing of this offering will be the successful closing of the acquisition of the acquired systems. Enbridge Partners will use the proceeds it receives from the sale of i-units to us to repay a portion of the debt owed to affiliates of Enbridge Inc. that it will assume in connection with the acquisition.

Special Approval

        A committee of independent members of the board of directors of Enbridge Energy Company, the general partner of Enbridge Partners, negotiated the purchase price and the terms of the acquisition on behalf of Enbridge Partners and recommended that the board of directors of the general partner approve the acquisition on behalf of Enbridge Partners.

Certain Terms of the Contribution Agreement

        Pursuant to the contribution agreement, Enbridge Energy Company will, following the mergers and conversions described above, contribute Enbridge Midcoast Energy and its subsidiaries that own the acquired systems to Enbridge Partners. The contribution agreement contains customary representations and warranties of Enbridge Energy Company.

        Enbridge Energy Company has agreed to indemnify Enbridge Partners and other related persons for liabilities arising from breaches of its representations, warranties and covenants contained in the contribution agreement and for liabilities related to the assets that are not being acquired by Enbridge Partners. In general, Enbridge Energy Company will not be required to indemnify Enbridge Partners under the contribution agreement until the aggregate liabilities exceed $20 million and Enbridge Energy Company's aggregate liability under the contribution agreement may not exceed, with limited exceptions, $150 million. Enbridge Partners and Enbridge Midcoast Energy have agreed to indemnify Enbridge Energy Company and other related persons for liabilities arising after the closing of the acquisition and liabilities arising from breaches of its representations,

44

warranties and covenants contained in the contribution agreement and, subject to Enbridge Energy Company's indemnities, certain other liabilities associated with the acquired systems, whether arising prior to or after the closing of the acquisition. In addition, Enbridge Energy Company has agreed to indemnify Enbridge Partners for failure to have defensible title to certain of the assets included in the acquired systems and for failure to obtain certain regulatory certificates, consents and permits necessary to the conduct of business relating to the acquired systems.

45

USE OF PROCEEDS

Enbridge Management

        We expect that we will receive net proceeds of approximately $424.1 million from the sale of the 10,000,000 shares we are offering, based on an estimated initial public offering price of $44.84 per share and after deducting underwriting discounts and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares from us in full, we will receive net proceeds of approximately $488.0 million. We will use $500,000 of the net proceeds of this offering to compensate Enbridge Inc. for its purchase obligation and tax indemnities and the remainder to purchase a number of i-units from Enbridge Partners equal to the number of shares outstanding immediately following this offering.

Enbridge Partners

        Enbridge Partners will use the proceeds it receives from the sale of i-units to us to repay $423.6 million of the $900 million of debt owed to affiliates of Enbridge Inc. that Enbridge Partners will assume in connection with the acquisition of the acquired systems. As of July 1, 2002, the weighted average interest rate of the debt to be repaid was 4.6%. As of March 31, 2002, Enbridge Partners' total debt owed to affiliates was $51.5 million. Following this offering and the repayment of debt described above, Enbridge Partners' total debt owed to affiliates is expected to be $527.9 million.

Enbridge Inc.

        Enbridge Inc. and its affiliates will use the aggregate proceeds they receive from us and from Enbridge Partners for general corporate purposes, including the repayment of commercial paper borrowings.

46

DISTRIBUTION POLICY

Our Policy Regarding Share Distributions

        Prior to our liquidation:

•

we will only make distributions to owners of shares in additional shares or fractions of shares;



•

we will calculate the fraction of a share to be distributed per outstanding share by dividing:



•

the cash distribution to be made by Enbridge Partners on each common unit; by



•

the average market price of a share during the 10 consecutive trading days preceding the date on which the shares begin to trade ex-dividend under the rules of the principal exchange on which they are listed;



•

we will make our distributions of shares at the same time as Enbridge Partners makes its quarterly distributions of cash to owners of common units; and



•

we will simultaneously make a distribution of an equivalent fraction of a voting share on each voting share or fraction of a voting share owned by the general partner of Enbridge Partners.

        When we make our quarterly distribution of shares, the number of i-units we own will also increase under the provisions of the Enbridge Partners partnership agreement with the result that the number of i-units we own will equal the number of our shares and voting shares that are then outstanding.

Enbridge Partners' Distribution Policy

Requirement to Distribute Available Cash

        The partnership agreement of Enbridge Partners provides that it will distribute all of its available cash to its partners on a quarterly basis. Distributions for a quarter are made within 45 days after the end of the quarter.

Definition of Available Cash

        Available cash generally means, for any calendar quarter, all cash received by Enbridge Partners from all sources, plus net reductions to cash reserves, less all of its cash disbursements and net additions to cash reserves.

Establishment of Reserves

        Decisions regarding amounts to be placed in or released from reserves have a direct impact on the amount of available cash for distribution. This is because increases and decreases in reserves are taken into account in computing available cash. Each quarter we may, in our reasonable discretion, determine the amounts to be placed in or released from reserves, subject to restrictions on the purposes of the reserves and to the approval of Enbridge Energy Company.

Cash Distributions and Additional i-Units

        Typically, the general partner and owners of common units will receive distributions in cash. Instead of receiving cash distributions, the number of i-units we own and our ownership interest in Enbridge Partners will increase. When we make our quarterly distribution of shares as described above, the number of i-units we own will increase under the provisions of the Enbridge Partners partnership agreement with the result that the number of i-units we own will equal the number of our shares and voting shares that are then outstanding. The cash equivalent amount of the additional i-units that we will own following a distribution of cash to the general partner and owners

47

of common units will be treated as if it actually had been distributed for purposes of determining the distributions to the general partner. Enbridge Partners will not distribute the cash related to our i-units but will instead retain that cash and use the cash in its business.

Two Different Types of Distributions

        Distributions by Enbridge Partners are characterized either as distributions of cash from operations or as distributions of cash from interim capital transactions. This distinction affects common unit distributions and the number of additional i-units we will own relative to the distributions to the general partner.

Cash from Operations

        Cash from operations, which is determined on a cumulative basis, generally means:

•

the $54 million cash balance that Enbridge Partners had on the closing date of its initial public offering in 1991; plus



•

all cash receipts from its operations; less



•

all of its cash operating expenditures, including maintenance capital expenditures; less



•

all of its cash debt service payments, except for certain payments of premium and principal in connection with sales or other dispositions of assets or refinancing or refunding of indebtedness; less



•

the amount of cash reserves that we deem necessary or appropriate to provide funds for the expenditures and payments described above and distributions to partners over the next four calendar quarters.

Cash from Interim Capital Transactions

        Cash from interim capital transactions is generated by:

•

borrowings and sales of debt securities (other than for working capital purposes and other than for items purchased on open account in the ordinary course of business);



•

sales of units or other equity interests for cash; and



•

sales or other dispositions of any assets for cash (other than inventory, accounts receivable and other current assets and assets disposed of in the ordinary course of business).

Rule for Characterizing Distributions

        To avoid the difficulty of trying to determine whether available cash distributed by Enbridge Partners is cash from operations or cash from interim capital transactions, all available cash distributed by Enbridge Partners from any source will be treated as distributions of cash from operations until the sum of all available cash distributed equals the cumulative amount of cash from operations actually generated from December 27, 1991 (the date Enbridge Partners commenced operations) through the end of the calendar quarter prior to that distribution. Any distribution of available cash which, when added to the sum of all prior distributions, is in excess of the cumulative amount of cash from operations, will be considered a distribution of cash from interim capital transactions. For purposes of calculating the sum of all distributions of available cash, the cash equivalent amount of the additional i-units that we will own following a distribution of cash to the general partner and owners of common units will be treated as distributions of available cash, even though we do not receive the cash. Enbridge Partners will retain that cash and use the cash in its business.

48

General Procedures for Quarterly Distributions

        The following illustrates the implementation of the provisions described above. For each quarter, we will use the following procedures to determine distributions to our shareholders and the partners of Enbridge Partners and the number of additional i-units we will own:

•

first, we will determine the amount of available cash for the quarter;



•

second, we will determine whether the available cash to be distributed will be characterized as cash from operations or cash from interim capital transactions;



•

third, we will calculate the amount of this available cash that will be distributed to the partners of Enbridge Partners and the amount that will be retained by Enbridge Partners for use in its business. If the available cash is characterized as cash from operations, we will cause Enbridge Partners to distribute and retain the available cash as described below under "Distributions of Cash from Operations." If the available cash is characterized as cash from interim capital transactions, we will cause Enbridge Partners to distribute and retain the available cash as described below under "Distributions of Cash from Interim Capital Transactions." As a result of this process, we will determine the amounts of cash to be distributed to the general partner and owners of common units and the amount of cash to be retained by Enbridge Partners for use in its business. We will also determine the total cash equivalent amount that will be used to calculate the number of additional i-units we will own following the distribution of cash to the general partner and owners of common units (as described in "fifth" below) and the number of additional shares we will distribute to our shareholders (as described in "sixth" below);



•

fourth, we will divide the total cash equivalent by the average market price per share, as determined for the 10-trading day period ending on the trading day immediately prior to the ex-dividend date for our shares, to determine the number of additional i-units we will own following the distribution of cash to the general partner and owners of common units described in "fifth" below;



•

fifth, we will cause Enbridge Partners to make the cash distributions to the general partner and owners of common units and the number of i-units we own will increase under the provisions of the Enbridge Partners partnership agreement with the result that the number of i-units we own will equal the number of our shares and voting shares that are outstanding following the distribution described in "sixth" below.



•

sixth, we will divide the total cash equivalent amount by the average market price per share, as determined for the 10-trading day period ending on the trading day immediately prior to the ex-dividend date for our shares, to determine the number of shares that we will distribute pro rata to the owners of our shares and then make that distribution.

        The discussion below indicates the percentages of distributions of available cash required to be made to the limited partners and general partner of Enbridge Partners. All distributions to the general partner and owners of common units will be made in cash. Except in liquidation, i-units will not be entitled to receive cash distributions. Instead of receiving cash distributions, the number of i-units we own will increase by means of an i-unit split. The cash equivalent amount of the additional i-units that we will own following a distribution of cash to the general partner and owners of common units will be treated as if it had actually been distributed for purposes of determining the distributions to be made to the general partner. Enbridge Partners will not distribute the cash related to our i-units but instead will retain that cash and use the cash in its business.

49

Distributions of Cash from Operations

        Enbridge Partners will make the following distributions of cash from operations for each quarter:

•

first, 98% to the owners of common units pro rata and 2% to the general partner until the owners of common units have received a total of $0.59 per unit in cash for that quarter;



•

second, 85% of any available cash then remaining to the owners of common units pro rata and 15% to the general partner until the owners of common units have received a total of $0.70 per unit in cash for that quarter;



•

third, 75% of any available cash then remaining to the owners of common units pro rata and 25% to the general partner until the owners of common units have received a total of $0.99 per unit in cash for that quarter; and



•

fourth, 50% of any available cash then remaining to the owners of common units pro rata and 50% to the general partner.

        Enbridge Partners may not make the distributions of available cash described above unless it also retains in respect of each i-unit then outstanding an amount of available cash equal to the amount obtained by dividing (i) the cash distribution to be made on a common unit by (ii) .98.

50

Illustration of a Distribution of Cash from Operations

        The following tables depict a hypothetical example of a quarterly distribution of cash from operations to the partners of Enbridge Partners and the related increase in the number of i-units we own and our distribution of shares to our shareholders. The example assumes that Enbridge Partners has a total of 45.2 million units outstanding, consisting of 35.2 million common units, and 10.0 million i-units, and assumes that 10.0 million of our shares are outstanding. The amounts shown for "cash receipts less cash disbursements for the quarter" and "reserves" are based upon the current quarterly distribution level of $0.90 of cash per common unit.

Determination of Available Cash

Cash receipts less cash disbursements for the quarter		$	55,114,990
	Less reserves		10,000,000
Available cash		$	45,114,990

Allocation Between General Partner and Limited Partners

	Quarterly Per Unit Amount	Limited Partners Percentage		General Partner Percentage		Total Cash for Limited Partners		Total Cash for General Partner		Total
Minimum Quarterly Distribution	$0.00 - $0.59	98	%	2	%	$	26,668,000	$	544,245	$	27,212,245
First Target Distribution	$0.59 - $0.70	85	%	15	%		4,972,000		877,412		5,849,412
Second Target Distribution	$0.70 - $0.99	75	%	25	%		9,040,000		3,013,333		12,053,333
Thereafter	$0.99 and above	50	%	50	%		—		—		—
Total						$	40,680,000	$	4,434,990	$	45,114,990

Pro Rata Allocation Among Classes of Limited Partners, Distributions to the General Partner and Cash Retained by Enbridge Partners

	Total		Per Unit
Cash distributions to owners of common units	$	31,680,000	$	0.90
Cash retained by Enbridge Partners with respect to i-units		9,000,000	$	0.90
Cash distributions to the general partner		4,251,317
Cash retained by Enbridge Partners with respect to the general partner's 2% interest		183,673
Total	$	45,114,990

Determination of Additional i-Units and Share Distributions
        (assuming $44.84 average share price)

	Total	Per Unit or Per Share Price		Total Cash Equivalent Amount		Cash Equivalent Amount Per Unit or Per Share
Additional i-units we will own	200,714	$	44.84	$	9,000,000	$	0.90
Additional shares distributed to owners of our outstanding shares	200,714	$	44.84	$	9,000,000	$	0.90

51

Distributions of Cash from Interim Capital Transactions

        Distributions of cash from interim capital transactions will be made in cash to the general partner and owners of common units. Instead of receiving cash distributions when a distribution of cash from interim capital transactions is made, the number of i-units we own will increase. Distributions of cash from interim capital transactions will be made as follows:

•

first, 98% to the owners of common units, pro rata, and 2% to the general partner until all distributions of cash from interim capital transactions since Enbridge Partners' initial public offering aggregate $21.50 per unit; provided, however; that Enbridge Partners may not make any such distribution unless at the same time it makes such distribution it also retains in respect of each i-unit then outstanding an amount of available cash equal to the amount obtained by dividing (i) the cash distribution to be made on a common unit by (ii) .98; and



•

thereafter, cash from interim capital transactions will be distributed as if it was cash from operations, and because the minimum quarterly and target distributions will have been reduced to zero, as described below under " — Adjustment of the Minimum Quarterly and Target Distributions," the general partner's share of distributions of available cash will increase, in general, to 50% of all distributions of available cash.

Notwithstanding the foregoing, if the minimum quarterly and target distributions have been reduced to zero as a result of distributions of cash from interim capital transactions and the Class A common unitholders have ever failed to receive the minimum quarterly distribution, distributions will first be made 98% with respect to the owners of Class A common units and 2% to the general partner until there has been distributed in respect of each Class A common unit then outstanding (taking into account all prior distributions of available cash constituting cash from operations) available cash constituting cash from operations since inception of Enbridge Partners in an amount equal to the minimum quarterly distribution for all periods since inception; provided, however, that Enbridge Partners may not make any such distribution unless at the same time it makes such distribution it also retains in respect of each i-unit then outstanding an amount of available cash equal to the amount obtained by dividing (i) the cash distribution to be made on a Class A common unit by (ii) .98. To date, the holders of the common units have always received at least the minimum quarterly distribution. Distributions of cash from interim capital transactions will not reduce target distributions in the quarter in which they are distributed.

Adjustment of the Minimum Quarterly and Target Distributions

        The minimum quarterly and target distributions will be adjusted proportionately if any combination or subdivision of units occurs, whether effected by a distribution payable in units or otherwise, but not by reason of the additional i-units we will own after each quarterly distribution as described above. In addition, if a distribution is made of cash from interim capital transactions, the minimum quarterly and target distributions will be adjusted downward by multiplying each amount, as the same may have been previously adjusted, by a fraction, the numerator of which is the unrecovered initial unit price immediately after giving effect to such distribution and the denominator of which is the unrecovered initial unit price immediately prior to such distribution. The unrecovered initial unit price is the amount by which $21.50 exceeds the aggregate per unit distributions of cash from interim capital transactions. If and when the unrecovered initial unit price is zero, the minimum quarterly and target distributions each will have been reduced to zero.

        For example, if a two-for-one split of the common units and i-units should occur, the minimum quarterly distribution, the target distribution levels and the unrecovered initial unit price would each be reduced to 50% of its then-existing level. Enbridge Partners will not make any of these adjustments by reason of our ownership of additional i-units after each distribution on the common units of available cash from operations or interim capital transactions or the issuance of additional units for cash or property.

52

        The minimum quarterly and target distributions may also be adjusted if legislation is enacted that causes Enbridge Partners to become taxable as a corporation or otherwise subjects it to taxation as an entity for U.S. federal income tax purposes. In such event, the minimum quarterly and target distributions for each quarter thereafter would be reduced to an amount equal to the product of each of the minimum quarterly and target distributions multiplied by one minus the sum of the effective U.S. federal income tax rate to which Enbridge Partners is subject as an entity (expressed as a fraction) plus the effective overall state and local income tax rate to which Enbridge Partners is subject as an entity (expressed as a fraction) for the taxable year in which such quarter occurs. For example, if Enbridge Partners became subject to a maximum marginal federal, and effective state and local income tax rate of 38%, then the minimum quarterly and target distributions would be reduced to 62% of their previous levels.

Distributions in Liquidation

        In the event of a liquidation of Enbridge Partners, which Enbridge Inc. has agreed will trigger a mandatory purchase obligation on its part, Enbridge Inc. will be required to purchase all of our outstanding shares for cash at a price equal to the greater of the market price per unit of the Class A common units and the market value per share of our shares. If Enbridge Inc. does not meet its purchase obligations, the following will be important to you as an owner of our shares.

        Upon dissolution of Enbridge Partners, unless Enbridge Partners is reconstituted and continued, the authorized liquidator will liquidate Enbridge Partners' assets and apply the proceeds of the liquidation generally as follows:

•

first, towards the payment of all creditors of Enbridge Partners and the creation of a reserve for contingent liabilities; and



•

second, to all partners in accordance with the positive balances in their respective capital accounts.

        Under some circumstances and subject to various limitations, the liquidator may defer liquidation or distribution of Enbridge Partners' assets for a reasonable period of time if the liquidator determines that an immediate sale would be impractical or would cause undue loss to the partners.

        If there is a liquidation of Enbridge Partners, it is intended that, to the extent available, we will be allocated income and gain, or deduction and loss, in an amount necessary for the capital account attributable to each i-unit to be equal to that of a common unit.

        Thus, generally, any income or gain will be allocated:

•

first, to owners of the i-units until the capital account of each i-unit equals the capital account of a common unit; and



•

thereafter, between the owners of common units and i-units, as limited partners, and Enbridge Energy Company, as the general partner, in a manner that approximates their sharing ratios in the various target distribution levels and equally on a per unit basis between the i-units and the common units.

        After each distribution of cash to other unitholders, including regular quarterly distributions, our ownership of additional i-units generally will represent the right to be allocated an increased share of that income or gain, or deduction or loss, upon liquidation.

        Any deduction or loss generally will be allocated:

•

first, to the common units until the per unit balance in a common unit capital account equals the per unit balance in a i-unit capital account;



•

second, in proportion to the positive balances in the partners' capital accounts until all the balances are reduced to zero; and



•

thereafter, to the general partner.

        We will owe U.S. federal income tax, and perhaps state taxes, on any taxable income or gain that is allocated to the i-units in a liquidation of Enbridge Partners. Our payment of these taxes will reduce the amount of assets that ultimately will be distributed to the holders of our shares. For further information about the tax indemnification agreement and the tax consequences of your investment in our shares, please read "Description of Our Shares — Tax Indemnity of Enbridge Inc." on page 123 and "Material Tax Consequences" beginning on page 151.

53

CAPITALIZATION OF ENBRIDGE PARTNERS

        The following table sets forth Enbridge Partners' historical capitalization as of March 31, 2002.

        The pro forma financial information as of March 31, 2002, gives effect to the acquisition by Enbridge Partners of the Midcoast, Northeast Texas and South Texas systems and the assumption of $900.0 million and incurrence of $20.3 million in debt by Enbridge Partners in connection with that acquisition.

        The pro forma as adjusted information as of March 31, 2002 adjusts the pro forma financial information to reflect:

•

the receipt by Enbridge Partners of $423.6 million in proceeds from the sale of its i-units to us, which assumes that we sell 10,000,000 shares at $44.84 per share, net of the underwriting discount, expected expenses and $500,000 paid by us to Enbridge Inc. in respect of its purchase obligation and tax indemnities; and



•

the use by Enbridge Partners of the proceeds it receives from the sale of i-units to repay debt owed to affiliates of Enbridge Inc. that Enbridge Partners will assume in connection with the acquisition of the acquired systems.

        Please read "Use of Proceeds" on page 46 for a detailed description of the application of the proceeds from the sale by Enbridge Partners of its i-units to us in connection with this offering.

			As of March 31, 2002			Pro Forma for Acquisition			Pro Forma as Adjusted
			(unaudited)			(unaudited)			(unaudited)
						(in millions)
Short-term Debt Notes			$	130.0		$	130.0		$	130.0
Long-term Debt:
	First Mortgage Notes			279.0			279.0			279.0
	Revolving Credit Facility			105.0			125.3	(1)		125.3
	7% Senior Notes due 2018			100.0			100.0			100.0
	71/8% Senior Notes due 2028			100.0			100.0			100.0
	7.9% Senior Notes due 2012			100.0			100.0			100.0
	Unamortized Discount			(0.6	)		(0.6	)		(0.6	)
		Total Long-term Debt	$	683.4		$	703.7		$	703.7
Loan from Enbridge Affiliate				51.5			951.5	(1)		527.9	(3)
Partners' Capital				705.6			715.9	(2)		1,139.5	(3)
		Total Capitalization	$	1,570.5		$	2,501.1		$	2,501.1

(1)

Reflects borrowings of $20.3 million under Enbridge Partners' credit facility, $18.8 million of which will be used to pay a portion of the consideration for the acquisition of the acquired systems and $1.5 million of which will be used to pay acquisition-related costs, and the assumption of $900.0 million of debt owed to affiliates of Enbridge Inc. in connection with the acquisition of the acquired systems.

(2)

Reflects the issuance of an additional $10.3 million equity interest to Enbridge Energy Company to satisfy its obligation to maintain a 2% general partner interest in Enbridge Partners, which arises primarily as a result of the issuance of i-units to us. This equity interest was issued as part of the consideration to be received by Enbridge Energy Company for the acquired systems.

(3)

Reflects repayment to affiliates of Enbridge Inc. of $423.6 million of debt assumed by Enbridge Partners in connection with the acquisition of the acquired systems with the net proceeds received by Enbridge Partners from the sale of i-units to us in connection with this offering.

54

CAPITALIZATION OF ENBRIDGE INC.

        The following table sets forth Enbridge Inc.'s historical capitalization as of March 31, 2002.

        The unaudited as adjusted information as of March 31, 2002 gives effect to:

•

the $500,000 payment received by Enbridge Inc. from us in respect of its purchase obligation and tax indemnities;



•

the use of the $423.6 million payment received by affiliates of Enbridge Inc. from Enbridge Partners, after payment of expenses associated with the sale of the acquired systems, for the repayment of

debt assumed by Enbridge Partners in connection with its acquisition of the Midcoast, Northeast Texas and South Texas systems; and

•

the purchase by Enbridge Energy Company of 500,000 shares from us in this offering.

        The information presented below is in Canadian dollars and has been prepared in accordance with Canadian generally accepted accounting principles. Thus, the information may not be comparable to financial information prepared in accordance with U.S. generally accepted accounting principles.

        On July 2, 2002, the noon buying rate in the City of New York for cable transfers in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York was Cdn$1.5263 = US$1.00.

		As at March 31, 2002		As Adjusted
		(unaudited)		(unaudited)
		(in millions of Canadian dollars)
Short-term borrowings		$	419.1	$	419.1
Current maturities and short-term debt			1,715.3		1,104.8
Long-term debt			6,298.9		6,298.9
Shareholders' equity
	Preferred securities		534.6		534.6
	Preferred shares		125.0		125.0
	Common shares		1,891.7		1,891.7
	Retained earnings and other shareholders' equity(1)		734.7		734.7
Total capitalization		$	11,719.3	$	11,108.8

(1)

Includes retained earnings, reciprocal shareholdings and the cumulative foreign currency translation adjustment.

55

CAPITALIZATION OF ENBRIDGE MANAGEMENT

        The following table sets forth our historical capitalization as of May 23, 2002, and our capitalization on that date as adjusted to give effect to the receipt of net proceeds of $424.1 million, which assumes that we sell 10,000,000 shares at $44.84 per share, net of the underwriting discount and expected expenses and that we use $500,000 of the net proceeds to compensate Enbridge Inc. for its purchase obligation and tax indemnities and use $423.6 million of the net proceeds to purchase a number of i-units from Enbridge Partners equal to the number of our outstanding shares. The as adjusted information in the table excludes 1,500,000 shares issuable upon the exercise of the underwriters' option to purchase additional shares from us.

        You should read this table together with "Management's Discussion and Analysis of Financial Condition and Results of Operations — Enbridge Management," beginning on page 64, and our financial statements and the related notes appearing elsewhere in this prospectus.

		As of May 23, 2002		As Adjusted for this Offering
		(audited)		(unaudited)
		(in thousands)
Voting shares		$	1	$	1
Non-voting shares			—		424,101
	Total equity	$	1	$	424,102

56

SELECTED FINANCIAL INFORMATION OF ENBRIDGE PARTNERS

        You should read the following selected financial information of Enbridge Partners in connection with the financial statements and related notes appearing elsewhere or incorporated by reference in this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Enbridge Partners — Results of Operations," beginning on page 65. The historical results of Enbridge Partners are not necessarily indicative of results to be expected in future periods.

        Enbridge Partners acquired the North Dakota system on May 18, 2001 and the East Texas system on November 30, 2001. The selected financial information of Enbridge Partners as of and for the year ended December 31, 2001 and the three months ended March 31, 2002 reflects the inclusion of those systems since the dates they were acquired.

			Year Ended December 31,															Three Months Ended March 31,
			1997			1998			1999			2000			2001			2001			2002
																		(unaudited)
			(dollars in millions, except per unit amounts)
Income Statement Data:
Operating revenue			$	282.1		$	287.7		$	312.6		$	305.6		$	340.4		$	71.9		$	181.3
Operating and administrative expenses				133.9			140.9			124.5			128.0			180.7			31.8			131.0
Depreciation and amortization				40.1			41.4			57.8			61.1			63.8			15.4			18.3
Operating income				108.1			105.4			130.3			116.5			95.9			24.7			32.0
Interest and other income				9.7			6.0			3.4			4.8			2.8			0.7			0.6
Interest expense				(38.6	)		(21.9	)		(54.1	)		(60.4	)		(59.3	)		(15.2	)		(14.7	)
Minority interest				(0.9	)		(1.0	)		(0.9	)		(0.7	)		(0.5	)		(0.1	)		(0.2	)
Net income			$	78.3		$	88.5		$	78.7		$	60.2		$	38.9		$	10.1		$	17.7
Net income per common unit(1)			$	3.02		$	3.07		$	2.48		$	1.78		$	0.98		$	0.27		$	0.43
Cash distributions paid per common unit				2.92			3.36			3.485			3.50			3.50			0.875			0.90
Financial Position Data: (at period end)
Property, plant and equipment, net			$	850.3		$	1,296.2		$	1,321.3		$	1,281.9		$	1,486.6		$	1,268.9		$	1,498.5
Total assets				1,063.2			1,414.4			1,413.7			1,376.7			1,649.2			1,369.8			1,682.6
Long-term debt				463.0			814.5			784.5			799.3			715.4			799.3			683.4
Partners' capital:
	Class A common unitholders			461.6			453.4			533.1			488.6			577.0			473.2			647.1
	Class B common unitholder			36.7			37.3			47.4			42.1			48.8			40.1			53.4
	General Partner			3.5			4.3			5.6			5.2			6.5			5.1			7.7
	Accumulated other comprehensive income (loss)			—			—			—			—			11.9			(1.0	)		(2.6	)
		Total	$	501.8		$	495.0		$	586.1		$	535.9		$	644.2		$	517.4		$	705.6
Other Financial Data:
EBITDA(2)			$	148.2		$	146.8		$	188.1		$	177.6		$	159.7		$	40.1		$	50.3
Cash flow from operating activities				106.6			103.6			101.6			117.3			122.3			46.7			52.2
Cash flow used in investing activities				(101.7	)		(427.9	)		(91.1	)		(20.7	)		(299.1	)		(6.3	)		(29.1	)
Cash flow from (used in) financing activities				24.1			252.7			(17.5	)		(99.4	)		179.8			(28.0	)		(1.0	)

57

Acquisitions included in investing activities				—		—		—		—		265.0		—		—
Capital expenditures included in investing activities			$	126.9	$	487.3	$	82.9	$	21.7	$	35.0	$	2.4	$	30.0
Operating Data:
Lakehead system
	Barrel miles (billions)(3)			389		391		350		341		333		83		86
	Deliveries (thousands of bpd)(4)
		United States		960		992		898		976		960		980		906
		Ontario		552		570		471		362		355		367		408
				1,512		1,562		1,369		1,338		1,315		1,347		1,314
East Texas system(5)
	Average daily volume (MMBtu/day)(6)			—		—		281		362		394		399		388

(1)

The general partner's allocation of net income with respect to its general partner interest in the following amounts has been deducted before calculating net income per common unit: 1997, $4.4 million; 1998, $8.0 million; 1999, $9.1 million; 2000, $8.8 million; 2001, $9.1 million; and the three months ended March 31, 2001 and 2002, $2.1 million and $3.2 million, respectively. The weighted average number of outstanding common units for each period is as follows: 1997, 24.4 million; 1998, 26.2 million; 1999, 28.0 million; 2000, 28.9 million; 2001, 30.2 million; and the three month periods ended March 31, 2001 and 2002, 28.9 million and 33.7 million, respectively.

(2)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides a basis for management to assess liquidity and measure performance over time and in relation to companies who own similar assets.

(3)

"Barrel miles" is a measurement of how fully a pipeline is used over its length and is calculated by multiplying the amount of each individual delivery (measured in barrels) by the distance it is shipped (measured in miles) and then adding the results so obtained for all deliveries.

(4)

"Deliveries" means the amount of liquid hydrocarbons delivered by a pipeline to certain points along the system and is quantified using a barrel as a unit of measure. "Barrels per day" (or "bpd") delivery data is a measurement of average deliveries for the indicated period and is computed by dividing the number of barrels delivered for the period by the number of days in the period.

(5)

East Texas system operating statistics for 1999, 2000 and 2001 are shown on full-year basis for informational purposes. Enbridge Partners acquired East Texas system on November 30, 2001.

(6)

In millions of British thermal units per day, or "MMBtu/day".

58

SELECTED FINANCIAL INFORMATION OF ENBRIDGE MIDCOAST ENERGY

        You should read the following selected financial information of Enbridge Midcoast Energy in connection with the financial statements and related notes appearing elsewhere in this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations — Enbridge Midcoast Energy — Results of Operations" beginning on page 71. The historical results of Enbridge Midcoast Energy are not necessarily indicative of results to be expected in future periods.

        Selected financial information for the year ended December 31, 2001 is presented as two separate periods due to the acquisition of Enbridge Midcoast Energy by Enbridge Energy Company on May 11, 2001. The acquisition was accounted for using the purchase method of accounting effective May 1, 2001.

        Enbridge Midcoast Energy acquired the South Texas system on January 2, 2002 and the Northeast Texas system on March 1, 2002. The selected financial information of Enbridge Midcoast Energy as of and for the three months ended March 31, 2002 reflects the inclusion of these systems since the dates they were acquired.

        The financial information for all periods beginning after April 30, 2001 reflect the financial performance of the assets under the ownership and management of Enbridge Energy Company.

		Year Ended December 31,												Four Months Ended April 30,			Eight Months Ended December 31,			Four Months Ended April 30,			Three Months Ended March 31,
		1997			1998			1999			2000			2001			2001			2002			2001			2002
		(dollars in millions)
																				(unaudited)
Statement of Operations Data:
Operating revenue		$	112.7		$	234.1		$	391.6		$	792.3		$	407.0		$	438.5		$	279.3		$	333.2		$	191.1
Operating expenses:
	Energy marketing expenses		100.3			211.0			330.5			682.5			390.9			364.7			236.0			320.9			158.5
	Operating and administration		3.5			6.3			30.0			48.6			29.5			37.1			23.2			13.5			15.9
	Unusual charges		—			—			2.7			—			—			—			—			—			—
	Depreciation and amortization		1.6			3.2			7.5			15.7			5.7			15.5			7.0			4.3			5.0
Total operating expenses			105.4			220.5			370.7			746.8			426.1			417.3			266.2			338.7			179.4
Operating income (loss)			7.3			13.6			20.9			45.5			(19.1	)		21.2			13.1			(5.5	)		11.7
Interest and other income			(0.1	)		0.2			(0.1	)		1.8			0.6			0.1			(0.5	)		0.2			(0.5	)
Interest expense			(1.1	)		(3.3	)		(6.5	)		(18.4	)		(9.4	)		(14.0	)		(6.4	)		(7.2	)		(4.4	)
Minority interest			(0.2	)		(0.1	)		(0.1	)		(0.1	)		(0.1	)		—			—			—			—
Income (loss) before income taxes and extraordinary item			5.9			10.4			14.2			28.8			(28.0	)		7.3			6.2			(12.5	)		6.8
Provision for income taxes			(0.1	)		(1.3	)		(2.2	)		(7.4	)		9.4			(4.2	)		(2.2	)		4.2			(2.5	)
Income (loss) before extraordinary item			5.8			9.1			12.0			21.4			(18.6	)		3.1			4.0			(8.3	)		4.3
Extraordinary item, net of income tax			—			—			(0.6	)		—			—			—			—			—			—
Cumulative effect of change in accounting principle, net of income tax			—			—			—			—			(0.9	)		—			—			—			—
Net income (loss)		$	5.8		$	9.1		$	11.4		$	21.4		$	(19.5	)	$	3.1		$	4.0		$	(8.3	)	$	4.3

59

Financial Position Data: (at period end)
Property, plant and equipment, net			$	97.6		$	154.2		$	393.0		$	416.0					$	482.1					$	415.4		$	656.0
Goodwill and other assets				1.4			2.5			23.0			26.3						217.0						25.7			246.4
Total assets				128.0			191.3			478.4			599.3						787.7						552.3			1,033.2
Long-term debt				28.9			78.1			240.0			256.0						—						261.1			—
Due to affiliates				—			—			—			—						319.2						—			540.6
Shareholder's equity:
	Common stock			0.1			0.1			0.1			0.1						—						0.1			—
	Paid-in capital			80.7			81.0			166.0			166.0						368.0						166.3			368.0
	Retained earnings (deficit)			(19.3	)		(12.0	)		(2.9	)		14.9						3.1						5.5			7.4
	Accumulated other comprehensive income			—			—			0.1			—						(7.7	)					(0.7	)		(15.8	)
	Treasury stock			—			(2.8	)		(2.6	)		(3.2	)					—						(3.3	)		—
		Total shareholders' equity	$	61.5		$	66.3		$	160.7		$	177.8					$	363.4					$	167.9		$	359.6
Other Financial Data:
EBITDA(1)			$	8.9		$	16.8		$	28.4		$	61.2		$	(13.4	)	$	36.7		$	20.1		$	(1.2	)	$	16.7
EBITDA net of Canadian assets(2)			$	8.9		$	16.8		$	27.2		$	57.4		$	(14.4	)	$	35.1		$	19.5		$	0.4		$	16.4
Cash flow from (used in) operating activities			$	3.8		$	17.2		$	16.7		$	26.0		$	(0.5	)	$	(21.8	)	$	11.5		$	(4.4	)	$	19.0
Cash flow used in investing activities			$	(62.5	)	$	(61.3	)	$	(254.3	)	$	(40.4	)	$	(11.4	)	$	(51.4	)	$	(216.8	)	$	(3.3	)	$	(207.4	)
Cash flow from financing activities			$	57.8		$	44.0		$	239.7		$	16.7		$	9.6		$	72.7		$	221.4		$	4.6		$	221.4
Acquisitions included in investing activities			$	60.8		$	52.1		$	238.1		$	22.8		$	—		$	1.2		$	189.6		$	—		$	189.6
Capital expenditures included in investing activities			$	1.4		$	7.8		$	16.6		$	16.5		$	10.8		$	50.2		$	27.2		$	3.4		$	17.8
Operating Data:
Average daily volume (MMBtu/day)(3)				401.0			606.8			752.9			884.1			1,227.7			1,102.5			1,231.5			1,233.3			1,251.6

(1)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides a basis for management to assess liquidity and measure performance over time and in relation to companies who own similar assets.

(2)

Excludes EBITDA attributable to the operation of the Canadian assets, which have a book value of approximately $25 million, that will not be contributed to Enbridge Partners.

(3)

In millions of British thermal units per day, or "MMBtu/day". Includes all active pipeline mileage in which Enbridge Midcoast Energy owns an interest.

60

SELECTED PRO FORMA AS ADJUSTED FINANCIAL INFORMATION OF ENBRIDGE PARTNERS

        The tables on the following pages show selected pro forma as adjusted financial information for Enbridge Partners for the year ended December 31, 2001 and the three months ended March 31, 2002 combined with the Midcoast, Northeast Texas and South Texas systems for the same periods. The pro forma financial information excludes the Canadian assets that are owned by Enbridge Midcoast Energy, which are being retained by Enbridge Energy Company.

        The selected pro forma as adjusted financial information gives effect to the following as of the beginning of the fiscal year presented:

•

the acquisition by Enbridge Partners of the acquired systems for $929.1 million, consisting of the assumption of $900.0 million in debt related to the acquired systems, payment of $18.8 million in cash and issuance of an additional $10.3 million equity interest in Enbridge Partners to Enbridge Energy Company; and

•

the receipt by Enbridge Partners of $423.6 million in proceeds from the sale of its i-units to us, which assumes that we sell 10,000,000 shares at $44.84 per share, net of the underwriting discount, expected expenses and $500,000 paid by us to Enbridge Inc. in respect of its purchase obligation and tax indemnities, and the use by Enbridge Partners of these proceeds to repay a portion of the debt it assumed in connection with the acquisition.

        Enbridge Midcoast Energy acquired the South Texas system on January 2, 2002 and the Northeast Texas system on March 1, 2002. The pro forma as adjusted financial information reflects the results of operations of these systems as of the beginning of the fiscal year presented.

        Enbridge Partners acquired the North Dakota system on May 18, 2001 and the East Texas system on November 30, 2001. The historical and pro forma as adjusted financial information for Enbridge Partners as of and for the 12 months ended December 31, 2001 and as of and for the three months ended March 31, 2002, reflects the results of operations of these systems as of the dates they were acquired.

        The selected pro forma as adjusted financial information has been prepared using the purchase method of accounting. The purchase price allocated in the selected pro forma as adjusted financial information is based on Enbridge Partners' estimate of the fair market values of assets acquired and liabilities assumed. The selected pro forma as adjusted financial information includes assumptions and adjustments as described in the notes to the pro forma as adjusted combined financial statements appearing elsewhere in this prospectus and should be read in conjunction with the historical financial statements and related notes of Enbridge Partners and Enbridge Midcoast Energy appearing elsewhere in this prospectus.

        The selected pro forma as adjusted financial information may not be indicative of the results that would have occurred if the acquisition of the acquired systems had been consummated as of the beginning of the fiscal year presented or that will be obtained in the future.

61

Selected Pro Forma as Adjusted Financial Information for the Year Ended December 31, 2001

	Enbridge Partners			Pro Forma Adjustments			Pro Forma as Adjusted
	(historical)			(unaudited)			(unaudited)
	(in millions, except per unit amounts)
Income Statement Data:
Operating revenue	$	340.4		$	991.9		$	1,332.3
Power		49.9			—			49.9
Cost of natural gas		26.3			858.6			884.9
Operating and administrative expenses		104.5			84.7			189.2
Depreciation and amortization		63.8			24.1			87.9
Operating income		95.9			24.5			120.4
Interest and other income		2.8			0.8			3.6
Interest expense		(59.3	)		(34.6	)		(93.9	)
Income before minority interest		39.4			(9.3	)		30.1
Minority interest		(0.5	)		(0.1	)		(0.6	)
Net income	$	38.9		$	(9.4	)	$	29.5
Net income per unit	$	0.98		$	(1.28	)	$	0.41
Weighted average units outstanding		30.2			10.0			40.2
General partner's net income allocation	$	9.1		$	3.9		$	13.0
Common unitholders' net income allocation	$	29.8		$	(13.3	)	$	16.5
Other Financial Data:
EBITDA(1)	$	159.7		$	48.6		$	208.3

(1)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides one basis for management to assess liquidity and measure performance over time and in relation to competitors who own similar assets.

62

Selected Pro Forma as Adjusted Financial Information for the Three Months Ended March 31, 2002

	Enbridge Partners			Pro Forma Adjustments			Pro Forma as Adjusted
	(unaudited)			(unaudited)			(unaudited)
	(in millions, except per unit amounts)
Income Statement Data:
Operating revenue	$	181.3		$	207.0		$	388.3
Power		13.6			—			13.6
Cost of natural gas		89.6			171.5			261.1
Operating and administrative expenses		27.8			17.9			45.7
Depreciation and amortization		18.3			4.9			23.2
Operating income		32.0			12.7			44.7
Interest and other income		0.6			(0.7	)		(0.1	)
Interest expense		(14.7	)		(8.6	)		(23.3	)
Income before minority interest		17.9			3.4			21.3
Minority interest		(0.2	)		—			(0.2	)
Net income	$	17.7		$	3.4		$	21.1
Net income per unit	$	0.43		$	0.24		$	0.39
Weighted average units outstanding		33.7			10.0			43.7
General partner's net income allocation	$	3.2		$	1.0		$	4.2
Common unitholders' net income allocation	$	14.5		$	2.4		$	16.9
Financial Position Data (at end of period):
Current assets	$	143.4		$	90.7		$	234.1
Net property, plant and equipment		1,498.5			684.1			2,182.6
Goodwill		15.0			251.3			266.3
Other assets		25.7			11.5			37.2
Total assets	$	1,682.6		$	1,037.6		$	2,720.2
Current liabilities	$	158.6		$	90.7		$	249.3
Short-term debt		130.0			18.8			148.8
Long-term debt		683.4			477.9			1,161.3
Other liabilities		1.6			16.3			17.9
Minority interest		3.4			—			3.4
Partners' capital		705.6			433.9			1,139.5
Total liabilities and partners' capital	$	1,682.6		$	1,037.6		$	2,720.2
Other Financial Data:
EBITDA(1)	$	50.3		$	17.6		$	67.9

(1)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides one basis for management to assess liquidity and measure performance over time and in relation to competitors who own similar assets.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with the "Selected Financial Information of Enbridge Partners" beginning on page 57 and the "Selected Financial Information of Enbridge Midcoast Energy" beginning on page 59 and the financial statements and related notes of Enbridge Partners, Enbridge Midcoast Energy and us appearing elsewhere or incorporated by reference in this prospectus. You also should read the financial statements and related notes of Enbridge Inc. incorporated by reference in this prospectus.

Enbridge Management

General

        We are a limited liability company that was formed in Delaware on May 14, 2002. We have elected to be treated as a corporation for U.S. federal income tax purposes. All of our voting shares are owned by Enbridge Energy Company.

Business

        By agreement with Enbridge Partners and its general partner, Enbridge Energy Company, we will manage and control the business and affairs of Enbridge Partners, subject to Enbridge Energy Company's right to approve specified actions.

Liquidity and Capital Resources

        Our authorized capital structure consists of two classes of membership interests: (1) equity interests with limited voting rights, which are the shares being issued in this offering, and (2) voting equity interests. At May 23, 2002, our issued capitalization consisted of $1,000 contributed by Enbridge Energy Company in connection with our formation and in exchange for its voting equity interest.

        We will use substantially all of the net proceeds from this offering to purchase i-units from Enbridge Partners and to compensate Enbridge Inc. for its purchase obligation and tax indemnities. The number of our shares outstanding, including the voting equity interest owned by Enbridge Energy Company, will at all times equal the number of i-units we own. Typically, the general partner and owners of common units will receive distributions from Enbridge Partners in cash. Instead of receiving cash distributions, the number of i-units we own will be increased. The amount of this increase is calculated by dividing the amount of the cash distribution paid by Enbridge Partners on each common unit by the average market price of one of our shares as determined for a 10-trading day period ending on the trading day immediately prior to the ex-dividend date for our shares. When Enbridge Partners makes cash distributions on its common units, the number of i-units we own will be increased, and we will make distributions on our shares in the form of additional shares, with the result that the number of our shares and voting shares that are then outstanding will equal the number of i-units that we own.

        If we incur liabilities or other obligations in connection with the performance of our obligations under the delegation of control agreement, we are entitled to be reimbursed or indemnified by Enbridge Partners or Enbridge Energy Company. Thus, we expect that our expenditures associated with managing and controlling the business and affairs of Enbridge Partners and the reimbursement we receive will be equal. Enbridge Partners also will reimburse us for our general and administrative expenses associated with securities filings, tax filings and related costs, other than expenses of this and any other offerings of shares. As stated above, we will not receive quarterly distributions of cash on the i-units we hold. Therefore, we expect neither to generate nor to require significant

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amounts of cash in ongoing operations. We expect that any net cash proceeds we receive from the sale of additional shares will immediately be used to purchase additional i-units. Accordingly, we do not anticipate any other sources or needs for additional liquidity.

        We are not permitted to borrow money or incur debt without the approval of holders, other than Enbridge Energy Company and its affiliates, owning at least a majority of our shares. Please read "Description of Our Shares — Limited Voting Rights" beginning on page 120.

Results of Operations

        Upon completion of our initial offering of shares to the public and the purchase of i-units from Enbridge Partners, our results of operations will consist of (1) the offsetting expenses and revenues associated with managing and controlling the business and affairs of Enbridge Partners and (2) our share of the earnings of Enbridge Partners attributable to the i-units we will own. As shown in the historical financial statements of Enbridge Partners appearing or incorporated by reference in this prospectus, the limited partners' interest in Enbridge Partners' net income was $69.6 million, $51.4 million and $29.8 million for the years ended December 31, 1999, 2000 and 2001, respectively. These historical amounts are not necessarily indicative of the level of earnings to be expected in the future.

        When this offering of 10,000,000 shares is completed, we will own approximately 21.7% of all of Enbridge Partners' outstanding limited partner interests (assuming no exercise of the underwriters' option to purchase additional shares from us). We will use the equity method of accounting for our investment and, therefore, will record earnings equal to approximately 21.7% of Enbridge Partners' limited partners' net income. Our percentage ownership will change over time if the number of i-units we own becomes a different percentage of the total units outstanding due to, among other things, our ownership of additional i-units and other issuances of additional common units by Enbridge Partners.

Enbridge Partners

Overview

        Prior to May 2001, Enbridge Partners was solely a transporter of crude oil and liquid petroleum through its Lakehead system. On May 18, 2001, Enbridge Partners acquired the North Dakota system, a crude oil and liquid petroleum gathering and transportation system, and on November 30, 2001, Enbridge Partners acquired the East Texas system, a natural gas gathering, treating, processing and transmission system. Enbridge Partners has entered into an agreement with Enbridge Energy Company to acquire the Midcoast, Northeast Texas and South Texas systems, which also consist of natural gas gathering, treating, processing, transmission and marketing assets. Following this acquisition, Enbridge Partners will have the following two lines of business:

•

Crude oil and liquid petroleum gathering and transportation operations; and



•

Natural gas gathering, treating, processing, transmission and marketing operations.

Factors Affecting Revenues from Crude Oil and Liquid Petroleum Operations

        The Lakehead and North Dakota systems largely consist of FERC regulated interstate crude oil and liquid petroleum pipelines. These systems generate most of their revenues by charging shippers a per barrel tariff rate to transport crude oil and liquid petroleum. For a discussion of regulation by the FERC of the tariff rates charged by Enbridge Partners for transporting crude oil and liquid petroleum on the Lakehead and North Dakota systems, please read "Business — Enbridge Partners — Regulation" beginning on page 97.

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        The Lakehead system links crude oil production from the western Canadian sedimentary basin to markets in the Great Lakes and Midwest regions of the United States and the Province of Ontario, Canada. Deliveries on the Lakehead system during 2001 were marginally lower than the previous year as a result of slightly decreased crude oil production from western Canada. Despite improving crude oil prices in 2000/2001 as compared to 1998/1999, exploration and development activity in western Canada in 2001 was focused on natural gas rather than crude oil, due to more robust natural gas market expectations. Crude oil production also was adversely impacted by a sustained period of low heavy crude oil prices relative to the price of light crude oil and by production problems and longer than expected maintenance at a major oil sands plant in the Province of Alberta, Canada.

        Enbridge Partners expects that crude oil production from western Canada, and therefore deliveries on the Lakehead system, will improve during the second half of 2002 and that incremental production will result from some of the Alberta oil sands development projects that are expected to go into service during the year. Furthermore, Enbridge Partners believes that long-term prospects for increased crude oil production remain positive as western Canadian producers report that they are committed to development projects that will bring incremental supply to the Lakehead system. Please read "—Lakehead System—Supply and Demand" beginning on page 87, for a discussion of the Alberta oil sands.

        Enbridge Partners estimates that from all these sources of supply, deliveries on the Lakehead system in 2002 will average approximately 1.3 million to 1.4 million barrels per day based on its most recent survey of crude oil shippers. Enbridge Partners further believes that the outlook for increased crude oil production in western Canada continues to be positive and will yield additional volumes. In this event, Enbridge Partners expects increased earnings contributions from this system. As an example, an incremental 100,000 barrels per day of deliveries on the Lakehead system to Chicago, Illinois would increase EBITDA by approximately $10-15 million. Enbridge Partners expects that increased capacity utilization on the Lakehead system will comprise a significant component of its future earnings growth. The timing of growth in the supply of western Canadian crude oil will depend upon the level of crude oil prices, oil drilling activity, the availability of financing and the completion of projects to produce heavy crude and synthetic oil from the Alberta oil sands.

Factors Affecting Revenues from Natural Gas Operations

Overview

        The East Texas, Midcoast, Northeast Texas and South Texas systems operate the following three principal businesses within the natural gas industry:

•

Transmission and wholesale activities, which include the transmission of natural gas through interstate and intrastate pipelines and delivery to the facilities of wholesale customers, such as local distribution companies, power plants and industrial facilities;



•

Gathering and processing activities, which include natural gas gathering, treating, processing and transmission, and NGL transportation; and



•

Marketing activities, which involve providing natural gas supply, transmission and sales services for producers and wholesale customers.

        Supply of natural gas is influenced by exploration and development activities that are driven by natural gas prices, natural gas supply and demand and related exploration costs. Unless the context otherwise requires, in describing the factors affecting revenues from natural gas operations, we assume that the acquisition of the Midcoast, Northeast Texas and South Texas systems by Enbridge Partners has occurred.

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Transmission and Wholesale Activities

        Enbridge Partners' FERC regulated interstate natural gas transmission pipeline systems generally derive their revenue from fees charged for transmission of natural gas, while its intrastate pipelines generally derive their revenue from the bundled sales of natural gas and transmission services. Customers of Enbridge Partners' FERC regulated natural gas pipeline systems typically pay a reservation fee each month to reserve capacity plus a nominal commodity charge based on actual transmission volumes. In some cases, Enbridge Partners' marketing operation uses these pipeline systems to sell natural gas it owns to its customers, such as local distribution companies or industrial facilities. Please read "— Other Matters — Regulatory Matters" beginning on page 79, for a discussion of rate regulatory matters that affect Enbridge Partners' operations, including a description of the rate proceeding relating to the Kansas Pipeline system.

Gathering and Processing Activities

        Enbridge Partners' receives revenues for its gathering and processing services under the following types of arrangements:

Fee-Based Arrangements: Under a fee-based contract, Enbridge Partners receives a set fee for gathering, treating, processing and transmission of raw natural gas and providing other gathering services. These revenues correlate with volumes and types of service, and do not depend directly on commodity prices. Enbridge Partners prefers fee-based contracts in order to support the stability of cash flows.

Other Arrangements: While Enbridge Partners prefers fee-based contracts, it also utilizes other types of arrangements in its natural gas gathering and processing business, including:

•

Percentage-of-Index-Contracts — Under these contracts, Enbridge Partners purchases raw natural gas at a negotiated discount to an agreed upon index. Enbridge Partners then resells the natural gas, generally for the index price, keeping the difference as its fee.



•

Percentage-of-Proceeds Contracts — Under these contracts, Enbridge Partners receives a negotiated percentage of the natural gas it processes in the form of residue natural gas, NGLs and sulfur, which it then sells at market prices.



•

Keep-Whole Contracts — Under these contracts, Enbridge Partners gathers or purchases raw natural gas from the producer for processing. A portion of the gathered or purchased gas is consumed during processing. Enbridge Partners extracts and retains the NGLs produced during processing, which it sells at market prices. In instances when Enbridge Partners purchases raw gas at the wellhead, it also sells for its own account the residue gas resulting from processing at market prices. In those instances when Enbridge Partners gathers and processes raw natural gas for the account of the producer, it must return to the producer residue gas with a Btu content equivalent to the original raw gas it received.

        Some of these other arrangements expose Enbridge Partners to commodity price risk, which is mitigated by offsetting physical purchases and sales and financial derivative hedge instruments. In addition, Enbridge Partners occasionally takes title to natural gas and NGLs for other reasons, such as to sell these products to customers. Although this exposure to commodity prices will increase as a result of the acquisition of the acquired systems, Enbridge Partners will continue to hedge a significant amount of this commodity price risk to support the stability of cash flows. Please read "— Quantitative and Qualitative Disclosures about Market Risk — Commodity Price Risk" beginning on page 82.

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Marketing Activities

        The Midcoast system's natural gas marketing operation provides supply, transmission and sales service for producers and wholesale customers on the Midcoast system's gathering, transmission and customer pipelines as well as other interconnected pipeline systems. Natural gas marketing activities are primarily undertaken to realize incremental margins on gas purchased at the wellhead, increase pipeline utilization and provide value added services to customers.

        In general, natural gas purchased and sold by the Midcoast system's marketing operation is priced at a published daily or monthly price index. Sales to wholesale customers typically incorporate a premium for managing their transmission and balancing requirements. Higher premiums and associated margins result from transactions that involve smaller volumes or that offer greater service flexibility for wholesale customers. At the request of the customer, Enbridge Midcoast Energy will enter into long-term fixed price purchase or sale contracts with its customers and generally will enter into offsetting hedged positions under the same or similar terms.

Enbridge Partners — Results of Operations

        The East Texas system was acquired by Enbridge Partners on November 30, 2001 for approximately $230 million, and its results of operations are included in Enbridge Partners' results of operations since that date. Enbridge Partners acquired the North Dakota system from Enbridge Inc. on May 18, 2001, for approximately $35 million, and its results of operations are included in Enbridge Partners' results of operations since that date.

Enbridge Partners — Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001

        Net income.    Net income for the first quarter of 2002 was $17.7 million compared with 2001 first quarter net income of $10.1 million, an increase of $7.6 million. The increase in net income resulted from higher earnings on the Lakehead system, as well as contributions from the newly acquired North Dakota and East Texas systems in the first quarter of 2002. Margins on the East Texas system were slightly lower than anticipated due to treating plant maintenance. The comparative numbers for the first quarter of 2001 did not include earnings from the North Dakota or East Texas systems, which were purchased in the second quarter and fourth quarter of 2001, respectively.

        Operating revenue.    Operating revenue for the first quarter of 2002 was $181.3 million, or $109.4 million higher than the first quarter of 2001. This increase was primarily due to the inclusion of revenue of $99.2 million from the East Texas system and $2.9 million from the North Dakota system and an increase in the Lakehead system revenue of $7.3 million. Revenue on the Lakehead system was higher than the same period last year due to a 2.9% increase in the indexed tariff effective July 1, 2001, an increase in the Terrace expansion program tariff rate of approximately 1.3 cents per barrel effective April 1, 2001 and a longer average haul distance.

        Deliveries.    Deliveries on the Lakehead system averaged 1.314 million barrels per day for the first quarter of 2002, down approximately 2.4% from the 1.347 million barrels per day averaged for the first quarter of 2001, due to a brief outage at a major producer's oil sands plant in the Province of Alberta, Canada.

        Cost of natural gas.    Cost of natural gas was $89.6 million for the first quarter of 2002. These costs were primarily incurred in connection with the purchase of natural gas at the wellhead on the East Texas system.

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        Power costs.    Power costs for the first quarter of 2002 were $13.6 million, or $1.9 million higher than the first quarter of 2001. The increase was primarily due to an increase in power costs on the Lakehead system of $1.6 million. Although deliveries decreased in the first quarter of 2002 compared to the first quarter of 2001, power costs increased to reflect the additional cost of transporting a higher proportion of heavy crude oil relative to lighter crude oil on the system and a longer average haul.

        Operating and administrative expenses.    Operating and administrative expenses for the first quarter of 2002 increased to $27.8 million from $20.1 million for the first quarter of 2001, as a result of the inclusion of the East Texas and North Dakota systems and higher expenses of $3.9 million on the Lakehead system due to higher pipeline inspection costs and a reduced pension credit. The increase was partially offset by lower oil measurement losses and decreased administrative expenses for salaries and wages, which resulted from increased construction activity and increased capitalized charges on the Terrace expansion program.

        Depreciation and amortization.    Depreciation and amortization increased to $18.3 million for the first quarter of 2002 from $15.4 million for the first quarter of 2001.

        Interest expense.    Interest expense was $14.7 million for the first quarter of 2002, compared to $15.2 million for the same period of the prior year. The decrease was attributable to lower interest rates and a lower average amount of debt outstanding, as interim debt financing associated with recent system acquisitions and expansions was reduced with the proceeds from the issuance of Class A common units.

        EBITDA.    EBITDA increased to $50.3 million for the first quarter of 2002 from $40.1 million for the first quarter of 2001.

Enbridge Partners — Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

        Net income.    Net income for 2001 was $38.9 million compared with $60.2 million for 2000. Net income for 2001 decreased by $21.3 million, primarily due to higher operating expenses, oil measurement losses, slightly lower volumes transported and a non-recurring charge for costs related to the relocation of Enbridge Partners' head office. Net income included positive contributions from the North Dakota and the East Texas systems since their dates of acquisition.

        Operating revenue.    Operating revenue for 2001 was $340.4 million, or $34.8 million higher than 2000. The increase was primarily due to the inclusion of operating revenue from the East Texas system and higher tariffs on the Lakehead system, offset by the impact of a decline in deliveries on the Lakehead system.

        Deliveries.    Deliveries averaged 1.315 million bpd on the Lakehead system in 2001, compared to 1.338 million bpd in 2000. This decline occurred due to lower crude oil production in western Canada. System utilization on the Lakehead system, measured in barrel miles, was 333 billion for 2001, compared to 341 billion for 2000, reflecting the decline in deliveries.

        Cost of natural gas.    Cost of natural gas for 2001 was $26.3 million, related to the East Texas system.

        Power costs.    Power costs were $49.9 million in 2001, or $2.5 million higher than in 2000. The increase was primarily due to the inclusion of power costs related to the North Dakota system and a higher proportion of heavy crude oil relative to lighter crude oil transported on the system, partially offset by lower deliveries.

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        Operating and administrative expenses.    Operating and administrative expenses of $104.5 million in 2001 were higher than the 2000 level of $80.6 million. The $23.9 million increase was primarily due to higher oil measurement losses and costs related to the relocation of Enbridge Partners' head office.

        Oil measurement losses occur as part of normal operating conditions of a crude oil and liquid petroleum pipeline and can be classified as follows:

•

Physical losses that occur through evaporation, shrinkage, difference in measurement between receipt and delivery locations and other incidents;



•

Degradation losses that result from mixing at the interface between higher quality light crude oil and lower quality heavy crude oil in the pipeline; and



•

Revaluation losses that are a function of the price of crude oil, the level of the pipeline's inventory and inventory positions of customers.

Oil measurement losses were approximately $18.0 million in 2001, or approximately $11.0 million higher than in 2000. This increase was primarily due to higher differentials between light and heavy crude oil prices, which increased the expense associated with inherent degradation between the batches of crude oil in the pipeline system. Also included in oil measurement losses was a $5.0 million adjustment to the value of the oil overage/shortage balance, which represents oil owed to or receivable from customers of the pipeline system. This adjustment resulted from refinements in the oil measurement loss estimation process, as well as more accurate measurement of oil losses through the development of new software applications.

        During the second quarter of 2001, Enbridge Partners announced the closing of its head office in Duluth, Minnesota and its relocation to Houston, Texas. Operating and administrative expenses for 2001 include a charge of $5.0 million related to the relocation.

        Depreciation and amortization.    Depreciation and amortization increased from $61.1 million for 2000 to $63.8 million for 2001, primarily due to the acquisition of the North Dakota and East Texas systems in the second and fourth quarters of 2001, respectively.

        Interest expense.    Interest expense of $59.3 million in 2001 was $1.1 million lower than 2000, primarily due to lower average debt balances combined with lower interest rates on Enbridge Partners' revolving credit facility. Debt was reduced with the proceeds from the issuance of Class A common units during 2001.

        EBITDA.    EBITDA for 2001 decreased to $159.7 million in 2001 from $177.6 million in 2000.

Enbridge Partners — Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

        Net income.    Net income for 2000 was $60.2 million compared with $78.7 million for 1999. Net income for 2000 was $18.5 million lower than for 1999, primarily due to lower pipeline utilization and increased operating costs. The decline in utilization was primarily a result of low crude oil prices in late 1998 and early 1999, which caused crude oil producers to limit their investment in oil exploration and development activities. Coupled with declines in crude oil production, reduced investment by oil producers adversely affected results due to lower volumes of crude oil being available for transport.

        Operating revenue.    Operating revenue for 2000 was $305.6 million, or $7.0 million less than 1999. The decrease was primarily due to the decline in deliveries of crude oil.

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        Deliveries.    Deliveries averaged 1.338 million bpd in 2000, compared to 1.369 million bpd in 1999. The decline occurred due to producer maintenance shutdowns and wetter than normal weather in western Canada, which delayed oil well tie-ins and other development activities. System utilization, measured in barrel miles, was 341 billion for 2000, compared to 350 billion for 1999, reflecting the decline in deliveries.

        Power costs.    Power costs were $47.4 million in 2000, a decrease of $5.6 million, due to lower throughput volumes.

        Operating and administrative expenses.    Operating and administrative expenses of $80.6 million in 2000 were higher than 1999 levels of $71.5 million, due to higher oil measurement losses and higher property taxes associated with recent expansion projects. In addition, decreased construction activity resulted in lower capitalized charges and increased administrative expenses for salaries and wages in 2000.

        Depreciation and amortization.    Depreciation and amortization increased from $57.8 million for 1999 to $61.1 million for 2000, primarily due to an increase in depreciable assets resulting from expansions of the Lakehead system.

        Interest expense.    Interest expense of $60.4 million in 2000 was $6.3 million higher than 1999. Less construction activity during 2000 led to a lower amount of capitalized interest and a corresponding increase in interest expense levels.

        EBITDA.    EBITDA for 2000 decreased from $188.1 million in 1999 to $177.6 million in 2000.

Enbridge Midcoast Energy — Results of Operations

        Enbridge Midcoast Energy acquired the South Texas system on January 2, 2002 for $9 million and the Northeast Texas system on March 1, 2002 for $178 million. The results of operations of Enbridge Midcoast Energy include the results of operations of the South Texas and Northeast Texas systems since those dates.

Overview

        The following table presents summary historical financial information for Enbridge Midcoast Energy for the periods indicated. The information presented for the eight months from May 1, 2001 through December 31, 2001 reflects the historical operating results of Enbridge Midcoast Energy during that period after giving effect to the changes in the basis of accounting described below. The combined information presented for the 12 months ended December 31, 2001 reflects the sum of the four and eight months described above. The financial information for the eight months ended

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December 31, 2001 and the three months ended March 31, 2002 reflect the financial performance of the assets under the ownership and management of Enbridge Energy Company.

	Years Ended December 31,				Four Months Ended April 30, 2001							Three Months Ended March 31,
								Eight Months Ended December 31, 2001		Combined Twelve Months Ended December 31, 2001
	1999		2000									2001			2002
Revenues	$	391.6	$	792.3	$	407.0		$	438.5	$	845.5	$	333.2		$	191.1
Cost of natural gas		330.5		682.5		390.9			364.7		755.6		320.9			158.5
Gross margin	$	61.1	$	109.8	$	16.1		$	73.8	$	89.9	$	12.3		$	32.6
Operating expenses(1)		30.0		48.6		29.5			37.1		66.6		13.5			15.9
Other expenses		2.7		—		—			—		—		—			—
EBITDA(2)	$	28.4	$	61.2	$	(13.4	)	$	36.7	$	23.3	$	(1.2	)	$	16.7
Depreciation and amortization		7.5		15.7		5.7			15.5				4.3			5.0
Interest expense		6.5		18.4		9.4			14.0				7.2			4.4
Net income (loss)	$	11.4	$	21.4	$	(19.5	)	$	3.1			$	(8.3	)	$	4.3

(1)

Operating expenses include operation and maintenance expenses and general and administrative expenses.

(2)

We define EBITDA as net income before (a) depreciation and amortization, (b) interest expense, net of capitalized interest, (c) minority interests, (d) interest and other income and (e) income taxes. EBITDA is used as

a supplemental financial measurement in the evaluation of our business, as described more fully below, and should not be considered as an alternative to net income as an indicator of our operating performance, cash flows from operating activities or other cash flow data calculated in accordance with generally accepted accounting principles or as a measure of liquidity. EBITDA is not defined under generally accepted accounting principles and thus, it may not be the same as similarly titled measures used by others.

EBITDA is used as a supplemental financial measure to assess: (a) the ability of assets to generate cash sufficient to pay interest costs and make cash distributions to unitholders, (b) the financial performance of assets and (c) the appropriateness of the purchase price of assets being considered for acquisition. As such, this supplemental financial measure provides a basis for management to assess liquidity and measure performance over time and in relation to companies who own similar assets.

        Enbridge Energy Company acquired Enbridge Midcoast Energy on May 11, 2001 at which time it valued the assets and liabilities of Enbridge Midcoast Energy at fair market value and allocated the purchase price to assets and liabilities acquired. In addition, the basis of accounting changed on the effective date of the acquisition of Enbridge Midcoast Energy. The primary change was the recognition of goodwill and a reduction in the carrying value of certain regulatory assets. Other changes included an increase in the allowance for doubtful accounts and an increase in deferred income taxes to reflect Enbridge Energy Company's allocation of fair market value.

        Enbridge Midcoast Energy acquired or constructed numerous pipelines in the five-year period ended March 31, 2002. The purchased assets were acquired from numerous sellers at different dates and were accounted for under the purchase method of accounting for business combinations. Accordingly, the results of operations for such acquisitions are included in Enbridge Midcoast Energy's financial statements only from the applicable date of the acquisition. As a consequence, the historical results of operations for the periods presented in the table above may not be comparable.

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Enbridge Midcoast Energy — Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001

        Exclusive of the unusual items discussed below, in both the first quarter of 2001 and 2002, volumes and margins within Enbridge Midcoast Energy's natural gas transmission pipelines and gathering, treating and processing assets were generally stable. In the first quarter of 2001, weak processing margins driven by unusually high natural gas prices relative to NGL prices were offset by earnings at systems that operate under percentage-of-proceeds contracts, where high natural gas prices generated higher earnings. Intrastate gas transmissions operations provided stable earnings and cash flow.

        In the first quarter of 2002, processing margins were greater than in the prior period, as gross margin from interstate pipeline systems was stable and Enbridge Midcoast Energy had contributions from the Northeast Texas and South Texas systems that did not exist in 2001.

        Net income.    Net income for the first quarter of 2002 was $4.3 million, an increase of $12.6 million compared to first quarter 2001 net loss of $8.3 million. The increase in net income was primarily due to the acquisition in the first quarter of 2002 of the Northeast Texas and South Texas systems, contribution from the BamaGas pipeline and the adverse impact of unusual items in the first quarter of 2001.

        Gross margin.    Gross margin for the first quarter of 2002 was $32.6 million compared to $12.3 million for the first quarter of 2001. Results of the first quarter of 2001 included approximately $20.5 million of losses primarily from shipper imbalances and operational balancing agreements. These losses were the result of significantly higher prices for gas imbalance and operational balancing agreements created at the beginning of the quarter than prices prevailing at March 31, 2001.

Operational balancing agreements and shipper imbalances are described below:

•

Operational balancing agreements.    To facilitate deliveries of natural gas and provide for operational flexibility, many natural gas transmission companies have operational balancing agreements in place with other interconnecting pipelines. These agreements ensure that the volume of gas a shipper schedules for transportation between two interconnecting pipelines equals the volume actually delivered. If natural gas moves between pipelines in volumes that are more or less than the volumes the shipper previously scheduled, the difference results in a net receivable or payable balance between the interconnecting pipelines. To the extent that such imbalances are not settled regularly, this receivable or payable balance may increase or decrease as a result of movements in natural gas prices.



•

Shipper imbalances.    When an operational balancing agreement is not in place, shippers of natural gas accumulate net receivable or payable balances with a pipeline if the volume of gas actually transported by the pipeline differs from the volume of gas the shipper had scheduled for transportation. This difference is referred to as a shipper imbalance.

        Enbridge Midcoast Energy believes it will be less affected by the impact of operational balancing agreements and shipper imbalances in the future due to improved systems of internal control for monitoring, valuation and settlement of the associated payables and receivables. The operational balancing agreements and shipper imbalances will be monitored through monthly and daily value at risk reporting mechanisms currently being developed and senior management oversight to comply with Enbridge Inc.'s commodity risk management policies.

        Operating expenses.    Total operating expenses include direct operating, general and administrative and other costs. Operating costs increased $2.4 million in the first quarter of 2002, primarily due to additional infrastructure associated with growth of the asset base. Increased

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insurance premiums associated with the impact of the September 11, 2001 terrorist attacks also contributed to higher operating costs.

        Depreciation and amortization.    Depreciation and amortization was $5.0 million in the first quarter of 2002, an increase from $4.3 million in the first quarter of 2001, primarily due to the acquisition of the Northeast Texas and South Texas systems during the first quarter of 2002.

        Interest expense.    Interest expense decreased due to lower interest rates and the restructuring of an interest rate swap assumed upon the acquisition of Enbridge Midcoast Energy by Enbridge Energy Company with an embedded option that did not qualify for the cash flow method of hedge accounting treatment under FAS 133. The mark-to-market treatment of the financial instrument was recognized as interest expense of $2.4 million in the first quarter of 2001. The embedded option was removed from the financial instrument, and the related charges to interest expense did not recur in 2002.

        EBITDA.    EBITDA was $16.7 million in the first quarter of 2002, an increase of $17.9 million from negative $1.2 million for the first quarter of 2001.

        Canadian assets.    Results of operations for the three months ended March 31, 2002 and March 31, 2001 include the contribution of Enbridge Midcoast Energy's Canadian assets. These assets will not be included in the acquisition of Enbridge Midcoast Energy by Enbridge Partners. Gross margin associated with these assets was $1.1 million and $1.9 million, operating costs associated with these assets were $0.8 million and $1.2 million, and depreciation associated with these assets was $0.2 million and $0.2 million, for the three months ended March 31, 2002 and March 31, 2001, respectively.

Enbridge Midcoast Energy—Twelve Months Ended December 31, 2001 Compared to Year Ended December 31, 2000

        Excluding unusual items, pipeline operations produced stable gross margins in both 2001 and 2000. Results in 2001 were driven by the full year contributions of the acquired UTOS offshore pipeline and by additional earnings from trucking operations. Intrastate and interstate pipeline operations provided stable earnings and cash flow.

        Net income.    For the four months ended April 30, 2001, Enbridge Midcoast Energy recorded a net loss of $19.5 million. This loss was primarily due to revaluations of balancing agreements and shipper imbalances as discussed above and transaction costs associated with and goodwill amortization recorded in connection with the acquisition of Enbridge Midcoast Energy by Enbridge Energy Company. For the eight months ended December 31, 2001, Enbridge Midcoast Energy recorded net income of $3.1 million. Integration costs associated with the acquisition of Enbridge Midcoast Energy by Enbridge Energy Company increased operating expenses during this period while lower than expected margins within marketing operations also reduced net income.

        Gross margin.    Gross margin decreased to $89.9 million in 2001 from $109.8 million in 2000, primarily due to $20.5 million in unusual items in the first quarter of 2001. Excluding these unusual items, gross margin for 2001 improved relative to 2000 due to the full year impact of acquisitions completed during 2000, including the acquisition of the UTOS offshore system and Enbridge Midcoast Energy's trucking operations.

        Operating expenses.    Operating expenses increased by $18 million due to acquisitions and higher fuel costs. Other increases reflected $5.6 million in advisory fees incurred by Enbridge Midcoast Energy in connection with its acquisition by Enbridge Energy Company, legal fees of $1.1 million during 2001, primarily associated with pipeline rate litigation, and $0.8 million of consulting and other costs associated with the integration of Enbridge Midcoast Energy. In addition,

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certain corporate overhead charges, including insurance premiums, increased relative to 2000 by approximately $0.8 million.

        Depreciation and amortization.    Depreciation and amortization during the eight months ended December 31, 2001 includes $4.5 million of goodwill resulting from the acquisition of Enbridge Midcoast Energy by Enbridge Energy Company.

        Interest expense.    Interest expense for the four months ended April 30, 2001 included an interest rate swap with an embedded option that did not qualify for the cash flow method of hedge accounting treatment under FAS 133. The mark-to-market treatment of the financial instrument was recognized as interest expense of $2.5 million. For the eight months ended December 31, 2001, Enbridge Midcoast Energy incurred interest expense of $2.6 million for the same embedded option.

        EBITDA.    EBITDA decreased to $23.3 million in 2001 from $61.2 million in 2000.

        Canadian assets.    Results of operations for 2001 and 2000 include the results of operations of Enbridge Midcoast Energy's Canadian assets. These assets will not be included in the acquisition of Enbridge Midcoast Energy by Enbridge Partners. Gross margin associated with these assets was $6.1 million and $5.9 million, operating costs associated with these assets were $4.3 million and $2.2 million and depreciation associated with these assets was $0.9 million and $0.8 million, for 2001 and 2000, respectively.

Enbridge Midcoast Energy—Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

        Net income.    Net income increased to $21.4 million in 2000 from $11.4 million in 1999, primarily due to the acquisition of the Kansas pipeline system, increased marketing margins and increased throughput on other systems.

        Gross margin.    Gross margin for 2000 increased by $48.7 million over the same period in 1999 due to increased transportation fees of $25.5 million resulting from the Kansas pipeline system acquisition in November 1999 and $13.3 million due primarily to acquisitions in gathering and processing, improved marketing margins and a more favorable commodity price environment.

        Operating expenses.    Operating expenses increased primarily due to the full year effect of acquisitions completed in 1999. General and administrative expenses for 2000 increased $7.3 million primarily due to increased employee costs related to the acquisitions.

        Depreciation and amortization.    Depreciation and amortization increased to $15.7 million in 2000 from $7.5 million in 1999 as a result of acquisitions.

        Interest expense.    Interest expense increased to $18.4 million in 2000 from $6.5 million in 1999 as a result of increased debt used to finance acquisitions.

        Unusual item.    During the fourth quarter of fiscal 1999, Enbridge Midcoast Energy recorded a pre-tax unusual charge totaling $2.7 million related to restructuring efforts announced in November 1999.

        EBITDA.    EBITDA increased to $61.2 million in 2000 from $28.4 million in 1999.

        Canadian assets.    Gross margin associated with the Canadian assets was $5.9 million and $2.2 million, operating costs associated with these assets were $2.2 million and $0.9 million and depreciation associated with these assets was $0.8 million and $0.3 million, for the years ended December 31, 2000 and 1999, respectively.

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Northeast Texas System—Overview

        The natural gas gathering, treating and processing business of the Northeast Texas system generated approximately $140 million of revenues in each of 2001 and 2000. EBITDA decreased to $18.1 million in 2001 from $38.0 million in 2000, primarily because of changes in natural gas prices. Enbridge Energy Company acquired the Northeast Texas system on March 1, 2002. Financial information relating to the Northeast Texas system is not included in any historical financial statements contained in this prospectus prior to that date. The foregoing financial information, which is unaudited, is derived from information Enbridge Energy Company received from the seller when it acquired the Northeast Texas system. Upon acquisition of the Northeast Texas system, Enbridge Energy Company instituted a hedging program that is intended to manage the stability of cash flows and reduce exposure to commodity price risk.

        Management expects an improvement in EBITDA related to these assets for the following reasons:

•

Completion of a full plant turnaround and associated maintenance and repairs at the Eustace natural gas treating and processing plant, which occurred during December of 2001 and the first two months of 2002.



•

Expenditure of expansion capital of approximately $21 million, which is included in the purchase price of the Northeast Texas system for the planned acquisition of natural gas compressors that are currently leased. Based on unaudited historical financial information provided by the seller, this acquisition would have reduced operating lease expenses, resulting in an increase in EBITDA of approximately $5.9 million on a pro forma basis for the 12 months ended April 30, 2002.



•

A full year contribution of revenues and EBITDA in 2002 from the Indian Rock natural gas treating plant, which was acquired in the second half of 2001.

Pro Forma Results of Operations

        The pro forma results of operations for the year ended December 31, 2001 present the results of operations for Enbridge Partners as if it had owned the acquired systems as of January 1, 2001. On a pro forma basis, net income would have decreased from $38.9 million to $29.5 million and net income per unit would have decreased from $0.98 per unit to $0.41 per unit. Enbridge Partners does not believe that these pro forma results are indicative of the normal operating performance of the acquired systems due to a number of significant unusual items that occurred in the first four months of 2001, as discussed below.

        The Midcoast system's normal operating performance was affected by several unusual items that occurred in the first four months of 2001. These unusual items, which reduced EBITDA of the Midcoast system by $26.1 million, include:

•

a $20.5 million reduction in EBITDA due to gas imbalances and operational balancing agreements, which were valued at prices higher than prices prevailing when the obligations were incurred; and



•

a $5.6 million reduction in EBITDA due to transaction expenses incurred when Enbridge Energy Company acquired Enbridge Midcoast Energy. These expenses consisted primarily of advisory fees and related expenses incurred by Enbridge Midcoast Energy in the transaction, and, as a result, are not expected to recur.

        Excluding these two items, EBITDA of the acquired systems for the 12 months ended December 31, 2001 would have been $74.7 million.

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        Additionally, Enbridge Partners does not believe that the unaudited results of operations of the Northeast Texas system contained in the pro forma results of operations are indicative of this system's normal operating performance. Enbridge Energy Company acquired the Northeast Texas system on March 1, 2002. Based on unaudited financial information it received from the seller, the Northeast Texas system generated similar revenues in 2000 and 2001 while EBITDA decreased to $18.1 million in 2001 from $38.0 million in 2000. As discussed in more detail under "—Northeast Texas System—Overview," Enbridge Partners expects an improvement in EBITDA from the Northeast Texas system.

Results of Operations—Latest 12 Months

        For the 12-months ended March 31, 2002, Enbridge Partners had EBITDA of $169.9 million, an increase of $10.2 million over the fiscal year ended December 31, 2001 as a result of contributions from the North Dakota and East Texas systems and lower operating costs on the Lakehead system.

        EBITDA of the acquired systems was $72.3 million for the 12-months ended April 30, 2002, which corresponds to the period of ownership by Enbridge Energy Company, which is $2.4 million lower than the pro forma results for the fiscal year ending December 31, 2001, primarily due to an outage at the Eustace natural gas treating and processing plant. Notwithstanding this plant outage, EBITDA for the 12-months ended April 30, 2002 is expected to be more indicative of actual results from the acquired assets on a recurring basis due to the previously discussed unusual items that occurred in the first four months of 2001. On a pro forma basis for the 12-months ended April 30, 2002, Enbridge Partners had EBITDA of $242.2 million, net income of $64.1 million, and net income per common unit of $1.21.

Future Prospects

        Enbridge Partners believes that it will be able to improve its financial performance in 2002 and 2003 through the following activities:

•

Improved performance of the Northeast Texas system: Increasing earnings from expansion, consolidation opportunities and acquisition of compression assets on the Northeast Texas system, as described in more detail under "—Pro Forma Results of Operations" above;



•

Asset optimization: Increasing net overall utilization of capacity and facilities through incremental performance improvements from existing and acquired systems;



•

Reduced administrative expenses: Realizing the benefits of increased scale of operations and the reduction of transition costs associated with recent acquisitions; and



•

Acquisitions: Applying expansion capital to acquire and operate complementary assets and properties expected to come to market in 2002 and 2003.

        There can be no assurance, however, that any of the foregoing activities can be successfully implemented or that, if implemented, the anticipated improvement in financial performance will occur.

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Liquidity and Capital Resources

        The following discussion relates to Enbridge Partners and gives effect to the acquisition of the acquired systems and corresponds to the March 31, 2002 pro forma as adjusted balance sheet. This balance sheet assumes the issuance of $423.6 million of i-units and the assumption and incurrence of $496.7 million of debt in connection with the acquisition of the acquired systems.

        Enbridge Partners anticipates that it will continue to have adequate liquidity to fund future recurring operating and investing activities. The primary cash requirements for Enbridge Partners consist of normal operating expenses, maintenance and expansion capital expenditures, debt service payments, distributions to partners and acquisitions of new businesses. Short-term cash requirements, such as operating expenses, maintenance capital expenditures and quarterly distributions to the partners are expected to be funded by operating cash flows. Long-term cash requirements for expansion projects and acquisitions are expected to be funded by several sources, including cash flows from operating activities, borrowings under bank credit facilities and the issuance of additional debt and equity securities, including common units and i-units. Enbridge Partners' ability to complete future debt and equity offerings will depend on various factors, including prevailing market conditions, interest rates and its financial condition at the time. Following the closing of this offering, Enbridge Partners also expects to be able to finance expansion capital requirements with the cash it retains instead of making cash distributions on the i-units we own.

        In 2002, Enbridge Partners anticipates spending approximately $70 million for system enhancements, $25 million for core maintenance activities, and $185 million for the Terrace expansion project. Excluding major expansion projects and acquisitions, ongoing capital expenditures are expected to average approximately $50 million annually (approximately 55% for core maintenance and 45% for enhancement of the systems). Core maintenance activities, such as the replacement of equipment and preventive maintenance programs, will be undertaken to enable Enbridge Partners' systems to operate at their maximum operating capacity. Enhancements to the systems, such as refurbishment and replacement of pipe, are expected to extend the life of the systems and permit Enbridge Partners to respond to developing industry and government standards and the changing service expectations of its customers.

        Enbridge Partners has established two unsecured credit facilities, a $300 million three-year term facility and a $300 million 364-day facility. Under the terms of these facilities, Enbridge Partners and Enbridge Energy, Limited Partnership may together borrow funds up to a combined maximum of $300 million under the three-year term facility and a combined maximum of $300 million under the 364-day facility. In addition, Enbridge Partners may designate any of its subsidiaries that is a material subsidiary to borrow under either or both of the facilities and, subject to complying with certain administrative procedures, that subsidiary will be permitted to borrow. Any borrowings under either facility will be guaranteed by Enbridge Partners, its material subsidiaries, unless that subsidiary is the borrower, and Enbridge Energy, Limited Partnership. As of March 31, 2002, Enbridge Partners and Enbridge Energy, Limited Partnership had borrowed approximately $204.0 million under the two credit facilities.

        As of March 31, 2002, $99 million was drawn on the 364-day facility at a weighted average interest rate of 3.14%, and $105 million was drawn on the three year term facility at a weighted average interest rate of 2.39%.

        As of March 31, 2002, Enbridge Partners had $51.5 million in debt outstanding under a floating rate subordinated note provided by an affiliate. The note is payable in January 2007, and as of March 31, 2002, bore an interest rate of 2.87%. The note evidencing this debt contains no covenants but has a cross-default provision that is triggered by events of default under the first

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mortgage notes issued by Enbridge Energy, Limited Partnership or defaults under Enbridge Partners' three-year term facility and 364-day facility.

        Enbridge Partners expects to have an additional $476.4 million in debt outstanding under a subordinated note provided by an affiliate. This note is expected to have a 5-year term and bear interest at one month LIBOR plus 1% during the first two years outstanding and, after that time, bear interest at one month LIBOR plus 2%. The note evidencing this debt contains no covenants but has a cross-default provision that is triggered by events of default under the first mortgage notes issued by Enbridge Energy, Limited Partnership or defaults under Enbridge Partners' three-year term facility and 364-day facility.

        Enbridge Partners has on file with the SEC a $500 million shelf registration statement for the issuance of Class A common units. The purpose of this registration statement is to give Enbridge Partners flexibility to respond quickly to attractive financing opportunities in the capital markets as it pursues its growth strategy and manages its debt obligations. Approximately $308 million in Class A common units is available for issuance under this registration statement.

        Enbridge Partners distributes quarterly all of its available cash, which generally is defined to mean for any calendar quarter the sum of all of the cash receipts of Enbridge Partners plus net reductions to reserves less all of its cash disbursements and net additions to reserves. See "Distribution Policy." These reserves are retained to provide for the proper conduct of Enbridge Partners' business, to stabilize distributions of cash to unitholders and its general partner, Enbridge Energy Company and, as necessary, to comply with the terms of any agreement or obligation of Enbridge Partners.

Other Matters

Regulatory Matters

        The currently approved rates for the Kansas pipeline system are based upon an annual cost of service of approximately $31 million and are not subject to any refund obligation. Enbridge Pipelines (KPC), the entity that owns the Kansas pipeline system, has proposed a rate increase in a rate case before the FERC that would increase rates to a level designed to recover annually a cost of service of approximately $34 million. The FERC suspended the rate increase and set the matter for hearing. Enbridge Pipelines (KPC) elected not to put the higher rate into effect. Because Enbridge Pipelines (KPC) did not increase its tariff rates, rates Enbridge Pipelines (KPC) is charging its customers are not subject to refund.

        On July 31, 2000, an administrative law judge issued a decision recommending that Enbridge Pipelines (KPC) recover annual revenues based on a cost of service of approximately $20 million. Enbridge Pipelines (KPC) filed exceptions to the administrative law judge's decision, and the matter is currently pending before the FERC for de novo review. An order is expected in late 2002. Enbridge Pipelines (KPC) cannot be assured of receiving a FERC decision that will maintain or increase its existing rates. If the FERC decision affirms the administrative law judge's decision or concludes that Enbridge Pipelines (KPC)'s rates should be based on an annual cost of service significantly below $31 million, Enbridge Partners' annual revenues on the Enbridge Pipelines (KPC) system will be reduced on a prospective basis.

        Enbridge Energy Company has agreed to indemnify Enbridge Partners in the event the final FERC approved cost of service is less than $22.9 million. Thus, if the decision of the administrative law judge were affirmed, Enbridge Energy Company would indemnify Enbridge Partners for up to $2.9 million per year for a maximum of five years. Accordingly, revenues and cash flow of KPC would decrease from approximately $31 million to $22.9 million per year.

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        Enbridge Pipelines (KPC)'s customers have not been paying the full amount of the $31 million cost of service. On a monthly basis, customers are underpaying invoiced amounts by approximately $0.8 million per month. Enbridge Pipelines (KPC) has continued to recognize the underpayments as revenue due to FERC decisions affirming that the current level of rates is not subject to refund. Enbridge Energy Company will assume the risk for any underpayments that occur prior to closing of the acquisition of the acquired systems. After closing, Enbridge Partners will assume the risk associated with underpayment amounts.

Critical Accounting Policies and Estimates

        Enbridge Partners' financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires its management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. The basis for these estimates is historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions. Enbridge Partners believes critical accounting policies discussed in the following paragraph affect the more significant judgments and estimates used in the preparation of its consolidated financial statements.

        In the normal course of the Enbridge Partners' business, judgment is involved in determining depreciation, customer and pipeline oil overage balances, crude oil measurement losses, payables and receivables associated with operational balancing agreements and year-end accruals. Enbridge Partners' records depreciation based on the estimated useful lives of the assets, which requires various assumptions to be made, including the supply of and demand for hydrocarbons in the markets served by assets, normal wear and tear of the facilities, and the extent and frequency of maintenance programs. Changes in any of these assumptions may impact the rate at which depreciation is recognized in the financial statements.

        The oil overage balance is recorded by Enbridge Partners based on measurement estimates. These estimates are based on mathematical calculations, physical measurement and include assumptions related to the type of crude oil, its market value, normal physical losses due to evaporation and capacity limitations of the system. If there is a material change in these assumptions, it may result in a change to the carrying value of the oil overage balance or revision of oil measurement loss estimates.

        Payables and receivables associated with the activity on operational balancing agreements and imbalances are booked monthly. These balances are either settled on a cash basis or are carried by the pipelines and shippers on an in-kind basis. Accruals associated with these in-kind balances are derived from the best available third party documentation and are valued on a published third party index. Finally, in the normal course of preparing the year-end financial statements, revenue and expense accruals are made for the month of December to ensure amounts are complete and accurate on an annual basis. Judgments and estimates are necessary to prepare these accruals. Changes in these estimates are not expected to have a material impact on the earnings of Enbridge Partners. For additional details relating to Enbridge Partners' accounting policies, see Note 2 to Enbridge Partners' Consolidated Financial Statements appearing elsewhere in this prospectus.

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Quantitative and Qualitative Disclosures About Market Risk

Interest Rate and Foreign Exchange Risk

        To the extent the amounts drawn under its revolving credit facilities carry a floating rate of interest, the Enbridge Partners' earnings and cash flow are exposed to changes in interest rates. This exposure is managed through periodically refinancing floating rate bank debt with long-term fixed rate debt and through the use of interest rate risk management hedge contracts. Enbridge Partners does not have any material exposure to movements in foreign exchange rates as virtually all of its revenue and expense is denominated in U.S. dollars. To the extent that a material foreign exchange exposure were to arise, Enbridge Partners intends to hedge such exposure using forward or other derivative contracts.

        Enbridge Partners.    The table below summarizes as of March 31, 2002 Enbridge Partners' derivative financial instruments and other financial instruments that are sensitive to changes in interest rates, including interest rate swaps and debt obligations. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and weighted average fixed interest rates by expected (contractual) maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract.

		Expected Maturity Date
																						Fair Value
		2002			2003			2004			2005			2006			Thereafter			Total
		(in millions)
Liabilities
Fixed Rate:
	First Mortgage Notes	$	31.0		$	31.0		$	31.0		$	31.0		$	31.0		$	155.0		$	310.0	$	342.4
	Interest Rate		9.15	%		9.15	%		9.15	%		9.15	%		9.15	%		9.15	%		—		—
	Senior Unsecured Notes		—			—			—			—			—		$	300.0		$	300.0	$	289.5
	Average Interest Rate		—			—			—			—			—			7.34	%		—		—
Variable Rate:
	Revolving Credit Facility		—		$	99.0			—		$	105.0			—			—		$	204.0	$	204.0
	Weighted Average Interest Rate		—			3.14	%		—			2.39	%		—			—			—		—
Interest Rate Derivatives
Interest Rate Swaps:
	Variable to Fixed	$	50.0			—			—			—			—			—		$	50.0	$	(1.1	)
	Average Pay Rate		6.23	%		—			—			—			—			—			—		—

        The fair value of the first mortgage notes and senior unsecured notes at March 31, 2002, was $342.4 million (December 31, 2001 — $342.6 million) and $289.5 million (December 31, 2001 — $291.4 million), respectively. Enbridge Partners had a total of $204.0 million (December 31, 2001 — $137.0 million) of variable rate debt outstanding under the 364-day and term revolving credit facilities at March 31, 2002. They had a combined fair value of $204.0 million (December 31, 2001 — $137.0 million) and weighted average interest rates of 3.14% and 2.39% (December 31, 2001 — 2.43%), respectively. Enbridge Partners intends to roll over variable rate debt under its revolving credit facilities as the debt matures.

        The fair value of the interest rate swap agreements at March 31, 2002 was ($1.1) million (December 31, 2001 — ($1.9) million). For additional information concerning Enbridge Partners' debt obligations, please see Note 8 to Enbridge Partners' Consolidated Financial Statements.

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        Enbridge Midcoast Energy.    The table below summarizes Enbridge Midcoast Energy's derivative financial instruments and other financial instruments that are sensitive to changes in interest rates, including interest rate swaps and debt obligations.

		Expected Maturity Date
March 31, 2002																Fair Value
		2002	2003			2004	2005	2006			Thereafter			Total
		(in millions)
Fixed Rate:
	Intercompany Loan	—		—		—	—	$	90.0		$	90.0		$	180.0	$	178.7
	Interest Rate	—		—		—	—		6.39	%		6.76	%		—		—
Variable Rate:
	Intercompany Loan	—		—		—	—	$	267.1		$	91.5		$	358.6	$	358.6
	Interest Rate	—		—		—	—		3.35	%		3.37	%		—		—
Interest Rate Derivatives
Interest Rate Swaps:
	Variable to Fixed	—	$	140.0		—	—		—			—		$	140.0	$	(5.1	)
	Average Pay Rate	—		5.53	%	—	—		—			—			—		—

        The fair value of the fixed rate intercompany loans as at March 31, 2002 was $178.7 million (December 31, 2001 — $90.6 million). The fair value of the floating rate intercompany loans as at March 31, 2002 was $358.6 million (December 31, 2001 — $229.2 million).

        The interest rate swap agreements are in place to hedge a portion of the variable rate intercompany loan. The fair value of the interest rate swap agreements at March 31, 2002 was ($5.1) million (December 31, 2001 — ($6.8) million).

        Enbridge Midcoast Energy does not have any material exposure to movements in foreign exchange rates as virtually all of its revenue and expense is denominated in U.S. dollars. To the extent that a material foreign exchange exposure were to arise, Enbridge Midcoast Energy intends to hedge such exposure using forward foreign exchange contracts or other appropriate derivative contracts.

Commodity Price Risk

        Enbridge Partners.    Enbridge Partners' earnings and cash flows associated with the Lakehead system are not directly impacted by changes in commodity prices, as Enbridge Partners does not own the crude oil and NGLs it transports. However, Enbridge Partners has indirect commodity risk related to degradation losses associated with increasing differentials between the price of heavy crude oil relative to light crude oil. Commodity prices have a significant impact on the underlying supply of, and demand for, crude oil and NGLs that Enbridge Partners transports. With Enbridge Partners' acquisition of the East Texas system on November 30, 2001, a portion of Enbridge Partners' earnings and cash flows are exposed to movements in the prices of natural gas and NGLs. Enbridge Partners has entered into hedge transactions to substantially mitigate exposure to movements in these prices. Pursuant to policies approved by the board of directors of its general partners, Enbridge Partners may not enter into derivative instruments for speculative purposes. All financial derivative transactions must be undertaken with highly creditworthy counterparties. As at March 31, 2002, all financial counterparties were rated at least "A" by all major credit rating agencies.

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        The table below summarizes Enbridge Partners' outstanding derivative financial instruments used to hedge exposure to movements in commodity prices as of March 31, 2002.

Commodity Hedges	Maturity Dates	Total Notional Principal	Fair Value
		(in millions)	(in millions)
Natural gas	2002-2012	38.8 MMBtus	$	(1.5	)
NGLs	2002	0.9 bbls	$	(1.3	)

        The fair value of the commodity hedging contracts at March 31, 2002 was $(2.7) million (December 31, 2001 — $20.5 million).

        Enbridge Midcoast Energy.    Enbridge Midcoast Energy utilizes financial derivative instruments to hedge market risks associated with certain energy commodities including natural gas and NGLs. These exposures arise as a result of fixed price commodity sales. Exposures also arise related to processing assets as a result of the terms of the gas processing contracts as well as a result of inventory positions. Enbridge Midcoast Energy may not engage in speculative trading and may not enter into financial derivative transactions for speculative purposes. All financial derivative transactions must be undertaken with highly credit worthy counterparties. As at March 31, 2002, all financial counterparties were rated at least "A" by all major credit rating agencies.

        The table below summarizes Enbridge Midcoast Energy's outstanding derivative financial instruments used to hedge exposure to movements in commodity prices as of March 31, 2002:

Commodity Hedges	Maturity Dates	Total Notional Principal	Fair Value
		(in millions)	(in millions)
Natural gas	2002-2012	57.5 MMBtu	$	(13.5	)
NGLs	2003	0.8 bbls	$	(2.2	)

        The total fair value of the commodity hedging contracts at March 31, 2002 was $(15.7) million (December 31, 2001 — $(10.7) million).

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BUSINESS

Enbridge Management

        We are a limited liability company formed in Delaware on May 14, 2002. Upon completion of this offering, our only business will consist of managing and controlling the operations of Enbridge Partners. We were formed as a limited liability company to accommodate the interrelationships among us and Enbridge Energy Company, Enbridge Partners, Enbridge Inc. and all of their respective affiliates. These interrelationships required that the fiduciary duties owed by our board of directors to us and our shareholders be modified from what otherwise would have been required under Delaware law. For a description of these interrelationships, please read "Conflicts of Interest and Fiduciary Responsibilities" beginning on page 145.

        We will have no operations prior to the closing of this offering. Upon the closing of this offering, the general partner of Enbridge Partners will delegate to us substantially all of the rights and powers to manage and control the business and affairs of Enbridge Partners and its subsidiaries. For more information regarding our management and control of the business and affairs of Enbridge Partners, please read "Relationships and Related Party Transactions — Delegation of Control Agreement" beginning on page 141 and "Business — Enbridge Partners — Employees" on page 108.

        We will be a limited partner of Enbridge Partners through our ownership of i-units and will have no assets other than our interest in Enbridge Partners. Further, we will have no operations other than the management and control of the business and affairs of Enbridge Partners. As a result, our financial condition and results of operations will depend upon the performance of Enbridge Partners. We do not expect to have any cash flow attributable to our ownership of the i-units, but we will own additional i-units in Enbridge Partners (as a result of an i-unit split) each quarter when cash distributions are made by Enbridge Partners on its common units. The number of additional i-units we will own will be based on the amount of cash to be distributed by Enbridge Partners to owners of its common units, which will be determined by the operations of Enbridge Partners and its direct and indirect operating subsidiaries.

        We have elected to be treated as a corporation for U.S. federal income tax purposes. As a result, an owner of our shares will not report on its U.S. federal income tax return any of our items of income, gain, loss and deduction.

        Although we will be subject to U.S. federal income taxes on our taxable income, Enbridge Partners will not allocate taxable income or gain to the i-units we own until such time as there is a liquidation of Enbridge Partners. Therefore, we do not anticipate that we will have material amounts of taxable income resulting from the ownership of the i-units unless we enter into a sale or exchange of the i-units or Enbridge Partners is liquidated.

        We are not a party to any litigation.

Enbridge Partners

        Enbridge Partners is a publicly traded Delaware limited partnership that, through its subsidiaries, owns and operates crude oil and liquid petroleum transportation assets and natural gas gathering, treating, processing, transmission and marketing assets in the United States.

Business Strategy

        Enbridge Partners' objective is to continue to increase cash distributions to unitholders. To achieve this objective, Enbridge Partners intends to:

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Expand and increase the utilization of the Lakehead system's capacity to meet expected growing supply of and demand for crude oil and liquid petroleum in the markets it serves.

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Develop and acquire complementary energy delivery assets, particularly in the Gulf Coast region of the United States, and improve the financial performance and operating efficiency of acquired assets. Enbridge Partners anticipates increased availability of attractive acquisition targets and believes that it is well positioned to acquire additional assets.

        Enbridge Partners expects that it will finance acquisitions through the issuance of common units and/or the incurrence or assumption of debt. Following the closing of this offering, Enbridge Partners also expects to be able to finance acquisitions, as well as other capital needs, through the sale of i-units to us in connection with our issuance of additional shares and with the cash it retains because it is not required to make cash distributions on the i-units.

Competitive Strengths

        Enbridge Partners believes that it is well positioned to successfully execute its business strategy given the following competitive strengths:

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Strategic Market Position: The Lakehead system, through its interconnection with the Enbridge system, is the primary transporter of western Canadian crude oil to the Great Lakes and Midwest regions of the United States and the sole transporter of western Canadian crude oil to the Province of Ontario, Canada. Following the acquisition of the acquired systems, Enbridge Partners will have natural gas and NGL assets in other key supply and demand regions, such as the Mid-Continent and Gulf Coast regions of the United States.

The Lakehead system is well positioned to benefit from improving supply and demand fundamentals. The demand for crude oil in the Great Lakes and Midwest regions of the United States has increased as a result of the combination of long-term growth in hydrocarbon demand and declining oil production in that region. In addition, the supply of crude oil from western Canada is expected to increase, at least through 2011, primarily from existing and planned expansion projects within the Alberta oil sands. Firms involved in the production of heavy crude oil from Alberta oil sands projects have announced projects anticipated to be completed over the next 10 years totaling in excess of Cdn$55 billion. It is estimated that these projects could provide up to 1.5 million incremental barrels per day of production. Enbridge Partners believes that the combination of this increased production, together with the increased demand for crude oil in the Great Lakes and Midwest regions of the United States, is expected to result in increased deliveries on the Lakehead system in 2002 and beyond.

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Diversified Business and Geographical Presence: The East Texas system, together with the acquired systems, adds extensive natural gas gathering, treating, processing and transmission assets to Enbridge Partners, thereby significantly diversifying its business operationally across natural gas transmission and crude oil transportation, short and long-distance transmission/transportation systems and regulated and unregulated businesses. The acquired systems, which are located in some of the most significant areas of hydrocarbon supply and demand, also diversify Enbridge Partners' geographical presence.

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Low Cost Operations: The Enbridge/Lakehead system is among the lowest cost transporters of crude oil and liquid petroleum in North America, based on operating cost per barrel mile

transported. Furthermore, Enbridge Partners anticipates improving the operational and financial performance of the East Texas system and the acquired systems as it integrates these systems.

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Competitive Cost of Capital: Enbridge Partners' cost of capital, due to its partnership structure, helps it compete more effectively in acquiring assets and expanding its existing systems.

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Enhanced Access to Capital Markets: The institutional share/i-unit structure established in connection with this offering broadens Enbridge Partners' access to the equity capital markets.

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Experienced Management: Our management has substantial industry experience and a strong track record of growth through acquisitions, having completed over 30 acquisitions in the last five years.

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Beneficial Relationship with Enbridge Inc.: Enbridge Partners is an integral part of Enbridge Inc.'s goal of being a leading North American energy delivery company and is its primary vehicle for acquiring mature energy delivery assets in the United States.

Properties and Operations

        Enbridge Partners currently owns three pipeline transportation systems, known as the Lakehead system, the North Dakota system and the East Texas system. Enbridge Partners intends to acquire the Midcoast, Northeast Texas and South Texas systems, which are discussed under "— Systems to be Acquired from Enbridge Energy Company" beginning on page 91, at the same time that we close this offering.

Existing Systems

Lakehead System

        The Lakehead system in the United States and the Enbridge system in Canada, which is owned by Enbridge Pipelines Inc., a wholly-owned subsidiary of Enbridge Inc., together form the Enbridge/Lakehead system. This system, which spans 3,100 miles, is the longest liquid petroleum pipeline system in the world and transports crude oil and other liquid petroleum products for third parties. The Enbridge/Lakehead system is the primary transporter of crude oil from western Canada to the United States and the only pipeline that transports crude oil from western Canada to the Province of Ontario in eastern Canada.

        The Enbridge/Lakehead system serves all the major refining centers in the Great Lakes and Midwest regions of the United States and the Province of Ontario, and, through interconnects, the Patoka/Wood River pipeline hub and refining center in southern Illinois. Deliveries of crude oil and NGLs from the Lakehead system are made principally to refineries, either directly or through connecting pipelines of other companies, and serve as feedstocks for refineries and petrochemical plants.

        The Lakehead system is a FERC regulated interstate common carrier pipeline system. The Lakehead system spans approximately 1,900 miles, consisting of approximately 3,300 miles of pipe with diameters ranging from 12 inches to 48 inches, 63 pump station locations with a total of approximately 667,000 installed horsepower and 58 crude oil storage tanks with an aggregate working capacity of approximately 10 million barrels. The Enbridge/Lakehead system operates in a segregation, or batch, mode. This operating mode allows the Lakehead system to transport up to 43 different types of liquid hydrocarbons including light, medium and heavy crude oil (including bitumen, which is a naturally occurring tar-like mixture of hydrocarbons), condensate and NGLs. This flexibility increases utilization of the system and enhances Enbridge Partners' ability to serve its customers.

        Customers.    The Lakehead system operates under month-to-month transportation arrangements with its shippers. During 2001, 39 shippers tendered crude oil and liquid petroleum for delivery through the Lakehead system. These customers included integrated oil companies, major independent oil producers, refiners and marketers. Shipments by the top ten shippers on the Lakehead system accounted for approximately 89% of total system revenues during 2001. Revenue

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from BP Canada Energy Company and ExxonMobil Canada Energy accounted for approximately 22% and 18%, respectively, of total operating revenue generated by Enbridge Partners during 2001.

        Supply and Demand.    The Lakehead system is uniquely positioned to benefit from the improving supply and demand fundamentals in the markets that it serves.

        As the primary transporter of crude oil from western Canada, the Enbridge/Lakehead system is positioned to capitalize on the expected increase in production in this region. According to Alberta government statistics, the reserves of bitumen in the Province of Alberta that are recoverable using existing technology were approximately 175 billion barrels at the end of 2000. Of this amount, cumulative production of bitumen at the end of 2000 was approximately 3.3 billion barrels. To put the scale of the bitumen resource in perspective, the proved reserves of crude oil in Saudi Arabia at the end of 2000 stood at approximately 261.7 billion barrels. Similarly, the combined proved reserves of crude oil in Iran, Iraq and Kuwait stood at approximately 298.7 billion barrels. Proved reserves are reserves that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. According to industry sources, the economics of producing bitumen have improved substantially from the late 1970's when average production costs were nearly Cdn$35 per barrel (including extraction and upgrading costs). Recent industry estimates of the cost of producing upgraded crude from the bitumen deposits are less than Cdn$13 per barrel. Industry experts predict that improvements in technology and operating methods will result in production costs below Cdn$10 per barrel by 2004.

        Firms involved in the production of heavy crude oil from Alberta oil sands projects have announced projects anticipated to be completed over the next 10 years totaling in excess of Cdn$55 billion, which could provide up to 1.5 million incremental barrels per day of production. Based upon Enbridge Partners' survey of western Canadian crude oil producers, Enbridge Partners expects that the supply of western Canadian crude oil and liquid petroleum will be approximately 2.1 million barrels per day in 2002, approximately 2.2 million barrels per day in 2003 and approximately 2.3 million barrels per day in 2004.

        Although substantially all of the crude oil and liquid petroleum delivered through the Lakehead system originates in oilfields in western Canada, the Lakehead system also receives:

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U.S. and Canadian production at Clearbrook, Minnesota through a connection with the North Dakota system (please read "— North Dakota system" beginning on page 88);


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U.S. production at Lewiston, Michigan; and


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both U.S. and offshore production in the Chicago, Illinois area.

        Enbridge Partners estimates that from all these sources of supply, deliveries on the Lakehead system in 2002 will average approximately 1.3 million to 1.4 million barrels per day based on its most recent survey of crude oil shippers. Enbridge Partners further believes that the outlook for increased crude oil production in western Canada continues to be positive and will yield additional volumes. In this event, Enbridge Partners expects increased earnings contributions from this system. As an example, an incremental 100,000 barrels per day of deliveries on the Lakehead system to Chicago, Illinois would increase EBITDA by approximately $10-15 million. Enbridge Partners expects that increased capacity utilization on the Lakehead system will comprise a significant component of its future earnings growth. The timing of growth in the supply of western Canadian crude oil will depend upon the level of crude oil prices, oil drilling activity, the availability of financing and the completion of projects to produce heavy crude and synthetic oil from the Alberta oil sands.

        Despite the expected increase in the future supply of crude oil from western Canada, crude oil deliveries on the Lakehead system have declined from the prior year in each of the last three

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calendar years. This decline resulted primarily from decreased conventional crude oil production in western Canada, which, in turn, resulted primarily from reduced spending levels for exploration and development activities in western Canada. These reduced spending levels resulted primarily from low oil prices in 1998 and the first part of 1999. During 2001, crude oil production from western Canada continued to lag behind industry expectations and, despite strong crude oil prices, exploration and development activity focused on natural gas drilling rather than crude oil drilling due to more favorable natural gas prices.

        Enbridge Partners' ability to increase deliveries and to expand its Lakehead system in the future ultimately will depend on numerous factors, such as investment levels and related development activities by oil producers, which are affected by the level of crude oil prices and level of natural gas prices relative to crude oil prices and periodic maintenance turnarounds and other shut-downs at the producing plants that supply the Enbridge, and indirectly, the Lakehead, systems.

        Enbridge Partners also believes that crude oil demand will continue to increase in PADD II, which is the U.S. Government's designation for the area that includes the Great Lakes and Midwest regions of the United States, the primary markets that the Lakehead system serves. PADD II continues to be a premium market for western Canadian supply because many refineries in PADD II are designed to efficiently process crude oils similar to those produced in western Canada. According to the U.S. Department of Energy's Energy Information Administration, demand for crude oil in PADD II increased from approximately 2.75 million barrels per day in 1984 to approximately 3.4 million barrels per day in 2000. Over that same period, production of crude oil in PADD II decreased from over 1.0 million barrels per day to approximately 475,000 barrels per day in 2000. Enbridge Partners expects this gap between demand and production in PADD II to continue to widen, contributing to an increasing need to transport crude oil to PADD II.

        Despite other sources of supply, Enbridge Partners expects aggregate demand for crude oil and other liquid petroleum delivered by the Lakehead system to the Province of Ontario to remain relatively stable for the foreseeable future.

        In anticipation of the improving supply and demand fundamentals discussed above, a major expansion of the Enbridge/Lakehead system was commenced in 1999. This expansion, which we refer to as the Terrace expansion program, was undertaken at the request of the Canadian Association of Petroleum Producers, or "CAPP," and consists of a multi-phase expansion of both the Canadian and U.S. portions of the Enbridge/Lakehead system. Upon the completion of the Terrace expansion program, Enbridge Partners expects that approximately 350,000 barrels per day of incremental capacity will have been added to the system.

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Phase I of the Terrace expansion was completed in 1999 and included construction of new 36-inch diameter pipeline facility from Kerrobert, Saskatchewan to Clearbrook, Minnesota that added approximately 170,000 barrels per day of capacity to the Enbridge/Lakehead system. Enbridge Partners' share of the cost of Phase I was approximately $140 million.


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Phase II of the Terrace expansion was completed in early 2002. Although Phase II did not involve construction on the Lakehead system, the approximate 40,000 barrel per day increase in capacity of the Enbridge system is expected to benefit Enbridge Partners directly by accommodating additional deliveries on the Lakehead system from the Alberta oil sands.


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Phase III of the Terrace expansion is designed primarily to increase heavy oil transportation capacity on the Lakehead system between Clearbrook, Minnesota and Superior, Wisconsin by approximately 140,000 barrels per day. The estimated cost to Enbridge Partners of Phase III is approximately $210 million, and the new facilities are expected to be in service in 2003.

        In addition to the Terrace expansion program, CAPP has also requested that Enbridge Partners construct additional pipeline facilities at an estimated cost of $35 million to enhance market access

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to PADD II. Subject to receipt of necessary governmental approvals, Enbridge Partners expects these additional facilities to be in service in 2003.

        Please read "— Tariffs and Rate Cases — Lakehead System" on page 103 for a description of the increased transportation fees Enbridge Partners is allowed to collect in respect of these capital expenditures.

        Competition.    Because pipelines are the lowest cost method for intermediate and long haul movement of crude oil over land, the most significant existing competitors for the transportation of western Canadian crude oil are other pipelines. In 2001, the Enbridge system transported approximately 65% of total western Canadian crude oil production; the remainder was either refined in the provinces of Alberta or Saskatchewan, Canada or transported through other pipelines. Of the pipelines transporting western Canadian crude oil out of Canada, the Enbridge/Lakehead system provides approximately 75% of the total pipeline design capacity. The remaining 25% is shared by five other pipelines transporting crude oil to the Province of British Columbia, Canada and Washington, Montana and other states in the northwestern United States. Enbridge Partners believes that high capital requirements, environmental considerations and the difficulty in acquiring rights of way and related permits make it difficult for a competing pipeline system comparable in size and scope to the Enbridge/Lakehead system to be built in the foreseeable future.

        In the United States, the Lakehead system encounters competition from other crude oil and refined products pipelines and other modes of transportation delivering crude oil and refined products to the refining centers of Minneapolis-St. Paul, Chicago, Detroit and Toledo and the refinery market and pipeline hub in the Patoka/Wood River area of southern Illinois. In 2001, the Lakehead system transported approximately 54% of all crude oil deliveries into the Chicago area, approximately 86% of all crude oil deliveries into the Minneapolis-St. Paul area and approximately 62% of all crude oil deliveries to the Province of Ontario.

North Dakota System

        The North Dakota system, which Enbridge Partners acquired from Enbridge Inc. on May 18, 2001 for approximately $35 million, is a crude oil gathering and transportation system servicing the Williston Basin in North Dakota and Montana. The North Dakota system's crude oil gathering pipelines collect crude oil from points near producing wells in approximately 36 oil fields in North Dakota and Montana and receive Canadian crude oil via an interconnect with an Enbridge Inc. gathering system in the Province of Saskatchewan, Canada. Most deliveries are made at Clearbrook, Minnesota to the Lakehead system and to a third-party pipeline system. The North Dakota system includes approximately 330 miles of crude oil gathering lines connected to a transportation line that is approximately 620 miles long, with an aggregate working capacity of approximately 84,000 barrels per day. The North Dakota system also has 15 pump stations and 12 terminaling facilities with an aggregate working storage capacity of approximately 715,000 barrels.

        Customers.    Customers of the North Dakota system include producers of crude oil and purchasers of crude oil at the wellhead, such as marketers, that require crude oil gathering and transportation services. Producers range in size from small independent owner/operators to the largest integrated oil companies.

        Supply and Demand.    Like the Lakehead system, the North Dakota system depends upon demand for crude oil in the Great Lakes and Midwest regions of the United States.

        Competition.    Competitors of the North Dakota system include integrated oil companies, interstate and intrastate pipelines or their affiliates and other crude oil gatherers. Many crude oil producers in the oil fields served by the North Dakota system have alternative gathering facilities available to them or have the ability to build their own facilities.

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East Texas System

        The East Texas system, which Enbridge Partners acquired on November 30, 2001 for approximately $230 million, is a natural gas gathering, treating, processing and transmission system. The East Texas system purchases and/or gathers natural gas from the wellhead, delivers it to plants for treating and/or processing and to intrastate or interstate pipelines for transmission or to wholesale customers such as power plants, industrial customers and local distribution companies.

        Natural gas treating involves the removal of hydrogen sulfide, carbon dioxide, water and other substances from raw natural gas so that it will meet the standards for transportation on transmission pipelines. Natural gas processing involves the separation of raw natural gas into residue gas, which is the processed natural gas that ultimately is consumed by end users, and NGLs. NGLs separated from the raw natural gas are either sold and transported as NGL raw mix or further separated through a process known as fractionation and sold as their individual components, including ethane, propane, butanes and natural gasoline.

        The East Texas system includes approximately 2,000 miles of gathering and transmission pipelines. Approximately 400 million cubic feet of natural gas per day flows into the gathering pipelines from approximately 440 gathering points. The East Texas system also includes four treating facilities, with a combined capacity of approximately 595 million cubic feet of natural gas per day. Currently, two of these facilities are active and have a combined capacity of 415 million cubic feet per day. This system also includes three cryogenic gas processing plants with a combined capacity of approximately 375 million cubic feet per day, one of which is currently inactive.

        The East Texas system is operationally similar to, and is located adjacent to, the Northeast Texas system. Enbridge Partners believes there will be opportunities to capitalize on operational synergies that exist between these two systems. The combination of these two systems should result in a more favorable cost structure, improved facility optimization, additional opportunities to serve wholesale customers and producers, expansion of treating, compression and processing services and better utilization of the Midcoast system's trucking assets.

        Customers.    Customers of the East Texas system include both natural gas producers and purchasers. Purchasers include marketers and large users of natural gas, such as power plants, industrial facilities and local distribution companies. Producers served by the East Texas system consist primarily of medium to large independent operators. Enbridge Partners sells NGLs resulting from its processing activities to a variety of customers ranging from large petrochemical and refining companies to small regional retail propane distributors.

        Supply and Demand.    Supply for the East Texas system's services primarily depends upon the rate of depletion of natural gas reserves and the rate of drilling of new wells. Treating services also are affected by the level of impurities in the natural gas gathered. Demand for these services depends upon overall economic conditions and the prices of natural gas and NGLs.

        Competition.    Competitors of the East Texas system include interstate and intrastate pipelines or their affiliates and other natural gas gatherers that gather, treat, process and market natural gas and/or NGLs and which vary widely in size. Competition for these services varies based upon the location of gathering, treating and processing facilities. Most natural gas producers and owners have alternate gathering, treating and processing facilities available to them. In addition, they have other alternatives such as building their own gathering facilities or in some cases selling their natural gas supplies without treating and processing. In addition to location, competition for the East Texas system's services also varies based upon pricing arrangements and reputation.

        Competition for customers in the marketing of residue gas is based primarily upon the price of the delivered gas, the services offered by the seller and the reliability of the seller in making

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deliveries. Residue gas also competes on a price basis with alternative fuels such as oil and coal, especially for customers that have the capability of using these alternative fuels, and on the basis of local environmental considerations. Competition in the marketing of NGLs comes from other NGL marketing companies, producers/traders, chemical companies and other asset owners.

Systems to be Acquired from Enbridge Energy Company

Midcoast System

        The Midcoast system, which was acquired by Enbridge Energy Company on May 11, 2001 for approximately $625 million, consists of natural gas gathering, treating, processing, transmission and marketing assets. The Midcoast system's business is divided among:

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natural gas transmission and wholesale customer pipelines;


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natural gas gathering, treating and processing systems;


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trucking operations; and


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marketing activities.

        The Midcoast system includes four FERC regulated interstate natural gas transmission pipeline systems, 20 intrastate natural gas transmission and wholesale customer pipeline systems and 30 gathering and processing/treating systems, including three processing and two treating plants, collectively representing approximately 4,000 miles of pipeline with an aggregate throughput capacity of over four billion cubic feet of natural gas per day. The Midcoast system also includes 98 trucks and trailers and 45 railcars used for transporting NGLs, crude oil and carbon dioxide. The Midcoast system is located in the Gulf Coast and Mid-Continent regions of the United States.

        Since the acquisition of the Midcoast system, subsidiaries of Enbridge Energy Company have completed approximately $83.6 million in enhancement capital expenditures, which include:

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$49 million to construct the BamaGas pipeline in Alabama;


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$6 million to acquire an additional natural gas processing facility in Texas;


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$16 million in other enhancement capital expenditures; and


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$12.6 million to acquire compression assets on the Northeast Texas system that were previously under lease.

        In addition, Enbridge Energy Company plans to acquire an additional $8.4 million in compression assets on the Northeast Texas system that are currently under lease. The $929 million purchase price includes the purchase of these additional compression assets.

        Transmission and Wholesale Customer Pipelines.    The Midcoast system's transmission pipeline systems include the following:

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the MidLa Pipeline, AlaTenn Pipeline, UTOS Pipeline and Kansas Pipeline systems, which are FERC regulated interstate pipelines; and


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the BamaGas Pipeline and Mid-Louisiana Gas Transmission Pipeline systems, which are intrastate pipelines.

        Each of these pipeline systems typically consists of a natural gas transmission pipeline as well as various interconnected pipelines that serve wholesale customers. These pipelines typically interconnect with, and receive natural gas from, gathering systems and other transmission pipelines.

        Customers.    The Midcoast system serves customers in Alabama, Kansas, Louisiana, Mississippi, Missouri and Tennessee. Customers include large users of natural gas, such as power

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plants, industrial facilities, local distribution companies, large consumers seeking an alternative to their local distribution company, and shippers of natural gas, such as natural gas producers and marketers.

        Supply and Demand.    Because the Midcoast system's pipelines generally serve different geographical areas, supply and demand vary in each market.

        Enbridge Partners believes that demand for natural gas in the areas served by the Midcoast system generally will remain strong as a result of these systems being located in areas where industrial, commercial and/or residential growth is occurring. The greatest demand for natural gas transmission services in the markets served by the Midcoast system's transmission and wholesale customer pipelines occurs in the winter months.

        The table below indicates the capacity in million cubic feet per day of the Midcoast system's transmission and wholesale customer pipelines with firm transportation contracts as of July 2, 2002 and the amount of capacity that is reserved under those contracts on a firm basis as of that date.

	Capacity MMcf/day	Percentage Reserved Under Contract As Of July 2, 2002
Kansas Pipeline	160	97	%
MidLa Pipeline	200	89
AlaTenn Pipeline	200	74
BamaGas Pipeline	450	58

        The Kansas Pipeline system has 83% of its capacity reserved under firm transportation contracts extending through 2009 and an additional 13% of its capacity under contracts extending through 2017. The remaining capacity of the Kansas Pipeline system is either unreserved or reserved under contracts that will terminate before 2009.

        The MidLa, AlaTenn and BamaGas pipelines primarily serve industrial corridors and power plants in Louisiana, Alabama and Tennessee. Industries in the area include energy intensive segments of the petrochemical and pulp and paper industries. The BamaGas pipeline was completed in the first quarter of 2002 in northern Alabama, where it serves a power plant recently placed in service and is expected to serve another plant proposed to be constructed. This pipeline is contiguous with the AlaTenn pipeline and a third party pipeline, allowing for operational flexibility as natural gas can flow between BamaGas and either of the other two systems. Enbridge Partners anticipates marketing the unused capacity on these pipelines under both short-term firm and interruptable transportation contracts and long-term firm transportation contracts. These pipelines are located in areas where opportunities exist to serve new industrial facilities and to make delivery interconnects to alleviate capacity constraints on other non-company owned pipeline systems. In addition to their current excess capacity, the AlaTenn pipeline and the MidLa pipeline have contracts representing 10% and 34%, respectively, of their capacity that are expected to expire before the end of 2002. In the case of the MidLa pipeline, as of July 2, 2002, approximately 45% of its capacity is under contract to affiliated entities. Enbridge Partners anticipates that these contracts will be replaced over time with third-party volumes.

        The UTOS Pipeline system is a FERC regulated offshore pipeline system with a capacity of 1.2 billion cubic feet of natural gas per day that transmits natural gas from offshore platforms to other pipelines onshore for further delivery. While the UTOS Pipeline system has no capacity reservations, the average daily throughput in the first quarter of 2002 was 282 million cubic feet of natural gas per day. Enbridge Partners expects additional sources of offshore natural gas supply to connect to the UTOS Pipeline system in 2002 and 2003.

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        The Mid-Louisiana Gas Transmission system is an intrastate natural gas pipeline system that interconnects facilities owned by major industrial customers to interstate natural gas pipeline systems. In addition to providing transmission services to large natural gas consumers and customers, the system is used by the Midcoast system's marketing operations to facilitate the marketing and transmission of natural gas to natural gas consumers. The Mid-Louisiana Gas Transmission system has no capacity reservations. In 2001, this system averaged throughput of 75 million cubic feet of natural gas per day. Further, this system is favorably positioned to grow as marketing and transmission opportunities emerge as a result of anticipated growth in the industrial consumer base in the Baton Rouge, Louisiana area.

        Competition.    Because pipelines are generally the only practical mode of transportation for natural gas over land, the most significant competitors of the Midcoast system's transmission and wholesale customer pipelines are other pipelines. Pipelines typically compete with each other based on location, capacity, price and reliability. Many of the large wholesale customers served by the Midcoast system have multiple pipelines connected or adjacent to their facilities. Accordingly, many of these customers have the ability to purchase natural gas directly from a number of pipelines and/or third parties that may hold capacity on the various pipelines.

        Natural Gas Gathering and Processing Systems.    Like the East Texas system, the Midcoast system purchases and/or gathers natural gas from the wellhead and delivers it to plants for treating and/or processing. Most treated natural gas and residue gas resulting from processing is delivered to intrastate and interstate transmission lines for transmission. Small amounts of residue gas are delivered to wholesale customers. Like the East Texas system, the NGLs separated from raw natural gas during processing are either sold and transported as NGL raw mix or further separated through fractionation and sold as components. Most of the Midcoast system's natural gas gathering assets are located in Texas and Oklahoma, with additional facilities in Mississippi, Louisiana, Kansas and Alabama.

        Customers.    Most of the Midcoast gathering system's customers are natural gas producers. The system also serves purchasers, such as marketers and natural gas consumers. NGLs are sold to a variety of customers ranging from large petrochemical and refining companies to small regional retail propane distributors.

        Supply and Demand.    Supply for the Midcoast system's services is affected by the same factors that affect the East Texas system's supply, such as the rate of drilling of new wells and depletion of reserves. Because of the geographic diversity of its gathering assets, the Midcoast system's natural gas gathering, processing and transmission assets are not dependent on a single supply or production source. Demand for these services largely is dependent upon overall economic conditions and the prices of natural gas and NGLs.

        Enbridge Partners intends to expand the Midcoast system's natural gas gathering and processing services through a combination of internal growth and acquisitions, which should provide exposure to incremental supplies of natural gas at the wellhead, increase opportunities to serve additional wholesale customers and allow expansion of the treating and processing businesses.

        Competition.    Competition in the markets served by the Midcoast gathering system is generally similar to that in the markets served by the East Texas system.

        Trucking Operations.    The Midcoast system's trucking operations transport NGLs, crude oil and carbon dioxide by truck and railcar from wellheads to treating, processing and fractionation facilities and to wholesale customers, such as distributors, refiners and chemical facilities. In addition, the Midcoast system's trucking operations markets these products. These services are provided using 98 trucks and trailers and 45 rail cars used for transporting NGLs, crude oil and

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carbon dioxide, product treating and handling equipment and over 400,000 gallons of NGL storage facilities.

        Customers.    Most of the customers of the Midcoast system's crude oil and NGL trucking operations are wholesale customers, such as refineries and propane distributors. The Midcoast system's trucking operations also market products to wholesale customers such as refineries and petrochemical plants.

        Supply and Demand.    The areas served by the Midcoast system's trucking operations are geographically diverse, and the forces that affect the supply of the products transported vary by region. The supply of these products is affected by crude oil and natural gas prices and production levels. The demand for trucking operations are affected by the demand for NGLs and crude oil by large industrial and similar customers in the regions they serve.

        Competition.    The Midcoast system's trucking operations have a number of competitors, including other trucking and railcar operations, pipelines, and, to a lesser extent, marine transportation and alternative fuels. In addition, the marketing segment of the Midcoast system's trucking operations has numerous competitors, including marketers of all types and sizes, affiliates of pipelines and independent aggregators.

        Gas Marketing.    The Midcoast system's natural gas marketing operation provides natural gas supply, transportation, balancing and sales services to producers and wholesale customers on the Midcoast system's gathering, transmission and wholesale customer pipelines as well as interconnected third-party pipelines. In general, the Midcoast system's marketing operation functions by making natural gas purchases from producers connected to its gathering systems and from other producers and marketers and then making natural gas sales to wholesale customers on its transmission and wholesale customer pipelines. The marketing operation also arranges transportation for wholesale customers.

        In addition to providing marketing for the Midcoast system, the marketing operation currently provides marketing services for the Northeast Texas and South Texas systems. Enbridge Partners anticipates that, upon the acquisition of the Midcoast system, the marketing operation's scope of responsibility would be expanded to include providing marketing services for the East Texas system. Enbridge Partners anticipates that the Northeast Texas, South Texas and East Texas systems will be combined into the marketing operations' existing portfolios and a significant amount of purchases from marketers will be replaced by purchases directly from producers on these systems.

        Natural gas purchased and sold by the Midcoast system's marketing operation is most typically priced based upon a published daily or monthly price index. Sales to wholesale customers incorporate a pass-through charge for costs of transportation and generally include an additional margin.

        The Midcoast system's marketing operation has numerous competitors, including the large marketing companies, marketing affiliates of pipelines, major oil and gas producers, independent aggregators and regional marketing companies.

Northeast Texas System

        The Northeast Texas system, which was acquired by Enbridge Energy Company on March 1, 2002 for approximately $178 million, is a natural gas gathering system located just north of and adjacent to the area served by Enbridge Partners' East Texas system. A substantial portion of the Northeast Texas system's pipeline infrastructure and Enbridge Partners' East Texas system previously were owned and operated as a single system. Enbridge Energy Company recently acquired $12.6 million of compression assets on the Northeast Texas system that were previously

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under lease. In addition, Enbridge Energy Company plans to acquire an additional $8.4 million in compression assets on the Northeast Texas system that are currently under lease. The acquisition of these compression assets is included in the $929 million purchase price for the acquired systems.

        Like the East Texas and Midcoast systems, the Northeast Texas system purchases natural gas directly from producers and/or provides natural gas gathering, treating and processing services to intrastate and interstate pipelines and other owners of natural gas. The Northeast Texas system is capable of handling sour gas, which has a high hydrogen sulfide and/or carbon dioxide and water content and which requires specialized treating processes before it can be delivered for transportation on downstream pipelines.

        The Northeast Texas system includes natural gas processing operations where NGLs are separated from raw natural gas and either sold and transported as NGL raw mix or further separated through fractionation into ethane, propane, butane and natural gasoline and sold as components. Residue gas is delivered to wholesale customers and to interstate and intrastate pipelines.

        The Northeast Texas system includes approximately 1,200 miles of natural gas gathering pipelines and seven natural gas treating plants with an aggregate treating capacity of 385 million cubic feet per day. These treating plants are capable of producing approximately 1,200 long tons of sulfur per day. Five of these seven treating plants are currently active, representing a treating capacity of 310 million cubic feet per day. The Northeast Texas system also includes five natural gas processing plants with a combined capacity of 215 million cubic feet per day, three of which are currently active, and represent a processing capacity of 140 million cubic feet per day, and two nitrogen rejection plants with a capacity of 75 million cubic feet per day. Approximately 180 million cubic feet of natural gas per day flows into the gathering pipelines from approximately 525 gathering points.

        As discussed under "— Existing Systems — East Texas System — Supply and Demand" on page 92, Enbridge Partners expects to realize financial and operational synergies following its acquisition of the Northeast Texas system, as it is adjacent to the East Texas system.

        Customers.    Customers of the Northeast Texas system are similar to those of the East Texas and Midcoast gas gathering, treating and processing systems. Unlike the East Texas system, the Northeast Texas system delivers natural gas to interstate or intrastate pipelines.

        Supply and Demand.    The Northeast Texas system's supply and demand is affected by the same factors that affect the East Texas and Midcoast gas gathering, treating and processing systems.

        Competition.    Competition for the Northeast Texas system is generally similar to that of the East Texas and Midcoast gas gathering, treating and processing systems. However, competition is more limited due to the infrastructure required to treat sour gas.

South Texas System

        The South Texas system, which was acquired by Enbridge Energy Company on January 2, 2002 for approximately $9 million, is a natural gas gathering and treating system that purchases and/or gathers natural gas at the wellhead, delivers it to plants for treating and/or processing and then delivers it to interstate and intrastate transmission pipelines for transmission. The South Texas system currently includes approximately 175 miles of natural gas gathering pipelines, one active hydrogen sulfide treating facility and one inactive natural gas processing plant. Approximately 30 million cubic feet of natural gas per day flows into the gathering pipelines from approximately 40 gathering points.

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        In connection with the acquisition of the South Texas system, Enbridge Partners will obtain the right, under asset purchase agreements with each of Transcontinental Gas Pipe Line Corporation, Williams Field Services and Goebel Gathering Company, to acquire for approximately $41 million a 500 mile natural gas transmission pipeline system that interconnects with the South Texas gathering and treating system. These assets consist of two mainlines that run from South Texas near Laredo and McAllen to a point of interconnection in Wharton County, Texas and a 38-mile lateral line connecting the two mainlines. The closing of this acquisition is subject to, among other things, certain regulatory approvals.

        Customers.    Customers of the South Texas system are similar to those of the East Texas and Northeast Texas systems and the gathering and processing segment of the Midcoast system. The South Texas system does not make deliveries to wholesale customers.

        Supply and Demand.    Supply of natural gas for the South Texas system largely is affected by the rate of drilling of new wells, rate of depletion of natural gas reserves and competitively priced transportation rates. In order to maintain throughput on the South Texas system, Enbridge Partners must access new natural gas supplies to offset the natural decline in reserves as fields currently served are produced. The South Texas system includes an idle processing plant that could be restarted or relocated, and opportunities exist for the acquisition of other treating facilities in the general area of the South Texas system.

        The transmission pipelines that Enbridge Partners has the right to acquire are large diameter pipelines which traverse some of the most prolific onshore producing areas in South Texas. The terms of the acquisition also provide for the seller to enter into a contract under which it will pay for transportation services on a substantial minimum volume. Other opportunities that exist include opportunities to acquire adjacent gathering systems to gain additional exposure to incremental wellhead supply and expansion of gathering, compression and processing services to producer customers and marketers not currently served.

        Competition.    Competition experienced by the South Texas system is generally similar to that of the East Texas and Northeast Texas systems and the gathering and processing business of the Midcoast system.

Title to Properties

        Enbridge Partners currently conducts business and owns properties located in 10 states: Illinois, Indiana, Louisiana, Michigan, Minnesota, Montana, New York, North Dakota, Texas and Wisconsin. In general, the Lakehead, North Dakota and East Texas systems are located on land owned by others and are operated under perpetual easements and rights of way, licenses or permits that have been granted by private land owners, public authorities, railways or public utilities. The pumping stations, tanks, terminals and certain other facilities of these systems are located on land that is owned by Enbridge Partners, except for five pumping stations that are situated on land owned by others and used by Enbridge Partners under easements or permits. An affiliate of Enbridge Energy Company acquired parcels of property for the benefit of Enbridge Partners to allow for the construction of Phase II of the Terrace expansion program. The affiliate is continuing to sell these parcels to third parties while retaining an easement for the benefit of Enbridge Partners.

        Substantially all of the Lakehead system assets are subject to a first mortgage securing indebtedness of Enbridge Energy, Limited Partnership, a principal operating subsidiary of Enbridge Partners.

        Following its acquisition of the Midcoast, Northeast Texas and South Texas systems, Enbridge Partners will conduct business and own properties in eight additional states: Alabama, Alaska, Arkansas, Kansas, Mississippi, Missouri, Oklahoma and Tennessee. In general, like the Lakehead,

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North Dakota and East Texas systems, the acquired systems are located on land owned by others and are operated under perpetual easements and rights of way, licenses or permits that have been granted by private land owners, public authorities, railways or public utilities.

        Some of the easements, rights-of-way, licenses and permits that will be acquired by Enbridge Partners through its acquisition of the acquired systems may require the consent of third parties, which in some instances is a governmental entity. Enbridge Partners believes that it has obtained or will obtain sufficient third-party consents, permits, and authorizations for the transfer of the acquired systems necessary for it to operate them in its business in all material respects as described in this prospectus. With respect to any consents, permits, or authorizations that have not been obtained, Enbridge Partners believes that these consents, permits or authorizations will be obtained after the closing of this offering, or that the failure to obtain these consents, permits or authorizations will not have a material adverse effect on the operation of the acquired systems in its business.

        Enbridge Energy Company has agreed under the contribution agreement to indemnify Enbridge Partners for failure to have defensible title to certain of the assets included in the acquired systems and for failure to obtain certain regulatory certificates, consents and permits necessary to the conduct of business relating to the acquired systems.

        In connection with the acquisition of the acquired systems under the contribution agreement, certain filings with respect to title records will not be made prior to the closing of this offering. Enbridge Partners or its subsidiaries will make these filings upon the closing of this offering or as soon as practicable thereafter. Although title to these properties is subject to encumbrances in some cases, such as customary interests generally retained in connection with acquisition of real property, liens that can be imposed in some jurisdictions for government-initiated action to clean up environmental contamination, liens for current taxes and other burdens, and easements, restrictions, and other encumbrances to which the underlying properties were subject at the time of acquisition by Enbridge Energy Company or Enbridge Partners and its subsidiaries, Enbridge Partners believes that none of these burdens should materially detract from the value of these properties or from its interest in these properties or should materially interfere with their use in the operation of Enbridge Partners' business.

Regulation

Regulation by the FERC of Interstate Common Carrier Liquids Pipelines

        The Lakehead and North Dakota systems are interstate common carrier liquids pipelines subject to regulation by the FERC under the Interstate Commerce Act, which we refer to as the "ICA." As interstate common carriers, these pipelines provide service to any shipper who requests transportation services, provided that products tendered for transportation satisfy the conditions and specifications contained in the applicable tariff. The ICA requires Enbridge Partners to maintain tariffs on file with the FERC that set forth the rates it charges for providing transportation services on its interstate common carrier pipelines as well as the rules and regulations governing these services.

        The ICA gives the FERC the authority to regulate the rates Enbridge Partners charges for service on its interstate common carrier pipelines. The ICA requires, among other things, that such rates be "just and reasonable" and nondiscriminatory. The ICA permits interested persons to challenge new or proposed changes to existing rates and authorizes the FERC to suspend the effectiveness of such rates for a period of up to seven months and to order a hearing concerning such rates. If, upon completion of an investigation, the FERC finds that the new or changed rate is unlawful, it is authorized to require the carrier to refund the revenues in excess of the prior tariff during the term of the investigation. The FERC also may investigate, upon complaint or on its own motion, rates that are already in effect and may order a carrier to change its rates prospectively.

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Upon an appropriate showing, a shipper may obtain reparations for damages sustained for a period of up to two years prior to the filing of a complaint.

        On October 24, 1992, Congress passed the Energy Policy Act of 1992, which we refer to as the "Energy Policy Act." The Energy Policy Act deemed petroleum pipeline rates that were in effect for the 365-day period ending on the date of enactment and had not been subject to complaint, protest or investigation to be just and reasonable under the ICA (i.e., "grandfathered"). The Energy Policy Act also limited the circumstances under which a complaint can be made against such grandfathered rates. In order to challenge grandfathered rates, a party would have to show that it was previously contractually barred from challenging the rates or that the economic circumstances or the nature of service underlying the rate had substantially changed or that the rate was unduly discriminatory or preferential. These grandfathering provisions and the circumstances under which they may be challenged have received only limited attention from FERC, causing a degree of uncertainty as to their application and scope. The North Dakota system is largely covered by the grandfathering provisions of the Energy Policy Act. The Lakehead system is not covered by the grandfathering provisions of the Energy Policy Act.

        The Energy Policy Act required the FERC to issue rules establishing a simplified and generally applicable ratemaking methodology for petroleum pipelines, and to streamline procedures in petroleum pipeline proceedings. The FERC responded to this mandate by issuing Order No. 561, which, among other things, adopted an indexing rate methodology for petroleum pipelines. Under the regulations, which became effective January 1, 1995, petroleum pipelines are able to change their rates within prescribed ceiling levels that are tied to an inflation index. Rate increases made within the ceiling levels may be protested, but such protests must show that the rate increase resulting from application of the index is substantially in excess of the pipeline's increase in costs. If the indexing methodology results in a reduced ceiling level that is lower than a pipeline's filed rate, Order No. 561 requires the pipeline to reduce its rate to comply with the lower ceiling. A pipeline may not be required to reduce its rate below the level grandfathered under the Energy Policy Act. Under Order No. 561, a pipeline must, as a general rule, utilize the indexing methodology to change its rates. The FERC, however, retained cost-of-service ratemaking, market-based rates and settlement as alternatives to the indexing approach, which alternatives may be used in certain specified circumstances.

        Enbridge Partners believes that the rates charged for transportation services on its interstate common carrier liquids pipelines are just and reasonable under the ICA. However, because the rates that Enbridge Partners charges are subject to review upon an appropriately supported complaint, Enbridge Partners cannot predict what rates it will be allowed to charge in the future for service on its interstate common carrier liquids pipelines. Furthermore, because rates charged for transportation services must be competitive with those charged by other transporters, the rates set forth in Enbridge Partners' tariffs will be determined based on competitive factors in addition to regulatory considerations.

Regulation by the FERC of Interstate Natural Gas Pipelines

        Enbridge Partners' AlaTenn Pipeline, Mid-Louisiana Pipeline, Kansas Pipeline and UTOS Pipeline systems are interstate natural gas pipelines regulated by the FERC under the Natural Gas Act, or "NGA," and the Natural Gas Policy Act, or "NGPA." Each system operates under separate FERC-approved tariffs that establish rates, terms and conditions under which each system provides service to its customers. In addition, the FERC's authority over natural gas companies that provide natural gas pipeline transportation services in interstate commerce includes:

•

the certification and construction of new facilities;



•

the extension or abandonment of services and facilities;

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•

the maintenance of accounts and records;



•

the acquisition and disposition of facilities;



•

the initiation and discontinuation of services; and



•

various other matters.

        Tariff changes can only be implemented upon approval by the FERC. There are two primary methods by which the rates, terms and conditions of service of an interstate pipeline may be changed. Under the first method, the company voluntarily seeks a tariff change by making a tariff filing with the FERC which justifies the proposed tariff change and provides notice, generally 30 days notice, to the appropriate parties. If the FERC determines that a proposed change may not be just and reasonable as required by the NGA, then the FERC may suspend such change for up to five months and set the matter for an administrative hearing. Subsequent to any suspension period ordered by the FERC, the proposed change may be placed into effect by the company pending final FERC approval. In most cases, a proposed rate increase is placed into effect before a final FERC determination on such rate increase, and the proposed increase is collected subject to refund (plus interest). Under the second method, the FERC may, on its own motion or based on a complaint, initiate a proceeding seeking to compel the company to change its rates, terms and/or conditions of service. If the FERC determines that the existing rates, terms and/or conditions of service are unjust, unreasonable, unduly discriminatory or preferential, then any rate reduction or change that it orders generally will be effective prospectively from the date of the FERC order requiring this change.

        Commencing in 1992, the FERC issued Order No. 636 and subsequent related orders, which we refer to collectively as "Order No. 636." Order No. 636 requires interstate pipelines to provide transportation and storage services separate, or "unbundled," from the pipelines' sales of natural gas. Also, Order No. 636 requires pipelines to provide open-access transportation and storage services on a basis that is equal for all shippers. The FERC has stated that it intends for Order No. 636 to foster increased competition within all phases of the natural gas industry. The courts largely have affirmed the significant features of Order No. 636 and numerous related orders pertaining to individual pipelines, although the FERC continues to review and modify its open access regulations.

        In 2000, the FERC issued Order No. 637 and subsequent orders, which we refer to collectively as "Order No. 637." Order No. 637 imposes a number of additional reforms designed to enhance competition in natural gas markets. Among other things, Order No. 637 revised the FERC pricing policy by waiving price ceilings for short-term released capacity for a two-year period ending September 30, 2002, and effected changes in the FERC regulations relating to scheduling procedures, capacity segmentation, pipeline penalties, rights of first refusal and information reporting. The U.S. Court of Appeals for the District of Columbia Circuit recently issued a decision that either upheld or declared premature for review most major aspects of Order No. 637. Order No. 637 required interstate natural gas pipelines to implement the policies mandated by the order through individual compliance filings. The FERC has now ruled on a number of the individual compliance filings, although its decisions in such proceedings remain subject to the outcome of pending rehearing requests and possible court appeals. Enbridge Partners cannot predict whether the FERC's actions will achieve the goal of increasing competition in markets in which it competes. However, Enbridge Partners does not believe that the effect on the operations of its interstate natural gas pipelines or its other pipeline operations, which indirectly are affected by the extent and nature of the FERC's jurisdiction over activities in interstate commerce, will be affected by any action taken materially differently than other companies with whom it competes.

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        In addition to its jurisdiction over the UTOS system under the NGA and the NGPA, the FERC also has jurisdiction over the UTOS system and Enbridge Partners' offshore gathering systems under the Outer Continental Shelf Lands Act, or "OCSLA." The OCSLA requires that all pipelines operating on or across the outer continental shelf, which we refer to as the "OCS," provide open-access, non-discriminatory transportation service on their systems. In 2000, the FERC issued Order Nos. 639 and 639-A, which we refer to collectively as "Order No. 639," which required "gas service providers" operating on the OCS to make public their rates, terms and conditions of service. The purpose of Order No. 639 was to provide regulators and other interested parties with sufficient information to detect and to remedy discriminatory conduct by such service providers. In a recent decision, the U.S. District Court for the District of Columbia Circuit permanently enjoined the FERC from enforcing Order No. 639, on the basis that the FERC did not possess the requisite rule-making authority under the OCSLA for issuing Order No. 639. The FERC's appeal of the court's decision is pending in the U.S. Court of Appeals for the District of Columbia Circuit. Enbridge Partners cannot predict the outcome of this appeal, nor can it predict what further action the FERC will take with respect to this matter.

        On September 27, 2001, the FERC issued a Notice of Proposed Rulemaking in Docket No. RM01-10. The proposed rules would expand the FERC's current standards of conduct to include a regulated transmission provider and all of its energy affiliates. It is not known whether the FERC will issue a final rule in this docket and, if it does, whether Enbridge Partners could, as a result, incur increased costs and increased difficulty in its operations.

        Additional proposals and proceedings that might affect the natural gas industry are pending before Congress, the FERC and the courts. The natural gas industry historically has been very heavily regulated; therefore, there is no assurance that the less stringent regulatory approach recently pursued by the FERC and Congress will continue.

Allowance for Income Taxes in Rates

        In a 1995 decision involving Enbridge Partners' Lakehead system, the FERC partially disallowed the inclusion of income taxes in the cost of service for the Lakehead system. Subsequent appeals of this ruling were resolved by settlement and were not adjudicated. In another FERC proceeding involving SFPP, L.P., an unrelated pipeline limited partnership, the FERC held that the limited partnership may not claim an income tax allowance for income attributable to non-corporate partners, both individuals and other entities. SFPP and other parties to the proceeding have appealed the FERC's orders to the U.S. Court of Appeals for the District of Columbia Circuit, which is holding the appeals in abeyance while the FERC resolves requests for rehearing of its orders. The effect of the FERC's policy stated in the Lakehead proceeding (and the results of the ongoing SFPP litigation regarding that policy) on Enbridge Partners is uncertain. Parties may challenge rates on Enbridge Partners' common carrier interstate liquids pipelines or its interstate natural gas pipelines on the basis that its rates are not just and reasonable because the level of income tax allowance in its rates exceeds that permitted under the Lakehead and/or SFPP decisions. While it is not possible to predict the likelihood that parties will assert such challenges or that such challenges would succeed, if such challenges were to be raised and succeeded, application of the Lakehead/SFPP and related rulings would reduce permissible income tax allowance in any cost-of-service based rate, to the extent income tax is attributed to partnership interests held by individual partners rather than corporations.

Intrastate Pipeline Regulation

        Enbridge Partners' intrastate liquids and natural gas pipeline operations generally are not subject to rate regulation by the FERC, but they are subject to regulation by various agencies of the states in which they are located. However, to the extent that its intrastate pipeline systems transport

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natural gas in interstate commerce, the rates, terms and conditions of such transportation service are subject to FERC jurisdiction under Section 311 of the NGPA, which regulates, among other things, the provision of transportation services by an intrastate natural gas pipeline on behalf of a local distribution company or an interstate natural gas pipeline. Most states have agencies that possess the authority to review and authorize natural gas transportation transactions and the construction, acquisition, abandonment and interconnection of physical facilities. Some states also have state agencies that regulate transportation rates, service terms and conditions and contract pricing to ensure their reasonableness and to ensure that the intrastate pipeline companies that they regulate do not discriminate among similarly situated customers.

Conversions of Various Enbridge Partners Pipeline Companies

        In connection with the acquisition of the acquired systems, the entities that own the AlaTenn Pipeline and MidLa Pipeline will be converted from corporations into limited liability companies or limited partnerships. These conversions will occur under statutes that provide that the converted entity continues its legal existence as the same entity following conversion and continues to hold all of the same rights and obligations that it held prior to the conversion. The FERC generally has determined that a pipeline owner that converts from a corporation into a limited liability company or a partnership in accordance with the appropriate statute is not required to seek FERC approval for the conversion. Rather, the FERC typically has recognized the converted entity by approving a new tariff that reflects the entity's new name and organizational form. The FERC has, however, indicated that if the conversion has potential rate or service implications, it could condition its approval of the new tariff in a manner that addresses any FERC rate or service concern. To date, we are not aware that the FERC has ever so conditioned any order approving the new tariff of a converted entity. However, in connection with the conversions of the entities that own the AlaTenn Pipeline and the MidLa Pipeline, the FERC could condition its approval on the satisfaction of conditions that the FERC determines are necessary to satisfy rate or service issues, such as the elimination by each of the allowance for income taxes in their respective rates.

        In addition, Enbridge Pipelines (Alabama Intrastate) and Enbridge Pipelines (Lousiana Intrastate), which are converting from corporations into limited liability companies, could be required to reduce the rates that they charge for transactions under Section 311 of the NGPA, which are subject to FERC jurisdiction. Such rates can only be changed in the context of a future rate adjustment before the FERC.

        Enbridge Partners cannot predict what effect, if any, these pre-acquisition conversions will have on the rates the affected pipelines will be allowed to charge in the future.

Gathering Pipeline Regulation

        Section 1(b) of the NGA exempts natural gas gathering facilities from the jurisdiction of the FERC under the NGA. Enbridge Partners owns certain natural gas pipelines that it believes meet the traditional tests the FERC has used to establish a pipeline's status as a gatherer not subject to the FERC jurisdiction. State regulation of gathering facilities generally includes various safety, environmental and, in some circumstances, nondiscriminatory take requirements, but generally does not entail rate regulation. Natural gas gathering may receive greater regulatory scrutiny at both the state and federal levels now that the FERC has taken a more light-handed approach to regulation of the gathering activities of interstate pipeline transmission companies and a number of such companies have transferred gathering facilities to unregulated affiliates. For example, the Texas Railroad Commission has approved changes to its regulations governing transportation and gathering services performed by intrastate pipelines and gatherers, which prohibit such entities from unduly discriminating in favor of their affiliates. Many of the producing states have adopted some form of complaint-based regulation that generally allows natural gas producers and shippers to file

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complaints with state regulators in an effort to resolve grievances relating to natural gas gathering access and rate discrimination. Enbridge Partners' gathering operations could be adversely affected should they be subject in the future to the application of state or federal regulation of rates and services. Enbridge Partners' gathering operations also may be or become subject to safety and operational regulations relating to the design, installation, testing, construction, operation, replacement and management of gathering facilities. Additional rules and legislation pertaining to these matters are considered or adopted from time to time. Enbridge Partners cannot predict what effect, if any, such changes might have on its operations, but the industry could be required to incur additional capital expenditures and increased costs depending on future legislative and regulatory changes.

Sales of Natural Gas, Crude Oil, Condensate and Natural Gas Liquids

        The price at which Enbridge Partners sells natural gas currently is not subject to federal regulation and, for the most part, is not subject to state regulation. Enbridge Partners' sales of natural gas are affected by the availability, terms and cost of pipeline transportation. As noted above, the price and terms of access to pipeline transportation are subject to extensive federal and state regulation. The FERC is continually proposing and implementing new rules and regulations affecting those segments of the natural gas industry, most notably interstate natural gas transmission companies, that remain subject to the FERC's jurisdiction. These initiatives also may affect the intrastate transportation of natural gas under certain circumstances. The stated purpose of many of these regulatory changes is to promote competition among the various sectors of the natural gas industry and these initiatives generally reflect more light-handed regulation. Enbridge Partners cannot predict the ultimate impact of these regulatory changes to its natural gas marketing operations, and Enbridge Partners notes that some of the FERC's more recent proposals may adversely affect the availability and reliability of interruptible transportation service on interstate pipelines. Enbridge Partners does not believe that it will be affected by any such FERC action materially differently than other natural gas marketers with whom it competes.

        Enbridge Partners' sales of crude oil, condensate and natural gas liquids currently are not regulated and are made at market prices. In a number of instances, however, the ability to transport and sell such products are dependent on pipelines whose rates, terms and conditions of service are subject to the FERC's jurisdiction under the ICA. Certain regulations implemented by the FERC in recent years could result in an increase in the cost of transportation service on certain petroleum products pipelines. However, Enbridge Partners does not believe that these regulations affect it any differently than other marketers of these products.

Other Regulation

        The governments of the United States and Canada have, by treaty, agreed to ensure nondiscriminatory treatment for the passage of oil and natural gas through the pipelines of one country across the territory of the other. Individual border crossing points require U.S. government permits that may be terminated or amended at the will of the U.S. government. These permits provide that pipelines may be inspected by or subject to orders issued by federal or state government agencies.

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Tariffs and Rate Cases

Lakehead System

        Under published tariffs for transportation on the Lakehead system, the rates for transportation of light crude oil from Neche, North Dakota (unless otherwise stated) to principal delivery points at April 1, 2002 (including the tariff surcharges related to the Lakehead expansion) are set forth below.

	Published Tariff Per Barrel
To Clearbrook, Minnesota	$	0.172
To Superior, Wisconsin	$	0.335
To Chicago, Illinois area	$	0.686
To Marysville, Michigan area	$	0.820
To Buffalo, New York area	$	0.840
Chicago to the international boarder near Marysville	$	0.304

        The rates at April 1, 2002 for medium and heavy crude oils are higher and those for NGLs are lower than the rates set forth in the table to compensate for differences in costs for shipping different types and grades of liquid hydrocarbons. Enbridge Partners periodically adjusts its tariff rates as allowed under the FERC's indexing methodology and the tariff agreement described below.

        Under a tariff agreement approved by the FERC in 1999, Enbridge Partners implemented a tariff surcharge for the Terrace expansion of approximately $0.013 per barrel (for light crude oil from the Canadian border to Chicago, Illinois). On April 1, 2001, the surcharge was increased to $0.026 per barrel. Subject to any adjustments permitted under the tariff agreement, this toll will be effective until April 1, 2004, when, absent any agreement from Enbridge Inc. stating otherwise, the toll will change to $0.007 per barrel to Enbridge Partners. This new toll will be in effect for the next six years, after which time it will return to $0.013 per barrel for Enbridge Partners. The tariff surcharge is based on the completion of all three phases of the Terrace expansion.

Midcoast System

        Tariff rates on the FERC regulated Midcoast system pipelines vary by pipeline and by receipt point and delivery point. The rates charged for transmission of natural gas on pipelines not regulated by the FERC or a state agency are established by competitive forces.

        The rates allowed for transmission of natural gas on the Kansas pipeline system have been the subject of litigation and several FERC proceedings over the last four years. In May 1998, after more than two years of jurisdictional proceedings before the FERC, the FERC asserted jurisdiction over the Kansas pipeline system and ordered Enbridge Pipelines (KPC), the Enbridge Midcoast subsidiary that owns the Kansas pipeline system, to file a rate case under Section 4 of the NGA by September 10, 1999.

        The currently approved rates for the Kansas pipeline system generate annual revenues of approximately $31 million and are not subject to any refund obligation. On September 1, 1999, Enbridge Pipelines (KPC) filed an NGA Section 4 rate increase in Docket No. RP99-485, proposing rates which would generate annual revenues of approximately $34 million. The FERC suspended the proposed rates and ordered a hearing in that proceeding. The rates proposed by Enbridge Pipelines (KPC) in Docket No. RP99-485 have not been placed into effect. On July 31, 2000, a FERC administrative law judge issued an initial decision recommending that Enbridge Pipelines (KPC) recover annual revenues based on a cost of service of approximately $20 million. Enbridge Pipelines (KPC) filed exceptions to the initial decision on virtually every issue decided by the administrative law judge and the matter is currently pending before the Commission for de novo review. A FERC order is expected in late 2002.

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Environmental and Safety Regulation

General

        Enbridge Partners' pipelines and gathering and processing facilities are subject to extensive operational and safety regulation. Many departments and agencies, both federal and state, are authorized by statute to issue and have issued a variety of rules and regulations that are binding on the pipeline industry. The failure to comply with such rules and regulations can result in substantial penalties. The regulatory burden on the pipeline industry increases Enbridge Partners' cost of doing business and, consequently, affects its profitability. However, Enbridge Partners does not believe that it is affected in a significantly different manner by these regulations than its competitors. Due to the myriad and complex federal and state statutes and regulations that may affect us, directly or indirectly, the following discussion of certain statutes and regulations should not be considered an exhaustive review of all regulatory considerations affecting Enbridge Partners' operations.

Pipeline Safety and Transportation Regulation

        Enbridge Partners' pipelines are subject to regulation by the U.S. Department of Transportation, or the "DOT," under the federal Hazardous Liquids Pipeline Safety Act, or the "HLPSA," relating to the design, installation, testing, construction, operation, replacement and management of pipeline facilities. The HLPSA requires pipeline operators to comply with regulations issued pursuant to the HLPSA, to permit access to and allow copying of pipeline records, and to make certain reports and provide information as required by the Secretary of Transportation.

        The Pipeline Safety Act amends the HLPSA in several important respects. The Pipeline Safety Act requires the Research and Special Programs Administration, or "RSPA," of the DOT to consider environmental impacts, as well as DOT's traditional public safety mandate, when developing pipeline safety regulations. In August 2000, the DOT adopted pipeline operator qualification rules requiring minimum qualification requirements for personnel performing operations and maintenance on hazardous liquid pipelines. The DOT has also approved regulations that require operators of hazardous liquid pipelines in High Consequence Areas, such as densely populated or ecologically sensitive areas, to conduct risk assessments, utilize internal inspection devices or perform hydrotesting to assess pipeline integrity, and facilitate changes in operation and maintenance procedures to reduce the risk of public safety and environmental impacts from pipeline leaks or spills. Similar integrity management regulations are currently being developed for natural gas pipelines regulated by the DOT. Legislation that would increase the stringency of federal pipeline safety requirements is currently pending before the U.S. Congress. Although states are largely preempted by federal law from regulating pipeline safety, some states have assumed responsibility for enforcing federal intrastate pipeline regulations and for inspecting intrastate pipelines. The State of Texas, for instance, has already implemented its own integrity management regulations for natural gas pipelines.

        Enbridge Partners' trucking and railcar operations are also subject to safety and permitting regulation by the DOT and state agencies with regard to the safe transportation of hazardous materials and other materials. Enbridge Partners believes that its pipeline, trucking and railcar operations are in substantial compliance with applicable operational and safety requirements. Nevertheless, significant expenses could be incurred in the future if additional safety measures are required or if safety standards are raised and exceed the capabilities of its current pipeline control system or other safety equipment.

Environmental Regulation

        General.    Enbridge Partners' operations are subject to complex federal, state, and local laws and regulations relating to the protection of health and the environment, including laws and regulations which govern the handling and release of crude oil and other liquid hydrocarbon

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materials. As with the petroleum industry in general, complying with current and anticipated environmental laws and regulations increases its overall cost of doing business, including its capital costs to construct, maintain, and upgrade equipment and facilities. While these laws and regulations affect its maintenance capital expenditures and net income, Enbridge Partners believes that they do not affect its competitive position since the operations of its competitors are similarly affected.

        In addition to compliance costs, violations of environmental laws or regulations can result in the imposition of significant administrative, civil and criminal fines and penalties and, in some instances, injunctions banning or delaying certain activities. Enbridge Partners believes that its operations are in substantial compliance with applicable environmental laws and regulations. However, these laws and regulations are subject to frequent change at the federal, state and local levels, and the clear trend is to place increasingly stringent limitations on activities that may affect the environment. Therefore, Enbridge Partners is unable to predict the ongoing cost of complying with these laws and regulations or their future impact on its operations.

        There are also risks of accidental releases into the environment associated with Enbridge Partners' operations, such as leaks or spills of crude oil, natural gas or other substances from its pipelines or storage facilities. Such accidental releases could, to the extent not insured, subject Enbridge Partners to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage, and fines or penalties for any related violations of environmental laws or regulations.

        Although Enbridge Partners is entitled in certain circumstances to indemnification from third parties for environmental liabilities relating to assets that it acquired from those parties, these contractual indemnification rights are limited and, accordingly, Enbridge Partners may be required to bear substantial environmental expenses.

        Enbridge Management will have managerial control over the operations of Enbridge Partners. Enbridge Partners will be primarily responsible for performing duties imposed under environmental laws, such as obligations to clean up hydrocarbons or other materials that are released into the environment. However, to the extent that Enbridge Partners incurs but does not perform or complete obligations imposed under environmental laws, Enbridge Management may be held liable for the costs and liabilities arising from those obligations as the party with managerial control over the operations of Enbridge Partners.

        Air Emissions.    Enbridge Partners' operations are subject to the federal Clean Air Act and comparable state and local statutes. These laws generally require facilities that emit air contaminants into the atmosphere to implement or achieve certain technological or performance-based emissions controls and to comply with various permitting, monitoring and reporting regulations. Amendments to the Clean Air Act enacted in 1990, as well as recent or soon to be adopted changes to state implementation plans implementing those amendments, require or will require most industrial operations in the United States to make capital expenditures in order to meet new air emission control standards developed by the U.S. Environmental Protection Agency, or the "EPA," and state environmental agencies. As a result of these amendments, Enbridge Partners' facilities are subject to increasingly stringent air emissions regulations, including requirements that some facilities install maximum or best achievable control technologies to reduce or eliminate regulated emissions. A number of Enbridge Partners' facilities are currently exempt from these air emissions regulations due to their age. Over the next several years, however, the exemptions for such "grandfathered" facilities are due to expire. Enbridge Partners anticipates, therefore, that it will incur certain capital expenses in the next several years for air pollution control equipment in connection with maintaining existing facilities and obtaining permits and approvals for any new or acquired facilities. For example, Enbridge Partners estimates it will incur up to $3.5 million in capital expenditures to upgrade its air pollution control equipment at the Tilden Gas Plant

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on the South Texas system. In addition, state and local air quality regulations can be more stringent than federal regulations in some circumstances, particularly in areas where national air quality standards have not been achieved. Although Enbridge Partners can give no assurances, it believes compliance with these Clean Air Act requirements will not have a material adverse effect on its financial condition or results of operations and that such requirements do not affect its competitive position since the operations of its competitors are similarly affected.

        Hazardous Substances and Waste Management.    The federal Comprehensive Environmental Response, Compensation and Liability Act, or "CERCLA" (also known as the "Superfund" law), and similar state laws, impose liability without regard to fault or the legality of the original conduct, on certain classes of persons, including the owners or operators of waste disposal sites and companies that disposed or arranged for disposal of hazardous substances found at such sites. CERCLA also authorizes the EPA and, in some cases, third parties to take actions in response to threats to public health or the environment at such disposal sites and to seek recovery of the costs they incur from the responsible classes of persons. Although "petroleum" is currently excluded from CERCLA's definition of a "hazardous substance," in the course of its ordinary operations Enbridge Partners may generate some wastes that fall within the definition of a "hazardous substance." Enbridge Partners may, therefore, be jointly and severally liable under CERCLA for all or part of any costs required to clean up and restore sites at which such wastes have been disposed. In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. Analogous state laws may apply to a broader range of substances than CERCLA and, in some instances, may offer fewer exemptions from liability. Enbridge Partners has not received any notification that it may be potentially responsible for cleanup costs under CERCLA or similar state laws.

        Enbridge Partners' operations also generate both hazardous and nonhazardous wastes that are subject to the requirements of the federal Resource Conservation and Recovery Act, or "RCRA," and comparable state statutes. Enbridge Partners is not currently required to comply with a substantial portion of RCRA's requirements as its operations generate minimal quantities of hazardous wastes. From time to time, however, the EPA has considered making changes in nonhazardous waste standards that would result in stricter disposal requirements for these wastes, including certain petroleum wastes. Furthermore, it is possible that some of the wastes Enbridge Partners generates that are currently classified as nonhazardous may in the future be reclassified as "hazardous wastes," which would trigger more rigorous and costly disposal requirements. In addition, analogous state and local laws may impose more stringent waste disposal requirements or apply to a broader range of wastes. While federal or state regulatory changes could result in an increase in Enbridge Partners' maintenance capital expenditures and operating expenses, Enbridge Partners believes that they would not effect its competitive position since the operations of its competitors would be similarly affected.

        Water.    The Federal Water Pollution Control Act, also known as the Clean Water Act, and similar state laws place strict limits on the discharge of contaminants into federal and state waters. Regulations under these laws prohibit such discharges unless authorized by and in compliance with a National Pollutant Discharge Elimination System permit or an equivalent state permit. The Clean Water Act and analogous state laws allow significant penalty assessments for unauthorized releases of water pollution and impose substantial liability for the costs of cleaning up spills and leaks into the water. In addition, the Clean Water Act and analogous state laws require individual permits or coverage under general permits for discharges of stormwater runoff from certain types of facilities. State laws may also place restrictions and cleanup requirements on the release of pollution into groundwater. Enbridge Partners believes that it will be able to obtain, or be covered under, any required Clean Water Act permits and that compliance with the conditions of those permits will not have a material effect on its operations.

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        The Oil Pollution Act, or "OPA," was enacted in 1990 and amends parts of the Clean Water Act and other statutes as they pertain to the prevention of and response to oil spills. Under the OPA, Enbridge Partners could be subject to strict, joint and potentially unlimited liability for removal costs and other consequences of an oil spill from its facilities into navigable waters, along shorelines or in an exclusive economic zone of the United States. The OPA also imposes certain spill prevention, control and countermeasure requirements, such as the preparation of detailed oil spill emergency response plans and the construction of dikes or other containment structures to prevent contamination of navigable or other waters in the event of an oil overflow, rupture or leak. Enbridge Partners believes it is in material compliance with these laws.

        Employee Health and Safety.    The workplaces associated with Enbridge Partners' operations are subject to the requirements of the federal Occupational Safety and Health Act, or "OSHA," and comparable state statutes that regulate worker health and safety. In addition, some states have received authorization to implement their own occupational safety and health programs in lieu of the federal program. Enbridge Partners has an ongoing safety training program for its employees and believes that its operations are in material compliance with applicable occupational health and safety requirements, including general industry standards, record keeping requirements, monitoring of occupational exposure to regulated substances, and hazard communication standards.

        Site Remediation.    Enbridge Partners owns and operates a number of pipelines, gathering systems, storage facilities and processing facilities that have been used to transport, distribute, store and process crude oil, natural gas and other petroleum products for many years. Certain facilities, including the Lakehead system, have been operated by Enbridge Partners or its predecessors for more than 50 years. Many of the other facilities of Enbridge Partners were previously owned and operated by third parties whose handling, disposal and release of petroleum and waste materials were not under Enbridge Partners' control. The age of the facilities combined with the past operating and waste disposal practices, which were standard for the industry at the time, have resulted in soil and groundwater contamination at some facilities due to historical spills and releases. Such contamination is not unusual within the petroleum industry. Any historical contamination found on, under or originating from Enbridge Partners' properties may be subject to CERCLA, RCRA and analogous state laws as described above. Under these laws, Enbridge Partners could incur substantial expense to remediate any such contamination, including contamination caused by prior owners and operators. In addition, Enbridge Management, as the entity with managerial responsibility for Enbridge Partners, could also be liable for such costs to the extent that Enbridge Partners is unable to fulfill its obligations. Enbridge Partners has conducted site investigations at some of its facilities to assess historical environmental issues, and it is currently addressing soil and groundwater contamination at various facilities through remediation and monitoring programs, with oversight by the applicable government agencies where appropriate.

        Most of the environmental site investigations of Enbridge Partners' facilities were performed in connection with the acquisition of assets from third parties. Environmental liabilities identified in these investigations were handled in several ways. In some instances, historical environmental liabilities were assumed upon the acquisition of assets. In connection with one acquisition, Enbridge Partners has been advised that the total cost to remediate environmental contamination at several sites on the Northeast Texas system is estimated to be approximately $7.0 million. In other circumstances, assets were acquired subject to indemnities from the sellers which are intended to protect Enbridge Partners from specific historical environmental liabilities. There are also instances where only parts of assets were acquired, leaving the seller with the portions believed to be more severely affected by historical environmental liabilities. In connection with Enbridge Partners' acquisition of the Midcoast, Northeast Texas and South Texas systems under the contribution agreement, Enbridge Energy Company has agreed to indemnify Enbridge Partners and other related persons for certain environmental liabilities of which Enbridge Energy Company has knowledge and which it did not disclose under the contribution agreement. Enbridge Energy

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Company will not be required to indemnify Enbridge Partners under the contribution agreement until the aggregate liabilities, including environmental liabilities, exceed $20 million, and Enbridge Energy Company's aggregate liability under the contribution agreement, including environmental liabilities, may not exceed, with certain exceptions, $150 million. Enbridge Partners will be liable for any environmental conditions related to the acquired systems that were not known to Enbridge Energy Company or were disclosed under the contribution agreement. In addition, Enbridge Partners will be liable for all removal, remediation and disposal of all asbestos containing materials and all naturally occurring radioactive materials associated with the Northeast Texas system and for which Enbridge Energy Company is liable to the prior owner of that system.

        Although Enbridge Partners believes these indemnities and carve outs provide valuable protection, it is possible that the sellers from whom these assets were purchased will not be able to satisfy their indemnity obligations or their remedial obligations related to retained liabilities or properties. In this case, it is possible that governmental agencies or third party claimants could assert that Enbridge Partners may be liable or bears some responsibility for such obligations.

        Enbridge Partners could also experience future spills or releases from its pipelines, gathering systems, storage facilities, or trucking or rail operations, or it could discover historical releases that were previously unidentified. To guard against these risks, Enbridge Partners maintains an extensive inspection and maintenance program designed to prevent, detect and address such releases promptly, and it has obtained insurance policies designed to provide additional protection against unknown historical environmental liabilities related to certain assets, including the Northeast Texas and East Texas systems. Enbridge Partners could nevertheless incur significant penalties, damages and remedial liabilities arising from future spills or the discovery of previously unknown historical releases. Such liabilities could have a material adverse effect on Enbridge Partners' financial condition and results of operations.

Employees

        None of Enbridge Management, Enbridge Partners or its general partner, Enbridge Energy Company, has any employees. As discussed under "Business — Enbridge Management" beginning on page 84, Enbridge Energy Company will delegate to us, pursuant to the delegation of control agreement, substantially all of the responsibility for the day-to-day management and operation of Enbridge Partners. Enbridge Energy Company will, however, retain certain functions and approval rights over the operations of Enbridge Partners. To fulfill its management obligations, our management subsidiary has entered into agreements with Enbridge Inc. and several of its subsidiaries to provide it with the necessary services and support personnel. Enbridge Partners reimburses these service providers at cost for expenses incurred in performing these services.

Insurance

        The operations of Enbridge Partners are subject to many hazards inherent in the liquid petroleum and natural gas gathering, processing and transmission industry. Enbridge Partners maintains insurance coverage for its operations and properties considered to be customary in the industry. There can be no assurance, however that insurance coverages maintained by Enbridge Partners will be available or adequate for any particular risk or loss or that it will be able to maintain adequate insurance in the future at rates it considers reasonable. Although management believes that the assets of Enbridge Partners are adequately covered by insurance, a substantial uninsured loss could have a material adverse effect on Enbridge Partners' financial position, results of operations or cash flows.

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MANAGEMENT OF ENBRIDGE MANAGEMENT

Directors and Executive Officers

        Our business and affairs will be managed by a board of managers whom we call our directors.

        Our directors and executive officers have served since our formation on May 14, 2002.

        The following table sets forth specific information for our executive officers and directors. All of our directors are elected annually by, and may be removed by, Enbridge Energy Company as the sole owner of our voting shares. Executive officers are appointed for one-year terms.

Name	Age	Position with Enbridge Management	Approximate Percentage of Officer's Time Devoted to Enbridge Management
J.R. Bird	53	Director	N/A
P.D. Daniel	55	Director	N/A
E.C. Hambrook	65	Director	N/A
G.K. Petty	60	Director	N/A
C.A. Russell	69	Director	N/A
D.P. Truswell	59	Director	N/A
Dan C. Tutcher	53	President and Director	80%
G.L. Sevick	46	Vice President — Operations	50%
T.L. McGill	47	Vice President — Commercial Activity & Business Development	90%
M.A. Maki	37	Controller	90%
A. Monaco	42	Treasurer	50%
J.L. Balko	36	Chief Accountant	90%
E.C. Kaitson	45	Corporate Secretary	90%

        J.R. Bird was elected a director of Enbridge Management upon its formation. Mr. Bird was elected a director of Enbridge Energy Company in September 2000 and served as President from September 2000 until June 2001. Mr. Bird previously served as Treasurer of the Enbridge Energy Company from October 1996 through October 1997. He also currently serves as Group Vice President, Transportation — North of Enbridge Inc. since May 2001 and President of Enbridge Pipelines since September 2000. Prior to that time he served as Senior Vice President, Corporate Planning and Development of Enbridge Inc. from August 1997 through August 2000 and as Vice President and Treasurer of Enbridge Inc. from January 1995 to August 1997.

        P.D. Daniel was elected a director of Enbridge Management upon its formation. Mr. Daniel was elected a director of Enbridge Energy Company in July 1996 and served as its President from July 1996 through October 1997. Mr. Daniel has served as President of Enbridge Inc. since September 2000 and as Chief Executive Officer of Enbridge Inc. since January 2001. Prior to that time Mr. Daniel also served as President and Chief Operating Officer — Energy Delivery of Enbridge Inc. from June 1998 to December 2000. Prior to that time Mr. Daniel served as Executive Vice President and Chief Operating Officer — Energy Transportation Services of Enbridge Inc. from September 1997 through June 1998, as Senior Vice President of Enbridge Inc. from May 1994 to August 1997, as President and Chief Executive Officer of Enbridge Pipelines from August 1996 to August 1997, and as President and Chief Operating Officer of Enbridge Pipelines from May 1994 to August 1996.

        E.C. Hambrook was elected a director of Enbridge Management upon its formation. Mr. Hambrook was elected a director of Enbridge Energy Company in January 1992 and served as Chairman of Enbridge Energy Company from July 1996 until July 1999. Mr. Hambrook has served

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as President of Hambrook Resources, Inc. since its inception in 1991. Hambrook Resources, Inc. is a real estate investment, marketing and sales company.

        G.K. Petty was elected a director of Enbridge Management upon its formation. Mr. Petty was elected a director of Enbridge Energy Company on February 22, 2001 and serves on its Audit, Finance & Risk Committee. Mr. Petty has served as a director of Enbridge Inc. since January 2001 and as a director of CAE Incorporated since August 1996. Mr. Petty served as President and Chief Executive Officer of Telus Corporation, a Canadian telecommunications company, from November 1994 to November 1999. Mr. Petty is a business consultant providing executive management consulting services to the telecommunications industry.

        C.A. Russell was elected a director of Enbridge Management upon its formation. Mr. Russell was elected a director of Enbridge Energy Company in October 1985 and serves as the Chairman of its Audit, Finance & Risk Committee. Mr. Russell served as Chairman and Chief Executive Officer of Norwest Bank Minnesota North, N.A. (now known as Wells Fargo Bank), from January through December 1995. He also served as a director of Minnesota Power and Light Co. (now known as Allete) until May 1996. Other than in his service as a director of the Enbridge Management and Enbridge Energy Company, Mr. Russell is retired

        D.P. Truswell was elected a director of Enbridge Management upon its formation. Mr. Truswell was elected a director of Enbridge Energy Company in 1991. Since September 2000, Mr. Truswell has served as Group Vice President and Chief Financial Officer of Enbridge Inc. and from May 1994 through August 2000 served as Senior Vice President and Chief Financial Officer of Enbridge Inc.

        Dan C. Tutcher was elected a director and was appointed President of Enbridge Management upon its formation. Mr. Tutcher was elected a director and was appointed President of Enbridge Energy Company in June 2001. He also currently serves as Group Vice President, Transportation — South of Enbridge Inc., as well as President of Enbridge Midcoast Energy, Inc. He was previously Chairman of the Board, President and Chief Executive Officer of Midcoast Energy Resources, Inc. from its formation in 1992 until it was acquired by Enbridge Inc. on May 15, 2001.

        G.L. Sevick was appointed Vice President, Operations of Enbridge Management upon its formation. Mr. Sevick was appointed Vice President, Operations of Enbridge Energy Company in June 2001. He has served as Vice President, Canadian Operations for Enbridge Pipelines since 1999. Prior to that time, he served as Vice President, Engineering & Logistics of Enbridge Consumers Gas from 1998 to 1999 and Senior Vice President, Distribution Operations of Enbridge Consumers Gas from 1996 to 1998.

        T.L. McGill was appointed Vice President — Commercial Activity and Business Development of Enbridge Management upon its formation. Mr. McGill was appointed Vice President — Commerical Activity and Business Development of Enbridge Energy Company in April 2002. Prior to that time, Mr. McGill was President of Columbia Gulf Transmission Company from January 1996 to March 2002. Prior to that time, Mr. McGill provided consulting services to natural gas, electric and other energy firms.

        M.A. Maki was appointed Controller of Enbridge Management upon its formation. Mr. Maki was appointed Controller of Enbridge Energy Company in June 2001. Prior to that time, he served as Controller, Enbridge Pipelines since September 1999. Prior to that time, he served as Chief Accountant of Enbridge Energy Company from June 1997 to August 1999.

        A. Monaco was appointed Treasurer of Enbridge Management upon its formation. Mr. Monaco was appointed Treasurer of Enbridge Energy Company in February 2002. He currently serves as Vice President, Financial Services of Enbridge Inc. and prior to that time as Director, Financial Services since 2000. Prior to that time, he served as Director, Investor Relations since 1997.

        J.L. Balko was appointed Chief Accountant of Enbridge Management upon its formation. Ms. Balko has served as Chief Accountant of Enbridge Energy Company since October 1999. Prior

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to that time, she served in supervisory positions in accounting with Enbridge Pipelines since January 1998, and was with The Westaim Corporation, an investor in, and manufacturer of, industrial technologies in various industries, including the biomedical and semiconductor industries, from November 1995 to December 1997.

        E.C. Kaitson was appointed Corporate Secretary of Enbridge Management upon its formation. Mr. Kaitson has served as Corporate Secretary of Enbridge Energy Company since November 2001. He also currently serves as Associate General Counsel, Transportation Group South of Enbridge Inc. He was previously Assistant Corporate Secretary and General Counsel of Midcoast Energy Resources, Inc. from 1997 until it was acquired by Enbridge Inc. on May 15, 2001.

Committees of the Board of Directors

        We anticipate that we will have an audit committee composed of our three independent directors, E.C. Hambrook, G.K. Petty and C.A. Russell, upon the closing of the sale of shares offered by this prospectus.

Executive Compensation

        Because we were formed in 2002, our directors and executive officers received no compensation in 2001. We have made no decision regarding 2002 compensation for our executive officers. We will be reimbursed by Enbridge Partners for the aggregate amount of compensation we pay our executive officers and other employees.

Director Compensation

        Officers or employees of Enbridge Energy Company who also serve as our directors will not receive additional compensation. Each independent director will receive an annual fee of $7,500 for his services to us plus $500 for each meeting of the board of directors or a committee of the board of directors that he attends. In addition, each independent director is reimbursed for out-of-pocket expenses in connection with attending meetings of the board of directors or committees. Each director is indemnified by us for actions associated with being a director to the full extent permitted under Delaware law.

Security Ownership of Certain Beneficial Owners and Management

        The following table sets forth certain information, as of June 1, 2002, regarding the beneficial ownership of our shares sold in this offering and our voting shares by affiliates of Enbridge Inc.

	Enbridge Management — Shares
	Before the Offering			After the Offering
	Number of Shares	Percent of Class		Number of Shares	Percent of Class
Enbridge Energy Company	0	0	%	500,000	5	%

	Enbridge Management — Voting Shares
	Before the Offering			After the Offering
	Number of Shares	Percent of Class		Number of Shares	Percent of Class
Enbridge Energy Company	1	100	%	1	100	%

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        The following table sets forth information as of June 1, 2002, regarding (a) the beneficial ownership of (i) common units of Enbridge Partners and (ii) the common stock of Enbridge Inc., the parent company of the general partner of Enbridge Partners, by all directors of Enbridge Energy Company, each of the named executive officers and all directors and executive officers as a group and (b) all persons known by Enbridge Energy Company to own beneficially more than 5% of Enbridge Partners' common units.

	Amount and Nature of Beneficial Ownership(1)
	Common Units(2)			Enbridge Inc. Voting Stock
	Number of Units(3)	Percent		Number of Shares(4)	Percent
J.R. Bird	—	—		8,887	*
P.D. Daniel	—	—		88,522	*
E.C. Hambrook	1,000	*		—	*
G.K. Petty	1,000	*		4,783	*
C.A. Russell	—	—		—	—
D.P. Truswell	—	—		58,888	*
Dan C. Tutcher	20,200	*		452,539	*
Directors and Executive Officers as a group (13 persons)	22,200	*		620,129	*
Enbridge Energy Company	3,912,750	11.1	%	—	—
Goldman, Sachs & Co.(5)	2,413,517	6.9	%	*	*

*

Less than 1%.

(1)

Except as noted otherwise, all common units and Enbridge Inc. shares involve sole voting power and sole investment power.

(2)

Except for Enbridge Energy Company, all persons listed own Class A common units only. Enbridge Energy Company owns all of the outstanding Class B common units and no Class A common units.

(3)

As of June 1, 2002, Enbridge Partners had 35,226,384 common units issued and outstanding.

(4)

As of June 1, 2002, Enbridge Inc. had a total of 163,866,788 shares of outstanding voting common stock issued and outstanding.

(5)

Based on information reported in a Form 13G/A filed with the Securities and Exchange Commission on February 14, 2002. As noted on such Form 13G/A, Goldman, Sachs & Co. and The Goldman Sachs Group, Inc. each disclaim beneficial ownership of the securities beneficially owned by (a) any client accounts with respect to which Goldman, Sachs & Co. or its employees have voting or investment discretion or both, and (b) certain investment entities, of which a subsidiary of The Goldman Sachs Group, Inc. or Goldman, Sachs & Co. is the general partner, managing general partner or other manager, to the extent interests in such entities are held by persons other than The Goldman Sachs Group, Inc., Goldman, Sachs & Co. or their affiliates.

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DESCRIPTION OF OUR SHARES

        The following is a summary of the principal documents that relate to our shares, as well as documents that relate to the i-units we will purchase upon completion of the offering. Copies of those documents are on file with the SEC as part of our registration statement. Please read "Where You Can Find More Information" on page 163 for information on how to obtain copies. You should refer to the provisions of each of the following agreements because they, and not this summary, will govern your rights as a holder of shares. These agreements include:

•

our limited liability company agreement, which provides for the issuance of the shares, distributions, limited voting rights and the indemnification of us by Enbridge Partners and Enbridge Energy Company;



•

the Enbridge Inc. purchase provisions, which are part of our limited liability company agreement and which provide for the optional and mandatory purchase of our shares by Enbridge Inc. in the limited circumstances set forth in our limited liability company agreement;



•

the Enbridge Inc. tax indemnification agreement, which provides that Enbridge Inc. will indemnify us for any tax liability attributable to our formation or our management of the business and affairs of Enbridge Partners and for any taxes arising out of our ownership or a transaction involving our i-units to the extent our ownership or the transaction does not generate sufficient cash to pay our taxes;



•

the Enbridge Partners limited partnership agreement which establishes the i-units as a class and specifies the relative rights and preferences of the i-units; and



•

the delegation of control agreement, which delegates to us substantially all of Enbridge Energy Company's power and authority to manage and control the business and affairs of Enbridge Partners and its operating subsidiaries, subject to the right of the general partner of Enbridge Partners to approve specified actions.

Distributions

        Under the terms of our limited liability company agreement, except in connection with our liquidation, we will not pay distributions on our shares in cash but instead will make distributions of additional shares or fractions of shares. When Enbridge Partners makes a cash distribution on its common units, we will distribute on each of our shares that fraction of a share determined by dividing the amount of the cash distribution paid by Enbridge Partners on each common unit by the average market price of one of our shares during the 10-trading day period ending immediately prior to the date on which the shares begin to trade ex-dividend under the rules of the principal national securities exchange on which they are listed or admitted to trading from time to time.

        Enbridge Partners has been distributing all of its "available cash" to its general partner and common unitholders of record on the applicable record date within approximately 45 days after the end of each quarter. "Available cash" is defined in the partnership agreement of Enbridge Partners, and it generally means, for any calendar quarter, all cash received by Enbridge Partners from all sources, plus net reductions to cash reserves, less all of its cash disbursements and net additions to cash reserves. Enbridge Partners increased its regular quarterly distribution from $0.875 to $0.90 per common unit effective with the distribution paid on February 14, 2002. On May 15, 2002, Enbridge Partners paid a regular quarterly cash distribution of $0.90 to its common unitholders, its second distribution at the rate of $0.90 per quarter, or $3.60 per common unit on an annualized basis.

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        Concurrently with the closing of this offering, the Enbridge Partners partnership agreement will be amended to provide for distributions of cash with respect to common units and the general partner interest and for our ownership of additional i-units (by means of a split) after each such distribution, except in the event of a liquidation or dissolution. As a result of these amendments, Enbridge Partners will make non-liquidating distributions in cash to owners of common units and to the general partner and, instead of receiving cash distributions, the number of i-units we own will increase with the result that the number of i-units we own will equal the number of our shares and voting shares that are then outstanding.

        We will distribute additional shares to owners of our shares if owners of common units receive a cash distribution or other cash payment on their common units other than a regular quarterly distribution. In that event, we will distribute on each share that fraction of a share determined as described above.

        Our limited liability company agreement provides that we may not declare any distribution on our shares after Enbridge Inc. gives notice to us of an optional purchase of our shares or after the occurrence of an event triggering a mandatory purchase of our shares.

        There will be no public market for trading fractional shares. No fraction of a share can be traded on any exchange on which our shares are listed until a holder acquires the remainder of the fraction and has a whole share.

        The term "average market price" is used above in connection with the share distributions, and it is used below in connection with optional and mandatory purchase of our shares. When we refer to the average market price of a share or a Class A common unit, we mean the average closing price of a share or Class A common unit during the ten consecutive trading days prior to the determination date but not including that date, unless a longer or shorter number of trading days is expressly noted.

        The "closing price" of securities on any day means:

•

for securities listed on a national securities exchange, the last sale price for that day, or, if there are no sales on that day, the average of the closing bid and asked prices for that day, in either case as reported in the principal composite transactions reporting system for the principal United States national securities exchange on which the securities are listed;



•

if the securities are not listed on a United States national securities exchange on that day, the last quoted price on that day, or, if no price is quoted, the average of the high bid and low asked prices on that day, each as reported by the NASDAQ;



•

if on that day the securities are not so quoted, the average of the closing bid and asked prices on that day furnished by a professional market maker in the securities selected by our board of directors (or, in the cases of mandatory or optional purchases of our shares, our board of directors); or



•

if on that day no market maker is making a market in the securities, the fair value of the securities as determined by our board of directors (or, in the cases of mandatory or optional purchases of our shares, the board of directors of Enbridge Inc.).

        A "trading day" for securities means a day on which:

•

the principal United States national securities exchange on which the securities are listed is open for business, or



•

if the securities are not listed on any United States national securities exchange, a day in which banking institutions in New York, New York generally are open.

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        Distributions will be made in accordance with the distribution standards of the principal national securities exchange on which our shares are listed or admitted to trading from time to time.

Covenants

        Our limited liability company agreement provides that our activities will be limited to being a limited partner in, and managing and controlling the business and affairs of, Enbridge Partners and its subsidiaries. It also requires that our issuance of classes of shares, other than the class of shares being sold in this offering and the class of voting shares currently owned by Enbridge Energy Company, be approved by the owners of our outstanding shares and further includes covenants that prohibit us from:

•

using the proceeds from our sale of shares in this offering other than for the purchase of i-units from Enbridge Partners and the purchase and tax indemnity obligations from Enbridge Inc.;



•

borrowing money or issuing debt;



•

selling, pledging or otherwise transferring any i-units;



•

issuing options, warrants or other securities entitling the holder to purchase our shares;



•

purchasing any of our shares, including voting shares; or



•

liquidating, merging or recapitalizing.

These covenants and other matters can be amended, waived or approved, as applicable, by the owners of our shares as described under "—Limited Voting Rights" below.

        Additionally, under our limited liability company agreement, Enbridge Inc. has agreed that neither it nor any of its affiliates will take any action that would result in Enbridge Inc. and its affiliates ceasing to be the beneficial owners of more than 50% of the total voting power of the general partner of Enbridge Partners, unless:

•

prior to taking such action it has notified us and Enbridge Partners that, upon the occurrence of such action, Enbridge Inc. will acquire all of our shares as more fully described under "—Mandatory Purchase" below; or



•

following the occurrence of such action another person will become the beneficial owner of more than 50% of the total voting power of the general partner of Enbridge Partners, and such person:



—

is organized under the laws of a state in the United States;



—

has long term unsecured debt with an investment grade credit rating as determined by Moody's Investor Services, Inc. and Standard & Poor's Rating Service immediately prior to the closing of the transaction; and



•

assumes all of Enbridge Inc.'s obligations under the purchase provisions and the tax indemnification agreement.

This covenant can be amended or waived by the owners of our shares as described under "—Limited Voting Rights" below.

        Upon the closing of this offering, the Enbridge Partners partnership agreement will be amended to provide that Enbridge Partners will not:

•

issue any of its i-units to any person other than us;

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•

except in liquidation, make a distribution on an i-unit other than in additional i-units or a security that has in all material respects the same rights and privileges as the i-units;



•

make a distribution on a common unit other than in cash, additional common units or a security that has in all material respects the same rights and privileges as the common units;



•

make a tender offer for common units unless the consideration payable in such tender offer:



—

is exclusively cash; and



—

together with any cash payable in respect of any other tender offer by Enbridge Partners for the common units concluded within the preceding 360 days and the aggregate amount of any cash distributions to all owners of common units made within the preceding 360-day period is less than 12% of the aggregate average market value of all classes of units of Enbridge Partners determined on the trading day immediately preceding the commencement of the tender offer;




•

allow an owner of common units to receive any consideration other than cash, common units or a security that has in all material respects the same rights and privileges as the common units, or allow us, as the owner of the i-units, to receive any consideration other than additional i-units or a security that has in all material respects the same rights and privileges as the i-units, in either case, in a:



—

merger transaction, if the unitholders of Enbridge Partners immediately prior to the transaction own more than 50% of the common equity securities of the survivor immediately after the transaction; or



—

recapitalization, reorganization or similar transaction;




•

be a party to a merger, sell all or substantially all of its assets to another person or enter into similar transactions if:



—

the survivor of the merger or the other person is to be controlled by Enbridge Inc. or its affiliates after the transaction; and



—

the transaction would result in the occurrence of a special event described under "—Mandatory Purchase" below; or




•

take any action that would result in the occurrence of either of the events described below, unless prior to the occurrence of the event Enbridge Inc. has notified us and Enbridge Partners that upon the occurrence of the event Enbridge Inc. will acquire all of our outstanding shares as more fully described under "—Mandatory Purchase" below:



—

aggregate distributions or other payments by Enbridge Partners on its common units, other than in common units or in securities that have in all material respects the same rights and privileges as common units but including pursuant to an issuer tender offer by Enbridge Partners, during a 360-day period exceeding 50% of the average market price of a common unit for the 10-trading day period ending on the trading day immediately prior to the beginning of that 360-day period;



—

the merger of Enbridge Partners with another entity where Enbridge Partners is not the surviving entity, or the sale of all or substantially all of Enbridge Partners' assets, unless in the transaction:



—

the only consideration that we receive in exchange for our i-units is a security that has in all material respects the same rights and privileges as the i-units; and

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—

the only consideration that the owners of common units receive in exchange for their common units is a security that has in all material respects the same rights and privileges as the common units and/or cash, and the amount of cash received per common unit does not exceed 33¹/3% of the average market price of a common unit for the 10-trading day period ending on the trading day immediately prior to the date of execution of the definitive agreement for the transaction.

These covenants can be amended or waived by the owners of the i-units as described under "—Limited Voting Rights" below.

Mandatory Purchase

General

        Under the terms of the Enbridge Inc. purchase provisions, Enbridge Inc. will be required to purchase all of our shares that it and its affiliates do not own if, prior to the occurrence of any of the events described below, which we refer to as "special events," Enbridge Inc. notifies us and Enbridge Partners that the occurrence of any such events will trigger a mandatory purchase obligation.

        These special events include:

•

aggregate distributions or other payments by Enbridge Partners on its common units, other than in common units or in securities which have in all material respects the same rights and privileges as common units but including pursuant to an issuer tender offer by Enbridge Partners, during a 360-day period that exceed 50% of the average market price of a Class A common unit during the 10 trading days ending on the trading day immediately prior to the beginning of that 360-day period.



•

the merger of Enbridge Partners with another entity where Enbridge Partners is not the surviving entity, or the sale of all or substantially all of Enbridge Partners' assets, unless in the transaction:



—

the only consideration that we receive in exchange for our i-units is a security that has in all material respects the same rights and privileges as the i-units; and



—

the only consideration that the owners of common units receive in exchange for their common units is a security that has in all material respects the same rights and privileges as the common units and/or cash, and the amount of cash received per common unit does not exceed 33¹/3% of the average market price of a Class A common unit for the 10 trading day period ending on the trading day immediately prior to the date of execution of the definitive agreement for the transaction; or




•

Enbridge Inc. or its affiliates taking any action that would result in Enbridge Inc. and its affiliates ceasing to be the beneficial owners, as defined in Rule 13d-3 and 13d-5 under the Securities Exchange Act of 1934, of more than 50% of the total voting power of the general partner of Enbridge Partners, unless, following the occurrence of such action, another person will become the beneficial owner of more than 50% of the total voting power of the general partner of Enbridge Partners, and such person:



—

is organized under the laws of a state in the United States;



—

has long term unsecured debt with an investment grade credit rating, as determined by Moody's Investor Services, Inc. and Standard & Poor's Rating Service, immediately prior to the closing of the transaction; and

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—

assumes all obligations of Enbridge Inc. under the purchase provisions and the tax indemnification agreement.

        The purchase price for the shares in the event of a mandatory purchase by Enbridge Inc. will be equal to the higher of the average market price of the shares and the Class A common units as determined for a 10-trading day period ending on the trading day immediately prior to the date of the applicable event.

        Enbridge Inc.'s mandatory purchase obligation will automatically terminate upon:

•

the removal of the general partner of Enbridge Partners by the limited partners of Enbridge Partners; or



•

the occurrence of any of the special events described above that does not also trigger a mandatory purchase obligation of Enbridge Inc.

Procedure

        Within three business days following the occurrence of any special event in respect of which Enbridge Inc. has notified us and Enbridge Partners will trigger a mandatory purchase obligation, Enbridge Inc. will mail to each holder of record of the shares a notice stating, among other things:

•

that a mandatory purchase event has occurred and that Enbridge Inc. will purchase such holder's shares for the purchase price described above;



•

the dollar amount per share of the purchase price;



•

the circumstances and relevant facts regarding the mandatory purchase event;



•

the purchase date, which shall be no later than five business days from the date such notice is mailed; and



•

the instructions a holder must follow in order to have its shares purchased.

        On or prior to the date of the purchase, Enbridge Inc. will irrevocably deposit with the transfer agent funds sufficient to pay the purchase price. Following the purchase date, a share owned by any person other than Enbridge Inc. and its affiliates will only represent the right to receive the purchase price.

        For purposes of the mandatory and optional purchase provisions, which are part of our limited liability company agreement, Enbridge Inc. will be deemed to include Enbridge Inc., its successors by merger, and any entity that succeeds to Enbridge Inc.'s obligations under the purchase provisions and the tax indemnification agreement in connection with an acquisition of all or substantially all of the assets of Enbridge Inc.

        Enbridge Inc. will comply with Rule 13e-3 under the Securities Exchange Act of 1934 in connection with the occurrence of a mandatory purchase event.

        The ability of Enbridge Inc. to purchase our outstanding shares upon the occurrence of a mandatory purchase event depends upon Enbridge Inc.'s financial ability to meet its obligations. Enbridge Inc. is not required to secure its obligations or comply with financial covenants to ensure performance of these obligations. If Enbridge Inc. fails to purchase our outstanding shares upon the occurrence of a mandatory purchase event, shareholders would be required to institute a cause of action and obtain a judgment for payment against Enbridge Inc.

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Optional Purchase

General

        The Enbridge Inc. purchase provisions, which are part of our limited liability company agreement, provide that if at any time Enbridge Inc. and its affiliates own 80% or more of our shares, then Enbridge Inc. has the option, which it may assign to any of its affiliates, to purchase all, but not less than all, of our shares not owned by it or its affiliates. Enbridge Inc. can exercise its right to make that purchase by giving notice to the transfer agent for the shares of its election to make the purchase not less than 10 days and not more than 60 days prior to the date that it selects for the purchase. We will cause the transfer agent to mail the notice of the purchase to the record holders of the shares.

        The price at which Enbridge Inc. may make an optional purchase in this circumstance is equal to 110% of the higher of:

•

the average closing price for our shares for the 10 consecutive trading days ending on the fifth trading day prior to the date the notice of the purchase is given; and



•

the highest price Enbridge Inc. or its affiliates paid for the shares during the 90 days prior to the date the notice of purchase is given.

        Our limited liability company agreement and Enbridge Partners' partnership agreement each provides that if at any time Enbridge Inc. and its affiliates own 85% or more of the common units and our shares on a combined basis, then Enbridge Inc. has the right to purchase all, but not less than all, of our shares but only if the general partner of Enbridge Partners elects to purchase all, but not less than all, of the common units not owned by it and its affiliates.

        The price at which Enbridge Inc. may make an optional purchase in this circumstance is equal to the highest of:

•

the average closing price of our shares or the Class A common units, whichever is higher, for the 20 consecutive trading days ending on the fifth trading day prior to the date on which the notice of the purchase is given; and



•

the highest price Enbridge Inc. or its affiliates paid either for our shares or the Class A common units during the 90 days prior to the giving of the notice of purchase.

        Enbridge Inc. and its affiliates currently own approximately 11.1% of the common units. Following this offering, Enbridge Inc. and its affiliates are expected to own 5% of our shares and 9.8% of our shares and the common units on a combined basis.

Procedure

        Enbridge Inc. may exercise its right to make the optional purchase in either circumstance by giving notice to the transfer agents for our shares and Enbridge Partners' common units of its election to make the optional purchase not less than 10 days and not more than 60 days prior to the date which it selects for the purchase. We and Enbridge Inc. or the general partner of Enbridge Partners also will cause the transfer agents to mail a notice of the purchase to the record holders of our shares and Enbridge Partners' common units.

        If Enbridge Inc. elects to purchase our shares or if Enbridge Inc. and the general partner of Enbridge Partners, respectively, elect to purchase our shares and Enbridge Partners' common units, Enbridge Inc. will deposit the aggregate purchase price for our shares or the combination of our shares and Enbridge Partners' common units, as the case may be, with the respective transfer agents. On and after the date set for the purchase, the holders of our shares and Enbridge Partners' common units, as the case may be, will have no rights as holders of shares or common

119

units, except to receive the purchase price, and their shares or common units will be deemed to be transferred to Enbridge Inc. for all purposes.

        Enbridge Inc. will comply with Rule 13e-3 under the Securities Exchange Act of 1934 if it makes an optional purchase.

Limited Voting Rights

No Right to Vote to Elect Directors

        Onwers of the class of shares being sold in this offering will have no right to elect our directors. Enbridge Energy Company owns all of our voting shares, which are the only class of shares that are entitled to vote to elect our directors.

Actions Requiring Vote of Owners of Our Shares

        Owners of the class of shares being sold in this offering, other than Enbridge Energy Company and its affiliates, may vote on the matters discussed below, and we, or Enbridge Inc., as the case may be, may take action in connection with these matters only after obtaining the approval of the percentage of our outstanding shares required for each matter.

        The following matters require the approval of a majority of the outstanding shares of the class being sold in this offering:

•

an amendment or waiver of our covenants prohibiting us from:



—

using the proceeds from our sale of shares in this offering other than for the purchase of i-units from Enbridge Partners and the purchase and tax indemnity obligations from Enbridge Inc.;



—

borrowing money or issuing debt;



—

selling, pledging or transferring any i-units;



—

issuing options, warrants or other securities entitling the holder to purchase our shares;



—

purchasing our shares; or



—

liquidating, merging or recapitalizing; and




•

an amendment or waiver of Enbridge Inc.'s covenant regarding it and its affiliates' continued ownership of more than 50% of the total voting power of the general partner of Enbridge Partners.

        On some matters, the approval of a majority of a quorum of the outstanding shares of the class being sold in this offering is required. Our limited liability company agreement provides that the holders of a majority of outstanding shares of the class being sold in this offering who are present at a meeting in person or by proxy constitutes a quorum. These matters include:

•

a proposed issuance of any new class of our shares; and



•

amendments to our limited liability company agreement (including the purchase provisions), the tax indemnification agreement and the delegation of control agreement, but only if the amendment would have a material adverse effect on us or the owners of our shares, as determined in the sole discretion of our board of directors, or would reduce the time for any notice to which the holders of our shares may be entitled.

120

        Additionally, our dissolution requires the approval of either:

•

the owner of our voting shares and a majority of the outstanding shares of the class being sold in this offering; or



•

two-thirds of the outstanding shares of the class being sold in this offering.

        We will also submit to a vote of the owners of our shares, including our voting shares, any matter submitted to us by Enbridge Partners for a vote of i-units. We will vote our i-units in proportion to the number of votes the owners of our shares, including our voting shares, cast for or against a proposal. Under the terms of the Enbridge Partners partnership agreement, the i-units are entitled to vote on all matters on which the common units are entitled to vote. In general, the i-units and common units will vote together as a single class, with each i-unit and common unit having one vote.

        The i-units, however, are entitled to vote as a separate class on some matters. Enbridge Partners may take action in connection with such matters only after obtaining the approval of the percentage of outstanding i-units required for each matter, other than the number of i-units equal to the number of our shares and voting shares owned by the general partner of Enbridge Partners and its affiliates, voting as a separate class.

        The following matters require the approval of a majority of the outstanding i-units, voting as a separate class:

•

amendments to the Enbridge Partners partnership agreement that, in the sole discretion of the general partner of Enbridge Partners, would have a material adverse effect on the holders of the i-units in relation to the other classes of units;



•

amendments or waivers of covenants in the Enbridge Partners partnership agreement that were created for the benefit of the i-units, including covenants relating to the first two types of special events described above under "—Mandatory Purchase—General," that are not permitted to be made by the general partner of Enbridge Partners alone;



•

the removal of the general partner of Enbridge Partners and the election of a successor general partner; and



•

the transfer by the general partner of Enbridge Partners of its general partner interest to a non-affiliated person and the admission of that person as a general partner of Enbridge Partners.

        Additionally, any proposed action that would cause Enbridge Partners to be treated as a corporation for U.S. federal income tax purposes requires the approval of two-thirds of the outstanding i-units, including i-units corresponding to our shares and voting shares owned by the general partner and its affiliates, voting as a separate class.

Limitations on Voting Rights of Certain Owners of Our Shares

        Our limited liability company agreement provides that any shares, including voting shares, owned by Enbridge Energy Company or its affiliates will not be entitled to vote on the following matters submitted by Enbridge Partners for a vote of the i-units:

•

the removal of the general partner of Enbridge Partners and the election of a successor general partner;



•

amendments or waivers of covenants in the Enbridge Partners' partnership agreement that were created for the benefit of the i-units, including covenants relating to the first two types

121

of special events described above under "—Mandatory Purchase—General," that are not permitted to be made by the general partner of Enbridge Partners alone;

•

the election of a successor general partner upon the voluntary withdrawal of the general partner of Enbridge Partners;



•

the transfer by the general partner of Enbridge Partners of its general partner interest to a non-affiliated person and the admission of that person as a general partner; and



•

amendments to the terms of the i-units that would have a material adverse effect on the i-units, as determined in the sole discretion of the general partner of Enbridge Partners.

        In addition, any person or group owning 20% or more of the aggregate number of issued and outstanding common units and our shares cannot vote the shares that they own on any matter. This limitation does not apply to Enbridge Inc. and its affiliates although, as described above, there are a number of matters on which Enbridge Inc. and its affiliates cannot vote the shares that they own.

        When the shares owned by Enbridge Inc. and its affiliates or by a person or group owning 20% or more of the aggregate number of common units and our shares are not entitled to vote as described above, they will be treated as not outstanding. Therefore, they will not be included in the numerator of the number of shares voting for approval or the denominator of the number of shares outstanding in determining whether the required percentage has been voted to approve a matter. The same is true with respect to the i-units. In other words, in this circumstance a number of i-units equal to the number of our shares and voting shares not entitled to vote as described above will be treated as not outstanding and will not be included in the numerator or the denominator in determining if the required percentage of i-units or total units, as the case may be, has been voted to approve a matter.

Actions Not Requiring the Vote of Owners of Our Shares

        Notwithstanding the voting provisions described above, we may take the following actions without obtaining approval of the owners of our shares:

•

make changes in the terms of our shares; and



•

make changes in the terms of our limited liability company agreement (including the purchase provisions), the tax indemnification agreement and the delegation of control agreement;

        that, in either case:

•

are necessary or desirable to meet the requirements of applicable securities and other laws and regulations and exchange rules;



•

are necessary to effect the intent of, or that are otherwise contemplated by, our limited liability company agreement; or



•

our board of directors determines in its sole discretion will not have a material adverse effect on the preferences or rights of our shares.

        Additionally, the agreements governing the terms of our shares provide that we are permitted, in the good faith discretion of our board, to amend the terms of the shares and these agreements without the approval of the holders of our shares to accommodate:

•

the assumption of the obligations of Enbridge Inc. by a person, other than Enbridge Inc. and its affiliates, who becomes the beneficial owner of more than 50% of the total voting power of the general partner of Enbridge Partners in a transaction with respect to which Enbridge Inc.

122

has not notified us and Enbridge Partners will trigger a mandatory purchase obligation but that requires the vote of the holders of the outstanding common units and our shares; or

•

changes resulting from a merger, recapitalization, reorganization or similar transaction involving Enbridge Partners which, in each case, Enbridge Inc. has not notified us and Enbridge Partners will trigger a mandatory purchase obligation but that requires the vote of the holders of the outstanding common units and our shares.

We believe that amendments made pursuant to these agreements, except in some cases in the context of a merger, recapitalization, reorganization or similar transaction, would not be significant enough to constitute the issuance of a new security. However, if such an amendment were deemed to constitute the issuance of a new security, we would have to register the issuance of such new security with the SEC or rely on an exemption from registration.

Merger

        As discussed under "Limited Liability Company Agreement—Merger" on page 134, if Enbridge Partners were to be treated as a corporation for federal income tax purposes, the owner of our voting shares could cause us to merge with or into Enbridge Partners or one of its subsidiaries, provided that the merger is currently non-taxable to holders of our shares, based upon an opinion of counsel or a ruling from the Internal Revenue Service. In such event, you would receive common units or other securities substantially similar to the common units in exchange for our shares that you own.

Tax Indemnity of Enbridge Inc.

        Concurrently with the closing of this offering, we will enter into a tax indemnification agreement with Enbridge Inc. Pursuant to this tax indemnification agreement, Enbridge Inc. has agreed to indemnify us for any tax liability attributable to our formation or our management of Enbridge Partners, and for any taxes arising out of a transaction involving or our ownership of the i-units we own to the extent the transaction or our ownership does not generate sufficient cash to pay our taxes.

Anti-dilution Adjustments

        Concurrently with the closing of this offering, Enbridge Partners will amend its partnership agreement to provide that Enbridge Partners will adjust proportionately the number of i-units held by us by causing an i-unit subdivision, split or combination if various events occur, including:

•

the payment of a common unit distribution on the common units; and



•

a subdivision, split or combination of the common units.

        Our limited liability company agreement provides that the number of all of our outstanding shares shall at all times equal the number of i-units we own. If there is a change in the number of i-units we own, we will pay to all shareholders a share distribution or effect a split or combination of our shares to provide that at all times the number of shares outstanding equals the number of i-units we own. Through the combined effect of the provisions in the Enbridge Partners partnership agreement and the provisions of our limited liability company agreement, the number of outstanding shares and i-units will always be equal.

Transfer Agent and Registrar

        We anticipate that Mellon Investor Services will serve as transfer agent and registrar for our shares and will receive a fee from us for serving in those capacities. All fees charged by the transfer

123

agent for transfers of shares, in connection with distributions of additional shares by us or otherwise, will be borne by us and not by you, except that fees similar to those customarily paid by shareholders for surety bond premiums to replace lost or stolen certificates, taxes and other governmental charges, special charges for services requested by you and other similar fees or charges will be borne by you. There will be no charge to you for disbursements by us of additional shares or cash distributions, if any. We will indemnify the transfer agent and registrar, their agents and each of their respective shareholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted in respect of our activities, except for any liability due to any negligence, gross negligence, bad faith or intentional misconduct of the indemnified person or entity.

        The transfer agent and registrar may at any time resign, by notice to us, or be removed by us, that resignation or removal to become effective upon the appointment by us of a successor transfer agent and registrar and its acceptance of that appointment. If no successor has been appointed and accepted that appointment within 30 days after notice of that resignation or removal, we are authorized to act as the transfer agent and registrar until a successor is appointed.

Replacement of Share Certificates

        We will replace any mutilated certificate at your expense upon surrender of that certificate to the transfer agent. We will replace certificates that become destroyed, lost or stolen at your expense upon delivery to us and the transfer agent of satisfactory evidence that the certificate has been destroyed, lost or stolen, together with any indemnity that may be required by us.

Fractional Shares

        We will make distributions of additional shares, including fractional shares. Records of fractional interests held by the holders of shares will be maintained by The Depository Trust Company or the broker or other nominees through which you hold your shares. You will be able to sell such fractional shares on the New York Stock Exchange only when they equal, in the aggregate, whole shares. Certificates representing fractional shares will not be issued under any condition. Fractional shares will receive distributions when distributions are made on our shares. All fractional shares will be rounded down, if necessary, and stated in six decimal places.

124

DESCRIPTION OF THE i-UNITS

        The i-units are a separate class of limited partner interests in Enbridge Partners. All the i-units will be owned by us and will not be publicly traded. A number of the covenants in our limited liability company agreement and in Enbridge Partners' partnership agreement affect us as the holder of i-units. For a description of the material covenants, see "Description of Our Shares — Covenants" beginning on page 115.

Voting Rights

        Generally, the i-units are entitled to vote together with the common units as a single class. On the matters discussed below, Enbridge Partners may take action only after obtaining the approval of the percentage of outstanding common units and i-units voting together as a single class required for each matter.

        The following items require the approval of two-thirds of the outstanding common units and i-units voting together as a single class, other than common units owned by the general partner of Enbridge Partners' and its affiliates and i-units corresponding to our shares and voting shares owned by the general partner of Enbridge Partners and its affiliates:

•

the transfer by the general partner of Enbridge Partners of its general partner interest to a non-affiliated person and the admission of that person as a general partner of Enbridge Partners;


•

a dissolution or reconstitution of Enbridge Partners;


•

a merger of Enbridge Partners, unless a separate class vote is otherwise required by the Enbridge Partners partnership agreement or Delaware law; and


•

amendments to the Enbridge Partners partnership agreement that are not permitted to be made by the general partner of Enbridge Partners alone.

        The following items require the approval of a majority of the outstanding common units and i-units voting together as a single class, excluding, unless otherwise noted, common units owned by the general partner of Enbridge Partners and its affiliates and i-units corresponding to shares and voting shares owned by the general partner of Enbridge Partners and its affiliates:

•

a sale or exchange of all or substantially all of Enbridge Partners' assets (common units owned by the general partner of Enbridge Partners and its affiliates and i-units corresponding to our shares and voting shares owned by the general partner of Enbridge Partners and its affiliates are included in this vote);


•

the approval of a successor general partner following the voluntary withdrawal of the general partner of Enbridge Partners; and


•

amendments to the limited partnership agreement of Enbridge Energy, Limited Partnership (a wholly owned subsidiary of Enbridge Partners which owns and operates the Lakehead system) that would have a material adverse effect on Enbridge Partnership.

        The i-units also will vote as a separate class on the matters discussed below. As discussed above, some of these matters also require the approval of the outstanding common units and i-units voting together as a single class. The following matters require the approval of a majority of the outstanding i-units, other than i-units corresponding to our shares and voting shares owned by the general partner of Enbridge Partners and its affiliates, voting as a separate class:

•

amendments to the Enbridge Partners partnership agreement that, in the sole discretion of the general partner of Enbridge Partners, would have a material adverse effect on the holders of the i-units in relation to the other classes of units;

125

•

amendments or waivers of covenants in the Enbridge Partners partnership agreement that were created for the benefit of the i-units, including covenants relating to the first two types of special events described above under "Description of Our Shares—Mandatory Purchase—General," on page 117, that are not permitted to be made by the general partner of Enbridge Partners alone;



•

the removal of the general partner of Enbridge Partners and the election of a successor general partner; and



•

the transfer by the general partner of Enbridge Partners of its general partner interest to a non-affiliated person and the admission of that person as a general partner of Enbridge Partners.

        Additionally, any proposed action that would cause Enbridge Partners to be treated as a corporation for U.S. federal income tax purposes requires the approval of two-thirds of the outstanding i-units, including i-units corresponding to our shares and voting shares owned by the general partner and its affiliates, voting as a separate class.

        In all cases, i-units will be voted in proportion to the affirmative and negative votes, abstentions and non-votes of owners of our shares, including our voting shares.

        For further information regarding the voting rights of i-units and our shares, see "Description of Our Shares — Limited Voting Rights" beginning on page 120.

Distributions and Payments

        Under Enbridge Partners' partnership agreement, the number of additional i-units we own after each quarterly distribution of cash will be based upon the amount of cash distributed by Enbridge Partners to an owner of a common unit and the average market price of one of our shares. Following each quarterly distribution, the number of additional i-units we own also will equal the number of additional shares distributed by us to our shareholders.

Merger, Consolidation or Sale of Assets

        In the case of any of the following events:

•

a consolidation or merger of Enbridge Partners with or into another person;



•

a merger of another person into Enbridge Partners, except a merger that does not result in any reclassification, conversion, exchange or cancellation of the common units of Enbridge Partners; or



•

a sale, transfer or lease of all or substantially all the properties and assets of Enbridge Partners;

if the owners of the common units receive cash in the transaction, the number of i-units outstanding will increase (by means of an i-unit split) by an additional amount of i-units determined by dividing the cash received on a common unit by the average market price of one of our shares determined for a 10-trading day period ending immediately prior to the effective time of the transaction, except that in the case of a liquidation, as the owner of the i-units, we will receive the distribution provided pursuant to the liquidation provisions in Enbridge Partners' partnership agreement.

U.S. Federal Income Tax Characteristics and Distribution Upon Liquidation of Enbridge Partners

        The i-units we own generally will not be allocated income, gain, loss or deduction until such time as there is a liquidation of Enbridge Partners. Therefore we do not anticipate that we will have

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material amounts of taxable income resulting from the ownership of the i-units unless we enter into a sale or exchange of the i-units or Enbridge Partners is liquidated.

        Upon the liquidation of Enbridge Partners, Enbridge Inc. is obligated to purchase all of our outstanding shares at a price equal to the higher of the average market price for the shares and the Class A common units. If Enbridge Inc. fails to do so because it is unwilling or unable to raise the necessary funds or because it is otherwise unwilling to do so, it will be in breach of its obligation under the purchase provisions. In that case, the value of your shares will depend on the amount of the liquidating distribution received by us as the owner of the i-units and the taxes we incur as a result of that liquidation.

        The liquidating distribution per i-unit may be less than the liquidating distribution received per common unit. The liquidating distribution for each i-unit and common unit will depend upon the relative per unit capital accounts of the i-units and the common units at liquidation. It is anticipated that over time the capital account per common unit will exceed the capital account per i-unit because the common units will be allocated income and gain prior to liquidation but the i-units will not. At liquidation, it is intended that each i-unit will be allocated income and gain in an amount necessary for the capital account attributable to each i-unit to be equal to that of a common unit. However, there may not be sufficient amounts of income and gain at liquidation to cause the capital accounts of an i-unit to be increased to that of a common unit. In that event, the liquidating distribution per common unit will exceed the liquidating distribution per i-unit.

        Additionally, we may recognize higher taxable income per i-unit than the holders of common units. As a result of the allocation of income and gain to the i-units, we will likely recognize taxable income upon the liquidation of Enbridge Partners. In the event income and gain is allocated to each i-unit then, because of taxes we pay, shareholders will receive less than the holders of the common units.

        Because of these factors, and if Enbridge Inc. fails to purchase our shares as described above, the value of our shares will likely be lower than the value of the common units upon the liquidation of Enbridge Partners.

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COMPARISON OF ENBRIDGE PARTNERS' UNITS WITH OUR SHARES

        The following table compares important features of the units of Enbridge Partners and our shares.

	Units	Our Shares
Numbers of Units and Shares	35,226,384 common units now outstanding   10,000,001 i-units to be outstanding immediately after this offering	One voting share now outstanding   10,000,000 shares to be issued in this offering
Current or Non-liquidating Distributions	On a quarterly basis Enbridge Partners is required to distribute to the owners of all classes of its units an amount equal to its available cash. Distributions to owners of common units will be made in cash. Instead of receiving cash distributions, the number of i-units we own will be increased.    For more information, please read "Distribution Policy — Enbridge Partners' Distribution Policy" on page 47.	We will distribute additional shares or fractions of shares whenever Enbridge Partners distributes cash to owners of common units and we own additional i-units.    For more information, please read "Description of Our Shares — Distributions" beginning on page 113.
Liquidation	Enbridge Partners will dissolve upon any of the following:    • certain events of withdrawal of the general partner of Enbridge Partners;    • an election to dissolve Enbridge Partners by its general partner that is approved by at least two-thirds of all outstanding units;   • entry of a decree of judicial dissolution of Enbridge Partners; or   • the sale of all or substantially all of the assets of Enbridge Partners or Enbridge Energy, Limited Partnership.	We will dissolve upon any of the following:    • entry of a decree of judicial dissolution of us;    • the approval of our voting shares and the owners of at least a majority of our shares; or    • the approval of at least two-thirds of our shares, other than the voting shares.

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Voting Generally, owners of common units vote with owners of i-units as a combined class, including with regard to the following matters:
  
• the transfer by the general partner of Enbridge Partners of its general partner interest to a non-affiliate and the admission of the transferee as a general partner;
 
• a dissolution or reconstitution of Enbridge Partners;
 
• a merger, unless a separate class vote is otherwise required by the Enbridge Partners partnership agreement or Delaware law, or the sale of all or substantially all of the assets of Enbridge Partners;
  
• the approval of a successor general partner following the withdrawal of the general partner; and
  
• some amendments to the partnership agreement of Enbridge Partners.
  
As the owner of the i-units, we vote as a separate class, in accordance with the votes of the owners of our shares, on the following matters:
  
• amendments to Enbridge Partners' partnership agreement that would have a material adverse effect on the i-units in relation to other classes of units;
 
• amendments or waivers of covenants in the Enbridge Partners partnership agreement created for the benefit of the i-units; We will vote our i-units in the same manner as our owners of our shares vote on the matters listed in the "Units" column.
  
In addition, owners of the class of shares issued in this offering, other than Enbridge Energy Company and its affiliates, may vote on the following matters:
  
• materially adverse amendments to our limited liability company agreement (including the purchase provisions), the tax indemnification agreement and the delegation of control agreement;
 
• amendments or waivers of our covenants or covenants of Enbridge Inc. in our limited liability company agreement;
  
• a proposed issuance of any new class of our shares; and
  
• our dissolution.
  
For more information, please read "Description of Our Shares — Limited Voting Rights" beginning on page 120.

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	• the removal of the general partner and the election of a successor general partner;    • the transfer by the general partner of Enbridge Partners of its general partner interest to a non-affiliate and the admission of the transferee as a general partner; and    • any proposed action that would cause Enbridge Partners to be treated as a corporation for U.S. federal income tax purposes.    For more information, please read "Description of the i-Units — Voting Rights" on page 125.
Removal	Enbridge Partners' general partner may be removed by the vote of owners of at least two-thirds of the outstanding common units, excluding units owned by it and its affiliates, voting as a separate class, and at least a majority of the outstanding i-units, excluding i-units corresponding to our shares and voting shares owned by it and its affiliates, voting as a separate class.	Our directors may not be removed by the holders of the shares.   In voting on removal of the general partner of Enbridge Partners, the owners of our shares, excluding shares owned by the owner of our voting shares and its affiliates, direct how the i-units will be voted.

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Optional Rights to Purchase Securities of Public Owners	If Enbridge Energy Company and its affiliates own 85% or more of the outstanding common units and our shares on a combined basis, then Enbridge Energy Company has the option, which it may assign to any of its affiliates to purchase all of the common units that it and its affiliates do not own, but only if Enbridge Inc. and its affiliates elect to purchase all, but not less than all, of our outstanding shares that Enbridge Inc. and its affiliates do not own.	If Enbridge Inc. and its affiliates own 85% or more of the outstanding common units and our shares on a combined basis, then Enbridge Inc. has the option, which it may assign to any of its affiliates, to purchase all of the shares that it and its affiliates do not own, but only if Enbridge Energy Company or its assignee elects to purchase all, but not less than all, of the outstanding common units that Enbridge Energy Company and its affiliates do not own.    In addition, if Enbridge Inc. and its affiliates own 80% or more of our outstanding shares, then Enbridge Inc. has the option, which it may assign to any of its affiliates, to purchase all, but not less than all, of the outstanding shares that it and its affiliates do not own.
Mandatory Obligation to Purchase Securities of Public Owners	None.	Enbridge Inc. will be required to purchase all of our outstanding shares that it and its affiliates do not own in the circumstances described in "Description of Our Shares — Mandatory Purchase" beginning on page 117.
Preemptive Rights to Acquire Securities	No holder of any of Enbridge Partners' units has any preemptive right. Generally, however, whenever Enbridge Partners issues units to any person, the general partner is required to make an additional capital contribution in order to maintain its percentage interest.	No holder of any of our shares has any preemptive right.

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Fractional Securities	Other than fractional i-units, no fractional units may be issued.	Distributions on our shares can be made in fractional shares. These fractional shares may not be traded on the NYSE.    For more information, please read "Description of Our Shares — Fractional Shares" on page 124.
Where Traded	Class A common units are traded on the New York Stock Exchange under the symbol "EEP."   All Class B common units are owned by Enbridge Energy Company and are not listed for trading on any stock exchange.    All i-units will be owned by us. They will not be listed for trading on any stock exchange.	We have applied to list the shares sold in this offering on the New York Stock Exchange under the symbol "      ."    The voting shares owned by Enbridge Energy Company will not be listed for trading on any stock exchange.
Transfer Agent and Register	Mellon Investor Services	We anticipate that Mellon Investor Services will serve as transfer agent and registrar for our shares.

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LIMITED LIABILITY COMPANY AGREEMENT

Formation

        Our certificate of formation has been filed in the office of the Secretary of State of the State of Delaware and is effective.

Purpose and Powers

        Our business purpose is to be a limited partner in and to manage and control the business and affairs of Enbridge Partners and its subsidiaries and to engage in any lawful business purpose or activity related thereto. We possess and may exercise all the powers and privileges granted by the Delaware Limited Liability Company Act, by any other law or by our limited liability company agreement, together with any incidental powers necessary, appropriate, advisable or convenient to the conduct, promotion or attainment of our business purposes or activities.

U.S. Federal Income Tax Status as a Corporation

        We have elected to be treated as a corporation for U.S. federal income tax purposes. The i-units owned by us will not be entitled to allocations of income, gain, loss or deduction of Enbridge Partners until such time as Enbridge Partners is liquidated. Thus, we do not expect to have material amounts of taxable income resulting from our ownership of the i-units unless we dispose of the i-units in a taxable transaction or Enbridge Partners is liquidated. Please read "Material Tax Consequences — U.S. Federal Income Tax Considerations Associated with the Ownership and Disposition of Shares — Enbridge Management Status as a Corporation For U.S. Federal Income Tax Purposes" beginning on page 151.

Power of Attorney

        Each shareholder appoints any person specifically authorized by our board of directors to act as its true and lawful representative and attorney-in-fact, in its name, place and stead, to swear to, acknowledge, deliver and file:

•

all certificates, documents and other instruments that our board of directors deems necessary or appropriate to form, qualify or continue the existence or qualification of us in the State of Delaware and in all other jurisdictions in which the we may conduct business or own property;



•

all certificates, documents and other instruments that our board of directors deems necessary or appropriate to reflect, in accordance with its terms, any amendment, change, modification or restatement of our limited liability company agreement;



•

all certificates, documents and other instruments that our board of directors deems necessary or appropriate to reflect our dissolution and liquidation pursuant to the terms of our limited liability company agreement;



•

all certificates, documents and other instruments relating to the transfer of any shares or other securities we may issue;



•

all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of any class or series of shares or other securities that we may issue;



•

all certificates, documents and other instruments relating to our merger or consolidation with another entity; and

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•

all ballots, consents, approvals, waivers, certificates and other instruments necessary or appropriate, in the sole discretion of our board of directors, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the owners of our shares under the power of attorney or is consistent with the terms of our limited liability company agreement or is necessary or appropriate, in the sole discretion of our board of directors, to effectuate the terms or intent of our limited liability company agreement.

        When required by any provision of our limited liability company agreement that establishes a percentage of our shares or of any class or series of our shares required to take any action, our board of directors may exercise this power of attorney only after the required vote, consent or approval of the percentage of our shares or of such class or series of our shares.

        The power of attorney is irrevocable and coupled with an interest, and it survives and is not affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any shareholder or the transfer of any of the shareholder's shares. The power of attorney also extends to the shareholder's heirs, successors, assigns and personal representatives.

Members

        Enbridge Energy Company is our organizational shareholder and owns the outstanding voting shares as our sole voting member. Our other members are the owners of the class of shares being sold in this offering.

        The voting member may approve a matter or take any action at a meeting or without a meeting by written consent. As the owner of our voting shares, it may call a meeting of the voting shares, as a class, at any time. In limited circumstances described in "Description of Our Shares — Limited Voting Rights" on page 120, the owners of our outstanding shares have the right to approve a number of significant actions.

Limited Liability

        All of our debts, obligations and liabilities, whether arising in contract, tort or otherwise, will be our debts, obligations and liabilities alone, and no owner of shares will be obligated for any of these debts, obligations or liabilities as a result of being an owner of our shares.

The Board

        Our business and affairs will be managed by a board of managers whom we call our directors. Members of the board will be selected only by the owner of our voting shares. The number of our directors may be fixed from time to time by the owner of our voting shares. Our initial board consists of seven directors.

        The board will hold regular and special meetings at any time as may be necessary. Regular meetings may be held without notice on dates set by the board from time to time. Special meetings of the board may be called with reasonable notice to each director upon request of the chairman of the board or upon the written request of any two directors. A quorum for a regular or special meeting will exist when one-third of the directors are participating in the meeting either in person or by conference telephone. Any action required or permitted to be taken at a meeting may be taken without a meeting, without prior notice and without a vote if all of the directors sign a written consent authorizing the action.

        The board is required to establish an audit committee which satisfies the requirements of the principal national securities exchange on which our shares are listed or admitted to trading from

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time to time. In addition to the audit committee, the board can establish other committees composed of two or more directors and can delegate power and authority to these committees.

Officers and Employees

        Subject to the terms of any employment agreements we might have in the future, the board can appoint and terminate officers and retain and terminate employees, agents and consultants. The board can delegate power and authority to officers, employees, agents and consultants, including the power to represent us and bind us in accordance with the scope of their duties. An affiliate of Enbridge Energy Company provides us, Enbridge Energy Company and Enbridge Partners with our employees. The costs of these employees related to their provision of services to us or Enbridge Partners will be borne directly or reimbursed by Enbridge Partners without profit to the affiliate.

Capital Structure

        Our present capital structure consists of two classes of membership equity interests:

•

the class of nonvoting shares being sold in this offering; and



•

the class of voting shares held by Enbridge Energy Company.

        We are authorized to issue an unlimited number of additional voting shares and the class of shares being sold in this offering.

Dissolution and Liquidation

        We will be dissolved only upon:

•

a judicial decree;



•

upon the approval by the owner of the voting shares and by the holders of a majority of the outstanding shares of the class sold in this offering; or



•

upon the approval of holders of two-thirds of our outstanding shares of the class sold in this offering.

        In the event that we are dissolved, we will be liquidated and our affairs will be wound up. All proceeds from the liquidation will be distributed in equal amounts to the holders of our outstanding shares of all classes.

Merger

        Under the provisions of our limited liability company agreement and Enbridge Partners' partnership agreement, if Enbridge Partners were to be treated as a corporation for U.S. federal income tax purposes, the owner of our voting shares would have the right to cause us to merge with or into Enbridge Partners or one of its subsidiaries, provided that such transaction should be currently non-taxable to our shareholders, except with respect to fractional shares and any consideration received from Enbridge Inc. in connection with its mandatory purchase obligations, based upon either an opinion of counsel or a ruling from the IRS. In such event, you would receive common units or other securities substantially similar to the common units in exchange for your shares.

Exculpation and Indemnification

        Notwithstanding any express or implied provision of our limited liability company agreement, or any other legal duty or obligation, none of our directors, officers or owners of our voting shares will

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be liable to us, our affiliates or any other person for any act or omission taken or omitted by the person if such person acted in good faith.

        Our limited liability company agreement provides that we will indemnify our directors, officers and owners of our voting shares from liabilities arising in the course of such persons' service to us, provided that the indemnitee acted in good faith and in a manner that such indemnitee believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe such indemnitee's conduct was unlawful. We expect that the directors and officers will be covered by directors' and officers' liability insurance for potential liability under such indemnification. The owners of our shares will not be personally liable for such indemnification.

        To the extent that the indemnification provisions purport to include indemnification for liabilities arising under the Securities Act of 1933, in the opinion of the SEC, such indemnification is contrary to public policy and therefore unenforceable.

Amendments

        Amendments to our limited liability company agreement and to our certificate of formation can be approved in writing solely by the owners of our voting shares, except for amendments that would reduce the time for any notice to which owners of shares of the class being sold in this offering would be entitled or that would have a material adverse effect on the rights or preferences of the class of shares being sold in this offering. These types of amendments must be approved by the owners of a majority of the outstanding shares of the class being sold in this offering excluding shares held by the owner of our voting shares and its affiliates. Additionally, any amendment with respect to a matter that requires the approval of the owners of shares of the class being sold in this offering must be approved by the owners of not less than the percentage of shares required to approve such matter. For more information regarding the voting rights of our shares and other amendments we may make, please read "Description of Our Shares — Limited Voting Rights" on page 120.

Meetings; Voting

        Meetings of the shareholders may be called by the board, the chairman of the board or by Enbridge Energy Company, as the sole owner of our voting shares. Within 60 days after such a call or within such greater time as may be reasonably necessary for us to comply with applicable law or the regulations of any securities exchange on which the shares are listed, the board of directors will send a notice of the meeting to the shareholders owning shares for which a meeting is being called either directly or indirectly through the transfer agent. The meeting will be held at a time and place determined by the board of directors on a date not more than 60 nor less than 10 days after the mailing of notice of the meeting.

        Except for the sole purpose of voting on a proposal to cause our dissolution, the owners of the class of shares being sold in this offering do not have the right to call a meeting of the shareholders. A meeting of shareholders for the sole purpose of voting on a proposal to cause our dissolution may be called by the owners of 10% of the class of shares being sold in this offering.

        A majority of the shares entitled to vote at a meeting constitutes a quorum. The act of a majority of a quorum at a meeting constitutes the act of the shareholders, except with respect to any proposed action that we have agreed not to take without the approval of a greater percentage of all outstanding shares of the class being sold in this offering. Owners of the class of shares being sold in this offering may not take any action by written consent. For more information on the voting rights of owners of our shares, please read "Description of Our Shares — Limited Voting Rights" on page 120.

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Books and Records; List of Shareholders

        We will keep at our principal office complete and accurate books and records, supporting documentation of the transactions with respect to the conduct of our business and affairs and minutes of the proceedings of our board of directors, the shareholders and each committee of the board. The records will include:

•

complete and accurate information regarding the state of our business and financial condition;



•

a copy of our limited liability company agreement and our certificate of formation, and any amendments thereto;



•

a current list of the names and last known business, residence, or mailing addresses of all of our directors and officers; and



•

our federal, state and local tax returns for our six most recent tax years.

Subject to reasonable standards (including standards governing what information and documents are to be furnished and at what time and location and at whose expense) as may be established by the board or any officer, each shareholder is entitled to all information to which a member of a Delaware limited liability company is entitled to have access pursuant to the Delaware Limited Liability Company Act under the circumstances and subject to the conditions stated in that statute. Specifically, each shareholder will have access to:

•

true and full information regarding the status of our business and financial condition;



•

a copy of our U.S. federal, state and local income tax returns for each year;



•

a current list of the name and last known business, residence or mailing address of each director and each shareholder of record;



•

a copy of our limited liability company agreement and certificate of formation, including all amendments, together with executed copies of any written powers of attorney pursuant to which our limited liability company agreement and any certificate and all amendments have been executed;



•

true and full information regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed by each shareholder and which each shareholder has agreed to contribute in the future, and the date on which each became a shareholder; and



•

other information regarding our affairs as is just and reasonable.

Our board will have the right to keep confidential from the shareholders, for such period of time as the board deems reasonable, any information which the board reasonably believes to be in the nature of trade secrets or other information the disclosure of which the board in good faith believes is not in our best interest or could damage us or our business or which we are required by law or by agreement with a third party to keep confidential.

No Removal

        A shareholder does not have the right or power to resign or withdraw as a shareholder and no shareholder may be expelled or removed as a shareholder. The restriction on a shareholder's ability to resign or withdraw as a shareholder does not, however, apply to a sale or other transfer of our shares by a shareholder, even though the shareholder so selling or transferring may cease to be a shareholder as a result of such sale or transfer.

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Distributions

        For information regarding distributions payable on our shares, please read "Description of Our Shares — Distributions."

Optional and Mandatory Purchase

        For information regarding the obligation of owners of our shares to sell those shares under specified circumstances please read "Description of Our Shares — Mandatory Purchase" on page 117 and "Description of Our Shares — Optional Purchase" on page 119.

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RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Our Relationship with Enbridge Inc. and Enbridge Partners

        The following charts depict a simplified organizational structure of Enbridge Inc. and Enbridge Partners immediately prior to this offering and the acquisition of the Midcoast, Northeast Texas and South Texas systems and the organizational structure following the offering and the acquisition:

Prior to the Offering and Acquisition

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Following the Offering and Acquistion

	Ownership of Enbridge Energy Partners, L.P. and its subsidiaries after the offering:
i-units owned by Enbridge Energy Management, L.L.C.			21.7%
Class A common units owned by the public			67.8%
Class B common units owned by affiliates of Enbridge Inc.			8.5%
General partner interest			2.0%
		Total	100.0%

        Following this offering, subsidiaries of Enbridge Inc. are expected to own collectively 11.6% of Enbridge Partners through their ownership of our shares and general and limited partner interests in Enbridge Partners.

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Delegation of Control Agreement

        Pursuant to a delegation of control agreement among Enbridge Energy Company, Enbridge Partners and its subsidiaries and us, the parties have agreed that:

•

Enbridge Energy Company, as general partner of Enbridge Partners, will delegate to us, and we will assume, upon the closing of this offering, substantially all of Enbridge Energy Company's power and authority to manage and control the business and affairs of Enbridge Partners and its subsidiaries.

•

The delegation of control agreement will provide that we will not take any of the following actions without the approval of Enbridge Energy Company:

—

amend or propose to amend Enbridge Partners' partnership agreement;

—

allow a merger or consolidation involving Enbridge Partners;

—

allow a sale or exchange of all or substantially all of the assets of Enbridge Partners; or

—

dissolve or liquidate Enbridge Partners.

•

Enbridge Energy Company:

—

will remain responsible to Enbridge Partners for actions taken or omitted by Enbridge Management in connection with serving as the delegee of Enbridge Energy Company as if Enbridge Energy Company had itself taken or omitted to take such actions;

—

will own (or one of its affiliates will own) all of our voting shares; and

—

has agreed not to withdraw as general partner, or otherwise, from Enbridge Partners.

•

Enbridge Partners will:

—

recognize the delegation of rights and powers to us;

—

indemnify and protect us and our officers and directors to the same extent as it does with respect to Enbridge Energy Company as general partner; and

—

reimburse our expenses to the same extent as it does with respect to Enbridge Energy Company as general partner.

        The delegation of control agreement with Enbridge Energy Company will continue until the earlier to occur of such time as Enbridge Energy Company has withdrawn or been removed as the general partner of Enbridge Partners or termination of the delegation of control agreement shall have been approved by Enbridge Energy Company, us and holders (other than Enbridge Energy Company and its affiliates) of a majority of the outstanding shares (excluding those owned by Enbridge Energy Company and its affiliates). The partnership agreement of Enbridge Partners will be amended to reflect these agreements. These agreements also will apply to the direct and indirect subsidiaries of Enbridge Partners and their partnership and other organizational agreements will be amended accordingly.

        Enbridge Energy Company will remain the only general partner of Enbridge Partners. Enbridge Energy Company will retain its general partner interest and share in the profits, losses and distributions from Enbridge Partners.

        The withdrawal or removal of Enbridge Energy Company as general partner of Enbridge Partners will simultaneously result in the termination of our power and authority to manage and control the business and affairs of Enbridge Partners. Similarly, if Enbridge Energy Company's power and authority as general partner are modified in the partnership agreement of Enbridge Partners, then the power and authority delegated to us will be modified on the same basis. The delegation of control agreement can be amended by all parties to the agreement, but on any amendment that would reduce the time for any notice to which owners of our shares are entitled or

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would have a material adverse effect on the shares, as determined by our board of directors in its discretion, the approval of the owners of a majority of the shares, excluding shares owned by Enbridge Energy Company and its affiliates, is required.

Contribution Agreement

        Pursuant to the contribution agreement, Enbridge Energy Company will, following the mergers and conversions described under "Acquisition of the Midcoast, Northeast Texas and South Texas Systems" on page 44, contribute Enbridge Midcoast Energy and its subsidiaries that own the acquired systems to Enbridge Partners. The contribution agreement contains customary representations and warranties of Enbridge Energy Company.

        Enbridge Energy Company has agreed to indemnify Enbridge Partners and other related persons for liabilities arising from breaches of its representations, warranties and covenants contained in the contribution agreement and for liabilities related to the systems that are not being acquired by Enbridge Partners. In general, Enbridge Energy Company will not be required to indemnify Enbridge Partners under the contribution agreement until the aggregate liabilities exceed $20 million and Enbridge Energy Company's aggregate liability under the contribution agreement may not exceed, with certain limited exceptions, $150 million. Enbridge Partners and Enbridge Midcoast Energy have agreed to indemnify Enbridge Energy Company and other related persons for liabilities arising after the closing of the acquisition and liabilities arising from breaches of its representations, warranties and covenants contained in the contribution agreement and, subject to Enbridge Energy Company's indemnities, certain other liabilities associated with the acquired systems, whether arising prior to or after the closing of the acquisition. In addition, Enbridge Energy Company has agreed to indemnify Enbridge Partners for failure to have defensible title to certain of the assets included in the acquired systems and for failure to obtain certain regulatory certificates, consents and permits necessary to the conduct of business relating to the acquired systems.

Amendments to Omnibus and Services Agreements

        Enbridge Partners, Enbridge Energy Company and Enbridge Inc. and certain of its affiliates are parties to an omnibus agreement and three services agreements that are being amended and restated in connection with the offering to govern, among other things:

•

potential competition among Enbridge Partners and its subsidiaries on the one hand, and Enbridge Inc. and its subsidiaries, other than Enbridge Partners and its subsidiaries, on the other hand;

•

the provision of various services and personnel by Enbridge Inc. and its affiliates to us in connection with our management of Enbridge Partners' business and affairs, including services and personnel relating to:

—

administrative and executive matters,

—

accounting and purchasing,

—

legal services,

—

information systems,

—

environmental and safety consulting,

—

public relations, and

—

tax planning;

•

the provision of various types of engineering and operational support services by Enbridge Inc. and its affiliates to us in connection with our management of the operation and maintenance of Enbridge Partners' pipeline systems; and

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•

the transportation and delivery of crude oil and other liquid hydrocarbons from the Enbridge system to the Lakehead system and from the Lakehead system to the Enbridge system.

        For a description of the provisions relating to potential competition among Enbridge Partners and its subsidiaries, on the one hand, and Enbridge Inc. and its subsidiaries, other than Enbridge Partners and its subsidiaries, on the other hand, please read "Conflicts of Interest and Fiduciary Responsibilities — Situations in which a Conflict of Interest Could Arise — Enbridge Inc. and its affiliates may compete with Enbridge Partners" on page 146.

        In connection with the delegation to us by Enbridge Energy Company of substantially all of the management and control of Enbridge Partners, each of these agreements will be amended to include us as a party. In managing and controlling Enbridge Partners' business and affairs, we will utilize and rely on the services and personnel provided by Enbridge Inc. and its affiliates under these agreements, who will act on our behalf, to the same extent as Enbridge Energy Company prior to its delegation of management and control to us.

        In some cases, we will reimburse Enbridge Inc. and its affiliates for the actual amount of direct and indirect expenses they incur and payments they make on behalf of us in connection with the services and personnel provided to us under these agreements. In other cases, we will be allocated an agreed percentage of Enbridge Inc.'s total expenses on a consolidated basis with respect to a particular type of service provided by Enbridge Inc. to all of its affiliates, including us. In either case, Enbridge Partners ultimately will pay directly or reimburse us for any amounts we incur under these agreements.

        In connection with the agreement regarding transportation and delivery of crude oil and other liquid hydrocarbons between the Enbridge and Lakehead systems, Enbridge Inc. will be permitted to invoice directly each shipper whose crude oil and liquid hydrocarbons are transported through the Enbridge system from the Lakehead system, and we will be permitted to invoice directly each shipper whose crude oil and liquid hydrocarbons are transported through the Lakehead system from the Enbridge system.

        These agreements generally will provide that Enbridge Inc. will indemnify us for any losses and defend us against any claims as a result of its negligence in connection with providing or failing to provide the agreed services to us. These agreements generally will also provide that we will indemnify Enbridge Inc. for any losses and defend Enbridge Inc. against any claims as a result of our obtaining the agreed services from Enbridge Inc.

Use of Proceeds to Retire Enbridge Midcoast Energy Debt

        As discussed under "Acquisition of the Midcoast, Northeast Texas and South Texas Systems" on page 38, Enbridge Partners has agreed to acquire the Midcoast, Northeast Texas and South Texas systems from Enbridge Energy Company.

        The consideration to be received by Enbridge Energy Company for the contribution of the acquired systems is $929.1 million. Enbridge Partners will fund this consideration through the assumption of $900.0 million in debt related to these systems, payment of $18.8 million in cash and issuance of an additional $10.3 million equity interest in Enbridge Partners. This additional equity interest will satisfy Enbridge Energy Company's obligation to maintain its 2% general partner interest in Enbridge Partners, primarily related to the issuance of i-units to us. The cash portion of the purchase price will be funded by Enbridge Partners by borrowings under its existing credit facility or from affiliates of Enbridge Inc. The debt to be assumed by Enbridge Partners is owed to affiliates of Enbridge Inc. The purchase price is subject to adjustment at closing for working capital, capital expenditures and other items.

        One of the conditions of the closing of this offering will be the successful closing of the acquisition of the acquired systems.

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        Enbridge Partners will use the proceeds it receives from the sale of i-units to us to repay a portion of the debt owed to affiliates of Enbridge Inc. that it will assume in connection with the acquisition.

Tax Indemnification Agreement and Purchase Agreement

        We have entered into the tax indemnification agreement and the purchase agreement with Enbridge Inc. that are described under "Description of Our Shares" beginning on page 113.

Additional Matters

        Conflicts of interest may arise because of the relationship between Enbridge Inc., Enbridge Partners, Enbridge Energy Company and us. Our directors and officers have fiduciary duties to manage our business in a manner beneficial to us and to the holders of our shares. However, these fiduciary duties have been limited pursuant to the terms of our limited liability company agreement. Simultaneously, some of our managers and officers are also directors and officers of Enbridge Inc. and Enbridge Energy Company and have fiduciary duties to manage the business of Enbridge Inc. or Enbridge Energy Company and Enbridge Partners in a manner beneficial to Enbridge Inc. and its shareholders or Enbridge Energy Company, Enbridge Partners and their respective shareholders or unitholders as the case may be. The resolution of these conflicts may not always be in our best interest or in the interest of the holders of our shares.

        Enbridge Energy Company owns the one outstanding voting share eligible to elect our directors. For more information regarding voting rights, please read "Description of Our Shares — Limited Voting Rights" beginning on page 120.

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CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITIES

Conflicts of Interest

        Enbridge Inc. indirectly owns all of the outstanding capital stock, and elects all of the directors, of Enbridge Energy Company, the general partner of Enbridge Partners. Enbridge Energy Company owns the initial outstanding share of our voting stock and elects all of our directors. Enbridge Inc. has a number of interests that differ from those of our shareholders. As a result, there is a risk that important business decisions will not be made in your best interest.

Situations in which a Conflict of Interest Could Arise

We and Enbridge Partners may compete for the time and effort of our directors and officers who are also directors and officers of Enbridge Inc.

        Enbridge Inc. and its affiliates conduct business and activities of their own in which we have no economic interest. There could be material competition for the time and effort of the directors, officers and employees who provide services to us and Enbridge Partners on the one hand, and Enbridge Inc. on the other hand. Our officers are not required to work full time on our affairs or the affairs of Enbridge Partners and may devote significant time to the affairs of Enbridge Inc. or its affiliates.

Enbridge Inc. may sell assets or provide services to Enbridge Partners, giving rise to conflicts of interest.

        Enbridge Inc.'s interest as a seller of assets or provider of services in transactions involving Enbridge Partners would conflict with Enbridge Partners' interests as a buyer of these assets or recipient of these services. Enbridge Inc. would want to receive the highest possible price and Enbridge Partners would want to pay the lowest possible price. The same type of conflict would arise if Enbridge Partners were the seller of services or assets and Enbridge Inc. were the purchaser. The acquisition by Enbridge Partners of the Midcoast, Northeast Texas and South Texas systems is an example of such a transaction with Enbridge Inc. A committee of independent, outside directors of the board of directors of Enbridge Energy Company negotiated the purchase price and terms of the acquisition on behalf of Enbridge Partners and recommended that the full board of directors of the general partner approve the acquisition.

The fiduciary duties of our board of directors to our shareholders and of our board of directors and the general partner of Enbridge Partners to the unitholders have been limited under our limited liability company agreement and Enbridge Partners' partnership agreement.

        Under the delegation of control agreement, the general partner of Enbridge Partners will delegate to us substantially all of its management and control of Enbridge Partners. As a result of this delegation of control, our board of directors could be held to have fiduciary duties similar to the general partner of Enbridge Partners. However, our limited liability company agreement and the Enbridge Partners partnership agreement limit the fiduciary duties of our board of directors and of the general partner of Enbridge Partners. These restrictions allow our board of directors and the general partner of Enbridge Partners to take into account the interests of other parties in addition to our interests and the interests of our shareholders and Enbridge Partners and its unitholders when resolving conflicts of interest. Additionally, this limitation reduces the rights of our shareholders under our limited liability company agreement and the unitholders under the Enbridge Partners partnership agreement to sue our board of directors and the general partner of Enbridge Partners should either of them act in a way that, were it not for this limitation of liability, would be a breach of their fiduciary duties. For more information regarding provisions in our limited liability company agreement and the Enbridge Partners partnership agreement relating to the limitation of fiduciary duties, please read "—Fiduciary Duties Owed to Our Shareholders and to the Owners of Units" beginning on page 147.

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Owners of the shares will have no right to enforce obligations of Enbridge Inc. and its affiliates under agreements with us.

        Any agreements between us and Enbridge Partners, on the one hand, and Enbridge Inc. and its affiliates, on the other hand, will not grant to holders of our shares any right to enforce the obligations of Enbridge Inc. and its affiliates in our or Enbridge Partners' favor.

Contracts between us and Enbridge Partners, on the one hand, and Enbridge Inc. and its affiliates, on the other, will not be the result of arm's-length negotiations.

        Neither the limited liability company agreement nor any of the other contracts or arrangements between us and Enbridge Inc. and its affiliates are or will be the result of arm's-length negotiations.

The similarity of the acquisition strategy of Enbridge Inc. to the strategy of Enbridge Partners creates conflicts of interest.

        Because Enbridge Inc. and Enbridge Partners plan to grow their businesses through acquisitions, conflicts of interest may arise because, as further discussed in the following paragraph, Enbridge Inc. is not prohibited from making acquisitions which also would be of interest to Enbridge Partners. Therefore, regardless of any arrangement for sharing or allocating investment opportunities which may be established between them, this conflict may result in Enbridge Partners being unable to make all of the favorable acquisitions it would otherwise make.

Enbridge Inc. and its affiliates may compete with Enbridge Partners.

        Enbridge Inc. has agreed with Enbridge Partners that, so long as an affiliate of Enbridge Inc. is the general partner of Enbridge Partners, Enbridge Inc. and its subsidiaries may not engage in or acquire any business that is in direct material competition with the businesses of Enbridge Partners as such businesses existed at the time of Enbridge Partners' initial public offering in December 1991, subject to the following material exceptions:

•

Enbridge Inc. and its subsidiaries are not restricted from continuing to engage in businesses, including the normal development of such businesses, in which they were engaged at the time of Enbridge Partners' initial public offering in December 1991;

•

such restriction is limited geographically only to those routes and products for which Enbridge Partners provided transportation at the time of Enbridge Partners' initial public offering;

•

Enbridge Inc. and its subsidiaries are not prohibited from acquiring any competitive business as part of a larger acquisition, so long as the majority of the value of the business or assets acquired, in Enbridge Inc.'s reasonable judgment, is not attributable to the competitive business; and

•

Enbridge Inc. and its subsidiaries are not prohibited from acquiring any competitive business if that business is first offered for acquisition to Enbridge Partners and Enbridge Partners fails to approve, after submission to a vote of unitholders, the making of the acquisition.

        Because Enbridge Partners was not engaged in any aspect of the natural gas business at the time of its initial public offering, Enbridge Inc. and its subsidiaries are not restricted from competing with Enbridge Partners in all aspects of the natural gas business. In addition, Enbridge Inc. and its subsidiaries would be permitted to transport crude oil and liquid petroleum over routes that are not the same as the Lakehead system even if such transportation is in direct material competition with the business of Enbridge Partners.

        This agreement also expressly permitted the reversal by Enbridge Inc. in 1999 of one of its pipelines that extends from Sarnia, Ontario to Montreal, Quebec. As a result of this reversal, Enbridge Inc. competes with Enbridge Partners to supply crude oil to the Ontario, Canada market.

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This competition from Enbridge has reduced Enbrige Partners' deliveries of crude oil to the Province of Ontario.

There could be a conflict as to whether we or Enbridge Partners should issue equity diluting Enbridge Inc.'s ownership.

        It may be in the best interests of Enbridge Partners to finance a transaction or operation by means of the issuance of equity that would result in a reduction of Enbridge Inc.'s percentage ownership of us or Enbridge Partners. Enbridge Inc. may not find it in its interest to have its percentage interest in us or Enbridge Partners reduced at that time. Because it ultimately controls us and the general partner of Enbridge Partners, Enbridge Inc. also makes the determination as to whether we or Enbridge Partners will issue additional equity. This could result in Enbridge Partners either having to forego a transaction that would otherwise be beneficial to it or to finance the transaction or operations in whole or in part by indebtedness that could increase its leverage.

Enbridge Inc. may exercise its purchase rights at a time or price that may be undesirable to you.

        Enbridge Inc. or its affiliates may exercise its optional purchase rights to acquire your shares at any time in its sole discretion after the conditions for such exercise have been satisfied. In exercising the rights, Enbridge Inc. and its affiliates do not have to consider whether the exercise is in your best interest. As a result, Enbridge Inc. may purchase your shares at a time or price that you find undesirable. For more information, please read "Description of Our Shares — Optional Purchase" beginning on page 119.

Fiduciary Duties Owed to Our Shareholders and to the Owners of Units

        The fiduciary duties owed to you by our board of directors are prescribed by Delaware law and our limited liability company agreement. Similarly, the fiduciary duties owed to the owners of units of Enbridge Partners by the general partner of Enbridge Partners and its board of directors are prescribed by Delaware law and Enbridge Partners' partnership agreement. Also, as a result of the delegation of control of Enbridge Partners to us by the general partner of Enbridge Partners, our board of directors could be held to have fiduciary duties similar to the general partner of Enbridge Partners. The Delaware Limited Liability Company Act and the Delaware Revised Uniform Limited Partnership Act provide that Delaware limited liability companies and Delaware limited partnerships, respectively, may, in their limited liability company agreements and partnership agreements, as applicable, restrict the fiduciary duties owed by their boards of directors to their shareholders and by their general partner to their limited partners.

        Our limited liability company agreement and the Enbridge Partners partnership agreement contain various provisions restricting the fiduciary duties that might otherwise be owed. We have modified the fiduciary duties that might otherwise be owed to the shareholders and unitholders in order to accommodate the complex organizational structure and the interrelationships among us and Enbridge Energy Company, Enbridge Partners, Enbridge Inc. and all of their respective affiliates. Additionally, without these modifications, the ability of our board of directors and the general partner of Enbridge Partners to make decisions involving conflicts of interest would be restricted. The modifications also enable us to attract and retain experienced and capable directors and officers. These modifications could be detrimental to our shareholders and the limited partners of Enbridge Partners because they restrict the remedies available to our shareholders and the limited partners of Enbridge Partners for actions that, without those limitations, might constitute breaches of fiduciary duty, as described below.

        The following is a summary of the material restrictions of the fiduciary duties owed by our board of directors to our shareholders and by our board of directors and the general partner of Enbridge Partners to the limited partners of Enbridge Partners. Any fiduciary duties owed to our

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shareholders by Enbridge Inc. and its affiliates, as the beneficial owner of all our voting shares, are similarly restricted or eliminated. These limited fiduciary duties are very different from the more familiar duties of a corporate board of directors, which must always act in the best interests of the corporation and its stockholders.

State-law fiduciary duty standards	Fiduciary duties generally are considered to include an obligation to act with due care and loyalty. The duty of care, unless the limited liability company agreement or partnership agreement provides otherwise, generally would require a manager, director or general partner to act for the limited liability company or limited partnership, as applicable, in the same manner as a prudent person would act on his own behalf. The duty of loyalty, in the absence of a provision in a limited liability company agreement or partnership agreement providing otherwise, generally would prohibit a manager or director of a Delaware limited liability company or a general partner of a Delaware limited partnership from taking any action or engaging in any transaction where a conflict of interest is present.
Our limited liability company agreement modifies these standards	Our limited liability company agreement contains provisions that prohibit shareholders from advancing claims arising from conduct by our board of directors that might otherwise raise issues as to compliance with fiduciary duties or applicable law. For example, our limited liability company agreement permits our board of directors to make a number of decisions in its "sole discretion." This entitles our board of directors to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any shareholder.
	Enbridge Inc., its affiliates, and their officers and directors who are also our officers or directors are not required to offer to us any business opportunity.
	In addition to the other more specific provisions limiting the obligations of our board of directors, our limited liability company agreement further provides that our board of directors will not be liable for monetary damages to us or our shareholders for any acts or omissions if our board of directors acted in good faith. Please read "Limited Liability Company Agreement — Exculpation and Indemnification" on page 135.

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Enbridge Partners' partnership agreement modifies these standards	The general partner of Enbridge Partners, pursuant to the partnership agreement of Enbridge Partners, and our board of directors, by virtue of the delegation of control to us by the general partner, are permitted to attempt to avoid personal liability in connection with the management of Enbridge Partners. The partnership agreement provides that the general partner does not breach its fiduciary duty even if the partnership could have obtained more favorable terms without limitations on the general partner's liability.
	The partnership agreement of Enbridge Partners contains provisions that allow the general partner and by virtue of the delegation of control agreements, our board of directors, to take into account the interests of parties in addition to Enbridge Partners in resolving conflicts of interest, thereby limiting their fiduciary duties to the limited partners. Also, the partnership agreement contains provisions that may restrict the remedies available to limited partners for actions taken that might, without such limitations, constitute breaches of fiduciary duties. Because some of our directors and officers are also directors and officers of Enbridge Inc. and the general partner of Enbridge Partners, the duties of the directors and officers of Enbridge Inc. to the shareholders of Enbridge Inc. may, therefore, come into conflict with the duties of the general partner and our board of directors, to the limited partners and the duties of our board of directors to our shareholders.
Rights and remedies of shareholders	The Delaware Limited Liability Company Act generally provides that a shareholder of a limited liability company may bring an action in the right of a limited liability company to recover a judgment in its favor if the board of directors has refused to bring the action or if an effort to cause the board of directors to bring the action is not likely to succeed. These actions could include actions against the board of directors or particular directors for breach of fiduciary duties or of the limited liability agreement. In addition, the statutory or case law of some jurisdictions may permit a shareholder to institute legal action on behalf of himself and all other similarly situated shareholders to recover damages from our board of directors or officers for violations of fiduciary duties or our limited liability agreement.

        By becoming one of our shareholders, a shareholder agrees to be bound by the provisions in the limited liability company agreement, including the provisions discussed above. This is in accordance with the policy of the Delaware Limited Liability Company Act favoring the principle of freedom of contract and the enforceability of limited liability company agreements. It is not necessary for a shareholder to sign the limited liability company agreement in order for the limited liability company agreement to be enforceable against that person.

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SHARES ELIGIBLE FOR FUTURE SALE

        Prior to this offering there has been no public market for or holders of our shares, and no predictions can be made regarding the effect, if any, that market sales of shares or the availability of shares for sale will have on the market price prevailing from time to time.

        The shares sold in the offering generally will be freely transferable without restriction or further registration under the Securities Act of 1933, except that any shares owned by an "affiliate" of our company, including Enbridge Inc. and Enbridge Energy Company, may not be resold publicly other than in compliance with the registration requirements of the Securities Act of 1933 or under an exemption under Rule 144 or otherwise. Rule 144 permits securities acquired by an affiliate of the issuer to be sold into the market in an amount that does not exceed, during any three-month period, the greater of:

•

1% of the total number of the securities outstanding; or



•

the average weekly reported trading volume of the securities for the four calendar weeks prior to the sale.

        Sales under Rule 144 also are subject to specific manner of sale provisions, notice requirements and the availability of current public information about us.

        Enbridge Energy Company and its affiliates have agreed not to sell any shares they beneficially own for a period of 180 days from the date of this prospectus. Please read "Underwriting" beginning on page 159 for a description of these lock-up provisions.

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MATERIAL TAX CONSEQUENCES

        This section is a summary of the material U.S. federal income tax considerations that may be relevant to prospective owners of shares and, unless otherwise noted in the following discussion, is the opinion of our counsel, Vinson & Elkins L.L.P., insofar as it relates to matters of U.S. federal income tax law and legal conclusions with respect to those matters. This section is based upon current provisions of the Internal Revenue Code, existing and proposed regulations and current administrative rulings and court decisions, all of which are subject to change. Later changes in these authorities may cause the tax consequences to vary substantially from the consequences described below.

        No attempt has been made in the following discussion to address all U.S. federal income tax matters affecting us, Enbridge Partners or the owners of shares. Moreover, the discussion does not address the U.S. federal income tax consequences that may be relevant to certain types of investors subject to specialized tax treatment, such as non-U.S. persons, financial institutions, insurance companies, real estate investment trusts, estates, trusts, dealers and persons entering into hedging transactions. Accordingly, we urge each prospective owner of shares to consult, and depend on, his own tax advisor in analyzing the U.S. federal, state, local tax and foreign tax consequences particular to him of the ownership or disposition of shares.

Legal Opinions

        All statements as to matters of law and legal conclusions, but not as to factual matters, contained in this section, unless otherwise noted, are the opinion of Vinson & Elkins L.L.P. and are based on the accuracy of the representations made by us and, where applicable, Enbridge Partners and Enbridge Energy Company, its general partner.

        No ruling has been or will be requested from the IRS regarding any matter affecting us or prospective owners of shares. The opinion of Vinson & Elkins L.L.P. represents only that firm's best legal judgment and does not bind the IRS or the courts. Accordingly, the opinions and statements made here may not be sustained by a court if contested by the IRS. In addition, any contest of this sort with the IRS may materially and adversely impact the market for shares and the prices at which shares trade. The cost of any contest with the IRS will be borne directly or indirectly by us and the owners of shares. Furthermore, the tax treatment of us or Enbridge Partners or of an investment in us or Enbridge Partners may be significantly modified by future legislative or administrative changes or court decisions. Any modification may or may not be retroactively applied.

U.S. Federal Income Tax Considerations Associated with the Ownership and Disposition of Shares

Enbridge Management Status as a Corporation for U.S. Federal Income Tax Purposes

        An election has been made with the IRS to treat us as a corporation for U.S. federal income tax purposes. Thus, we are subject to U.S. federal income tax on our taxable income at tax rates up to 35%. Additionally, in certain instances we could be subject to the alternative minimum tax of 20% on our alternative minimum taxable income to the extent that the alternative minimum tax exceeds our regular tax.

        The terms of the i-units provide that the i-units owned by us are not entitled to allocations of income, gain, loss or deduction of Enbridge Partners until such time as it is liquidated. Thus, we do not anticipate that we will have material amounts of either taxable income or alternative minimum taxable income resulting from our ownership of the i-units unless we dispose of the i-units in a taxable transaction or Enbridge Partners is liquidated. Please read " — U.S. Federal Income Tax Considerations Associated with the Ownership of i-Units" beginning on page 154.

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Tax Consequences of Share Ownership

        No Flow-Through of Our Taxable Income.    Because we are treated as a corporation for U.S. federal income tax purposes, an owner of shares will not report on its U.S. federal income tax return any of our items of income, gain, loss and deduction.

        Distributions of Additional Shares.    Under the terms of our limited liability company agreement, except in connection with our liquidation, we will not make distributions of cash in respect of shares but rather will make distributions of additional shares. Because these distributions of additional shares will be made proportionately to all owners of shares, the receipt of these additional shares will not be includable in the gross income of an owner of shares for U.S. federal income tax purposes. As each owner of shares receives additional shares, it will be required to allocate its basis in its shares in the manner described below. Please read " — Basis of Shares" below.

        Basis of Shares.    An owner's initial tax basis for its shares will be the amount paid for them. As additional shares are distributed to an owner of shares, it will be required to allocate its tax basis in its shares equally between the old shares and the new shares received. If the old shares were acquired for different prices, and the owner can identify each separate lot, then the basis of each old lot of shares can be used separately in the allocation to the new shares received with respect to the identified old lot. If an owner of shares cannot identify each lot, then it must use the first-in first-out tracing approach. A shareholder cannot use the average cost for all lots for this purpose.

        Disposition of Shares.    Gain or loss will be recognized on a sale or other disposition of shares, whether to a third party or to Enbridge Inc. pursuant to the purchase provisions or in connection with the liquidation of us, equal to the difference between the amount realized and the owner's tax basis for the shares sold or otherwise disposed of. An owner's amount realized will be measured by the sum of the cash and the fair market value of other property received by it.

        Except as noted below, gain or loss recognized by an owner of shares, other than a "dealer" in shares, on the sale or exchange of a share generally will be taxable as capital gain or loss. Capital gain recognized by an individual on the sale of shares held more than 12 months generally will be taxed at a maximum rate of 20%, subject to the discussion below relating to straddles. Capital gain recognized by a corporation on the sale of shares generally will be taxed at a maximum rate of 35%. Net capital loss may offset capital gains and no more than $3,000 of ordinary income, in the case of individuals, and may only be used to offset capital gains in the case of corporations.

        Capital gain treatment may not result from a sale of shares to Enbridge Inc. for cash if a single shareholder of us or our shareholders as a group own 50% or more of the stock of Enbridge Inc. In that case, if either we or Enbridge Inc. has earnings and profits, then the amount received by a seller of shares may be taxed as ordinary income to the extent of its portion of those earnings and profits, but only if the seller sells less than all of its shares or is a shareholder of Enbridge Inc. after applying the ownership attribution rules.

        For purposes of determining whether capital gains or losses on the disposition of shares are long or short term, subject to the discussion below relating to straddles, an owner's holding period begins on its acquisition of shares pursuant to this offering. As additional shares are distributed to the owner, the holding period of each new share received also will include the period for which the owner held the old shares to which the new share relates.

        Because the purchase rights in respect of the shares arise as a result of an agreement other than solely with us, these rights do not appear to constitute inherent features of the shares for tax purposes. Please read "Description of Our Shares — Optional Purchase" beginning on page 119 and "Description of Our Shares — Mandatory Purchase" beginning on page 117. As such, it is

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possible that the IRS would assert that shares and the related purchase rights constitute a straddle for U.S. federal income tax purposes to the extent that those rights are viewed as resulting in a substantial diminution of a share purchaser's risk of loss from owning its shares. In that case, any owner of shares who incurs interest or other carrying charges that are allocable to the shares (as would be the case if the owner finances its acquisition of shares with debt) would have to capitalize those interest or carrying charges to the basis of the related shares and purchase rights rather than deducting those interest or carrying charges currently. In addition, the holding period of the shares would be suspended, resulting in short-term capital gain or loss (generally taxed at ordinary income rates) upon a taxable disposition even if the shares were held for more than 12 months. However, we believe that the purchase rights have minimal value and do not result in a substantial diminution of a share purchaser's risk of loss from owning shares. Based on that, the shares and the related purchase rights should not constitute a straddle for U.S. federal income tax purposes and therefore should not result in any suspension of an owner's holding period or interest and carrying charge capitalization, although there can be no assurance that the IRS or the courts would agree with this conclusion.

        Investment in Shares by Tax-Exempt Investors, Regulated Investment Companies and Non-U.S. Persons.    Employee benefit plans and most other organizations exempt from U.S. federal income tax, including individual retirement accounts, known as IRAs, and other retirement plans, are subject to U.S. federal income tax on unrelated business taxable income. Because we will be treated as a corporation for U.S. federal income tax purposes, an owner of shares will not report on its U.S. federal income tax return any of our items of income, gain, loss and deduction. Therefore, a tax-exempt investor will not have unrelated business taxable income attributable to its ownership or sale of our shares unless its ownership of the shares is debt financed. In general, a share would be debt financed if the tax-exempt owner of shares incurs debt to acquire a share or otherwise incurs or maintains a debt that would not have been incurred or maintained if that share had not been acquired.

        A regulated investment company, or "mutual fund," is required to derive at least 90% of its gross income for every taxable year from qualifying income. As stated above, an owner of shares will not report on its U.S. federal income tax return any of our items of income, gain, loss and deduction. Thus, ownership of shares will not result in income which is not qualifying income to a mutual fund. Furthermore, any gain from the sale or other disposition of the shares, and the associated purchase rights, will qualify for purposes of that 90% test. Finally, shares, and the associated purchase rights, will constitute qualifying assets to mutual funds which also must own at least 50% qualifying assets at the end of each quarter.

        Because distributions of additional shares will be made proportionately to all owners of shares, the receipt of these additional shares will not be includable in the gross income of an owner of shares for U.S. federal income tax purposes. Therefore, no withholding taxes will be imposed on distributions of additional shares to non-resident aliens and foreign corporations, trust or estates. A non-U.S. owner of shares generally will not be subject to U.S. federal income tax or subject to withholding on any gain recognized on the sale or other disposition of shares unless:

•

the gain is considered effectively connected with the conduct of a trade or business by the non-U.S. owner within the U.S. and, where a tax treaty applies, is attributable to a U.S. permanent establishment of that owner (and, in which case, if the owner is a foreign corporation, it may be subject to an additional branch profits tax equal to 30% or a lower rate as may be specified by an applicable income tax treaty);



•

the non-U.S. owner is an individual who holds the shares as a capital asset and is present in the U.S. for 183 or more days in the taxable year of the sale or other disposition and other conditions are met; or

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•

we are or have been a "United States real property holding corporation," or a USRPHC, for U.S. federal income tax purposes.

        We believe that we are a USRPHC for U.S. federal income tax purposes. Therefore, any gain on the sale or other disposition of shares by a non-U.S. owner will be subject to U.S. federal income tax unless the shares are regularly traded on an established securities market and the non-U.S. owner has not actually or constructively held more than 5% of the shares at any time during the shorter of the five-year period preceding the disposition and that owner's holding period. We expect our shares to be traded on an established securities market.

        Merger of Enbridge Partners and Enbridge Management. As discussed under "Limited Liability Company Agreement—Merger" on page 135, if Enbridge Partners were to be treated as a corporation for federal income tax purposes, the owner of our voting shares could cause us to merge into Enbridge Partners or one of its subsidiaries provided that the merger is currently non-taxable to our shareholders based upon an opinion of counsel or a ruling from the IRS. In such event, you would receive common units or other securities substantially similar to the common units in exchange for your shares in a transaction in which neither gain nor loss is recognized.

U.S. Federal Income Tax Considerations Associated with the Ownership of i-Units

        A partnership is not a taxable entity and incurs no U.S. federal income tax liability. Instead, each partner of a partnership is required to take into account its share of items of income, gain, loss and deduction of the partnership in computing its U.S. federal income tax liability, regardless of whether cash distributions are made to it by the partnership. Distributions by a partnership to a partner generally are not taxable unless the amount of cash distributed to the partner is in excess of its adjusted basis in its partnership interest.

        With respect to the i-units to be owned by us, the Enbridge Partners partnership agreement provides that no allocations of income, gain, loss or deduction will be made in respect of the i-units until such time as there is a liquidation of Enbridge Partners. If there is a liquidation of Enbridge Partners, it is intended that we will receive allocations of income and gain, or deduction and loss, in an amount necessary for the capital account attributable to each i-unit to be equal to that of a common unit. The aggregate capital account of our i-units will not be increased as a result of our ownership of additional i-units. Thus, each additional i-unit we own after a cash distribution to other unitholders generally will represent the right to receive additional allocations of such income and gain, or deduction and loss on the liquidation of Enbridge Partners. As a result, we likely would realize taxable income or loss upon the liquidation of Enbridge Partners. However, no assurance can be given that there will be sufficient amounts of income and gain to cause the capital account attributable to each i-unit to be equal to that of a common unit. If they are not equal, we will receive less value than would be received by a holder of common units upon such a liquidation. We also likely would realize taxable income or loss upon any sale or other disposition of our i-units.

        The anticipated benefit of an investment in our shares depends largely on the treatment of Enbridge Partners as a partnership for U.S. federal income tax purposes. No ruling has been or will be sought from the IRS and the IRS has made no determination as to Enbridge Partners' status or the status of its operating partnerships as partnerships or disregarded entities for U.S. federal income tax purposes or whether Enbridge Partners' operations generate "qualifying income" under Section 7704 of the Internal Revenue Code. Instead, we will rely on the opinion of Vinson & Elkins L.L.P. that, based upon the Internal Revenue Code, its regulations, published revenue rulings and court decisions and the representations described below, Enbridge Partners and its operating partnerships have been and will be treated as partnerships or disregarded entities for U.S. federal income tax purposes.

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        Treasury Regulations pertaining to the classification of entities such as Enbridge Partners as partnerships or corporations for U.S. federal income tax purposes were significantly revised effective January 1, 1997. Pursuant to these revised Treasury Regulations, known as the "check-the-box" regulations, entities organized as limited partnerships under domestic partnership statutes are treated as partnerships for U.S. federal income tax purposes unless they elect to be treated as corporations. Domestic limited partnerships in existence prior to 1997 and classified as partnerships as of December 31, 1996, under the prior Treasury Regulations, would continue to be classified as partnerships after 1996 unless they elected another form of classification under the check-the-box regulations. Neither Enbridge Partners nor any of its operating partnerships has elected to be treated as a corporation under the check-the-box regulations, and Vinson & Elkins L.L.P. is of the opinion that Enbridge Partners and its operating partnerships each were treated as partnerships for U.S. federal income tax purposes on and before December 31, 1996, under the prior Treasury Regulations, and subsequently have been and will be treated as partnerships or disregarded entities for U.S. federal income tax purposes.

        In rendering its opinion, Vinson & Elkins L.L.P. has relied on factual representations made by us, Enbridge Partners and its general partner. The representations made by us, Enbridge Partners and its general partner upon which Vinson & Elkins L.L.P. has relied are:

•

neither Enbridge Partners nor its operating partnerships have elected or will elect to be treated as a corporation;



•

prior to January 1, 1997, (i) Enbridge Partners and each operating partnership were operated in accordance with applicable state partnership statutes, their respective partnership agreements and the statements and representations made in this prospectus, and (ii) the general partner of Enbridge Partners and each operating partnership, at all times while acting as general partner, had a substantial net worth on a fair market value basis (excluding any interest in, or receivables due from, Enbridge Partners and each operating partnership).



•

for each taxable year, more than 90% of Enbridge Partners' gross income has been and will be income from sources that Vinson & Elkins L.L.P. has opined or will opine is "qualifying income" within the meaning of Section 7704(d) of the Internal Revenue Code; and



•

each hedging transaction treated as resulting in "qualifying income" by Enbridge Partners will be accurately identified as a hedging transaction pursuant to applicable Treasury regulations, and will be associated with oil, gas or products thereof that are held or to be held by Enbridge Partners in activities that Vinson & Elkins L.L.P. has opined or will opine result in qualifying income.

        Section 7704 of the Internal Revenue Code provides that publicly-traded partnerships will, as a general rule, be taxed as corporations. However, an exception, referred to as the "Qualifying Income Exception," exists with respect to publicly-traded partnerships of which 90% or more of the gross income for every taxable year consists of "qualifying income." Qualifying income includes income and gains derived from the marketing, transportation, storage and processing of crude oil, natural gas and products thereof. Other types of qualifying income include interest other than from a financial business, dividends, gains from the sale of real property and gains from the sale or other disposition of assets held for the production of income that otherwise constitutes qualifying income. Enbridge Partners estimates that less than 4% of its current gross income is not qualifying income; however, this estimate could change from time to time. Based upon and subject to this estimate, the factual representations made by us, Enbridge Partners and its general partner and a review of the applicable legal authorities, Vinson & Elkins L.L.P. is of the opinion that at least 90% of Enbridge Partners' current gross income constitutes qualifying income.

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        If Enbridge Partners fails to meet the Qualifying Income Exception, other than a failure which is determined by the IRS to be inadvertent and which is cured within a reasonable time after discovery, Enbridge Partners will be treated as if it had transferred all of its assets, subject to liabilities, to a newly formed corporation, on the first day of the year in which it fails to meet the Qualifying Income Exception, in return for stock in that corporation and then distributed that stock to the unitholders in liquidation of their interests in Enbridge Partners. This contribution and liquidation should be tax-free to unitholders and Enbridge Partners so long as Enbridge Partners, at that time, does not have liabilities in excess of the tax basis of its assets. Thereafter, Enbridge Partners would be treated as a corporation for U.S. federal income tax purposes.

        If Enbridge Partners were treated as a corporation in any taxable year, either as a result of a failure to meet the Qualifying Income Exception or otherwise, its items of income, gain, loss and deduction would be reflected only on its tax return rather than being passed through to its unitholders, and its net income would be taxed to it at corporate rates. Our ownership of additional i-units after each quarterly distribution of cash to common unitholders generally would be taxed as a corporate distribution to us, with that distribution treated as either taxable dividend income, to the extent of Enbridge Partners' current or accumulated earnings and profits, or, in the absence of earnings and profits, a nontaxable return of capital, to the extent of our tax basis in our i-units, or taxable capital gain, after our tax basis in our i-units is reduced to zero. Because a tax would be imposed upon Enbridge Partners as a corporation, the cash available for distribution to a common unitholder would be substantially reduced, which would reduce the value of additional i-units we own after a distribution of cash is made to other unitholders and the value of our shares distributed quarterly to you. Accordingly, Enbridge Partners' treatment as a corporation would result in a substantial reduction of the value of our shares.

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ERISA CONSIDERATIONS

        The following is a summary of material considerations arising under the Employee Retirement Income Security Act of 1974, as amended, commonly known as "ERISA," and the prohibited transaction provisions of section 4975 of the Internal Revenue Code that may be relevant to a prospective purchaser of our shares. The discussion does not purport to deal with all aspects of ERISA or section 4975 of the Internal Revenue Code that may be relevant to particular shareholders in light of their particular circumstances.

        We base this discussion on current provisions of ERISA and the Internal Revenue Code, existing and currently proposed regulations under ERISA and the Internal Revenue Code, the legislative history of ERISA and the Internal Revenue Code, existing administrative rulings of the Department of Labor, or "DOL," and reported judicial decisions. No assurance can be given that legislative, judicial or administrative changes will not affect the accuracy of any statements herein with respect to transactions entered into or contemplated prior to the effective date of such changes.

A fiduciary making a decision to invest in our shares on behalf of a prospective purchaser that is an employee benefit plan, a tax-qualified retirement plan or an IRA is advised to consult with its own legal advisor regarding the specific considerations arising under ERISA, section 4975 of the Internal Revenue Code and state law with respect to the purchase, ownership, sale or exchange of our shares by such plan or IRA.

        Each fiduciary of a pension, profit-sharing or other employee benefit plan, known as an "ERISA Plan," subject to Title I of ERISA should consider carefully whether an investment in our shares is consistent with its fiduciary responsibilities under ERISA. In particular, the fiduciary requirements of Part 4 of Title I of ERISA require an ERISA Plan's investments to be (1) prudent and in the best interests of the ERISA Plan, its participants and its beneficiaries, (2) diversified in order to minimize the risk of large losses, unless it is clearly prudent not to do so and (3) authorized under the terms of the ERISA Plan's governing documents (provided the documents are consistent with ERISA). In determining whether an investment in the shares is prudent for purposes of ERISA, the appropriate fiduciary of an ERISA Plan should consider all of the facts and circumstances, including whether the investment is reasonably designed, as a part of the ERISA Plan's portfolio for which the fiduciary has investment responsibility, to meet the objectives of the ERISA Plan, taking into consideration the risk of loss and opportunity for gain (or other return) from the investment, the diversification, cash flow and funding requirements of the ERISA Plan's portfolio.

        The fiduciary of an individual retirement account, commonly called an "IRA," or of a qualified retirement plan not subject to Title I of ERISA because it is a governmental or church plan or because it does not cover common law employees (a "Non-ERISA Plan") should consider that such an IRA or Non-ERISA Plan may only make investments that are authorized by the appropriate governing documents and under applicable state law.

        Fiduciaries of ERISA Plans and persons making the investment decision for an IRA or other Non-ERISA Plan should consider the application of the prohibited transaction provisions of ERISA and the Internal Revenue Code in making their investment decision. A "party in interest" or "disqualified person" with respect to an ERISA Plan or with respect to a Non-ERISA Plan or IRA subject to Internal Revenue Code section 4975 is subject to (1) an initial 15% excise tax on the amount involved in any prohibited transaction involving the assets of the plan or IRA and (2) an excise tax equal to 100% of the amount involved if any prohibited transaction is not corrected. If the disqualified person who engages in the transaction is the individual on behalf of whom an IRA is maintained (or his beneficiary), the IRA will lose its tax-exempt status and its assets will be deemed to have been distributed to such individual in a taxable distribution (and no excise tax will be imposed) on account of the prohibited transaction. In addition, a fiduciary who permits an ERISA

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Plan to engage in a transaction that the fiduciary knows or should know is a prohibited transaction may be liable to the ERISA Plan for any loss the ERISA Plan incurs as a result of the transaction or for any profits earned by the fiduciary in the transaction.

        The following section discusses certain principles that apply in determining whether the fiduciary requirements of ERISA and the prohibited transaction provisions of ERISA and the Internal Revenue Code apply to an entity because one or more investors in the equity interests in the entity is an ERISA Plan or is a Non-ERISA Plan or IRA subject to section 4975 of the Internal Revenue Code. An ERISA Plan fiduciary should also consider the relevance of those principles to ERISA's prohibition on improper delegation of control over or responsibility for "plan assets" and ERISA's imposition of co-fiduciary liability who participates in, permits (by action or inaction) the occurrence of or fails to remedy a known breach by another fiduciary.

        Regulations of the DOL defining "plan assets," known as the "Plan Asset Regulations," generally provide that when an ERISA Plan or Non-ERISA Plan or IRA acquires a security that is an equity interest in an entity and the security is neither a "publicly-offered security" nor a security issued by an investment company registered under the Investment Company Act of 1940, the ERISA or Non-ERISA Plan's or IRA's assets include both the equity interest and an undivided interest in each of the underlying assets of the issuer of such equity interest, unless one or more -exceptions specified in the Plan Asset Regulations are satisfied.

        The Plan Asset Regulations define a publicly-offered security as a security that is "widely-held," "freely transferable," and either part of a class of securities registered under the Exchange Act, or sold pursuant to an effective registration statement under the Securities Act, provided the securities are registered under the Exchange Act within 120 days after the end of the fiscal year of the issuer during which the offering occurred. The Plan Asset Regulations provide that a security is "widely held" only if it is part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another. A security will not fail to be widely held because the number of independent investors falls below 100 subsequent to the initial public offering as a result of events beyond the issuer's control. The Plan Asset Regulations provide that whether a security is "freely transferable" is a factual question to be determined on the basis of all relevant facts and circumstances.

        We anticipate that our shares will meet the criteria of publicly offered securities under the Plan Asset Regulations. The underwriters expect (although no assurance can be given) that our shares will be held beneficially by more than 100 independent persons by the conclusion of the offering, that no restrictions will be imposed on the transfer of the shares and that the shares will be sold as part of an offering pursuant to an effective registration statement under the Securities Act of 1933. As a result, the shares will be timely registered under the Securities Exchange Act of 1934.

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UNDERWRITING

        We and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. Subject to the conditions contained in the underwriting agreement, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman, Sachs & Co., is the representative of the underwriters.

Underwriters			Number of Shares
	Goldman, Sachs & Co.
		Total	10,000,000

        As part of this offering, the underwriters will sell 500,000 shares to Enbridge Energy Company. The underwriters are not entitled to any discount or commission on these shares.

        The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

        If the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to an additional 1,500,000 shares from us to cover such sales. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

        The following table shows the per share and total underwriting discounts and commissions to be paid by us to the underwriters. Such amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase 1,500,000 additional shares.

Paid by Enbridge Management		No Exercise	Full Exercise
	Per Share	$	$
	Total	$	$

        Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $    per share from the initial public offering price. Any such securities dealers may resell any shares purchased from the underwriters to certain other brokers or dealers at a discount of up to $    per share from the initial public offering price. If all the shares are not sold at the initial public offering price, the representatives may change the offering price and the other selling terms.

        We, Enbridge Inc., Enbridge Partners, Enbridge Energy Company and our and their directors and executive officers have agreed with the underwriters not to dispose of or hedge any of our securities or securities of Enbridge Partners that are substantially similar to the shares, i-units or common units, including, but not limited to, any securities that are convertible into or exchangeable for shares, i-units or common units or any substantially similar securities, without the prior written consent of Goldman, Sachs & Co. in its sole discretion. Goldman, Sachs & Co. has no set criteria for the waiver of these restrictions and currently has no intention to waive these restrictions. With respect to shares and i-units and securities of the above issuers that are substantially similar to the shares and i-units as described above, but specifically excluding common units, the lock-up period will be from the date of this prospectus and continuing through the date 180 days after the date of this prospectus. With respect to the common units and securities of the above issuers that are

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substantially similar to the common units as described above, the lock-up period will be from the date of this prospectus and continuing through the date of 60 days after the date of this prospectus. This agreement does not apply to (1) the sale of i-units by Enbridge Partners to us and subsequent quarterly distributions of i-units and shares as contemplated by the prospectus, (2) the disposal of such securities in connection with the acquisition of assets (other than cash), businesses or the capital stock or other ownership interests of businesses by any of Enbridge Inc., Enbridge Partners, or any operating subsidiary of Enbridge Partners owning common units on the date of this prospectus if the recipient of such securities agrees not to dispose of the securities received in connection with such acquisitions during the lock-up period, and (3) the disposal of such securities pursuant to an employee stock or unit option plan existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this prospectus. Please read "Shares Eligible for Future Sale" on page 150 for a discussion of certain transfer restrictions.

        Prior to the offering, there has been no public market for our shares. The initial public offering price of our shares will be negotiated among us and the representative of the underwriters. We expect our shares to be offered at a price within approximately 5% of the closing price of Enbridge Partners' Class A common units, which trade on the NYSE under the symbol "EEP," prior to the determination of the offering price. The other factors we expect to be considered in determining the initial public offering price of our shares, include prevailing market conditions, Enbridge Partners' historical performance, estimates of our and Enbridge Partners' business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.

        We have applied to list our shares on the New York Stock Exchange under the symbol "      ." In order to meet one of the requirements for listing the shares on the New York Stock Exchange, the underwriters have undertaken to sell lots of 100 or more shares to a minimum of 2,000 beneficial holders.

        In connection with the offering, the underwriters may purchase and sell shares and Class A common units in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Shorts sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. "Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares from us in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares from us. "Naked" short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares or Class A common units made by the underwriters in the open market prior to the completion of the offering.

        The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representative has repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

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        Purchases to cover a short position and stabilizing transactions may have the effect of preventing or retarding a decline in the market price of the shares or the Class A common units, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the shares or the Class A common units. As a result, the price of the shares or the Class A common units may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise.

        Each underwriter has represented, warranted and agreed that: (i) it has not offered or sold and, prior to the expiry of a period of six months from the closing of this offering, will not offer or sell any shares to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of any shares in circumstances in which section 21(1) of the FSMA does not apply to us; and (iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

        The shares may not be offered, sold, transferred or delivered in or from The Netherlands, as part of their initial distribution or as part of any re-offering, and neither this prospectus nor any other document in respect of this offering may be distributed or circulated in The Netherlands, other than to individuals or legal entities which include, but are not limited to, banks, brokers, dealers, institutional investors and undertakings with a treasury department, who or which trade or invest in securities in the conduct of a business or profession.

        At our request, the underwriters are reserving up to               shares for sale at the initial public offering price to our directors through a directed share program. The number of shares available for sale to the general public in the public offering will be reduced to the extent these persons purchase the reserved shares. Any shares not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered hereby.

        A prospectus in electronic format will be made available on the websites maintained by one or more of the lead managers of this offering and may also be made available on websites maintained by other underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the lead managers to underwriters that may make internet distributions on the same basis as other allocations.

        The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

        We estimate that our share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $3 million.

        We and each of Enbridge Partners and Enbridge Inc. have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933.

        Some of the underwriters have from time to time performed various investment banking and financial advisory services, participated in the underwriting of debt and equity securities offerings and served as lender or agent under credit facilities for Enbridge Partners, Enbridge Inc. and their affiliates for which they have received customary fees and reimbursement of their out of pocket expenses. The underwriters may, from time to time in the future, engage in transactions with and perform services for us, Enbridge Partners, Enbridge Inc. and our and their affiliates in the ordinary course of business.

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LEGAL MATTERS

        The validity of the shares and i-units offered by this prospectus will be passed upon for us by Vinson & Elkins L.L.P., Houston, Texas. Legal matters in connection with the shares, i-units and purchase obligation offered by this prospectus will be passed upon for the underwriters by Andrews & Kurth Mayor, Day & Caldwell L.L.P., Houston, Texas.

EXPERTS

        The financial statements as of May 23, 2002 of Enbridge Management included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

        The consolidated financial statements of Enbridge Partners as of and for the years ended December 31, 1999, 2000 and 2001, included in and incorporated in this prospectus by reference to the Annual Report on Form 10-K of Enbridge Partners for the year ended December 31, 2001, and the audited consolidated statement of financial position of Enbridge Energy Company as of December 31, 2001 and 2000, incorporated in this prospectus by reference to the Current Report on Form 8-K of Enbridge Partners filed on February 26, 2002, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

        The financial statements of Enbridge Inc. incorporated in this prospectus by reference to the Annual Report on Form 40-F of Enbridge Inc. for the year ended December 31, 2001 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

        The financial statements as of and for the years ended December 31, 1999 and 2000, the four months ended April 30, 2001 and the eight months ended December 31, 2001 of Enbridge Midcoast Energy included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

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WHERE YOU CAN FIND MORE INFORMATION

        We have filed on Form S-1, Enbridge Partners has filed on Form S-3 and Enbridge Inc. has filed on Form F-3, a registration statement with the SEC under the Securities Act of 1933 with respect to the securities offered in this offering. This prospectus, which is a part of those registration statements, does not contain all of the information set forth in those registration statements, or the exhibits which are part of those registration statements, parts of which are omitted as permitted by the rules and regulations of the SEC. For further information about us, Enbridge Partners and Enbridge Inc. and about the securities to be sold in this offering, please refer to those registration statements and the exhibits which are part of those registration statements.

        Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934 and, in accordance therewith, will file periodic reports, proxy and information statements and other information with the SEC. Our periodic reports, proxy and information statements and other information will be available for inspection and copying at the public reference facility and web site of the SEC referred to below.

        We intend to furnish our shareholders with annual reports containing audited financial statements and an opinion thereon expressed by independent certified public accounts. We also intend to furnish other reports as we may determine or as required by law.

        Enbridge Partners and Enbridge Inc. file annual, quarterly and other reports, proxy statements and other information with the SEC. Their current SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document they file at the SEC's public reference room located at:

450 Fifth Street, N.W.
Washington, D.C. 20549

        Please call the SEC at 1-800-SEC-0330 for further information on the public reference room and its copy charges.

        Because Enbridge Partners' Class A common units and Enbridge Inc.'s common stock are listed on the New York Stock Exchange, Enbridge Partners' and Enbridge Inc.'s reports, proxy statements and other information can be reviewed and copied at the office of that exchange at 20 Broad Street, New York, New York 10005.

        The SEC allows Enbridge Partners and Enbridge Inc. to "incorporate by reference" the information they file with the SEC, which means that Enbridge Partners and Enbridge Inc. can disclose important information to you without actually including the specific information in this prospectus by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Information that Enbridge Partners and Enbridge Inc. file with the SEC automatically will update and supersede this information. Enbridge Partners and Enbridge Inc. incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the termination of the offering, other than information furnished under Item 9 of any Form 8-K that is listed below or

163

filed in the future and which is not deemed filed under the Securities Exchange Act of 1934 and is not incorporated in this prospectus:

Enbridge Partners SEC Filings (File No. 1-10934)	Period
Registration Statement on Form 8-A/A	Filed August 8, 2001
Annual Report on Form 10-K	Year ended December 31, 2001
Quarterly Report on Form 10-Q	Three months ended March 31, 2002
Current Report on Form 8-K	Filed February 26, 2002
Current Report on Form 8-K	Filed February 27, 2002
Current Report on Form 8-K	Filed May 23, 2002
Enbridge Inc. SEC Filings (File No. 0-21080)	Period
Annual Report on Form 40-F	Year ended December 31, 2001
Report of Foreign Private Issuer on Form 6-K	Filed February 4, 2002
Report of Foreign Private Issuer on Form 6-K	Filed March 4, 2002
Report of Foreign Private Issuer on Form 6-K	Filed March 27, 2002
Report of Foreign Private Issuer on Form 6-K	Filed May 16, 2002

        Enbridge Partners will provide copies of any of its documents incorporated by reference in this prospectus and any exhibit specifically incorporated by reference in those documents at no cost by request directed to it at the following address and telephone number:

Investor Relations
Enbridge Energy Partners, L.P.
1100 Louisiana, Suite 3300
Houston, Texas 77002
866-337-4636 or
866-EEP-INFO
713-650-8900
investor@enbridgepartners.com

        Enbridge Inc. will provide copies of any of its documents incorporated by reference in this prospectus and any exhibit specifically incorporated by reference in those documents at no cost by request directed to it at the following address and telephone number:

Investor Relations
Enbridge Inc.
3000, 425-1st Street S.W.
Calgary, Alberta, Canada T2P 3L8
800-481-2804
investor@corp.enbridge.com

        The information concerning Enbridge Partners contained or incorporated by reference in this document has been provided by Enbridge Partners, and the information concerning Enbridge Inc. contained or incorporated by reference in this document has been provided by Enbridge Inc.

        You should rely only on the information contained or incorporated by reference in this prospectus to purchase the securities offered by this prospectus. We, Enbridge Partners and Enbridge Inc. have not authorized anyone to provide you with information that is different from what is contained in this prospectus. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the cover, and the mailing of the prospectus to shareholders shall not create any implication to the contrary.

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INDEX TO FINANCIAL STATEMENTS

ENBRIDGE ENERGY PARTNERS, L.P.

PRO FORMA FINANCIAL STATEMENTS (Unaudited)

	Page
Introduction	F-3
Unaudited Pro Forma Consolidated Statement of Income for the Year Ended December 31, 2001	F-5
Unaudited Pro Forma Consolidated Statement of Income for the Three Months Ended March 31, 2002	F-6
Unaudited Pro Forma Consolidated Statement of Financial Position as at March 31, 2002	F-7
Notes to Unauditied Pro Forma Consolidated Financial Statements	F-8
HISTORICAL FINANCIAL STATEMENTS
Consolidated Statement of Income for the Three Months Ended March 31, 2001 and 2002	F-13
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2001 and 2002	F-14
Consolidated Statement of Financial Position as at March 31, 2001 and 2002	F-15
Consolidated Statement of Partners' Capital for the Three Months Ended March 31, 2001 and 2002	F-16
Notes to the Consolidated Financial Statements	F-17
Report of Independent Accountants	F-20
Consolidated Statements of Income for the Years Ended December 31, 1999, 2000, 2001	F-21
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 2000, 2001	F-22
Consolidated Statements of Financial Position as at December 31, 2000 and 2001	F-23
Consolidated Statements of Partners' Capital for the Years Ended December 31, 1999, 2000, 2001	F-24
Notes to the Consolidated Financial Statements	F-25
Supplementary Information (Unaudited) Selected Quarterly Financial Data	F-38
ENBRIDGE MIDCOAST ENERGY, INC.
HISTORICAL FINANCIAL STATEMENTS
Consolidated Statement of Income for the Three Months Ended March 31, 2002 and the Four Months Ended April 30, 2002	F-39
Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2002 and the Four Months Ended April 30, 2002	F-40
Consolidated Statement of Financial Position for the Three Months Ended March 31, 2002 and for the Four Months Ended April 30, 2002	F-41
Notes to the Consolidated Financial Statements	F-42

F-1

Report of Independent Accountants	F-43
Report of Independent Accountants	F-44
Consolidated Balance Sheets as at December 31, 2000 and 2001	F-45
Consolidated Statements of Operations	F-46
Consolidated Statements of Comprehensive Income	F-47
Consolidated Statements of Shareholders' Equity	F-48
Consolidated Statements of Cash Flows	F-49
Notes to Consolidated Financial Statements	F-50
ENBRIDGE ENERGY MANAGEMENT, L.L.C.
HISTORICAL FINANCIAL STATEMENTS
Report of Independent Accountants	F-70
Balance Sheet as at May 23, 2002	F-71
Notes to Balance Sheet	F-72

F-2

Unaudited Pro Forma Financial Statements

Introduction

        The following pro forma financial information has been prepared to assist in your analysis of the financial effects of the proposed acquisition of Enbridge Midcoast Energy, Inc., which includes the Northeast Texas, South Texas, compression assets, and Hobart asset acquisitions. The proposed acquisition excludes Enbridge Midcoast Energy Canadian assets, which will be retained by the General Partner.

        The pro forma consolidated statement of financial position presents the combined financial position of Enbridge Partners and the proposed acquisitions assuming they had occurred as of March 31, 2002. In addition, the results of operations of Enbridge Partners and the proposed acquisitions have also been combined for the three months ended March 31, 2002 and for the year ending December 31, 2001. The pro forma consolidated statements of income assume the acquisition was effective as of the beginning of the fiscal year presented. This pro forma information is based on the following information:

•

The audited and unaudited financial statements of Enbridge Midcoast Energy. Financial data is adjusted as necessary to include the Northeast Texas, South Texas, compression and Hobart acquisitions, all of which will have closed prior to the effective date of this offering. Enbridge Midcoast Energy acquired the South Texas system on January 2, 2002 and the Northeast Texas system on March 1, 2002. The pro forma as adjusted financial information reflects the results of operations of these systems as of the beginning of the fiscal year presented.



•

Financial data of the Northeast Texas, South Texas, compression asset and Hobart acquisitions are unaudited. This financial data was largely derived from the records of previous owners and is believed to be reliable.



•

The acquisition will be accounted for using the purchase method of accounting. Under the purchase method of accounting, the assets acquired (including intangible assets) and the liabilities assumed are recorded at fair market value rather than historical book value of the predecessor companies. Any excess purchase price over fair market value of assets is attributed to goodwill.



•

The acquisition by Enbridge Partners of the acquired systems for $929.1 million, consisting of the assumption of $900.0 million in debt related to the acquired systems, payment of $18.8 million in cash and issuance of an additional $10.3 million equity interest in Enbridge Partners to Enbridge Energy Company.



•

The receipt by Enbridge Partners of $423.6 million in proceeds from the sale of its i-units to us, which assumes that we sell 10,000,000 shares at $44.84 per share, net of the underwriting discount, expected expenses and $500,000 paid by us to Enbridge Inc. in respect of its purchase obligation and tax indemnities, and the use by Enbridge Partners of these proceeds to repay a portion of the debt it assumed in connection with the acquisition.



•

Cash distributions per unit by Enbridge Partners in each quarter of 2001 are assumed to be unaffected by the acquisition of Enbridge Midcoast Energy. Due to the incentive distributions received by the general partner of Enbridge Partners, an increase in the level of distributions per unit paid to limited partners will result in a disproportionate sharing of cash available for distribution in favor of the General Partner. As a result, the net earnings per unit attributable to common unitholders would decline assuming no other changes in other income statement items. Conversely, a reduction in the level of cash distributed per unit paid to unitholders

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would reduce the General Partner's share of income, thereby improving net income per unit to the limited partners.

•

Enbridge Partners' objective is to continue to increase cash distributions to unitholders. The cash distribution policy and the amount of quarterly cash distributions of Enbridge Partners will be determined by the Board of Directors of Enbridge Energy Management. The Board of Directors periodically reviews the distribution policy whereby it considers a number of factors including the amount of cash available to Enbridge Partners for distribution to unitholders, the amount and timing of capital expenditures and the targeted capital structure of the Partnership. Enbridge Partners anticipates that it will continue to have adequate liquidity to fund future cash distributions at current levels from operating cash flows.



•

Enbridge Partners is not a taxable entity and incurs no U.S. federal income tax liability; accordingly, no income tax expense is reflected in pro forma results of operations.

        The purpose of pro forma as adjusted financial information is to illustrate the results of operations given the effect of certain transactions. The pro forma as adjusted financial information presented here is not necessarily indicative of full year results of the combined entity on a recurring basis due, among other things, to the following:

•

During the first four months of 2001, Enbridge Midcoast Energy's results of operations were impacted by a series of charges associated with natural gas imbalance accounts and operational balancing agreements totaling approximately $20.5 million, primarily related to the volatility of prices in the natural gas market in late 2000 and early 2001.



•

Enbridge Midcoast Energy has completed the BamaGas project, which has contributed approximately $0.4 million of EBITDA per month beginning in February 2002. Results from this project and other projects and agreements, including an agreement Enbridge Midcoast Energy has with a major oil company to transport polypropylene, have not been included in the pro forma financial information.



•

The pro forma as adjusted financial information reflects a major plant turn-around on the Northeast Texas system in December 2001. The pro forma as adjusted financial information has not been adjusted to reflect the impact of the plant turn-around.



•

The results of operations of Enbridge Midcoast Energy for 2001 were abnormally impacted by other charges including expenses related to the sale of Enbridge Midcoast Energy to Enbridge Energy Company in early 2001, and acquisition integration costs.

        The pro forma information is presented for illustrative purposes only. If the acquisition of Enbridge Midcoast Energy had occurred in the past, Enbridge Partner's financial position, and results of operations, could have been materially different than that represented in the pro forma financial information. The pro forma financial information should not be considered indicative of results of future operations following the acquisition of Enbridge Midcoast Energy.

F-4

Unaudited Pro Forma Consolidated Statement of Income

Year Ended December 31, 2001

		Enbridge Partners			Enbridge Midcoast Energy Assets			Midcoast Pro Forma Adjustments			Other Assets Pro Forma Adjustments		Depreciation and Financing Related Pro Forma Adjustments			Pro Forma Results
		(Audited)
		(In Millions, except per unit amounts)
								(Note 3)			(Note 4)		(Note 2)
Revenues:
	Transportation	$	311.7		$	51.8		$	(4.2	)	$	4.1	$	—		$	363.4
	Energy marketing		26.1			755.2			(1.9	)		135.8		—			915.2
	Processing		2.6			38.4			(3.0	)		15.7		—			53.7
			340.4			845.4			(9.1	)		155.6		—			1,332.3
Expenses:
	Power		49.9			—			—			—		—			49.9
	Cost of natural gas		26.3			755.5			(2.1	)		105.2		—			884.9
	Operating and administrative		104.5			66.6			(3.6	)		21.7		—			189.2
	Depreciation and amortization (Note 6)		63.8			21.2			(1.0	)		—		3.9			87.9
			244.5			843.3			(6.7	)		126.9		3.9			1,207.3
Operating income			95.9			2.1			(2.4	)		28.7		(3.9	)		120.4
Interest and other income			2.8			0.8			—			—		—			3.6
Interest expense			(59.3	)		(23.4	)		23.4			—		(34.6	)		(93.9	)
Income before minority interest			39.4			(20.5	)										30.1
Minority interest			(0.5	)		(0.1	)										(0.6	)
Net income		$	38.9		$	(20.6	)									$	29.5
Net income allocated to limited partners		$	29.8													$	16.5
Net income per unit		$	0.98													$	0.41
Weighted average units outstanding (millions)			30.2											10.0			40.2

The accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements are an integral part of these statements.

F-5

Unaudited Pro Forma Consolidated Statement of Income

Three Months Ended March 31, 2002

		Enbridge Partners			Enbridge Midcoast Energy Assets			Midcoast Pro Forma Adjustments		Other Assets Pro Forma Adjustments	Depreciation and Financing Related Pro Forma Adjustments		Pro Forma Results
		(In Millions, except per unit amounts)
								(Note 3)		(Note 4)	(Note 2)
Revenues:
	Transportation	$	82.8		$	21.9		—		—	—		$	104.7
	Energy marketing		91.2			84.5		(0.7	)	12.3	—			187.3
	Processing		7.3			84.7		(0.5	)	4.8	—			96.3
			181.3			191.1		(1.2	)	17.1	—			388.3
Expenses:
	Power		13.6			—		—		—	—			13.6
	Cost of natural gas		89.6			158.5		(0.1	)	13.1	—			261.1
	Operating and administrative		27.8			15.9		(0.8	)	2.8	—			45.7
	Depreciation and amortization (Note 6)		18.3			5.0		(0.2	)	—	0.1			23.2
			149.3			179.4		(1.1	)	15.9	0.1			343.6
Operating income			32.0			11.7		(0.1	)	1.2	(0.1	)		44.7
Interest and other income			0.6			(0.5	)	(0.2	)	—	—			(0.1	)
Interest expense			(14.7	)		(4.4	)	4.4		—	(8.6	)		(23.3	)
Income before minority interest			17.9			6.8								21.3
Minority interest			(0.2	)		—								(0.2	)
Net income		$	17.7		$	6.8							$	21.1
Net income allocated to limited partners		$	14.5										$	16.9
Net income per unit		$	0.43										$	0.39
Weighted average units outstanding (millions)			33.7								10.0			43.7

The accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements are an integral part of these statements.

F-6

Unaudited Pro Forma Consolidated Statement of Financial Position

March 31, 2002

		Enbridge Partners			Pro Forma Acquired Assets and Liabilities		Pro Forma Financing and Other Adjustments			Pro Forma Results
		(In Millions)
					(Note 1)		(Note 2)
Assets
Current Assets
	Cash and cash equivalents	$	62.3			—		—		$	62.3
	Due from General Partner and affiliates		—			—		—			—
	Advances to affiliate		2.4			—		—			2.4
	Accounts receivable and other		70.2			75.7		—			145.9
	Materials, supplies and inventory		8.5			15.0		—			23.5
			143.4			90.7		—			234.1
Goodwill			15.0			251.3		—			266.3
Other assets			25.7			10.0		1.5			37.2
Property, plant and equipment, net			1,498.5			684.1		—			2,182.6
		$	1,682.6		$	1,036.1	$	1.5		$	2,720.2
Liabilities and Partners' Capital
Current Liabilities
	Due to General Partner and affiliate	$	9.4		$	0.2		—		$	9.6
	Accounts payable and other		96.6			90.5		—			187.1
	Other deferred costs		1.1			—		—			1.1
	Loans from Enbridge Energy Company, Inc.		51.5			—		—			51.5
	Short-term debt		130.0			18.8		—			148.8
			288.6			109.5		—			398.1
Long-term debt			683.4			900.0		(422.1	)		1,161.3
Minority interest			3.4			—		—			3.4
Other deferred costs			1.6			16.3		—			17.9
			977.0			1,025.8		(422.1	)		1,580.7
Partners' Capital
	Class A common unitholders		647.1			—		—			647.1
	Class B common unitholders		53.4			—		—			53.4
	Class I common unitholder		—			—		423.6			423.6
	General Partner		7.7			10.3		—			18.0
	Accumulated other comprehensive loss		(2.6	)		—		—			(2.6	)
			705.6			—		440.3			1,139.5
		$	1,682.6		$	1,036.1	$	1.5		$	2,720.2

The accompanying notes to the Unaudited Pro Forma Consolidated Financial Statements are an integral part of these statements.

F-7

Notes to the Unaudited Pro Forma Consolidated Financial Statements

(in millions, except per unit amounts)

1. Accounting for the acquisition

        New accounting standards require that Enbridge Partners account for the acquisition of Enbridge Midcoast Energy using the purchase method of accounting. Accordingly, all assets and liabilities of Enbridge Midcoast Energy will be valued at fair market value with excess purchase price assigned to goodwill.

        The purchase price assumed in the pro forma financial statements is based upon the purchase price negotiated between Enbridge Partners and a special committee of Enbridge Energy Company's Board of Directors. The special committee engaged independent financial and legal advisors to assist with evaluation of the transaction.

        Fair market value of working capital items is expected to approximate book value. Property, plant and equipment, intangible assets, and goodwill will be valued through an independent appraisal process to be undertaken in connection with the acquisition of Enbridge Midcoast Energy. Due to the recent timing of the Enbridge Midcoast Energy acquisition in May 2001, it is expected that amounts disclosed on the statement of financial position will not vary materially from that indicated in the pro forma statement of financial position.

        The purchase price of $929.1 million was allocated at the acquisition date to the assets acquired and the liabilities assumed as follows:

			($ millions)
Assets Acquired:
	Accounts Receivable and Other		$	75.7
	Materials, Supplies and Inventory			15.0
	Goodwill			251.3
	Other Assets			10.0
	Property, Plant & Equipment, Net			684.1
				1,036.1
Less—Liabilities Assumed:
	Current Liabilities			90.7
	Other Deferred Costs			16.3
				107.0
		Total Purchase Price	$	929.1

        The pro forma statement of financial position reflects goodwill of $251 million. In addition, approximately $10 million has been assigned as the fair market value of other intangible assets pending completion of the formal asset appraisal. Under new accounting standards, goodwill is no longer subject to annual amortization. However, it is subject to annual impairment testing. Other intangible assets are expected to be largely comprised of customer contracts, potential customer lists, and certain regulatory assets associated with our FERC regulated companies. These assets are expected to be relatively minor and will be amortized over a period not to exceed the remaining life of the underlying Enbridge Midcoast Energy pipeline systems.

        Fair market value of the property, plant and equipment is estimated to be $684.1 million. Pipeline systems underlying this value are depreciated over their varying economic useful lives. For purposes of the pro forma calculations, a composite life of 35 years has been assumed.

F-8

        As Enbridge Partners incurs no U.S. federal income tax liability, no tax adjustments impact the pro forma financial statements.

2. Transaction financing, issuance of equity and retirement of long-term debt

        Closing of the acquisition of Enbridge Midcoast Energy by Enbridge Partners is contingent upon suitable financing. The acquisition will be financed through the assumption of approximately $525 million of existing Enbridge Midcoast Energy debt and approximately $375 million of existing Enbridge Energy Company debt.

        The proceeds of the equity offering will be used to repay a portion of the assumed debt. The remaining assumed debt will be refinanced with longer term debt. The pro forma statement of financial position and related results of operation assumes the issuance of 10,000,000 new limited partner interests called i-units by Enbridge Partners at $44.84 per unit, before underwriting and transaction costs. A corresponding 2% contribution by the General Partner is required, approximating $10 million.

        Debt financing is assumed to bear an interest rate of 6.96%. This interest rate is based on the assumption that 80% of the debt requirement is funded with long term debt and 20% is funded with short term debt. The long term debt financing cost is estimated at 7.6%, which is based on an estimated yield for 10-year United States Treasury Bonds plus an estimated credit spread applicable to Enbridge Partners. The short term debt financing cost is estimated at 4.5%, which is based on 3-month Libor plus a credit spread applied to borrowings under Energy Partners existing revolving bank credit facilities. If interest rates vary ¹/8 of one-percent from the assumed rate interest expense will increase or decrease by approximately $0.6 million.

3. Enbridge Midcoast Energy adjustments to results of operations

        The acquisition of Enbridge Midcoast Energy does not include certain assets owned by Enbridge Midcoast Energy in Canada. The results of operations of these assets, together with other

F-9

assets disposed of in 2001, are reflected in this column for each of the noted periods. The adjustments are summarized as follows (in millions):

		Year Ended December 31, 2001			Three Months Ended March 31, 2002
		Canadian Assets	Assets Sold	Total	Canadian Assets	Assets Sold	Total
Revenues:
	Transportation	3.4	0.8	4.2	—	—	—
	Energy marketing	1.9	—	1.9	0.7	—	0.7
	Processing	3.0	—	3.0	0.5	—	0.5
		8.3	0.8	9.1	1.2	—	1.2
Expenses
	Cost of natural gas	2.1	—	2.1	0.1	—	0.1
	Operating and administrative	3.6	—	3.6	0.8	—	0.8
	Depreciation and amortization	0.9	0.1	1.0	0.2	—	0.2
		6.6	0.1	6.7	1.1	—	1.1
Operating income		1.7	0.7	2.4	0.1	—	0.1

        Enbridge Energy Company recognized goodwill on its acquisition of Enbridge Midcoast Energy. Under standards in effect during 2001, Enbridge Midcoast Energy amortized goodwill as required under standards in effect at the time. Effective January 1, 2002, goodwill is no longer subject to amortization. Accordingly, goodwill amortization is removed from the pro forma results of operations for the three months ended March 2002. However, goodwill amortization of the $4.6 million is included in historical depreciation and amortization amount for the year-ended December 31, 2001.

4. Acquired assets adjustments to results of operations

        Enbridge Midcoast Energy acquired the South Texas assets in January 2002, the Northeast Texas assets in March 2002, the Hobart assets in May 2002, and will acquire the compression assets prior to closing of this offering. Enbridge Midcoast Energy's results of operations include the contributions of South Texas and Northeast Texas from these dates of acquisition. The following table highlights the adjustments required to show the full-period impact of the purchases of the South Texas, Northeast Texas, Hobart and compression assets as if they had been owned by

F-10

Enbridge Midcoast Energy since January 1, 2001. These adjustments are based on unaudited financial information provided by third parties.

		Year Ended December 31, 2001						Three Months Ended March 31, 2002
		South Texas	Northeast Texas	Hobart	Compression		Total	South Texas	Northeast Texas		Hobart	Compression		Total
					(a)			(b)	(c)
Revenues:
	Transportation	—	4.1	—	—		4.1	—	—		—	—		—
	Energy marketing	—	135.8	—	—		135.8	—	12.3		—	—		12.3
	Processing	2.9	7.0	5.8	—		15.7	—	3.3		1.5	—		4.8
		2.9	146.9	5.8	—		155.6	—	15.6		1.5	—		17.1
Expenses
	Cost of natural gas	—	101.2	4.0	—		105.2	—	12.1		1.0	—		13.1
	Operating and administrative	2.1	24.6	0.9	(5.9	)	21.7	—	4.0		0.3	(1.5	)	2.8
		2.1	125.8	4.9	(5.9	)	126.9	—	16.1		1.3	(1.5	)	15.9
Operating margin		0.8	21.1	0.9	5.9		28.7	—	(0.5	)	0.2	1.5		1.2

		Three Months Ended March 31, 2001
		South Texas	Northeast Texas	Hobart	Compression		Total
Revenues:
	Transportation	—	0.9	—	—		0.9
	Energy marketing	—	43.0	—	—		43.0
	Processing	0.7	1.4	1.5	—		3.6
		0.7	45.3	1.5	—		47.5
Expenses
	Cost of natural gas	—	30.8	1.0	—		31.8
	Operating and administrative	0.5	6.0	0.3	(1.5	)	5.3
		0.5	36.8	1.3	(1.5	)	37.1
Operating margin		0.2	8.5	0.2	1.5		10.4

(a)

This column reflects the proforma impact of the planned acquisition of natural gas compressor assets. These assets were leased by the previous owner of the Northeast Texas system at a net annual cost of $5.9 million. As the Partnership will acquire the compressor assets from the lessor, the acquisition would have

reduced operating and administrative expenses, resulting in an increase in operating margin of $5.9 million on a proforma basis.

(b)

Included in Enbridge Midcoast Energy's results of operations from January 1, 2002 forward therefore no adjustment is necessary in this period.

(c)

Included in Enbridge Midcoast Energy's results of operations from March 1, 2002 forward therefore the adjustment reflects operating data for January and February of 2002.

5. Net Income allocated to limited partners

      Net income allocated to limited partners is computed by subtracting income allocated to the General Partner, incentive distributions and historical cost depreciation adjustments from net

F-11

income. Net income allocated to the General Partner is equal to an amount based upon its 1% general partner interest in Enbridge Partners, while incentive distributions depend upon the amount of cash distributions per unit paid to unitholders. Historical cost depreciation adjustments reflect depreciation on the General Partner's historical cost basis of the assets contributed to Enbridge Partners in 1991.

	Year Ended December 31, 2001				Three Months Ended March 31, 2002
($ in millions)	Enbridge Partners		Proforma Results		Enbridge Partners		Proforma Results
Net income	$	38.9	$	29.5	$	17.7	$	21.1
Net income allocated to general partner		0.4		0.3		0.2		0.3
Incentive distributions		8.6		12.6		3.0		3.9
Historical cost depreciation adjustments		0.1		0.1		—		—
Net income allocated to limited partners	$	29.8	$	16.5	$	14.5	$	16.9

        Among other factors, the level of net income allocated to limited partners will be primarily dependent upon the results of operations, the amount of quarterly distributions per unit paid to unitholders and the number of units outstanding.

6. Depreciation and amortization

        The depreciation adjustment noted in column "Depreciation and Financing Related Pro Forma Adjustments" is the increase necessary to balance depreciation expense for the pro forma period to the amount implied by the 35-year composite depreciable life assumed for the acquired pipeline systems.

F-12

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENT OF INCOME

		Three months ended March 31,
		2001			2002
		(unaudited; dollars in millions, except per unit amounts)
Operating revenue
	Transportation	$	71.9		$	82.8
	Marketing		—			91.2
	Processing		—			7.3
			71.9			181.3
Expenses
	Power		11.7			13.6
	Cost of natural gas		—			89.6
	Operating and administrative		20.1			27.8
	Depreciation and amortization		15.4			18.3
			47.2			149.3
Operating income			24.7			32.0
Interest and other income			0.7			0.6
Interest expense			(15.2	)		(14.7	)
Minority interest			(0.1	)		(0.2	)
Net income		$	10.1		$	17.7
Net income per unit (Note 2)		$	0.27		$	0.43
Weighted average units outstanding (millions)			28.9			33.7

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-13

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENT OF CASH FLOWS

				Three months ended March 31,
Cash provided from operating activities				2001			2002
				(unaudited; dollars in millions)
	Net income			$	10.1		$	17.7
	Adjustments to reconcile net income to cash provided from operating activities:
		Depreciation and amortization			15.4			18.3
		Other			1.1			0.1
		Changes in operating assets and liabilities:
			Accounts receivable and other		1.7			(14.2	)
			Oil shortage balance		2.1			0.9
			General Partner and affiliates		4.7			9.7
			Accounts payable and other		(3.8	)		6.1
			Interest payable		12.5			12.3
			Property and other taxes		2.9			1.3
					46.7			52.2
Investing activities
	Repayments from affiliate				0.1			0.5
	Additions to property, plant and equipment				(2.4	)		(30.0	)
	Changes in construction payables				(4.0	)		0.4
					(6.3	)		(29.1	)
Financing activities
	Variable rate financing, net				—			67.0
	Loan from Enbridge Energy Company, Inc., net				—			(124.7	)
	Proceeds from unit issuance, net (Note 3)				—			90.8
	Distributions to partners				(27.6	)		(32.6	)
	Minority interest				(0.3	)		(0.1	)
	Other				(0.1	)		(1.4	)
					(28.0	)		(1.0	)
Increase in cash and cash equivalents					12.4			22.1
Cash and cash equivalents at beginning of period					37.2			40.2
Cash and cash equivalents at end of period				$	49.6		$	62.3

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-14

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		December 31, 2001		March 31, 2002
				(unaudited)
		(dollars in millions)
ASSETS
Current assets
	Cash and cash equivalents	$	40.2	$	62.3
	Due from General Partner and affiliates		0.3		—
	Advances to affiliate		2.9		2.4
	Accounts receivable and other		63.1		70.2
	Materials and supplies		8.5		8.5
			115.0		143.4
Deferred charges and other			47.6		40.7
Property, plant and equipment, net			1,486.6		1,498.5
		$	1,649.2	$	1,682.6
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
	Due to General Partner and affiliate	$	—	$	9.4
	Oil shortage balance		9.4		10.3
	Accounts payable and other		48.5		51.5
	Interest payable		6.8		19.1
	Property and other taxes payable		14.4		15.7
	Other deferred costs		—		1.1
	Loans from Enbridge Energy Company, Inc.		176.2		51.5
	Short-term debt (Note 4)		31.0		130.0
			286.3		288.6
Long-term debt (Note 4)			715.4		683.4
Minority interest			3.3		3.4
Other deferred costs			—		1.6
			1,005.0		977.0
Partners' capital
	Class A common unitholders (Units authorized and issued—31,253,634 in 2002 and 29,053,634 in 2001)		577.0		647.1
	Class B common unitholders (Units authorized and issued—3,912,750)		48.8		53.4
	General Partner		6.5		7.7
	Accumulated other comprehensive gain (loss)		11.9		(2.6	)
		$	644.2	$	705.6
		$	1,649.2	$	1,682.6

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-15

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL

	Three months ended March 31, 2002
	General Partner			Class B Common Unitholders			Class A Common Unitholders			Other Comprehensive Loss			Total Consolidated Partners' Capital
	(unaudited; dollars in millions)
Partners' Capital at December 31, 2001	$	6.5		$	48.8		$	577.0		$	11.9		$	644.2
Allocation of Net Proceeds from Unit Issuance		0.9			6.2			83.7			—			90.8
Net Income Allocation		3.2			2.0			12.5			—			17.7
Distributions to Partners		(2.9	)		(3.6	)		(26.1	)		—			(32.6	)
Floating to Fixed Interest Rate Swaps		—			—			—			(14.5	)		(14.5	)
Partners' Capital at March 31, 2002	$	7.7		$	53.4		$	647.1		$	(2.6	)	$	705.6

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-16

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(dollars in millions; except for per unit amounts)

1. Basis of Presentation

        The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, they contain all adjustments, consisting only of normal recurring adjustments, which management considers necessary to present fairly the financial position as at March 31, 2002 and December 31, 2001; the results of operations for the three month periods ended March 31, 2002 and 2001; and cash flows for the three month periods ended March 31, 2002 and 2001. The results of operations for the three months ended March 31, 2002 should not be taken as indicative of the results to be expected for the full year. The interim financial statements should be read in conjunction with Enbridge Energy Partners, L.P.'s (the "Partnership") consolidated financial statements and notes thereto presented in the Partnership's 2001 Annual Report on Form 10-K.

2. Net Income per Unit

        Net income per unit is computed by dividing net income, after deduction of the General Partner's allocation, by the weighted average number of Class A and Class B Common Units outstanding. The General Partner's allocation is equal to an amount based upon its 1.0% general partner interest, adjusted to reflect an amount equal to incentive distributions and an amount required to reflect depreciation on the General Partner's historical cost basis for assets contributed on formation of the Partnership. Net income per unit was determined as follows.

	Period ended March 31,
	2001			2002
Net income	$	10.1		$	17.7
Net income allocated to General Partner		(0.1	)		(0.2	)
Incentive distributions and historical cost depreciation adjustments		(2.1	)		(3.0	)
		(2.2	)		(3.2	)
Net income allocable to Common Units	$	7.9		$	14.5
Weighted average units outstanding (millions)		28.9			33.7
Net income per unit	$	0.27		$	0.43

3. Unit Issuance

        On March 4, 2002, the Partnership issued an additional 2.2 million Class A Common Units, which generated proceeds, net of underwriters' discounts and commissions and issuance expenses, of approximately $90.8 million. Proceeds from this offering were used to repay indebtedness. After giving effect to the Class A Common Unit offering, the General Partner has an 11.0% limited partner interest (in the form of 3,912,750 Class B Common Units) and a 1.0% general partner interest in the Partnership, as well as a 1.0% general partner interest in Enbridge Energy, Limited Partnership (the "Operating Partnership"). On April 4, 2002, the Partnership issued an additional 60,000 Class A Common Units to the underwriters in the above offering upon exercise by the underwriters of their option to purchase additional shares from us, resulting in additional

F-17

proceeds to the Partnership, net of underwriters' discount and commissions and issuance expenses, of approximately $2.5 million.

4. Credit Facilities

        On January 29, 2002, the Partnership established two new unsecured credit facilities, a $300.0 million three-year term facility and a $300.0 million 364-day facility, to replace the original $350.0 million revolving credit facility. Under the terms of these new facilities, the Partnership and the Operating Partnership may borrow funds up to a combined maximum of $300.0 million under the three-year term facility and a combined maximum of $300.0 million under the 364-day facility. In addition, when no default exists, the Partnership may designate any of its material subsidiaries to borrow under either or both the facilities, subject to complying with certain administrative procedures. Any borrowings under either facility will be guaranteed by the Partnership, the Operating Partnership and any of their material subsidiaries, unless that entity is the borrower. The indebtedness under the original $350.0 million revolving credit facility was refinanced with indebtedness drawn under the new credit facilities and the original $350.0 million revolving credit facility was terminated. As at March 31, 2002, the Partnership and the Operating Partnership had borrowed approximately $204.0 million under the two new credit facilities.

5. Segment Information

        The Partnership's operations are segmented for accounting purposes based on the type of business activity and management control. The table below provides certain information regarding the financial performance of these segments. The Partnership's transportation pipelines primarily receive crude oil, liquid hydrocarbons, natural gas and NGLs from producers and other pipelines and deliver these products to other pipelines and customers, such as refineries and other industrial facilities.

        The Partnership's marketing activities include providing natural gas supply and sales services to certain of its customers by purchasing the natural gas supply from other marketers, pipeline affiliates and natural gas producers and reselling the natural gas to customers.

        Processing revenues are realized from the processing and treating of natural gas, which involves the extraction and sale of NGLs as well as the sale of the residual natural gas.

        The "Other" column consists of costs of financing, interest income and minority interest, which are not allocated to the other business segments.

        The following table presents certain financial information relating to the Partnership's business segments as at or for the quarter ended March 31, 2002. As a result of the Partnership's North Dakota acquisition in May 2001 and East Texas acquisition in November 2001, the results of operations from the transportation segment as of and for the period ended March 31, 2002 include results from crude oil and natural gas gathering activities. Likewise, a majority of the Partnership's marketing and processing revenues were derived from the assets acquired in the East Texas

F-18

acquisition in November 2001. As a result of these changes in the composition of the Partnership's segment reporting occurring in 2001, comparative segment information for 2001 is not shown.

	As of or for the Quarter Ended March 31, 2002
	Transportation		Marketing		Processing		Other			Totals
Operating revenues	$	82.8	$	91.2	$	7.3	$	—		$	181.3
Power		13.6		—		—		—			13.6
Cost of natural gas		—		83.8		5.8		—			89.6
Operating and administrative		23.0		4.0		0.6		0.2			27.8
Depreciation and amortization		16.2		1.7		0.4		—			18.3
Operating Income		30.0		1.7		0.5		(0.2	)		32.0
Interest and other		—		—		—		0.6			0.6
Interest expense		—		—		—		(14.7	)		(14.7	)
		30.0		1.7		0.5		(14.3	)		17.9
Minority interest		—		—		—		(0.2	)		(0.2	)
Net income		30.0		1.7		0.5		(14.5	)		17.7
Total Assets		1,423.4		214.4		44.8		—			1,682.6
Capital Expenditures		26.9		2.7		0.4		—			30.0

6. Accounting Changes

        In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill and intangible assets with indefinite lives are not amortized but are reviewed for impairment at least annually. Intangible assets with finite lives are amortized over their useful lives, which is limited to a maximum of forty years. The Partnership adopted SFAS No. 142 on January 1, 2002.

        In conjunction with the acquisition of the East Texas assets in December 2001, customer contracts valued at $15.0 million were acquired. Customer contracts are comprised entirely of natural gas purchase and sale contracts and are allocated to the Partnership's marketing segment. These customer contracts are being amortized over the estimated useful life of the underlying reserves and at March 31, 2002, accumulated amortization was $0.2 million. Estimated amortization expense based on current customer contracts for 2002 and each of the next four years is $0.6 million.

        In addition, the Partnership is in the process of completing its initial transition goodwill impairment test and anticipates that goodwill associated with the East Texas acquisition of approximately $15.0 million is not impaired. Goodwill is allocated entirely to the Partnership's marketing segment.

F-19

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Enbridge Energy Partners, L.P.:

In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of income, of partners' capital, and of cash flows present fairly, in all material respects, the financial position of Enbridge Energy Partners, L.P. and its subsidiaries (the Partnership) at December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Houston, Texas
January 24, 2002

F-20

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF INCOME

		Year ended December 31,
		1999		2000		2001
		(in millions, except per unit amounts)
Revenues (Note 10)
	Transportation	$	312.6	$	305.6	$	311.7
	Energy marketing		—		—		26.1
	Processing		—		—		2.6
			312.6		305.6		340.4
Expenses
	Power		53.0		47.4		49.9
	Cost of natural gas		—		—		26.3
	Operating and administrative		71.5		80.6		104.5
	Depreciation		57.8		61.1		63.8
			182.3		189.1		244.5
Operating income			130.3		116.5		95.9
Interest and other income			3.4		4.8		2.8
Interest expense (Note 8)			(54.1)		(60.4)		(59.3)
Income before minority interest			79.6		60.9		39.4
Minority interest			(0.9)		(0.7)		(0.5)
Net income		$	78.7	$	60.2	$	38.9
Net income per unit (Note 5)		$	2.48	$	1.78	$	0.98
Weighted average units outstanding (millions)			28.0		28.9		30.2

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-21

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Year ended December 31,
				1999			2000			2001
				(In Millions)
Cash provided from operating activities
	Net income			$	78.7		$	60.2		$	38.9
	Adjustments to reconcile net income to cash provided from operating activities:
		Depreciation			57.8			61.1			63.8
		Interest on accrued rate refunds			0.7			—			—
		Minority interest			0.9			0.7			0.5
		Other			0.9			0.8			—
		Changes in operating assets and liabilities:
			Accounts receivable and other		(3.2	)		1.1			(23.1	)
			Oil overage/shortage balance		(3.1	)		(4.2	)		18.3
			Materials and supplies		(0.3	)		(0.3	)		(0.1	)
			General Partner and affiliates		(1.2	)		(3.2	)		0.7
			Accounts payable and other		(2.4	)		(0.2	)		23.2
			Interest payable		0.8			0.2			0.3
			Property and other taxes		1.4			1.1			(0.2	)
			Payment of rate refunds and related interest		(29.4	)		—			—
					101.6			117.3			122.3
Investing activities
	Repayments from affiliate (Note 9)				24.5			1.6			3.0
	Additions to property, plant and equipment				(82.9	)		(21.7	)		(35.0	)
	Change in construction payables				(32.7	)		(0.6	)		(2.1	)
	Asset acquisitions, net of cash acquired (Note 3)				—			—			(265.0	)
					(91.1	)		(20.7	)		(299.1	)
Financing activities
	Proceeds from unit issuances, net (Note 1)				119.7			—			171.3
	Loans from Enbridge Energy Company, Inc. (Note 3)				—			—			176.2
	Distributions to partners (Note 4)				(107.3	)		(110.4	)		(113.8	)
	Variable rate financing, net (Note 8)				(30.0	)		(85.0	)		(53.0	)
	Fixed rate financing, net (Note 8)				—			96.9			—
	Other				—			0.2			(0.5	)
	Minority interest				0.1			(1.1	)		(0.4	)
					(17.5	)		(99.4	)		179.8
Increase (decrease) in cash and cash equivalents					(7.0	)		(2.8	)		3.0
Cash and cash equivalents at beginning of year					47.0			40.0			37.2
Cash and cash equivalents at end of year				$	40.0		$	37.2		$	40.2

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-22

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

		December 31,
		2000		2001
		(in millions)
ASSETS
Current assets
	Cash and cash equivalents	$	37.2	$	40.2
	Due from General Partner and affiliates		1.5		0.3
	Accounts receivable and other		25.7		63.1
	Oil overage balance		8.9		—
	Advances to affiliate (Note 9)		5.9		2.9
	Materials and supplies		7.7		8.5
			86.9		115.0
Property, plant and equipment, net (Note 6)			1,281.9		1,486.6
Other assets, net (Note 7)			7.9		47.6
		$	1,376.7	$	1,649.2
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
	Oil shortage balance	$	—	$	9.4
	Accounts payable and other		17.4		48.5
	Interest payable		6.5		6.8
	Property and other taxes payable		14.4		14.4
	Loans from Enbridge Energy Company, Inc. (Note 3)		—		176.2
	Current portion of First Mortgage Notes		—		31.0
			38.3		286.3
Long-term debt (Note 8)			799.3		715.4
Contingencies (Note 11)
Minority interest			3.2		3.3
			840.8		1,005.0
Partners' capital
	Class A common unitholders (Units authorized and issued—29,053,634 in 2001 and 24,990,000 in 2000)		488.6		577.0
	Class B common unitholder (Units authorized and issued—3,912,750)		42.1		48.8
	General Partner		5.2		6.5
	Accumulated other comprehensive income (Note 12)		—		11.9
			535.9		644.2
		$	1,376.7	$	1,649.2

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-23

ENBRIDGE ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL

	Class A Common Unitholders			Class B Common Unitholder			General Partner			Accumulated Other Comprehensive Income		Total
	(in millions)
Partners' capital at December 31, 1998	$	453.4		$	37.3		$	4.3			—	$	495.0
Allocation of net proceeds from unit issuance		106.2			12.4			1.1			—		119.7
Distributions to partners		(84.8	)		(13.6	)		(8.9	)		—		(107.3	)
Net income allocation		58.3			11.3			9.1			—		78.7
Partners' capital at December 31, 1999		533.1			47.4			5.6			—		586.1
Distributions to partners		(87.5	)		(13.7	)		(9.2	)		—		(110.4	)
Net income allocation		43.0			8.4			8.8			—		60.2
Partners' capital at December 31, 2000		488.6			42.1			5.2			—		535.9
Allocation of net proceeds from unit issuances (Note 1)		154.6			15.0			1.7			—		171.3
Distributions to partners		(90.6	)		(13.7	)		(9.5	)		—		(113.8	)
Subtotal		552.6			43.4			(2.6	)		—		593.4
Net income allocation		24.4			5.4			9.1			—		38.9
Other comprehensive income:
Gain on derivative financial instruments		—			—			—			11.9		11.9
Comprehensive Income		24.4			5.4			9.1			11.9		50.8
Partners' capital at December 31, 2001	$	577.0		$	48.8		$	6.5		$	11.9	$	644.2

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-24

ENBRIDGE ENERGY PARTNERS, L.P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per unit amounts)

1. PARTNERSHIP ORGANIZATION AND NATURE OF OPERATIONS

        Enbridge Energy Partners, L.P., formerly Lakehead Pipe Line Partners, L.P., (the "Partnership"), is a publicly traded limited partnership that was formed in 1991 to acquire, own and operate the crude oil and natural gas liquids pipeline business of Enbridge Energy Company, Inc., formerly Lakehead Pipe Line Company, Inc. (the "General Partner"). The General Partner is an indirect, wholly-owned subsidiary of Enbridge Inc. ("Enbridge") of Calgary, Alberta, Canada. The Partnership owns a 99% limited partner interest in Enbridge Energy, Limited Partnership, formerly Lakehead Pipe Line Company, Limited Partnership ("Operating Partnership"). Both are Delaware limited partnerships. The Operating Partnership owns the United States portion of the world's longest liquid petroleum pipeline ("Lakehead System"). During 2001, the Partnership acquired the assets of Enbridge Pipelines (North Dakota) L.L.C. ("North Dakota System") and assets in east Texas ("East Texas System"). The assets acquired are held in a series of limited liability companies and limited partnerships owned, directly or indirectly, 100% by Enbridge Energy Partners, L.P.

        During the second quarter of 2001, the Partnership issued 1,813,634 Class A Common Units, which generated proceeds, net of issue expenses, of approximately $79.9 million. Proceeds from this offering were used to repay debt. On November 26, 2001, the Partnership completed the issuance of 2,250,000 Class A Common Units for net proceeds of $91.4 million. Proceeds from this offering were used to fund a portion of the East Texas System acquisition. After giving effect to the Class A Common Unit offerings, the General Partner has a 11.8% limited partner (in the form of 3,912,750 Class B Common Units) and 1.0% general partner interest in the Partnership, as well as a 1.0% general partner interest in the Operating Partnership.

        The reporting segments of the Partnership represent its businesses of pipeline transportation, natural gas processing, and natural gas marketing activities. The transportation business, which transports crude oil and natural gas liquids through common carrier pipeline systems, is the most significant segment. The Lakehead System is the largest business in this segment.

        The transportation segment includes the Lakehead System and the North Dakota System. The majority of shipments reach the Lakehead System at the Canada/United States border in North Dakota, through a Canadian pipeline system owned indirectly by Enbridge. Substantially all crude oil and natural gas liquids transported originate in western Canadian oil fields. Deliveries are made in the Great Lakes region of the U.S. and in the Province of Ontario, principally to refineries, either directly or through the connecting pipelines of other companies. The Partnership's natural gas processing segment includes natural gas treating and processing plants located in East Texas. The natural gas marketing segment primarily sells natural gas and related products to municipal utilities, industrial customers, and other third-party marketing companies and includes the related pipeline assets.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        The consolidated financial statements of the Partnership are prepared in accordance with generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Actual results could differ from those estimates and assumptions.

F-25

Principles of Consolidation

        The financial statements of the Partnership include the accounts of the Partnership, the Operating Partnership and other wholly owned subsidiaries on a consolidated basis. The General Partner's 1.0% interest in the Operating Partnership is accounted for by the Partnership as a minority interest.

Regulation of Transportation Segment

        As an interstate common carrier oil pipeline, rates and accounting practices of the Lakehead System and the North Dakota System are under the regulatory authority of the Federal Energy Regulatory Commission ("FERC"). The East Texas System is rate regulated by the Texas Railroad Commission on a complaint basis.

Revenue Recognition

        Substantially all transportation pipeline system revenues are derived from transportation of crude oil, natural gas liquids ("NGLs") and natural gas and are recognized upon delivery. Natural gas gathering, treating and marketing revenues are recognized upon delivery of natural gas and related products.

Cash and Cash Equivalents

        Cash equivalents are defined as all highly marketable securities with a maturity of three months or less when purchased. They are accounted for as held-to-maturity securities and valued at amortized cost.

Oil Overage/Shortage Balance

        Represents oil owed to, or receivable from, customers of the pipeline system. The balance also includes crude oil retained by the pipeline under terms of its transportation tariff.

Materials and Supplies

        Materials and supplies are stated at cost.

Deferred Financing Charges

        Deferred financing charges are amortized on the straight-line basis over the life of the related debt, which is comparable to results using the effective interest method.

Property, Plant and Equipment

        Property, plant and equipment is stated at cost. Expenditures for system expansion and major renewals and betterments are capitalized; maintenance and repair costs are expensed as incurred. Interest incurred on external borrowings during construction is capitalized. Depreciation of property, plant and equipment is provided on the straight-line basis over estimated service lives. For all segments, when property, plant and equipment are disposed of, the cost less net proceeds is

F-26

normally charged to accumulated depreciation and no gain or loss on disposal of property is recognized.

Goodwill and Other Intangible Assets

        Goodwill represents the excess of cost over fair value of assets of businesses acquired. Other intangible assets, primarily consisting of shipper contracts acquired on the East Texas System, are amortized on a straight-line basis over the life of the underlying assets. The Partnership tests goodwill and other intangible assets periodically to determine whether an impairment has occurred. An impairment occurs when the carrying amount of an asset exceeds the fair value of the recognized goodwill or intangible asset. If impairment has occurred, the loss is recorded in the period.

Income Taxes

        The Partnership is not a taxable entity for federal and state income tax purposes. Accordingly, no recognition has been given to income taxes for financial reporting purposes. The tax on Partnership net income is borne by the individual partners through the allocation of taxable income. Net income for financial statement purposes may differ significantly from taxable income of Unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities and the taxable income allocation requirements under the Partnership Agreement. The aggregate difference in the basis of the Partnership's net assets for financial and tax reporting purposes cannot be readily determined because information regarding each partner's tax attributes in the Partnership is not available to the Partnership.

Derivative Financial Instruments

        The Partnership recognizes all derivative financial instruments as assets and liabilities and measures them at fair value. For derivative financial instruments that are designated and qualify as a cash flow hedge, the effective portions of changes in fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Changes in the fair value of derivatives that do not qualify for hedge treatment are recognized currently in earnings. The related cash flows from those derivative financial instruments accounted for as hedges are classified in the same category as the items being hedged.

        Net income and cash flows are subject to volatility stemming mainly from changes in interest rates, natural gas prices, and fractionation margins. In order to manage the risks to Partnership unitholders, the General Partner uses a variety of derivative financial instruments to create offsetting positions to specific commodity or interest rate exposures. All of these financial instruments are employed in connection with an underlying asset, liability or anticipated transaction and are not used for speculative purposes. In implementing its hedging programs, the General Partner has established a formal analysis and execution framework that requires the approval of the Board of Directors of the General Partner, or a committee of senior management.

        Derivative financial instruments are used primarily to hedge against the effect of future interest rate movements, to manage natural gas purchases on the East Texas System that are related to

F-27

regional natural gas prices, and to hedge fractionation margins associated with the East Texas System processing assets. (See Note 12 to the Consolidated Financial Statements.)

Comparative Amounts

        Certain reclassifications have been made to the prior years reported amounts to conform to the classifications used in the 2001 consolidated financial statements. These reclassifications have no impact on net income.

New Accounting Pronouncements

        In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." This Statement requires that all derivatives be recognized at fair value in the balance sheet and all changes in fair value be recognized currently in earnings or deferred as a component of other comprehensive income, depending on the intended use of the derivative. The Partnership adopted SFAS No. 133 on January 1, 2001.

        In June 2001, the FASB issued SFAS No. 141, "Business Combinations." This Statement requires the use of the purchase method for all business combinations. In addition, it requires the reassessment of intangible assets to determine if they are appropriately classified either separately or within goodwill. This Statement is effective for business combinations initiated after June 30, 2001. The Partnership adopted SFAS No. 141 on July 1, 2001 with no impact on results of operations, financial position or cash flows.

        In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets". Under SFAS No. 142, goodwill and intangible assets with indefinite lives will not be amortized but will be reviewed for impairment at least annually. Intangible assets with finite lives will continue to be amortized over their useful lives, which will not be limited to a maximum life of forty years. The Partnership adopted SFAS No. 142 on January 1, 2002. This standard is not expected to have a material impact on results of operations, financial position or cash flows. With the adoption of SFAS No. 142, goodwill of $15.0 million is no longer subject to amortization over its estimated useful life.

        Also in July 2001, the FASB issued SFAS No. 143 "Accounting for Asset Retirement Obligations" under which retirement obligations will be recognized at fair value in the period they are incurred. When the liability is initially recorded, the cost is capitalized by increasing the asset's carrying value, which is subsequently depreciated over its useful life. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Partnership is currently evaluating the potential effects if any, of adopting SFAS No. 143, on its financial condition and results of operations as well as the timing of its adoption.

        In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 establishes a single accounting model for long-lived assets to be disposed of by sale. The Statement retains most of the requirements in SFAS No. 121 related to the recognition of impairment of long-lived assets to be held and used. The Partnership adopted SFAS No. 144 on January 1, 2002. This standard is not expected to have a material impact on results of operations, financial position or cash flows.

F-28

3. ACQUISITIONS

        On November 30, 2001, the Partnership acquired natural gas gathering, transportation, processing and marketing assets in east Texas. The assets were purchased for cash of $230.0 million plus estimated transaction costs of $0.5 million. The purchase was funded by the issuance of Class A Common Units with total net proceeds of $91.4 million and a short-term loan at market rates from the General Partner. The value allocated to the assets was determined by agreement between the parties and supported by an independent appraisal. Goodwill associated with the acquisition is $15.0 million, and is allocated entirely to the Partnership's marketing segment. Customer contracts are comprised entirely of natural gas purchase and sale contracts and are allocated entirely to the Partnership's marketing segment.

        The allocation of the purchase price is as follows.

Gathering and Transportation Assets	$	180.5
Processing Assets		20.0
Customer Contracts		15.0
Goodwill		15.0
Total	$	230.5

        The consolidated financial statements include the results of operations from, and the estimated fair value of assets at, the date of acquisition.

        Unaudited pro forma net income for the twelve months ended December 31, 2001 and December 31, 2000 is estimated to be $44.0 and $65.7 million, respectively. These estimates assume the acquisition of the East Texas System had occurred on January 1, 2001 and January 1, 2000, respectively, and represent the combined results of operations for each of the years ending December 31, 2001 and 2000. The unaudited pro forma financial results have been prepared for comparative purposes only and may not be indicative of results that would have occurred if the Partnership had acquired the assets as of January 1 of either year. Pro forma results for the year-ended 1999 are not representative due to significant natural gas volume increases since 1999.

        On May 18, 2001, the Partnership completed its acquisition of the assets of Enbridge Pipelines (North Dakota) L.L.C. for cash of $35.4 million, including working capital and transaction costs. This acquisition was accounted for using the purchase method. North Dakota System results of operations have been included in earnings from the date of the acquisition. The purchase price has been allocated to current assets, liabilities and to property, plant and equipment on the basis of estimated fair values with property, plant and equipment being depreciated over the economic life of the assets. No goodwill or intangible assets were recognized in the acquisition. The acquisition was funded by a short-term loan from the General Partner.

4. CASH DISTRIBUTIONS

        The Partnership distributes quarterly all of its "Available Cash", which is generally defined in the Partnership Agreement as cash receipts less cash disbursements and net additions to reserves for future requirements. These reserves are retained to provide for the proper conduct of the Partnership business and as necessary to comply with the terms of any agreement or obligation of

F-29

the Partnership. Distributions by the Partnership of its Available Cash generally are made 98.0% to the Class A and B Common Unitholders and 2.0% to the General Partner, subject to the payment of incentive distributions to the General Partner to the extent that certain target levels of cash distributions to the Unitholders are achieved. The incremental incentive distributions payable to the General Partner are 15.0%, 25.0% and 50.0% of all quarterly distributions of Available Cash that exceed target levels of $0.59, $0.70, and $0.99 per Class A and B Common Units, respectively.

        In 2001 and 2000, the Partnership paid cash distributions of $3.50 per unit, consisting of $0.875 per unit paid in February, May, August and November. In 1999, the Partnership paid cash distributions of $3.485 per unit, consisting of $0.86 per unit paid in February and $0.875 per unit paid in May, August and November.

5. NET INCOME PER UNIT

        Net income per unit is computed by dividing net income, after deduction of the General Partner's allocation, by the weighted average number of Class A and Class B Common Units outstanding. The General Partner's allocation is equal to an amount based upon its 1.0% general partner interest, adjusted to reflect an amount equal to incentive distributions and an amount required to reflect depreciation on the General Partner's historical cost basis for assets contributed on formation of the Partnership. Net income per unit was determined as follows.

	Year ended December 31,
	1999		2000		2001
Net income	$	78.7	$	60.2	$	38.9
Net income allocated to General Partner		(0.8)		(0.6)		(0.4)
Incentive distributions and historical cost depreciation adjustments		(8.3)		(8.2)		(8.7)
		(9.1)		(8.8)		(9.1)
Net income allocable to Common Units	$	69.6	$	51.4	$	29.8
Weighted average units outstanding (millions)		28.0		28.9		30.2
Net income per unit	$	2.48	$	1.78	$	0.98

F-30

6. PROPERTY, PLANT AND EQUIPMENT, NET

	December 31,
	Depreciation Rates	2000			2001
Land	—	$	6.4		$	7.8
Rights-of-way	3.8% - 4.35%		109.8			132.4
Pipeline	3.6% - 4.35%		957.9			1,111.5
Pumping equipment, buildings and tanks	4.2% - 4.35%		470.1			482.4
Compressors, meters, and other operating equipment	4.00%		—			15.6
Vehicles, office furniture and equipment	8.15% - 25.0%		34.3			38.7
Processing and treater plants	4.00%		—			41.8
Construction in progress	—		10.0			25.9
			1,588.5			1,856.1
Accumulated depreciation			(306.6	)		(369.5	)
		$	1,281.9		$	1,486.6

        Depreciation rates utilized by the Lakehead System were approved by the Federal Energy Regulatory Commission, effective January 1, 1999, coinciding with the in-service date for the Partnership's system expansion programs.

        Depreciation rates for the North Dakota System and the East Texas System are based on the lesser of the estimated remaining service lives of the properties or the estimated remaining life of crude oil or natural gas production in the basins served by the pipelines.

7. OTHER ASSETS, NET

	December 31,
	2000		2001
Customer Contracts	$	—	$	15.0
Goodwill		—		15.0
Other		7.9		17.6
	$	7.9	$	47.6

8. DEBT

	December 31,
	2000		2001
First Mortgage Notes	$	310.0	$	310.0
Revolving Credit Facility Agreement		190.0		137.0
Senior Unsecured Notes, Net		299.3		299.4
	$	799.3	$	746.4
Current portion		—		(31.0	)
	$	799.3	$	715.4

F-31

First Mortgage Notes

        The First Mortgage Notes ("Notes") are secured by a first mortgage on substantially all of the property, plant and equipment of the Operating Partnership and are due and payable in ten equal annual installments beginning December 2002. The interest rate on the Notes is 9.15% per annum, payable semi-annually. The Notes contain various restrictive covenants applicable to the Partnership, and restrictions on the incurrence of additional indebtedness, including compliance with certain issuance tests. The General Partner believes these issuance tests will not negatively impact the Partnership's ability to finance future expansion projects. Under the Note Agreements, the Partnership cannot make cash distributions more frequently than quarterly in an amount not to exceed Available Cash (Note 4) for the immediately preceding calendar quarter. If the notes were to be paid prior to their stated maturities, the Note Agreements provide for the payment of a redemption premium by the Partnership.

Revolving Credit Facility Agreement

        As of December 31, 2001, Partnership had a $350.0 million Revolving Credit Facility Agreement scheduled to mature in September 2005. Upon drawdown, the loans are secured by a first lien on the mortgaged property that ranks equally with the Notes or may be fully collateralized with U.S. or Canadian government securities. The facility contains restrictive covenants substantially identical to those in the Note Agreements, provides for borrowing at variable interest rates and has a facility fee of 0.10% (2000—0.10%) per annum on the entire $350.0 million. At December 31, 2001, $137.0 million of the facility was utilized and was classified as long-term debt (2000—$190.0 million). The interest rate on loans averaged 5.3% (2000—6.7%; 1999—5.4%) for the year and was 2.3% at the end of 2001 (2000—6.2%).

        On January 29, 2002, the Partnership established two new unsecured credit facilities, a $300.0 million three-year term facility and a $300.0 million 364-Day facility, to replace the existing $350.0 million Revolving Credit Facility. Under the terms of these new facilities, the Partnership and the Operating Partnership may borrow funds up to a combined maximum of $300.0 million under the three-year term facility and a combined maximum of $300.0 million under the 364-Day Facility. In addition, when no default exists, the Partnership may designate any of its subsidiaries that is a material subsidiary to borrow under either or both the facilities and subject to complying with certain administrative procedures, it will be permitted to borrow. Any borrowings under either facility will be guaranteed by the Partnership, the Operating Partnership and any of its material subsidiaries, unless it is the borrower. Upon closing, indebtedness under the $350.0 million Revolving Credit Facility was refinanced with indebtedness drawn under the new credit facilities and the $350.0 million Revolving Credit Facility was terminated.

Senior Unsecured Notes

        The Operating Partnership has issued a total of $300 million of senior unsecured notes. The notes pay interest semi-annually and have varying maturities and terms as outlined in the table

F-32

below. The senior unsecured notes do not contain any covenants restricting the issuance of additional indebtedness.

	December 31,
Senior Unsecured Notes	Interest Rate		2000			2001
Notes maturing in 2012	7.900	%	$	100.0		$	100.0
Notes maturing in 2018	7.000	%		100.0			100.0
Notes maturing in 2028	7.125	%		100.0			100.0
Unamortized Discount				(0.7	)		(0.6	)
			$	299.3		$	299.4

Interest

        Interest expense is net of amounts capitalized of $0.3 million (2000—$0.3 million; 1999—$4.4 million). Interest paid amounted to $57.0 million (2000—$59.4 million; 1999—$56.1 million).

Debt Service Reserve

        Under the terms of the First Mortgage Notes and the Revolving Credit Facility in place at December 31, 2001, the Partnership is required to establish at the end of each quarter a debt service reserve in an amount equal to 50% of the prospective debt service payments for the immediate following calendar quarter. At December 31, 2001, the debt service reserve was $1.0 million (2000—$0.8 million).

        The aggregate long-term maturities for the five years ending December 31, 2002 through 2006 are $31.0 million per year of First Mortgage Notes and $137.0 million borrowed on the Revolving Credit Facility in 2005.

9. RELATED PARTY TRANSACTIONS

        The Partnership, which does not have any employees, uses the services of the General Partner and its affiliates for managing and operating its pipeline business. These services, which are reimbursed at cost in accordance with service agreements, amounted to $36.9 million (2000—$30.3 million; 1999—$34.3 million) and are included in operating and administrative expenses. At December 31, 2001, the Partnership has accounts receivable from the General Partner and affiliates of $0.3 million. At December 31, 2000, the Partnership had accounts receivable from the General Partner and affiliates of $1.5 million.

        The Partnership has entered into an easement acquisition agreement with Enbridge Holdings (Mustang) Inc. ("Enbridge Mustang"), an affiliate of the General Partner. Enbridge Mustang acquired certain real property for the purpose of granting pipeline easements to the Partnership for construction of a new pipeline, completed during 1998, by the Partnership from Superior, Wisconsin to Chicago, Illinois. In order to provide for these real property acquisitions by Enbridge Mustang, the Partnership had made non-interest bearing cash advances to Enbridge Mustang. As Enbridge Mustang disposes of the real property, the advances are repaid. The advances amounted to

F-33

$2.9 million at December 31, 2001 (2000—$5.9 million). Under the terms of the agreement, the Partnership will reimburse Enbridge Mustang the net cost of acquiring, holding and disposing of the real property.

        The Partnership has entered into an agreement with Tidal Energy Marketing Inc. ("Tidal") in which Enbridge Inc. has a 50% interest. Tidal is engaged in the business of crude oil and condensate marketing, transportation, storage and trading and providing related services. The agreement gives Tidal the ability to act as the Partnership's agent in the leasing of the Partnership's terminalling and storage facility, consisting of nine 100,000 barrels ("bbl") nominal capacity tanks and related facilities. The Partnership pays Tidal a monthly fee which includes 50% of the distributable proceeds from the tank leases. In 2001, the Partnership paid Tidal $0.3 million, (2000, $0.1 million).

        A portion of the purchase price related to the acquisition of the East Texas System and the North Dakota System was financed with short term loans from the General Partner. In January 2002, these loans were refinanced with a subordinated loan payable to the General Partner which matures in January 2007. This loan bears interest at a floating market based rate and the Partnership has the right to repay the principal amount of this loan plus accrued interest at any time, without penalty.

        The Partnership has entered into hedge transactions to substantially mitigate exposure to movements in commodity prices which arise from the Partnership's investment in the East Texas System. Enbridge currently provides a guarantee of the obligations in respect of these hedging transactions. Under the terms of the guarantee, the Partnership has agreed to pay Enbridge a fee, which is based on a formula that is consistent with what third party financial institutions would charge for this form of guarantee.

10. MAJOR CUSTOMERS

        Operating revenue received from major customers was as follows:

	Year ended December 31,
	1999		2000		2001
BP Canada Energy Company	$	71.9	$	69.6	$	73.4
ExxonMobil Canada Energy	$	42.2	$	48.3	$	59.7
PDV Midwest	$	23.7	$	33.7	$	21.4
Imperial Oil Limited	$	33.3	$	23.3	$	24.0

        The Partnership has a concentration of trade receivables from companies operating in the oil and gas industry. These receivables are collateralized by the crude oil and other products contained in the Partnership's pipeline and storage facilities.

F-34

11. CONTINGENCIES

Environment

        The Partnership is subject to federal and state laws and regulations relating to the protection of the environment. Environmental risk is inherent to liquid and gas pipeline operations and the Partnership could, at times, be subject to environmental cleanup and enforcement actions. The General Partner manages this environmental risk through appropriate environmental policies and practices to minimize the impact to the Partnership. To the extent that the Partnership is unable to recover environmental costs in its rates, to the extent not recovered through insurance, the General Partner has agreed to indemnify the Partnership from and against any costs relating to environmental liabilities associated with the Lakehead System assets prior to the transfer to the Partnership in 1991. This excludes any liabilities resulting from a change in laws after such transfer. The Partnership continues to voluntarily investigate past leak sites on the Lakehead, North Dakota and East Texas Systems for the purpose of assessing whether any remediation is required in light of current regulations, and to date no material environmental risks have been identified.

Oil and Gas in Custody

        The Partnership's Lakehead System and North Dakota assets transport crude oil and NGLs owned by its customers for a fee. The volume of liquid hydrocarbons in the Partnership's pipeline system at any one time approximates 14 million barrels, virtually all of which is owned by the Partnership's customers. Under terms of the Partnership's tariffs, losses of crude oil not resulting from direct negligence of the Partnership may be apportioned among its customers. In addition, the Partnership maintains adequate property insurance coverage with respect to crude oil and NGLs in the Partnership's custody.

        Approximately 30% of the natural gas volume on the East Texas System is transported by customers on their contract with the remaining 70% purchased by the Partnership and sold to third parties downstream of the purchase point. The value of customer natural gas in custody of the East Texas System is not material to the Partnership.

12. FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

        The carrying amounts of cash equivalents approximate fair value because of the short-term maturities of these investments.

        Based on the borrowing rates currently available for instruments with similar terms and remaining maturities, the carrying value of borrowings under the Revolving Credit Facility approximate fair value, the fair value of the First Mortgage Notes approximates $342.6 million (2000—$346.5 million) and the fair value of the Senior Unsecured Notes approximates $291.4 million (2000—$290.3 million). Due to defined contractual make-whole arrangements, refinancing of the First Mortgage Notes and Senior Unsecured Notes would not result in any financial benefit to the Partnership.

F-35

Fair Value of Derivative Financial Instruments

Interest rate risk:

        The Partnership enters into interest rate swaps to manage the effect of future interest rate movements on its interest costs. These agreements, maturing July 2002, meet the criteria for hedge accounting and are treated as cash flow hedges. On January 1, 2001, the Partnership recorded an unrealized loss of $0.1 million charged to Other Comprehensive Income, representing the transition adjustment for the cash flow hedges. During the year ended December 31, 2001, this payable increased to $1.9 million due to revaluation of the floating to fixed interest rate swaps and the entire amount is reflected in Other Comprehensive Income.

        Realized gains and losses on financial instruments used to hedge the Partnership's exposure to changes in future interest rates are recognized currently with the related interest expense.

Natural gas price risk:

        Earnings and cash flows of the East Texas System are sensitive to changes in the price of natural gas and fractionation margins. To mitigate volatility of cash flows, the Partnership enters into derivative financial instruments to manage its exposures. Gains and losses on cash flow hedging instruments are reflected in other comprehensive income and recognized in net income in the periods when the underlying transaction occurs. If the derivative financial instrument is no longer effective as a hedge, the Partnership will recognize future changes in the value of the financial instrument in net income.

        To hedge cash flow volatility associated with the East Texas System natural gas sales, at December 31, 2001, the Partnership has outstanding derivative financial instruments hedging 9,000 MMBtu/day of natural gas for a period approximating 10 years. The fair value of these contracts at December 31, 2001, is approximately $8.5 million receivable. The entire amount of the corresponding gain is recorded in Other Comprehensive Income.

        For the benefit of its customers, the East Texas System will enter into fixed price natural gas purchase contracts. No price risk is assumed by the East Texas System as simultaneous derivative financial instruments are put in place at the same time the customer contract is entered into. At December 31, 2001, the fair value of these derivative financial instruments is $6.8 million receivable.

        To hedge against unfavorable changes in processing fractionation margins, the Partnership has entered into a series of derivative financial instruments to sell components of natural gas liquids (ethane, propane, butane, condensate) through November 30, 2002. These hedges are done in conjunction with natural gas price hedges for 15,000 MMBtu/d to buy natural gas to hedge costs associated with processing liquids from the raw natural gas stream. Collectively, the value of these contracts at December 31, 2001 is approximately $1.5 million payable. The entire amount of the corresponding loss is recorded in Other Comprehensive Income.

        The financial instruments described above meet the criteria for hedge accounting and are treated as cash flow hedges with related gains or losses on the contracts recorded as operating revenue when the underlying transaction occurs.

F-36

        At December 31, 2001, no material credit risk exposure existed as the General Partner enters into financial instruments only with creditworthy institutions that possess investment grade ratings.

13. SEGMENT INFORMATION

        The Partnership's operations are segmented based on the type of business activity and management control. The Partnership's transportation pipelines primarily receive, and deliver, crude oil, liquid hydrocarbons, natural gas, and natural gas liquids to, and from, other pipelines, refineries and provide gathering functions in certain areas.

        The Partnership provides marketing services to its customers. The Partnership's marketing activities include providing natural gas supply and sales services to some of its end-user customers by purchasing the natural gas supply from other marketers, pipeline affiliates, and natural gas producers and reselling the natural gas to the end-user. Natural gas processing revenues are realized from the extraction and sale of NGLs as well as the sale of the residual natural gas.

        The "Other" column consists of costs of financing, interest income and minority interest, which are not allocated to the other business segments.

        The following table presents certain financial information relating to the Company's business segments as of or for the year ended December 31, 2001. As discussed in Note 3 to the Consolidated Financial Statements, the results from the East Texas System were included since November 30, 2001. Comparative segment information for years 2000 and 1999 is not comparable, as a result of the Partnership having only one segment in prior years. December 2001 results for gas pipeline marketing and processing are not representative of full year expectations due to a maintenance shut down during the month.

	As of or for the Year Ended December 31, 2001
	Transportation		Marketing		Processing		Other		Totals
Operating revenues	$	311.7	$	26.1	$	2.6	—		$	340.4
Power		49.9		—		—	—			49.9
Cost of natural gas		—		24.1		2.2	—			26.3
Operating and administrative		102.9		1.4		0.2	—			104.5
Depreciation		63.1		0.6		0.1	—			63.8
Operating Income		95.8		—		0.1	—			95.9
Interest and other		—		—		—	2.8			2.8
Interest expense		—		—		—	(59.3	)		(59.3	)
		95.8		—		0.1	(56.5	)		39.4
Minority interest		—		—		—	(0.5	)		(0.5	)
Net income		95.8		—		0.1	(57.0	)		38.9
Total Assets		1,393.8		212.3		43.1	—			1,649.2
Capital Expenditures (excluding acquisitions)	$	35.0		—		—	—		$	35.0

F-37

ENBRIDGE ENERGY PARTNERS, L.P.

SUPPLEMENTARY INFORMATION (UNAUDITED)

SELECTED QUARTERLY FINANCIAL DATA

(Dollars in Millions, Except Per Unit Amounts)

2000 Quarters	First		Second		Third		Fourth		Total
Operating revenue	$	78.8	$	78.3	$	74.9	$	73.6	$	305.6
Operating income	$	33.3	$	31.2	$	29.0	$	23.0	$	116.5
Net income	$	20.1	$	16.5	$	14.2	$	9.4	$	60.2
Net income per unit(1)	$	0.62	$	0.49	$	0.42	$	0.25	$	1.78

2001 Quarters	First		Second		Third		Fourth		Total
Operating revenue	$	71.9	$	81.1	$	75.9	$	111.5	$	340.4
Operating income	$	24.7	$	25.9	$	20.5	$	24.8	$	95.9
Net income	$	10.1	$	11.6	$	6.6	$	10.6	$	38.9
Net income per unit(1)	$	0.27	$	0.32	$	0.13	$	0.26	$	0.98

(1)

The General Partner's allocation of net income has been deducted before calculating net income per unit.

F-38

ENBRIDGE MIDCOAST ENERGY, INC.

(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED STATEMENT OF INCOME

		Three Months ended March 31, 2002			Four Months ended April 30, 2002
		(unaudited, in millions)
Operating revenue
	Energy marketing	$	84.5		$	114.0
	Transportation		21.9			29.5
	Processing		84.7			135.8
			191.1			279.3
Expenses
	Cost of natural gas		158.5			236.0
	Operating and administrative		15.9			23.2
	Depreciation and amortization		5.0			7.0
			179.4			266.2
Operating income			11.7			13.1
Interest and other income			(0.5	)		(0.5	)
Interest expense			(4.4	)		(6.4	)
Income before income taxes			6.8			6.2
Provision for income taxes
	Current		1.7			2.0
	Deferred		(4.2	)		(4.2	)
			(2.5	)		(2.2	)
Net Income		$	4.3		$	4.0

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-39

ENBRIDGE MIDCOAST ENERGY, INC.

(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED STATEMENT OF CASH FLOWS

			Three Months ended March 31, 2002			Four Months ended April 30, 2002
			(unaudited, in millions)
Cash provided from operating activities
	Net income		$	4.3		$	4.0
	Adjustments to reconcile net income to cash
	provided from operating activities:
		Depreciation and amortization		5.0			7.0
		Deferred income taxes		4.2			4.2
		Other		1.1			(0.2	)
		Changes in operating assets and liabilities		4.4			(3.5	)
				19.0			11.5
Investing activities
	Acquisitions (Note 2)			(189.6	)		(189.6	)
	Capital expenditures			(17.8	)		(27.2	)
				(207.4	)		(216.8	)
Financing activities
	Due to affiliates			221.4			221.4
				221.4			221.4
Increase in cash and cash equivalents				33.0			16.1
Cash and cash equivalents at beginning of period				1.9			1.9
Cash and cash equivalents at end of period			$	34.9		$	18.0

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-40

ENBRIDGE MIDCOAST ENERGY, INC.

(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		March 31, 2002			April 30, 2002
		(unaudited, in millions)
ASSETS
Current assets
	Cash and cash equivalents	$	34.9		$	18.0
	Accounts receivable, net of allowance of $4.4		82.0			94.6
	Other current assets		13.9			4.8
			130.8			117.4
Other non-current assets			246.4			247.3
Property, plant and equipment, net			656.0			663.4
		$	1,033.2		$	1,028.1
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
	Accounts payable and other liabilities	$	88.5		$	68.9
	Due to affiliates		0.8			16.7
			89.3			85.6
Due to affiliates			540.6			540.6
Other liabilities			16.2			20.3
Deferred income taxes			27.0			18.1
Minority interest			0.5			0.5
Shareholder's equity:
	Paid-in-capital		368.0			368.0
	Retained earnings		7.3			6.8
	Accumulated other comprehensive loss		(15.7	)		(11.8	)
			359.6			363.0
		$	1,033.2		$	1,028.1

The accompanying notes to the Consolidated Financial Statements
are an integral part of these statements.

F-41

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in millions; except per unit amounts)

1.

Basis of Presentation

        The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, they contain all adjustments, consisting only of normal recurring adjustments, which management considers necessary to present fairly the financial position as at March 31, 2002 and April 30, 2002; the results of operations for the three month and four month periods ended March 31, 2002 and April 30, 2002; and cash flows for the three month and four month periods ended March 31, 2002 and April 30, 2002. The results of operations for the three months ended March 31, 2002 and four month ended April 30, 2002 should not be taken as indicative of the results to be expected for the full year. The interim financial statements should be read in conjunction with Enbridge Midcoast Energy, Inc.'s consolidated financial statements and notes thereto.

2.

Acquisition

        In March 2002, the Company acquired natural gas gathering and processing facilities in northeast Texas for cash consideration of $180.6 million. The facilities are complementary to Enbridge Midcoast's assets.

        The results of operations have been included in the consolidated financial statements from the date of acquisition. All of the goodwill is expected to be deductible for tax purposes.

Fair value of assets acquired:
	Property, plant and equipment	$	152.1
	Goodwill		30.0
	Working capital deficiency		(1.5	)
		$	180.6

The acquisition was funded with loans from affiliated companies.

F-42

Report of Independent Accountants

To the Shareholder and Board of Directors
of Enbridge Energy Company, Inc.:

        In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of comprehensive income, of shareholders' equity, and of cash flows present fairly, in all material respects, the financial position of Enbridge Midcoast Energy, Inc. and its subsidiaries (formerly known as Midcoast Energy Resources, Inc.) at December 31, 2001, and the results of their operations and their cash flows for the period from May 1, 2001 to December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Houston, Texas
May 15, 2002

F-43

Report of Independent Accountants

To the Shareholder and Board of Directors
of Enbridge Energy Company, Inc.:

        In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of comprehensive income, of shareholders' equity, and of cash flows present fairly, in all material respects, the financial position of Midcoast Energy Resources, Inc. and its subsidiaries at December 31, 2000, and the results of their operations and their cash flows for the period from January 1, 2001 to April 30, 2001 and for each of the two years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for derivative instruments and hedging activities effective January 1, 2001.

PricewaterhouseCoopers LLP
Houston, Texas
May 15, 2002

F-44

ENBRIDGE MIDCOAST ENERGY, INC.
(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

			December 31,
			2000			2001
			(Predecessor)
ASSETS
Current Assets
	Cash and cash equivalents		$	4,619		$	1,924
	Accounts and notes receivable, net of allowance of $1,096 and $4,434, respectively			144,649			69,599
	Inventory			7,730			17,158
		Total Current Assets		156,998			88,681
Property, Plant and Equipment, net (Note 4)				416,046			482,075
Other Assets (Note 5)				26,276			216,958
		Total Assets	$	599,320		$	787,714
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
	Accounts payable and accrued liabilities		$	146,347		$	80,126
Long-term Debt (Note 6)				255,999			—
Other Liabilities				782			7,876
Due to Affiliates (Note 10)				—			319,200
Deferred Income Taxes (Note 13)				17,746			16,685
Commitments and Contingencies (Note 14)
Minority Interest in Consolidated Subsidiaries				595			451
Shareholders' Equity:
	Common stock, par value $.01 and $1,000 per share; authorized 31,250,000 and 1 shares; issued 12,738,109 and 1, respectively			127			1
	Paid-in capital			166,028			368,039
	Retained earnings			14,941			3,080
	Accumulated other comprehensive income			2			(7,744	)
	Treasury stock (at cost), 201,908 and 0 treasury shares, respectively			(3,247	)		—
		Total Shareholders' Equity		177,851			363,376
		Total Liabilities and Shareholders' Equity	$	599,320		$	787,714

The accompanying notes are an integral part of these consolidated financial statements.

F-45

ENBRIDGE MIDCOAST ENERGY, INC.
(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

				For the Years Ended December 31,						Four Months Ended April 30,			Eight Months Ended December 31,
				1999			2000			2001			2001
				(Predecessor)			(Predecessor)			(Predecessor)
Operating Revenues:
	Energy marketing revenue			$	346,956		$	690,935		$	374,805		$	380,387
	Transportation and gathering fees				26,657			59,407			18,175			33,615
	Natural gas processing and treating revenue				15,564			38,871			12,650			19,022
	Other.				2,394			3,133			1,323			5,450
		Total operating revenues			391,571			792,346			406,953			438,474
Operating Expenses:
	Energy marketing expenses				319,207			656,990			383,364			355,559
	Natural gas processing and treating costs				11,244			25,520			7,481			9,082
	Other operating expenses				21,556			30,737			11,614			22,422
	Depreciation and amortization				7,545			15,695			5,715			15,527
	General and administrative				6,708			13,975			16,439			11,854
	Taxes other than income				1,723			3,925			1,445			2,853
	Unusual charges				2,685			—			—			—
		Total operating expenses			370,668			746,842			426,058			417,297
		Operating income/(loss)			20,903			45,504			(19,105	)		21,177
Non-Operating Items:
	Interest expense				(6,533	)		(18,489	)		(9,431	)		(13,976	)
	Minority interest in consolidated subsidiaries				(43	)		(88	)		(55	)		(42	)
	Other income/(expense), net				(137	)		1,837			616			167
		Total non-operating items			(6,713	)		(16,740	)		(8,870	)		(13,851	)
Income/(loss) before income taxes and extraordinary item					14,190			28,764			(27,975	)		7,326
Provision for income taxes:
	Current				(1,833	)		(684	)		8,442			2,130
	Deferred				(336	)		(6,712	)		890			(6,376	)
Income/(loss) before extraordinary item and cumulative effect of change in accounting principle					12,021			21,368			(18,643	)		3,080
Extraordinary item, net of income tax provision of $300					(582	)		—			—			—
Cumulative effect of change in accounting principle, net of income tax provision of $457					—			—			(850	)		—
Net income/(loss)				$	11,439		$	21,368		$	(19,493	)	$	3,080
Earnings per common share:
	Basic
		Income/(loss) before extraordinary item and cumulative effect of change in accounting principle		$	1.31		$	1.71		$	(1.48	)
		Extraordinary item			(.06	)		—			—
		Cumulative effect of change in accounting principle									(0.07	)
			Net income/(loss)	$	1.25		$	1.71		$	(1.55	)
	Diluted
		Income/(loss) before extraordinary item and cumulative effect of change in accounting principle		$	1.28		$	1.68		$	(1.48	)
		Extraordinary item			(.06	)		—			—
		Cumulative effect of change in accounting principle			—						(0.07	)
			Net income/(loss)	$	1.22		$	1.68		$	(1.55	)
Weighted Average Number of Common Shares Outstanding:
		Basic			9,176,201			12,506,346			12,569,640
		Diluted			9,400,754			12,756,414			12,569,640

The accompanying notes are an integral part of these consolidated financial statements.

F-46

ENBRIDGE MIDCOAST ENERGY, INC.
(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

		For the Years Ended December 31,					For the Four Months Ended April 30,			For the Eight Months Ended December 31,
		1999		2000			2001			2001
		(Predecessor)		(Predecessor)			(Predecessor)
Net income/(loss)		$	11,439	$	21,368		$	(19,493	)	$	3,080
Derivative financial instruments:
	Cumulative effect of transition adjustment, net of tax of $2,971		—		—			3,847			—
	Loss on fair value, net of tax recovery of $2,845 and $4,330, respectively		—		—			(4,735	)		(6,715	)
Foreign currency translation adjustment			71		(69	)		(26	)		(1,029	)
Comprehensive (loss)/income		$	11,510	$	21,299		$	(20,407	)	$	(4,664	)

The accompanying notes are an integral part of these consolidated financial statements.

F-47

ENBRDIGE MIDCOAST ENERGY INC.
(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands)

	Common Stock											Accumulated Other Comprehensive Income			Treasury Stock
						Paid-in Capital			Retained Earnings (Deficit)											Total Shareholders' Equity
	Shares		Amounts												Shares		Amounts
Balance, December 31, 1998 (predecessor)	7,150		$	71		$	80,955		$	(11,947	)	$	—		(181	)	$	(2,791	)	$	66,288
Net income	—			—			—			11,439			—		—			—			11,439
Stock options exercised	—			—			42			—			—		—			—			42
Sale of common stock	5,572			56			84,772			—			—		—			—			84,828
Treasury stock purchased	—			—			—			—			—		(144	)		(2,406	)		(2,406	)
Treasury stock issued in connection with acquisitions	—			—			195			—			—		164			2,627			2,822
Foreign currency translation adjustment	—			—			—			—			71		—			—			71
Common stock dividends, $0.27 per share	—			—			—			(2,407	)		—		—			—			(2,407	)
Balance, December 31, 1999 (predecessor)	12,722		$	127		$	165,964		$	(2,915	)	$	71		(161	)	$	(2,570	)	$	160,677
Net income	—			—			—			21,368			—		—			—			21,368
Stock options exercised	6			—			90			—			—		—			—			90
Warrants exercised	10			—			—			—			—		—			—			—
Treasury stock purchased	—			—			—			—			—		(101	)		(1,566	)		(1,566	)
Treasury stock issued in connection with acquisitions	—			—			165			—			—		60			889			1,054
Foreign currency translation adjustment	—			—			—			—			(69	)	—			—			(69	)
Common stock dividends, $0.28 per share	—			—			—			(3,512	)		—		—			—			(3,512	)
Other	—			—			(191	)		—			—		—			—			(191	)
Balance, December 31, 2000 (predecessor)	12,738		$	127		$	166,028		$	14,941		$	2		(202	)	$	(3,247	)	$	177,851
Net loss										(19,493	)										(19,493	)
Treasury stock purchased	—			—			—			—			—		(2	)		(64	)		(64	)
Other comprehensive income/(loss)	—			—			—			—			(914	)	—			—			(914	)
Common stock dividends, $0.10 per share	—			—			—			(2,149	)		—		—			—			(2,149	)
Options exercised	166			8			1,839			—			—		—			—			1,847
Other	—			—			(44	)		(175	)		—		—			—			(219	)
Balance, April 30, 2001 (predecessor)	12,904		$	135		$	167,823		$	(6,876	)	$	(912	)	(204	)	$	(3,311	)	$	156,859
Purchase price adjustments at May 1, 2001	(12,903	)		(134	)		193,014			6,876			912		204			3,311			203,979
Balance May 1, 2001, as adjusted	1			1			360,837			—			—		—			—			360,838
Net income							—			3,080											3,080
Other comprehensive income/(loss)	—			—			—			—			(7,744	)	—			—			(7,744	)
Capital contribution	—			—			7,000			—			—		—			—			7,000
Other	—			—			202			—			—		—			—			202
Balance December 31, 2001	1		$	1		$	368,039		$	3,080		$	(7,744	)	—		$	—		$	363,376

The accompanying notes are an integral part of these consolidated financial statements.

F-48

ENBRIDGE MIDCOAST ENERGY, INC.,
(an indirectly owned subsidiary of Enbridge Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

					For the Year Ended December 31,						For the Four Months Ended April 30,			For the Eight Months Ended December 31,
					1999			2000			2001			2001
					(Predecessor)			(Predecessor)			(Predecessor)
Cash Flows from Operating Activities:
	Net income/(loss)				$	11,439		$	21,368		$	(19,493	)	$	3,080
	Adjustments to arrive at net cash (used)/provided by operating activities:
		Depreciation and amortization				7,545			15,695			5,715			15,527
		Deferred income taxes				336			6,712			1,347			6,376
		Extraordinary charge, net of tax				582			—			—			—
		Other				(129	)		(3,577	)		(178	)		(1,649	)
		Changes in working capital accounts:
			Decrease (Increase) in accounts receivable			(11,396	)		(86,199	)		59,107			13,842
			Decrease (Increase) in other current assets			186			(3,146	)		1,899			4,311
			(Decrease) Increase in accounts payable and accrued liabilities			8,136			75,113			(48,859	)		(63,281	)
				Net cash (used)/provided by operating activities		16,699			25,966			(462	)		(21,794	)
Cash Flows from Investing Activities:
	Acquisitions, net of cash acquired					(238,104	)		(22,752	)		—			(1,229	)
	Capital expenditures					(16,562	)		(16,528	)		(10,773	)		(50,185	)
	Other					368			(1,157	)		(656	)		42
				Net cash used by investing activities		(254,298	)		(40,437	)		(11,429	)		(51,372	)
Cash Flows from Financing Activities:
	Bank debt borrowings					194,658			125,806			31,760			156,628
	Bank debt repayments					(33,599	)		(109,878	)		(24,600	)		(419,786	)
	Net proceeds from equity offerings					84,870			—			—			—
	Financing costs					(1,372	)		—			1,581			—
	Contribution from affiliate.					—			—			—			7,000
	Loans from affiliates					—			—			—			319,200
	Cash overdrafts					—			6,659			—			10,295
	Treasury stock purchases					(2,406	)		(1,566	)		(64	)		—
	Dividends on common stock					(2,407	)		(3,512	)		(879	)		—
	Other					—			(764	)		1,849			(622	)
				Net cash provided by financing activities		239,744			16,745			9,647			72,715
Net (Decrease) Increase in Cash and Cash Equivalents						2,145			2,274			(2,244	)		(451	)
Cash and Cash Equivalents, beginning of period						200			2,345			4,619			2,375
Cash and Cash Equivalents, end of period					$	2,345		$	4,619		$	2,375		$	1,924
Supplemental Disclosures:
	Cash paid for interest, net of amounts capitalized				$	7,357		$	19,928		$	4,021		$	11,982
	Cash paid for income taxes				$	460		$	1,813		$	98		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-49

Enbridge Midcoast Energy, Inc.
(an indirectly owned subsidiary of Enbridge Inc.)

Notes to Consolidated Financial Statements

Note 1. Organization and Business:

        The Company, along with its subsidiaries and its affiliated companies, is primarily engaged in the transportation, gathering, processing and marketing of natural gas and other petroleum products. The Company owns and operates four interstate transmission pipeline systems, 20 intrastate transmission and wholesale customer pipeline systems, and gathering systems, in total representing approximately 4,000 miles of pipeline with an aggregate daily throughput capacity of approximately 4.0 billion cubic feet of natural gas per day. Operations also include three gas processing and two treating plants, 98 natural gas liquid, crude oil and carbon dioxide trucks and trailers and 45 rail cars. The Company's principal business consists of providing transportation services to natural gas producers and wholesale customers, providing natural gas marketing services to these customers and processing natural gas. In connection with these services, the Company acquires and constructs pipelines to meet these customers' needs. The Company's principal assets are located in the Gulf Coast and Mid-Continent areas.

        On May 11, 2001, Midcoast Energy Resources, Inc. was acquired by Enbridge Inc. ("Enbridge"). Enbridge acquired all of the common stock of Midcoast for $27 per share in cash and assumed long-term debt.

        The purchase price of $623.8 million was determined based on negotiations between management of Enbridge and Midcoast and was approved by their respective boards of directors.

        The purchase price was allocated to the assets acquired and the liabilities assumed based on estimated fair market values, with the residual assigned to goodwill. The purchase price was allocated at the acquisition date to the assets acquired and the liabilities assumed as follows:

			($ millions)
Assets Acquired:
	Current Assets		$	99.3
	Goodwill			212.0
	Other Assets			24.4
	Property, Plant & Equipment, Net			436.9
				772.6
Less – Liabilities Assumed:
	Current Liabilities			123.1
	Deferred Income Taxes			25.7
				148.8
		Total Purchase Price	$	623.8

Note 2. Summary of Significant Accounting Policies:

Basis of Presentation

        The consolidated financial statements include the accounts of the Company and all of its subsidiaries. Investments in entities which are not subsidiaries, but over which the Company exercises significant influence, are accounted for using the equity method. Other investments are

F-50

accounted for at cost. The financial statements for previous periods include certain reclassifications that were made to conform to the current year presentation. Such reclassifications have no impact on reported net income or shareholders' equity.

Use of Estimates

        The preparation of the Company's consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company's management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities that exist at the date of the financial statements. Actual results could differ from those estimates.

Regulation

        Certain of the Company's activities are subject to regulation by various authorities, including the Federal Energy Regulatory Commission ("FERC"), and follow the provisions of Statement of Financial Accounting Standards ("SFAS") No. 71, "Accounting for the Effects of Certain Types of Regulation." Regulatory bodies exercise statutory authority over matters such as construction, rates and underlying accounting practices, and ratemaking agreements with customers. In order to achieve a proper matching of revenues and expenses, the timing of recognition of certain revenues and expenses in these operations may differ from that otherwise expected, in the absence of SFAS No. 71. Approximately 50% of the Company's operations are subject to regulation.

Cash and Cash Equivalents

        The Company considers short-term, highly liquid investments that have an original maturity of three months or less at the time of purchase to be cash equivalents.

Operational Balancing Agreements

        To facilitate deliveries of natural gas and provide for operating flexibility, the Company has operational balancing agreements in place with other interconnecting pipelines. A balancing agreement ensures that the volume of gas a shipper schedules for transportation between two interconnecting pipelines equals the volume actually delivered. If natural gas moves between pipelines in volumes that are more or less than the volumes previously scheduled, the difference results in a net receivable or payable balance between the interconnecting pipelines. These are settled through cash-out procedures specified in each tariff or operational balancing agreements or recovered or repaid through the receipt or delivery of natural gas in the future. Such imbalances are recorded as current assets or current liabilities on the balance sheet using the posted index prices of the applicable FERC-approved tariffs, which approximate market rates or our weighted average cost of gas ("WACOG").

Inventories

        Inventories consist primarily of materials and supplies, natural gas and liquid petroleum products. Inventories of materials and supplies utilized for ongoing replacements and expansions

F-51

are carried at average cost and are reviewed regularly and adjusted to their net realizable value. The natural gas and liquid petroleum products are carried at lower of cost or market.

Property, Plant and Equipment

        Interstate and intrastate natural gas transmission, distribution and processing facilities and other equipment are stated at cost and depreciated by the straight-line method at rates based on the following estimated useful lives of the assets:

Interstate natural gas transmission facilities	15 - 66	Years
Intrastate natural gas transmission facilities	15 - 60	Years
Pipeline right-of-ways	17	Years
Natural gas processing facilities	30	Years
Other property and equipment	3 - 10	Years

        For regulated interstate natural gas transmission facilities, the cost of additions to property, plant and equipment includes direct labor and material, allocable overhead and an allowance for the estimated cost of funds used during construction ("AFUDC"). Such provisions for AFUDC are not reflected separately in the accompanying consolidated statements of operations due to the amounts not being material. Maintenance and repairs, including the cost of renewals of minor items of property, are charged principally to expense as incurred. Major additions, replacements and improvements of property are charged to the appropriate property accounts. Upon retirement of a pipeline plant asset, its cost is charged to accumulated depreciation together with the cost of removal, less salvage value.

        For all other non-regulated assets, repairs and maintenance are charged to expense as incurred; renewals and betterments are capitalized including any direct labor. Upon retirement or disposal, the net book value of the assets, net of any sale proceeds or retirement costs, is recorded as a charge or credit to income.

Impairment of Long-Lived Assets

        In accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," the Company evaluates the long-lived assets, including related intangibles, of identifiable business activities for impairment when events or changes in circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable. The determination of whether an impairment has occurred is based on management's estimate of undiscounted future cash flows attributable to the assets as compared to the carrying value of the assets. If an impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value for the assets and recording a provision for loss if the carrying value is greater than fair value. For assets identified to be disposed of in the future, the carrying value of these assets is compared to the estimated fair value less the cost to sell to determine if an impairment is required. Until the assets are disposed of, an estimate of the fair value is redetermined when related events or circumstances change.

F-52

Goodwill

        Goodwill represents the excess of the purchase price over the fair value of net assets upon acquisition of a business and is amortized on a straight-line basis over 30 years. Effective January 1, 2002, the Company adopted SFAS No. 142 related to goodwill and other intangible assets. Under the new standard, goodwill will not be amortized but will be tested for impairment at least annually and written down if recorded value exceeds fair value.

Revenue Recognition

        Revenues are recorded when products have been delivered or services have been performed. Certain of the Company's operations are subject to regulation. In these situations, revenue is recognized in a manner that is consistent with the underlying rate design as mandated by the regulatory authority.

Income Taxes

        Income taxes are based on income reported for tax return purposes along with a provision for deferred income taxes. Deferred income taxes are provided to reflect the tax consequences in future years of differences between the financial statement and tax bases of assets and liabilities. Tax credits are accounted for under the flow-through method, which reduces the provision for income taxes in the year the tax credits first become available. Deferred tax assets are reduced by a valuation allowance when, based upon management's estimates, it is more likely than not that a portion of the deferred tax asset will not be realized in a future period. The estimates utilized in the recognition of deferred tax assets are subject to revision in future periods based on new facts or circumstances.

Derivative Financial Instruments

        In accordance with SFAS No. 133, the Company recognizes all derivative financial instruments as assets and liabilities and measures them at fair value. For derivative financial instruments that are designated and qualify as a cash flow hedge, the effective portions of changes in fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Changes in the fair value of derivatives that do not qualify for hedge treatment are recognized currently in earnings. The related cash flows from those derivative financial instruments accounted for as hedges are classified in the same category as the items being hedged.

        Prior to December 31, 2000, unrealized gains and losses on hedge contracts are deferred and recognized in income in the same manner as the hedged item. These contracts are initially and regularly evaluated to determine that there is a high correlation between changes in the fair value of the hedge contract and fair value of the hedged item. In instances where the anticipated correlation of price movements does not occur, hedge accounting is terminated and future changes in the value of the instruments are recognized as gains or losses in the statement of operations. If the hedged item of the underlying transaction is sold or settled, the instrument is recognized in income. The income effect and cash flows from these items are included in the same balances as the underlying transactions on the statement of operations and of cash flows.

F-53

        Net income and cash flows are subject to volatility stemming mainly from changes in interest rates, natural gas prices, and fractionation margins. In order to manage the risks, the Company uses a variety of derivative financial instruments to create offsetting positions to specific commodity or interest rate exposures. All of these financial instruments are employed in connection with an underlying asset, liability or anticipated transaction and are not used for speculative purposes.

        Derivative financial instruments are used primarily to hedge against the effect of future interest rate movements, to manage natural gas purchases and to hedge fractionation margins associated with processing assets. (See Note 11 for additional information.)

Capitalization of Interest

        The Company capitalizes interest on major projects during construction. Interest is capitalized on borrowed funds and, where regulation by the FERC exists, on internally generated funds. The rates used by regulated companies are calculated in accordance with FERC rules. Rates used by unregulated companies are based on the average interest rate on related debt.

Foreign Currency Translation

        Assets and liabilities of certain foreign subsidiaries with functional currencies other than the U.S. dollar are translated at the spot foreign currency exchange rate in effect at the applicable reporting date, and the combined statements of operations are translated at the average rates in effect during the applicable period. The resulting cumulative translation adjustment is recorded as a separate component of other comprehensive income.

New Accounting Pronouncements

        In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This Statement requires that all derivatives be recognized at fair value in the balance sheet and all changes in fair value be recognized currently in earnings or deferred as a component of other comprehensive income, depending on the intended use of the derivative. The Company adopted SFAS No. 133 on January 1, 2001. The cumulative effect of the accounting change associated with the initial adoption of SFAS No. 133 resulted in a $3.8 million increase in other comprehensive income, net of taxes and a $0.9 million charge to earnings as a cumulative effect change in accounting principle.

        In June 2001, the FASB issued SFAS No. 141, "Business Combinations." This Statement requires the use of the purchase method for all business combinations. In addition, it requires the reassessment of intangible assets to determine if they are appropriately classified either separately or within goodwill. This Statement is effective for business combinations initiated after June 30, 2001. The Company adopted SFAS No. 141 on July 1, 2001 with no impact on results of operations, financial position or cash flows.

        In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets". Under SFAS No.142, goodwill and intangible assets with indefinite lives will not be amortized but will be reviewed for impairment at least annually. Intangible assets with finite lives will continue to be amortized over their useful lives, which will not be limited to a maximum life of forty years. The

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Company adopted SFAS No.142 on January 1, 2002. As of May 15, 2002, the initial impairment assessment has not been completed. With the adoption of SFAS No. 142, goodwill of $207.5 million is no longer subject to amortization.

        In July 2001, the FASB issued SFAS No. 143 "Accounting for Asset Retirement Obligations" under which retirement obligations will be recognized at fair value in the period they are incurred. When the liability is initially recorded, the cost is capitalized by increasing the asset's carrying value, which is subsequently depreciated over its useful life. SFAS No.143 is effective for fiscal years beginning after June 15, 2002. The Company is currently evaluating the potential effects if any, of adopting SFAS No. 143, on its financial condition and results of operations as well as the timing of its adoption.

        Also, in October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 establishes a single accounting model for long-lived assets to be disposed of by sale. The Statement retains most of the requirements in SFAS No. 121 related to the recognition of impairment of long-lived assets to be held and used. The Company adopted SFAS No. 144 on January 1, 2002. This standard is not expected to have a material impact on results of operations, financial position or cash flows.

Note 3. Acquisitions:

Northeast Texas Acquisition

        In March 2002, the Company purchased natural gas gathering and processing facilities in Northeast Texas for $178.0 million. The Northeast Texas facilities include 1,200 miles of natural gas gathering pipelines, seven gas treating plants with an elemental sulphur capacity of more than 900 long tons per day, five gas processing plants with a capacity of 215 million cubic feet per day ("mmcfd"), and two nitrogen rejection plants with a capacity of 75 mmcfd.

South Texas Acquisition

        In October 2001, the Company agreed to purchase natural gas gathering, treating and transmission assets in south Texas. The Company agreed to acquire 492 miles of gas mainlines regulated by the FERC and 175 miles of non-FERC regulated assets including gathering systems and pipeline laterals for $50.0 million. Closing of the acquisition is subject to regulatory approvals including approval by FERC to remove the mainlines from jurisdiction under the Natural Gas Act. As of May 2002 the Company had purchased the non-FERC regulated assets for a total of $9.0 million in cash consideration. The remaining assets will be purchased on receipt of regulatory approval.

The Kansas Pipeline Company Acquisition

        In November 1999, the Company acquired KPC and other related entities for cash consideration of approximately $195.2 million which included the repayment of $68.4 million in existing KPC senior secured notes and other indebtedness. KPC owns and operates a 1,120-mile regulated interstate natural gas pipeline system. The system extends into two major segments from northwestern and northeastern Oklahoma through Wichita and into the Kansas City metropolitan area. The system's two principal customers are divisions of ONEOK, Inc. and Southern Union

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Company, which are the local distribution companies for Wichita and Kansas City. KPC derives 97% of its gross margin from a series of long-term transportation contracts with these two principal customers. KPC is capable of delivering approximately 140 mmcfd and 21 mmcfd of natural gas into the Kansas City and Wichita marketplaces, respectively. KPC is one of only three pipeline systems currently capable of delivering natural gas into the Kansas City metropolitan market. The acquisition was funded through the Company's credit facility.

        In conjunction with the acquisition of KPC, the Company opted to terminate a revenue sharing agreement with an affiliate of the selling party by agreeing to pay approximately $10.8 million in January 2000.

        In addition to the acquisition discussed above, the Company made several additional, individually insignificant acquisitions in 1999. The Company utilized the purchase method of accounting to record all of its acquisitions. Accordingly, the operating results of these acquired businesses have been included in the statements of operations from the date of acquisition. At the acquisition date, the respective assets and liabilities acquired were recorded at their estimated fair values. Any excess of the purchase price over fair value was allocated to goodwill. In connection with its 1999 acquisition activity, the Company acquired certain assets and liabilities to include approximately $229.8 million in property, plant and equipment, $35.4 million in other non-cash assets and $24.3 million in assumed liabilities. Furthermore, the Company issued approximately $2.8 million of treasury stock as consideration.

Note 4. Property, Plant, and Equipment:

        Property, plant, and equipment consisted of the following (in thousands):

		December 31,
		2000		2001
		(predecessor)
Property, Plant, and Equipment:
	Transmission	$	326,774	$	339,977
	Gathering and Processing		95,513		102,783
	Marketing		170		639
	Corporate and Other		4,391		27,306
	Construction in Progress		15,679		52,673
			442,527		523,378
Less: Accumulated Depreciation			26,481		41,303
Total Property, Plant, and Equipment, net		$	416,046	$	482,075

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Note 5. Other Assets:

        Other assets are summarized as follows (in thousands):

	December 31,
	2000		2001
	(predecessor)
Regulatory assets, net of accumulated amortization of $7,450 and $2,282	$	18,165	$	7,483
Goodwill, net of accumulated amortization of $310 and $4,540		4,822		207,482
Other		3,289		1,993
	$	26,276	$	216,958

        Goodwill at December 31, 2001 is related entirely to the acquisition of Midcoast Energy Resources, Inc. by Enbridge Inc. and represents the excess of cost over the fair value of the assets acquired.

Note 6. Long-term Debt:

        At December 31, 2000, the Company had a revolving credit line with a bank under a $300 million promissory note bearing interest at 8.22% with $256.0 million outstanding. In 2001, the revolving credit line was settled with proceeds received from affiliate loans and the promissory note was cancelled.

Note 7. Capital Stock:

        Effective May 1, 2001 and pursuant to the acquisition by Enbridge Inc., all outstanding shares of Common Stock purchased were replaced by one share held by Enbridge Energy Company, Inc., an indirect wholly owned subsidiary of Enbridge Inc., as the sole shareholder of the Company.

        In May 1999, the Company sold 3.57 million shares of its Common Stock at an offering price of $16.31 per share. Proceeds of $54.5 million, net of issuance costs, were used to pay down existing long-term debt.

        In December 1999, the Company sold 2 million shares of its Common Stock at an offering price of $16.06 per share. Proceeds of $30.2 million, net of issuance costs, were used to repay existing long-term debt, consummate an acquisition and provide working capital for general corporate purposes.

Note 8. Stock Option Plans:

        Prior to the acquisition by Enbridge Inc., the Company had two stock option plans: the 1996 Incentive Stock Plan (the "Incentive Plan") and the 1997 Non-Employee Director Stock Option Plan (the "Director's Plan"). Pursuant to the acquisition by Enbridge Inc. in 2001, the Incentive Plan, the Director's Plan, and all outstanding options were cancelled.

        In May 1996, the Board adopted the Incentive Plan, which was subsequently approved by the Company's shareholders in May 1997. All employees, including officers (whether or not directors) and consultants of the Company and its subsidiaries, are currently eligible to participate in the Incentive Plan. Persons who are not in an employment or consulting relationship with the Company

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or any of its subsidiaries, including non-employee directors, are not eligible to participate in the Incentive Plan. Under the Incentive Plan, 1,000,000 shares of the Company's common stock are reserved for issuance.

        The Incentive Plan provides for the grant of (i) incentive stock options, (ii) shares of restricted stock, (iii) performance awards payable in cash or common stock, (iv) shares of phantom stock, and (v) stock bonuses. In addition, the Incentive Plan provides for the grant of cash bonuses payable when a participant is required to recognize income for federal income tax purposes in connection with the vesting of shares of restricted stock or the issuance of shares of common stock upon the grant of a performance award or a stock bonus, provided that such cash bonus may not exceed the fair market value (as defined) of the shares of Common Stock received on the grant or exercise, as the case may be, of an Incentive Award.

        With respect to incentive stock options, no option may be granted more than ten years after the effective date of the stock option plan or exercised more than ten years after the date of the grant (five years if the optionee owns more than 10% of the common stock of the Company at the date of the grant). Additionally, with regard to incentive stock options, the exercise price of the options may not be less than the fair market value of the common stock at the date of the grant (110% if the optionee owns more than 10% of the common stock of the Company). Subject to certain limited exceptions, options may not be exercised unless, at the time of the exercise, the optionee is in the service of the Company. In general, options granted under the incentive plan vest at a rate of one-fifth each year.

        Transactions with regard to incentive stock options issued pursuant to the Incentive Plan are as follows:

		Stock Options
		1999				2000				2001
		Number of Shares Underlying Options		Weighted Average Exercise Price		Number of Shares Underlying Options		Weighted Average Exercise Price		Number of Shares Underlying Options		Weighted Average Exercise Price
Outstanding at beginning of the year		441,814		$	11.32	464,689		$	11.55	630,864		12.67
	Granted	64,375			16.68	195,925			15.80	117,500		22.10
	Exercised	(2,500	)		16.80	(5,750	)		15.66	(65,226	)	10.83
	Forfeited/Repurchased	(39,000	)		17.14	(24,000	)		15.73	—		—
	Cancelled on acquisition	—			—	—			—	(683,138	)	14.46
Outstanding at end of year		464,689		$	11.55	630,864		$	12.67	—		—
Exercisable at end of year		152,289		$	9.92	232,173		$	10.37	—		—

        In April 1997, the Board adopted the Director's Plan, which was subsequently approved by the Company's shareholders in May 1997. The Director's Plan is for the benefit of Directors of the Company, who at the time of their service, are not employees of the Company or any of its subsidiaries. Under the Director's Plan, 150,000 shares of the Company's common stock are reserved for issuance.

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        The Director's Plan provides for the granting of non-qualified stock options ("NQO"), the provisions of which do not qualify as "incentive stock options" under the Internal Revenue Code. Options granted under the Director's Plan must have an exercise price at least equal to the fair market value of the Company's common stock on the date of the grant. Pursuant to the Director's Plan, options to purchase 15,000 shares of common stock are granted to each non-employee director upon their initial election to the Board. In addition, all non-employee Directors are eligible to receive a NQO to purchase 5,000 shares of common stock at the time of the Directors re-election to the Board, subject to share availability. Options granted under the Director's Plan are fully vested upon issue and expire ten years after the date of the grant.

        The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Assumption:	1999		2000		2001
Expected Term in Years	6.35		6.64		7
Expected Volatility	33.04	%	26.43	%	24.91	%
Expected Dividends	0.4	%	1.8	%	1.3	%
Risk-Free Interest Rate	5.95	%	6.60	%	5.16	%

        The Black-Scholes weighted average fair value of all options granted under both plans during 2001, 2000, and 1999 was $7.32, $5.36, and $7.10, respectively.

        The Company applies Accounting Pronouncement Bulletin (APB) No. 25 and related Interpretations in accounting for its plans. Accordingly, no compensation cost has been recognized for its stock option plans. Had compensation expense for the Company's stock-based compensation plans been determined applying the provisions of SFAS No. 123, the Company's net income and net income per common share for 2001, 2000, and 1999 would approximate the pro forma amounts below (in thousands, except per share data):

	Year Ended December 31, 1999				Year Ended December 31, 2000				Four Months Ended April 30, 2001
	As Reported		Pro Forma		As Reported		Pro Forma		As Reported			Pro Forma
Net income/(loss)	$	11,439	$	11,121	$	21,368	$	21,194	$	(19,493	)	$	(19,692	)
Basic earnings/(loss) per share	$	1.25	$	1.21	$	1.71	$	1.69	$	(1.55	)	$	(1.56	)
Diluted earnings/(loss) per share	$	1.22	$	1.18	$	1.68	$	1.66	$	(1.55	)	$	(1.56	)

Note 9. Employee Benefits:

        In December 1996, the Company established a defined contribution 401(k) Profit Sharing Plan for its employees. The plan provides participants with a mechanism for making contributions for retirement savings. Each participant may contribute certain amounts of eligible compensation. The Company made a matching contribution to the plan, which is recognized as compensation expense in the year incurred, of approximately $305,000, $410,000, $179,000, and $345,000 for years ended December 31, 1999 and 2000 and the four months ended April 30, 2001 and the eight months ended December 31, 2001, respectively.

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        Effective January 1, 2002 employees of the Company became employees of Enbridge Employee Services Inc. and became eligible to participate in the Enbridge 401(K) Savings Plan. The employees' contributions are matched up to a maximum of 5% of each employee's contribution. The Company (through its parent, Enbridge Energy Company, Inc.) sponsors other plans for the benefit of employees. These plans include health and dental care, life insurance, accidental death and dismemberment, short-term disability, long-term disability and business travel accident insurance.

Note 10. Related Party Transactions:

        Affiliates refer to Enbridge Inc. and companies that are either directly or indirectly owned by Enbridge Inc.

        In December 2001, the Company obtained $229.2 million from an affiliate, Enbridge (U.S.) Inc., in the form of three promissory notes that bear interest at three month LIBOR plus 150 basis points and are for a 5 year term. Proceeds were used to repay existing debt and working capital requirements.

        In September 2001, the Company obtained $90 million from an affiliate of Enbridge Inc. This promissory note has a 5-year term, interest rate of 6.39% with interest payable semi-annually on June 15 and December 15. Proceeds were used to repay existing debt.

        The Company receives certain administrative and treasury services from affiliates. These services, which are charged at cost in accordance with service agreements or which reflect normal commercial trade terms, amounted to $4.2 million for the eight months ended December 31, 2001. At December 31, 2001, accounts payable and accrued liabilities included $2.2 million due to affiliates.

Note 11. Financial Instruments

Derivative Financial Instruments used for Risk Management

        The Company is exposed to movements in interest rates and the price of energy commodities, primarily natural gas. In order to manage these exposures, the Company utilizes derivative financial instruments to create offsetting positions to specific exposures. These instruments are not used for speculative purposes.

        These instruments require the Company to exchange with counterparties the difference between fixed and variable amounts, calculated by reference to specific interest rates or energy commodity price indices, based on a notional principal amount or notional energy commodity quantity. The notional amounts are not recorded in the financial statements as they do not represent amounts exchanged by the counterparties.

        Derivative financial instruments involve credit and market risks. Credit risk arises from the possibility that a counterparty will default on its contractual obligations and is limited to those contracts where the Company would incur a loss in replacing the instrument. The Company minimizes credit risk by entering into risk management transactions only with creditworthy institutions that possess investment grade credit ratings or with approved forms of collateral. For

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transactions with terms greater than five years, the Company may also retain the right to require a counterparty, who would otherwise meet the Company's credit criteria, to provide collateral.

Interest Costs

        To hedge against the effect of future interest rate movements on its short to long-term borrowing requirements, the Company enters into forward interest rate agreements, swaps and collars.

Energy Commodity Costs

        The Company's commodity price risk exposure arises from holding inventory and purchase and sale commitments. The Company uses over-the-counter commodity price swaps, futures, options and collars to manage exposures to natural gas and natural gas liquids prices.

Fair Values

        The fair values of derivatives have been estimated using year-end market rates and approximate the amount that the Company would receive or pay to terminate the contracts at December 31. The following derivative instruments qualify as cash flow hedges and have been recorded in the consolidated balance sheet as of December 31, 2001.

		December 31,
		2000						2001
(millions of dollars)		Notional Principal or Quantity		Fair Value (Payable)			Maturity	Notional Principal or Quantity		Fair Value (Payable)			Maturity
				(predecessor)
Energy Commodities
	Natural gas (bcf)		4.3	$	(1.1	)	2001-2004		12.8	$	(10.7	)	2002-2004
Interest rates
	Interest rate swaps	$	140.0	$	(0.4	)	2003	$	140.0	$	(6.8	)	2003

        As the Company does not settle hedging instruments in advance of the hedged transactions, there were no gains or losses deferred for any of the Company's hedges of anticipated transactions at December 31, 2001 and 2000. Credit risk was insignificant at December 31, 2001 and 2000 as all derivative instruments were in payable positions.

Fair Values of Other Financial Instruments

        The fair value of financial instruments, other than derivatives, represents the amounts that would have been received from or paid to counterparties, calculated at the reporting date, to settle these instruments. The carrying amount of all financial instruments classified as current approximates fair value because of the short maturities of these instruments. The estimated fair values of all other financial instruments are based on quoted market prices or, in the absence of specific market prices, on quoted market prices for similar instruments and other valuation techniques.

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        The carrying amounts of all financial instruments, except as shown below, approximate fair value.

	December 31,
	2000				2001
(millions of dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(predecessor)
Long-term debt	$	256.0	$	256.0		—		—
Due to affiliates		—		—	$	319.2	$	319.8

Note 12. Concentration of Credit Risk:

        The Company derives revenue from commercial companies located in the United States and Canada. The Company performs ongoing evaluations of its customers and generally does not require collateral. The Company assesses its credit risk and provides an allowance for doubtful accounts for any accounts that it deems doubtful of collection.

Note 13. Income Taxes:

        The tax effects of significant temporary differences representing deferred tax assets and liabilities are as follows (in thousands):

		December 31, 2000			December 31, 2001
		(predecessor)
Net operating loss and other carryforwards		$	6,304		$	18,509
Valuation allowance			(480	)		—
Book value of assets in excess of tax net book value of assets			(23,570	)		(39,244	)
Unrealized holding gains/losses			—			4,748
Other			—			(698	)
	Net deferred tax liabilities	$	(17,746	)	$	(16,685	)

        The Company has non-operating loss ("NOL") carryforwards of approximately $51 million at December 31, 2001, expiring in various amounts from 2002 through 2021. A portion of these loss carryforwards were acquired through corporate acquisitions. The ability of the Company to utilize the carryforwards is dependent upon the Company generating sufficient taxable income and will be affected by annual limitations under section 382 of the Internal Revenue Code. No valuation allowance was deemed necessary due to management's view that the NOLs are anticipated to be utilized.

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        A reconciliation of the provision for income taxes to the statutory U.S. rate is as follows (in thousands):

		Year Ended December 31, 1999 (34%)			Year Ended December 31, 2000 (34%)			Four Months Ended April 30, 2001 (34%)			Eight Months Ended December 31, 2001 (35%)
		(predecessor)			(predecessor)			(predecessor)
Federal income tax expense (benefit) computed at statutory rate		$	4,832		$	9,780		$	(9,956	)	$	2,565
Utilization of net operating loss carryforwards			(1,989	)		(240	)		—			—
Effect of goodwill amortization			—			—			—			1,603
Reduction in valuation allowance			(581	)		(1,984	)		—			—
Foreign and state taxes			(146	)		(200	)		122			7
Other			53			40			45			71
	Actual provision	$	2,169		$	7,396		$	(9,789	)	$	4,246

        Prior to May 1, 2001, United States income taxes were not provided on the cumulative undistributed earnings of the Company's Canadian subsidiaries, as it was management's intention not to repatriate these earnings. Tax has been provided on these earnings at May 1, 2001 in conjunction with the acquisition.

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Note 14. Commitments and Contingencies:

Leases

        The Company leases facilities and equipment under various operating leases. The Company incurred net lease expenses of $0.2 million, $1.7 million, $3.0 million and $0.8 million during the periods ended December 31, 1999 and 2000, April 30, 2001 and December 31, 2001, respectively. As of December 31, 2001, future minimum lease payments due under these leases are approximately $1.8 million, $2.1 million, $2.0 million, $2.1 million, and $1.2 million for the years ended December 31, 2002, 2003, 2004, 2005 and 2006, respectively.

MIT Acquisition Contingency

        As part of the MIT acquisition in 1997, the Company has agreed to pay additional contingent annual payments to the seller, not to exceed $250,000 per year, which will be treated as deferred purchase price adjustments. The amount each year is dependent upon revenues received by the Company from certain natural gas transportation contracts. The contingency is due over an eight-year period commencing April 1, 1998 and payable at the end of each anniversary date. The Company is obligated to pay the lesser of 50% of the gross revenues received under these contracts or $250,000. As of December 31, 2001, the Company has made payments of $750,000 and has accrued an additional $187,500 under the contingency.

The Kansas Pipeline Company Rate and Regulatory Matters

        The pipeline assets of KPC were held in three partnerships prior to May 11, 1998. KansOk Partnership owned intrastate pipelines whose rates were regulated by state agencies or the FERC. Kansas Pipeline Partnership owned an intrastate pipeline in Kansas whose rates were determined by the Kansas Corporation Commission. Riverside Pipeline Company, L.P., owned interstate assets in Kansas, Oklahoma and Missouri that connected the assets of the other two partnerships at the state lines of Missouri, Kansas and Oklahoma.

        Effective May 11, 1998, after more than two years of jurisdictional proceedings before the FERC, the FERC asserted jurisdiction over the assets of these three entities, which were combined into a single, FERC-regulated entity, KPC. The new company's initial rates, by order of the FERC, were approximately equal to its then-existing rates. That discussion was affirmed by the FERC in its order on Remand issued on November 9, 2001. The FERC's order also ordered the company to file a Section 4 Rate Case by September 10, 1999.

        In accordance with the FERC's order, KPC filed a rate case pursuant to Section 4 of the Natural Gas Act ("NGA") on August 27, 1999 (FERC Docket No. RP99-485-000). KPC's proposed rates reflect an annual revenue increase when compared to its initial FERC-approved rates. The rates have been protested by KPC's two principal customers and by the state public utility commissions that regulate them. On September 30, 1999, the FERC issued an order that set KPC's proposed rates for hearing and accepted and suspended the rates to be effective March 1, 2000, subject to possible refund. However, through December 31, 2001, KPC is continuing to charge its customers the initial lower FERC-approved rates. Additionally, the two customers have been paying only a portion of the Company's invoices pursuant to their protest of the current rates. The resultant net unpaid balance from both customers at December 31, 2001 was approximately $4.4 million, for which no reserve has been recorded. The Section 4 rate case proceeding will determine the rates

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by KPC for interstate transportation of natural gas prospective from the date of approval. The hearing related to the proposed increase commenced on September 26, 2000 and concluded on October 20, 2000. The presiding Administrative Law Judge issued an "Initial Decision" on July 31, 2001, recommending a cost of service of $20 million, which is approximately $11 million less than the cost of service included in current rates. A final Commission decision is not expected until at least the fourth quarter of 2002.

Note 15. Segment Data:

        The Company's operations are segregated into reportable segments based on the type of business activity and type of customer served. The Company's transmission pipelines primarily receive and deliver natural gas to and from other pipelines, and, secondarily, provide wholesale customer or gathering functions. Transportation fees are received by the Company for transporting natural gas owned by other parties through the Company's pipeline systems. The transmission pipelines segment also includes wholesale customer pipelines providing natural gas and natural gas transportation services to industrial customers, municipalities or electrical generating facilities through interconnect natural gas pipelines constructed or acquired by the Company. These pipelines provide a direct supply of natural gas to new industrial facilities or to existing facilities as an alternative to the local distribution company. The Company's natural gas gathering and processing systems typically consist of a network of pipelines which collect natural gas or crude oil from points near producing wells, treat and process the natural gas, and transport oil and natural gas to larger pipelines for further transmission. The Company's natural gas processing revenues are realized from the extraction and sale of NGLs as well as the sale of the residual natural gas. In addition, the Company provides natural gas marketing services to its customers within each of the three segments. The Company's marketing activities include providing natural gas supply and sales services to some of its wholesale customers by purchasing the natural gas supply from other marketers or pipeline affiliates and reselling the natural gas to the wholesale customer. The Company also purchases natural gas directly from well operators on many of the Company's gathering systems and resells the natural gas to other marketers or pipeline affiliates. Many of the contracts pertaining to the Company's natural gas marketing activities are month-to-month spot market transactions with numerous natural gas suppliers or producers in the industry. The Company also offers other natural gas services to some of its customers including management of capacity release and gas balancing.

        The Company evaluates each of its segments on a gross margin basis, which is defined as the revenues of the segment less related direct costs and expenses of the segment and does not include depreciation and amortization, interest or allocated corporate overhead. Gross margin reflects total revenues net of energy marketing expenses, natural gas processing and treating costs, and other operating expenses. The "Other" column includes results of processing plant construction projects, which includes planning, fabrication, installation and facility operations and management, as well as general corporate items. Foreign amounts primarily relate to the Company's Canadian operations, which are not considered material for separate disclosure. No customers constituted more than 10% of revenues during the periods ended December 31, 2001, April 30, 2001, or the years ended December 31, 2000, and 1999. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2).

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        The following tables present certain financial information relating to the Company's business segments as of or for the eight months ended December 31, 2001, the four months ended April 30, 2001 and the years ended December 31, 2000, and 1999:

		As of or for the Eight Months Ended December 31, 2001
		Transmission Pipelines			Marketing			Gathering and Processing			Other			Total
		(In thousands)
Revenues
	Domestic	$	59,418		$	180,787		$	193,807			—		$	434,012
	Foreign		—			—			4,462			—			4,462
Total Revenues			59,418			180,787			198,269			—			438,474
Gross Margin			30,550			1,973			18,888			—			51,411
Depreciation and Amortization			(7,422	)		(48	)		(3,374	)		(4,683	)		(15,527	)
General and Administrative, including taxes other than income												(14,707	)		(14,707	)
Interest Expense												(13,976	)		(13,976	)
Other, net												125			125
Income before Income Taxes			23,128			1,925			15,514			(33,241	)		7,326
Assets
	Domestic		390,364			33,021			119,606			220,158			763,149
	Foreign		—			—			24,565			—			24,565
Total Assets			390,364			33,021			144,171			220,158			787,714
Capital Expenditures (excluding acquisitions)		$	38,582		$	51		$	8,668		$	2,884		$	50,185

F-66

		As of or for the four months Ended April 30, 2001 (predecessor)
		Transmission Pipelines			Marketing			Gathering and Processing			Other			Total
		(In thousands)
Revenues
	Domestic	$	33,115		$	229,485		$	140,543			—		$	403,143
	Foreign		—			—			3,810			—			3,810
Total Revenues			33,115			229,485			144,353			—			406,953
Gross Margin			17,834			(18,555	)		5,218			(3	)		4,494
Depreciation and Amortization			(3,459	)		(17	)		(1,761	)		(478	)		(5,715	)
General and Administrative, including taxes other than income			—			—			—			(17,884	)		(17,884	)
Interest Expense			—			—			—			(9,431	)		(9,431	)
Other, net			—			—			—			561			561
Income before Income Taxes			14,375			(18,572	)		3,457			(27,235	)		(27,975	)
Capital Expenditures (excluding acquisitions)		$	8,230		$	77		$	2,253		$	213		$	10,773

F-67

		As of or for the Year Ended December 31, 2000 (predecessor)
		Transmission Pipelines			Marketing			Gathering and Processing			Other			Total
		(In thousands)
Revenues
	Domestic	$	87,838		$	411,266		$	280,721			—		$	779,825
	Foreign		—			—			12,521			—			12,521
Total Revenues			87,838			411,266			293,242			—			792,346
Gross Margin			49,175			5,180			24,744			—			79,099
Depreciation and Amortization			(10,345	)		(15	)		(4,315	)		(1,020	)		(15,695	)
General and Administrative, including taxes other than income			—			—			—			(17,900	)		(17,900	)
Interest Expense			—			—			—			(18,489	)		(18,489	)
Other, net			—			—			—			1,749			1,749
Income before Income Taxes and Extraordinary Charge			38,830			5,165			20,429			(35,660	)		28,764
Assets
	Domestic		366,395			79,706			113,824			13,334			573,259
	Foreign		—			—			26,061			—			26,061
Total Assets			366,395			79,706			139,885			13,334			599,320
Capital Expenditures (excluding acquisitions)		$	8,526		$	313		$	5,855		$	1,834		$	16,528

F-68

		As of or for the Year Ended December 31, 2000 (predecessor)
		Transmission Pipelines			Marketing			Gathering and Processing			Other			Total
		(In thousands)
Revenues
	Domestic	$	53,606		$	201,107		$	134,668			—		$	389,381
	Foreign		—			—			2,190			—			2,190
Total Revenues			53,606			201,107			136,858			—			391,571
Gross Margin			20,095			4,972			14,497			—			39,564
Depreciation and Amortization			(4,078	)		(21	)		(3,015	)		(431	)		(7,545	)
	General and Administrative, including taxes other than income		—			—			—			(8,431	)		(8,431	)
Interest Expense			—			—			—			(6,533	)		(6,533	)
Other, net			—			—			—			(2,865	)		(2,865	)
Income before Income Taxes and extraordinary charge		$	16,017		$	4,951		$	11,482		$	(18,260	)	$	14,190
Assets
	Domestic	$	348,017		$	23,837		$	81,770		$	9,821		$	463,545
	Foreign		—			—			14,827			—			14,827
Total Assets		$	348,017		$	23,937		$	96,597		$	9,821		$	478,372
Capital Expenditures (excluding acquisitions)		$	8,753		$	143		$	3,928		$	3,738		$	16,562

Note 16. Unusual Charge:

        During the fourth quarter of fiscal 1999, the Company recorded a pre-tax unusual charge totaling $2.7 million ($2.2 million after tax) related to the restructuring efforts announced in November 1999. The charge primarily related to the severance and benefits of approximately 50 employees who were involuntarily terminated. All employees had been terminated by December 31, 2000 and the accrued liability was reduced to nil.

F-69

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Member of
    Enbridge Energy Management, L.L.C.:

In our opinion, the accompanying balance sheet presents fairly, in all material respects, the financial position of Enbridge Energy Management, L.L.C. at May 23, 2002 in conformity with accounting principles generally accepted in the United States of America. This financial statement is the responsibility of the Company's management; our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, and evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Houston, Texas
May 23, 2002

F-70

ENBRIDGE ENERGY MANAGEMENT, L.L.C.

BALANCE SHEET

May 23, 2002

ASSETS
Cash		$	1,000
	Total Assets	$	1,000
EQUITY
Voting shares; unlimited shares authorized; 1 share issued and outstanding		$	1,000
Nonvoting shares; unlimited shares authorized; no shares issued			—
	Total Equity	$	1,000

The accompanying Notes are an integral part of this statement.

F-71

Enbridge Energy Management, L.L.C.

Notes to Balance Sheet

1. Formation and Ownership

        Enbridge Energy Management, L.L.C. ("EEM") is a Delaware limited liability company formed on May 14, 2002 under the Delaware Limited Liability Company Act. Enbridge Energy Company, Inc., ("EEC") a wholly owned subsidiary of Enbridge Inc. (a major energy company traded on the New York Stock Exchange and the Toronto Stock Exchange under the ticker symbol "ENB"), owns all of Enbridge Energy Management L.L.C.'s voting securities and is its sole managing member.

2. Capitalization

        EEM's authorized capital structure consists of two classes of membership interests: (1) nonvoting shares and (2) voting shares. Additional equity interests may be approved by the board and the vote of the holders of a majority of the outstanding shares of nonvoting equity interests. As of May 23, 2002, the issued capitalization consists of $1,000 contributed by EEC for its voting equity interest.

        EEC expects to issue nonvoting shares for cash to the public as discussed in Note 3, using all of the net proceeds to purchase a number of i-units from Enbridge Energy Partners, L.P. ("EEP") (a large publicly-traded pipeline limited partnership, traded on the New York Stock Exchange under the ticker symbol "EEP") equal to the number of shares EEM have outstanding and related rights from Enbridge Inc. These i-units are similar to EEP's common limited partner units, except that quarterly distributions from operations and from interim capital transactions will be received in additional i-units rather than cash. Each time EEP issues i-units to EEM, EEM will also distribute an equal number of shares to holders of EEM's shares. The number of i-units and shares will remain equal.

3. Business

        EEM proposes to file a registration statement with respect to an initial public offering of shares.

        At no time after EEM's formation and prior to the public offering has EEM had or does it expect to have any operations or own any interest in EEP. After the public offering, EEM will be a limited partner in EEP and pursuant to a delegation of control agreement EEM will manage and control EEP's business and affairs. Under the delegation of control agreement, EEC will delegate to EEM, to the fullest extent permitted under Delaware law and EEP's partnership agreement, all of EEC's power of authority to manage and control the business and affairs of EEP. EEP will either pay directly or reimburse EEM for all expenses incurred in performing under the delegation of control agreement and will be obligated to indemnify EEM against claims and liabilities except in cases in which EEM has acted in bad faith or in which indemnity is not permitted by law. EEP will consent to the terms of the delegation of control agreement including EEP's indemnity and reimbursement obligations. EEM will not be paid a fee for its service under the delegation of control agreement, nor will EEM receive any margin or profit on the expense reimbursement. The expense reimbursements by EEP to EEM will be accounted for as a reduction to the expense incurred. After the public offering, EEM will own all of the i-units issued by EEP, which will represent an approximate 21.7% ownership interest in EEP.

        Enbridge Employees Services, Inc. ("EES") is a wholly-owned subsidiary of EEC and provides employees and related centralized payroll and employee benefits services to EEM, EEC, EEP and its subsidiaries (collectively, the "Group"). Regular employees of EES are assigned to work for one

F-72

or more members of the Group. The direct costs of all compensation, benefits expenses, employer taxes and other employer expenses for these regular employees are allocated and charged by EES to the appropriate member of the Group, and the members of the Group reimburse EES for their allocated shares of these direct costs. There is no profit or margin charged by EES to the members of the Group. The administrative work necessary to implement these payroll and benefits services is performed by the human resources department of Enbridge Inc. and the related administrative costs are allocated to members of the Group in accordance with existing expense allocation procedures. The effect of these arrangements is that each member of the Group bears the direct compensation and employee benefits costs of its assigned employees, while also bearing its allocable share of administrative costs. Pursuant to its limited partnership agreement, EEP reimburses EEM for EEM's share of these administrative costs and such reimbursements will be accounted for as described above.

4. Income Tax

        EEM is a limited liability company that has elected to be treated as a corporation for federal income tax purposes.

F-73

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	30
Information Regarding Forward Looking Statements	43
Acquisition of the Midcoast, Northeast Texas and South Texas Systems	44
Use of Proceeds	46
Distribution Policy	47
Capitalization of Enbridge Partners	54
Capitalization of Enbridge Inc.	55
Capitalization of Enbridge Management	56
Selected Financial Information of Enbridge Partners	57
Selected Financial Information of Enbridge Midcoast Energy	59
Selected Pro Forma as Adjusted Financial Information of Enbridge Partners	61
Management's Discussion and Analysis of Financial Condition and Results of Operations	64
Business	84
Management of Enbridge Management	109
Description of Our Shares	113
Description of the i-Units	125
Comparison of Enbridge Partners' Units with Our Shares	128
Limited Liability Company Agreement	133
Relationships and Related Party Transactions	139
Conflicts of Interest and Fiduciary Responsibilities	145
Shares Eligible for Future Sale	150
Material Tax Consequences	151
ERISA Considerations	157
Underwriting	159
Legal Matters	162
Experts	162
Where You Can Find More Information	163
Index to Financial Statements	F-1

        Through and including                , 2002 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

10,000,000 Shares

ENERGY MANAGEMENT, L.L.C.

Representing Limited Liability
Company Interests

PROSPECTUS

Goldman, Sachs & Co.
Representative of the Underwriters

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution (Form S-1; Item 14 of Form S-3)

        Set forth below are the expenses (other than underwriting discounts and commissions) expected to be incurred in connection with the issuance and distribution of the securities registered hereby. With the exception of the Securities and Exchange Commission registration fee and the NASD filing fee, the amounts set forth below are estimates.

Registration fee		$	48,139
NASD filing fee		$	30,500
NYSE listing fee		$	170,000
Printing and engraving expenses		$	900,000
Fees and expenses of legal counsel		$	1,500,000
Accounting fees and expenses		$	275,000
Transfer agent and registrar fees		$	50,000
Miscellaneous		$	26,361
	Total	$	3,000,000

Item 14.    Indemnification of Directors and Officers (Form S-1; Item 15 of Form S-3; Item 8 of Form F-3)

Enbridge Management

        Enbridge Management's limited liability company agreement provides that Enbridge Management will indemnify the members of the board and the officers of Enbridge Management from liabilities arising in the course of such persons' service to Enbridge Management, provided that the indemnitee acted in good faith and in a manner which such indemnitee believed to be in or not opposed to the best interests of Enbridge Management and, with respect to any criminal proceeding, had no reasonable cause to believe such indemnitee's conduct was unlawful. Such liabilities include all losses, claims, damages, expenses (including, without limitation, legal fees and expenses), judgments, fines, penalties, interests, settlements and other amounts, provided that with respect to any criminal proceeding, the indemnitee had no reasonable cause to believe its conduct was unlawful. Enbridge Management expects to be included within the same coverage available to Enbridge Energy Company for directors' and officers' liability insurance for potential liability under such indemnification. The holders of shares will not be personally liable for such indemnification.

Enbridge Partners

        The partnership agreement of Enbridge Partners and the partnership and limited liability company agreements of its subsidiaries provide that Enbridge Partners or it subsidiaries, as the case may be, will indemnify (to the fullest extent permitted by applicable law) certain indemnitees from and against any and all losses, claims, damages, liabilities (joint or several), expenses (including, without limitation, legal fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by such indemnitee in connection with any claim, demand, action, suit or proceeding to which the indemnitee is or was an actual or threatened party and which relates to the partnership agreement of Enbridge Partners or the partnership or limited liability company agreements, as applicable, of its subsidiaries or the property, business, affairs or management of Enbridge Partners and its subsidiaries. This indemnity is available only if the indemnitee acted in good faith, in a manner in which such indemnitee believed to be in, or not

II-1

opposed to, the best interests of Enbridge Partners and its subsidiaries and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful. Indemnitees include the general partner, any Departing Partner (as defined in the partnership agreement of Enbridge Partners or the partnership or limited liability company agreements, as applicable, of its subsidiaries), any affiliate of the general partner or any Departing Partner, any person who is or was a director, officer, employee or agent of the general partner or any Departing Partner or any affiliate of either, or any person who is or was serving at the request of the general partner, any Departing Partner, or any such affiliate as a director, officer, partner, trustee, employee or agent of another person. Expenses subject to indemnity will be paid by the applicable partnership or limited liability company to the indemnitee in advance, subject to receipt of an undertaking by or on behalf of the indemnitee to repay such amount if it is ultimately determined by a court of competent jurisdiction that the indemnitee is not entitled to indemnification.

        Enbridge Partners will, to the extent commercially reasonable, purchase and maintain insurance on behalf of the indemnitees, whether or not Enbridge Partners would have the power to indemnify such indemnitees against liability under the applicable partnership agreement.

        Subject to any terms, conditions or restrictions set forth in the partnership agreement of Enbridge Partners or the partnership agreement of the direct operating partnership subsidiary, Section 17-108 of the Delaware Revised Limited Partnership Act empowers a Delaware limited partnership to indemnify and hold harmless any partner or other person from and against all claims and demands whatsoever.

Enbridge Inc.

        Enbridge Inc.'s by-laws and indemnity agreements that it has entered into with its directors and officers provide that it will indemnify (to the fullest extent permitted by applicable law) a director or officer against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by such indemnitee in respect of any civil, criminal or administrative action or proceeding to which such indemnitee is made a party by reason of having been a director or officer of Enbridge Inc. or such body corporate, if: (a) such indemnitee acted honestly and in good faith with a view to the best interests of the corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by monetary penalty, such indemnitee had reasonable grounds for believing that their conduct was lawful.

        Enbridge Inc. maintains insurance for the benefit of its directors and officers and those of its subsidiaries as a group in respect of their performance of the duties of their respective offices.

Enbridge Management, Enbridge Partners, and Enbridge Inc.

        The Form of Underwriting Agreement filed herewith as Exhibit 1.1, under certain circumstances, provides for indemnification by the Underwriters of the directors, officers and controlling persons of Enbridge Management, Enbridge Partners and Enbridge Inc.

        Each of Enbridge Management, Enbridge Partners, and Enbridge Inc. has purchased liability insurance policies covering the members or directors, as the case may be, and officers of each of the respective entities, including, to provide protection where the entity cannot legally indemnify a director or officer and where a claim arises under the Employee Retirement Income Security Act of 1974 against a director or officer based on an alleged breach of fiduciary duty or other wrongful act.

II-2

ITEM 15.    Recent Sales Of Unregistered Securities (Form S-1 Only)

        Enbridge Management's initial voting share was sold to Enbridge Energy Company for $1,000 on May 14, 2002. Such sale was completed without registration under the Securities Act in reliance upon the exemption provided by Section 4(2) of the Securities Act.

ITEM 16.    Exhibits (Forms S-1 and S-3; Item 9 of Form F-3) and Financial Statement Schedules (Form S-1 only)

        (a)  Exhibits.

        Reference is made to the Index to Exhibits following the signature pages hereto, which Index to Exhibits is hereby incorporated into this Item.

        (b)  Financial Statement Schedules of Enbridge Management.

        All financial statement schedules are omitted because the information is not required, is inapplicable, is not material or is otherwise included in the financial statements or related notes thereto.

ITEM 17.    Undertakings (Forms S-1 and S-3; Item 10 of Form F-3)

Enbridge Management

        (a)  Enbridge Management hereby undertakes to provide at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.

        (b)  Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Enbridge Management under the foregoing provisions, or otherwise, Enbridge Management has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Enbridge Management of expenses incurred or paid by a director, officer or controlling person of Enbridge Management in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Enbridge Management will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        (c)  Enbridge Management hereby undertakes that:

        (1)  For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by Enbridge Management under Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

        (2)  For purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

Enbridge Partners and Enbridge Inc.

        (a)  Enbridge Partners and Enbridge Inc. each hereby undertakes:

        (1)  To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

        (2)  That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

        (3)  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (b)  Enbridge Partners and Enbridge Inc. each hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of their respective annual reports pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (c)  Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of each of Enbridge Partners and Enbridge Inc. pursuant to the foregoing or otherwise, each company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the respective company of expenses incurred or paid by a director, officer or controlling person of the respective company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the respective company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Enbridge Management and Enbridge Partners

        Each of Enbridge Management and Enbridge Partners undertakes to send to each limited partner at least on an annual basis a detailed statement of any transactions with Enbridge Energy Company or its affiliates, and of fees, commissions, compensation and other benefits paid, or accrued to Enbridge Energy Company or its affiliates for the fiscal year completed, showing the amount paid or accrued to each recipient and the services performed.

        Each of Enbridge Management and Enbridge Partners undertakes to provide to the limited partners of Enbridge Partners the financial statements required by Form 10-K for the first full fiscal year of operations of Enbridge Partners.

II-4

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant named below certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on July 8, 2002.

ENBRIDGE ENERGY MANAGEMENT, L.L.C.
By:	/s/  DAN C. TUTCHER
Name: Dan C. Tutcher Title: President

        Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities indicated on July 8, 2002.

ENBRIDGE ENERGY MANAGEMENT, L.L.C.

Signature	Title
/s/  DAN C. TUTCHER Dan C. Tutcher	President and Director (Principal Executive Officer)
/s/  J.L. BALKO J.L. Balko	Chief Accountant (Principal Financial and Accounting Officer)
* E.C. Hambrook	Director
* G.K. Petty	Director
* P.D. Daniel	Director
* C.A. Russell	Director
* D.P. Truswell	Director

II-5

* J.R. Bird
Director

*By:	J.L. Balko, Attorney-in-fact
/s/  J.L. BALKO J.L. Balko

II-6

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant named below certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on July 8, 2002.

ENBRIDGE ENERGY PARTNERS, L.P.
By:	ENBRIDGE ENERGY COMPANY, INC., its General Partner
	By:	/s/  DAN C. TUTCHER
		Name: Dan C. Tutcher Title: President

        Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities indicated on July 8, 2002.

ENBRIDGE ENERGY COMPANY, INC.

Signature	Title
/s/  DAN C. TUTCHER Dan C. Tutcher	President and Director (Principal Executive Officer)
/s/  J.L. BALKO J.L. Balko	Chief Accountant (Principal Financial and Accounting Officer)
* E.C. Hambrook	Director
* G.K. Petty	Director
* P.D. Daniel	Director
* C.A. Russell	Director

II-7

* D.P. Truswell	Director
* J.R. Bird	Director

*By:	J.L. Balko, Attorney-in-fact
/s/  J.L. BALKO J.L. Balko

II-8

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant named below certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Canada, on July 8, 2002.

ENBRIDGE INC.
By:	/s/  PATRICK D. DANIEL
Name: Patrick D. Daniel Title: President & Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities indicated on July 8, 2002.

ENBRIDGE INC.

Signature	Title
/s/  PATRICK D. DANIEL Patrick D. Daniel	President, Chief Executive Officer, and Director (Principal Executive Officer)
/s/  DEREK P. TRUSWELL Derek P. Truswell	Group Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
* David A. Arledge	Director
* James J. Blanchard	Director
J. Lorne Braithwaite	Director
* E. Susan Evans	Director

II-9

* William R. Fatt	Director
* Richard L. George	Director
Michel Gourdeau	Director
* Louis D. Hyndman	Director
* Brian F. MacNeill	Director
* Robert W. Martin	Director
* George K. Petty	Director
* Donald J. Taylor	Director

*By:	Blaine G. Melnyk, Attorney-in-fact
/s/  BLAINE G. MELNYK Blaine G. Melnyk

II-10

AUTHORIZED REPRESENTATIVE

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on July 8, 2002 by the undersigned as the duly authorized representative of Enbridge Inc. in the United States.

By:	/s/  E. CHRIS KAITSON
Name:		E. Chris Kaitson
Title:		Authorized Representative in the United States

II-11

INDEX TO EXHIBITS

Exhibit Number	Description
1.1**	Form of Underwriting Agreement
3.1*	Certificate of Formation of Enbridge Energy Management, L.L.C.
3.2*	Limited Liability Company Agreement of Enbridge Energy Management, L.L.C.
3.3**	Form of Amended and Restated Limited Liability Company Agreement of Enbridge Energy Management, L.L.C. (including Purchase Provisions adopted by Enbridge Inc.)
4.1**	Form of Certificate Representing Shares of Enbridge Energy Management, L.L.C.
4.2**	Form of Third Amended and Restated Agreement of Limited Partnership of Enbridge Energy Partners, L.P.
5.1**	Opinion of Vinson & Elkins L.L.P. as to the legality of the securities being offered
8.1**	Opinion of Vinson & Elkins L.L.P. as to certain U.S. federal income tax matters
10.1**	Contribution Agreement between Enbridge Energy Company, Inc. and Enbridge Energy Partners, L.P.
10.2**	Form of Tax Indemnity Agreement between Enbridge Energy Management, L.L.C. and Enbridge Inc.
10.3**	Form of Delegation of Control Agreement between Enbridge Energy Management, L.L.C. and Enbridge Energy Company, Inc.
10.4**	Form of Amended and Restated Treasury Services Agreement
10.5**	Form of Amended and Restated Operational Services Agreement
10.6**	Form of Amended and Restated General and Administrative Services Agreement
10.7**	Form of Omnibus Agreement
23.1**	Consent of Vinson & Elkins L.L.P. (included in its opinions filed as Exhibits 5.1 and 8.1)
23.2**	Consent of McCarthy Tétrault LLP
23.3**	Consent of PricewaterhouseCoopers LLP
23.4**	Consent of PricewaterhouseCoopers LLP
23.5**	Consent of PricewaterhouseCoopers LLP
23.6**	Consent of PricewaterhouseCoopers LLP
23.7**	Consent of PricewaterhouseCoopers LLP
24.1*	Powers of Attorney with respect to Enbridge Energy Management, L.L.C.
24.2*	Powers of Attorney with respect to Enbridge Energy Partners, L.P.
24.3*	Powers of Attorney with respect to Enbridge Inc.

*

Previously filed.

**

Filed herewith.

II-12

EX-1.1

                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.

                                 __________ SHARES
               REPRESENTING LIMITED LIABILITY COMPANY INTERESTS


                               -----------------

                             UNDERWRITING AGREEMENT
                             ----------------------
                                                                          , 2002

Goldman, Sachs & Co.,
[NAMES OF CO-REPRESENTATIVES]
  As representatives of the several Underwriters
   named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004

Ladies and Gentlemen:

      Enbridge Energy Management, L.L.C., a Delaware limited liability
company (the "Company"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of _________ shares (the "Firm Shares") and, at
the election of the Underwriters, up to ________ additional shares (the
"Optional Shares") of the Company (the Firm Shares and the Optional Shares
that the Underwriters elect to purchase pursuant to Section 2 hereof being
collectively called the "Shares").

      The Company, Enbridge Energy Partners, L.P., a Delaware limited
partnership (the "Partnership"), Enbridge Energy Company, Inc., a Delaware
corporation, in its individual capacity and in its capacity as the general
partner of the Partnership (the "General Partner") are collectively referred
to herein as the "Enbridge Entities." Enbridge Inc., a corporation organized
under the laws of the province of Alberta, Canada, is herein referred to as
"Enbridge".

      1A. Each of the Company, the Partnership and the General Partner,
jointly and severally, represents and warrants to, and agrees with, each of
the Underwriters that:

      (a) A registration statement (File Nos. 333-89552, 333-89588 and
333-89618) (the "Initial Registration Statement"), in respect of, in each
case as described in the Initial Registration Statement, (a) the Shares to be
issued by the Company, on Form S-1, (b) the i-units to be issued by



the Partnership, on Form S-3 and (c) the Enbridge purchase obligation in
respect of the Shares, on Form F-3, has been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statement
and any post-effective amendment thereto, each in the form heretofore
delivered to you, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, have been
declared effective by the Commission in such form; other than (i) a
registration statement, if any, increasing the size of the offering (a "Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, and (ii) a registration statement filed on May 24, 2002 that was
identical to the Initial Registration Statement in all material respects but
which was deleted from the Commission's EDGAR system as a result of
Commission errors that occurred in connection with the filing of such
registration statement, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and, to the knowledge of the Enbridge Entities, no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary Prospectus";
the Preliminary Prospectus dated ____________, 2002 is hereinafter called the
"Final Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (i) the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time it
was declared effective and (ii) the documents incorporated by reference in
the prospectus contained in the Initial Registration Statement at the time
such part of the Initial Registration Statement became effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus"; any reference herein to the Final Preliminary Prospectus, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Form S-3
and Form F-3 under the Act, as of the date of such Final Preliminary
Prospectus, Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to the Final Preliminary Prospectus,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Final Preliminary
Prospectus, Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Final Preliminary Prospectus, Preliminary
Prospectus or Prospectus, as the case may be, and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Partnership or Enbridge filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement); as used herein, the term "Incorporated Documents"
means the documents which at the time are incorporated by reference in the
Registration Statement, the Final Preliminary Prospectus, the Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto;


                                       2


      (b) The Final Preliminary Prospectus included as part of the
Registration Statement complied when so filed in all material respects with
the provisions of the Act and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
such Final Preliminary Prospectus made in reliance upon and in conformity
with information relating to any Underwriters furnished to the Company, the
Partnership, the General Partner or Enbridge in writing by an Underwriter
through Goldman, Sachs & Co. expressly for use therein; PROVIDED, HOWEVER,
that no representation and/or warranty is hereby being made as to any of the
Enbridge Inc. Information (as hereinafter defined) contained in the Final
Preliminary Prospectus. To the best of each of the Enbridge Entities'
knowledge, information and belief, having made reasonable inquiries, the
Commission has not issued any order preventing or suspending the use of such
Final Preliminary Prospectus;

      (c) The Partnership and the offering of the i-units contemplated by
this Agreement meet the requirements for using Form S-3 under the Act. The
Registration Statement in the form in which it became or becomes effective
and also in such form as it may be when any post-effective amendment thereto
shall become effective and the Final Prospectus and any supplement or
amendment thereto when filed with the Commission under Rule 424(b) and at the
Time of Delivery complied or will comply in all material respects with the
provisions of the Act, and will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and the statements made or to be made in such documents that are covered by
Rule 175(b) under the Act were made or will be made with a reasonable basis
and in good faith, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating
to any Underwriters furnished to the Company, the Partnership, the General
Partner or Enbridge in writing by an Underwriter through Goldman, Sachs & Co.
expressly for use therein; PROVIDED, HOWEVER, that no representation and/or
warranty is hereby being made as to any of the Enbridge Inc. Information
contained in the Registration Statement or Prospectus or the Enbridge Inc.
Part II Information contained in the Registration Statement;

      (d) The Incorporated Documents, other than those filed by Enbridge,
heretofore filed, when they were filed (or, if any amendment with respect to
any such document was filed, when such amendment was filed), conformed in all
material respects with the requirements of the Exchange Act; any further
Incorporated Documents, other than those filed by Enbridge, so filed will,
when they are filed, conform in all material respects with the requirements
of the Exchange Act; no such document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further document, when it is
filed, will contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading;

      (e) The capitalization of each of the Company and the Partnership as of
the respective dates set forth in the Prospectus is as set forth under the
headings "Capitalization of Enbridge Management" and "Capitalization of
Enbridge Partners," respectively, in the Prospectus;


                                       3


      (f) The Shares and i-units have been duly and validly authorized and,
when issued, delivered and paid for as provided herein (or in the case of the
i-units, as described in the Prospectus), will be validly issued, fully paid
and non-assessable (except as non-assessability may be affected by the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act") and the
Delaware Limited Liability Company Act (the "Delaware LLC Act")) and free of
any preemptive or similar rights, and will conform in all material respects
to the descriptions thereof contained in the Prospectus, and the Underwriters
will, [except as set forth in the Prospectus,] acquire the Shares free and
clear of any liens, encumbrances, security interests, charges or claims;

      (g) The Partnership has been duly formed and is validly existing as a
limited partnership in good standing under the Delaware Act, with partnership
power and authority to own or lease its properties and to conduct its
business as described in the Prospectus. Each of the Current Operating
Subsidiaries has been and, at the First Time of Delivery, each of the
Post-Closing Operating Subsidiaries will be, duly organized and validly
existing as a limited liability company or limited partnership, as the case
may be, in good standing under the laws of its respective jurisdiction of
organization set forth on Schedule IIB, with full limited liability company
or partnership, as the case may be, power and authority to own or lease its
properties and to conduct its business as described in the Prospectus;

      (h) The General Partner has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with the corporate power and authority to own or lease its
properties, to conduct its businesses and to act as a general partner of the
Partnership, in each case as described in the Prospectus; the General Partner
is the sole member of the Company and owns all equity securities of the
Company (other than the Shares to be issued as contemplated herein) and each
of the subsidiaries listed on Schedule IIC hereto (the "General Partner
Subsidiaries") free and clear of any lien, encumbrance, security interest,
equity or charge (except for such liens, encumbrances, security interest,
equities or charges as are not, individually or in the aggregate, material to
such interest ownership or as described in the Prospectus) and such equity
securities have been duly and validly authorized and issued and are fully
paid and (except as required to the contrary by the Delaware LLC Act),
non-assessable. The General Partner is the sole general partner of the
Partnership, and the General Partner's ownership of the Partnership is as set
forth in the Prospectus under the heading "Organizational Structure--Prior to
the Offering and Acquisition" and, following the offering, will be as set
forth in the Prospectus under the heading "Organizational
Structure--Following the Offering and Acquisition." Each of the General
Partner Subsidiaries has been duly organized and validly existing as a
limited liability company or limited partnership, as the case may be, in good
standing under the laws of its respective jurisdiction of organization set
forth on Schedule IIC, with full limited liability company or partnership, as
the case may be, power and authority to own or lease its properties and to
conduct its business as described in the Prospectus. Except as described in
the Prospectus or as set forth in the Partnership Agreement or the Delegation
of Control Agreement (as hereinafter defined), the General Partner shall
have, by the First Time of Delivery, delegated all of its power to control
and manage the business and affairs of the Partnership to the Company.
Complete and correct copies of the Certificate of Incorporation of the
General Partner, as amended, and of the By-Laws of the General Partner, as
amended, have been delivered to the Underwriters;

      (i) The Company has been duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, with full limited liability company power and authority to own or
lease its properties and to conduct its business as described in the


                                       4


Prospectus. The Company was organized for the purpose of the transactions
contemplated herein and in the Prospectus. Except as described in the
Prospectus, the Company has not engaged in any business activities other than
in connection with its organization and the transactions described therein.
Complete and correct copies of the Certificate of Formation and the Amended
and Restated Limited Liability Company Agreement of the Company have been
delivered to the Underwriters;

      (j) Other than with respect to Enbridge, as to which no representation
or warranty is hereby made, the accountants, PricewaterhouseCoopers LLP, who
have certified or shall certify the financial statements included or
incorporated by reference in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), are independent public accountants
as required by the Act;

      (k) The historical financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), other than the financial statements, schedules and notes of
Enbridge incorporated by reference into the Registration Statement and
Prospectus as to which no representation or warranty is hereby made, present
fairly the respective consolidated financial position, results of operations
and changes in financial position of the Company, the Partnership and
Enbridge Midcoast Energy Inc. on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; the other
summary and selected financial and statistical information and data included
or incorporated by reference in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), other than any summary and
selected financial and statistical information and data of Enbridge Inc. as
to which no representation or warranty is hereby made, are accurately
presented and prepared on a basis consistent with such financial statements
and the respective books and records of the Company, the Partnership and
Enbridge Midcoast Energy Inc., as applicable; and the pro forma financial
statements included in or incorporated by reference in the Registration
Statement and the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act, the Exchange Act and the
rules and regulations of the Commission under such acts, except to the extent
stated therein have been prepared on a basis consistent with the historical
consolidated financial statements of the Partnership and give effect to the
assumptions used in the preparation thereof on a reasonable basis and in good
faith;

      (l) Each of the Enbridge Entities has all of the necessary limited
liability company, partnership and corporate, as the case may be, power and
authority to enter into this Agreement and consummate the transactions
contemplated hereby. The execution and delivery of, and the performance by,
the Enbridge Entities of their respective obligations under this Agreement
have been duly and validly authorized, and this Agreement has been duly
executed and delivered, by each of the Enbridge Entities;

      (m) Each of the Enbridge Entities has all of the necessary limited
liability company, partnership and corporate, as the case may be, power and
authority to enter into the following agreements to which it is a party: the Tax
Indemnification Agreement between the Company and Enbridge (the "Tax
Indemnification Agreement"), the Delegation of Control Agreement among the
General Partner, the Company and the Partnership (the "Delegation of Control
Agreement"), the Third Amended and Restated Agreement of Limited Partnership of
the Partnership, and the


                                       5


Company's Amended and Restated Limited Liability Company Agreement, including
the Purchase Provisions attached thereto as Appendix A (the "Purchase
Provisions"), each to be dated as of the First Time of Delivery, and
consummate the transactions contemplated thereby. Such agreements have been
duly authorized by the respective Enbridge Entities and conform to the
descriptions thereof in the Prospectus. Each of such agreements will have
been duly executed and delivered at the First Time of Delivery and will
constitute a valid and legally binding agreement of the parties thereto,
enforceable against each of such parties in accordance with its terms,
subject, as to enforcement, (i) to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights, (ii) to general equity principles and (iii) as the rights to
indemnification or contribution thereunder may be limited by federal or state
securities laws.

      (n) Neither the offer, sale or delivery of the Shares or the i-units,
the execution, delivery or performance of this Agreement, the Tax
Indemnification Agreement, the Delegation of Control Agreement, the Third
Amended and Restated Agreement of Limited Partnership, and the Company's
Amended and Restated Limited Liability Company Agreement (including the
Purchase Provisions) (all as described in the Prospectus), compliance by any
of the Enbridge Entities or the Operating Subsidiaries with the provisions
hereof or thereof nor consummation by any of the Enbridge Entities or the
Operating Subsidiaries of the transactions contemplated hereby or thereby
constitutes or, at the First Time of Delivery will constitute, as the case
may be, a breach of, or a default under, the respective partnership
agreement, limited liability company agreement, certificate or articles of
incorporation or bylaws, or other organizational documents, as the case may
be, of any of the Enbridge Entities or the Operating Subsidiaries or any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which any of the Enbridge Entities
or the Operating Subsidiaries is a party or by which any of them may be bound
or to which any of their respective properties is subject, nor will any such
action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable federal, provincial and state
securities and Blue Sky laws), judgment, injunction, order or decree to which
any of the Enbridge Entities or the Operating Subsidiaries is a named party,
excluding in each case any breaches, defaults or violations which,
individually or in the aggregate, would not have a material adverse effect on
the financial position, results of operations, business or prospects of the
Enbridge Entities and the Operating Subsidiaries (taken as a whole), or
subject the partners of the Partnership to unlimited personal liability (a
"Material Adverse Effect"); and no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body is required for the issue and sale of the Shares or the i-units or the
consummation by the Enbridge Entities of the transactions contemplated by
this Agreement or the Prospectus, except for (i) the registration under the
Act of the Shares, i-Units and purchase obligation as described in Section
1(a) herein, (ii) such consents, approvals, authorizations, registrations or
qualifications as may be required under state or provincial securities or
Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters and (iii) filings necessary to implement the merger,
conversion and formation of certain of the Operating Subsidiaries;

      (o) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), none of the Enbridge
Entities or the Operating Subsidiaries has incurred any liability or obligation,
direct or contingent, or entered into any transaction, not in the ordinary
course of business, that is material to the limited partners of the Partnership
or the Enbridge Entities and the Operating


                                       6


Subsidiaries (taken as a whole), and there has not been any change in the
capital stock or partner's capital, or material increase in the short-term
debt or long-term debt of, any of the Enbridge Entities, or any material
adverse change, or any development that any Enbridge Entity has reasonable
cause to believe will involve a prospective material adverse change, in the
financial position, business, prospects or results of operations of the
Enbridge Entities and the Operating Subsidiaries (taken as a whole);

      (p) None of the Enbridge Entities has distributed and, prior to the
later to occur of (i) the Time of Delivery and (ii) completion of the
distribution of the Shares, will distribute any offering material in
connection with the offering and sale of the Shares other than the Prospectus
or other materials, if any, permitted by the Act;

      (q) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment of supplement thereto), no more than ten percent
of the net proceeds from the sale of the Shares are intended to be or will be
paid to members of the National Association of Securities Dealers or
associated or affiliated persons of such members, or members of the immediate
family of such members;

      (r) No person has any right to require registration of any membership
interests of the Company because of the filing of the Registration Statement
or consummation of the transactions contemplated by this Agreement; and
except for the General Partner, who has waived such rights, no holder of any
security of the Partnership or any other person has any right to require
registration of units representing limited partner interests in the
Partnership or any other interest or other security of the Partnership
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement;

      (s) None of the Enbridge Entities or Operating Subsidiaries is, or as
of the Time of Delivery will be, an "Investment Company" as that term is
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act"), or required to register as an "Investment Company" under the
Investment Company Act;

      (t) None of the Enbridge Entities or Operating Subsidiaries is (i) a
"public utility company," (ii) a "holding company," (iii) a "subsidiary
company" of a "registered holding company" or of a "holding company" required
to be registered under the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act"), or (iv) an "affiliate" of (A) a "registered holding
company," (B) a "holding company" required to be registered under the 1935
Act, (C) a "subsidiary company" of a "registered holding company" or (D) a
"subsidiary company" of a "holding company" required to be registered under
the 1935 Act, as such terms are defined in the 1935 Act. The issuance and
sale of the Shares as contemplated by the Prospectus is not subject to
regulation under the 1935 Act;

      (u) There are no legal or governmental proceedings pending or, to the
knowledge of any of the Enbridge Entities, threatened, against any of the
Enbridge Entities or Operating Subsidiaries, or to which any of the Enbridge
Entities or Operating Subsidiaries or any of their respective properties, is
subject, that are required to be described in the Registration Statement or
the Prospectus and are not described as required;

      (v) Each of the Enbridge Entities and Current Operating Subsidiaries is
and, at the First Time of Delivery, each of the Enbridge Entities and the
Post-Closing Operating Subsidiaries will be, duly qualified and in good standing
as a foreign limited partnership, limited liability company or corporation, as
the case may be, authorized to do business in each jurisdiction in which the
nature of


                                       7


its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect;

      (w) Each of the Enbridge Entities owns or leases all properties as are
necessary to the conduct of their operations as described in the Prospectus,
except where the failure to own or lease any of such properties would not,
individually or in the aggregate, have a Material Adverse Effect;

      (x) None of the Enbridge Entities is (a) in violation of its formation
or incorporation, as applicable, or other governing documents or (b) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, except for such
violations or defaults as would not, individually or in the aggregate, have a
Material Adverse Effect;

      (y) The statements set forth in the Prospectus under the captions
"Description of Our Shares", "Description of the I-Units", "Comparison of
Enbridge Partners Units with Our Shares" and "Distribution Policy," insofar
as they purport to constitute a summary of the terms of the Shares, i-units
and Common Units, are accurate and complete in all material respects;

      (z) The Audit Committee of the Company's Board of Directors complies
with the applicable requirements of the New York Stock Exchange;

      1B. Enbridge represents and warrants to, and agrees with, each of the
Underwriters that:

      (a) The Initial Registration Statement has been filed with the
Commission; the Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, excluding
exhibits thereto but including all documents incorporated by reference in the
prospectus contained therein, have been declared effective by the Commission
in such form; other than (i) a Rule 462(b) Registration Statement, if any,
which became effective upon filing, and (ii) registration statement filed on
May 24, 2002 that was identical to the Initial Registration Statement in all
material respects but which was deleted from the Commission's EDGAR system as
a result of Commission errors that occurred in connection with the filing of
such registration statement, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and, to the knowledge of Enbridge, no proceeding for that purpose has
been initiated or threatened by the Commission;

      (b) The information under the headings "Prospectus Summary--Enbridge
Inc.," "Use of Proceeds--Enbridge Inc." and "Capitalization of Enbridge Inc."
and the information incorporated by reference into the Prospectus from the
documents listed under "Where You Can Find More Information--Enbridge Inc. SEC
Filings (File No. 0-21080)" (all of such information relating to Enbridge being
referred to herein collectively as the "Enbridge Inc. Information") contained in
such Final Preliminary Prospectus complied when so filed in all material
respects with the provisions of the Act and did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Final Preliminary Prospectus made in reliance upon and in conformity with
information relating to any Underwriters furnished to the Company, the
Partnership or Enbridge in writing by an Underwriter through Goldman, Sachs &
Co. expressly for use therein. To

                                       8


the best of Enbridge's knowledge, information and belief, having made
reasonable inquiries, the Commission has not issued any order preventing or
suspending the use of the Preliminary Prospectus;

      (c) Enbridge and the offering of the purchase obligation meet the
requirements for using Form F-3 under the Act. The Enbridge Inc. Information
contained or incorporated by reference in (i) the Registration Statement in
the form in which it became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become effective and
(ii) the Prospectus and any supplement or amendment thereto when filed with
the Commission under Rule 424(b) and at the Time of Delivery and any
information relating to Enbridge in Part II of the Registration Statement
(including any such post-effective amendment) under headings identified as
containing information relating to Enbridge ("Enbridge Inc. Part II
Information") complied or will comply in all material respects with the
provisions of the Act, and will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and the statements made or to be made in such sections of such documents that
are covered by Rule 175(b) under the Act were made or will be made with a
reasonable basis and in good faith, except that this representation and
warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to any Underwriters furnished to the Company, the
Partnership, the General Partner or Enbridge in writing by an Underwriter
through Goldman, Sachs & Co. expressly for use therein;

      (d) Enbridge's Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act; any further Incorporated Documents of
Enbridge so filed will, when they are filed, conform in all material respects
with the requirements of the Exchange Act; no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading; and no such further
document, when it is filed, will contain an untrue statement of a material
fact or will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading;

      (e) The capitalization of as of the date set forth in the Prospectus,
is as set forth in the under the heading "Capitalization of Enbridge Inc." in
the Prospectus;

      (f) Enbridge has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Province of Alberta,
Canada, with full corporate power and authority to own or lease its
properties and to conduct its business as described in the Prospectus.
Enbridge indirectly wholly owns the General Partner free and clear of any
lien, encumbrance, security interest, equity or charge (except for such
liens, encumbrances, security interests, equities or charges as are not,
individually or in the aggregate, material to such interest ownership or as
described in the Prospectus). The shares of stock in the General Partner
owned by Enbridge have been duly and validly authorized and issued and are
fully paid and non-assessable. Complete and correct copies of the Certificate
of Incorporation of Enbridge, and all amendments thereto, and of the By-Laws
of Enbridge, as amended, have been delivered to the Underwriters;

      (g) The accountants, PricewaterhouseCoopers LLP, who have certified
Enbridge's financial statements incorporated by reference in the Registration
Statement and the Prospectus (or


                                       9


any amendment or supplement thereto), are, in respect of Enbridge,
independent public accountants as required by the Act;

      (h) The historical financial statements of Enbridge, together with
related schedules and notes, incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position, results of operations and
changes in financial position of Enbridge on the basis stated in the
Registration Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other summary and selected financial and statistical
information and data included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are accurately presented and prepared on a basis consistent with
such financial statements and the books and records of Enbridge;

      (i) Enbridge has all of the necessary corporate power and authority to
enter into this Agreement and consummate the transactions contemplated
hereby. The execution and delivery of, and the performance by Enbridge of its
obligations under this Agreement have been duly and validly authorized, and
this Agreement has been duly executed and delivered, by Enbridge;

      (j) Enbridge has all of the necessary corporate power and authority to
enter into the Tax Indemnification Agreement and to adopt the Purchase
Provisions, and consummate the transactions contemplated thereby. Such
agreements have been duly authorized, and will have been duly executed and
delivered at the First Time of Delivery, by Enbridge. Each of such agreements
constitutes a valid and legally binding agreement of Enbridge, enforceable
against it in accordance with its terms, subject, as to enforcement, (i) to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights, (ii) to general
equity principles and (iii) as the rights to indemnification or contribution
thereunder may be limited by federal or state securities laws.

      (k) Neither the execution, delivery or performance of this Agreement,
the Tax Indemnification Agreement and the Purchase Provisions, compliance by
Enbridge with the provisions hereof or thereof nor consummation by Enbridge
of the transactions contemplated hereby or thereby constitutes or, at the
First Time of Delivery will constitute, as the case may be, a breach of, or a
default under, the articles of incorporation or bylaws of Enbridge or any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which Enbridge is a party or by
which it may be bound or to which its properties is subject, nor will any
such action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable federal, provincial and state
securities and Blue Sky laws), judgment, injunction, order or decree to which
it is a named party, excluding in each case any breaches, defaults or
violations which, individually or in the aggregate, would not have a material
adverse effect on the financial position or results of operations, business
or prospects of Enbridge and its subsidiaries (taken as a whole); and no
consent, approval, authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the
consummation by Enbridge of the transactions contemplated by this Agreement,
except for the registration under the Act as described in Section 1(a) herein
and such consents, approvals, authorizations, registrations or qualifications
as may be required under state or provincial securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters;


                                      10




      (l) Enbridge has not distributed and, prior to the later to occur of
(i) the Time of Delivery and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Prospectus or other materials,
if any, permitted by the Act;

      (m) Enbridge is not and, as of the Time of Delivery will not be, an
"Investment Company" as that term is defined in the Investment Company Act,
or required to register as an "Investment Company" under the Investment
Company Act;

      (n) Enbridge is not (i) a "public utility company," (ii) a "holding
company," (iii) a "subsidiary company" of a "registered holding company" or
of a "holding company" required to be registered under the 1935 Act, or (iv)
an "affiliate" of (A) a "registered holding company," (B) a "holding company"
required to be registered under the 1935 Act, (C) a "subsidiary company" of a
"registered holding company" or (D) a "subsidiary company" of a "holding
company" required to be registered under the 1935 Act, as such terms are
defined in the 1935 Act.

      (o) There are no legal or governmental proceedings pending or, to the
knowledge of Enbridge, threatened, against Enbridge or any of its
subsidiaries, or to which Enbridge or any of its subsidiaries of any of their
respective properties, is subject, that are required to be described in the
Registration Statement or the Prospectus and are not described as required;

      (p) Enbridge is not (a) in violation of its incorporation documents or
(b) in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, except for such
violations or defaults as would not, individually or in the aggregate, have a
material adverse effect on the financial position, results of operations,
business or prospects of Enbridge and its subsidiaries (taken as a whole);

      2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per share of $___________ for Firm Shares to be sold to
the public [and $_________ for Firm Shares to be sold to Enbridge], the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, at the purchase price per share set forth in
clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so
as to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Shares that all of the
Underwriters are entitled to purchase hereunder.

      The Company hereby grants to the Underwriters the right to purchase at
their election up to _____________ Optional Shares, at the purchase price per
share set forth in the paragraph above, for the sole purpose of covering
sales of shares in excess of the number of Firm Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to
the Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the


                                      11


aggregate number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier
than two or later than ten business days (as defined below in Section 14)
after the date of such notice.

      3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.

      4. (a) Certificates in definitive form for the Shares to be purchased
by each Underwriter hereunder in such authorized denominations and registered
in such names as Goldman, Sachs & Co. may request upon at least forty-eight
hours' prior notice to the Company shall be delivered by or on behalf of the
Company to Goldman, Sachs & Co. , through the facilities of the Depository
Trust Company ("DTC") for the account of such Underwriter, against payment by
or on behalf of such Underwriter of the purchase price therefor by wire
transfer of federal (same-day) funds to the account specified by the Company
to Goldman, Sachs & Co. at least forty-eight hours in advance. The Company
will cause the certificates representing the Shares to be made available for
checking and packaging at least twenty four hours prior to the Time of
Delivery (as defined below) with respect thereto at the Closing Location (as
defined below). The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:30 a.m., New York City time, on _____________,
2002 or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing and, with respect to the Optional Shares, shall be 9:30
a.m., New York time, on the date specified by Goldman, Sachs & Co. in the
written notice given by Goldman, Sachs & Co. of the Underwriters' election to
purchase such Optional Shares, or such other time and date as Goldman, Sachs
& Co. and the Company may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "First Time of Delivery",
such time and date for delivery of the Optional Shares, if not the First Time
of Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called a "Time of Delivery".

         (b) The Shares and documents to be delivered at each Time of
Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross receipt for the Shares, will be delivered at the offices
of Vinson & Elkins L.L.P., 1001 Fannin, Suite 2300, Houston, Texas 77002 (the
"Closing Location"). A meeting will be held at the Closing Location at 2:00
p.m., Houston time, on the business day next preceding such Time of Delivery,
at which meeting the final drafts of the documents to be delivered pursuant
to the preceding sentence will be available for review by the parties hereto.

      5. Each of the Company, the General Partner, the Partnership and,
except in the case of (d), (f) and (g), Enbridge, agrees with each of the
Underwriters:

      (a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish you with copies thereof; to file promptly all reports and
any definitive proxy or


                                      12


information statements required to be filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of the Prospectus and for so long as the delivery of a prospectus is required
in connection with the transactions contemplated by the Prospectus; to advise
you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares, i-units or Partnership's Class A Units for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus or suspending any such qualification, promptly to
use commercially reasonable efforts to obtain the withdrawal of such order;

      (b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;

      (c) Prior to 10:00 A.M., New York City time, on the business day next
succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with written and electronic copies of the Prospectus in New York
City in such quantities as you may reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the
offering or sale of the Shares and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify you and upon your
request to file such document and to prepare and furnish without charge to
each Underwriter and to any dealer in securities as many written and
electronic copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any Underwriter
is required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many written and electronic copies
as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;

      (d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules
and regulations thereunder (including, at the option of the Company, Rule
158);


                                      13


      (e) During the period beginning from the date hereof and continuing to
and including the date (i) 60 days after the date of the Prospectus with
respect to Class A Units or any securities substantially similar thereto or
(ii) 180 days after the date of the Prospectus with respect to Shares,
i-units or any securities substantially similar thereto (but not including
Class A Units), not to, directly or indirectly, offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of, except as provided hereunder and in the Prospectus, any
securities of the Company or the Partnership that are, or are substantially
similar to, Shares, i-units or Class A Units, or any options or warrants to
purchase any such securities including but not limited to any securities that
are convertible into or exchangeable for, or that represent the right to
receive, Shares, i-units or Class A Units or any such substantially similar
securities whether now owned (beneficially or otherwise, including holding as
a custodian) or hereinafter acquired (other than (A) the regular quarterly
splits of i-units by the Partnership to be received by the Company and the
corresponding issuance of Shares by the Company to the holders of the
Company's shares, (B) in connection with the acquisition of assets (other
than cash), businesses or the capital stock or other ownership interests of
businesses by any of Enbridge, the Partnership or any subsidiary of Enbridge
owning Common Units on the date hereof, or any operating subsidiary of the
Partnership owning Common Units on the date hereof, if the recipient(s) of
such securities agree(s) not to offer, sell, contract to sell, or otherwise
dispose of during such lock-up period any such securities received in
connection with such acquisition(s) and (C) pursuant to employee unit option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement)
without your prior written consent, it being expressly agreed that the
foregoing restriction shall preclude the Partnership, the General Partner,
Enbridge and the Company from engaging, directly or indirectly, in any
hedging or other transaction which is designed to or reasonably expected to
lead to or result in a sale or disposition of Shares, i-units or Class A
Units, or even if such Shares, i-units or Class A Units would be disposed of
by someone other than the Partnership, the General Partner, Enbridge or the
Company, including, without limitation, any short sale or any purchase, sale
or grant of any right (including, without limitation, any put or call option)
with respect to any of the Shares, i-units or Class A Units or with respect
to any security that includes, relates to, or derives any significant part of
its value from such Shares, i-units or Class A Units;

       (f) To furnish to the Shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three quarters
of each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), to make available to the
Shareholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;

      (g) During a period of five years from the effective date of the
Registration Statement, to furnish to you, or otherwise make publicly
available, copies of all reports or other communications (financial or other)
furnished to Shareholders, and to deliver to you such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request;

      (h) To use the net proceeds received by them from the sale of the
Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds;"


                                      14


      (i) To use its best efforts to list, subject to notice of issuance, the
Shares of New York Stock Exchange (the "Exchange").

      (j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;

      (k) If the Company, the Partnership or Enbridge elects to rely upon
Rule 462(b), the Company, the Partnership and Enbridge shall file a Rule
462(b) Registration Statement with the Commission in compliance with Rule
462(b), and the Company, the Partnership and Enbridge shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act;

      (l) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the "License"); PROVIDED, HOWEVER, that the License
shall be used solely for the purpose described above, is granted without any
fee and may not be assigned or transferred;

      (m) The Partnership shall duly authorize and issue i-units to the
Partnership as contemplated in the Prospectus under "Use of Proceeds;"

      (n) To authorize, execute and deliver by the Time of Delivery each of
the Tax Indemnification Agreement, the Delegation of Control Agreement, the
Third Amended and Restated Agreement of Limited Partnership of the
Partnership and the Company's Limited Liability Company Agreement (including
the Purchase Provisions), (all as described in the Prospectus); and

      (o) To authorize, execute and deliver the amended and restated
agreements of limited partnership or limited liability company agreements, as
the case may be, of each of the Operating Subsidiaries promptly after the
Time of Delivery.

      6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the preparation,
printing or reproduction, and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto), any Preliminary
Prospectus, the Prospectus, each amendment or supplement to any of them and this
Agreement; (ii) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, the Preliminary Prospectus, the Prospectus, the
Incorporated Documents, and all amendments or supplements to any of them, as may
be reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of the Shares and the i-units; (iv) the printing (or reproduction) and delivery
of this Agreement, any Agreement among Underwriters, any preliminary or
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Offered Units on the New York Stock Exchange; (vi) the
registration or qualification of the Shares or i-units for offer and sale under
the securities or Blue Sky laws of the several states as provided in Section
5(g) hereof, if required (including the reasonable fees, expenses and
disbursements of counsel for the Underwriters relating to the preparation,
printing or reproduction, and delivery of any preliminary or supplemental Blue
Sky Memoranda and such registration and qualification); (vii) the filing fees
and the fees and expenses of counsel for the Underwriters in connection with any
filings required to be made with the National Association of Securities Dealers,


                                      15


Inc.; (viii) the transportation and lodging expenses incurred by or on behalf
of representatives of the Companies in connection with any presentations to
prospective purchasers of the Shares; (ix) the fees and expenses of the
accountants for the Enbridge Entities and Enbridge; (x) the fees and expenses
of counsel (including local and special counsel) for the Enbridge Entities
and Enbridge; and (xi) any fees payable to DTC in connection with the Shares
being book-entry only securities.

      7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements
of the Company, the Partnership, the General Partner and Enbridge herein are,
at and as of such Time of Delivery, true and correct, the condition that each
of the Company, the Partnership, the General Partner and Enbridge shall have
performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:

      (a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company, the Partnership or Enbridge has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;

      (b) Andrews & Kurth Mayor, Day & Caldwell L.L.P., counsel for the
Underwriters, shall have furnished to you such written opinion, dated such
Time of Delivery, with respect to the matters covered in paragraphs (i)
(insofar as it relates to the due formation and good standing of the Company
and the Partnership in Delaware and the Company's and the Partnership's power
and authority to conduct its business as described in the Registration
Statement and the Prospectus, [(v)], and [(xv)] of the opinion attached
hereto as Annex I, as described in Annex I, as well as such other related
matters as you may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;

      (c) Vinson & Elkins L.L.P., counsel for the Company, the Partnership,
[the General Partner] and Enbridge shall have furnished to you their written
opinion, dated such Time of Delivery, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto;

      (d) Each of (i) Berkowitz, Lefkovits, Isom & Kushner, Birmingham,
Alabama, (ii) Logan & Logan, Prairie Village, Kansas, (iii) Lemle & Kelleher,
L.L.P., New Orleans, Louisiana, (iv) Brunini, Grantham, Grower & Hewes,
Jackson, Mississippi and (v) Elias, Books, Brown, Peterson & Massad, each of
which is acting as special local counsel to the Enbridge Entities, shall have
furnished to you, its written opinion, dated such Time of Delivery, in form
and substance satisfactory to you, to the effect set forth in Annex II hereto;

      (e) McCarthy Tetrault LLP, Canadian counsel to the Enbridge Entities,
shall have furnished to you, its written opinion or opinions, dated as of the
Time of Delivery, in form and substance satisfactory to you, to the effect
set forth in Annex III hereto;

      (f) On the date of the Prospectus, at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of


                                      16


Delivery, PricewaterhouseCoopers LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex IV and V,
respectively, hereto;

       (g) None of the Enbridge Entities or Enbridge shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the partners'
capital or capital stock, as applicable, or long-term debt of any of the
Enbridge Entities or Enbridge or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders', unitholders' or interestholders' equity or
results of operations of any of the Enbridge Entities or Enbridge, otherwise
than as set forth or contemplated in the Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;

      (h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded any of the Enbridge Entities' or Enbridge's debt
securities or preferred stock by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Enbridge Entities' or
Enbridge's debt securities or preferred stock;

      (i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's, the Partnership's or
Enbridge's securities on the NYSE; (iii) a general moratorium on commercial
banking activities declared by either federal or New York State authorities
or a material disruption in commercial banking or securities settlement or
clearance services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus;

      (j) The Shares to be sold at such Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange;

      (k) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from (i) each executive officer, director or 5% equity
holder of the Company and the Partnership, other than the General Partner and
Enbridge, substantially to the effect set forth in Subsection 5(e) hereof in
form and substance satisfactory to you, and (ii) each person required by Rule
2110(d) of the NASD Conduct Rules in form and substance as is required by
such Rule, such executive officers, directors, equity holders and other
persons being listed on Schedule IV hereto;


                                      17


      (l) The Company, the Partnership and Enbridge shall have complied with
the provisions of Section 5(c) hereof with respect to the furnishing of
prospectuses on the Business Day next succeeding the date of this Agreement;

      (m) The Company, the General Partner the Partnership and Enbridge shall
have furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company, the Partnership, the General Partner
and Enbridge satisfactory to you as to (i) the accuracy of the
representations and warranties of the Company, the Partnership, the General
Partner and Enbridge herein that are qualified by materiality, and as to the
accuracy in all material respects of the representations and warranties of
the Company, the Partnership, the General Partner and Enbridge herein that
are not so qualified, at and as of such Time of Delivery, (ii) as to the
performance in all material respects by each of the Company, the Partnership,
the General Partner and Enbridge of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, (iii) as to
the matters set forth in subsections (a) and (g) of this Section and (iv) as
to such other matters as you may reasonably request;

      (n) The following documents shall have been duly authorized, executed
and delivered and be in full force and effect: the Tax Indemnification
Agreement, the Delegation of Control Agreement, the Third Amended and
Restated Agreement of Limited Partnership of the Partnership and the
Company's Amended and Restated Limited Liability Company Agreement (including
the Purchase Provisions) (all as described in the Prospectus);

      (o) The successful delegation of the General Partner's control and
management of the business and affairs of the shall have occurred; and

      (p) The Partnership shall have duly and validly authorized and issued,
and the Company shall have purchased and shall own, the i-units, as
contemplated by the Prospectus.

      8. (a) (i) Each of the Company, the Partnership and the General Partner
will, jointly and severally, indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Final Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, other than
any Enbridge Inc. Information or Enbridge Inc. Part II Information, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred and (ii) Enbridge will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Enbridge Inc. Information in the Final
Preliminary Prospectus, the Prospectus or the Registration Statement or in the
Enbridge Inc. Part II Information in the Registration Statement, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any


                                      18


such action or claim as such expenses are incurred; PROVIDED, HOWEVER, that
the Company, the Partnership, the General Partner and Enbridge shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Final
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Goldman,
Sachs & Co. expressly for use therein.

      (b) Each Underwriter will indemnify and hold harmless the Company, the
Partnership, the General Partner and Enbridge against any losses, claims,
damages or liabilities to which the Company, the Partnership, the General
Partner and/or Enbridge may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Final Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Final Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Goldman,
Sachs & Co. expressly for use therein; and will reimburse the Company, the
Partnership, the General Partner and/or Enbridge for any legal or other
expenses reasonably incurred by any of them in connection with investigating
or defending any such action or claim as such expenses are incurred.

      (c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against a person who
is required to indemnify such indemnified party pursuant to subsection (a) or
(b) above (an "indemnifying party"), notify such indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement
or compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified party
is an actual or potential party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of
the indemnified party from all liability arising out of such action or claim
and

                                      19


(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of any indemnified party.

      (d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company, the Partnership, the
General Partner and Enbridge on the one hand and the Underwriters on the
other from the offering of the Shares. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or
if the indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company, the Partnership, the General Partner and Enbridge on the one hand
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company, the
Partnership, the General Partner and Enbridge on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (after deducting underwriting discounts
and commissions, but before deducting expenses) received by the Company, the
Partnership, the General Partner and Enbridge bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, (i) whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, the Partnership, the General Partner or Enbridge on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and (ii) whether an indemnified party failed to give the notice
required under subsection (c) above. The Company, the Partnership, the
General Partner and Enbridge and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were
determined by PRO RATA allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission and (ii) Enbridge
shall not be required to contribute any amount unless it is or could have
been an indemnifying party pursuant to subsection (a). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.


                                      20




      (e) The obligations of the Company, the Partnership, the General
Partner and Enbridge under this Section 8 shall be in addition to any
liability which the Company, the Partnership, the General Partner and
Enbridge may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company, the Partnership, the
General Partner and Enbridge (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director
of the Company, the Partnership, the General Partner or Enbridge) and to each
person, if any, who controls the Company, the Partnership, the General
Partner or Enbridge within the meaning of the Act.

      9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties
to purchase such Shares on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the
purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties reasonably satisfactory to you to purchase such Shares on such terms.
In the event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Shares, or the
Company notifies you that it has so arranged for the purchase of such Shares,
you or the Company shall have the right to postpone such Time of Delivery for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or
in any other documents or arrangements, and the Company agrees to file
promptly any amendments to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to this
Agreement with respect to such Shares.

      (b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of
all the Shares to be purchased at such Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to purchase
the number of shares which such Underwriter agreed to purchase hereunder at
such Time of Delivery and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares
which such Underwriter agreed to purchase hereunder) of the Shares of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.

      (c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company
to sell the Optional Shares) shall thereupon terminate, without liability on
the part of any non-defaulting


                                      21


Underwriter or the Company, except for the expenses to be borne by the
Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.

      10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Partnership, the General Partner and
Enbridge and the several Underwriters, as set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter
or any controlling person of any Underwriter, or the Company, the
Partnership, the General Partner or Enbridge, or any officer or director or
controlling person of the Company, the Partnership, the General Partner or
Enbridge, and shall survive delivery of and payment for the Shares.

      11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except
as provided in Sections 6 and 8 hereof; but, if for any other reason, any
Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Shares not so delivered, but the
Company shall then be under no further liability to any Underwriter except as
provided in Sections 6 and 8 hereof.

      12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.

      All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, Attention:
Registration Department; and if to the Company shall be delivered or sent by
mail to the address of the Company set forth in the Registration Statement,
Attention: Chris Kaitson, with a copy to Vinson & Elkins L.L.P., 1001 Fannin,
Suite 2300, Houston, Texas 77002-6760, Attention: William N. Finnegan IV;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire,
or telex constituting such Questionnaire, which address will be supplied to
the Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.

      13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Partnership, the General
Partner and Enbridge and, to the extent provided in Sections 8 and 10 hereof,
the officers and directors of the Company, the Partnership, the General
Partner and Enbridge and each person who controls the Company, the
Partnership, the General Partner or Enbridge or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.

      14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.

                                      22


      15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

      16. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York court,
(ii) waives, to the fullest extent it may effectively do so, any objection
which it may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the exclusive jurisdiction of such courts in
any such suit, action or proceeding. Enbridge has appointed [ ], New York,
New York, as its authorized agent (the "Authorized Agent") upon whom process
may be served in any such action arising out of or based on this Agreement or
the transactions contemplated hereby which may be instituted in any New York
Court by any Underwriter or by any person who controls any Underwriter,
expressly consents to the jurisdiction of any such court in respect of any
such action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable.
Enbridge represents and warrants that the Authorized Agent has agreed to act
as such agent for service at process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such
service to Enbridge shall be deemed, in every respect, effective service of
process upon Enbridge.

      17. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment
currency") other than United States dollars, the Company, the Partnership,
the General Partner and, if Enbridge is or could have been an indemnifying
party under Section 8(a) in respect of such judgment or order, Enbridge, as
the case may be, will indemnify each Underwriter against any loss incurred by
such Underwriter as a result of any variation as between (i) the rate of
exchange at which the United States dollar amount is converted into the
judgment currency for the purpose of such judgment or order and (ii) the rate
of exchange at which an Underwriter is able to purchase United States dollars
with the amount of the judgment currency actually received by such
Underwriter. The foregoing indemnity shall constitute a separate and
independent obligation of the Company, the Partnership, the General Partner
and Enbridge and shall continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of or conversion into United States dollars.

      18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.

      19. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with
respect to such transaction, and all materials of any kind (including tax
opinions and other tax analyses) related to those benefits, without the
Underwriters imposing any limitation of any kind.



                      [rest of page intentionally left blank]


                                      23


      If the foregoing is in accordance with your understanding, please sign
and return to us, one for the Company and each of the Representatives plus
one for each counsel, counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters
and the Company, the Partnership, the General Partner and Enbridge. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the
authority of the signers thereof.

                                          Very truly yours,

                                          Enbridge Energy Management, L.L.C.

                                          By:
                                             -----------------------
                                             Name:
                                             Title:

                                          Enbridge Energy Partners, L.P.

                                          By:  Enbridge Energy Company, Inc.,
                                               its General Partner

                                          By:
                                             -----------------------
                                             Name:
                                             Title:


                                          Enbridge Energy Company, Inc.

                                          By:
                                             -----------------------
                                             Name:
                                             Title:

                                          Enbridge Inc.

                                          By:
                                             -----------------------
                                             Name:
                                             Title:


                                      24


Accepted as of the date hereof:

GOLDMAN, SACHS & CO.
[INSERT NAMES OF OTHER REPRESENTATIVES]

BY:
   ------------------------------------

   On behalf of each of the Underwriters



                                      25


                                   SCHEDULE I




                                                         TOTAL NUMBER OF            TOTAL NUMBER OF            NUMBER OF OPTIONAL
                                                        FIRM SHARES TO BE          FIRM SHARES TO BE         SHARES TO BE PURCHASED
                                                       PURCHASED AND SOLD          PURCHASED AND SOLD              IF MAXIMUM
                   UNDERWRITER                            TO THE PUBLIC               TO ENBRIDGE               OPTION EXERCISED
                   -----------                            -------------               -----------               ----------------
                                                                                                    

Goldman, Sachs & Co.............................



Total




                                      26


                                   SCHEDULE IIA

                         CURRENT OPERATING SUBSIDIARIES



         ENTITY                                                  JURISDICTION OF
         ------                                                   ORGANIZATION
                                                                  ------------
                                                              
Enbridge Energy, Limited Partnership                                Delaware

Enbridge Pipelines (North Dakota) L.L.C.                          North Dakota

Enbridge Pipelines (Lakehead) L.L.C.                                Delaware

[To be formed in July]

Enbridge Pipelines (East Texas) L.L.C.                              Delaware

Enbridge Pipelines (East Texas) L.P.                                Delaware

Enbridge Processing (East Texas) L.P.                               Delaware

Enbridge Marketing (East Texas) L.P.                                Delaware





                                   SCHEDULE IIB

                       POST-CLOSING OPERATING SUBSIDIARIES




         ENTITY                                                  JURISDICTION OF
         ------                                                   ORGANIZATION
                                                                  ------------
                                                              
Enbridge Energy, Limited Partnership                               Delaware

Enbridge Pipelines (North Dakota) L.L.C.                         North Dakota

Enbridge Pipelines (Lakehead) L.L.C.                               Delaware

[To be formed in July]

Enbridge Pipelines (East Texas) L.L.C.                             Delaware

Enbridge Pipelines (East Texas) L.P.                               Delaware

Enbridge Processing (East Texas) L.P.                              Delaware

Enbridge Marketing (East Texas) L.P.                               Delaware

Enbridge Midcoast Holdings, L.L.C.                                 Delaware

Enbridge Holdings (Texas Systems) L.L.C.                           Delaware

Enbridge Pipelines (Louisiana Intrastate) L.L.C.                   Delaware

Enbridge Pipelines (SIGCO Intrastate) L.L.C.                       Delaware

Mid Louisiana Gas Transmission, L.L.C.                             Delaware

Enbridge Processing (Mississippi) L.L.C.                           Delaware

Dufour Petroleum, L.P.                                             Delaware

Enbridge Midcoast Energy, L.P.                                       Texas

Pan Grande Pipeline, L.L.C.                                          Texas

[Texana Pipeline Company                                             N/A]

Enbridge Pipelines (Texas Intrastate) L.P.                           Texas

Enbridge Offshore Pipelines (Seacrest) L.P.                          Texas

Enbridge Offshore Pipelines (UTOS) L.L.C.                          Delaware


                                      28





         ENTITY                                                  JURISDICTION OF
         ------                                                   ORGANIZATION
                                                                  ------------
                                                              

Enbridge Pipelines (Louisiana Liquids) L.L.C.                      Delaware

Enbridge Pipelines (Texas Gathering) L.P.                          Delaware

Midcoast Kansas Pipeline, L.L.C.                                   Delaware

Midcoast Kansas General Partner, L.L.C.                            Delaware

Margasco Partnership                                               Oklahoma

Mid-Kansas Partnership                                              Kansas

Riverside Pipeline Company, L.P.                                    Kansas

Nugget Drilling Corporation                                        Minnesota

Midcoast Holdings No. One, L.L.C.                                  Delaware

Enbridge Pipelines (Alabama Intrastate) L.L.C.                      Alabama

Enbridge Pipelines (AlaTenn) L.L.C.                                 Alabama

Enbridge Pipelines (Tennessee River) L.L.C.                         Alabama

Enbridge Pipelines (Midla) L.L.C.                                  Delaware

H&W Pipeline, L.L.C.                                                Alabama

Enbridge Marketing (U.S.) L.P.                                       Texas

Enbridge Pipelines (Alabama Gathering) L.L.C.                       Alabama

Enbridge Pipelines (Bamagas Intrastate) L.L.C.                     Delaware

[Enbridge Pipelines (KPC)]                                          Kansas

Enbridge Pipelines (NE Texas) L.L.C.                               Delaware

Enbridge Pipelines (NE Texas Liquids) L.L.C.                       Delaware

Enbridge Gathering (Texarkana) L.L.C.                              Delaware




                                      29


                                   SCHEDULE IIC

                           GENERAL PARTNER SUBSIDIARIES




         ENTITY                                                  JURISDICTION OF
         ------                                                   ORGANIZATION
                                                                  ------------
                                                              
Enbridge Midcoast Holdings, L.L.C.                                 [______]

Enbridge Holdings (Texas Systems) L.L.C.                           Delaware

Enbridge Pipelines (Louisiana Intrastate) L.L.C.                   Delaware

Enbridge Pipelines (Louisiana Intrastate) Inc.                     Delaware

Enbridge Pipelines (SIGCO Intrastate) L.L.C.                       Delaware

[Southern Industrial Gas Corporation                                 N/A]

Mid Louisiana Gas Transmission, L.L.C.                             Delaware

Enbridge Processing (Mississippi) L.L.C.                           Delaware

Enbridge Processing (Mississippi) Inc.                             Delaware

Dufour Petroleum, L.P.                                             Delaware

Dufour Petroleum, Inc.                                             Delaware

Enbridge Midcoast Energy, Inc.                                       Texas

Enbridge Pipelines (Texas Intrastate) Inc.                           Texas

Pan Grande Pipeline, L.L.C.                                          Texas

[Texana Pipeline Company                                             N/A]

Enbridge Offshore Pipelines (Seacrest) Inc.                          Texas

Enbridge Offshore Pipelines (UTOS) [L.L.C.]                        Delaware

Enbridge Pipelines (Louisiana Liquids) Inc.                        Delaware

Enbridge Pipelines (Texas Gathering) Inc.                          Delaware

Midcoast Kansas Pipeline, Inc.                                     Delaware

Midcoast Kansas General Partner, Inc.                              Delaware


                                      30




         ENTITY                                                  JURISDICTION OF
         ------                                                   ORGANIZATION
                                                                  ------------
                                                              
Margasco Partnership                                               Oklahoma

Mid-Kansas Partnership                                              Kansas

Riverside Pipeline Company, L.P.                                    Kansas

Nugget Drilling Corporation                                        Minnesota

Midcoast Holdings No. One, Inc.                                    Delaware

Enbridge Pipelines (Alabama Intrastate) Inc.                        Alabama

Enbridge Pipelines (AlaTenn) Inc.                                   Alabama

Enbridge Pipelines (Tennessee Intrastate) Inc.                      Alabama

Enbridge Pipelines (Midla) Inc.                                    Delaware

H&W Pipeline Corporation                                            Alabama

Enbridge Marketing (U.S.) Inc.                                       Texas

Enbridge Pipelines (Alabama Gathering) Inc.                         Alabama

Enbridge Pipelines (Bamagas Intrastate) Inc.                       Delaware

[Enbridge Pipelines (KPC)]                                          Kansas

Enbridge Pipelines (NE Texas) L.L.C.                               Delaware

Enbridge Pipelines (NE Texas Liquids) L.L.C.                       Delaware

Enbridge Gathering (Texarkana) L.L.C.                              Delaware


                                      31




                                   SCHEDULE III

                              FOREIGN QUALIFICATIONS

                                    [TO COME]





                                      32


                                   SCHEDULE IV

                        PERSONS EXECUTING LOCK-UP LETTERS

                                    [TO COME]





                                      33




                                   ANNEX I

                       OPINION OF VINSON & ELKINS L.L.P.

                                  [TO COME]





                                      34


                                   ANNEX II

                         FORM OF LOCAL COUNSEL OPINION

CERTAIN DEFINITIONS

In this form of opinion, the following terms have the following meanings
unless the context otherwise requires:

"CONVERSIONS" will be defined as those listed on a schedule to the opinion,
being the conversions in the steps memo that affect the Operating
Subsidiaries and/or the OSGPs.

"ENBRIDGE ENTITIES" will be defined to mean the Company, the Partnership, the
General Partner, all OSGPs and all Operating Subsidiaries.

"MERGERS" will be defined as those listed on a schedule to the opinion, being
the mergers in the steps memo that affect the Operating Subsidiaries and/or
the OSGPs.

"OPERATING SUBSIDIARIES" means the Partnership's operating subsidiaries who
conduct business in the State, which will be listed on a schedule to the
opinion.

"OSGP" means the general partner(s), if any, of the Operating Subsidiaries,
which will be listed on a schedule to the opinion.

"STATE" means the state as to which counsel is opining.

"TRANSACTIONS" means all the Mergers and Conversions that affect the
Operating Subsidiaries and/or the OSGPs.

FORM OF OPINION

We have acted as special counsel in the State of ____________ to Enbridge
Energy Partners, L.P., a Delaware limited partnership (the "PARTNERSHIP"),
Enbridge Energy Company, Inc., a Delaware corporation (the "GENERAL
PARTNER"), and Enbridge Energy Management, L.L.C., a Delaware limited
liability company (the "COMPANY"), in connection with the transactions
contemplated by that certain Underwriting Agreement dated [date], by and
among the Company, the Partnership, the General Partner, Enbridge Inc., a
Canadian corporation ("ENBRIDGE"), and the underwriters named therein (the
"UNDERWRITING AGREEMENT"). This opinion is being delivered to you pursuant to
the request of our client pursuant to SECTION [7(d)] of the Underwriting
Agreement. All capitalized terms used in this opinion and not otherwise
defined herein shall have the meanings set forth in the Underwriting
Agreement.

In connection with this opinion letter, we have examined copies of the
following documents (the "TRANSACTION DOCUMENTS"):

          (a) the Amended and Restated Limited Liability Company Agreement
      of Management dated [date];

          (b) [list organizational documents of Operating Subsidiaries and
      OSGPs];

          (c) the Underwriting Agreement;


                                      35


          (d) the Registration Statement (File Nos. 333-89552, 333-89588 and
      333-89618) in the form in which it became effective and Prospectus
      dated [___________], 2002;

          (e) [List relevant Plans/Articles/Certificates of Merger/Conversion]
      (the "REORGANIZATION AGREEMENTS");

          (f) [the form of Affidavit of Identity attached hereto as Exhibit
      [__] (the "Affidavit");] and

          (g) [list other documents reviewed].

We also have examined originals, or copies certified or otherwise identified,
of certain records of the Enbridge Entities and Enbridge as furnished to us
by representatives of those entities, certificates of public officials and of
representatives of the Enbridge Entities and Enbridge and statues and other
instruments and documents as a basis for the opinions hereinafter expressed.

[List counsel's customary assumptions - subject to review and comment]

Based on the foregoing and subject to the assumptions, qualifications and
limitations provided herein, we are of the opinion that:

          (1) Each of [the OSGPs] [any Operating Subsidiary that is a limited
      liability company] is duly [qualified] [registered] as a [foreign] limited
      liability company for the transaction of business under the laws of the
      State.

          (2) Each of the Operating Subsidiaries is duly [qualified]
      [registered] as a [foreign] limited partnership for the transaction of
      business under the laws of the State.

          (3) Each of [the OSGPs and] the Operating Subsidiaries has all
      requisite power and authority as a limited liability company [or limited
      partnership, as the case may be,] under the laws of the State to own or
      lease its properties and to conduct its business in the State in each case
      in all material respects to the same extent as described or otherwise
      disclosed in the Prospectus with respect to the Partnership, and, upon the
      consummation of the Transactions, and solely by virtue of the
      Transactions, the [[member(s) of the OSGPs and the] [member(s)][limited
      partner(s)] of the Operating Subsidiaries will not be liable under the
      laws of the State for the liabilities of such entities, except in each
      case to the same extent as under the laws of the State of Delaware.

          (4) Assuming that each of the Transactions were legally sufficient
      under each of the applicable laws (other than the laws of the State as to
      which we make no such assumption, except as expressly set forth herein)
      governing such Transactions to vest in each of the surviving entities the
      assets of the applicable parties to such Transactions, then [(i)] the
      [Transactions] [Mergers] [Conversions] are legally sufficient, under the
      laws of the State, to so vest, directly or indirectly, in the respective
      surviving entities the assets and liabilities of the respective entities
      before each of such [Transactions] [Mergers] [Conversions] located in the
      State [and (ii) the Conversions, together with the filing of a properly
      completed Affidavit of Identity in the office of the County Clerk of each
      county in which property of an Operating Subsidiary is located for all
      assets located in the State, are legally sufficient, under the laws of the
      State, to so vest, directly or indirectly, in the respective surviving
      entities the assets and liabilities of the respective entities before each
      of the Conversions].

          (5) No permit, consent, approval, authorization, order, registration,
      filing or qualification (collectively, "Consents") of or with any court,
      governmental agency or body of the State


                                      36


      having jurisdiction over the Enbridge Entities or Enbridge or any of
      their respective properties, is required for (A) the issuance and sale
      of the Shares by Management or the Units by the Partnership or (B) the
      execution and delivery by [the OSGPs and] the Operating Subsidiaries,
      and the performance by such entities of their obligations under, the
      Transaction Documents to which they are a party, except (a) for such
      Consents required under state securities or "Blue Sky" laws, as to
      which the undersigned does not express any opinion, (b) for such
      Consents which have been obtained or made, (c) for such Consents which
      are (i) of a routine or administrative nature, (ii) not customarily
      obtained or made prior to the consummation of transactions such as
      those contemplated under the Transaction Documents and (iii) expected
      in the reasonable judgment of management of the applicable Enbridge
      Entity to be obtained or made in the ordinary course of business
      subsequent to the consummation of the Transactions, (d) for such
      Consents which, if not obtained or made, would not, individually or in
      the aggregate, have a material adverse effect upon the operations
      conducted or to be conducted as described in the Prospectus in the
      State by the Enbridge Entities, taken as a whole, (e) as disclosed in
      the Prospectus with respect to the Partnership or (f) as otherwise
      required by the Transaction Documents.

          (6) The execution and delivery by [the OSGPs and] the Operating
      Subsidiaries, and the performance by such entities of their obligations
      under, the Transaction Documents to which they are a party has not
      violated and will not violate any statute of the State or any rule,
      regulation or, to our knowledge, any order of any agency of the State
      having jurisdiction over any of the OSGPs and Operating Subsidiaries or
      any of their respective properties, except for any such violations which,
      individually or in the aggregate, would not have a material adverse effect
      on the holders of Units or the operations conducted in the State by the
      OSGPs and the Operating Subsidiaries, taken as a whole.

          (7) [The Affidavit of Identity is in a form legally sufficient for
      recordation in the appropriate public offices of the State, to the extent
      such recordation is required to constitute notice to third parties that
      title to the properties covered thereby is in the applicable Operating
      Subsidiary following the consummation of the Transactions, and, upon
      proper recordation thereof in the State, will constitute notice to all
      third parties under the recordation statutes of the State concerning
      record title to the assets covered thereby. Recordation in the office of
      the [County Clerk] of each county in which property of an Operating
      Subsidiary is located, is the appropriate public office in the State for
      the recordation of deeds, assignments and other evidences of title
      evidencing interests in real property located in such county.]

The opinions expressed herein are effective and based upon laws and matters
existing only as of the date hereof. We disclaim any undertaking to update,
review or modify any opinion herein in the future or in light of future
information, circumstances or changes in law that may effect the opinions
herein.

We express no opinion with respect to (i) title to any of the real or personal
property, (ii) the accuracy of descriptions or references to real or personal
property, (iii) [permits to own or operate any real or personal property,] or
(iv) with respect to state or local taxes or tax statutes including, without
limitation, those to which any of the limited partners of the Partnership may be
subject.

[List counsel's other customary qualifications - subject to review and
comment]

The Enbridge Entities, Enbridge, [list other Enbridge counsel, if any] and
Vinson & Elkins L.L.P. are hereby authorized to rely upon this opinion letter in
connection with the Transactions as if such opinion letter were addressed and
delivered to each of them on the date hereof. Subject to the


                                      37


foregoing, this opinion letter may be relied upon only by you and your
counsel in connection with the Transactions and no other use or distribution
of this opinion letter may be made without our prior written consent.

                                   ANNEX III

                        OPINION OF MCCARTHY TETRAULT LLP

                                   [TO COME]






                                      38



                                   ANNEX IV

                   [FORM OF COMFORT LETTER FOR THE COMPANY]

      Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:

          (i) They are independent certified public accountants with respect to
      the Company and its subsidiaries within the meaning of the Act and the
      applicable published rules and regulations thereunder;

          (ii) In their opinion, the financial statements and any supplementary
      financial information and schedules (and, if applicable, financial
      forecasts and/or pro forma financial information) examined by them and
      included in the Prospectus or the Registration Statement comply as to form
      in all material respects with the applicable accounting requirements of
      the Act and the related published rules and regulations thereunder; and,
      if applicable, they have made a review in accordance with standards
      established by the American Institute of Certified Public Accountants of
      the unaudited consolidated interim financial statements, selected
      financial data, pro forma financial information, financial forecasts
      and/or condensed financial statements derived from audited financial
      statements of the Company for the periods specified in such letter, as
      indicated in their reports thereon, copies of which have been separately
      furnished to the representatives of the Underwriters (the
      "Representatives;

          (iii) They have made a review in accordance with standards established
      by the American Institute of Certified Public Accountants of the unaudited
      condensed consolidated statements of income, consolidated balance sheets
      and consolidated statements of cash flows included in the Prospectus as
      indicated in their reports thereon copies of which have been separately
      furnished to the Representatives and on the basis of specified procedures
      including inquiries of officials of the Company who have responsibility
      for financial and accounting matters regarding whether the unaudited
      condensed consolidated financial statements referred to in paragraph
      (vi)(A)(i) below comply as to form in all material respects with the
      applicable accounting requirements of the Act and the related published
      rules and regulations, nothing came to their attention that cause them to
      believe that the unaudited condensed consolidated financial statements do
      not comply as to form in all material respects with the applicable
      accounting requirements of the Act and the related published rules and
      regulations;

          (iv) The unaudited selected financial information with respect to the
      consolidated results of operations and financial position of the Company
      for the five most recent fiscal years included in the Prospectus agrees
      with the corresponding amounts (after restatements where applicable) in
      the audited consolidated financial statements for such five fiscal years
      which were included or incorporated by reference in the Company's Annual
      Reports on Form 10-K for such fiscal years;

          (v) They have compared the information in the Prospectus under
      selected captions with the disclosure requirements of Regulation S-K and
      on the basis of limited procedures specified in such letter nothing came
      to their attention as a result of the foregoing procedures that caused
      them to believe that this information does not conform in all material
      respects with the disclosure requirements of Items 301, 302, 402 and
      503(d), respectively, of Regulation S-K;


                                      39


          (vi) On the basis of limited procedures, not constituting an
      examination in accordance with generally accepted auditing standards,
      consisting of a reading of the unaudited financial statements and other
      information referred to below, a reading of the latest available interim
      financial statements of the Company and its subsidiaries, inspection of
      the minute books of the Company and its subsidiaries since the date of the
      latest audited financial statements included in the Prospectus, inquiries
      of officials of the Company and its subsidiaries responsible for financial
      and accounting matters and such other inquiries and procedures as may be
      specified in such letter, nothing came to their attention that caused them
      to believe that:

                 (A) (i) the unaudited consolidated statements of income,
              consolidated balance sheets and consolidated statements of cash
              flows included in the Prospectus do not comply as to form in all
              material respects with the applicable accounting requirements of
              the Act and the related published rules and regulations, or (ii)
              any material modifications should be made to the unaudited
              condensed consolidated statements of income, consolidated balance
              sheets and consolidated statements of cash flows included in the
              Prospectus for them to be in conformity with generally accepted
              accounting principles;

                 (B) any other unaudited income statement data and balance sheet
              items included in the Prospectus do not agree with the
              corresponding items in the unaudited consolidated financial
              statements from which such data and items were derived, and any
              such unaudited data and items were not determined on a basis
              substantially consistent with the basis for the corresponding
              amounts in the audited consolidated financial statements included
              in the Prospectus;

                 (C) the unaudited financial statements which were not included
              in the Prospectus but from which were derived any unaudited
              condensed financial statements referred to in clause (A) and any
              unaudited income statement data and balance sheet items included
              in the Prospectus and referred to in clause (B) were not
              determined on a basis substantially consistent with the basis for
              the audited consolidated financial statements included in the
              Prospectus;

                 (D) any unaudited pro forma consolidated condensed financial
              statements included in the Prospectus do not comply as to form in
              all material respects with the applicable accounting requirements
              of the Act and the published rules and regulations thereunder or
              the pro forma adjustments have not been properly applied to the
              historical amounts in the compilation of those statements;

                 (E) as of a specified date not more than five days prior to the
              date of such letter, there have been any changes in the
              consolidated capital stock (other than issuances of capital stock
              upon exercise of options and stock appreciation rights, upon
              earn-outs of performance shares and upon conversions of
              convertible securities, in each case which were outstanding on the
              date of the latest financial statements included in the
              Prospectus) or any increase in the consolidated long-term debt of
              the Company and its subsidiaries, or any decreases in consolidated
              net current assets or stockholders' equity or other items
              specified by the Representatives, or any increases in any items
              specified by the Representatives, in each case as compared with
              amounts shown in the latest balance sheet included in


                                      40


              the Prospectus, except in each case for changes, increases or
              decreases which the Prospectus discloses have occurred or may
              occur or which are described in such letter; and

                 (F) for the period from the date of the latest financial
              statements included in the Prospectus to the specified date
              referred to in clause (E) there were any decreases in consolidated
              net revenues or operating profit or the total or per share amounts
              of consolidated net income or other items specified by the
              Representatives, or any increases in any items specified by the
              Representatives, in each case as compared with the comparable
              period of the preceding year and with any other period of
              corresponding length specified by the Representatives, except in
              each case for decreases or increases which the Prospectus
              discloses have occurred or may occur or which are described in
              such letter; and

          (vii) In addition to the examination referred to in their report(s)
      included in the Prospectus and the limited procedures, inspection of
      minute books, inquiries and other procedures referred to in paragraphs
      (iii) and (vi) above, they have carried out certain specified procedures,
      not constituting an examination in accordance with generally accepted
      auditing standards, with respect to certain amounts, percentages and
      financial information specified by the Representatives, which are derived
      from the general accounting records of the Company and its subsidiaries,
      which appear in the Prospectus, or in Part II of, or in exhibits and
      schedules to, the Registration Statement specified by the Representatives,
      and have compared certain of such amounts, percentages and financial
      information with the accounting records of the Company and its
      subsidiaries and have found them to be in agreement.


                                      41




                                   ANNEX V
                          [FORM OF COMFORT LETTER
             FOR THE PARTNERSHIP, ENBRIDGE AND ENBRIDGE MIDCOAST]

      Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:

          (i) They are independent certified public accountants with respect to
      the Company and its subsidiaries within the meaning of the Act and the
      applicable published rules and regulations thereunder;

          (ii) In their opinion, the financial statements and any supplementary
      financial information and schedules (and, if applicable, financial
      forecasts and/or pro forma financial information) examined by them and
      included or incorporated by reference in the Registration Statement or the
      Prospectus comply as to form in all material respects with the applicable
      accounting requirements of the Act or the Exchange Act, as applicable, and
      the related published rules and regulations thereunder; and, if
      applicable, they have made a review in accordance with standards
      established by the American Institute of Certified Public Accountants of
      the consolidated interim financial statements, selected financial data,
      pro forma financial information, financial forecasts and/or condensed
      financial statements derived from audited financial statements of the
      Company for the periods specified in such letter, as indicated in their
      reports thereon, copies of which have been separately furnished to the
      representatives of the Underwriters (the "Representatives");

          (iii) They have made a review in accordance with standards established
      by the American Institute of Certified Public Accountants of the unaudited
      condensed consolidated statements of income, consolidated balance sheets
      and consolidated statements of cash flows included in the Prospectus
      and/or included in the Company's quarterly report on Form 10-Q
      incorporated by reference into the Prospectus as indicated in their
      reports thereon copies of which have been separately furnished to the
      Representatives; and on the basis of specified procedures including
      inquiries of officials of the Company who have responsibility for
      financial and accounting matters regarding whether the unaudited condensed
      consolidated financial statements referred to in paragraph (vi)(A)(i)
      below comply as to form in the related in all material respects with the
      applicable accounting requirements of the Act and the Exchange Act and the
      related published rules and regulations, nothing came to their attention
      that caused them to believe that the unaudited condensed consolidated
      financial statements do not comply as to form in all material respects
      with the applicable accounting requirements of the Act and the Exchange
      Act and the related published rules and regulations;

          (iv) The unaudited selected financial information with respect to the
      consolidated results of operations and financial position of the Company
      for the five most recent fiscal years included in the Prospectus and
      included or incorporated by reference in Item 6 of the Company's Annual
      Report on Form 10-K for the most recent fiscal year agrees with the
      corresponding amounts (after restatement where applicable) in the audited
      consolidated financial statements for such five fiscal years which were
      included or incorporated by reference in the Company's Annual Reports on
      Form 10-K for such fiscal years;

          (v) They have compared the information in the Prospectus under
      selected captions with the disclosure requirements of Regulation S-K and
      on the basis of limited procedures specified in such letter nothing came
      to their attention as a result of the foregoing procedures


      that caused them to believe that this information does not conform in all
      material respects with the disclosure requirements of Items 301, 302, 402
      and 503(d), respectively, of Regulation S-K;

          (vi) On the basis of limited procedures, not constituting an
      examination in accordance with generally accepted auditing standards,
      consisting of a reading of the unaudited financial statements and other
      information referred to below, a reading of the latest available interim
      financial statements of the Company and its subsidiaries, inspection of
      the minute books of the Company and its subsidiaries since the date of the
      latest audited financial statements included or incorporated by reference
      in the Prospectus, inquiries of officials of the Company and its
      subsidiaries responsible for financial and accounting matters and such
      other inquiries and procedures as may be specified in such letter, nothing
      came to their attention that caused them to believe that:

                 (A) (i) the unaudited condensed consolidated statements of
              income, consolidated balance sheets and consolidated statements of
              cash flows included in the Prospectus and/or included or
              incorporated by reference in the Company's Quarterly Reports on
              Form 10-Q incorporated by reference in the Prospectus do not
              comply as to form in all material respects with the applicable
              accounting requirements of the Exchange Act and the related
              published rules and regulations, or (ii) any material
              modifications should be made to the unaudited condensed
              consolidated statements of income, consolidated balance sheets and
              consolidated statements of cash flows included in the Prospectus
              or included in the Company's Quarterly Reports on Form 10-Q
              incorporated by reference in the Prospectus, for them to be in
              conformity with generally accepted accounting principles;

                 (B) any other unaudited income statement data and balance sheet
              items included in the Prospectus do not agree with the
              corresponding items in the unaudited consolidated financial
              statements from which such data and items were derived, and any
              such unaudited data and items were not determined on a basis
              substantially consistent with the basis for the corresponding
              amounts in the audited consolidated financial statements included
              or incorporated by reference in the Company's Annual Report on
              Form 10-K for the most recent fiscal year;

                 (C) the unaudited financial statements which were not included
              in the Prospectus but from which were derived the unaudited
              condensed financial statements referred to in clause (A) and any
              unaudited income statement data and balance sheet items included
              in the Prospectus and referred to in clause (B) were not
              determined on a basis substantially consistent with the basis for
              the audited financial statements included or incorporated by
              reference in the Company's Annual Report on Form 10-K for the most
              recent fiscal year;

                 (D) any unaudited pro forma consolidated condensed financial
              statements included or incorporated by reference in the Prospectus
              do not comply as to form in all material respects with the
              applicable accounting requirements of the Act and the published
              rules and regulations thereunder or the pro forma adjustments have
              not been properly applied to the historical amounts in the
              compilation of those statements;



                 (E) as of a specified date not more than five days prior to the
              date of such letter, there have been any changes in the
              consolidated capital stock (other than issuances of capital stock
              upon exercise of options and stock appreciation rights, upon
              earn-outs of performance shares and upon conversions of
              convertible securities, in each case which were outstanding on the
              date of the latest balance sheet included or incorporated by
              reference in the Prospectus) or any increase in the consolidated
              long-term debt of the Company and its subsidiaries, or any
              decreases in consolidated net current assets or stockholders'
              equity or other items specified by the Representatives, or any
              increases in any items specified by the Representatives, in each
              case as compared with amounts shown in the latest balance sheet
              included or incorporated by reference in the Prospectus, except in
              each case for changes, increases or decreases which the Prospectus
              discloses have occurred or may occur or which are described in
              such letter; and

                 (F) for the period from the date of the latest financial
              statements included or incorporated by reference in the Prospectus
              to the specified date referred to in clause (E) there were any
              decreases in consolidated net revenues or operating profit or the
              total or per share amounts of consolidated net income or other
              items specified by the Representatives, or any increases in any
              items specified by the Representatives, in each case as compared
              with the comparable period of the preceding year and with any
              other period of corresponding length specified by the
              Representatives, except in each case for increases or decreases
              which the Prospectus discloses have occurred or may occur or which
              are described in such letter; and

          (vii) In addition to the examination referred to in their report(s)
      included or incorporated by reference in the Prospectus and the limited
      procedures, inspection of minute books, inquiries and other procedures
      referred to in paragraphs (iii) and (vi) above, they have carried out
      certain specified procedures, not constituting an examination in
      accordance with generally accepted auditing standards, with respect to
      certain amounts, percentages and financial information specified by the
      Representatives which are derived from the general accounting records of
      the Company and its subsidiaries, which appear in the Prospectus
      (excluding documents incorporated by reference) or in Part II of, or in
      exhibits and schedules to, the Registration Statement specified by the
      Representatives or in documents incorporated by reference in the
      Prospectus specified by the Representatives, and have compared certain of
      such amounts, percentages and financial information with the accounting
      records of the Company and its subsidiaries and have found them to be in
      agreement.

EX-3.3

                                                                     EXHIBIT 3.3








                              AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.





                       DATED AS OF ________________, 2002





                              AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.
                      A DELAWARE LIMITED LIABILITY COMPANY


                                TABLE OF CONTENTS

                                                                                          
                                    ARTICLE I
                                   DEFINITIONS


SECTION 1.01.       Definitions................................................................1

SECTION 1.02.       Construction...............................................................7

                                    ARTICLE II
                                   ORGANIZATION

SECTION 2.01.       Formation and Continuation.................................................8

SECTION 2.02.       Name.......................................................................8

SECTION 2.03.       Registered Office; Registered Agent; Principal Office; Other Offices.......8

SECTION 2.04.       Purpose; Powers............................................................8

SECTION 2.05.       Foreign Qualification......................................................9

SECTION 2.06.       Power of Attorney..........................................................9

SECTION 2.07.       Term......................................................................10

SECTION 2.08.       Taxation as Corporation; No State-Law Partnership.........................10

SECTION 2.09.       Title to Company Assets...................................................10

                                   ARTICLE III
                           SHAREHOLDERS; CERTIFICATES;
                          TRANSFER OF COMPANY SECURITIES

SECTION 3.01.       Shareholders..............................................................11

SECTION 3.02.       No Liability to Third Parties.............................................11

SECTION 3.03.       No Resignation or Expulsion...............................................11

SECTION 3.04.       Certificates..............................................................11

SECTION 3.05.       Register, Registration of Transfer and Exchange...........................12

SECTION 3.06.       Mutilated, Destroyed, Lost or Stolen Certificates.........................13

                                   ARTICLE IV
               AUTHORIZATION AND ISSUANCE OF COMPANY SECURITIES

SECTION 4.01.       Company Securities........................................................14

SECTION 4.02.       Voting Shares.............................................................15

SECTION 4.03.       Listed Shares.............................................................17

SECTION 4.04.       Splits and Combinations...................................................20

SECTION 4.05.       Withholding...............................................................21

                                       i


                                    ARTICLE V
                                   MANAGEMENT

SECTION 5.01.       Management of the Company's Affairs.......................................21

SECTION 5.02.       Board of Directors........................................................21

SECTION 5.03.       Restrictions on the Board of Directors' Authority.........................23

SECTION 5.04.       Committees................................................................23

SECTION 5.05.       Officers..................................................................24

SECTION 5.06.       Compensation..............................................................26

SECTION 5.07.       Business Opportunities....................................................26

SECTION 5.08.       Interested Officers or Directors..........................................27

SECTION 5.09.       Resolutions of Conflicts of Interest......................................27

SECTION 5.10.       Duties of Record Holders of Voting Shares and Directors...................28

SECTION 5.11.       Indemnification...........................................................29

SECTION 5.12.       Liability of Indemnitees..................................................31

SECTION 5.13.       Facsimile Signatures......................................................31

                                   ARTICLE VI
                               BOOKS AND RECORDS;
                            INFORMATION AND ACCOUNTS

SECTION 6.01.       Maintenance of Books and Records..........................................31

SECTION 6.02.       Information...............................................................32

SECTION 6.03.       Accounts..................................................................32

                                   ARTICLE VII
              DISSOLUTION, WINDING-UP AND TERMINATION; CERTAIN MERGERS

SECTION 7.01.       Dissolution...............................................................32

SECTION 7.02.       Winding-Up and Termination................................................33

SECTION 7.03.       Merger Relating to Change in Tax Status...................................33

                                  ARTICLE VIII
                             AMENDMENT OF AGREEMENT;
                        SHAREHOLDER MEETINGS; RECORD DATE

SECTION 8.01.       Amendment Procedures......................................................34

SECTION 8.02.       Meetings..................................................................34

SECTION 8.03.       Notice of a Meeting.......................................................35

SECTION 8.04.       Record Date...............................................................35

SECTION 8.05.       Adjournment...............................................................35

SECTION 8.06.       Waiver of Notice; Approval of Meeting; Approval of Minutes................35

SECTION 8.07.       Quorum; Voting............................................................36

SECTION 8.08.       Conduct of Meeting........................................................36

SECTION 8.09.       Action Without a Meeting..................................................36

SECTION 8.10.       Voting and Other Rights...................................................37

                                       ii


                                   ARTICLE IX
                                   COVENANTS

SECTION 9.01.       Covenants.................................................................38

                                   ARTICLE X
                              GENERAL PROVISIONS

SECTION 10.01.      Fiscal Year...............................................................38

SECTION 10.02.      Offset....................................................................38

SECTION 10.03.      Notices...................................................................38

SECTION 10.04.      Entire Agreement..........................................................39

SECTION 10.05.      Waiver....................................................................39

SECTION 10.06.      Binding Effect............................................................39

SECTION 10.07.      Governing Law; Severability...............................................39

SECTION 10.08.      Further Action............................................................39

SECTION 10.09.      No Right to Action for Dissolution or Partition...........................39

SECTION 10.10.      Third-Party Beneficiaries.................................................39

SECTION 10.11.      Creditors.................................................................40

SECTION 10.12.      Counterparts..............................................................40




ANNEX A - Purchase Provisions
ANNEX B - Delegation of Control Agreement


















                                      iii


                              AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.

      This Amended and Restated Limited Liability Company Agreement of
Enbridge Energy Management, L.L.C., a Delaware limited liability company (the
"COMPANY"), dated as of _____________, 2002, is agreed to by and among
Enbridge Energy Company, Inc., a Delaware corporation (the "ORGANIZATIONAL
SHAREHOLDER"), and any other Persons (as defined below) who become
Shareholders (as defined below) of the Company or parties hereto as provided
herein.

                                    ARTICLE I
                                   DEFINITIONS

      SECTION 1.01. DEFINITIONS. As used in this Agreement, except as defined
otherwise in the Purchase Provisions (within each of which the definitions in
which shall control), the following terms shall have the following respective
meanings:

      "ACT" means the Delaware Limited Liability Company Act, as amended from
time to time, and any successor to such statute.

      "AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, the Person in question. As used in this definition of "AFFILIATE," the
term "CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

      "AGREEMENT" means this Amended and Restated Limited Liability Company
Agreement, including the Purchase Provisions, as amended, supplemented or
restated from time to time.

      "ASSIGNEE" means a Person to whom one or more Company Securities have
been transferred in a manner permitted under this Agreement.

      "AUDIT COMMITTEE" has the meaning assigned to such term in SECTION
5.04(c).

      "AVERAGE MARKET PRICE" means, except as otherwise provided in the
Purchase Provisions, the average of the daily Closing Prices per Listed Share
during the ten consecutive Trading Days prior to the date on which the Listed
Shares begin to trade ex-dividend, but not including that date. For the
purpose of this definition, the "date on which the Listed Shares begin to
trade ex-dividend" means the date on which "EX-DIVIDEND" trading commences
for a Share Distribution on the principal National Securities Exchange on
which the Listed Shares are then listed or admitted to trading.

      "BANKRUPTCY" or "BANKRUPT" means, with respect to any Person, that (a)
such Person (i) makes a general assignment for the benefit of creditors; (ii)
files a voluntary petition in bankruptcy; (iii) is insolvent or has entered
against such Person an order for relief in any

                                       1


bankruptcy or insolvency proceeding; (iv) files a petition or answer seeking
for such Person any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any Law; (v) files an answer
or other pleading admitting or failing to contest the material allegations of
a petition filed against such Person in a proceeding of the type described in
subclauses (i) through (iv) of this clause (a); or (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of such
Person or of all or any substantial part of such Person's properties; or (b)
120 days have passed after the commencement of any proceeding seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any Law, if the proceeding has not been
dismissed, or 90 days have passed after the appointment without such Person's
consent or the acquiescence of a trustee, receiver or liquidator of such
Person or of all or any substantial part of such Person's properties, if the
appointment is not vacated or stayed, or 90 days have passed after the date
of expiration of any such stay, if the appointment has not been vacated.

      "BENEFICIAL OWNER" has the meaning set forth in Rules 13d-3 and 13d-5
under the Exchange Act, as in effect on the date of this Agreement, and the
terms "BENEFICIAL OWNERSHIP," "BENEFICIALLY OWN," "BENEFICIALLY OWNED" and
similar terms have correlative meanings.

      "BOARD OF DIRECTORS" has the meaning assigned to it in SECTION 5.01(a).

      "CERTIFICATE" has the meaning assigned to it in SECTION 3.04(a).

      "CERTIFICATE OF MERGER" means any certificate of merger or similar
document filed with any Secretary of State or similar governmental authority
pursuant to the Act or any other applicable Law in connection with a merger
of the Company pursuant to SECTION 7.03.

      "CHAIRMAN OF THE BOARD" has the meaning assigned to it in SECTION
5.02(g).

      "CLASS A COMMON UNIT" has the meaning assigned to it in the Partnership
Agreement.

      "CLOSING DATE" means the date of the sale by the Company of Listed
Shares to the Underwriters pursuant to the Underwriting Agreement.

      "CLOSING PRICE" means (a) for securities that are listed on a National
Securities Exchange, the last sale price for that day, regular way, or, if
there are no sales on that day, the average of the closing bid and asked
prices for that day, regular way, in either case as reported in the principal
composite transactions reporting system for the principal National Securities
Exchange on which the securities are listed; or (b) for securities that are
not listed on a National Securities Exchange, (i) the last quoted price on
that day, or if no price is quoted, the average of the high bid and low asked
prices on that day, each as reported by the National Association of
Securities Dealers Automated Quotation System; (ii) if on that day the
securities are not so quoted, the average of the closing bid and asked prices
on that day furnished by a professional market maker in the securities
selected by the Board of Directors in its sole discretion; or (iii) if on
that day no market maker is making a market in the securities, the fair value
of the securities as determined by the Board of Directors in its sole
discretion.

                                       2


      "CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time and as interpreted by the applicable regulations
thereunder. All references herein to a specific SECTION or SECTIONs of the
Code shall be deemed to include a reference to any corresponding provision or
provisions of future Law.

      "COMMON UNIT" has the meaning assigned to it in the Partnership
Agreement.

      "COMPANY" means Enbridge Energy Management, L.L.C., a Delaware limited
liability company.

      "COMPANY SECURITIES" means any equity securities of the Company and
includes Voting Shares, Listed Shares and any other series or class of equity
securities that may be approved in accordance with SECTION 4.01(a), as the
context requires.

      "DELEGATION OF CONTROL AGREEMENT" means the Delegation of Control
Agreement dated as of _____________, 2002 among the Organizational
Shareholder, the Partnership and the Company, attached hereto as Annex B, as
amended, supplemented or restated from time to time.

      "DGCL" means the General Corporation Law of the State of Delaware, as
amended.

      "DIRECTOR" means a member of the Board of Directors elected as provided
in SECTION 5.02, but such term does not include any Person who has ceased to
be a member of the Board of Directors. Directors are "managers" (as such term
is defined in the Act) of the Company.

      "DISPOSE", "DISPOSING" or "DISPOSITION" means, with respect to any
Company Security or Shareholder Interest, a sale, assignment, transfer,
conveyance, gift, exchange or other disposition of such Company Security or
Shareholder Interest, whether such disposition be voluntary, involuntary or
by operation of Law, including the following: (a) in the case of a Company
Security or Shareholder Interest owned by a natural person, a transfer of
such Company Security or Shareholder Interest upon the death of its owner,
whether by will, intestate succession or otherwise; (b) in the case of
Company Security or Shareholder Interest owned by an entity, (i) a merger or
consolidation of such entity (other than where such entity is the survivor
thereof), (ii) a conversion of such entity into another type of entity, or
(iii) a distribution of such Company Security or Shareholder Interest,
including in connection with the dissolution, liquidation, winding-up or
termination of such entity (unless, in the case of dissolution, such entity's
business is continued without the commencement of liquidation or winding-up);
and (c) a disposition in connection with, or in lieu of, a foreclosure of an
Encumbrance; but such terms shall not include the creation of an Encumbrance.

      "DISSOLUTION EVENT" has the meaning assigned to it in SECTION 7.01(a).

      "ENBRIDGE INC." means Enbridge Inc., a Canadian corporation, and its
successor by merger, consolidation or acquisition of all or substantially all
of its assets.

                                       3


      "ENCUMBER", "ENCUMBERING" or "ENCUMBRANCE" means the creation of a
security interest, lien, pledge, mortgage or other encumbrance, whether such
encumbrance be voluntary, involuntary or by operation of Law.

      "ENTITY" means a corporation, limited liability company, joint venture,
partnership, trust, unincorporated organization, association or other entity.

      "EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended from time to time, and any successor to such statute and all rules
and regulations promulgated thereunder.

      "GROUP" means a "GROUP" of Persons as defined in SECTION 13(d)(3) of
the Exchange Act.

      "INCENTIVE PLAN" means any plan or arrangement pursuant to which the
Company may compensate its Directors, Officers, employees, consultants, and
service providers.

      "INDEMNITEES" means (a) the Record Holders of Voting Shares; (b) any
Person who is or was an Affiliate of the Record Holders of Voting Shares; (c)
any Person who is or was an officer, director, employee, partner, agent or
trustee of the Record Holders of Voting Shares, the Company or any of their
respective Affiliates; or (d) any Person who is or was serving at the request
of the Record Holders of Voting Shares, the Company or any of their
respective Affiliates as a director, officer, employee, partner, agent or
trustee of another Person.

      "INITIAL PUBLIC OFFERING" means the consummation of the first
underwritten public offering of Listed Shares pursuant to an effective
registration statement filed under the Securities Act, as underwritten by the
Underwriters pursuant to the Underwriting Agreement.

      "I-UNIT" has the meaning assigned to it in the Partnership Agreement.

      "LAW" means any applicable constitutional provision, statute, act, code
(including the Code), law, regulation, rule, ordinance, order, decree,
ruling, proclamation, resolution, judgment, decision, declaration or
interpretative or advisory opinion or letter of a governmental authority, and
includes any applicable rule of any National Securities Exchange on which
Company Securities are traded or listed.

      "LIQUIDATOR" has the meaning assigned to such term in SECTION 7.02(a).

      "MERGER AGREEMENT" means any agreement and plan of merger or similar
agreement entered into by the Company in connection with any merger pursuant
to SECTION 7.03.

      "LISTED SHARE" has the meaning assigned to it in SECTION 4.01(a).

      "NATIONAL SECURITIES EXCHANGE" means an exchange registered with the
Securities and Exchange Commission under SECTION 6(a) of the Exchange Act.

                                       4


      "OFFICER" means any Person elected as an officer of the Company as
provided in SECTION 5.05, but such term does not include any Person who has
ceased to be an officer of the Company. Officers are "MANAGERS" (as such term
is defined in the Act) of the Company.

      "OPERATING SUBSIDIARIES" has the meaning assigned to it in the
Partnership Agreement.

      "OPINION OF COUNSEL" means a written opinion of counsel (who may be
regular counsel to the Company or any Affiliate thereof) acceptable to the
Board of Directors, any committee thereof or any Officer.

      "ORGANIZATIONAL CERTIFICATE" has the meaning assigned to it in SECTION
2.01.

      "ORGANIZATIONAL SHAREHOLDER" means Enbridge Energy Company, Inc., a
Delaware corporation.

      "OUTSTANDING" means, with respect to any Company Securities, all
Company Securities that are issued by the Company and reflected as
outstanding on the books and records of the Company (including the Transfer
Agent) as of the date of determination, excluding Company Securities held in
treasury; PROVIDED, HOWEVER, that (a) any Listed Shares that are Beneficially
Owned by any Person or Group, excluding the Record Holders of Voting Shares
and their Affiliates, shall not be considered to be Outstanding for the
purposes of SECTION 4.03(d) and Article 8 if the sum of the number of Listed
Shares Beneficially Owned by such Person or Group plus the number of Common
Units Beneficially Owned by such Person or Group equals 20% or more of the
sum of the aggregate number of Listed Shares that are issued by the Company
and reflected as outstanding on the books and records of the Company
(including the Transfer Agent) as of the date of determination, but not
including Listed Shares held in treasury, plus the aggregate number of Common
Units that are issued by the Partnership and reflected as outstanding on the
books and records of the Partnership (including any transfer agent) as of the
date of determination, but not including Common Units held in treasury; and
(b) any Voting Shares or Listed Shares that are Beneficially Owned by the
Record Holder of Voting Shares shall not be considered to be Outstanding for
purposes of (i) any matter in respect of which the Record Holders of Voting
Shares are and their Affiliates are not entitled to vote any Voting Shares
pursuant to SECTION 4.02(b), and (ii) any matter that is presented to the
Record Holders of Listed Shares pursuant to SECTION 4.03(d).

      "PARTNERSHIP" means Enbridge Energy Partners, L.P., a Delaware limited
partnership.

      "PARTNERSHIP AGREEMENT" means the Third Amended and Restated Agreement
of Limited Partnership of the Partnership dated as of _____________, 2002, as
amended, supplemented or restated from time to time.

      "PERSON" means a natural person or an Entity.

      "PRIOR AGREEMENT" means the Limited Liability Company Agreement of the
Company dated as of May 14, 2002.

                                       5


      "PURCHASE PROVISIONS" means the Purchase Provisions executed and
adopted by Enbridge Inc. and attached hereto as Annex A, as amended,
supplemented or restated from time to time, which are an integral part of
this Agreement.

      "RECORD DATE" means the date established by the Board of Directors for
determining (a) the identity of the Record Holders entitled to notice of, or
to vote at, any meeting of the Shareholders or entitled to vote by ballot or
give approval of a Company action in writing without a meeting or entitled to
exercise rights in respect of any lawful action of the Shareholders, (b) the
identity of the Record Holders entitled to notice with respect to any other
matter, or (c) the identity of the Record Holders entitled to receive any
distribution, including a Share Distribution.

      "RECORD HOLDER" means the Person in whose name a Company Security is
registered on the books and records of the Company or the Transfer Agent as
contemplated in SECTION 3.05.

      "RESIGN" or "RESIGNATION" means the resignation, withdrawal or
retirement of a Shareholder from the Company as a Shareholder. Such terms
shall not include any Disposition of any Company Security, even though the
Shareholder making a Disposition may cease to be a Shareholder as a result of
such Disposition.

      "SECURITIES ACT" means the United States Securities Act of 1933, as
amended from time to time, and any successor to such statute and all rules
and regulations promulgated thereunder.

      "SECURITIES AND EXCHANGE COMMISSION" means the Securities and Exchange
Commission of the United States and any successor thereto.

      "SHARE DISTRIBUTION" means a distribution in respect of a Company
Security made or required to be made in an additional Company Security or a
fraction thereof to any Shareholder pursuant to the terms of the Company
Securities held by such Shareholder.

      "SHAREHOLDER" means any Person admitted as a shareholder in accordance
with SECTION 3.01(a), but such term does not include any Person who has
ceased to be a Record Holder of any Company Security. Shareholders are
"members" (as such term is defined in the Act) of the Company.

      "SHAREHOLDER INTEREST" means a limited liability company interest (as
such term is defined in the Act) of a Shareholder, including the right to
receive Share Distributions and other distributions from the Company,
together with all other rights, benefits and privileges enjoyed by the
Shareholder (under the Act, the Organizational Certificate, this Agreement or
otherwise) in its capacity as a Shareholder, including the right to vote,
consent and approve, and all obligations, duties and liabilities imposed on
the Shareholder (under the Act, the Organizational Certificate, this
Agreement or otherwise) in its capacity as a Shareholder.

      "TAX INDEMNIFICATION AGREEMENT" means the Tax Indemnification Agreement
dated as of _______________, 2002 between the Company and Enbridge Inc., as
amended, supplemented or restated from time to time.

                                       6


      "TAX STATUS EVENT" means any event causing the Partnership to be
taxable as a corporation or otherwise taxed as an entity for U.S. federal
income tax purposes.

      "TRADING DAY" means, with respect to Listed Shares or Common Units, a
day on which the principal National Securities Exchange on which the Listed
Shares or Common Units, as the case may be, are listed or admitted to trading
is open for business or, if the Listed Shares or Common Units, as the case
may be, are not listed or admitted to trading on any National Securities
Exchange, a day on which banking institutions in New York, New York generally
are open.

      "TRANSFER AGENT" means any bank, trust company or other Person
(including the COMPANY or any Affiliate) appointed from time to time by the
Board of Directors to act as registrar and transfer agent for the Company
Securities. Initially, Mellon Investor Services shall be the Transfer Agent
for the Listed Shares.

      "TREASURY REGULATIONS" means the regulations promulgated by the United
States Department of the Treasury pursuant to and in respect of provisions of
the Code. All references herein to SECTIONs of the Treasury Regulations shall
include any corresponding provisions of succeeding, similar, substitute,
proposed or final Treasury Regulations.

      "UNDERWRITERS" means Goldman, Sachs & Co. as representative of the
several underwriters named in Schedule I to the Underwriting Agreement.

      "UNDERWRITING AGREEMENT" means the Underwriting Agreement dated as of
_________, 2002 among the Underwriters, the Company, the Organizational
Shareholder, Enbridge Inc., and the Partnership, providing for the purchase
of Listed Shares by the Underwriters, as amended, supplemented or restated
from time to time.

      "UNIT" has the meaning assigned to it in the Partnership Agreement.

      "VOTING SHARE" has the meaning assigned to it in SECTION 4.01(a).

      SECTION 1.02.  CONSTRUCTION.  Unless the context requires otherwise:

            (a) terms defined in SECTION 1.01 have the meanings assigned to them
      in that SECTION for purposes of this Agreement; terms defined in the
      Purchase Provisions and also in this Agreement shall, in the Purchase
      Provisions, have the meanings ascribed to them therein;

            (b)   the gender (or lack of gender) of all words used in this
      Agreement includes the masculine, feminine and neuter;

            (c) references to Articles and SECTIONs (other than in connection
      with the Code, the Treasury Regulations or the Act) refer to Articles and
      SECTIONs, respectively, of this Agreement;

                                       7


            (d) the words "HEREIN," "HEREOF," "HEREUNDER" and other words of
      similar import refer to this Agreement as a whole and not to any
      particular Article or SECTION, except as otherwise provided in the
      Purchase Provisions;

            (e)   "INCLUDE," "INCLUDES" and "INCLUDING" mean "INCLUDE, WITHOUT
      LIMITATION," "INCLUDES, WITHOUT LIMITATION" and "INCLUDING, WITHOUT
      LIMITATION," respectively;

            (f)   terms defined herein include the plural as well as the
      singular; and

            (g)   "OR" is not exclusive.

                                   ARTICLE II
                                  ORGANIZATION

      SECTION 2.01.  FORMATION AND CONTINUATION. The Company was organized as
a Delaware limited liability company by the filing of a Certificate of
Formation on May 14, 2002 (as amended, supplemented or restated from time to
time, the "ORGANIZATIONAL CERTIFICATE"), pursuant to the Act. The
Organizational Shareholder, as the initial Shareholder, hereby continues the
existence of the Company as a limited liability company pursuant to the
provisions of the Act.

      SECTION 2.02.  NAME.  The name of the Company is "Enbridge Energy
Management, L.L.C." and all Company business shall be conducted in that name
or such other names that comply with Law and as the Board of Directors may
select.

      SECTION 2.03.  REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE;
OTHER OFFICES. The registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the initial
registered agent for service of process named in the Organizational
Certificate or such other office (which need not be a place of business of
the Company) as the Board of Directors may designate in the manner provided
by Law. The registered agent for service of process of the Company in the
State of Delaware shall be the initial registered agent for service of
process named in the Organizational Certificate or such other Person or
Persons as the Board of Directors may designate in the manner provided by
Law. The principal office of the Company in the United States shall be
located at 1100 Louisiana, Suite 3300, Houston, Texas 77002, or such other
place as the Board of Directors may from time to time designate, which need
not be in the State of Delaware, and the Company shall maintain records there
and shall keep the street address of such principal office at the registered
office of the Company in the State of Delaware. The Company may have such
other offices as the Board of Directors may designate.

      SECTION 2.04.  PURPOSE; POWERS. The purposes of the Company are to
Beneficially Own, directly or through one or more Affiliates, limited partner
interests in the Partnership, to manage and control, directly or through one
or more Affiliates, the business and affairs of the Partnership and the
Operating Subsidiaries pursuant to the Delegation of Control Agreement and to
engage in any lawful business, purpose or activity related thereto. The
Company shall possess

                                       8


and may exercise all the powers and privileges granted by the Act, by any
other Law or by this Agreement, together with any powers incidental thereto,
including such powers and privileges as are necessary or convenient to the
conduct, promotion or attainment of the business, purposes or activities of
the Company.

      SECTION 2.05.  FOREIGN QUALIFICATION. Prior to the Company's conducting
business in any jurisdiction other than the State of Delaware, the Board of
Directors shall cause the Company to comply, to the extent procedures are
available and those matters are reasonably within the control of the Board of
Directors, with all requirements necessary to qualify the Company as a
foreign limited liability company in that jurisdiction.

      SECTION 2.06.  POWER OF ATTORNEY.

            (a) Each Shareholder does hereby constitute and appoint each Person
      specifically authorized by the Board of Directors or any Liquidator to act
      as its true and lawful representative and attorney-in-fact, in its name,
      place and stead, to execute, swear to, acknowledge, deliver and file:

                  (i) in the appropriate public offices (A) all certificates,
            documents and other instruments (including, without limitation, this
            Agreement and the Organizational Certificate and all amendments or
            restatements thereof) that the Board of Directors or the Liquidator
            deems necessary or appropriate to form, qualify or continue the
            existence or qualification of the Company in the State of Delaware
            and in all other jurisdictions in which the Company may conduct
            business or own property; (B) all certificates, documents and other
            instruments that the Board of Directors or the Liquidator deems
            necessary or appropriate to reflect, in accordance with its terms,
            any amendment, change, modification or restatement of this
            Agreement; (C) all certificates, documents and other instruments
            (including, without limitation, conveyances and a certificate of
            cancellation) that the Board of Directors or the Liquidator deems
            necessary or appropriate to reflect the dissolution and liquidation
            of the Company pursuant to the terms of this Agreement; (D) all
            certificates, documents and other instruments relating to the
            transfer of any Company Security; (E) all certificates, documents
            and other instruments relating to the determination of the rights,
            preferences and privileges of any class or series of Company
            Securities; and (F) all certificates, documents and other
            instruments (including, without limitation, agreements and a
            certificate of merger) relating to a merger or consolidation of the
            Company; and

                  (ii) all ballots, consents, approvals, waivers, certificates
            and other instruments necessary or appropriate, in the sole
            discretion of the Board of Directors or the Liquidator, to make,
            evidence, give, confirm or ratify any vote, consent, approval,
            agreement or other action that is made or given by the Shareholders
            hereunder or is consistent with the terms of this Agreement or is
            necessary or appropriate, in the sole discretion of the Board of
            Directors or the Liquidator, to effectuate the terms or intent of
            this Agreement; PROVIDED HOWEVER,

                                       9


            that when required by any provision of this Agreement that
            establishes a percentage of Company Securities or of Company
            Securities of any class or series required to take any action,
            the Board of Directors or the Liquidator may exercise the power of
            attorney made in this SECTION 2.06 only after the required vote,
            consent or approval of the percentage of Company Securities or of
            Company Securities of such class or series.

            (b) The foregoing power of attorney is hereby declared to be
      irrevocable and a power coupled with an interest; and it shall survive and
      not be affected by the subsequent death, incompetency, disability,
      incapacity, dissolution, bankruptcy or termination of any Shareholder and
      the transfer of all or any portion of such Shareholder's Shareholder
      Interest, and shall extend to all Assignees. Each Shareholder hereby
      agrees to be bound by any act of the Person or Persons specifically
      authorized by the Board of Directors or the Liquidator acting in good
      faith pursuant to such power of attorney, and each Shareholder hereby
      waives any and all defenses that may be available to contest, negate or
      disaffirm the action of such authorized Person taken in good faith under
      such power of attorney. Each Shareholder shall execute and deliver to such
      authorized Person, within 15 days after receipt of a request therefor from
      such authorized Person, such further designations, powers of attorney and
      other instruments as the Board of Directors, the Liquidator or such
      authorized Person deems necessary to effectuate this Agreement and the
      purposes of the Company.

      SECTION 2.07.  TERM. The term of the Company commenced on May 14, 2002,
which was the date of the filing of the Organizational Certificate in the
office of the Secretary of State of the State of Delaware, and the Company's
existence shall be perpetual, unless and until the Company is dissolved or
merged out of existence in accordance with Article 7.

      SECTION 2.08.  TAXATION AS CORPORATION; NO STATE-LAW PARTNERSHIP. The
Company shall elect pursuant to SECTIONs 301.7701-2 and 301.7701-3 of the
Treasury Regulations to be treated as a corporation for all purposes under
the Code. The Shareholders intend that the Company not be a partnership
(including a limited partnership) or joint venture, that no Shareholder be a
partner or joint venturer of any other Shareholder, and that this Agreement
may not be construed to suggest otherwise.

      SECTION 2.09.  TITLE TO COMPANY ASSETS. Title to Company assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Company as an entity, and no Shareholder, Director
or Officer, individually or collectively, shall have any ownership interest
in any Company assets or any portion thereof. Title to any or all of the
Company assets may be held in the name of the Company or one or more of its
Affiliates or one or more nominees, as the Board of Directors may determine.
All Company assets shall be recorded as the property of the Company in its
books and records, irrespective of the name in which record title to the
Company assets is held.

                                       10


                                   ARTICLE III
                           SHAREHOLDERS; CERTIFICATES;
                         TRANSFER OF COMPANY SECURITIES

      SECTION 3.01.  SHAREHOLDERS

            (a) A Person shall be admitted as a Shareholder, and shall become
      bound by this Agreement, if such Person executes this Agreement or,
      without such execution, if such Person purchases or otherwise acquires a
      Company Security and becomes the Record Holder of such Company Security in
      accordance with the provisions of SECTION 3.05. Unless otherwise provided
      in this Agreement, a Person may become a Record Holder without the consent
      or approval of any of the Shareholders. All rights of Shareholders under
      this Agreement are owned, and may be exercised, only by Record Holders.

            (b) The name and mailing address of each Record Holder shall be
      listed on the books and records of the Company or the Transfer Agent. The
      Secretary of the Company shall be required to update the books and records
      from time to time as necessary to reflect accurately the information
      therein or to cause the Transfer Agent to do so, as applicable. Company
      Securities shall be represented by the Certificates held by the
      Shareholders, except as provided in SECTION 3.04(b).

      SECTION 3.02.  NO LIABILITY TO THIRD PARTIES. No Shareholder, Record
Holder or Beneficial Owner of any Company Security shall be liable for the
debts, obligations or liabilities of the Company, whether arising in
contract, tort or otherwise, by reason of being a Shareholder, Record Holder
or Beneficial Owner of any Company Security.

      SECTION 3.03.  NO RESIGNATION OR EXPULSION.  A Shareholder does not
have the right or power to Resign and no Shareholder may be expelled or
removed as a Shareholder.

      SECTION 3.04.  CERTIFICATES

            (a) Certificates evidencing any of the Company Securities
      ("CERTIFICATES") shall be in such form, not inconsistent with that
      required by the Act or any other Law and this Agreement, as shall be
      approved by the Board of Directors. Each Certificate shall certify the
      number of Company Securities and the class of such Company Securities
      which the Certificate represents and shall be signed by (i) the Chairman
      of the Board, the President or any Vice President and (ii) the Secretary,
      any Assistant Secretary, the Treasurer or any Assistant Treasurer of the
      Company and countersigned by the Transfer Agent (in the event that the
      Company is not the Transfer Agent); PROVIDED, HOWEVER, that any or all of
      the signatures, including the countersignature, on the Certificate may be
      facsimile. In the event that any Officer or Transfer Agent who shall have
      signed, or whose facsimile signature or signatures shall have been placed
      upon, any such Certificate shall have ceased to be such Officer or
      Transfer Agent before such Certificate is issued by the Company, such
      Certificate may nevertheless be issued by the Company with the

                                       11


      same effect as if such person were such Officer or Transfer Agent on the
      date of issue. Certificates for each class of Company Securities shall be
      consecutively numbered and shall be entered in the books and records of
      the Company as they are issued and shall exhibit the holder's name and
      number of Company Securities, except as provided in SECTION 3.04(b). No
      Certificate shall be valid for any purpose until it has been countersigned
      by the Transfer Agent (in the event that the Company is not the Transfer
      Agent).

            (b) The Company Securities may be represented by global certificates
      issued in the name of Cede & Co. (or such other name as the depositary may
      direct), as nominee for the Depositary Trust Company, as depositary for
      the Company Securities, and Certificates shall not be issued to owners of
      beneficial interests in global certificates held by the depositary. Any
      provision herein calling for delivery of Certificates for Company
      Securities may be satisfied by delivering such Company Securities by
      book-entry transfer to such owners of beneficial interests at an account
      maintained for that purpose by the Transfer Agent with the depositary, in
      accordance with arrangements among the depositary and its participants and
      subject to the various policies and procedures that may be adopted by the
      depositary from time to time.

      SECTION 3.05.  REGISTER, REGISTRATION OF TRANSFER AND EXCHANGE

            (a) The Company shall keep or cause to be kept on behalf of the
      Company a register that, subject to any requirement of the Board of
      Directors and subject to the provisions of SECTION 3.05(b), shall provide
      for the registration and transfer of Company Securities. The Transfer
      Agent is hereby appointed registrar and transfer agent for the purpose of
      registering Company Securities and transfers of Company Securities as
      herein provided. At any time the Transfer Agent may resign, by notice to
      the Board of Directors, or may be removed, with or without cause, by the
      Board of Directors. Such resignation or removal shall be effective upon
      the earlier of (i) the appointment by the Board of Directors of a
      successor Transfer Agent and the acceptance by such successor of such
      appointment, or (ii) the 30th day after notice of such resignation or
      removal was given, whereupon the Company shall act as the Transfer Agent
      until a successor is appointed. The Company shall not recognize transfers
      of Company Securities unless the same are effected in the manner described
      in this SECTION 3.05. Upon surrender for registration of transfer of any
      Certificate, and subject to the provisions of SECTION 3.05(b), the
      appropriate Officers of the Company shall execute, and the Transfer Agent
      shall countersign and deliver, in the name of the holder or the designated
      transferee or transferees, as required pursuant to the Record Holder's
      instructions, one or more new Certificates evidencing the same aggregate
      number and type of Company Securities as were evidenced by the Certificate
      so surrendered.

            (b) The Company shall not recognize any transfer of Company
      Securities until (i) the Certificates evidencing such Company Securities
      are surrendered to the Transfer Agent for registration of transfer, or
      (ii) such Company Securities are delivered by book-entry transfer to the
      Shareholder in accordance with SECTION 3.04(b). No charge shall be

                                       12


      imposed by the Company for such transfer; PROVIDED, HOWEVER, that, as a
      condition to the issuance of any new Certificate under this SECTION 3.05,
      the Company may require the payment of a sum sufficient to cover any tax
      or other governmental charge, surety bond premium, special charges for
      services requested by the transferor or transferee, or similar fees or
      charges that may be imposed with respect thereto.

            (c) By transfer of Company Securities in accordance with this
      SECTION 3.05, the transferor shall be deemed to have given the transferee
      the right to be admitted to the Company as a Shareholder, and each
      transferee of Company Securities (including any nominee holder or an agent
      acquiring such Company Securities for the account of another Person) shall
      become a Shareholder with respect to the Company Securities so transferred
      to such Person when any such transfer and admission is reflected in the
      books and records of the Transfer Agent, and such Person thereby becomes a
      Record Holder of such Company Securities.

            (d) The Company shall be entitled to recognize the Record Holder as
      the owner of Company Securities and, accordingly, shall not be bound to
      recognize any equitable or other claim to or interest in such Company
      Securities on the part of any other Person, whether or not the Company
      shall have actual or other notice thereof, except as otherwise provided by
      Law. Except as otherwise provided in this Agreement or by Law, including
      the Securities Act, Company Securities shall be freely transferable to any
      Person. The transfer of any Company Securities and the admission of any
      new Shareholder shall not constitute an amendment to this Agreement.

            (e) Any Share Distribution or other distribution in respect of
      Company Securities shall be made by the Company, directly or through the
      Transfer Agent or through any other Person or agent, only to the Record
      Holders thereof as of the Record Date set by the Board of Directors for
      the Share Distribution or other distribution. The making of such Share
      Distribution or other distribution shall constitute full payment and
      satisfaction of the Company's liability in respect of such Share
      Distribution or other distribution regardless of any claim of any Person
      who may have an interest in such Share Distribution or other distribution
      by reason of an assignment or otherwise.

      SECTION 3.06.  MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES

            (a) If any mutilated Certificate is surrendered to the Transfer
      Agent, then the appropriate Officers on behalf of the Company shall
      execute, and upon the Company's request the Transfer Agent shall
      countersign and deliver in exchange therefor, a new Certificate evidencing
      the same aggregate number and type of Company Securities as the
      Certificate so surrendered.

                                       13


            (b) The appropriate Officers on behalf of the Company shall execute,
      and upon the Company's request the Transfer Agent shall countersign and
      deliver, a new Certificate in place of any Certificate previously issued
      if the Record Holder of the Certificate:

                  (i) makes proof by affidavit in form and substance
            satisfactory to an Officer that a previously issued Certificate has
            been lost, destroyed or stolen;

                  (ii) requests the issuance of a new Certificate before the
            Company has notice that the previously issued Certificate has been
            acquired by a purchaser for value in good faith and without notice
            of an adverse claim;

                  (iii) if requested, delivers to the Company a bond, in form
            and substance satisfactory to the Company, with surety or sureties
            and with fixed or open penalty as the Company may reasonably direct,
            in its sole discretion, to indemnify the Company and the Transfer
            Agent against any claim that may be made on account of the alleged
            loss, destruction or theft of the Certificate; and

                  (iv) satisfies any other reasonable requirements imposed by
            the Company, including the requirement to make a payment pursuant to
            SECTION 3.06(c).

      If a Shareholder fails to notify the Company within a reasonable time
      after such Shareholder has notice of the loss, destruction or theft of a
      Certificate, and a transfer of the Company Securities represented by the
      Certificate is registered before the Company or the Transfer Agent
      receives such notification, the Shareholder shall be precluded from making
      any claim against the Company or the Transfer Agent for such transfer or
      for a new Certificate.

            (c) As a condition to the issuance of any new Certificate under this
      SECTION 3.06, the Company may require the payment of a sum sufficient to
      cover any tax or other governmental charge that may be imposed in relation
      thereto and any other expenses (including the fees and expenses of the
      Transfer Agent) reasonably connected therewith.

                                   ARTICLE IV
                 AUTHORIZATION AND ISSUANCE OF COMPANY SECURITIES

      SECTION 4.01.  COMPANY SECURITIES

            (a) Subject to SECTIONs 4.03(b) and 4.03(d)(ii), the requirements of
      the Act and other applicable Law, the Company shall have authority to
      issue an unlimited number of Company Securities, including Company
      Securities with the rights set forth in SECTION 4.02 (the "VOTING SHARES")
      and Company Securities with the rights set forth in SECTION 4.03 and the
      Purchase Provisions (the "LISTED SHARES").

                                       14


            (b) The total number of Company Securities that are issued by the
      Company and reflected as outstanding on the books and records of the
      Company (including the Transfer Agent) as of the date of determination,
      excluding Company Securities held in the treasury, shall at all times
      equal the number of I-Units held by the Company. If the number of I-Units
      held by the Company increases or decreases, the Company shall by the same
      number increase or decrease, as the case may be, the number of Company
      Securities that are issued by the Company and reflected as outstanding on
      the books and records of the Company (including the Transfer Agent) as of
      the date of determination, excluding Company Securities held in the
      treasury, (i) in the event of an increase in the number of I-Units, by
      making to each Record Holder of Company Securities a pro rata Share
      Distribution or by effecting a split of Company Securities pursuant to
      SECTION 4.05, or (ii) in the event of a decrease in the number of I-Units,
      by effecting a combination of Company Securities pursuant to SECTION 4.05.

            (c) Company Securities issued as Share Distributions or issued for
      such consideration as the Board of Directors determines to be appropriate
      shall be deemed to be fully paid, and except to the extent specified in
      SECTION 18-607(b) of the Act, non-assessable, if the entire amount of such
      consideration has been received by the Company for such Company
      Securities.

      SECTION 4.02.  VOTING SHARES

            (a) Prior to the execution of this Agreement, one Voting Share was
      issued to the Organizational Shareholder. The designations, preferences
      and relative, participating, optional or other special rights, powers and
      duties relating to the Voting Shares are as set forth in this SECTION
      4.02. Each Voting Share shall be identical in every respect with each
      other Voting Share.

            (b) The Record Holders of Voting Shares shall be entitled to one
      vote per Voting Share on matters submitted to a vote or consent of the
      Record Holders of Voting Shares, as provided in SECTION 4.02(d) and
      elsewhere in this Agreement; PROVIDED, HOWEVER, that neither any Record
      Holder of Voting Shares nor any of its Affiliates may vote any Voting
      Shares with respect to a matter that is presented to the Record Holders of
      Voting Shares pursuant to SECTION 4.02(d) in order to determine the manner
      in which I-Units shall be voted with respect to any of the following
      matters:

                  (i) the proposed removal of the general partner of the
            Partnership and the election of a successor general partner in
            connection therewith pursuant to SECTION 13.2 of the Partnership
            Agreement;

                  (ii) any vote required to be taken under SECTION 11.2(a) of
            the Partnership Agreement with respect to the transfer by the
            general partner of the Partnership of all, but not less than all, of
            its Partnership Interest (as defined in the Partnership Agreement)
            as the general partner of the Partnership to a single

                                       15



            transferee and the admission of such transferee as a general partner
            of the Partnership;

                  (iii) a proposed amendment to the provisions of SECTION
            5.10(d) of the Partnership Agreement;

                  (iv) a proposed amendment to the terms of the I-Units pursuant
            to SECTION 15.3(c) of the Partnership Agreement that would have a
            material adverse effect on the rights and preferences of the
            I-Units; or

                  (v) the election of a successor general partner upon the
            withdrawal of the general partner of the Partnership pursuant to
            SECTION 13.1(a)(i) of the Partnership Agreement.

            (c) In the event that (i) the Partnership makes a cash distribution
      in respect of its Common Units that results in an increase in the number
      of outstanding I-Units pursuant to SECTION 5.10(a) of the Partnership
      Agreement, or (ii) the Partnership engages in a merger, consolidation,
      exchange, reorganization, recapitalization or similar transaction pursuant
      to which the record holders of Common Units receive a cash distribution
      and the number of I-Units held by the record holders of I-Units is
      increased, the Company shall make a Share Distribution of additional
      Voting Shares in respect of its Outstanding Voting Shares and fractional
      Voting Shares in an amount per whole Voting Share equal to the quotient
      obtained by dividing the amount of the cash distribution to be made by the
      Partnership in respect of each Common Unit by the Average Market Price per
      Listed Share. A Share Distribution in respect of a Voting Share or
      fractional Voting Share pursuant to this SECTION 4.02(c) shall be made on
      the date on which the Partnership makes the related cash distribution in
      respect of each Common Unit. Each fractional Voting Share that is created
      as a result of any Share Distribution in respect of Voting Shares pursuant
      to this SECTION 4.02(c) shall be equal to and represented by a fraction
      that is calculated to six decimal places (without rounding), and any
      calculation that would result in a fractional interest in excess of
      one-millionth (1/1,000,000) of a Voting Share shall be disregarded without
      payment or other consideration and shall not be accumulated. Each Voting
      Share or fraction thereof issued as a Share Distribution shall bear a date
      of original issuance which is the same as the date on which such Share
      Distribution was made and shall be duly authorized, fully paid and
      nonassessable. The Company shall identify the Record Holders entitled to
      receive any Share Distributions pursuant to this SECTION 4.02(c) in
      accordance with SECTION 3.05. EXCEPT AS PROVIDED IN THIS SECTION 4.02(C)
      AND SECTIONS 4.01(B) AND 4.05, NO SHARE DISTRIBUTION SHALL BE MADE IN
      RESPECT OF VOTING SHARES. Except as otherwise provided in SECTION 7.02, no
      distribution in respect of Voting Shares shall be made in cash.

            (d) Subject to the limitations set forth in SECTION 4.02(b), the
      Company or the Board of Directors shall submit to the vote of the Record
      Holders of Voting Shares any matter on which the Company is entitled to
      vote as a record holder of I-Units in order to ascertain the manner in
      which such I-Units shall be voted. For each Voting Share or

                                       16


      fraction thereof that has been voted "for" the matter presented to the
      Record Holders of Voting Shares, the Company shall vote one I-Unit or an
      equivalent fraction "for" such corresponding matter when presented to the
      record holder of I-Units, such that the number of Voting Shares voted
      "for" such matter presented to the Record Holders of Voting Shares, in
      addition to the number of Listed Shares voted "for" such matter presented
      to the Record Holders of Listed Shares pursuant to SECTION 4.03(c), shall
      equal the number of I-Units voting "for" such corresponding matter when
      presented to the record holder of I-Units. For each Voting Share or
      fraction thereof that has been voted "against" the matter presented to the
      Record Holders of Voting Shares, the Company shall vote one I-Unit or an
      equivalent fraction "against" such matter when presented to the record
      holder of I-Units, such that the number of Voting Shares voted "against"
      such matter presented to the Record Holders of Voting Shares, in addition
      to the number of Listed Shares voted "against" such matter presented to
      the Record Holders of Listed Shares pursuant to SECTION 4.03(c), shall
      equal the number of I-Units voting "against" such corresponding matter
      when presented to the record holder of I-Units. For each Voting Share or
      fraction thereof that has abstained from the vote or has not been voted,
      whether by broker non-vote or otherwise, on the matter presented to the
      Record Holders of Voting Shares, the Company shall abstain from voting one
      I-Unit or an equivalent fraction on such matter when presented to the
      record holder of I-Units, such that the number of Voting Shares that have
      abstained from voting or have not been voted on such matter presented to
      the Record Holders of Voting Shares, in addition to the number of Listed
      Shares that have abstained from voting or have not been voted on such
      matter presented to the Record Holders of Listed Shares pursuant to
      Section 4.03(c), shall equal the number of I-Units abstaining from voting
      on such corresponding matter when presented to the record holder of
      I-Units.

      SECTION 4.03.  LISTED SHARES

            (a) As of the Closing Date, there shall be Outstanding 10,000,000
      Listed Shares, and, in the event that the Underwriters exercise their
      option to purchase additional Listed Shares pursuant to the Underwriting
      Agreement, there shall be Outstanding up to 11,500,000 Listed Shares. The
      Listed Shares shall initially be listed on a National Securities Exchange.
      The designations, preferences and relative, participating, optional or
      other special rights, powers and duties relating to the Listed Shares are
      as set forth in this SECTION 4.03. Each Listed Share shall be identical in
      every respect with each other Listed Share.

            (b) Except as provided in SECTIONs 4.03(c) and (d), the Record
      Holders of Listed Shares, in their capacity as such, shall not be entitled
      to vote on any matter. On any matter submitted by the Company or the Board
      of Directors to the Record Holders of Listed Shares pursuant to SECTIONs
      4.03(c) or (d) each Record Holder of Listed Shares shall be entitled,
      subject to the limitations set forth in SECTION 4.03(e), to one vote per
      Listed Share.

                                       17


            (c) The Company or the Board of Directors shall submit to the vote
      of the Record Holders of Listed Shares entitled to vote any matter on
      which the Company is entitled to vote as a record holder of I-Units in
      order to ascertain the manner in which such I-Units shall be voted. For
      each Listed Share or fraction thereof that has been voted "for" the matter
      presented to Record Holders of Listed Shares entitled to vote thereon, the
      Company shall vote one I-Unit or an equivalent fraction "for" such
      corresponding matter when presented to the record holder of I-Units, such
      that the number of Listed Shares voted "for" such matter presented to the
      Record Holders of Listed Shares, in addition to the number of Voting
      Shares voted "for" such matter presented to the Record Holders of Voting
      Shares pursuant to SECTION 4.02(d), shall equal the number of I-Units
      voting "for" such corresponding matter when presented to the record holder
      of I-Units. For each Listed Share or fraction thereof that has been voted
      "against" the matter presented to Record Holders of Listed Shares entitled
      to vote thereon, the Company shall vote one I-Unit or an equivalent
      fraction "against" such matter when presented to the record holder of
      I-Units, such that the number of Listed Shares voted "against" such matter
      presented to the Record Holders of Listed Shares, in addition to the
      number of Voting Shares voted "against" such matter presented to the
      Record Holders of Voting Shares pursuant to SECTION 4.02(d), shall equal
      the number of I-Units voting "against" such corresponding matter when
      presented to the record holder of I-Units. For each Listed Share or
      fraction thereof that has abstained from the vote or has not been voted,
      whether by broker non-vote or otherwise, on the matter presented to Record
      Holders of Listed Shares entitled to vote thereon, the Company shall
      abstain from voting one I-Unit or an equivalent fraction on such matter
      when presented to the record holder of I-Units, such that the number of
      Listed Shares that have abstained from voting or have not been voted on
      such matter presented to the Record Holders of Listed Shares, in addition
      to the number of Voting Shares that have abstained from voting or have not
      been voted on such matter presented to the Record Holders of Voting Shares
      pursuant to SECTION 4.02(d), shall equal the number of I-Units abstaining
      from voting on such corresponding matter when presented to the record
      holder of I-Units.

            (d) The Company or the Board of Directors shall submit to the vote
      of Record Holders of Listed Shares entitled to vote thereon the following
      matters:

                  (i)   any matter for which the approval of the Record Holders
            of Listed Shares is required pursuant to SECTION 7.01(a);

                  (ii)  any matter for which the approval of the Record Holders
            of Listed Shares is required pursuant to SECTION 9.01(c);

                  (iii) any proposed issuance of any new class or series of
            Company Securities into which the interests in the Company may be
            divided, other than the Voting Shares and the Listed Shares; and

                  (iv) any proposed amendment to, or alteration or repeal of,
            this Agreement, including the Purchase Provisions, the Delegation of
            Control

                                       18


            Agreement, or the Tax Indemnification Agreement if such proposed
            amendment, alteration or repeal would (A) reduce the time for any
            notice to which Record Holders of Listed Shares would be entitled,
            or (B) have a material adverse effect on the Company or the powers,
            preferences or rights of the Listed Shares, as determined in the
            sole discretion of the Board of Directors; PROVIDED, HOWEVER, that
            any of the following amendments shall not be deemed to have a
            material adverse effect on the powers, preferences or rights of the
            Listed Shares: (1) any amendment that is necessary or desirable to
            comply with applicable Law, compliance with which the Board of
            Directors determines in its sole discretion to be in the best
            interests of the Company and the Shareholders, and (2) any
            amendment that is required to effect the intent of the provisions of
            this Agreement, including the Purchase Provisions, or is otherwise
            contemplated by this Agreement, including the Purchase Provisions.

            (e) The following Persons or Groups, as the case may be, shall not
      be entitled to vote in their capacities as Record Holders of Listed
      Shares:

                  (i) any Person or Group, excluding the Record Holders of
            Voting Shares and their Affiliates, if the sum of the number of
            Listed Shares Beneficially Owned by such Person or Group plus the
            number of Common Units Beneficially Owned by such Person or Group
            equals 20% or more of the sum of the aggregate number of Listed
            Shares that are Outstanding plus the aggregate number of Common
            Units that are outstanding; and

                  (ii)  the Record Holders of Voting Shares and their Affiliates
            with respect to:

                        (A) a matter in respect of which the Record Holders of
                  Voting Shares and their Affiliates are not entitled to vote
                  any Voting Shares pursuant to SECTION 4.02(b); and

                        (B) a matter that is presented to the Record Holders of
                  Listed Shares pursuant to SECTION 4.03(d).

            (f) In the event that (i) the Partnership pays a cash distribution
      in respect of its Common Units that results in an increase in the number
      of outstanding I-Units pursuant to SECTION 5.10(a) of the Partnership
      Agreement, or (ii) the Partnership engages in a merger, consolidation,
      exchange, reorganization, recapitalization or similar transaction pursuant
      to which the record holders of Common Units receive a cash distribution
      and the number of I-Units held by the record holders of I-Units is
      increased, the Company shall make a Share Distribution of additional
      Listed Shares in respect of its Outstanding Listed Shares and fractional
      Listed Shares in an amount per whole Listed Share equal to the quotient
      obtained by dividing the amount of the cash distribution to be made by the
      Partnership on each Common Unit by the Average Market Price per Listed
      Share. Except as provided in the Purchase Provisions, a Share Distribution
      in respect of each

                                       19


      Listed Share shall be made on the date on which the Partnership makes the
      related cash distribution in respect of each Common Unit. Each fractional
      Listed Share that is created as a result of any Share Distribution in
      respect of Listed Shares pursuant to this SECTION 4.03(f) shall be equal
      to and represented by a fraction that is calculated to six decimal places
      (without rounding), and any calculation that would result in a fractional
      interest in excess of one-millionth (1/1,000,000) of a Listed Share shall
      be disregarded without payment or other consideration and shall not be
      accumulated. Each Listed Share or fraction thereof issued as a Share
      Distribution shall bear a date of original issuance which is the same as
      the date on which such Share Distribution was made and shall be duly
      authorized, fully paid and nonassessable. The Company shall identify the
      Record Holders entitled to receive any Share Distribution in accordance
      with SECTION 3.05. EXCEPT AS PROVIDED IN THIS SECTION 4.03(f) AND
      SECTIONS 4.01(b) AND 4.05, NO SHARE DISTRIBUTIONS SHALL BE MADE IN RESPECT
      OF LISTED SHARES. Except as otherwise provided in SECTION 7.02(b), no
      distribution in respect of Listed Shares shall be made in cash.

            (g) Under certain circumstances set forth in the Purchase
      Provisions, Shareholders may be required to sell their Listed Shares to
      the Purchaser (as defined in the Purchase Provisions). The Purchase
      Provisions also set forth the rights of the Record Holders of Listed
      Shares to any distributions, including Share Distributions, on Listed
      Shares that have been declared (or a record date for which has been set)
      but that have not been paid or made. The Purchase Provisions are attached
      as Annex A and are an integral part of this Agreement.

            (h) Fractions of Listed Shares shall not be sold on a National
      Securities Exchange until they equal, in the aggregate, whole Listed
      Shares.

      SECTION 4.04.  SPLITS AND COMBINATIONS. The Board of Directors may make
a pro rata distribution of Company Securities to all Record Holders or may
effect a subdivision or combination of Company Securities; PROVIDED, HOWEVER,
that after such distribution, subdivision or combination, each Shareholder
shall have the same relative Shareholder Interest as before such
distribution, subdivision or combination. In the event that (a) the
Partnership makes a pro rata distribution of Partnership Securities to the
record holders of the I-Units, (b) the Partnership effects a subdivision or
combination of the I-Units, or (c) the Partnership engages in a merger or
other transaction that has the effect of converting, subdividing or combining
the I-Units, then the Board of Directors shall be required to make a
corresponding distribution, adjustment, conversion, subdivision or
combination of the Company Securities so that the number of outstanding
I-Units and the aggregate number of Company Securities that are issued by the
Company and reflected as outstanding on the books and records of the Company
(including the Transfer Agent) as of the date of determination, excluding
Company Securities held in the treasury, shall always be equal. Each
fractional Company Security that is created as a result of any distribution,
subdivision or combination pursuant to this SECTION 4.04 shall be equal to
and represented by a fraction that is calculated to six decimal places
(without rounding), and any calculation that would result in a fractional
interest in excess of one-millionth (1/1,000,000) of a Company Security shall
be disregarded without payment or other consideration and shall not be
accumulated.

                                       20


      SECTION 4.05.  WITHHOLDING. Notwithstanding any other provision of this
Agreement, the Company shall comply with any withholding requirements under
any Law in connection with the payment of Share Distributions and other
distributions in respect of Company Securities and shall remit amounts
withheld to and file required forms with applicable taxing authorities. In
the event of any claimed over-withholding, Shareholders shall be limited to
an action against the applicable taxing authority. If an amount required to
be withheld was not withheld from an actual Share Distribution or other
distribution, the Company may reduce subsequent Share Distributions or other
distributions by the amount of such required withholding. Each Shareholder
agrees to furnish the Company such forms or other documentation as are
necessary to assist the Company in determining the extent of, and in
fulfilling, its withholding obligations.

                                    ARTICLE V
                                   MANAGEMENT

      SECTION 5.01.  MANAGEMENT OF THE COMPANY'S AFFAIRS.

            (a) As provided in this Agreement, all management powers over the
      business and affairs of the Company shall be vested exclusively in a board
      of directors (the "BOARD OF DIRECTORS") and, subject to the direction of
      the Board of Directors, the Officers. The Officers and Directors shall
      constitute "managers" of the Company within the meaning of the Act.

            (b) No Shareholder, Record Holder or Beneficial Owner of any Company
      Security, in its capacity as such, shall have any management power over
      the business and affairs of the Company or actual or apparent authority to
      enter into contracts on behalf of, or to otherwise bind, the Company.

            (c) Except as otherwise specifically provided in this Agreement, the
      authority and functions of the Board of Directors on the one hand and of
      the Officers on the other shall be identical to the authority and
      functions of the board of directors and officers, respectively, of a
      corporation organized under the DGCL. Thus, except as otherwise
      specifically provided in this Agreement, the business and affairs of the
      Company shall be managed under the direction of the Board of Directors,
      and the day-to-day activities of the Company shall be conducted on the
      Company's behalf by the Officers, who shall be agents of the Company. In
      addition to the powers that now or hereafter can be granted to managers
      under the Act and to all other powers granted under any other provision of
      this Agreement or the Delegation of Control Agreement, and except as set
      forth in the Delegation of Control Agreement, the Board of Directors
      (subject to SECTION 5.03 and Article 9) and the Officers (subject to
      SECTION 5.05 and the direction of the Board of Directors) shall have full
      power and authority to do all things on such terms as they, in their sole
      discretion, may deem necessary or appropriate to conduct, or cause to be
      conducted, the business and affairs of the Company.

      SECTION 5.02.  BOARD OF DIRECTORS

                                       21


            (a) NUMBER. The Board shall consist of one or more members, the
      number thereof to be determined from time to time by approval of the
      Record Holders of a majority of the Voting Shares.

            (b) ELECTION OF DIRECTORS; TERM. The Record Holders of Voting Shares
      shall have the sole authority with respect to the election and removal of
      Directors as provided in this SECTION 5.02(b). Vacancies existing from
      time to time on the Board of Directors (including vacancies created by
      virtue of an increase by the Record Holders of Voting Shares of the number
      of Directors constituting the entire Board of Directors pursuant to
      SECTION 5.02(a)) shall be filled by the Record Holders of a majority of
      the Voting Shares. Each Director shall hold office until his successor is
      elected and qualified or until his earlier death, resignation or removal.
      Any Director may resign at any time upon written notice to the Board of
      Directors or to the Secretary of the Company. Such resignation shall take
      effect at the time specified therein, and, unless otherwise specified
      therein, no acceptance of such resignation shall be necessary for such
      resignation to become effective. Any Director or the entire Board of
      Directors may be removed at any time, with or without cause, by approval
      of the Record Holders of a majority of the Voting Shares. No Person shall
      commence a term of service as a Director of the Company after attaining
      the age of 70 years.

            (c) REGULAR MEETINGS. Regular meetings of the Board of Directors may
      be held at such places within or without the State of Delaware and at such
      times as the Board of Directors may from time to time determine, and, if
      so determined, notice thereof need not be given.

            (d) SPECIAL MEETINGS. Special meetings of the Board of Directors or
      any committee thereof may be held at any time or place within or without
      the State of Delaware whenever called by the Chairman of the Board, or by
      any two Directors. Reasonable notice thereof shall be given by the Person
      or Persons calling the meeting.

            (e) TELEPHONIC MEETINGS PERMITTED. Members of the Board of
      Directors, or any committee thereof, may participate in a meeting of the
      Board of Directors or of such committee, as the case may be, by means of
      conference telephone or similar communications equipment by means of which
      all Persons participating in the meeting can hear each other, and
      participation in a meeting by such means shall constitute presence in
      person at such meeting.

            (f) QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the Board
      of Directors, one-third of the entire Board of Directors shall constitute
      a quorum for the transaction of business. The vote of a majority of the
      Directors present at a meeting at which a quorum is present shall be the
      act of the Board of Directors. In case at any meeting of the Board of
      Directors a quorum shall not be present, the Directors present may adjourn
      the meeting until a quorum shall be present. Each Director shall have one
      vote.

                                       22


            (g) ORGANIZATION; CHAIRMAN. The Board of Directors may elect a
      Chairman of the Board (the "Chairman of the Board"), who shall not be an
      officer of the Company, to preside at meetings of the Board of Directors
      and meetings of Shareholders, or may select a chairman to preside at any
      meeting in the absence of the Chairman of the Board or in the event of his
      inability or refusal to act. The Secretary shall act as secretary of the
      meeting, but in his absence the Chairman of the Board or the chairman of
      the meeting may appoint any Person to act as secretary of the meeting.

            (h) ACTION BY DIRECTORS WITHOUT A MEETING. Any action required or
      permitted to be taken at any meeting of the Board of Directors, or of any
      committee thereof, may be taken without prior notice, without a meeting
      and without a vote if all members of the Board of Directors or of such
      committee, as the case may be, consent thereto in writing, and the writing
      or writings are filed with the minutes of proceedings of the Board of
      Directors or such committee.

      SECTION 5.03.  RESTRICTIONS ON THE BOARD OF DIRECTORS' AUTHORITY.
Except as otherwise specifically provided in this Agreement or by resolution
of the Board of Directors, (1) no Director or group of Directors shall have
any actual or apparent authority to enter into contracts on behalf of, or to
otherwise bind, the Company, nor to take any action in the name of or on
behalf of the Company or conduct any business of the Company other than by
action of the Board of Directors taken in accordance with the provisions of
this Agreement, and (2) no Director shall have the power or authority to
delegate to any Person such Director's rights and powers as a Director to
manage the business and affairs of the Company.

      SECTION 5.04.  COMMITTEES.

            (a) The Board of Directors may, by resolution of a majority of the
      whole Board of Directors, designate one or more committees, each committee
      to consist of two or more of the Directors of the Company. The Board of
      Directors may designate two or more Directors as alternate members of any
      committee, who may replace any absent or disqualified member at any
      meeting of such committee. In the absence or disqualification of a member
      of a committee, the member or members thereof present at any meeting and
      not disqualified from voting, whether or not he or they constitute a
      quorum, may unanimously appoint another member of the Board of Directors
      to act at the meeting in place of any such absent or disqualified member.
      Any such committee, to the extent provided in the resolution of the Board
      of Directors, shall have and may exercise all the powers and authority of
      the Board of Directors in the management of the business and affairs of
      the Company, but no such committee shall have power or authority in
      reference to any matter described in SECTIONs 4.01, 5.09 or Article 9 that
      requires the action or approval of the Board of Directors.

            (b) Unless the Board of Directors otherwise provides, each committee
      designated by the Board of Directors may make, alter and repeal rules for
      the conduct of its business. In the absence of a provision by the Board of
      Directors or a provision in the rules of such committee to the contrary, a
      majority of the entire authorized number of

                                       23


      members of such committee shall constitute a quorum for the transaction
      of business, the vote of a majority of the members present at a meeting
      at the time of such vote if a quorum is then present shall be the act of
      such committee, and in other respects each committee shall conduct its
      business in the same manner as the Board of Directors conducts its
      business pursuant to SECTION 5.02.

            (c) Notwithstanding anything to the contrary contained in this
      SECTION 5.04, the Board of Directors shall establish an audit committee
      (the "Audit Committee") which satisfies the requirements of the principal
      National Securities Exchange on which the Listed Shares are listed or
      admitted to trading from time to time.

      SECTION 5.05.  OFFICERS.

            (a) OFFICERS; ELECTION; QUALIFICATION; TERM OF OFFICE; RESIGNATION;
      REMOVAL; VACANCIES. The Board of Directors shall elect Officers which may
      include a President, a Secretary, a Controller and a Treasurer. The Board
      of Directors may also elect one or more Vice Presidents, one or more
      Assistant Vice Presidents, one or more Assistant Secretaries, one or more
      Assistant Treasurers and one or more other Officers, and may give any of
      them such further designations or alternate titles as it considers
      desirable. Each such Officer shall hold office until his successor is
      elected and qualified or until his earlier death, resignation or removal.
      Any Officer may resign at any time upon written notice to the Board of
      Directors or to the President or the Secretary of the Company. Such
      resignation shall take effect at the time specified therein, and unless
      otherwise specified therein no acceptance of such resignation shall be
      necessary to make it effective. The Board of Directors may remove any
      Officer with or without cause at any time. Any such removal shall be
      without prejudice to the contractual rights of such Officer, if any, with
      the Company, but the election of an Officer shall not of itself create
      contractual rights. Any number of offices may be held by the same person.
      Any vacancy occurring in any office of the Company by death, resignation,
      removal or otherwise may be filled for the unexpired portion of the term
      by the Board of Directors at any regular or special meeting.

            (b) PRESIDENT. The President shall be the chief executive officer of
      the Company and shall be responsible for the general management and
      affairs of the Company and shall perform all duties incidental to such
      office, whether required by Law or otherwise, and all such other duties as
      are properly required of him by the Board of Directors. The President
      shall make reports to the Board of Directors and the Shareholders and
      shall see that all orders and resolutions of the Board of Directors and of
      any committee thereof are carried into effect. The President shall have
      full authority to execute all contracts, certificates, instruments or
      other documents on behalf of the Company, except in cases where the
      execution thereof shall be expressly delegated by the Board of Directors
      or by this Agreement to some other Officer or agent of the Company or
      shall be required by Law to be otherwise executed.

                                       24


            (c) VICE PRESIDENTS. Any Vice President, in the order of seniority,
      unless otherwise determined by the Board of Directors, shall, in the
      absence or disability of the President, perform the duties and exercise
      the powers of the President. The Vice President or Vice Presidents shall
      also perform the usual and customary duties that pertain to the office of
      Vice President and generally assist the President by executing contracts,
      certificates, instruments or other documents and shall have such powers
      and perform such duties as shall be delegated to them by the President and
      as assigned by the Board of Directors.

            (d) CONTROLLER. The Controller shall be the chief financial officer
      of the Company and shall be responsible for the financial reporting of the
      Company and shall perform all duties incidental to such office, whether
      required by Law or otherwise, and all such other duties as are delegated
      to him by the President or assigned to him by the Board of Directors. The
      Controller shall make reports to the Board of Directors regarding all
      financial reporting and accounting matters and shall see that all orders
      and resolutions of Board of Directors and of any committee thereof
      relating to financial reporting and accounting matters are carried in to
      effect.

            (e) SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall record
      all the proceedings of the meetings of the Shareholders and the Board of
      Directors and of any committees thereof in a book to be kept for that
      purpose; he shall see that all notices are duly given in accordance with
      the provisions of this Agreement or as otherwise required by law; he shall
      be custodian of the records of the Company; he may affix the official seal
      of the Company, if any, to any document the execution of which, on behalf
      of the Company, is duly authorized, and when so affixed may attest the
      same; and, in general, he shall perform all duties incident to the office
      of secretary of a corporation organized under the DGCL, and such other
      duties as from time to time may be delegated to him by the President or
      assigned to him by the Board of Directors or as may otherwise be provided
      by Law. The Assistant Secretaries shall exercise the powers of the
      Secretary during the Secretary's absence or inability or refusal to act.
      If no Secretary or Assistant Secretary is appointed and serving, or in the
      absence of the appointed Secretary and Assistant Secretary, such other
      Officer as the Board of Directors shall select shall have the powers and
      duties conferred upon the Secretary.

            (f) TREASURER. The Treasurer shall have charge of and be responsible
      for all funds, securities, receipts and disbursements of the Company, and
      shall deposit or cause to be deposited, in the name of the Company, all
      moneys or other valuable effects in such banks, trust companies or other
      depositories as shall, from time to time, be selected by or under
      authority of the Board of Directors; if required by the Board of
      Directors, he shall give a bond for the faithful discharge of his duties,
      with such surety or sureties as the Board of Directors may determine; he
      shall keep or cause to be kept full and accurate records of all receipts
      and disbursements in books of the Company and shall render to the Board of
      Directors, whenever requested, an account of the financial condition of
      the Company; and, in general, he shall perform all the duties incident to
      the office of treasurer of a corporation organized under the DGCL and such
      other duties as may be

                                       25


      delegated to him by the President or assigned to him by the Board of
      Directors or as may otherwise be provided by Law. The Assistant
      Treasurers shall exercise the powers of the Treasurer during the
      Treasurer's absence or inability or refusal to act. If no Treasurer or
      Assistant Treasurer is appointed and serving, or in the absence of the
      appointed Treasurer and Assistant Treasurer, such other Officer as the
      Board of Directors shall select shall have the powers and duties conferred
      upon the Treasurer.

            (g) OTHER OFFICERS. The other Officers, if any, of the Company shall
      have such powers and duties in the management of the Company as shall be
      stated in a resolution of the Board of Directors which is not inconsistent
      with this Agreement and, to the extent not so stated, as generally pertain
      to their respective offices, subject to the control of the Board of
      Directors. The Board of Directors may require any Officer, agent or
      employee to give security for the faithful performance of his duties.

            (h)   POWERS OF ATTORNEY.  The Company may grant powers of attorney
      or other authority as appropriate to establish and evidence the authority
      of the Officers and other Persons.

            (i) DELEGATION OF AUTHORITY. Unless otherwise provided by this
      Agreement or by resolution of the Board of Directors, no Officer shall
      have the power or authority to delegate to any Person such Officer's
      rights and powers as an Officer to manage the business and affairs of the
      Company.

      SECTION 5.06.  COMPENSATION. The Officers shall receive such
compensation for their services as may be designated by the Board of
Directors. In addition, the Officers shall be entitled to be reimbursed for
out-of-pocket costs and expenses incurred in the course of their service
hereunder. The members of the Board of Directors who are not employees of the
Company or any Affiliate thereof shall receive such compensation for their
services as Directors or committee members as the Board of Directors shall
determine. The members of the Board of Directors who are employees of the
Company or any Affiliate thereof shall receive no compensation for their
services as Directors or committee members. All the members of the Board of
Directors shall be entitled to be reimbursed for out-of-pocket costs and
expenses incurred in the course of their service hereunder.

      SECTION 5.07.  BUSINESS OPPORTUNITIES

            (a) No Indemnitee shall be expressly or implicitly restricted or
      proscribed pursuant to this Agreement, by Law or otherwise from engaging
      in other activities for profit, whether in the businesses engaged in by
      the Company or any Shareholder or anticipated to be engaged in by the
      Company or any Shareholder. Without limitation of and subject to the
      foregoing, each Indemnitee shall have the right to engage in businesses of
      every type and description and to engage in and possess an interest in
      other business ventures of any and every type or description,
      independently or with others, including, without limitation, business
      interests and activities in direct competition with the Company or any
      Shareholder, and none of the same shall breach any duty to the

                                       26


      Company or any Shareholder. Neither the Company, the Shareholder nor any
      other Person shall have any rights by virtue of this Agreement, by Law or
      otherwise in any business ventures of any Indemnitee and such Indemnitees
      shall have no obligation to offer any interest in any such business
      ventures to the Company, any Shareholder or any other Person.

            (b) Without limitation of SECTION 5.07(a), and notwithstanding
      anything to the contrary in this Agreement, the competitive activities of
      Indemnitees and the limitations on the Company's activities described in
      SECTION 2.04 are hereby approved by the Company and all Shareholders, and
      it shall not be deemed to be a breach of the fiduciary duty (if any such
      duty is owed) of the Board of Directors or the Record Holders of Voting
      Shares for the Board of Directors or the Record Holders of Voting Shares
      to permit an Indemnitee to engage in a business opportunity in preference
      to or to the exclusion of the Company or any other Shareholder, if such
      activities are permitted by this Agreement.

      SECTION 5.08.  INTERESTED OFFICERS OR DIRECTORS. No contract or
transaction between the Company, on the one hand, and the Record Holders of
Voting Shares, any Affiliate thereof or any other Entity, on the other hand,
in which an Officer or Director Beneficially Owns an interest or of which
such Officer or Director is an Affiliate, or between the Company, on the one
hand, and any of its Officers or Directors, on the other hand, shall be void
or voidable for this reason or because the Officer or Director is present at
or participates in the meeting of the Board of Directors or committee thereof
that authorizes the contract or transaction, or because his vote is counted
for such purpose, if such contractor transaction is:

            (a)   approved by a committee of the Board of Directors comprised
      solely of members who have no interest in the contract or transaction;

            (b) on terms no less favorable than those generally being provided
      to or available from unrelated third parties, as determined in the sole
      discretion of the Board of Directors; or

            (c) fair, taking into account the totality of the relationships
      between the parties involved, including other transactions between the
      parties, as determined in the sole discretion of the Board of Directors.

      SECTION 5.09.  RESOLUTIONS OF CONFLICTS OF INTEREST.

            (a) Unless otherwise expressly provided in this Agreement or the
      Omnibus Agreement, whenever a potential conflict of interest exists or
      arises between the Company or any of its Affiliates, on the one hand, and
      the Shareholders or any Assignee, on the other hand, any resolution or
      course of action in respect of such conflict of interest shall be
      permitted and deemed approved by all Shareholders and Assignees, and shall
      not constitute a breach of this Agreement, the Omnibus Agreement, any
      other agreement contemplated herein or therein, or any duty stated or
      implied by law or equity, if the resolution or course of action is or, by
      operation of this Agreement, is deemed to be, fair

                                       27


      and reasonable to the Company. The Board of Directors shall be authorized
      in connection with its resolution of any conflict of interest to consider
      (i) the relative interests of any party to such conflict, agreement,
      transaction or situation and the benefits and burdens relating to such
      interest; (ii) any customary or accepted industry practices and any
      customary or historical dealings with a particular Person; (iii) any
      applicable generally accepted accounting or engineering practices or
      principles; and (iv) such additional factors as the Board of Directors
      determines in its sole discretion to be relevant, reasonable or
      appropriate under the circumstances. Nothing contained in this Agreement,
      however, is intended to nor shall it be construed to require the Board of
      Directors to consider the interests of any Person other than the Company.
      In the absence of bad faith by the Board of Directors, the resolution,
      action or terms so made, taken or provided by the Board of Directors with
      respect to such matter shall not constitute a breach of this Agreement or
      any other agreement contemplated herein or a breach of any standard of
      care or duty imposed herein or therein or under the Act or any other Law.

            (b) Whenever this Agreement or any other agreement contemplated
      hereby provides that the Board of Directors or the Company or any of its
      Affiliates is permitted or required to make a decision (i) in its "sole
      discretion" or "discretion" that it deems "necessary or appropriate" or
      under a grant of similar authority or latitude, the Board of Directors,
      the Company or such Affiliate, as applicable, shall be entitled to
      consider only such interests and factors as it desires and shall have no
      duty or obligation to give any consideration to any interest of, or
      factors affecting, any Shareholder or any Assignee or (ii) in "good faith"
      or under another express standard, the Board of Directors, the Company or
      such Affiliate, as applicable, shall act under such express standard and
      shall not be subject to any other or different standards imposed by this
      Agreement, the Omnibus Agreement or any other agreement contemplated
      hereby or under the Act or any other Law.

            (c) Whenever a particular transaction, arrangement or resolution of
      a conflict of interest is required under this Agreement to be "fair and
      reasonable" to any Person, the fair and reasonable nature of such
      transaction, arrangement or resolution shall be considered in the context
      of all similar or related transactions.

      SECTION 5.10.  DUTIES OF RECORD HOLDERS OF VOTING SHARES AND DIRECTORS

            (a) Except as otherwise provided in this Agreement, the Record
      Holders of Voting Shares, the Directors and any of their Affiliates shall
      have no obligations whatsoever, by virtue of the relationships established
      pursuant to this Agreement, to take or refrain from taking any action that
      may impact the Company, the Shareholders or any Affiliate of the Company
      or a Shareholder.

            (b) The provisions of this Agreement, including SECTIONs 5.07, 5.08,
      5.09 and 5.10, constitute an agreement to restrict or eliminate fiduciary
      and other duties pursuant to the provisions of SECTION 18-1101 of the Act.

                                       28


      SECTION 5.11.  INDEMNIFICATION

            (a) The Indemnitees shall be entitled to mandatory indemnification
      and shall be entitled to be held harmless by the Partnership to the extent
      and subject to the conditions provided in Article 6 of the Delegation of
      Control Agreement with the Organizational Shareholder, in its capacity as
      general partner of the Partnership, hereby deeming it advisable that such
      indemnification and holding harmless shall (rather than may) be done and
      provided by the Partnership to the fullest extent and subject to the
      conditions provided therein.

            (b) To the extent that the indemnification provisions of Article 6
      of the Delegation of Control Agreement do not fully hold harmless any of
      the Indemnitees, then to the fullest extent permitted by Law but subject
      to the limitations expressly provided in this Agreement, such Indemnitees
      shall be indemnified and held harmless by the Company from and against any
      and all losses, claims, damages, liabilities, joint or several, expenses
      (including legal fees and expenses), judgments, fines, penalties,
      interest, settlements and other amounts arising from any and all claims,
      demands, actions, suits or proceedings, whether civil, criminal,
      administrative or investigative, in which any Indemnitee may be involved,
      or is threatened to be involved, as a party or otherwise, by reason of its
      status as (i) a Record Holder of Voting Shares or any Affiliate thereof,
      (ii) an officer, director, employee, partner, agent or trustee of a Record
      Holder of Voting Shares, the Company or any of their Affiliates, or (iii)
      a Person serving at the request of the Company in another Entity in a
      similar capacity; PROVIDED, HOWEVER, that in each case the Indemnitee
      acted in good faith and in the manner which such Indemnitee reasonably
      believed to be in, or not opposed to, the best interests of the Company,
      and, with respect to any criminal proceeding, had no reasonable cause to
      believe such conduct was unlawful. The termination of any action, suit or
      proceeding by judgment, order, settlement, conviction or upon a plea of
      NOLO CONTENDERE, or its equivalent, shall not create a presumption that
      the Indemnitee acted in a manner contrary to that specified above. Any
      indemnification pursuant to this SECTION 5.11(b) shall be made only out of
      the assets of the Company, it being agreed that no Shareholder, in its
      capacity as such, shall be personally liable for such indemnification nor
      shall it have any obligation to contribute or loan any monies or property
      to the Company to enable the Company to effectuate such indemnification.
      The indemnification provided by this SECTION 5.11(b) shall be secondary to
      any other rights to which an Indemnitee may be entitled as contemplated
      under the Delegation of Control Agreement or any other agreement, pursuant
      to any vote of the Record Holders of Voting Shares, as a matter of Law or
      otherwise, both as to actions in the Indemnitee's capacity as (A) a Record
      Holder of Voting Shares or an Affiliate thereof, (B) an officer, director,
      employee, partner, agent or trustee of a Record Holder of Voting Shares,
      the Company or any of their Affiliates, or (C) a Person serving at the
      request of the Company in another Entity in a similar capacity, and as to
      actions in any other capacity (including any capacity under the
      Underwriting Agreement), and shall continue as to an Indemnitee who has
      ceased to serve in such capacity and shall inure to the benefit of the
      heirs, successors, assigns and administrators of the Indemnitee.

                                       29


            (c) To the fullest extent permitted by Law, expenses (including
      legal fees and expenses) incurred by an Indemnitee who is indemnified
      pursuant to SECTIONs 5.11(a) or 5.11(b) in defending any claim, demand,
      action, suit or proceeding shall, from time to time, be advanced by the
      Company prior to the final disposition of such claim, demand, action, suit
      or proceeding upon receipt by the Company of a written undertaking by or
      on behalf of the Indemnitee to repay such amount if it shall be determined
      that the Indemnitee is not entitled to be indemnified as authorized in
      this SECTION 5.11.

            (d) The Organizational Shareholder may purchase and maintain
      insurance, on behalf of such Persons as the Board of Directors shall
      determine, against any liability that may be asserted against, or expense
      that may be incurred by, such Person in connection with the Company's
      activities, regardless of whether the Company would have the power to
      indemnify such Person against such liability under the provisions of this
      Agreement.

            (e) For purposes of this SECTION 5.11, the Company shall be deemed
      to have requested an Indemnitee to serve as fiduciary of an employee
      benefit plan whenever the performance by it of its duties to the Company
      also imposes duties on, or otherwise involves services by, it to the plan
      or participants or beneficiaries of the plan; excise taxes assessed on an
      Indemnitee with respect to an employee benefit plan pursuant to applicable
      law shall constitute "fines" for purposes of indemnities contemplated by
      SECTIONs 5.11(a) and 5.11(b); and action taken or omitted by it with
      respect to an employee benefit plan in the performance of its duties for a
      purpose reasonably believed by it to be in the interest of the
      participants and beneficiaries of the plan shall be deemed to be for a
      purpose which is in, or not opposed to, the best interests of the Company.

            (f) In no event may an Indemnitee subject the Shareholders to
      personal liability by reason of the indemnification provisions set forth
      in this Agreement.

            (g) An Indemnitee shall not be denied indemnification in whole or in
      part contemplated under this SECTION 5.11 because the Indemnitee had an
      interest in the transaction with respect to which the indemnification
      applies if the transaction was otherwise permitted by the terms of this
      Agreement.

            (h) The provisions of this SECTION 5.11 are for the benefit of the
      Indemnitees, their heirs, successors, assigns and administrators and shall
      not be deemed to create any rights for the benefit of any other Persons.

            (i) No amendment, modification or repeal of this SECTION 5.11 or any
      provision hereof shall in any manner terminate, reduce or impair the right
      of any past, present or future Indemnitee to be indemnified by the
      Company, nor the obligation of the Company to indemnify any such
      Indemnitee under and in accordance with the provisions of this SECTION
      5.11 as in effect immediately prior to such amendment, modification or
      repeal with respect to claims arising from or relating to matters
      occurring, in whole or in part, prior to such amendment, modification or
      repeal, regardless of when such claims may arise or be asserted.
      Notwithstanding the foregoing, nothing herein shall limit the

                                       30


      power or authority of the Partnership to amend any provisions of the
      Partnership Agreement regarding indemnification and reimbursement or
      similar provisions.

      SECTION 5.12.  LIABILITY OF INDEMNITEES

            (a) Notwithstanding anything to the contrary set forth in this
      Agreement, no Indemnitee shall be liable for monetary damages to the
      Company, the Shareholders or any other Person for losses sustained or
      liabilities incurred as a result of any act or omission constituting a
      breach of such Indemnitee's fiduciary duty, in the event that such a duty
      is found to exist, if such Indemnitee acted in good faith and in the
      manner which such Indemnitee reasonably believed to be in, or not opposed
      to, the best interests of the Company, and, with respect to any criminal
      proceeding, had no reasonable cause to believe such conduct was unlawful.

            (b) Subject to its obligations and duties as set forth in this
      Article 5, the Board of Directors and any committee thereof may exercise
      any of the powers granted to it by this Agreement and perform any of the
      duties imposed upon it hereunder either directly or by or through the
      Company's agents, and neither the Board of Directors nor any committee
      thereof shall be responsible for any misconduct or negligence on the part
      of any such agent appointed by the Board of Directors or any committee
      thereof in good faith.

            (c) Any amendment, modification or repeal of this SECTION 5.12 or
      any provision hereof shall be prospective only and shall not in anyway
      affect the limitations on liability under this SECTION 5.12 as in effect
      immediately prior to such amendment, modification or repeal with respect
      to claims arising from or relating to matters occurring, in whole or in
      part, prior to such amendment, modification or repeal, regardless of when
      such claims may arise or be asserted.

      SECTION 5.13.  FACSIMILE SIGNATURES. In addition to the provisions for
      the use of facsimile signatures elsewhere specifically authorized in this
      Agreement, facsimile signatures of any Officer of the Company may be used
      whenever and as authorized by the Board of Directors.

                                   ARTICLE VI
                               BOOKS AND RECORDS;
                            INFORMATION AND ACCOUNTS

      SECTION 6.01.  MAINTENANCE OF BOOKS AND RECORDS. The Company shall keep
at its principal office complete and accurate books and records of the
Company, supporting documentation of the transactions with respect to the
conduct of the Company's business and affairs and minutes of the proceedings
of the Board of Directors, the Shareholders and each committee of the Board
of Directors. The records shall include: (a) complete and accurate
information regarding the state of the business and financial condition of
the Company; (b) a copy of this Agreement and the Organizational Certificate;
(c) a current list of the names and last

                                       31


known business, residence, or mailing addresses of all Directors and
Officers; and (d) the Company's federal, state and local tax returns for the
Company's six most recent tax years.

      SECTION 6.02.  INFORMATION. In addition to the other rights
specifically set forth in this Agreement and subject to such reasonable
standards (including standards governing what information and documents are
to be furnished and at what time and location and at whose expense) as may be
established by the Board of Directors or any Officer, each Shareholder is
entitled to all information to which a member of a Delaware limited liability
company is entitled to have access pursuant to the Act under the
circumstances and subject to the conditions therein stated.

      SECTION 6.03.  ACCOUNTS. The Board of Directors may establish, or
direct or authorize any Officer to establish, one or more separate bank and
investment accounts and arrangements for the Company, which shall be
maintained in the Company's name with financial institutions and firms that
the Board of Directors, or any Officer so directed or authorized, determines.

                                   ARTICLE VII
             DISSOLUTION, WINDING-UP AND TERMINATION; CERTAIN MERGERS

      SECTION 7.01.  DISSOLUTION

            (a) The Company shall dissolve and its affairs shall be wound up on
      the first to occur of the following events (each a "DISSOLUTION EVENT"):

                  (i)   entry of a decree of judicial dissolution of the Company
            under SECTION 18-802 of the Act;

                  (ii)  the approval of the Record Holders of Voting Shares and
            the Record Holders of a majority of the Listed Shares then
            Outstanding; or

                  (iii) the approval of Record Holders of Listed Shares owning
            at least 66?% of the Listed Shares then Outstanding.

            (b) Neither the death, dissolution or Bankruptcy of any Shareholder
      nor the occurrence of any other event that causes a Shareholder to cease
      to be a member of the Company shall constitute a Dissolution Event, and
      the business of the Company shall be continued after such event.





                                       32


      SECTION 7.02.  WINDING-UP AND TERMINATION

            (a) On the occurrence of a Dissolution Event, the Board of Directors
      shall select one or more Persons to act as liquidator (the "LIQUIDATOR").
      The Liquidator shall proceed diligently to wind up the affairs of the
      Company and make final distributions as provided herein and in the Act.
      The costs of winding up shall be borne as a Company expense. Until final
      distribution, the Liquidator shall continue to operate the Company's
      properties with all of the power and authority of the Board of Directors.

            (b) Any assets of the Company remaining after satisfaction of the
      liabilities of the Company (whether by payment or by reasonable provisions
      for payment) shall be distributed on a share-for-share basis on all
      Outstanding Company Securities.

            (c) On completion of such final distribution, the Liquidator shall
      file a Certificate of Cancellation with the Secretary of State of the
      State of Delaware, cancel any other filings made pursuant to SECTION 2.05,
      and take such other actions as may be necessary to terminate the existence
      of the Company.

      SECTION 7.03.  MERGER RELATING TO CHANGE IN TAX STATUS

            (a) Subject to SECTIONs 7.03(c) and 7.03(d) of this Agreement and
      SECTION 16.6 of the Partnership Agreement, upon or at any time following
      the occurrence of a Tax Status Event, the Record Holder of Voting Shares
      shall have the right, which right it may exercise in its sole discretion
      and without a vote of Record Holders of Listed Shares, to cause a merger
      of the Company with or into the Partnership or any subsidiary of the
      Partnership.

            (b) If the Record Holder of Voting Shares determines to exercise its
      right to cause a merger as described in SECTION 7.03(a), it shall execute
      and/or file a Certificate of Merger pursuant to the Act and shall execute
      and/or file, pursuant to the Act or other applicable Law, all other
      documents, instruments or certificates deemed by it necessary or
      appropriate to effectuate such merger and, subject to SECTIONs 7.03(c) and
      7.03(d), such merger shall have the effects provided in the Certificate of
      Merger, the Merger Agreement and under the Act and any other applicable
      Law.

            (c) The Record Holder of Voting Shares may cause a merger of the
      Company as described in SECTION 7.03(b) only if it has received a written
      opinion of counsel to the Company, which counsel and form of opinion shall
      be reasonably satisfactory to the Board of Directors, to the effect that,
      for U.S. federal income tax purposes, no gain or loss should be recognized
      by a Shareholder that owns (for such tax purposes) Listed Shares upon the
      receipt of Class A Common Units (or another security that is in all
      respects substantially similar to Class A Common Units) in exchange for
      Listed Shares pursuant to such merger, except with respect to (i) any cash
      received in lieu of a fraction of a Listed Share or (ii) the termination
      of any rights or obligations related to the Purchase Provisions. In lieu
      of such opinion requirement, the Record Holder of Voting Shares may cause
      a merger of the Company as described in SECTION 7.03(b) if it or the

                                       33


      Company has received a ruling from the Internal Revenue Service to the
      effect set forth in the preceding sentence.

            (d) The Merger Agreement executed in connection with any merger of
      the Company pursuant to this SECTION 7.03 shall provide that, at the
      effective time of such merger, each Shareholder shall receive, in exchange
      for the total number of Listed Shares owned by such Shareholder, a number
      of whole Class A Common Units and an amount of cash in lieu of fractional
      Class A Common Units such that (i) the product of the number of whole
      Class A Common Units so received by such Shareholder and the Closing Price
      of one Class A Common Unit on the last Trading Day prior to the effective
      time of such merger, plus (ii) the amount of cash received by such
      Shareholder, is equal to the product of the number of Listed Shares owned
      by such Shareholder and the Closing Price of one Listed Share on the last
      Trading Day prior to the effective time of such merger. For purposes of
      this SECTION 7.03(d), the term "Class A Common Units" shall include any
      other security received in exchange for Listed Shares in lieu of Class A
      Common Units that is in all respects substantially similar to Class A
      Common Units.

                                  ARTICLE VIII
                             AMENDMENT OF AGREEMENT;
                        SHAREHOLDER MEETINGS; RECORD DATE

      SECTION 8.01.  AMENDMENT PROCEDURES

            (a) Except as provided in SECTION 8.01 of the Purchase Provisions,
      any provision of this Agreement, including the Purchase Provisions, may be
      amended by the Record Holders of Voting Shares without the approval of any
      Record Holder of Listed Shares; PROVIDED, HOWEVER, that with respect to
      any matter for which the approval of the Record Holders of Listed Shares
      entitled to vote thereon is required pursuant to SECTION 4.03(d), then
      such amendment shall be not be effective until such amendment has been
      approved by Record Holders of Listed Shares whose aggregate percentage
      constitutes not less than the percentage of Listed Shares required to
      approve such matter.

            (b) Any proposed amendment that requires the approval of the Record
      Holders of Listed Shares shall be explained in a writing that contains the
      text of the proposed amendment. If such an amendment is proposed, the
      Board of Directors shall seek the written approval of the Record Holders
      of the requisite percentage of Company Securities or call a meeting of the
      Shareholders entitled to vote thereon to consider and vote on such
      proposed amendment.

            (c) The Board of Directors shall notify all Record Holders of Listed
      Shares upon final adoption of any proposed amendment that requires the
      approval of the Record Holders of Listed Shares.

      SECTION 8.02.  MEETINGS. Except as otherwise provided in this
Agreement, all acts of the Shareholders to be taken hereunder shall be taken
in the manner provided in this Article 8. A

                                       34


meeting of the Record Holders of Company Securities for the transaction of
such business as may properly come before the meeting shall be held at such
time and place as the Board of Directors, the Chairman of the Board or a
Record Holder of Voting Shares shall specify in the notice of the meeting;
PROVIDED, HOWEVER, that a meeting of the Record Holders of Voting Shares and
Listed Shares at which such Record Holders shall vote pursuant to SECTIONs
4.02(d) and 4.03(c), respectively, shall be held at the same time and place
as a meeting of the record holder of I-Units at which the Company shall be
entitled to vote as the record holder of I-Units. No Record Holder of Listed
Shares shall have the right or power to call a meeting of Shareholders, to
determine the time and place of such a meeting or to present any matter to be
voted upon by the Shareholders at such a meeting; provided however, that, not
withstanding the foregoing, the Record Holder of Voting Shares, upon the
written request of the Record Holders of at least 10% of the Outstanding
Listed Shares, shall call and give notice of a meeting of Shareholders within
15 days of receiving such request for the sole purpose of voting on a
proposal to dissolve the Company in accordance with SECTION 7.01(a)(iii).

      SECTION 8.03.  NOTICE OF A MEETING. Notice of a meeting called pursuant
to SECTION 8.02 shall be given in writing by mail or other means of written
communication in accordance with SECTION 10.03 to the Record Holders of
Company Securities for whom the meeting is called. The notice shall be deemed
to have been given at the time when deposited in the mail or sent by other
means of written communication.

      SECTION 8.04.  RECORD DATE. For purposes of determining the
Shareholders entitled to notice of, or to vote at, any meeting of the
Shareholders or entitled to vote by ballot or give approval of Company action
in writing without a meeting or entitled to exercise rights in respect of any
lawful action of the Shareholders, the Record Date shall not be less than 10
nor more than 60 days before (a) the date of the meeting (unless such
requirement conflicts with any Law, in which case the Law shall govern), or
(b) in the event that approvals are sought without a meeting, the date by
which the Shareholders are requested in writing by the Board of Directors to
give such approvals.

      SECTION 8.05.  ADJOURNMENT. When a meeting is adjourned to another time
or place, notice need not be given of the adjourned meeting and a new Record
Date need not be fixed if the time and place thereof are announced at the
meeting at which the adjournment is taken, unless such adjournment shall be
for more than 45 days. At the adjourned meeting, the Company may transact any
business which might have been transacted at the original meeting. If the
adjournment is for more than 45 days or if a new Record Date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given in
accordance with this Article 8.

      SECTION 8.06.  WAIVER OF NOTICE; APPROVAL OF MEETING; APPROVAL OF
MINUTES. The transactions of any meeting of the Shareholders, however called
and noticed, and whenever held, shall be as valid as if they had been
authorized at a meeting duly held after regular call and notice, if a quorum
is present either in person or by proxy, and if, either before or after the
meeting, Shareholders representing such quorum who were present in person or
by proxy and entitled to vote, sign a written waiver of notice or an approval
of the holding of the meeting or an approval of the minutes thereof. All
waivers and approvals shall be filed with the Company

                                       35


records or made a part of the minutes of the meeting. Attendance of a
Shareholder at a meeting shall constitute a waiver of notice of the meeting,
except (a) when the Shareholder does not approve, at the beginning of the
meeting, of the transaction of any business because the meeting is not
lawfully called or convened; and (b) that attendance at a meeting is not a
waiver of any right to disapprove the consideration of matters required to be
included in the notice of the meeting, but not so included, if the
disapproval is expressly made at the meeting.

      SECTION 8.07.  QUORUM; VOTING. The Record Holders of a majority of
those Outstanding Company Securities for which a meeting has been called who
are entitled to vote and be present in person or by proxy shall constitute a
quorum at a meeting of the Shareholders of such class or classes. At any
meeting of the Shareholders duly called and held in accordance with this
Agreement at which a quorum is present, the act of the Record Holders of a
majority of all Outstanding Company Securities present and entitled to vote
thereon shall be deemed to constitute the act of the Record Holders of such
Company Securities, except as approval by holders of a different amount of
Company Securities is required by any other provision of this Agreement or
the Purchase Provisions or by the Act, in which case the act of the
Shareholders holding a number of Outstanding Company Securities representing
at least such different amount shall be required. The Shareholders present at
a duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by the required percentage of Company Securities
specified in this Agreement. In the absence of a quorum, any meeting of the
Shareholders may be adjourned from time to time by the affirmative vote of
the Record Holders of a majority of the Company Securities represented either
in person or by proxy.

      SECTION 8.08.  CONDUCT OF MEETING. The Board of Directors shall have
sole power and authority concerning the manner of conducting any meeting of
the Shareholders or the solicitation of approvals in writing, including the
determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of this Article 8, the conduct of voting,
the validity and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or during the
meeting or voting. The Board of Directors shall, if it has not elected a
Chairman of the Board or if the Chairman of the Board so elected is not
present at the meeting or is otherwise unable or unwilling to serve,
designate a Person to serve as chairman of any meeting and shall further
designate a Person to take the minutes of any meeting. All minutes shall be
kept with the records of the Company. The Board of Directors may make such
other regulations consistent with applicable Law and this Agreement as it may
deem advisable concerning the conduct of any meeting of the Shareholders or
the solicitation of approvals in writing, including regulations in regard to
the appointment of proxies, the appointment and duties of inspectors of votes
and approvals, the submission and examination of proxies and other evidence
of the right to vote and the revocation of approvals in writing.

      SECTION 8.09.  ACTION WITHOUT A MEETING. Any action that may be taken
at a meeting of Shareholders may be taken without a meeting if consents in
writing setting forth such action are signed by the Record Holders holding
not less than the minimum percentage of the Company Securities that would be
necessary to authorize or take such action at a meeting at

                                       36


which all the Company Securities entitled to vote on such matter were present
and voted. Prompt notice of the taking of action without a meeting shall be
given to the Record Holders who were entitled to, but did not, authorize the
action taken. The Board of Directors may specify that any written consent
submitted to Record Holders for the purpose of taking any action without a
meeting shall be returned to the Company within the time period, which shall
be not less than 20 days, specified by the Board of Directors. If a ballot
returned to the Company does not vote all of the Company Securities held by
the Shareholder, the Company shall be deemed to have failed to receive a
ballot for the Company Securities that were not voted. If approval of the
taking of any action by the Shareholders is solicited by any Person other
than by or on behalf of the Board of Directors, the written approvals shall
have no force and effect unless and until (a) they are deposited with the
Company in care of the Board of Directors, (b) approvals sufficient to take
the action proposed are dated as of a date not more than 90 days prior to the
date sufficient approvals are deposited with the Company and (c) an Opinion
of Counsel is delivered to the Board of Directors to the effect that the
exercise of such right and the action proposed to be taken with respect to
any particular matter is otherwise permissible under applicable Law,
including any statutes then governing the rights, duties and liabilities of
the Company and the Shareholders. Notwithstanding any of the foregoing to the
contrary, no written consent of Record Holders of Listed Shares obtained
pursuant to this SECTION 8.10 shall be valid for any purpose unless such
written consent was first presented to the Record Holders of Listed Shares at
the direction of the Board of Directors in accordance with this SECTION 8.10.

      SECTION 8.10.  VOTING AND OTHER RIGHTS

            (a) Only those Record Holders of Company Securities on the Record
      Date set pursuant to SECTION 8.04 (and also subject to SECTION 4.03(e))
      shall be entitled to notice of, and to vote at, a meeting of the
      Shareholders or to act with respect to matters as to which the holders of
      the Company Securities have the right to vote or to act. All references in
      this Agreement to votes of, or other acts that may betaken by, the Company
      Securities shall be deemed to be references to the votes or acts of the
      Record Holders of such Company Securities.

            (b) With respect to Company Securities that are held for a Person's
      account by another Person (such as a broker, dealer, bank, trust company
      or clearing corporation, or an agent of any of the foregoing), in whose
      name such Company Securities are registered, such broker, dealer or other
      agent shall, in exercising the voting rights in respect of such Company
      Securities on any matter, and unless the arrangement between such Persons
      provides otherwise, vote such Company Securities on the behalf, and at the
      direction, of the Person who is the Beneficial Owner, and the Company
      shall be entitled to assume it is so acting without further inquiry.

            (c) With respect to any Shareholder action, broker non-votes and
      other non-votes shall not be counted as votes "for" or "against" any
      matter unless otherwise required by Law.

                                       37


                                   ARTICLE IX
                                    COVENANTS

      SECTION 9.01.  COVENANTS.

            (a)   The Company shall:

                  (i)   use the net proceeds from the Initial Public Offering
            for the purchase of I-Units and other rights as contemplated by this
            Agreement;

                  (ii)  not sell, pledge or otherwise transfer any I-Units or
            such other rights except as contemplated by this Agreement;

                  (iii) not issue options, warrants or other securities
            entitling holder thereof to subscribe for or purchase Company
            Securities;

                  (iv)  not borrow money or issue debt;

                  (v)   except as provided by SECTION 7.03, not effect a
            liquidation, merger, recapitalization or similar transaction
            involving the Company; and

                  (vi)  not purchase Company Securities.

            (b) The Purchaser (as defined in the Purchase Provisions) shall not
      take any action that would result in the occurrence of a Special Event
      described in clause (c) of the definition of "Special Event" in the
      Purchase Provisions unless, prior to the occurrence of such Special Event,
      the Purchaser has notified the Company and the Partnership that the
      occurrence of such Special Event shall constitute a Mandatory Purchase
      Event.

            (c) The covenants set forth in this SECTION 9.01 may be amended or
      waived upon obtaining the approval of the Record Holders of a majority of
      the Outstanding Listed Shares (excluding for all purposes of such approval
      any Listed Shares Beneficially Owned by the Record Holders of Voting
      Shares and their Affiliates).

                                    ARTICLE X
                               GENERAL PROVISIONS

      SECTION 10.01.  FISCAL YEAR.  The fiscal year of the Company shall be
the calendar year.

      SECTION 10.02.  OFFSET.  Whenever the Company is to pay any sum to any
Shareholder, any amounts that Shareholder owes the Company may be deducted
from that sum before payment.

      SECTION 10.03.  NOTICES. Except as expressly set forth to the contrary
in this Agreement, all notices, requests or consents provided for or
permitted to be given under this

                                       38


Agreement must be in writing and must be delivered to the recipient in
person, by courier or mail or by facsimile, telegram, telex, cablegram or
similar transmission, and a notice, request or consent given under this
Agreement is effective on receipt by the Person to receive it. Whenever any
notice is required to be given by Law, the Organizational Certificate or this
Agreement, a written waiver thereof, signed by the Person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent
to the giving of such notice.

      SECTION 10.04.  ENTIRE AGREEMENT. This Agreement, including the
Purchase Provisions, amends and restates the Prior Agreement in its entirety
and constitutes the entire agreement among the Shareholders and the Company
pertaining to the subject matter hereof.

      SECTION 10.05.  WAIVER. No failure by any party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute waiver of any such breach or any other covenant, duty,
agreement or condition.

      SECTION 10.06.  BINDING EFFECT. This Agreement is binding upon and
shall inure to the benefit of the Shareholders, the Assignees and their
respective executors, administrators, successors and legal representatives.

      SECTION 10.07.  GOVERNING LAW; SEVERABILITY. This Agreement shall be
construed in accordance with, and governed by, the laws of the State of
Delaware without regard to the principles of conflicts of law. In the event
of a direct conflict between the provisions of this Agreement and (a) any
provision of the Organizational Certificate or (b) any mandatory,
non-waivable provision of the Act, such provision of the Organizational
Certificate or the Act shall control. If any provision of the Act provides
that it may be varied or superseded in the limited liability company
agreement (or otherwise by agreement of the members or managers of a limited
liability company), such provision shall be deemed superseded and waived in
its entirety if this Agreement contains a provision addressing the same issue
or subject matter. If any provision of this Agreement or the application
thereof to any Person or circumstance is held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of that provision
to other Persons or circumstances is not affected thereby and that provision
shall be enforced to the greatest extent permitted by Law.

      SECTION 10.08.  FURTHER ACTION. The parties shall execute and deliver
all documents, provide all information and take or refrain from taking action
as maybe necessary or appropriate to achieve the purposes of this Agreement.

      SECTION 10.09.  NO RIGHT TO ACTION FOR DISSOLUTION OR PARTITION. No
Shareholder has any right to maintain any action for dissolution of the
Company or for partition of the property of the Company.

      SECTION 10.10.  THIRD-PARTY BENEFICIARIES. The Shareholders, the
Assignees, the Indemnitees and their respective executors, administrators,
successors and legal representatives

                                       39


shall be considered to be third-party beneficiaries of this Agreement,
including the Purchase Provisions.

      SECTION 10.11.  CREDITORS.  None of the provisions of this Agreement
shall be for the benefit of, or shall be enforceable by, any creditor of the
Company in its capacity as such.

      SECTION 10.12.  COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute an agreement binding on
all parties hereto, notwithstanding that all such parties are not signatories
to the original or the same counterpart. Each party shall become bound by
this Agreement immediately upon affixing its signature hereto or, in the case
of a Person acquiring a Company Security, upon (a) the acquisition by such
Person of the Certificate evidencing such Company Security or (b) the
transfer of such Company Security to such Person by book-entry transfer in
accordance with SECTION 3.04(b).




























                                       40


      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.

                                    Organizational Shareholder and Record Holder
                                    of Voting Shares:



                                    ENBRIDGE ENERGY COMPANY, INC.



                                    By:
                                             ----------------------------------
                                    Name:
                                             ----------------------------------
                                    Title:
                                             ----------------------------------





                                    All holders of Listed Shares



                                    By:
                                             ----------------------------------
                                             Attorney-in-fact authorized by the

                                             Board of Directors






                                       41


                                                                         ANNEX A

                               PURCHASE PROVISIONS

      These Purchase Provisions, dated as of __________, 2002, are an
integral part of the Amended and Restated Limited Liability Company Agreement
of Enbridge Energy Management, L.L.C., dated as of ____________, 2002.

                                    ARTICLE I
                                   DEFINITIONS

      SECTION 1.01.  DEFINITIONS.  In these Purchase Provisions, the
following terms shall have the following respective meanings:

      "AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, the Person in question. As used herein, the term "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.

      "AVERAGE MARKET PRICE" for any security means the average of the
Closing Prices for such security for the consecutive Trading Days in the
period specified in the relevant Article of these Purchase Provisions ending
on the Trading Day specified in the relevant Article of these Purchase
Provisions.

      "BENEFICIAL OWNER" has the meaning set forth in Rules 13d-3 and 13d-5
under the Securities Exchange Act, as in effect on the date of these Purchase
Provisions, and the terms "BENEFICIAL OWNERSHIP," "BENEFICIALLY OWN" and
"BENEFICIALLY OWNED" and similar terms have correlative meanings.

      "BOARD OF DIRECTORS OF THE COMPANY" means the board of directors of the
Company established pursuant to the LLC Agreement.

      "BOARD OF DIRECTORS OF THE PURCHASER" means (a) if the Purchaser is
Enbridge Inc., the board of directors of Enbridge Inc.; (b) if the Purchaser
is a limited partnership with a corporate general partner or is any other
corporation, the board of directors of such corporate general partner or
corporation; and (c) if the Purchaser is any other form of entity, the board
of directors or other comparable governing body of such entity.

      "BUSINESS DAY" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or
the State of New York [or the government of Canada or the Province of Alberta]
 shall not be regarded as a Business Day.

                                      A-1


      "CLOSING PRICE" means (a) for securities that are listed on a National
Securities Exchange, the last sale price for that day, regular way, or, if
there are no sales on that day, the average of the closing bid and asked
prices for that day, regular way, in either case as reported in the principal
composite transactions reporting system for the principal National Securities
Exchange on which the securities are listed; or (b) for securities that are
not listed on a National Securities Exchange, (i) the last quoted price on
that day, or if no price is quoted, the average of the high bid and low asked
prices on that day, each as reported by the National Association of
Securities Dealers Automated Quotation System; (ii) if on that day the
securities are not so quoted, the average of the closing bid and asked prices
on that day furnished by a professional market maker in the securities
selected by the Board of Directors of the Purchaser; or (iii) if on that day
no market maker is making a market in the securities, the fair value of the
securities as determined by the Board of Directors of the Purchaser.

      "COMMON UNITS" has the meaning assigned to it in the Partnership
Agreement.

      "COMPANY" means Enbridge Energy Management, L.L.C., a Delaware limited
liability company.

      "CONTROLLING ENTITY" has the meaning set forth in clause (c)(ii) of the
definition of Special Event in this Section 1.01.

      "ENBRIDGE INC." means Enbridge Inc., a Canadian corporation, its
successors by merger and any Person who succeeds to its obligations under
these Purchase Provisions and the Tax Indemnification Agreement in connection
with an acquisition of all or substantially all of its assets by such Person.

      "ENTITY" means a corporation, limited liability company, joint venture,
partnership, trust, unincorporated organization, association or other entity.

      "GENERAL PARTNER" means the general partner of the Partnership. On the
date of these Purchase Provisions, the General Partner is Enbridge Energy
Company, Inc.

      "I-UNITS" has the meaning assigned to it in the Partnership Agreement.

      "LAW" has the meaning assigned to such term in the LLC Agreement.

      "LLC AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of the Company dated as of __________, 2002, including
these Purchase Provisions.

      "LISTED SHARES" means the limited liability company interests in the
Company designated in the LLC Agreement as "LISTED SHARES."

      "MANDATORY PURCHASE" means the purchase of Listed Shares pursuant to
Article 2.

      "MANDATORY PURCHASE DATE" has the meaning set forth in Section 2.03(d).

                                      A-2


      "MANDATORY PURCHASE EVENT" means the occurrence of a Special Event
which the Purchaser has notified the Company and the Partnership, prior to
its occurrence, shall constitute a Mandatory Purchase Event.

      "MANDATORY PURCHASE NOTICE" has the meaning set forth in Section 2.03.

      "MANDATORY PURCHASE PRICE" means the higher of the Average Market Price
for the Listed Shares and the Average Market Price for the Common Units, in
each case as determined by the 10 consecutive Trading Day period ending on
the Trading Day immediately prior to the date of the Mandatory Purchase Event.

      "NATIONAL SECURITIES EXCHANGE" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Securities
Exchange Act.

      "NOTICE DATE" means the date on which the Purchaser either mails the
relevant Purchase Notice to the holders of Listed Shares or delivers copies
of the relevant Purchase Notice to the Transfer Agent for mailing to the
holders of Listed Shares.

      "OPTIONAL PURCHASE" means the purchase of Listed Shares at the election
of the Purchaser pursuant to Article 3 or Article 4.

      "OPTIONAL PURCHASE CONDITION FOR COMMON UNITS AND LISTED SHARES" means
any time at which the sum of the number of Common Units held by the Purchaser
and its Affiliates plus the number of Listed Shares held by the Purchaser and
its Affiliates equals 85% or more of the sum of the aggregate number of
Common Units then outstanding plus the aggregate number of Listed Shares then
outstanding.

      "OPTIONAL PURCHASE CONDITION FOR LISTED SHARES" means any time at which
the Purchaser and its Affiliates hold 80% or more of the then outstanding
Listed Shares.

      "OPTIONAL PURCHASE DATE" means the date selected by the Purchaser for
the Optional Purchase of Listed Shares pursuant to Section 3.02 or Section
4.02.

      "OPTIONAL PURCHASE NOTICE" has the meaning set forth in Section 3.02.

      "OPTIONAL PURCHASE NOTICE FOR COMMON UNITS AND LISTED SHARES" has the
meaning set forth in Section 4.02.

      "OPTIONAL PURCHASE PRICE FOR COMMON UNITS AND LISTED SHARES" means a
price which is equal to the greatest of: (a) the Average Market Price for the
Common Units for the 20 consecutive Trading Day period ending on the fifth
Trading Day prior to the Notice Date, (b) the highest price the Purchaser or
its Affiliates paid for Common Units during the 90 calendar day period ending
on the day prior to the Notice Date, (c) the Average Market Price for the
Listed Shares for the 20 consecutive Trading Day period ending on the fifth
Trading Day prior to the Notice Date, and (d) the highest price the Purchaser
or its Affiliates paid for Listed Shares (other than pursuant to these
Purchase Provisions) during the 90 calendar day period ending on the day
prior to the Notice Date. To the extent that the price paid for Listed Shares
or Common Units in clauses (b) or (d) is paid in securities, the value of
such securities shall be the Closing Price for

                                      A-3


such securities on the day the purchase of the Listed Shares or Common Units
is effected. To the extent that the price paid for Listed Shares or Common
Units in clauses (b) or (d) is paid other than in cash or securities, the
value of such the other consideration (and therefore the price paid for such
Listed Shares or Common Units) shall be as determined by the Board of
Directors of the Purchaser.

      "OPTIONAL PURCHASE PRICE FOR LISTED SHARES" means a price which is
equal to 110% of the greater of: (a) the Average Market Price for the Listed
Shares for the 10 consecutive Trading Day period ending on the fifth Trading
Day prior to the Notice Date, and (b) the highest price Purchaser or its
Affiliates paid for Listed Shares (other than pursuant to these Purchase
Provisions) during the 90 calendar day period ending on the day prior to the
Notice Date. To the extent that the price paid for Listed Shares in clause
(b) is paid in securities, the value of such securities shall be the Closing
Price for such securities on the day the purchase of the Listed Shares is
effected. To the extent that the price paid for Listed Shares in clause (b)
is paid other than in cash or securities, the value of such the other
consideration (and therefore the price paid for such Listed Shares) shall be
as determined by the Board of Directors of the Purchaser.

      "PARTNERSHIP" means Enbridge Energy Partners, L.P., a Delaware limited
partnership.

      "PARTNERSHIP AGREEMENT" means the Third Amended and Restated Agreement
of Limited Partnership of the Partnership, dated as of _________, 2002.
"PARTNERSHIP NOTICE" has the meaning set forth in Section 4.02.

      "PERSON" means a natural person or an Entity.

      "PURCHASE DATE" means either a Mandatory Purchase Date or an Optional
Purchase Date.

      "PURCHASE NOTICE" means a Mandatory Purchase Notice, an Optional
Purchase Notice, or an Optional Purchase Notice for Common Units and Listed
Shares.

      "PURCHASE PRICE" means the Mandatory Purchase Price, the Optional
Purchase Price for Listed Shares or the Optional Purchase Price for Common
Units and Listed Shares.

      "PURCHASE PROVISIONS" means these Purchase Provisions, which are
attached to the LLC Agreement as Annex A and hereby made a part of the LLC
Agreement.

      "PURCHASER" means the Person with the obligation to make the Mandatory
Purchase and the right to make an Optional Purchase pursuant to these
Purchase Provisions. The Purchaser initially is Enbridge Inc.

      "RECORD HOLDER" has the meaning assigned to such term in the LLC
Agreement, in the case of Listed Shares, or in the Partnership Agreement, in
the case of Units.

      "SECTION" means a section of these Purchase Provisions.

      "SECURITIES ACT" means the United States Securities Act of 1933, as
amended from time to time and any successor to such statute and all rules and
regulations promulgated thereunder.

                                       A-4


      "SECURITIES EXCHANGE ACT" means the United States Securities Exchange
Act of 1934, as amended from time to time and any successor to such statute
and all rules and regulations promulgated thereunder.

      "SIMILAR COMMON UNIT SECURITY" means a security which has in all
material respects the same rights and privileges as the Common Units.

      "SIMILAR I-UNIT SECURITY" means a security that has in all material
respects the same rights and privileges as the I-Units.

      "SPECIAL EVENT" means any one of the following:

            (a) the occurrence of the first day on which the aggregate amount of
      distributions or other payments by the Partnership on the Common Units
      (other than distributions or payments made in Common Units or Similar
      Common Unit Securities, but including distributions and other payments
      pursuant to an issuer tender offer by the Partnership) during the
      immediately preceding 360-day period exceeds 50% of the Average Market
      Price of a Common Unit during the 10 consecutive Trading Day period ending
      on the last Trading Day prior to the first day of such 360-day period;

            (b) the merger of the Partnership with or into another Person in any
      case where the Partnership is not the surviving entity, or the sale of all
      or substantially all of the assets of the Partnership and its
      subsidiaries, taken as a whole, to another Person, unless in the
      transaction:

                  (i) the only consideration the Company receives in exchange
            for all of its I-Units is a Similar I-Unit Security of the Person
            that is the surviving Entity or that purchased the assets; and

                  (ii) the only consideration received by the holders of Common
            Units is Similar Common Unit Securities and/or cash, and the amount
            of cash received per Common Unit does not exceed 33?% of the Average
            Market Price of a Common Unit for the 10 consecutive Trading Day
            period ending on the Trading Day immediately preceding the execution
            of the definitive agreement for the transaction; and

            (c) the occurrence of an event resulting in the Purchaser and its
Affiliates ceasing to be the Beneficial Owners of more than 50% of the total
voting power of all shares of capital stock of the General Partner, unless:

                  (i)   the event results from the removal of the General
            Partner as general partner of the Partnership by the limited
            partners of the Partnership, or

                  (ii)  the event results in:

                        A.    another Person becoming the Beneficial Owner
                  of more than 50% of the total voting power of all shares
                  of capital stock of the

                                       A-5


                  General Partner (such other Person being referred to
                  herein as the "CONTROLLING ENTITY");

                        B.    the Controlling Entity is organized under
                  the laws of a state in the United States;

                        C. the Controlling Entity has long term unsecured debt
                  with an investment grade credit rating, as determined by
                  Moody's Investor Services, Inc. and Standard & Poor's Rating
                  Service, immediately prior to the event that results in the
                  Controlling Entity becoming the Beneficial Owner of more than
                  50% of the total voting power of all shares of capital stock
                  of the General Partner; and

                        D.    the Controlling Entity assumes all
                  obligations of the Purchaser and Enbridge Inc. to the
                  Company and to the holders of the Listed Shares under
                  these Purchase Provisions and the Tax Indemnification
                  Agreement, respectively.

      "SUBSIDIARY," when used in connection with the Partnership, means any
Affiliate of the Partnership which the Partnership controls, and of which the
Partnership owns, directly or indirectly, a majority of the aggregate shares,
partnership interests or other equity interests.

      "TAX INDEMNIFICATION AGREEMENT" means the Tax Indemnification
Agreement dated as of ___________, 2002, between Enbridge Inc. and the
Company.

      "TRADING DAY" for any security means a day on which:

            (a)   the principal National Securities Exchange on which such
      security is listed or admitted to trading is open for business; or

            (b) if such security is not listed or admitted to trading on any
      National Securities Exchange, a day on which banking institutions in New
      York, New York generally are open.

      "TRANSFER AGENT" means any bank, trust company or other Person
(including the Company or any Affiliate of the Company) appointed from time
to time by the Board of Directors of the Company to act as registrar and
transfer agent for the Listed Shares. On the date of these Purchase
Provisions, Mellon Investor Services is the Transfer Agent.

      "UNITS" has the meaning assigned to such term in the Partnership
Agreement.

      SECTION 1.02.  RULES OF CONSTRUCTION.  Unless the context otherwise
clearly requires:

            (a) the terms defined in Section 1.01 have the meanings assigned to
      them in that Section for purposes of these Purchase Provisions; terms
      defined both in the LLC Agreement and elsewhere in these Purchase
      Provisions shall in such other portions of the LLC Agreement have the
      meanings ascribed to them in the LLC Agreement;

                                       A-6


            (b)   terms defined include the plural as well as the singular
      and vice versa;

            (c) references to any document, agreement, instrument or provision
      thereof mean such document, agreement, instrument or provisions thereof as
      the same may be duly amended, supplemented or restated from time to time;

            (d)   "INCLUDING" means including without limitation;

            (e)   "OR" is not exclusive; and

            (f) the words "HEREIN," "HEREOF," "HEREUNDER" and other words of
      similar import refer to these Purchase Provisions as a whole and not to
      any particular Article or other subdivision.

                                   ARTICLE II
                               MANDATORY PURCHASE

      SECTION 2.01.  MANDATORY PURCHASE EVENT. Upon the occurrence of a
Mandatory Purchase Event, the Purchaser shall purchase all, but not less than
all, of the outstanding Listed Shares that are not held by the Purchaser or
its Affiliates at the Mandatory Purchase Price, pursuant to the provisions of
this Article 2. The Mandatory Purchase Price for any fractional Listed Share
shall be the Mandatory Purchase Price for a whole Listed Share times the
fraction of the Listed Share to be purchased. In determining whether any
fractional Listed Shares are outstanding, all certificates registered in the
name of the same holder of Listed Shares shall be aggregated.

      SECTION 2.02.  NOTICE TO TRANSFER AGENT. Promptly, but in no case later
than three Business Days, following the occurrence of a Mandatory Purchase
Event, the Purchaser shall give notice to the Transfer Agent that a Mandatory
Purchase Event has occurred, and request that the Transfer Agent mail the
Mandatory Purchase Notice to the record holders of the Listed Shares as of
earlier of the date of the Mandatory Purchase Event or the most recent
practicable date. If the Purchaser so requests, the Transfer Agent shall, and
the Company shall use its reasonable efforts to cause the Transfer Agent to,
mail the Mandatory Purchase Notice to such record holders of Listed Shares.

      SECTION 2.03.  PURCHASE NOTICE. Within three Business Days following
the occurrence of a Mandatory Purchase Event, the Purchaser shall mail, or
deliver to the Transfer Agent for mailing and cause the Transfer Agent to
mail, to the record holders of the Listed Shares described in Section 2.02, a
notice (the "MANDATORY PURCHASE NOTICE") which shall state:

            (a) that a Mandatory Purchase Event has occurred and that pursuant
      to the provisions of the LLC Agreement and these Purchase Provisions the
      Purchaser will purchase all of the outstanding Listed Shares that are not
      held by the Purchaser or its Affiliates at the Mandatory Purchase Price;

            (b)   a brief description of the circumstances and relevant
      facts regarding the Mandatory Purchase Event;

                                       A-7


            (c)   the dollar amount per Listed Share of the Mandatory
      Purchase Price;

            (d) the date on which the Listed Shares will be purchased (the
      "PURCHASE DATE"), which shall be no later than five Business Days from the
      date the Mandatory Purchase Notice is mailed by the Purchaser or the
      Transfer Agent; and

            (e) the instructions a holder of Listed Shares must follow,
      including any other documents such holder must deliver, in order to
      receive the Mandatory Purchase Price.

      Any such Mandatory Purchase Notice mailed to a record holder of Listed
Shares at such holder's address as reflected in the records of the Transfer
Agent as of the time set forth in Section 2.02, or delivered by the Purchaser
to the Transfer Agent for mailing to such holders, shall be conclusively
presumed to have been given, whether or not such holder receives such notice.
Failure to give any such notice to any particular holder or holders shall not
affect the validity of the Mandatory Purchase pursuant to these Purchase
Provisions.

      SECTION 2.04.  DEPOSIT OF FUNDS; EFFECT OF PURCHASE. On or prior to the
Mandatory Purchase Date, the Purchaser shall irrevocably deposit with the
Transfer Agent funds sufficient to pay the Mandatory Purchase Price for all
outstanding Listed Shares that on the date of such deposit are not held by
the Purchaser or its Affiliates. After the date of such deposit and prior to
the Mandatory Purchase Date, neither the Purchaser nor any of its Affiliates
shall dispose of any Listed Shares held by them, other than to the Purchaser
or any of its Affiliates. The Transfer Agent shall return to the Purchaser
any funds not so required for the purchase of Listed Shares that on the
Mandatory Purchase Date are not held by the Purchaser or its Affiliates. If
the Purchaser so deposits such funds with the Transfer Agent, and if the
Purchaser has delivered the Mandatory Purchase Notice to the Transfer Agent
for mailing to the record holders of the Listed Shares, then from and after
the Mandatory Purchase Date, notwithstanding that any certificate
representing Listed Shares shall not have been surrendered for purchase, all
rights of the holders of such Listed Shares as such, including any other
rights under the LLC Agreement and the rights to receive any distributions on
Listed Shares that have been declared (or a record date for which has been
set) but that have not been paid or made, shall thereupon cease, except the
right to receive the Mandatory Purchase Price, without interest, upon
surrender to the Transfer Agent of the certificates representing such Listed
Shares, with such other documents as may be required by the Mandatory
Purchase Notice, in compliance with the instructions in the Mandatory
Purchase Notice, and such Listed Shares shall from and after the Mandatory
Purchase Date be deemed to be purchased by the Purchaser and shall be
transferred to the Purchaser on the record books of the Transfer Agent, and
the Purchaser shall be deemed to be the owner of such Listed Shares from and
after the Mandatory Purchase Date and shall have all rights as the owner and
record holder of such Listed Shares.

      SECTION 2.05.  TERMINATION OF MANDATORY PURCHASE OBLIGATION. The
provisions of this Article 2 shall terminate and be of no further force and
effect upon the occurrence of any of the following events:

            (a)   the removal of the General Partner as general partner of
      the Partnership by the limited partners of the Partnership; or

                                       A-8


            (b)   the occurrence of a Special Event that is not also a
      Mandatory Purchase Event.

                                   ARTICLE III
                                OPTIONAL PURCHASE

      SECTION 3.01.  OPTIONAL PURCHASE CONDITION FOR LISTED SHARES. At any
time when the Optional Purchase Condition for Listed Shares exists, the
Purchaser may elect, but shall not be obligated, to purchase all, but not
less than all, of the outstanding Listed Shares that are not held by the
Purchaser or its Affiliates at the Optional Purchase Price for Listed Shares
pursuant to the provisions of this Article 3. The Purchase Price for any
fractional Listed Share purchased pursuant to this Article 3 shall be the
Optional Purchase Price for Listed Shares times the fraction of the Listed
Share to be purchased. In determining whether any fractional Listed Shares
are outstanding, all certificates registered in the name of the same holder
of Listed Shares shall be aggregated.

      SECTION 3.02.  OPTIONAL PURCHASE NOTICE. The Purchaser may exercise its
election to make an Optional Purchase by delivering copies of a notice (the
"OPTIONAL PURCHASE NOTICE") to the Transfer Agent not less than ten days and
not more than 60 days prior to the date the Purchaser selects for the
Optional Purchase (the "OPTIONAL PURCHASE DATE"). The Transfer Agent shall,
and the Company will use its reasonable efforts to cause the Transfer Agent
to, mail the Optional Purchase Notice to the record holders of Listed Shares
as of the most recent practicable date. Any such Optional Purchase Notice
mailed to a record holder of Listed Shares at his address as reflected in the
records of the Transfer Agent, or delivered by the Purchaser to the Transfer
Agent for mailing to such holders, shall be conclusively presumed to have
been given, whether or not such holder receives such notice. Failure to give
such notice to any particular holder or holders shall not affect the validity
of the Optional Purchase pursuant to these Purchase Provisions. So long as
the Optional Purchase Condition for Listed Shares exists on the date of the
Optional Purchase Notice, the Purchaser may purchase such Listed Shares
pursuant to these Optional Purchase provisions, whether or not the Optional
Purchase Condition for Listed Shares continues to exist on the Optional
Purchase Date. The Optional Purchase Notice shall state:

            (a) that as of the date of such Optional Purchase Notice, the
      Optional Purchase Condition for Listed Shares exists, and that the
      Purchaser has elected to make the Optional Purchase pursuant to the terms
      of the LLC Agreement and these Purchase Provisions;

            (b)   the Optional Purchase Price;

            (c)   the Optional Purchase Date; and

            (d) the instructions a holder of Listed Shares must follow,
      including any other documents a holder of Listed Shares must deliver, in
      order to receive the Optional Purchase Price.

      SECTION 3.03.  DEPOSIT OF FUNDS; EFFECT OF PURCHASE. On or prior to the
Optional Purchase Date, the Purchaser shall irrevocably deposit with the
Transfer Agent funds sufficient to pay the Optional Purchase Price for Listed
Shares for all outstanding Listed Shares that on the

                                       A-9


date of such deposit are not held by the Purchaser or its Affiliates. After
the date of such deposit and prior to the Optional Purchase Date, neither the
Purchaser nor any of its Affiliates shall dispose of any Listed Shares held
by them, other than to the Purchaser or any of its Affiliates. The Transfer
Agent shall return to the Purchaser any funds not so required for the
purchase of Listed Shares that on the Optional Purchase Date are not held by
the Purchaser or its Affiliates. If the Purchaser so deposits such funds with
the Transfer Agent, and if the Purchaser has delivered the Optional Purchase
Notice to the Transfer Agent for mailing to the record holders of the Listed
Shares, then from and after the Optional Purchase Date, notwithstanding that
any certificate representing Listed Shares shall not have been surrendered
for purchase, all rights of the holders of such Listed Shares as such,
including any other rights under the LLC Agreement and the rights to receive
any distributions on Listed Shares that have been declared (or a record date
for which has been set) but that have not been paid or made, shall thereupon
cease, except the right to receive the Optional Purchase Price for Listed
Shares, without interest, upon surrender to the Transfer Agent of the
certificates representing such Listed Shares, with such other documents as
may be required by the Optional Purchase Notice, in compliance with the
instructions in the Optional Purchase Notice, and such Listed Shares shall
from and after the Optional Purchase Date be deemed to be purchased by the
Purchaser and shall be transferred to the Purchaser on the record books of
the Transfer Agent, and the Purchaser shall be deemed to be the owner of such
Listed Shares from and after the Optional Purchase Date and shall have all
rights as the owner of such Listed Shares.

                                   ARTICLE IV
            OPTIONAL PURCHASE OF COMMON UNITS AND LISTED SHARES

      SECTION 4.01.  OPTIONAL PURCHASE CONDITION FOR COMMON UNITS AND LISTED
SHARES. If at any time when the Optional Purchase Condition for Common Units
and Listed Shares exists, the Purchaser may elect, but shall not be
obligated, to purchase all, but not less than all, of the outstanding Listed
Shares that are not held by the Purchaser or its Affiliates at the Optional
Purchase Price for Common Units and Listed Shares pursuant to the provisions
of this Article 4, but only if the General Partner or its assignee elects to
purchase all, but not less than all, of the outstanding Common Units that are
not held by the Purchaser or its Affiliates pursuant to the provisions of the
Partnership Agreement. The Purchase Price for any fractional Listed Share
purchased pursuant to this Article 4 shall be the Optional Purchase Price for
Common Units and Listed Shares times the fraction of the Listed Share to be
purchased. In determining whether any fractional Listed Shares are
outstanding, all certificates registered in the name of the same holder of
Listed Shares shall be aggregated.

      SECTION 4.02.  OPTIONAL PURCHASE NOTICE FOR COMMON UNITS AND LISTED
SHARES. The Purchaser may exercise its election to make an Optional Purchase
of Common Units and Listed Shares by delivering copies of a notice (the
"OPTIONAL PURCHASE NOTICE FOR COMMON UNITS AND LISTED SHARES") to the
Transfer Agent not less than ten days and not more than 60 days prior to the
date the Purchaser selects for the Optional Purchase (the "OPTIONAL PURCHASE
DATE"). The Optional Purchase Notice for Common Units and Listed Shares shall
not be effective, however, unless and until the later to occur of (i)
delivery of the Optional Purchase Notice for Common Units and Listed Shares
to the Transfer Agent and (ii) delivery to the transfer agent for the Common
Units of a similar notice with respect to the purchase of all outstanding
Common Units not owned by the Purchaser and its Affiliates (the "PARTNERSHIP
NOTICE") pursuant to the

                                      A-10


provisions of the Partnership Agreement. After both the Partnership Notice
has been given to the transfer agent for the Common Units and the Optional
Purchase Notice for Common Units and Listed Shares has been given to the
Transfer Agent, the Transfer Agent shall, and the Company will use its
reasonable efforts to cause the Transfer Agent to, mail the Optional Purchase
Notice for Common Units and Listed Shares to the record holders of Listed
Shares as of the most recent practicable date. Any such Optional Purchase
Notice for Common Units and Listed Shares mailed to a record holder of Listed
Shares at his address as reflected in the records of the Transfer Agent, or
delivered by the Purchaser to the Transfer Agent for mailing to such holders,
shall be conclusively presumed to have been given, whether or not such holder
receives such notice. Failure to give such notice to any particular holder or
holders shall not affect the validity of the purchase pursuant to these
Purchase Provisions. So long as the Optional Purchase Condition for Common
Units and Listed Shares exists on the date of the Optional Purchase Notice
for Common Units and Listed Shares, the Purchaser may purchase such Listed
Shares pursuant to these Optional Purchase provisions, whether or not the
Optional Purchase Condition for Common Units and Listed Shares continues to
exist on the Optional Purchase Date. The Optional Purchase Notice for Common
Units and Listed Shares shall state:

            (a) that with respect to Listed Shares that on the Optional Purchase
      Date are not held by the Purchaser or its Affiliates, the Purchaser has
      elected to make the Optional Purchase for Common Units and Listed Shares
      pursuant to the terms of the LLC Agreement and these Purchase Provisions
      and that the General Partner or its assignee has elected to make the
      purchase of Common Units pursuant to the similar provisions of the
      Partnership Agreement;

            (b)   the Optional Purchase Price for Common Units and Listed
      Shares;

            (c)   the optional Purchase Date; and

            (d) the instructions a holder of Listed Shares must follow,
      including any other documents such holder must deliver, in order to
      receive the Optional Purchase Price for Common Units and Listed Shares.

      SECTION 4.03.  DEPOSIT OF FUNDS; EFFECT OF PURCHASE. On or prior to the
Optional Purchase Date, the Purchaser shall irrevocably deposit with the
Transfer Agent funds sufficient to pay the Optional Purchase Price for Common
Units and Listed Shares for all outstanding Listed Shares that on the date of
such deposit are not held by the Purchaser or its Affiliates. After the date
of such deposit and prior to the Optional Purchase Date, neither the
Purchaser nor any of its Affiliates shall dispose of any Listed Shares held
by them, other than to the Purchaser or any of its Affiliates. The Transfer
Agent shall return to the Purchaser any funds not so required for such
purchase. If the Purchaser so deposits funds with the Transfer Agent, and if
the Purchaser has delivered the Optional Purchase Notice for Common Units and
Listed Shares to the Transfer Agent for mailing to the record holders of the
Listed Shares, then from and after the Optional Purchase Date,
notwithstanding that any certificate representing Listed Shares shall not
have been surrendered for purchase, all rights of the holders of such Listed
Shares as such, including any other rights under the LLC Agreement and the
right to receive any distributions on Listed Shares that have been declared
(or a record date for which has been set) but that have not been paid or
made, shall thereupon cease, except the right to receive the Optional
Purchase Price

                                      A-11


for Common Units and Listed Shares, without interest, upon surrender to the
Transfer Agent of the certificates representing such Listed Shares, with such
other documents as may be required by the Optional Purchase Notice for Common
Units and Listed Shares, in compliance with the instructions in the Optional
Purchase Notice for Common Units and Listed Shares, and such Listed Shares
shall from and after the Optional Purchase Date be deemed to be purchased by
the Purchaser and shall be transferred to the Purchaser on the record books
of the Transfer Agent, and the Purchaser shall be deemed to be the owner of
such Listed Shares from and after the Optional Purchase Date and shall have
all rights as the owner of such Listed Shares.

                                    ARTICLE V
                        RESPONSIBILITY OF TRANSFER AGENT

      SECTION 5.01.  RESPONSIBILITY OF TRANSFER AGENT FOR PURCHASE
PROVISIONS. The Transfer Agent, in such capacity, shall not at any time be
under any duty or responsibility to any holder of Listed Shares to determine
whether any Mandatory Purchase Event has occurred, or with respect to the
amount of the Purchase Price to be paid, or with respect to the method
employed, or herein provided to be employed, in calculating the same. The
Transfer Agent, in such capacity, shall not be responsible for any failure of
the Purchaser to make or calculate any cash payment or for any failure of the
Purchaser to comply with any of the Purchase Provisions.

      SECTION 5.02.  DELIVERIES TO HOLDERS AND FORMER HOLDERS. Whenever the
Purchaser or the Company may deliver to the Transfer Agent for mailing or
delivery to the record holders or former record holders of Listed Shares any
notice, communication, Purchase Price or other payment or other matter
deliverable to record holders or former record holders of Listed Shares under
these Purchase Provisions, the Transfer Agent shall promptly mail or deliver
such notice, communication or payment or matter to the relevant record holder
or former record holder, and the Company shall use its reasonable efforts to
cause the Transfer Agent to do so.

                                   ARTICLE VI
                         BINDING EFFECT ON THE PURCHASER

      SECTION 6.01.  ADOPTION OF PURCHASE PROVISIONS BY PURCHASER.  Enbridge
Inc., as the initial Purchaser pursuant to these Purchase Provisions, has
executed in the place provided below and delivered to the Company a copy of
these Purchase Provisions, pursuant to which Enbridge Inc. has, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, adopted and agreed to be subject to and bound by these Purchase
Provisions as the Purchaser hereunder.  Enbridge Inc. further acknowledges
and agrees that these Purchase Provisions and its obligations hereunder are
for the benefit of and shall be enforceable by any record holder of Listed
Shares.

                                      A-12


                                   ARTICLE VII
                                CERTAIN COVENANTS

      SECTION 7.01.  FILINGS AND CONSENTS. The Purchaser and the Company will
use their reasonable best efforts to make or cause to be made any
registrations and filings with governmental authorities required of such
party or any of its subsidiaries or Affiliates, and to obtain any consents,
authorizations, approvals or failures to object of governmental authorities
required with respect to such party or any of its subsidiaries or Affiliates,
that are necessary for the consummation of a Mandatory Purchase or an
Optional Purchase hereunder, (i) in the case of a Mandatory Purchase, prior
to the occurrence of a Mandatory Purchase Event, and (ii) in the case of an
Optional Purchase, prior to the Optional Purchase Date.

      SECTION 7.02.  RULE 13E-3 COMPLIANCE.  Enbridge Inc. agrees that it
will comply with Rule 13e-3 under the Securities Exchange Act in connection
with a Mandatory Purchase Event or if it makes an Optional Purchase.

                                  ARTICLE VIII
                                   AMENDMENTS

      SECTION 8.01.  AMENDMENT. Except as provided in Section 8.01 of the LLC
Agreement and Section 8.02 of these Purchase Provisions, these Purchase
Provisions may be amended by an agreement in writing signed by the Company
and the Purchaser without the vote, approval or consent of the holders of any
of the Listed Shares.

      SECTION 8.02.  CERTAIN AMENDMENTS WITHOUT VOTE. Notwithstanding the
foregoing provisions and the other provisions of the LLC Agreement with
respect to amendments to these Purchase Provisions, the Board of Directors of
the Company has reserved the right to make, with the written consent of the
Purchaser, and may make, with the written consent of the Purchaser, changes
in the Listed Shares and these Purchase Provisions to meet the requirements
of applicable Law and to effect the intent of the LLC Agreement, and also may
make other changes which the Board of Directors of the Company determines in
its sole discretion will not have a material adverse effect on the rights and
privileges of the Listed Shares, in each case without the vote, consent or
approval of the holders of any Listed Shares. In addition, notwithstanding
the foregoing provisions with respect to amendments, (a) in the case of (i)
any merger of the Partnership, whether or not the Partnership is the
survivor, that is the subject of a vote of Record Holders of Units and does
not constitute a Special Event, and (ii) any recapitalization, reorganization
or similar transaction of the Partnership, in each case that is the subject
of a vote of Record Holders of Units and does not constitute a Special Event,
or (b) if any Person becomes a Controlling Entity in a transaction complying
with the requirements of clause (c)(ii) of the definition of "Special Event"
in these Purchase Provisions, such amendments as the Board of Directors of
the Company deems appropriate in its good faith discretion and are agreed to
by the Purchaser may be made in these Purchase Provisions to accommodate, in
the case of clause (a), such merger, recapitalization, reorganization, or
similar transaction, or, in the case of clause (b), the assumption by such
Person of the obligations of the Purchaser under these Purchase Provisions,
and any such amendment shall be deemed not to have such a material adverse
effect or reduce the time for any notice, and therefore may be made without
the vote, consent or approval of the Record Holders of Listed Shares.

                                      A-13


                            ADOPTION BY ENBRIDGE INC.

      Enbridge Inc., as the Purchaser pursuant to these Purchase Provisions,
has executed in the place provided below and delivered to the Company a copy
of these Purchase Provisions, pursuant to which Enbridge Inc. has, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, adopted and agreed to be subject and bound by these Purchase
Provisions as the Purchaser hereunder and by Section 9.01(b) of the LLC
Agreement. Enbridge Inc. further acknowledges and agrees that these Purchase
Provisions, Section 9.01(b) of the LLC Agreement and its obligations
hereunder and thereunder are for the benefit of and shall be enforceable by
any record holder of Listed Shares.

Dated:                  , 2002

                                       ENBRIDGE INC.


                                       By:
                                            ------------------------------------
                                                  Authorized Officer























                                      A-14

EX-4.1

                                                                   EXHIBIT 4.1

                      Certificate Evidencing Listed Shares
               Representing Limited Liability Company Interests in
                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.


No. _______                                                _______ Listed Shares

      ENBRIDGE ENERGY MANAGEMENT, L.L.C., a Delaware limited liability company
(the "Company"), hereby certifies that ___________________________________ (the
"Holder") is the registered owner of _______________________________ Listed
Shares representing limited liability company interests in the Company (the
"Listed Shares") transferable on the books of the Company, in person or by duly
authorized attorney, upon surrender of this Certificate properly endorsed. The
designations, preferences and relative, participating, optional or other special
rights, powers and duties relating to the Listed Shares are set forth in, and
this Certificate and the Listed Shares represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Limited Liability Company Agreement of ENBRIDGE ENERGY MANAGEMENT,
L.L.C., as amended, supplemented or restated from time to time (the
"Agreement"). Copies of the Agreement are on file at, and will be furnished
without charge on delivery of written request to the Company at, the principal
office of the Company located at 1100 Louisiana, Suite 3300, Houston, Texas
77002. Capitalized terms used herein but not defined shall have the meanings
given to them in the Agreement.

      The Holder, by accepting this Certificate, is deemed to have (i) executed
and agreed to comply with, and to become bound by, the Agreement; (ii)
represented and warranted that the Holder has all right, power and authority
and, if an individual, the capacity, necessary to enter into the Agreement;
(iii) appointed any Person duly authorized by the Board of Directors to act as
the true and lawful representative and attorney-in-fact of the Holder, in the
name, place and stead of the Holder, to make, execute, sign, deliver and file
(a) any amendment of the Organizational Certificate, (b) any amendment to the
Agreement, including any amendment to the Purchase Provisions, made in
accordance with the terms of the Agreement, and (c) all such other instruments,
documents and certificates that may from time to time be required by Law to
effectuate, implement and continue the valid and subsisting existence of the
Company or for any other purpose consistent with the Agreement and the
transactions contemplated thereunder; (iv) given the powers of attorney provided
for in the Agreement; and (v) made the waivers and given the consents and
approvals contained in the Agreement.

      This certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent of the Listed Shares.



Dated:___________________________



Countersigned and Registered by:    ENBRIDGE ENERGY MANAGEMENT, L.L.C.

MELLON INVESTOR SERVICES
as Transfer Agent and Registrar     By:_______________________________________
of the Listed Shares                            Authorized Officer


By:______________________________   By:_______________________________________
      Authorized Signature                      Authorized Officer





                            [Reverse of Certificate]

                                  ABBREVIATIONS


      The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as follows according to applicable laws or
regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT - ___________________
TEN ENT - as tenants by the entireties                      (Cust)    (Minor)
JT TEN  - as joint tenants with right                     under Uniform Gifts to
          of survivorship and not as                 Minors Act of _____________
          tenants in common                                             (State)


      Additional abbreviations, though not in the above list, may also be used.



                                       2


                                   STOCK POWER

For Value Received, ___________________________________________ hereby sells,
assigns and transfers unto______________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE, AND PLEASE INSERT
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFYING NUMBER OF ASSIGNEE)

____________________ Listed Shares represented by the Certificate and does
hereby irrevocably constitute and appoint __________________ as
attorney-in-fact, to transfer the said Listed Shares on the books of the within
named Company and with full power of substitution in the premises.


Dated:____________________________

NOTICE:

THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.


__________________________________
(SIGNATURE)


__________________________________
(SIGNATURE)


THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.

SIGNATURE(S) GUARANTEED BY:______________________________________________



                                       3

EX-4.2

                                                                  Exhibit 4.2

                           THIRD AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                         ENBRIDGE ENERGY PARTNERS, L.P.







                         DATED AS OF __________, 2002








                                               TABLE OF CONTENTS


                                                                                                           
                                                   ARTICLE I
                                            ORGANIZATIONAL MATTERS

1.1      Continuation.............................................................................................2
1.2      Name.....................................................................................................2
1.3      Registered Office; Principal Office......................................................................2
1.4      Power of Attorney........................................................................................2
1.5      Term.....................................................................................................4
1.6      Possible Restrictions on Transfer........................................................................4

                                                  ARTICLE II
                                                  DEFINITIONS


                                                  ARTICLE III
                                                    PURPOSE

3.1      Purpose and Business....................................................................................17
3.2      Powers..................................................................................................17

                                                  ARTICLE IV
                                             CAPITAL CONTRIBUTIONS

4.1      Initial Contribution....................................................................................18
4.2      Intentionally Omitted...................................................................................18
4.3      Intentionally Omitted...................................................................................18
4.4      Issuances of Units and Other Securities.................................................................18
4.5      Limited Preemptive Rights...............................................................................19
4.6      Capital Accounts........................................................................................20
4.7      Interest................................................................................................22
4.8      No Withdrawal...........................................................................................22
4.9      Loans from Partners.....................................................................................22
4.10     No Fractional Units.....................................................................................22
4.11     Splits and Combinations.................................................................................22
4.12     I-Units.................................................................................................23

                                                   ARTICLE V
                                         ALLOCATIONS AND DISTRIBUTIONS

5.1      Allocations for Capital Account Purposes................................................................24
5.2      Allocations for Tax Purposes............................................................................30
5.3      Requirement and Characterization of Distributions.......................................................32
5.4      [Intentionally Omitted].................................................................................33
5.5      Cash from Operations....................................................................................33
5.6      Change of Class A Common Units and Class B Common Units.................................................34
5.7      Cash from Interim Capital Transactions..................................................................34
5.8      Definitions.............................................................................................34
5.9      Adjustment of Minimum Quarterly Distribution and Target Distribution Levels.............................37
5.10     Special Provisions Relating to I-Units..................................................................38



                                       i


                                                                                                           
                                                  ARTICLE VI
                                     MANAGEMENT AND OPERATION OF BUSINESS

6.1      Management..............................................................................................40
6.2      Certificate of Limited Partnership......................................................................42
6.3      Restrictions on General Partner's Authority.............................................................42
6.4      Reimbursement of the General Partner....................................................................43
6.5      Outside Activities......................................................................................44
6.6      Loans to and from the General Partner; Contracts with Affiliates........................................44
6.7      Indemnification.........................................................................................46
6.8      Liability of Indemnitees................................................................................47
6.9      Resolution of Conflicts of Interest.....................................................................48
6.10     Other Matters Concerning the General Partner............................................................49
6.11     Title to Partnership Assets.............................................................................50
6.12     Purchase or Sale of Class A Common Units................................................................50
6.13     Reliance by Third Parties...............................................................................50
6.14     Registration Rights of the General Partner and its Affiliates...........................................51
6.15     Delegation to EEM.......................................................................................53

                                                  ARTICLE VII
                                  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

7.1      Limitation of Liability.................................................................................54
7.2      Management of Business..................................................................................54
7.3      Outside Activities......................................................................................54
7.4      Return of Capital.......................................................................................54
7.5      Rights of Limited Partners Relating to the Partnership..................................................54

                                                 ARTICLE VIII
                                    BOOKS, RECORDS, ACCOUNTING AND REPORTS

8.1      Records and Accounting..................................................................................55
8.2      Fiscal Year.............................................................................................56
8.3      Reports.................................................................................................56

                                                  ARTICLE IX
                                                  TAX MATTERS

9.1      Preparation of Tax Returns..............................................................................56
9.2      Tax Elections...........................................................................................56
9.3      Tax Controversies.......................................................................................56
9.4      Organizational Expenses.................................................................................57
9.5      Withholding.............................................................................................57
9.6      Entity-Level Taxation...................................................................................57
9.7      Entity-Level Deficiency Collections.....................................................................57
9.8      Opinions of Counsel.....................................................................................58

                                                   ARTICLE X
                                               UNIT CERTIFICATES

10.1     Unit Certificates.......................................................................................58
10.2     Registration, Registration of Transfer and Exchange.....................................................58



                                       ii


                                                                                                           
10.3     Mutilated, Destroyed, Lost or Stolen Certificates.......................................................59
10.4     Record Holder...........................................................................................60

                                                  ARTICLE XI
                                             TRANSFER OF INTERESTS

11.1     Transfer................................................................................................60
11.2     Transfer of General Partner's Partnership Interest......................................................60
11.3     Transfer of Units.......................................................................................61
11.4     Restrictions on Transfers...............................................................................62
11.5     Citizenship Certificates; Non-citizen Assignees.........................................................62
11.6     Redemption of Interests.................................................................................63

                                                  ARTICLE XII
                                             ADMISSION OF PARTNERS

12.1     [Intentionally Omitted].................................................................................64
12.2     Admission of Substituted Limited Partners...............................................................64
12.3     Admission of Successor General Partner..................................................................65
12.4     Admission of Additional Limited Partners................................................................65
12.5     Amendment of Agreement and Certificate of Limited Partnership...........................................66

                                                 ARTICLE XIII
                                       WITHDRAWAL OR REMOVAL OF PARTNERS

13.1     Withdrawal of the General Partner.......................................................................66
13.2     Removal of the General Partner..........................................................................67
13.3     Interest of Departing Partner and Successor General Partner.............................................68
13.4     [Intentionally Omitted].................................................................................69
13.5     Withdrawal of Limited Partners..........................................................................69

                                                  ARTICLE XIV
                                          DISSOLUTION AND LIQUIDATION

14.1     Dissolution.............................................................................................69
14.2     Continuation of the Business of the Partnership after Dissolution.......................................70
14.3     Liquidation.............................................................................................70
14.4     Distributions in Kind...................................................................................71
14.5     Cancellation of Certificate of Limited Partnership......................................................72
14.6     Reasonable Time for Winding Up..........................................................................72
14.7     Return of Capital.......................................................................................72
14.8     Capital Account Restoration.............................................................................72
14.9     Waiver of Partition.....................................................................................72

                                                  ARTICLE XV
                           AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

15.1     Amendment to be Adopted Solely by General Partner.......................................................72
15.2     Amendment Procedures....................................................................................74
15.3     Amendment Requirements..................................................................................74
15.4     Meetings................................................................................................75
15.5     Notice of a Meeting.....................................................................................75



                                       iii


                                                                                                           
15.6     Record Date.............................................................................................76
15.7     Adjournment.............................................................................................76
15.8     Waiver of Notice; Approval of Meeting; Approval of Minutes..............................................76
15.9     Quorum..................................................................................................76
15.10    Conduct of Meeting......................................................................................77
15.11    Action Without a Meeting................................................................................77
15.12    Voting and Other Rights.................................................................................78

                                                  ARTICLE XVI
                                                    MERGER

16.1     Authority...............................................................................................78
16.2     Procedure for Merger or Consolidation...................................................................78
16.3     Approval by Limited Partners of Merger or Consolidation.................................................79
16.4     Certificate of Merger...................................................................................80
16.5     Effect of Merger........................................................................................80
16.6     Merger with EEM upon Tax Status Event...................................................................80

                                                 ARTICLE XVII
                                            RIGHT TO ACQUIRE UNITS

17.1     Right to Acquire Units..................................................................................81

                                                 ARTICLE XVIII
                                              GENERAL PROVISIONS

18.1     Addresses and Notices...................................................................................83
18.2     Titles and Captions.....................................................................................84
18.3     Pronouns and Plurals....................................................................................84
18.4     Further Action..........................................................................................84
18.5     Binding Effect..........................................................................................84
18.6     Integration.............................................................................................84
18.7     Creditors...............................................................................................84
18.8     Waiver..................................................................................................84
18.9     Counterparts............................................................................................84
18.10    Applicable Law..........................................................................................85
18.11    Invalidity of Provisions................................................................................85
18.12    Amendments to Reflect GP Reorganization Agreement.......................................................85



                                       iv



                      THIRD AMENDED AND RESTATED AGREEMENT
                            OF LIMITED PARTNERSHIP OF
                         ENBRIDGE ENERGY PARTNERS, L.P.

      THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
ENBRIDGE ENERGY PARTNERS, L.P., dated as of __________, 2002, is entered into
by and among Enbridge Energy Company, Inc., a Delaware corporation, as the
General Partner, and the Limited Partners, together with any other Persons who
become Partners in the Partnership as provided herein.

      WHEREAS, the General Partner and the other parties thereto entered into
that certain Agreement of Limited Partnership of the Partnership on December 19,
1991 (the "ORIGINAL AGREEMENT"); and

      WHEREAS, the General Partner amended and restated the Original Agreement,
as evidenced by that certain Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of December 27, 1991 (the "FIRST AMENDED
AND RESTATED AGREEMENT"); and

      WHEREAS, the General Partner, acting pursuant to Section 15.1 of the First
Amended and Restated Agreement, amended and restated the First Amended and
Restated Agreement, as evidenced by that certain Amended and Restated Agreement
of Limited Partnership of the Partnership dated as of April 15, 1997 (the
"SECOND AMENDED AND RESTATED AGREEMENT"); and

      WHEREAS, the General Partner, acting pursuant to Section 15.1 of the
Second Amended and Restated Agreement, amended the Second Amended and Restated
Agreement, as evidenced by that certain Amendment to Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of August 28, 2001
(the "AMENDMENT AGREEMENT"); and

      WHEREAS, pursuant to the authority granted to the General Partner in the
Second Amended and Restated Agreement, as amended, the General Partner desires
(i) to amend the Second Amended and Restated Agreement to create a class of
Units to be designated "I-Units," and to fix the preferences and relative,
participating, optional and other special rights, powers and duties pertaining
to the I-Units, (ii) to amend the Second Amended and Restated Agreement to
reflect the withdrawal of the General Partner as the general partner of Enbridge
Energy, Limited Partnership and the increase in the General Partner's general
partner interest in the Partnership, (iii) to amend the Second Amended and
Restated Agreement to reflect the expiration of the Preference Period (as
defined in the Second Amended and Restated Agreement) and the inapplicability of
various rights, preferences, duties and obligations associated therewith,
including the purchase and redemption obligations and rights associated with
APIs, and (iv) to restate the Second Amended and Restated Agreement as amended
by the Amendment Agreement and the amendments described in (i) through (iii)
above; and

      WHEREAS, Article IV and Section 15.1 of the Second Amended and Restated
Agreement permit the General Partner, without the approval of any Limited
Partner or Assignee, to amend the Second Amended and Restated Agreement as
provided herein;

      NOW, THEREFORE, the General Partner does hereby amend and restate the
Second Amended and Restated Agreement, as amended, to provide, in its entirety,
as follows:



                                    ARTICLE I
                             ORGANIZATIONAL MATTERS

            1.1  CONTINUATION. The General Partner and the Limited Partners
hereby continue the Partnership as a limited partnership pursuant to the
provisions of the Delaware Act. Except as expressly provided to the contrary
in this Agreement, the rights and obligations of the Partners and the
administration, dissolution and termination of the Partnership shall be
governed by the Delaware Act. The Partnership Interest of each Partner shall
be personal property for all purposes.

            1.2  NAME. The name of the Partnership shall be "Enbridge Energy
Partners, L.P." The Partnership's business may be conducted under any other
name or names deemed necessary or appropriate by the General Partner,
including, without limitation, the name of the General Partner or any
Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or similar
words or letters shall be included in the Partnership's name where necessary
for the purposes of complying with the laws of any jurisdiction that so
requires. The General Partner in its sole discretion may change the name of
the Partnership at any time and from time to time and shall notify the
Limited Partners of such change in the next regular communication to Limited
Partners.

            1.3  REGISTERED OFFICE; PRINCIPAL OFFICE. Unless and until
changed by the General Partner, the registered office of the Partnership in
the State of Delaware shall be located at The Corporation Trust Center, 1209
Orange Street, New Castle County, Wilmington, Delaware 19801, and the
registered agent for service of process on the Partnership in the State of
Delaware at such registered office shall be The Corporation Trust Company.
The principal office of the Partnership and the address of the General
Partner shall be 1100 Louisiana, Suite 3300, Houston, Texas 77002, or such
other place as the General Partner may from time to time designate by notice
to the Limited Partners. The Partnership may maintain offices at such other
place or places within or outside the State of Delaware as the General
Partner deems advisable.

            1.4  POWER OF ATTORNEY. (a) Each Limited Partner and each
Assignee hereby constitutes and appoints each of the General Partner and, if
a Liquidator shall have been selected pursuant to Section 14.3, the
Liquidator severally (and any successor to either thereof by merger,
transfer, assignment, election or otherwise) and each of their authorized
officers and attorneys-in-fact, with full power of substitution, as his true
and lawful agent and attorney-in-fact, with full power and authority in his
name, place and stead, to:

                  (i) execute, swear to, acknowledge, deliver, file and record
            in the appropriate public offices (A) all certificates, documents
            and other instruments (including, without limitation, this Agreement
            and the Certificate of Limited Partnership and all amendments or
            restatements thereof) that the General Partner or the Liquidator
            deems necessary or appropriate to form, qualify or continue the
            existence or qualification of the Partnership as a limited
            partnership (or a partnership in which the limited partners have
            limited liability) in the State of Delaware and in all other
            jurisdictions in which the Partnership may conduct business or own
            property; (B) all certificates, documents and other instruments that
            the General Partner or the Liquidator deems necessary or appropriate
            to

                                      2


            reflect, in accordance with its terms, any amendment, change,
            modification or restatement of this Agreement; (C) all certificates,
            documents and other instruments (including, without limitation,
            conveyances and a certificate of cancellation) that the General
            Partner or the Liquidator deems necessary or appropriate to reflect
            the dissolution and liquidation of the Partnership pursuant to the
            terms of this Agreement; (D) all certificates, documents and other
            instruments relating to the admission, withdrawal, removal or
            substitution of any Partner pursuant to, or other events described
            in, Article XI, XII, XIII or XIV or the Capital Contribution of any
            Partner; (E) all certificates, documents and other instruments
            relating to the determination of the rights, preferences and
            privileges of any class or series of Units or other securities
            issued pursuant to Section 4.4; and (F) all certificates, documents
            and other instruments (including, without limitation, agreements and
            a certificate of merger) relating to a merger or consolidation of
            the Partnership pursuant to Article XVI; and

                  (ii) execute, swear to, acknowledge, deliver, file and record
            all ballots, consents, approvals, waivers, certificates and other
            instruments necessary or appropriate, in the sole discretion of the
            General Partner or the Liquidator, to make, evidence, give, confirm
            or ratify any vote, consent, approval, agreement or other action
            that is made or given by the Partners hereunder or is consistent
            with the terms of this Agreement or is necessary or appropriate, in
            the sole discretion of the General Partner or the Liquidator, to
            effectuate the terms or intent of this Agreement; provided, that
            when required by Section 15.3 or any other provision of this
            Agreement that establishes a percentage of the Limited Partners or
            of the Limited Partners of any class or series required to take any
            action, the General Partner or the Liquidator may exercise the power
            of attorney made in this Section 1.4(a)(ii) only after the necessary
            vote, consent or approval of the Limited Partners or of the Limited
            Partners of such class or series. Nothing contained in this Section
            1.4 shall be construed as authorizing the General Partner to amend
            this Agreement except in accordance with Article XV, or as may be
            otherwise expressly provided for in this Agreement.

            (b) The foregoing power of attorney is hereby declared to be
      irrevocable and a power coupled with an interest, and it shall survive and
      not be affected by the subsequent death, incompetency, disability,
      incapacity, dissolution, bankruptcy or termination of any Limited Partner
      or Assignee and the transfer of all or any portion of such Limited
      Partner's or Assignee's Partnership Interest and shall extend to such
      Limited Partner's or Assignee's heirs, successors, assigns and personal
      representatives. Each such Limited Partner or Assignee hereby agrees to be
      bound by any representation made by the General Partner or the Liquidator
      acting in good faith pursuant to such power of attorney; and each such
      Limited Partner or Assignee hereby waives any and all defenses that may be
      available to contest, negate or disaffirm the action of the General
      Partner or the Liquidator taken in good faith under such power of
      attorney. Each Limited Partner or Assignee shall execute and deliver to
      the General Partner or the Liquidator, within 15 days after receipt of the
      General Partner's or the Liquidator's request therefor, such further
      designation, powers of attorney and other instruments as the General
      Partner or

                                      3


      the Liquidator deems necessary to effectuate this Agreement and
      the purposes of the Partnership.

            1.5  TERM. The Partnership commenced upon the filing of the
Certificate of Limited Partnership in accordance with the Delaware Act and
shall continue in existence until the close of Partnership business on
December 31, 2031 or until the earlier termination of the Partnership in
accordance with the provisions of Article XIV.

            1.6  POSSIBLE RESTRICTIONS ON TRANSFER. Notwithstanding anything
to the contrary contained in this Agreement, in the event of (i) the
enactment (or imminent enactment) of any legislation, (ii) the publication of
any temporary or final regulation by the Treasury Department (a "TREASURY
REGULATION"), (iii) any ruling by the Internal Revenue Service or (iv) any
judicial decision, that, in any such case, in the Opinion of Counsel, would
result in the taxation of the Partnership for federal income tax purposes as
a corporation or would otherwise subject the Partnership to being taxed as an
entity for federal income tax purposes, then, either (a) the General Partner
may impose such restrictions on the transfer of Units or Partnership
Interests as may be required, in the Opinion of Counsel, to prevent the
Partnership from being taxed as a corporation or otherwise being taxed as an
entity for federal income tax purposes, including, without limitation, making
any amendments to this Agreement as the General Partner in its sole
discretion may determine to be necessary or appropriate to impose such
restrictions, provided, that any such amendment to this Agreement that would
result in the delisting or suspension of trading of the Units on any National
Securities Exchange on which the Units are then traded must be approved by
the holders of at least 66 2/3% of the Outstanding Units (excluding for this
purpose Units held by the General Partner and its Affiliates) or (b) upon the
recommendation of the General Partner and the approval of the holders of at
least 66 2/3% of the Outstanding Units (excluding for this purpose Units held
by the General Partner and its Affiliates), the Partnership may be converted
into and reconstituted as a trust or any other type of legal entity (the "NEW
ENTITY") the manner and on other terms so recommended and approved. In such
event, the business of the Partnership shall be continued by the New Entity
and the Units shall be converted into equity interests of the New Entity in
the manner and on the terms so recommended and approved. Notwithstanding the
foregoing, no such reconstitution shall take place unless the Partnership
shall have received an Opinion of Counsel to the effect that the liability of
the Limited Partners for the debts and obligations of the New Entity shall
not, unless such Limited Partners take part in the control of the business of
the New Entity, exceed that which otherwise had been applicable to such
Limited Partners as limited partners of the Partnership under the Delaware
Act.

                                   ARTICLE II
                                   DEFINITIONS

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

      "ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 12.4 and who is shown as such on the books
and records of the Partnership.

                                      4



      "ADJUSTED CAPITAL ACCOUNT" means the Capital Account maintained for each
Partner as of the end of each taxable year of the Partnership, (a) increased by
any amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-1T(b)(4)(iv)(f) and
1.704-1T(b)(4)(iv)(h)(5)), and (b) decreased by (i) the amount of all losses and
deductions that, as of the end of such taxable year, are reasonably expected to
be allocated to such Partner in subsequent years under Sections 704(e)(2) and
706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii)
the amount of all distributions that, as of the end of such taxable year, are
reasonably expected to be made to such Partner in subsequent years in accordance
with the terms of this Agreement or otherwise to the extent they exceed
offsetting increases to such Partner's Capital Account that are reasonably
expected to occur during (or prior to) the year in which such distributions are
reasonably expected to be made (other than increases as a result of a minimum
gain chargeback pursuant to Section 5.1(e)(i) or 5.1(e)(ii)). The foregoing
definition of Adjusted Capital Account is intended to comply with the provisions
of Treasury Regulation Section 1.704-(b)(2)(ii)(d) and shall be interpreted
consistently therewith. The Adjusted Capital Account of a Partner in respect of
a Class A Common Unit, a Class B Common Unit, an I-Unit or any other interest in
the Partnership shall be the amount which such Adjusted Capital Account would be
if such Class A Common Unit, Class B Common Unit, I-Unit or other interest in
the Partnership was the only interest in the Partnership held by a Partner.

      "ADJUSTED PROPERTY" means any property the Carrying Value of which has
been adjusted pursuant to Section 4.6(d)(i) or 4.6(d)(ii). Once an Adjusted
Property is deemed distributed by, and recontributed to, the Partnership for
federal income tax purposes upon a termination thereof pursuant to Section 708
of the Code, such property shall thereafter constitute a Contributed Property
until the Carrying Value of such property is further adjusted pursuant to
Section 4.6(d)(i) or 4.6(d)(ii) hereof.

      "AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, the Person in question. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise. For purposes of this Agreement,
EEM is an Affiliate of the Company.

      "AGREED ALLOCATION" means any allocation made pursuant to Section 5.1(a),
(b), (c), (d) or (f).

      "AGREED VALUE" of any Contributed Property means the fair market value of
such property or other consideration at the time of contribution as determined
by the General Partner using such reasonable method of valuation as it may
adopt. The General Partner shall, in its sole discretion, use such method as it
deems reasonable and appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a single or integrated
transaction among such properties on a basis proportional to their fair market
value.

                                      5


      "AGREEMENT" means this Third Amended and Restated Agreement of Limited
Partnership of Enbridge Energy Partners, L.P., as it may be further amended,
supplemented or restated from time to time.

      "AMENDMENT AGREEMENT" has the meaning assigned to such term in the
recitals to this Agreement.

      "ASSIGNEE" means a Non-citizen Assignee or a Person to whom one or more
Units have been transferred in a manner permitted under this Agreement and who
has executed and delivered a Transfer Application as required by this Agreement,
but who has not become a Substituted Limited Partner.

      "AVAILABLE CASH" has the meaning assigned to such term in Section 5.8 (a).

      "AVERAGE MARKET PRICE" has the meaning assigned to such term in Section
5.10(c).

      "BOOK-TAX DISPARITY" means with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 4.6 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.

      "BUSINESS DAY" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or
Canada or the State of New York or the Province of Alberta shall not be regarded
as a Business Day.

      "CALCULATED UNIT AMOUNT" has the meaning assigned to such term in Section
5.10(c).

      "CAPITAL ACCOUNT" means the capital account maintained for any Partner
pursuant to Section 4.6.

      "CAPITAL CONTRIBUTION" means any cash, cash equivalents or the Net Agreed
Value of Contributed Property that a Partner has previously contributed to the
Partnership pursuant to the Prior Agreements or hereafter contributes to the
Partnership pursuant to Sections 4.4, 4.6(c) or 13.3(c).

      "CARRYING VALUE" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
amortization and cost recovery deductions charged to the Partners' Capital
Accounts, and (b) with respect to any other Partnership property, the adjusted
basis of such property for federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Sections 4.6(d)(i) and 4.6(d)(ii) and to reflect
changes, additions or other adjustments to the Carrying Value for dispositions
and acquisitions of Partnership properties, as deemed appropriate by the General
Partner.

                                      6


      "CASH FROM INTERIM CAPITAL TRANSACTIONS" has the meaning assigned to such
term in Section 5.8(b).

      "CASH FROM OPERATIONS" has the meaning assigned to such term in Section
5.8(c).

      "CAUSE" means a court of competent jurisdiction has entered a final,
non-appealable judgment finding the General Partner liable for actual fraud,
gross negligence or willful or wanton misconduct in its capacity as general
partner of the Partnership.

      "CERTIFICATE" means a certificate issued by the Partnership evidencing
ownership of one or more Partnership Interests.

      "CERTIFICATE OF LIMITED PARTNERSHIP" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
referenced in Section 6.2, as such Certificate may be amended or restated from
time to time.

      "CERTIFICATE OF MERGER" has the meaning assigned to such term in the LLC
Agreement.

      "CITIZENSHIP CERTIFICATION" means a properly completed certificate in such
form as may be specified by the General Partner by which an Assignee or a
Limited Partner certifies that he (and if he is a nominee holding for the
account of another Person, that to the best of his knowledge such other Person)
is an Eligible Citizen.

      "CLASS A COMMON UNIT" means, except as otherwise provided in Section
16.6(c), a Unit representing a fractional part of the Partnership Interests of
all Limited Partners and Assignees and having the rights and obligations
specified with respect to Class A Common Units in this Agreement.

      "CLASS B COMMON UNIT" means a Unit representing a fractional part of the
Partnership Interests of the Limited Partners and Assignees and having the
rights and obligations specified with respect to Class B Common Units in this
Agreement.

      "CLOSING DATE" means December 27, 1991.

      "CLOSING PRICE" has the meaning assigned to such term in Section 17.1(a).

      "CODE" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, as interpreted by the applicable regulations thereunder. Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.

      "COMMON UNIT" means a Class A Common Unit or a Class B Common Unit.

      "COMPANY" means Enbridge Energy Company, Inc., a Delaware
corporation.

      "CONTRIBUTED PROPERTY" means each property or other asset, in such form as
may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership (or deemed contributed to the Partnership on termination and
reconstitution thereof pursuant to Section 708

                                      7


of the Code or otherwise). Once the Carrying Value of a Contributed Property
is adjusted pursuant to Section 4.6(d), such property shall no longer
constitute a Contributed Property for purposes of Section 5.1, but shall be
deemed an Adjusted Property for such purposes.

      "CONTRIBUTING PARTNER" means each Partner contributing (or deemed to have
contributed on termination and reconstitution of the Partnership pursuant to
Section 708 of the Code or otherwise) a Contributed Property.

      "CONTRIBUTION AGREEMENT" means the Contribution Agreement, dated as of May
16, 2002, between the Company and the Partnership, as amended, supplemented or
restated from time to time.

      "CONVEYANCE AGREEMENT" means the Contribution, Conveyance and Assumption
Agreement dated as of December 27, 1991, among the Company, the Partnership and
Enbridge Energy, Limited Partnership.

      "CURRENT MARKET PRICE" has the meaning assigned to such term in Section
17.1(a).

      "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.

      "DELEGATION OF CONTROL AGREEMENT" means the Delegation of Control
Agreement, dated as of    , 2002, among the Partnership, the Company and EEM, as
amended, supplemented or restated from time to time.

      "DEPARTING INTEREST" has the meaning assigned to such term in Section
13.3(a).

      "DEPARTING PARTNER" means a former general partner of the Partnership,
from and after the effective date of any withdrawal or removal of such former
general partner pursuant to Section 13.1 or Section 13.2.

      "DISCRETIONARY ALLOCATION" shall mean any allocation of an item of income,
gain, deduction, or loss pursuant to the provisions of Section 5.1(d)(iii).

      "ECONOMIC RISK OF LOSS" has the meaning set forth in Treasury Regulation
Section 1.704-1T(b)(4)(iv)(k)(1).

      "EEM" means Enbridge Energy Management, L.L.C., a Delaware Limited
Liability Company.

      "ELIGIBLE CITIZEN" means a Person qualified to own interests in real
property in jurisdictions in which the Partnership or any Operating Subsidiary
does business or proposes to do business from time to time, and whose status as
a Limited Partner or Assignee does not or would not subject the Partnership or
any Operating Subsidiary to a substantial risk of cancellation or forfeiture of
any of its properties or any interest therein.

      "ENBRIDGE INC." means Enbridge Inc., a Canadian corporation.

                                      8


      "EQUIVALENT NON-CASH AMOUNT" has the meaning assigned to such term in
Section 5.10(c).

      "EVENT OF WITHDRAWAL" has the meaning assigned to such term in Section
13.1(a).

      "EXCHANGE ACT" means the Securities Exchange Act of 1934 as amended,
supplemented or restated from time to time, and any successor to such statute.

      "FIRST AMENDED AND RESTATED AGREEMENT" has the meaning assigned to such
term in the recitals to this Agreement.

      "FIRST LIQUIDATION TARGET AMOUNT" has the meaning assigned to such term in
Section 5.1(c)(i)(H).

      "FIRST TARGET DISTRIBUTION" has the meaning assigned to such term in
Section 5.8(h).

      "GENERAL PARTNER" means the Company, and its successors as general partner
of the Partnership.

      "GENERAL PARTNER EQUITY VALUE" means, as of any date of determination, the
fair market value of the General Partner's Partnership Interest as a general
partner as determined by the General Partner using whatever reasonable method of
valuation it may adopt.

      "GP REORGANIZATION AGREEMENT" means the Reorganization Agreement, dated as
of    , 2002, among the Partnership, the General Partner, Enbridge Energy,
Limited Partnership and Enbridge Pipelines (Lakehead) L.L.C.

      "I-UNIT" means a Unit representing a fractional part of the Partnership
Interests of all Limited Partners and Assignees and having the rights and
obligations specified with respect to I-Units in this Agreement.

      "INCENTIVE DISTRIBUTION" means any amount of cash distributed to the
General Partner, in its capacity as general partner of the Partnership, pursuant
to paragraph (d), (e) or (f) of Section 5.5 which exceeds an amount equal to
2.0% of the aggregate amount of cash then being distributed pursuant to such
provisions.

      "INDEMNITEE" means the General Partner, any Operating General Partner, any
Departing Partner, any Person who is or was an Affiliate of the General Partner,
any Operating General Partner or any Departing Partner, any Person who is or was
an officer, director, employee, partner, agent or trustee of the General
Partner, any Operating General Partner or any Departing Partner or any such
Affiliate, or any Person who is or was serving at the request of the General
Partner, any Operating General Partner or any Departing Partner or any such
Affiliate as a director, officer, employee, partner, agent or trustee of another
Person.

      "INITIAL OFFERING" means the initial offering of Class A Common Units to
the public, as described in the Registration Statement.

      "INITIAL UNIT PRICE" means $21.50.

                                      9


      "INTERIM CAPITAL TRANSACTION" has the meaning assigned to such term in
Section 5.8(i).

      "ISSUE PRICE" means the price at which a Unit is purchased from the
Partnership, less any sales commission or underwriting discount charged to the
Partnership.

      "LIMITED PARTNER" means each initial Limited Partner, each Substituted
Limited Partner, each Additional Limited Partner and any Departing Partner upon
the change of its status from General Partner to Limited Partner pursuant to
Section 13.3 and, solely for purposes of Articles IV, V and VI and Sections 14.3
and 14.4, shall include an Assignee.

      "LIMITED PARTNER EQUITY VALUE" means, as of any date of determination, the
amount equal to the sum of (a) the product obtained by multiplying (i) the total
number of Class A Common Units Outstanding (immediately prior to an issuance of
Units or distribution of cash or Partnership property), by (ii)(A) in the case
of a valuation required by Section 4.6(d)(i) (other than valuations caused by
sales of a de minimis quantity of Units), the Issue Price or (B) in the case of
a valuation required by Section 4.6(d)(ii) (or a valuation required by Section
4.6(d)(i) caused by sales of a de minimis quantity of Units), the Closing Price
and (b) the fair market value of the Class B Common Units Outstanding
(immediately prior to an issuance of Units or distribution of cash or
Partnership property) as determined by the General Partner using whatever
reasonable method of valuation it may adopt.

      "LIQUIDATOR" means the General Partner or other Person approved pursuant
to Section 14.3 who performs the functions described therein.

      "LISTED SHARES" means the limited liability company interests in EEM
designated in the LLC Agreement as "Listed Shares."

      "LLC AGREEMENT" means the Amended and Restated Limited Liability Company
Agreement of EEM dated as of    , 2002, including exhibits and annexes thereto,
as it may be amended, supplemented or restated from time to time.

      "LPL CONTRIBUTION AGREEMENT" means the LPL Contribution and Assumption
Agreement dated as of December 27, 1991 among the Company, the Partnership and
Lakehead Services, Limited Partnership.

      "MANDATORY PURCHASE EVENT" has the meaning assigned to such term in the
Purchase Provisions.

      "MAXIMUM PERMITTED DELEGATION" has the meaning assigned to such term in
the Delegation of Control Agreement.

      "MERGER AGREEMENT" has the meaning assigned to such term in Section 16.1;
provided, however, that as used in Section 16.6, such term has the meaning
assigned to such term in the LLC Agreement.

      "MINIMUM GAIN ATTRIBUTABLE TO PARTNER NONRECOURSE DEBT" means that amount
determined in accordance with the principles of Treasury Regulation Section
1.704-1T(b)(iv)(4)(h)(6).

                                      10


      "MINIMUM QUARTERLY DISTRIBUTION" has the meaning assigned to such term in
Section 5.8(j).

      "NATIONAL SECURITIES EXCHANGE" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.

      "NET AGREED VALUE" means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a Partner or
Assignee by the Partnership, the Partnership's Carrying Value of such property
at the time such property is distributed, reduced by any indebtedness either
assumed by such Partner or Assignee upon such distribution or to which such
property is subject at the time of distribution as determined under Section 752
of the Code.

      "NET INCOME" has the meaning assigned to such term in Section 5.8(k).

      "NET LOSS" has the meaning assigned to such term in Section 5.8(l).

      "NET TERMINATION GAIN" has the meaning assigned to such term in Section
5.8(m).

      "NET TERMINATION LOSS" has the meaning assigned to such term in Section
5.8(n).

      "NEW ENTITY" has the meaning assigned to such term in Section 1.6.

      "NON-CITIZEN ASSIGNEE" means a Person who the General Partner has
determined in its sole discretion does not constitute an Eligible Citizen and as
to whose Partnership Interest the General Partner has become the Substituted
Limited Partner, pursuant to Section 11.5.

      "NONRECOURSE BUILT-IN GAIN" means with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Section 5.2(b)(i)(A),
5.2(b)(ii)(A) or 5.2(b)(iii) if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for no other
consideration.

      "NONRECOURSE DEDUCTIONS" means any and all items of loss, deduction or
expenditure (described in Section 705(a)(2)(B) of the Code) that, in accordance
with the principles of Treasury Regulation Section 1.704-1T(b)(4)(iv)(b), are
attributable to a Nonrecourse Liability.

      "NONRECOURSE LIABILITY" has the meaning set forth in Treasury Regulation
Section 1.704-1T(b)(4)(iv)(k)(3).

      "NOTICE OF ELECTION TO PURCHASE" has the meaning assigned to such term in
Section 17.1(b).

      "OMNIBUS AGREEMENT" means the Omnibus Agreement dated as of ____, 2002,
among Enbridge Inc., the Company and the Partnership, which specifies certain
business opportunities in which the Company or its Affiliates are prohibited
from engaging and which amends and restates the Distribution Support Agreement,
dated December 27, 1991, to delete the provisions

                                      11


therein relating to distribution support, including the purchase and
redemption of APIs (as defined therein) and to reflect the reorganization of
the Partnership as contemplated by the GP Reorganization Agreement.

      "OPERATING GENERAL PARTNER" means each of Enbridge Pipelines (Lakehead)
L.L.C., a Delaware limited liability company, Enbridge (East Texas) L.L.C., a
Delaware limited liability company and Enbridge Midcoast Holdings, L.L.C., a
Delaware limited liability company, and such other Persons that serve as a
general partner or otherwise manage and control the business and affairs, of any
Operating Subsidiary.

      "OPERATING SUBSIDIARY" means a Subsidiary of the Partnership.

      "OPERATING SUBSIDIARY AGREEMENT" means the partnership agreement of any
Operating Subsidiary that is a limited or general partnership, the limited
liability company agreement of any Operating Subsidiary that is a limited
liability company, the certificate of incorporation and bylaws or similar
organizational documents of any Operating Subsidiary that is a corporation, the
joint venture agreement or similar governing document of any Operating
Subsidiary that is a joint venture and the governing or organizational or
similar documents of any other Operating Subsidiary that is a Person other than
a limited or general partnership, limited liability company, corporation or
joint venture, as such may be amended, supplemented or restated from time to
time.

      "OPINION OF COUNSEL" means a written opinion of counsel (who may be
regular counsel to the Partnership or the General Partner) acceptable to the
General Partner.

      "OPTIONAL PURCHASE PRICE" has the meaning assigned to such term in Section
17.1.

      "ORIGINAL AGREEMENT" has the meaning assigned to such term in the recitals
to this Agreement.

      "OUTSTANDING" means, with respect to the Units or other Partnership
Securities, as the case may be, all Units or other Partnership Securities, as
the case may be, that are issued by the Partnership and reflected as outstanding
on the Partnership's books and records as of the date of determination; provided
however, that on any matter in this Agreement in respect of which Record Holders
of I-Units are entitled to vote, a number of I-Units equal to the number of
Listed Shares and Voting Shares held by Persons not entitled to vote their
Listed Shares or Voting Shares on such matter under the LLC Agreement shall be
deemed to be not Outstanding and shall not be included in the numerator or
denominator of any calculation to determine if the required percentage of Units
or I-Units has been voted to approve such matter under this Agreement.

      "PARTNER" means a General Partner or a Limited Partner and Assignees
thereof, if applicable.

      "PARTNER NONRECOURSE DEBT" has the meaning set forth in Treasury
Regulation Section 1.704-1T(b)(4)(iv)(k)(4).

                                      12


      "PARTNER NONRECOURSE DEDUCTIONS" means any and all items of loss,
deduction or expenditure (including any expenditure described in Section
705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury
Regulation Section 1.704-1T(b)(4)(iv)(h)(3), are attributable to a Partner
Nonrecourse Debt.

      "PARTNERSHIP" means Enbridge Energy Partners, L.P., a Delaware limited
partnership heretofore formed and continued pursuant to this Agreement, and any
successor thereto.

      "PARTNERSHIP ASSETS" means all assets of the Partnership and any Operating
Subsidiary, whether tangible or intangible and whether real, personal or mixed,
including, without limitation, all ownership interests of the Partnership in any
Operating Subsidiary.

      "PARTNERSHIP INCEPTION" means the Closing Date.

      "PARTNERSHIP INTEREST" means the interest of a Partner in the Partnership,
which, in the case of a Limited Partner or an Assignee, shall be expressed in
terms of Units or other Partnership Securities or a combination thereof, as the
case may be.

      "PARTNERSHIP MINIMUM GAIN" means the amount determined pursuant to the
provisions of Treasury Regulation Sections 1.704-1T(b)(4)(iv)(a) and
1.704-1T(b)(4)(iv)(c).

      "PARTNERSHIP SECURITIES" has the meaning assigned to such term in Section
4.4(a).

      "PARTNERSHIP YEAR" means the fiscal year of the Partnership, which shall
be the calendar year.

      "PERCENTAGE INTEREST" means, as of the date of such determination, (a) as
to the General Partner, 2% and (b) as to any Limited Partner or Assignee holding
Units, the product of (i) 98% multiplied by (ii) the quotient of (x) the number
of Units, and fractions thereof, held by such Limited Partner or Assignee
divided by (y) the total number of all Units, and fractions thereof, then
Outstanding; provided, however, that following any issuance of any new class of
Units or other equity securities by the Partnership in accordance with Section
4.4, proper adjustment shall be made to the Percentage Interest represented by
each Unit to reflect such issuance.

      "PERSON" means an individual or a corporation, partnership, limited
liability company, trust, unincorporated organization, association or other
entity.

      "PRIOR AGREEMENTS" means the Original Agreement, the First Amended and
Restated Agreement, the Second Amended and Restated Agreement and the Amendment
Agreement.

      "PRO RATA" means (a) when modifying Units or any class thereof,
apportioned equally among all designated Units, and fractions thereof, and (b)
when modifying Partners and Assignees, apportioned among all designated Partners
and Assignees in accordance with their relative Percentage Interests.

      "PURCHASE DATE" means the date determined by the General Partner, an
Affiliate of the General Partner or the Partnership, as the case may be, as the
date for purchase of all

                                      13


Outstanding Units (other than Units owned by the General Partner and its
Affiliates) pursuant to Article XVII.

      "PURCHASE PROVISIONS" means the purchase provisions that are attached to
the LLC Agreement as Annex B.

      "RECAPTURE INCOME" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or 743 of the Code)
upon the disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.

      "RECAPTURED CREDITS" means credits previously taken against federal income
tax liability which are required to be recaptured upon the disposition of any
property by the Partnership prior to the end of such property's useful life used
in determining the amount of the credit relating thereto.

      "RECORD DATE" means the date established by the General Partner for
determining (a) the identity of Limited Partners (or Assignees if applicable)
entitled to notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of Partnership action in writing
without a meeting or entitled to exercise rights in respect of any lawful action
of Limited Partners, or (b) the identity of Record Holders entitled to receive
any report or distribution.

      "RECORD HOLDER" means the Person in whose name a Unit is registered on the
books of the Transfer Agent as of the opening of business on a particular
Business Day; provided, however, that when such term is used in relation to
Listed Shares, such term shall have the meaning ascribed to such term in the LLC
Agreement.

      "REDEEMABLE UNITS" means any Units for which a redemption notice has been
given, and has not been withdrawn, under Section 11.6.

      "REGISTRATION STATEMENT" means the Registration Statement on Form S-1
(Registration No. 33-43425), as it may have been amended or supplemented from
time to time, filed by the Partnership with the Securities and Exchange
Commission under the Securities Act to register the offering and sale of Class A
Common Units in the Initial Offering.

      "REQUIRED ALLOCATIONS" means any allocation (or limitation imposed on any
allocation) of an item of income, gain, deduction or loss pursuant to (a) the
proviso-clause of Section 5.1(b)(i) or (b) Section 5.1(e), such allocations (or
limitations thereon) being directly or indirectly required by the Treasury
Regulations promulgated under Section 704(b) of the Code.

      "RESIDUAL GAIN" or "RESIDUAL LOSS" means any item of gain or loss, as the
case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of a Contributed Property
or Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 5.2(b)(i)(A) or 5.2(b)(ii)(A), to eliminate Book-Tax
Disparities.

      "SECOND AMENDED AND RESTATED AGREEMENT" has the meaning assigned to such
term in the recitals to this Agreement.

                                      14


      "SECOND TARGET DISTRIBUTION" has the meaning assigned to such term in
Section 5.8(o).

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

      "SHARE DISTRIBUTION" has the meaning assigned to such term in the LLC
Agreement.

      "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 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.

      "SUBSTITUTED LIMITED PARTNER" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 12.2 in place of and with all the
rights of a Limited Partner and who is shown as a Limited Partner on the books
and records of the Partnership.

      "SURVIVING BUSINESS ENTITY" has the meaning assigned to such term in
Section 16.2(b).

      "TAX STATUS EVENT" has the meaning assigned to such term in the LLC
Agreement.

      "TRADING DAY" has the meaning assigned to such term in Section 17.1(a).

      "TRANSFER AGENT" means such bank, trust company or other Person
(including, without limitation, the General Partner or one of its Affiliates) as
shall be appointed from time to time by the Partnership to act as registrar and
transfer agent for the Units.

      "TRANSFER APPLICATION" means an application and agreement for transfer of
Units in the form set forth on the back of a Unit Certificate or in a form
substantially to the same effect in a separate instrument.

      "TRANSPORTATION SYSTEM" means any of the following assets and related
facilities that are owned or operated directly or indirectly by the Partnership
or any Operating Subsidiary, as such assets and facilities may be maintained or
improved from time to time: (a) crude oil and natural gas liquids pipeline
assets and related facilities, (b) natural gas pipeline assets and related
facilities, and (c) crude oil, natural gas liquids, natural gas and carbon
dioxide trucking and railcar assets and related facilities.

      "TREASURY REGULATION" has the meaning assigned to such term in Section
1.6.

                                      15


      "UNDERWRITER" means each Person named as an underwriter in the
Underwriting Agreement who purchased Units pursuant thereto.

      "UNDERWRITING AGREEMENT" means the Underwriting Agreement dated December
19, 1991 among the Underwriters, the Partnership, the General Partner and
Enbridge Inc. providing for the purchase of Class A Common Units by such
Underwriters.

      "UNIT" means a Partnership Interest of a Limited Partner or Assignee in
the Partnership representing a fractional part of the Partnership Interests of
all Limited Partners and Assignees and shall include, without limitation, Class
A Common Units, Class B Common Units and I-Units.

      "UNITHOLDER" means a Person who is the holder of a Unit.

      "UNREALIZED GAIN" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the fair market
value of such property as of such date over (b) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant to Section
4.6(d) as of such date). In determining such Unrealized Gain, the aggregate cash
amount and fair market value of all Partnership Assets (including cash or cash
equivalents) shall be determined by the General Partner using such reasonable
method of valuation as it may adopt; provided, however, the General Partner, in
arriving at such valuation, must take fully into account the Limited Partner
Equity Value and the General Partner Equity Value at such time. In determining
the fair market value of the Partnership Assets, the General Partner shall treat
the amount determined pursuant to paragraph (a) of the definition of Limited
Partner Equity Value as the fair market value of the Partnership assets that
would be distributed with respect to the Class A Common Units Outstanding
pursuant to Article XIV upon a hypothetical dissolution and liquidation of the
Partnership as of the relevant date of determination (assuming that all
Partnership indebtedness is paid pursuant to Section 14.3(a) prior to any
distributions to Partners pursuant to Sections 14.3(b) or 14.3(c)). The General
Partner shall allocate such aggregate value among the assets of the Partnership
(in such manner as it determines in its sole discretion to be reasonable) to
arrive at a fair market value for individual properties.

      "UNREALIZED LOSS" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (a) the Carrying Value
of such property as of such date (prior to any adjustment to be made pursuant to
Section 4.6(d) as of such date) over (b) the fair market value of such property
as of such date. In determining such Unrealized Loss, the aggregate cash amount
and fair market value of all Partnership Assets (including cash or cash
equivalents) shall be determined by the General Partner using such reasonable
method of valuation as it may adopt; provided, however, the General Partner, in
arriving at such valuation, must take fully into account the Limited Partner
Equity Value and the General Partner Equity Value at such time. In determining
the fair market value of the Partnership Assets, the General Partner shall treat
the amount determined pursuant to paragraph (a) of the definition of Limited
Partner Equity Value as the fair market value of the Partnership assets that
would be distributed with respect to the Class A Common Units Outstanding
pursuant to Article XIV upon a hypothetical dissolution and liquidation of the
Partnership as of the relevant date of determination (assuming that all
Partnership indebtedness is paid pursuant to Section 14.3(a) prior to any
distributions to Partners pursuant to Sections 14.3(b) or 14.3(c)). The General

                                      16


Partner shall allocate such aggregate value among the assets of the Partnership
(in such manner as it determines in its sole discretion to be reasonable) to
arrive at a fair market value for individual properties.

      "UNRECOVERED CAPITAL" means, at any time, with respect to a Unit, the
Unrecovered Initial Unit Price.

      "UNRECOVERED INITIAL UNIT PRICE" means, at any time, with respect to any
Unit, the Initial Unit Price, less the sum of all distributions theretofore made
in respect of a Class A Common Unit issued in the Initial Offering constituting,
and which for purposes of determining the priority of such distribution is
treated as constituting, Cash from Interim Capital Transactions and of any
distributions of cash (or the Net Agreed Value of any distributions in kind) in
connection with the dissolution and liquidation of the Partnership theretofore
made in respect of a Class A Common Unit that was issued in the Initial
Offering.

      "VOTING SHARES" has the meaning assigned to such term in the LLC
Agreement.

      "WITHDRAWAL OPINION OF COUNSEL" has the meaning assigned to such term in
Section 13.1(b).

                                   ARTICLE III
                                     PURPOSE

            3.1  PURPOSE AND BUSINESS. The purpose and nature of the business
to be conducted by the Partnership shall be (i) to serve as a partner in any
Operating Subsidiary that is a partnership and, in connection therewith, to
exercise all of the rights and powers conferred upon the Partnership as a
partner in any Operating Subsidiary that is a partnership pursuant to any
Operating Subsidiary Agreement or otherwise, (ii) to serve as a member,
shareholder or other equity interest holder of any Operating Subsidiary that
is a limited liability company or corporation, and in connection therewith,
to exercise all of the rights and powers conferred upon the Partnership as a
member, shareholder or other equity interest holder of any Operating
Subsidiary pursuant to any Operating Subsidiary Agreement or otherwise, (iii)
to engage directly in, or to enter into any partnership, joint venture or
similar arrangement to engage in, any business activity that may be lawfully
conducted by a limited partnership organized pursuant to the Delaware Act
and, in connection therewith, to exercise all of the rights and powers
conferred upon the Partnership pursuant to the agreements relating to such
business activity, (iv) to do anything necessary or appropriate to the
foregoing (including, without limitation, the making of capital contributions
or loans to any Operating Subsidiary or in connection with its involvement in
the activities referred to in clause (iii) of this sentence), and (v) to
engage in any other business activity as permitted under Delaware law.

            3.2  POWERS. The Partnership shall be empowered to do any and all
acts and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and
business described in Section 3.1 and for the protection and benefit of the
Partnership.

                                      17


                                   ARTICLE IV
                              CAPITAL CONTRIBUTIONS

            4.1  INITIAL CONTRIBUTION. The initial Capital Contributions of
the General Partner and the initial Limited Partners were made in accordance
with Section 4.3 of the First Amended and Restated Agreement.

            4.2  INTENTIONALLY OMITTED.

            4.3  INTENTIONALLY OMITTED.

            4.4  ISSUANCES OF UNITS AND OTHER SECURITIES.

            (a) Subject to Section 4.4(c), the General Partner is hereby
      authorized to cause the Partnership to issue, in addition to the Common
      Units issued heretofore by the Partnership, such additional Units, or
      classes or series thereof, or options, rights, warrants or appreciation
      rights relating thereto, or any other type of equity security that the
      Partnership may lawfully issue, or any unsecured or secured debt
      obligations of the Partnership or debt obligations of the Partnership
      convertible into any class or series of equity securities of the
      Partnership (collectively, "PARTNERSHIP SECURITIES"), for any Partnership
      purpose, at any time or from time to time, to the Partners or to other
      Persons for such consideration and on such terms and conditions as shall
      be established by the General Partner in its sole discretion, all without
      the approval of any Limited Partners. The General Partner shall have sole
      discretion, subject to the guidelines set forth in this Section 4.4 and
      the requirements of the Delaware Act, in determining the consideration and
      terms and conditions with respect to any future issuance of Partnership
      Securities.

            (b) Notwithstanding any provision of this Agreement to the contrary,
      additional Partnership Securities to be issued by the Partnership pursuant
      to this Section 4.4 shall be issuable from time to time in one or more
      classes, or one or more series of any of such classes, with such
      designations, preferences and relative, participating, optional or other
      special rights, powers and duties, including, without limitation, rights,
      powers and duties senior to existing classes and series of Partnership
      Securities, all as shall be fixed by the General Partner in the exercise
      of its sole and complete discretion, subject to Delaware law, including,
      without limitation, (i) the allocations of items of Partnership income,
      gain, loss, deduction and credit to each such class or series of
      Partnership Securities; (ii) the right of each such class or series of
      Partnership Securities to share in Partnership distributions; (iii) the
      rights of each such class or series of Partnership Securities upon
      dissolution and liquidation of the Partnership; (iv) whether such class or
      series of additional Partnership Securities is redeemable by the
      Partnership and, if so, the price at which, and the terms and conditions
      upon which, such class or series of additional Partnership Securities may
      be redeemed by the Partnership; (v) whether such class or series of
      additional Partnership Securities is issued with the privilege of
      conversion and, if so, the rate at which, and the terms and conditions
      upon which, such class or series of Partnership Securities may be
      converted into any other class or series of Partnership Securities; (vi)
      the terms and conditions upon which each such class or series of
      Partnership Securities will be issued, evidenced by Unit

                                      18


      Certificates and assigned or transferred; and (vii) the right, if any,
      of each such class or series of Partnership Securities to vote on
      Partnership matters, including, without limitation, matters relating to
      the relative rights, preferences and privileges of each such class or
      series.

            (c) Upon the issuance of any Units by the Partnership (other than
      I-Units or fractions of I-Units pursuant to Sections 5.10(a) and 5.10(e),
      and except upon the change of Class A Common Units and Class B Common
      Units pursuant to Section 5.6), the General Partner shall be required to
      make additional Capital Contributions to the Partnership such that the
      General Partner shall at all times have a balance in its Capital Account
      equal to 2% of the total positive Capital Account balances of all
      Partners.

            (d) The General Partner is hereby authorized and directed to take
      all actions that it deems necessary or appropriate in connection with each
      issuance of Units or other Partnership Securities pursuant to Section
      4.4(a) and to amend this Agreement in any manner that it deems necessary
      or appropriate to provide for each such issuance, to admit Additional
      Limited Partners in connection therewith and to specify the relative
      rights, powers and duties of the holders of the Units or other Partnership
      Securities being so issued.

            (e) Subject to the terms of Sections 4.4(c) and 6.4(c), the General
      Partner is authorized to cause the issuance of Partnership Securities
      (other than I-Units) pursuant to any employee benefit plan for the benefit
      of employees responsible for the operations of the Partnership or any
      Operating Subsidiary maintained or sponsored by the General Partner, the
      Partnership, any Operating Subsidiary or any Affiliate of any of them.

            (f) The General Partner shall do all things necessary to comply with
      the Delaware Act and is authorized and directed to do all things it deems
      to be necessary or advisable in connection with any future issuance of
      Partnership Securities, including, without limitation, compliance with any
      statute, rule, regulation or guideline of any federal, state or other
      governmental agency or any National Securities Exchange on which the Units
      or other Partnership Securities are listed for trading.

            4.5  LIMITED PREEMPTIVE RIGHTS. Except as provided in Section
4.4(c), no Person shall have any preemptive, preferential or other similar
right with respect to (a) additional Capital Contributions; (b) issuance or
sale of any class or series of Units or other Partnership Securities, whether
unissued, held in the treasury or hereafter created; (c) issuance of any
obligations, evidences of indebtedness or other securities of the Partnership
convertible into or exchangeable for, or carrying or accompanied by any
rights to receive, purchase or subscribe to, any such Units or other
Partnership Securities; (d) issuance of any right of subscription to or right
to receive, or any warrant or option for the purchase of, any such Units or
other Partnership Securities; or (e) issuance or sale of any other securities
that may be issued or sold by the Partnership.

                                      19


            4.6  CAPITAL ACCOUNTS.

            (a) The Partnership shall maintain for each Partner (or a beneficial
      owner of Units held by a nominee in any case in which the nominee has
      furnished the identity of such owner to the Partnership in accordance with
      Section 6031(c) of the Code or any other method acceptable to the General
      Partner in its sole discretion) a separate Capital Account in accordance
      with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such
      Capital Account shall be increased by (i) the amount of all Capital
      Contributions made by such Partner to the Partnership pursuant to this
      Agreement and (ii) all items of Partnership income and gain (including,
      without limitation, income and gain exempt from tax) computed in
      accordance with Section 4.6(b) and allocated to such Partner pursuant to
      Section 5.1 and decreased by (x) the amount of cash or Net Agreed Value of
      all distributions of cash or property made to such Partner pursuant to
      this Agreement and (y) all items of Partnership deduction and loss
      computed in accordance with Section 4.6(b) and allocated to such Partner
      pursuant to Section 5.1.

            (b) For purposes of computing the amount of any item of income,
      gain, loss or deduction to be reflected in the Partners' Capital Accounts,
      the determination, recognition and classification of any such item shall
      be the same as its determination, recognition and classification for
      federal income tax purposes (including, without limitation, any method of
      depreciation, cost recovery or amortization used for that purpose),
      provided, that:

                  (i) Solely for purposes of this Section 4.6, the Partnership
            shall be treated as owning directly its proportionate share (as
            determined by the General Partner based upon the provisions of any
            Operating Subsidiary Agreement) of all property owned by any
            Operating Subsidiary that is not treated as a corporation for
            federal income tax purposes.

                  (ii) All fees and other expenses incurred by the Partnership
            to promote the sale of (or to sell) a Partnership Interest that can
            neither be deducted nor amortized under Section 709 of the Code, if
            any, shall, for purposes of Capital Account maintenance, be treated
            as an item of deduction at the time such fees and other expenses are
            incurred and shall be allocated among the Partners pursuant to
            Section 5.1.

                  (iii) Except as otherwise provided in Treasury Regulation
            Section 1.704-1(b)(2)(iv)(m), the computation of all items of
            income, gain, loss and deduction shall be made without regard to any
            election under Section 754 of the Code which may be made by the
            Partnership and, as to those items described in Section 705(a)(1)(B)
            or 705(a)(2)(B) of the Code, without regard to the fact that such
            items are not includable in gross income or are neither currently
            deductible nor capitalized for federal income tax purposes.

                  (iv) Any income, gain or loss attributable to the taxable
            disposition of any Partnership property shall be determined as if
            the adjusted basis of such

                                      20


            property as of such date of disposition were equal in amount to
            the Partnership's Carrying Value with respect to such property as
            of such date.

                  (v) In accordance with the requirements of Section 704(b) of
            the Code, any deductions for depreciation, cost recovery or
            amortization attributable to any Contributed Property shall be
            determined as if the adjusted basis of such property on the date it
            was acquired by the Partnership were equal to the Agreed Value of
            such property. Upon an adjustment pursuant to Section 4.6(d) to the
            Carrying Value of any Partnership property subject to depreciation,
            cost recovery or amortization, any further deductions for such
            depreciation, cost recovery or amortization attributable to such
            property shall be determined (A) as if the adjusted basis of such
            property were equal to the Carrying Value of such property
            immediately following such adjustment and (B) using a rate of
            depreciation, cost recovery or amortization derived from the same
            method and useful life (or, if applicable, the remaining useful
            life) as is applied for federal income tax purposes; provided,
            however, that, if the asset has a zero adjusted basis for federal
            income tax purposes, depreciation, cost recovery or amortization
            deductions shall be determined using any reasonable method that the
            General Partner may adopt.

                  (vi) If the Partnership's adjusted basis in depreciable or
            cost recovery property is reduced for federal income tax purposes
            pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of
            such reduction shall, solely for purposes hereof, be deemed to be an
            additional depreciation or cost recovery deduction in the year such
            property is placed in service and shall be allocated among the
            Partners pursuant to Section 5.1. Any restoration of such basis
            pursuant to Section 48(q)(2) of the Code shall to the extent
            possible, be allocated in the year of such restoration as an item of
            income pursuant to Section 5.1.

            (c) A transferee of a Partnership Interest shall succeed to a pro
      rata portion of the Capital Account of the transferor relating to the
      Partnership Interest so transferred.

            (d) (i) Consistent with the provisions of Treasury Regulation
      Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash
      or Contributed Property or the conversion of the General Partner's
      Partnership Interest to Units pursuant to Section 13.3(b), the Capital
      Accounts of all Partners (other than those holding I-Units) and the
      Carrying Value of each Partnership property immediately prior to such
      issuance shall be adjusted upward or downward to reflect any Unrealized
      Gain or Unrealized Loss attributable to such Partnership property, as if
      such Unrealized Gain or Unrealized Loss had been recognized on an actual
      sale of each such property immediately prior to such issuance and had been
      allocated to the Partners at such time pursuant to Section 5.1.

            (ii) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), immediately prior to any distribution to a Partner of any
Partnership property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest or an increase in the number
of Outstanding I-Units (or fractions thereof) pursuant to Sections 5.10(a) and
5.10(e)), the Capital Accounts of all Partners other than those holding I-Units
unless the redemption or retirement is pursuant to Section 14.3 and the Carrying
Value of each Partnership

                                      21


property shall be adjusted upward or downward to reflect any Unrealized Gain
or Unrealized Loss attributable to such Partnership property, as if such
Unrealized Gain or Unrealized Loss had been recognized in a sale of such
property immediately prior to such distribution for an amount equal to its
fair market value, and had been allocated to the Partners, at such time,
pursuant to Section 5.1(c).

            (iii) Upon an increase in the number of Outstanding I-Units (or
fractions thereof) pursuant to Sections 5.10(a) or 5.10(e), the Capital Accounts
of all I-Units that are Outstanding prior to such increase shall be divided
equally among all I-Units that are Outstanding after such increase (and any
fractional I-Unit shall be allocated a fractional part of such Capital
Accounts).

            4.7  INTEREST.  No interest shall be paid by the Partnership on
Capital Contributions or on balances in Partners' Capital Accounts.

            4.8  NO WITHDRAWAL. No Partner shall be entitled to withdraw any
part of its Capital Contributions or its Capital Account or to receive any
distribution from the Partnership, except as provided herein.

            4.9  LOANS FROM PARTNERS. Loans by a Partner to the Partnership
shall not constitute Capital Contributions. If any Partner shall advance
funds to the Partnership in excess of the amounts required hereunder to be
contributed by it to the capital of the Partnership, the making of such
excess advances shall not result in any increase in the amount of the Capital
Account of such Partner. The amount of any such excess advances shall be a
debt obligation of the Partnership to such Partner and shall be payable or
collectible only out of the Partnership Assets in accordance with the terms
and conditions upon which such advances are made.

            4.10  NO FRACTIONAL UNITS.  Except with respect to I-Units, no
fractional Units shall be issued by the Partnership.

            4.11 SPLITS AND COMBINATIONS.

            (a) Subject to Sections 4.11(d) and 5.10(a) and (d), the General
      Partner may make a Pro Rata distribution of Units or other Partnership
      Securities to all Record Holders or may effect a subdivision or
      combination of Units or other Partnership Securities; provided, however,
      that, subject to Sections 4.11(d) and 5.10(a) and (d), after any such
      distribution, subdivision or combination, each Partner shall have the same
      Percentage Interest in the Partnership as before such distribution,
      subdivision or combination and the Capital Accounts of all such classes of
      distributed, subdivided or combined Units or other Partnership Securities
      Outstanding prior to such distribution, subdivision or combination shall
      be divided equally (on a class by class basis) among all such Units or
      other Partnership Securities Outstanding after such distribution,
      subdivision or combination.

            (b) Except with respect to subdivisions of Outstanding I-Units
      pursuant to Section 5.10(a), whenever such a distribution, subdivision or
      combination of Units or other Partnership Securities is declared, the
      General Partner shall select a Record Date as of which the distribution,
      subdivision or combination shall be effective and shall send

                                      22


      notice of the distribution, subdivision or combination at least 20 days
      prior to such Record Date to each Record Holder as of a date not less
      than 10 days prior to the date of such notice. The General Partner also
      may cause a firm of independent public accountants selected by it to
      calculate the number of Units to be held by each Record Holder after
      giving effect to such distribution, subdivision or combination. The
      General Partner shall be entitled to rely on any certificate provided
      by such firm as conclusive evidence of the accuracy of such calculation.

            (c) Promptly following any such distribution, subdivision or
      combination, the General Partner may cause Unit Certificates to be issued
      to the Record Holders of Units as of the applicable Record Date
      representing the new number of Units held by such Record Holders, or the
      General Partner may adopt such other procedures as it may deem appropriate
      to reflect such distribution, subdivision or combination; provided,
      however, if any such distribution, subdivision or combination results in a
      smaller total number of Units Outstanding, the General Partner shall
      require, as a condition to the delivery to a Record Holder of such new
      Unit Certificate, the surrender of any Unit Certificate held by such
      Record Holder immediately prior to such Record Date.

            (d) Except with respect to I-Units, the Partnership shall not issue
      fractional Units upon any distribution, subdivision or combination of
      Units. If a distribution, subdivision or combination of Units would result
      in the issuance of fractional Units but for the provision of Section 4.10
      and this Section 4.11(d), each fractional Unit (other than a fractional
      I-Unit) shall be rounded to the nearest whole Unit (and a 0.5 Unit shall
      be rounded to the next higher Unit).

            4.12  I-UNITS. Pursuant to Section 4.4, the General Partner
hereby designates and creates a special class of Units designated "I-UNITS"
and fixes the designations, preferences and relative, participating, optional
or other special rights, powers and duties of the holders of the I-Units as
follows:

            (a) Except as otherwise provided in Section 5.1(c), a holder of an
      I-Unit will receive no allocations of income, gain, loss or deductions.
      Except for distributions made in accordance with Sections 14.3(b) and
      14.3(c), no distributions or payments shall be made to a holder of an
      I-Unit except in additional I-Units (or fractions thereof) or a security
      that has in all material respects the same rights and privileges as the
      I-Units, in accordance with Section 5.10.

            (b)   The number of Outstanding I-Units may be subdivided
      pursuant to Section 5.10.

            (c) Except as otherwise provided in this Agreement, each I-Unit
      shall have the rights of a holder of a Common Unit with respect to voting.
      Except as otherwise provided in this Agreement, all Units shall vote or
      consent together as a single class on all matters submitted for a vote or
      consent of the Outstanding Units.

                                      23



                                    ARTICLE V
                          ALLOCATIONS AND DISTRIBUTIONS

            5.1  ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES. For purposes of
maintaining the Capital Accounts and in determining the rights of the
Partners among themselves, the Partnership's items of income, gain, loss and
deduction (computed in accordance with Section 4.6(b)) shall be allocated
among the Partners in each taxable year (or portion thereof) as provided
herein below.

            (a) NET INCOME. All items of income, gain, loss and deduction taken
      into account in computing Net Income for such taxable period shall be
      allocated in the same manner as such Net Income is allocated hereunder,
      which Net Income shall be allocated as follows:

                  (i) FIRST, 100% to the General Partner until the aggregate
            Net Income allocated to the General Partner pursuant to this
            Section 5.1(a)(i) for the current taxable year and all previous
            taxable years is equal to the aggregate Net Losses allocated to
            the General Partner pursuant to Section 5.1(b)(ii) for all
            previous taxable years; and

                  (ii) SECOND, the balance, if any, 98% to the Limited Partners
            holding Common Units, Pro Rata, and 2% to the General Partner.

            (b) NET LOSSES. All items of income, gain, loss and deduction taken
      into account in computing Net Losses for such taxable period shall be
      allocated in the same manner as such Net Losses are allocated hereunder,
      which Net Losses shall be allocated as follows:

                  (i) FIRST, 98% to the Limited Partners holding Common Units,
            Pro Rata, and 2% to the General Partner; PROVIDED, that Net Losses
            shall not be allocated pursuant to this Section 5.1(b)(i) to the
            extent that such allocation would cause any Partner to have a
            deficit balance in its Adjusted Capital Account at the end of such
            taxable year (or increase any existing deficit balance in its
            Adjusted Capital Account); and

                  (ii) SECOND, the balance, if any, 100% to the General
            Partner.

            (c) NET TERMINATION GAINS AND LOSSES. After giving effect to the
      special allocations set forth in Sections 5.1(d) and 5.1(e), all items of
      income, gain, loss and deduction taken into account in computing Net
      Termination Gain or Net Termination Loss for such taxable period shall be
      allocated in the same manner as such Net Termination Gain or Net
      Termination Loss is allocated hereunder. All allocations under this
      Section 5.1(c) shall be made after Capital Account balances have been
      adjusted by all other allocations provided under this Section 5.1 and
      after all distributions of Available Cash provided under Section 5.5 have
      been made with respect to such taxable period.

                  (i) If a Net Termination Gain is recognized, such Net
            Termination Gain shall be allocated between the General Partner and
            the Limited Partners in the

                                      24



            following manner (and the Adjusted Capital Accounts of the Partners
            shall be increased by the amount so allocated in each of the
            following subclauses, in the order listed, before an allocation
            is made pursuant to the next succeeding subclause):

                  (A) FIRST, to each Partner having a deficit balance in its
            Adjusted Capital Account, in the proportion that such deficit
            balance bears to the total deficit balances in the Adjusted Capital
            Accounts of all Partners, until each such Partner has been allocated
            Net Termination Gain equal to any such deficit balance in its
            Adjusted Capital Account;

                  (B) SECOND, if the Adjusted Capital Account of an I-Unit is
            less than the Adjusted Capital Account of a Common Unit, 98% to the
            Limited Partners holding I-Units or fractions thereof, Pro Rata, and
            2% to the General Partner until the Adjusted Capital Account of each
            I-Unit or fractions thereof, equals the Adjusted Capital Account of
            each Common Unit, or comparable fraction thereof, or, if the
            Adjusted Capital Account of an I-Unit is greater than the Adjusted
            Capital Account of a Common Unit, 98% to the Limited Partners
            holding Common Units, Pro Rata, and 2% to the General Partner until
            the Adjusted Capital Account of each Common Unit equals the Adjusted
            Capital Account of each I-Unit;

                  (C) THIRD, 98% to the Limited Partners holding I-Units, or
            fractions thereof, and Common Units, Pro Rata, and 2% to the General
            Partner, until each Limited Partner's Adjusted Capital Account
            (determined on a per Unit basis) is equal to the sum of (aa) the
            Unrecovered Capital plus (bb) any cumulative arrearages in the
            payment of the Minimum Quarterly Distribution for any quarter
            commencing after December 31, 1996;

                  (D) FOURTH, 85% to all Limited Partners holding I-Units, or
            fractions thereof, and Common Units, Pro Rata, and 15% to the
            General Partner until each such Limited Partner's Adjusted Capital
            Account in respect of its Units or fractions thereof (determined on
            a per Unit basis) is equal to the sum of (aa) the Unrecovered
            Capital, plus (bb) any cumulative arrearages in the payment of the
            Minimum Quarterly Distribution for any quarter commencing after
            December 31, 1996, plus (cc) the excess of the First Target
            Distribution over the Minimum Quarterly Distribution for each
            quarter of the Partnership's existence, less (dd) the amount of any
            distributions of Available Cash that is deemed to be Cash from
            Operations that was distributed pursuant to Section 5.5(d) (the sum
            of (bb) plus (cc) less (dd) is hereinafter defined as the "FIRST
            LIQUIDATION TARGET AMOUNT");

                  (E) FIFTH, 75% to all Limited Partners holding I-Units, or
            fractions thereof, and Common Units, Pro Rata, and 25% to the
            General Partner until each such Limited Partner's Adjusted Capital
            Account in respect of its Units or fractions thereof (determined on
            a per Unit basis) is equal to the sum of (aa) the Unrecovered
            Capital, plus (bb) the First Liquidation Target Amount, plus (cc)
            the excess of the Second Target Distribution over the First Target
            Distribution for

                                      25



            each quarter of the Partnership's existence less (dd) the amount of
            any distributions of Available Cash that is deemed to be Cash from
            Operations distributed pursuant to Section 5.5(e); and

                  (F) SIXTH, the balance, if any, 50% to all Limited Partners
            holding I-Units, or fractions thereof, and Common Units, Pro Rata,
            and 50% to the General Partner.

                  (ii) If a Net Termination Loss is recognized, such Net
            Termination Loss shall be allocated to the Partners in the following
            manner:

                  (A) FIRST, if the Adjusted Capital Account of an I-Unit, or
            fraction thereof, is less than the Adjusted Capital Account of a
            Common Unit, 98% to the Limited Partners holding Common Units, Pro
            Rata, and 2% to the General Partner until the Adjusted Capital
            Account of each Common Unit equals the Adjusted Capital Account of
            each I-Unit or, if the Adjusted Capital Account of an I-Unit is
            greater than the Adjusted Capital Account of a Common Unit, 98% to
            the Limited Partners holding I-Units, or fractions thereof, Pro
            Rata, and 2% to the General Partner until the Adjusted Capital
            Account of each I-Unit, or fraction thereof, equals the Adjusted
            Capital Account of each Common Unit, or comparable fraction thereof;

                  (B) SECOND, 100% to the General Partner and the Limited
            Partners in proportion to, and to the extent of, the positive
            balances in their respective Adjusted Capital Accounts until all
            such balances are reduced to zero; and

                  (C) THIRD, the balance, if any, 100% to the General Partner.

            (d)   SPECIAL ALLOCATIONS.  Notwithstanding any other
      provisions of this Section 5.1 (other than Section 5.1(e)), the
      following special allocations shall be made for such taxable period:

                  (i) PRIORITY ALLOCATIONS. (A) If the amount of cash or the Net
            Agreed Value of any property distributed (except cash or property
            distributed pursuant to Section 14.3 or 14.4) to any Limited Partner
            holding Units during a taxable year is greater (on a per Unit basis)
            than the amount of cash or the Net Agreed Value of property
            distributed to the other Limited Partners holding Units other than
            I-Units (on a per Unit basis), then (1) each Limited Partner holding
            Units receiving such greater cash or property distribution shall be
            allocated gross income in an amount equal to the product of (x) the
            amount by which the distribution (on a per Unit basis) to such
            Limited Partner holding Units exceeds the distribution (on a per
            Unit basis) to the Limited Partners holding Units other than I-Units
            receiving the smallest distribution and (y) the number of Units
            owned by the Limited Partner holding Units receiving the greater
            distribution; and (2) the General Partner shall be allocated gross
            income in an amount equal to 2.04% of the sum of the amounts
            allocated in clause (1) above.

                                      26



                  (B) After the application of Section 5.1(d)(i)(A), all or a
            portion of the remaining items of Partnership gross income or gain
            for the taxable period, if any, shall be allocated 100% to the
            General Partner (or its assignee) until the aggregate amount of such
            items allocated to the General Partner (or its assignee) pursuant to
            this paragraph (d)(i)(B) for the current taxable period and all
            previous taxable periods is equal to the cumulative amount of all
            Incentive Distributions made to the General Partner (or its
            assignee) from the Closing Date to a date 45 days after the end of
            the current taxable period.

                  (C) At the election of the General Partner with respect to any
            taxable period, all or a portion of the remaining items of
            Partnership gross income or gain for the taxable period, if any,
            shall be allocated to each Partner holding Class B Common Units, in
            the proportion that the respective number of Class B Common Units
            held by such Partner bears to the total number of Class B Common
            Units then outstanding, until such Partner has been allocated an
            amount of gross income or gain which increases the Capital Account
            maintained with respect to such Class B Common Units to an amount
            such that the Capital Account attributable to each Class B Common
            Unit held by the Partner, on a per Unit basis, is equal to the
            Capital Account, stated on a per Unit basis, underlying any Class A
            Common Unit Outstanding at the time of determination. The purpose of
            this allocation is to establish uniformity between the Capital
            Accounts underlying Class B Common Units and the Capital Accounts
            underlying Class A Common Units immediately prior to the change of
            all Class A Common Units into Class B Common Units pursuant to
            Section 5.6.

                  (ii) NONRECOURSE LIABILITIES. For purposes of Treasury
            Regulation Section 1.752-3(a)(3), the Partners agree that
            Nonrecourse Liabilities of the Partnership in excess of the sum of
            (A) the amount of Partnership Minimum Gain and (B) the total amount
            of Nonrecourse Built-in Gain shall be allocated among the General
            Partner and the holders of Common Units in accordance with the
            allocation of Net Income set forth in Section 5.1(a)(ii).

                  (iii) DISCRETIONARY ALLOCATION. (A) Notwithstanding any other
            provision of Section 5.1(a), (b) or (c), the Agreed Allocations
            shall be adjusted so that, to the extent possible, the net amount of
            items of income, gain, loss and deduction allocated to each Partner
            pursuant to the Required Allocations and the Agreed Allocations,
            together, shall be equal to the net amount of such items that would
            have been allocated to each such Partner under the Agreed
            Allocations had there been no Required Allocations; provided,
            however, that for purposes of applying this Section 5.1(d)(iii)(A),
            it shall be assumed that all chargebacks pursuant to Sections
            5.1(e)(i) and (ii) have occurred.

                  (B) The General Partner shall have reasonable discretion, with
            respect to each taxable year, to (1) apply the provisions of Section
            5.1(d)(iii)(A) in whatever fashion as is most likely to minimize the
            economic distortions that might otherwise result from the Required
            Allocations, and (2) divide all

                                      27



            allocations pursuant to Section 5.1(d)(iii)(A) among the Partners
            in a manner that is likely to minimize such economic distortions.

            (e)   REQUIRED ALLOCATIONS.  Notwithstanding any other
      provision of this Section 5.1, the following special allocations shall be
      made for such taxable period:

                  (i) PARTNERSHIP MINIMUM GAIN CHARGEBACK. Notwithstanding the
            other provisions of this Section 5.1, if there is a net decrease in
            Partnership Minimum Gain during any Partnership taxable period, each
            Partner shall be allocated items of Partnership income and gain for
            such period (and, if necessary, subsequent periods) in the manner
            and amounts provided in Treasury Regulation Sections 1.704-2(f)(6),
            1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provisions. For
            purposes of this Section 5.1(e), each Partner's Adjusted Capital
            Account balance shall be determined, and the allocation of income or
            gain required hereunder shall be effected, prior to the application
            of any other allocations pursuant to this Section 5.1 with respect
            to such taxable period.

                  (ii) CHARGEBACK OF MINIMUM GAIN ATTRIBUTABLE TO PARTNER
            NONRECOURSE DEBT. Notwithstanding the other provisions of this
            Section 5.1 (other than 5.1(e)(i)), except as provided in Treasury
            Regulation Section 1.704-2(i)(4) if there is a net decrease in
            Minimum Gain Attributable to Partner Nonrecourse Debt during any
            Partnership taxable period, any Partner with a share of Minimum Gain
            Attributable to Partner Nonrecourse Debt at the beginning of such
            taxable period shall be allocated items of Partnership income and
            gain for such period (and, if necessary, subsequent periods) in the
            manner and amounts provided in Treasury Regulation Sections
            1.704-2(a)(4) and 1.704-2(j)(ii), or any successor provisions. For
            purposes of this Section 5.1, each Partner's Adjusted Capital
            Account balance shall be determined and the allocation of income or
            gain required hereunder shall be effected, prior to the application
            of any other allocations pursuant to this Section 5.1(e), other than
            Section 5.1(e)(i), with respect to such taxable period.

                  (iii) QUALIFIED INCOME OFFSET. In the event any Limited
            Partner unexpectedly receives adjustments, allocations or
            distributions described in Treasury Regulation Sections
            1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
            1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall
            be specifically allocated to such Partner in an amount and manner
            sufficient to eliminate, to the extent required by the Treasury
            Regulations promulgated under Section 704(b) of the Code, the
            deficit balance, if any, in its Adjusted Capital Account created by
            such adjustments, allocations or distributions as quickly as
            possible unless such deficit balance is otherwise eliminated
            pursuant to Section 5.1(e)(i) or 5.1(e)(ii).

                  (iv) GROSS INCOME ALLOCATIONS. In the event any Partner has a
            deficit balance in its Adjusted Capital Account at the end of any
            Partnership taxable period, that is in excess of the sum of (A) the
            amount such Partner is obligated to restore and (B) the amount such
            Partner is deemed to be obligated to restore pursuant to Treasury
            Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall
            be specially allocated items of Partnership gross income and gain in

                                     28



            the amount of such excess as quickly as possible; provided, that an
            allocation pursuant to this Section 5.1(e)(iv) shall be made only if
            and to the extent that such Partner would have a deficit balance in
            its Adjusted Capital Account after all other allocations provided in
            this Section 5.1 have been tentatively made as if this Section
            5.1(e)(iv) was not in this Agreement.

                  (v) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
            taxable period shall be allocated to the Partners in accordance with
            their respective Percentage Interests. If the General Partner
            determines in its good faith discretion that the Partnership's
            Nonrecourse Deductions must be allocated in a different ratio to
            satisfy the safe harbor requirements of the Treasury Regulations
            promulgated under Section 704(b) of the Code, the General Partner is
            authorized, upon notice to the Limited Partners, to revise the
            prescribed ratio to the numerically closest ratio which does satisfy
            such requirements.

                  (vi) PARTNER NONRECOURSE DEDUCTIONS. Partner Nonrecourse
            Deductions for any taxable period shall be allocated 100% to the
            Partner that bears the Economic Risk of Loss for such Partnership
            Nonrecourse Debt to which such Partner Nonrecourse Deductions are
            attributable in accordance with Treasury Regulation Section
            1.704-2(i). If more than one Partner bears the Economic Risk of Loss
            with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse
            Deductions attributable thereto shall be allocated between or among
            such Partners in accordance with the ratios in which they share such
            Economic Risk of Loss.

            (f) The Limited Partners holding Class A Common Units will be
      allocated gross income during each taxable year of the Partnership that
      would otherwise be allocated to the Limited Partners holding Class B
      Common Units pursuant to this Agreement (other than Section 5.1(e)), to
      the extent such an amount of gross income exists, in accordance with the
      following schedule:



          YEAR                                           AMOUNT
                                                    
          1995......................................   $ 9 million
          1996......................................     9 million
          1997......................................     9 million
          1998......................................    11 million
          1999......................................    11 million
          2000......................................    13 million
          2001......................................    13 million
          2002......................................    15 million
          2003......................................    15 million
          2004......................................    17 million
          2005......................................    17 million
          2006......................................    19 million
          2007......................................    19 million
          2008......................................    21 million
          2009......................................    21 million
          2010......................................    23 million


                                      29





          YEAR                                           AMOUNT
                                                    
          2011......................................    23 million
          2012......................................    25 million
          Thereafter................................    25 million
          

Notwithstanding the above, no allocation of gross income shall be made
pursuant to this Section 5.1(f) (or the amount of such allocation shall be
reduced) in any taxable year of the Partnership to the extent that a
purchaser of a Class A Common Unit in the offering made pursuant to the
Registration Statement would be allocated, pursuant to this Agreement, an
amount of federal taxable income with respect to such taxable year that would
exceed 65% of the amount of Available Cash distributed to such a Unitholder
with respect to that taxable year. In addition, no allocation of gross income
shall be made pursuant to this Section 5.1(f) for any taxable year including
or following the change of all Class A Common Units into Class B Common Units
pursuant to Section 5.6.

            5.2 ALLOCATIONS FOR TAX PURPOSES.

            (a) Except as otherwise provided herein, for federal income tax
      purposes, each item of income, gain, loss and deduction which is
      recognized by the Partnership for federal income tax purposes shall be
      allocated among the Partners in the same manner as its correlative item of
      "book" income, gain, loss or deduction is allocated pursuant to Section
      5.1.

            (b) In an attempt to eliminate Book-Tax Disparities attributable
      to a Contributed Property or Adjusted Property, items of income, gain,
      loss, depreciation, amortization and cost recovery deductions shall be
      allocated for federal income tax purposes among the Partners as follows:

                  (i) (A) In the case of a Contributed Property, such items
            attributable thereto shall be allocated among the Partners in the
            manner provided under Section 704(c) of the Code that takes into
            account the variation between the Agreed Value of such property and
            its adjusted basis at the time of contribution; and (B) except as
            otherwise provided in Section 5.2(b)(iii), any item of Residual Gain
            or Residual Loss attributable to a Contributed Property shall be
            allocated among the Partners in the same manner as its correlative
            item of "book" gain or loss is allocated pursuant to Section 5.1.

                  (ii) (A) In the case of an Adjusted Property, such items shall
            (1) first, be allocated among the Partners in a manner consistent
            with the principles of Section 704(c) of the Code to take into
            account the Unrealized Gain or Unrealized Loss attributable to such
            property and the allocations thereof pursuant to Section 4.6(d)(i)
            or (ii), and (2) second, in the event such property was originally a
            Contributed Property, be allocated among the Partners in a manner
            consistent with Section 5.2(b)(i)(A); and (B) except as otherwise
            provided in Section 5.2(b)(iii), any item of Residual Gain or
            Residual Loss attributable to an Adjusted Property shall be
            allocated among the Partners in the same manner as its correlative
            item of "book" gain or loss is allocated pursuant to Section 5.1.

                                      30



                  (iii) Any items of income, gain, loss or deduction otherwise
            allocable under Section 5.2(b)(i)(B) or 5.2(b)(ii)(B) shall be
            subject to allocation by the General Partner in a manner designed to
            eliminate, to the maximum extent possible, Book-Tax Disparities in a
            Contributed Property or Adjusted Property otherwise resulting from
            the application of the "ceiling" limitation (under Section 704(c) of
            the Code or Section 704(c) principles) to the allocations provided
            under Section 5.2(b)(i)(A) or 5.2(b)(ii)(A).

            (c) For the proper administration of the Partnership or for the
      preservation of uniformity of the Units (or any class or classes thereof),
      the General Partner shall have sole discretion to (i) adopt such
      conventions as it deems appropriate in determining the amount of
      depreciation, amortization and cost recovery deductions; (ii) make special
      allocations for federal income tax purposes of income (including, without
      limitation, gross income) or deductions; and (iii) amend the provisions of
      this Agreement as appropriate (x) to reflect the proposal or promulgation
      of Treasury Regulations under Section 704(b) or Section 704(c) of the Code
      or (y) otherwise to preserve or achieve uniformity of the Units (or any
      class or classes thereof). The General Partner may adopt such conventions,
      make such allocations and make such amendments to this Agreement as
      provided in this Section 5.2(c) only if such conventions, allocations or
      amendments would not have a material adverse effect on the Partners, the
      holders of any class or classes of Units issued and Outstanding of the
      Partnership, and if such allocations are consistent with the principles of
      Section 704 of the Code.

            (d) The General Partner in its sole discretion may determine to
      depreciate the portion of an adjustment under Section 743(b) of the Code
      attributable to unrealized appreciation in any Adjusted Property (to the
      extent of the unamortized Book-Tax Disparity) using a predetermined rate
      derived from the depreciation method and useful life applied to the
      Partnership's common basis of such property, despite the inconsistency of
      such approach with Treasury Regulation Section 1.167(c)-1(a)(6). If the
      General Partner determines that such reporting position cannot reasonably
      be taken, the General Partner may adopt a depreciation convention under
      which all purchasers acquiring Units in the same month would receive
      depreciation, based upon the same applicable rate as if they had purchased
      a direct interest in the Partnership's property. If the General Partner
      chooses not to utilize such aggregate method, the General Partner may use
      any other reasonable depreciation convention to preserve the uniformity of
      the intrinsic tax characteristics of any Units that would not have a
      material adverse effect on the Limited Partners or the Record Holders of
      any class or classes of Units. In addition, for purposes of computing the
      adjustments under Section 743(b) of the Code, the General Partner shall be
      authorized (but not required) to adopt a convention whereby the price paid
      by a transferee of Units will be deemed to be the lowest quoted trading
      price of the Units on any National Securities Exchange on which such Units
      are traded during the calendar month in which such transfer is deemed to
      occur pursuant to Section 5.2(g) without regard to the actual price paid
      by such transferee.

            (e) Any gain allocated to the Partners upon the sale or other
      taxable disposition of any Partnership asset shall, to the extent
      possible, after taking into account other required allocations of gain
      pursuant to this Section 5.2 be characterized as

                                      31



      Recapture Income in the same proportions and to the same extent as such
      Partners (or their predecessors in interest) have been allocated any
      deductions directly or indirectly giving rise to the treatment of such
      gains as Recapture Income.

            (f) All items of income, gain, loss, deduction and credit recognized
      by the Partnership for federal income tax purposes and allocated to the
      Partners in accordance with the provisions hereof shall be determined
      without regard to any election under Section 754 of the Code which may be
      made by the Partnership; provided, however, that such allocations, once
      made, shall be adjusted as necessary or appropriate to take into account
      those adjustments permitted or required by Sections 734 and 743 of the
      Code.

            (g) Each item of Partnership income, gain, loss and deduction
      attributable to a transferred Partnership Interest of the General Partner
      or to transferred Units shall, for federal income tax purposes, be
      determined on an annual basis and prorated on a monthly basis and shall be
      allocated to the Partners as of the close of the New York Stock Exchange
      on the last day of the preceding month; provided, however, that gain or
      loss on a sale or other disposition of any assets of the Partnership other
      than in the ordinary course of business shall be allocated to the Partners
      as of the opening of the New York Stock Exchange on the first Business Day
      of the month in which such gain or loss is recognized for federal income
      tax purposes. The General Partner may revise, alter or otherwise modify
      such methods of allocation as it determines necessary, to the extent
      permitted or required by Section 706 of the Code and the regulations or
      rulings promulgated thereunder.

            (h) Allocations that would otherwise be made to a Limited Partner
      under the provisions of this Article V shall instead be made to the
      beneficial owner of Units held by a nominee in any case in which the
      nominee has furnished the identity of such owner to the Partnership in
      accordance with Section 6031(c) of the Code or any other method acceptable
      to the General Partner in its sole discretion.

            5.3  REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS.

            (a) Within 45 days following the end of each calendar quarter the
      Partnership shall distribute to the Partners and retain for reinvestment
      in its business in accordance with this Article V, an amount equal to 100%
      of Available Cash with respect to such quarter. Distributions of Available
      Cash by the Partnership to the Partners shall be made as of the Record
      Date selected by the General Partner in its reasonable discretion. All
      amounts of Available Cash distributed and retained by the Partnership on
      any date from any source shall be deemed to be Cash from Operations until
      the sum of all amounts of Available Cash theretofore distributed by the
      Partnership to the Partners pursuant to Section 5.4 of the Second Amended
      and Restated Agreement or any substantially similar provisions of any
      other Prior Agreements and Section 5.5 and retained by the Partnership
      pursuant to Section 5.5 equals the aggregate amount of all Cash from
      Operations of the Partnership from the Partnership Inception through the
      end of the calendar quarter immediately preceding such distribution and
      retention. Any remaining amounts of Available Cash distributed and
      retained by the Partnership on such date shall be deemed to be Cash from
      Interim Capital Transactions.

                                      32



            (b) Notwithstanding the definitions of Available Cash and Cash from
      Operations contained herein, disbursements (including, without limitation,
      contributions to any Operating Subsidiary or disbursements on behalf of
      any Operating Subsidiary) made or cash reserves established after the end
      of any quarter shall be deemed to have been made or established, for
      purposes of determining Available Cash and Cash from Operations, within
      such quarter if the General Partner so determines. Notwithstanding the
      foregoing, in the event of the dissolution and liquidation of the
      Partnership, all proceeds of such liquidation shall be applied and
      distributed in accordance with, and subject to the terms and conditions
      of, Sections 14.3 and 14.4.

            5.4  INTENTIONALLY OMITTED.

            5.5  CASH FROM OPERATIONS. Available Cash with respect to any
calendar quarter that is deemed to be Cash from Operations pursuant to the
provisions of Section 5.3 or 5.7 shall be distributed by the Partnership to
the Partners as follows:

            (a) FIRST, 98% to all Limited Partners holding Common Units, Pro
      Rata, and 2% to the General Partner until the Partnership has distributed
      in respect of each Common Unit then Outstanding an amount of cash equal to
      the Minimum Quarterly Distribution;

            (b) SECOND, 85% to all Limited Partners holding Common Units, Pro
      Rata, and 15% to the General Partner until the Partnership has distributed
      in respect of each Common Unit then Outstanding an amount of cash equal to
      the excess of the First Target Distribution over the Minimum Quarterly
      Distribution;

            (c) THIRD, 75% to all Limited Partners holding Common Units, Pro
      Rata, and 25% to the General Partner until the Partnership has distributed
      in respect of each Common Unit then Outstanding an amount of cash equal to
      the excess of the Second Target Distribution over the First Target
      Distribution; and

            (d) FOURTH, 50% to all Limited Partners holding Common
      Units, Pro Rata, and 50% to the General Partner;

PROVIDED, HOWEVER, that the Partnership may not make a distribution of
Available Cash to Limited Partners holding Common Units pursuant to this
Section 5.5, unless at the same time that it makes such distribution, the
Partnership shall retain in respect of each I-Unit then Outstanding an amount
of Available Cash equal to the quotient obtained by dividing (i) the cash
distribution then being made on a Common Unit pursuant to this Section 5.5 by
(ii) .98; and

PROVIDED, FURTHER, that if the Minimum Quarterly Distribution, the First
Target Distribution and the Second Target Distribution have been reduced to
zero pursuant to Section 5.9(a)(ii), then distributions of Available Cash
that is deemed to be Cash from Operations with respect to any quarter will be
made 98% to all Limited Partners holding Class A Common Units, Pro Rata, and
2% to the General Partner until there has been distributed in respect of each
Class A Common Unit then Outstanding, pursuant to Section 5.4 of the Second
Amended and Restated Agreement or any substantially similar provisions of any
other Prior Agreements and this Section 5.5 including this proviso, Available
Cash that is deemed to be Cash from Operations since

                                      33



Partnership Inception equal to the Minimum Quarterly Distribution (as from
time to time adjusted) for all periods since Partnership Inception, and
thereafter in accordance with Section 5.5(d).

            5.6  CHANGE OF CLASS A COMMON UNITS AND CLASS B COMMON UNITS. At
such time as the General Partner determines, based on advice of counsel, that
all Class B Common Units have, as a substantive matter, like intrinsic
economic and federal income tax characteristics, in all material respects, to
the intrinsic economic and federal income tax characteristics of the Class A
Common Units then Outstanding, all differences and distinctions between Class
A Common Units and Class B Common Units shall automatically cease and all
Class A Common Units and Class B Common Units shall thereafter be one class
of Units called "Common Units."

            5.7  CASH FROM INTERIM CAPITAL TRANSACTIONS. Available Cash that
is deemed to be Cash from Interim Capital Transactions shall be distributed,
unless the provisions of Section 5.3 require otherwise, 98% to all Limited
Partners holding Common Units, Pro Rata, and 2% to the General Partner until
a hypothetical holder of a Class A Common Unit acquired at the time of the
Initial Offering has received with respect to each Class A Common Unit, from
Partnership Inception through such date, distributions of Available Cash that
are deemed to be Cash from Interim Capital Transactions in an aggregate
amount per Class A Common Unit equal to the Initial Unit Price; PROVIDED,
HOWEVER, that the Partnership may not make a distribution of Available Cash
to Limited Partners holding Common Units pursuant to this Section 5.7, unless
at the same time that it makes any such distribution, the Partnership shall
retain in respect of each I-Unit then Outstanding an amount of Available Cash
equal to the quotient obtained by dividing (i) the cash distribution then
being made on a Common Unit pursuant to this Section 5.7 by (ii) .98.
Thereafter, all Available Cash shall be distributed as if it were Cash from
Operations and shall be distributed in accordance with Section 5.5.

            5.8  DEFINITIONS.  As used herein,

            (a) "AVAILABLE CASH" means, with respect to any calendar quarter,
      (i) the sum of (A) all cash receipts of the Partnership during such
      quarter from all sources (including, without limitation, distributions of
      any Operating Subsidiary's "Available Cash" (as that term is defined in
      the respective Operating Subsidiary Agreement) received by the Partnership
      pursuant to the respective Operating Subsidiary Agreement) and (B) any
      reduction in cash reserves established in prior quarters (either by
      reversal or utilization), less (ii) the sum of (aa) all cash disbursements
      of the Partnership during such quarter, and (bb) any cash reserves
      established in such quarter in such amounts as the General Partner
      determines to be necessary or appropriate in its reasonable discretion (x)
      to provide for the proper conduct of the business of the Partnership
      (including reserves for possible rate refunds or future capital
      expenditures) or (y) to provide funds for distributions with respect to
      any of the next four calendar quarters and (cc) any other cash reserves
      established in such quarter in such amounts as the General Partner
      determines in its reasonable discretion to be necessary because the
      distribution of such amounts would be prohibited by applicable law or by
      any loan agreement, security agreement, mortgage, debt instrument or other
      agreement or obligation to which the Partnership is a party or by which it
      is bound or its assets are subject. Taxes paid by the Partnership on
      behalf of, or

                                      34




      amounts withheld with respect to, all or less than all of the Partners
      shall not be considered cash disbursements of the Partnership which
      reduce Available Cash, but the payment or withholding thereof shall
      be deemed to be a distribution of Available Cash to such Partners.
      Alternatively, in the discretion of the General Partner, such taxes (if
      pertaining to all Partners) may be considered to be cash disbursements
      of the Partnership which reduce Available Cash, but the payment or
      withholding thereof shall not be deemed to be a distribution of Available
      Cash to such Partners. Notwithstanding the foregoing, Available Cash shall
      not include any cash receipts or reductions in reserves or take into
      account any disbursements made or reserves established after commencement
      of the dissolution and liquidation of the Partnership. For purposes of
      determining "Available Cash," the aggregate Equivalent Non-Cash Amount for
      all I-Units with respect to any calendar quarter will be disregarded for
      purposes of determining "Available Cash" in future quarters.

            (b) "CASH FROM INTERIM CAPITAL TRANSACTIONS" means, at any date,
      such amounts of Available Cash as are deemed to be Cash from Interim
      Capital Transactions pursuant to Section 5.3.

            (c) "CASH FROM OPERATIONS" means, at any date but prior to
      commencement of the dissolution and liquidation of the Partnership, on a
      cumulative basis, the cash balance of the Partnership and any Operating
      Subsidiary at Partnership Inception, excluding any such cash proceeds to
      the Partnership from the exercise of the Underwriters' over-allotment
      option granted in the Underwriting Agreement, plus all cash receipts of
      the Partnership and any Operating Subsidiary from their operations
      (excluding any cash proceeds from any Interim Capital Transactions) during
      the period since the Partnership Inception through such date less the sum
      of (i) all cash operating expenditures of the Partnership and any
      Operating Subsidiary during such period, including, without limitation,
      taxes imposed on the Partnership or any Operating Subsidiary as an entity,
      (ii) all cash debt service payments of the Partnership and any Operating
      Subsidiary during such period (other than payments or prepayments of
      principal and premium required by reason of loan agreements (including
      covenants and default provisions therein) or by lenders, in each case in
      connection with sales or other dispositions of assets or made in
      connection with refinancings or refundings of indebtedness; provided, that
      any payment or prepayment of principal, whether or not then due, shall be
      determined at the election and in the discretion of the General Partner to
      be refunded or refinanced by any indebtedness incurred or to be incurred
      by the Partnership or any Operating Subsidiary simultaneously with or
      within 180 days prior to or after such payment or prepayment to the extent
      of the principal amount of such indebtedness so incurred), (iii) all cash
      capital expenditures of the Partnership and any Operating Subsidiary
      during such period necessary to maintain the service capability of the
      Transportation System, (iv) an amount equal to the incremental revenues
      collected pursuant to a rate increase that are, at such date, subject to
      possible refund and for which the General Partner has established a cash
      reserve, (v) any cash reserves outstanding as of such date which the
      General Partner determines in its reasonable discretion to be necessary or
      appropriate to provide for the future cash payment of items of the type
      referred to in clauses (i) through (iii) of this sentence and (vi) any
      cash reserves outstanding as of such date that the General Partner
      determines to be necessary or appropriate in its reasonable discretion to
      provide funds for

                                      35



      distributions with respect to any one or more of the next four calendar
      quarters, all as determined on a consolidated basis and after elimination
      of intercompany items. Taxes paid by the Partnership on behalf of, or
      amounts withheld with respect to, all or less than all of the Partners
      shall not be considered cash operating expenditures of the Partnership
      which reduce Cash from Operations, but the payment or withholding thereof
      shall be deemed to be a distribution of Available Cash to such Partners.
      Alternatively, in the discretion of the General Partner, such taxes (if
      pertaining to all Partners) may be considered to be cash disbursements of
      the Partnership which reduce Cash from Operations, but the payment or
      withholding thereof shall not be deemed to be a distribution of Available
      Cash to such Partners. For purposes of the foregoing, reserves do not
      include reserves outstanding at Partnership Inception.

            (d)   Intentionally Omitted;

            (e)   Intentionally Omitted;

            (f)   Intentionally Omitted;

            (g)   Intentionally Omitted;

            (h) "FIRST TARGET DISTRIBUTION" means $0.70 per Unit per calendar
      quarter, subject to adjustment in accordance with Sections 5.9 and 9.6.

            (i) "INTERIM CAPITAL TRANSACTIONS" means (i) borrowings and sales of
      debt securities (other than for working capital purposes and for items
      purchased on open account in the ordinary course of business) by the
      Partnership or any Operating Subsidiary, (ii) sales of equity interests by
      the Partnership or any Operating Subsidiary and (iii) sales or other
      voluntary or involuntary dispositions of any assets of the Partnership or
      any Operating Subsidiary (other than (x) sales or other dispositions of
      inventory in the ordinary course of business, (y) sales or other
      dispositions of other current assets including accounts receivable or (z)
      sales or other dispositions of assets as a part of normal retirements or
      replacements), in each case prior to the commencement of the dissolution
      and liquidation of the Partnership. The General Partner shall have the
      right to determine in its reasonable discretion whether inventory
      reductions shall be considered in the ordinary course of business or such
      a normal retirement.

            (j) "MINIMUM QUARTERLY DISTRIBUTION" means $0.59 per Unit per
      calendar quarter, subject to adjustment in accordance with Sections 5.9
      and 9.6.

            (k) "NET INCOME" means, for any taxable period, the excess, if any,
      of the Partnership's items of income and gain (other than those items
      attributable to dispositions constituting Termination Capital
      Transactions) for such taxable period over the Partnership's items of loss
      and deduction (other than those items attributable to dispositions
      constituting Termination Capital Transactions) for such taxable period.
      The items included in the calculation of Net Income shall be determined in
      accordance with Section 4.6(b) and shall not include any items specially
      allocated under Section 5.1(d) or 5.1(e). Once an item of income, gain,
      loss or deduction that has been included in the initial computation of Net
      Income is subjected to a Required Allocation or a

                                      36


      Discretionary Allocation, the applicable Net Income or Net Loss shall be
      recomputed without regard to such item. For purposes of Sections 5.1(a)
      and 5.1(b), in determining whether Net Income has been allocated to any
      Unit or any Partner (as the case may be) for any previous taxable period,
      any Unrealized Gain or Unrealized Loss allocated pursuant to Section
      4.6(d) shall be treated as an item of gain or loss in computing Net
      Income.

            (l) "NET LOSS" means, for any taxable period, the excess, if any, of
      the Partnership's items of loss and deduction (other than those items
      attributable to dispositions constituting Termination Capital
      Transactions) for such taxable period over the Partnership's items of
      income and gain (other than those items attributable to dispositions
      constituting Termination Capital Transactions) for such taxable period.
      The items included in the calculation of Net Loss shall be determined in
      accordance with Section 4.6(b) and shall not include any items
      specifically allocated under Section 5.1(d) or 5.1(e). Once an item of
      income, gain, loss or deduction that has been included in the initial
      computation of Net Loss is subjected to a Required Allocation or a
      Discretionary Allocation, the applicable Net Income or Net Loss shall be
      recomputed without regard to such item. For purposes of Sections 5.1(a)
      and 5.1(b), in determining whether Net Losses have been allocated to any
      Unit or any Partner (as the case may be) for any previous taxable period,
      any Unrealized Gain or Unrealized Loss allocated pursuant to Section
      4.6(d) shall be treated as an item of gain or loss in computing Net
      Losses.

            (m) "NET TERMINATION GAIN" means the sum, if positive, of all items
      of income, gain, loss and deduction (as determined in accordance with
      Section 4.6(b)) recognized by the Partnership during the period in which
      the Partnership has dissolved and can no longer be continued pursuant to
      Section 14.2 and all subsequent periods.

            (n) "NET TERMINATION LOSS" means the sum, if negative, of all items
      of income, gain, loss and deduction (as determined in accordance with
      Section 4.6(b)) recognized by the Partnership during the period in which
      the Partnership has dissolved and can no longer be continued pursuant to
      Section 14.2 and all subsequent periods.

            (o) "SECOND TARGET DISTRIBUTION" means $0.99 per Unit per calendar
      quarter, subject to adjustment in accordance with Sections 5.9 and 9.6.

      5.9  ADJUSTMENT OF MINIMUM QUARTERLY DISTRIBUTION AND TARGET DISTRIBUTION
LEVELS.

            (a) Adjustments of the Minimum Quarterly Distribution, First Target
      Distribution and Second Target Distribution shall be made in the following
      circumstances: (i) the Minimum Quarterly Distribution, First Target
      Distribution and Second Target Distribution shall be proportionately
      adjusted in the event of any distribution, combination or subdivision
      (whether effected by a distribution payable in Units or otherwise) of
      Units or other Partnership Securities in accordance with Section 4.11;
      provided, however, that no such adjustment shall be made as a result of
      any increase in the number of I-Units or fractions of I-Units Outstanding
      pursuant to Section 5.10(a); and (ii) in the event of a distribution of
      Available Cash that is deemed to

                                      37



      be Cash from Interim Capital Transactions, the Minimum Quarterly
      Distribution, First Target Distribution and Second Target Distribution
      shall be adjusted proportionately downward to equal the product obtained
      by multiplying the otherwise applicable Minimum Quarterly Distribution,
      First Target Distribution and Second Target Distribution, as the same may
      have been previously adjusted, by a fraction of which the numerator is the
      Unrecovered Initial Unit Price immediately after giving effect to such
      distribution and of which the denominator is the Unrecovered Initial Unit
      Price immediately prior to giving effect to such distribution.

            (b) The Minimum Quarterly Distribution, First Target Distribution
      and Second Target Distribution may also be adjusted under the
      circumstances, and in the manner, set forth in Section 9.6.

            5.10  SPECIAL PROVISIONS RELATING TO I-UNITS.

            (a) Except as otherwise provided by Sections 14.3(b) and 14.3(c),
      whenever distributions are made to Limited Partners holding Common Units
      pursuant to Sections 5.5 and 5.7, the number of Outstanding I-Units will
      be increased in accordance with paragraph (b) of this Section 5.10.
      Distributions pursuant to Sections 5.5 and 5.7 to Limited Partners holding
      Common Units and to the General Partner will be made in cash and an amount
      of Available Cash equal to the quotient obtained by dividing (i) the
      Equivalent Non-Cash Amount by (ii) .98 will be retained by the Partnership
      in respect of each I-Unit then Outstanding.

            (b) Whenever Limited Partners holding Common Units receive
      distributions of cash pursuant to Sections 5.5 and 5.7, the number of
      Outstanding I-Units will be automatically subdivided, by means of a split
      of each Outstanding I-Unit, or fraction thereof, with the result that each
      Limited Partner holding I-Units will own a number of additional fractional
      I-Units per each I-Unit, or fraction thereof, held by such Limited Partner
      immediately prior to the Record Date for the related cash distribution to
      Limited Partners holding Common Units, which number shall equal the
      Calculated Unit Amount. Each fractional I-Unit that is created pursuant to
      this Section 5.10(b) as a result of distributions of cash to Limited
      Partners holding Common Units pursuant to Sections 5.5 and 5.7 shall be
      equal to and represented by a fraction that is calculated to six decimal
      places (without rounding), and any calculation that would result in a
      fractional interest in excess of one-millionth (1/1,000,000) of an I-Unit
      shall be disregarded without payment or other consideration and shall not
      be accumulated. The creation of additional fractional I-Units pursuant to
      this Section 5.10(b) will not result in any adjustment to the Capital
      Accounts of holders of I-Units.

            (c) As used in this Agreement, (i) "EQUIVALENT NON-CASH AMOUNT"
      means, for each I-Unit, an amount equal to the cash distribution made on a
      Common Unit in accordance with Sections 5.5 and 5.7; (ii) "CALCULATED UNIT
      AMOUNT" means a fraction of an I-Unit calculated per I-Unit, or fraction
      thereof, by dividing the Equivalent Non-Cash Amount by the Average Market
      Price; and (iii) "AVERAGE MARKET PRICE" means the average of the daily
      Closing Prices per Listed Share for the ten consecutive Trading Days prior
      to the date on which the Listed Shares begin to trade ex-dividend, but not
      including

                                      38



      that date. For purposes of this Section 5.10(c), the "date on which the
      Listed Shares begin to trade ex-dividend" means the date on which
      "ex-dividend" trading commences for a Share Distribution on the principal
      National Securities Exchange on which the Listed Shares are listed or
      admitted to trading.

            (d) At any time during which there are any I-Units Outstanding, the
      Partnership will not:

                  (i) make a distribution on a Common Unit other than in cash,
            Common Units or a Partnership Security that has in all material
            respects the same rights and privileges as the Common Units;

                  (ii) except pursuant to Section 14.3(b), make a distribution
            on an I-Unit other than in additional I-Units or a security that has
            in all material respects the same rights and privileges as the
            I-Units;

                  (iii) allow a Limited Partner holding Common Units to receive
            any consideration other than cash or Common Units or a security that
            has in all material respects the same rights and privileges as the
            Common Units or allow a Limited Partner holding I-Units to receive
            any consideration other than additional I-Units or a security that
            has in all material respects the same rights and privileges as the
            I-Units in a (A) merger, if the Limited Partners of the Partnership
            immediately prior to the transaction own more than 50% of the
            residual common equity securities of the survivor immediately after
            the transaction, or (B) recapitalization, reorganization or similar
            transaction;

                  (iv) be a party to a merger, sell substantially all of the
            Partnership's assets to another Person or enter into similar
            transactions if (A) the survivor of the merger or the other Person
            is to be an Affiliate of Enbridge Inc. after the transaction; and
            (B) the transaction will result in the occurrence of a Mandatory
            Purchase Event;

                  (v) make a tender offer for Common Units unless the
            consideration payable in such tender offer (A) is exclusively cash;
            and (B) together with any cash payable in respect of any other
            tender offer by the Partnership for Common Units concluded within
            the preceding 360 days and the aggregate amount of any cash
            distributions to all Limited Partners holding Common Units made
            within the preceding 360 days, is less than 12% of the aggregate
            market value of all Outstanding Units determined on the Trading Day
            immediately preceding the commencement of the tender offer;

                  (vi) issue any I-Units to any Person other than EEM; or

                  (vii) take any action that would result in the occurrence of a
            Special Event under clause (a) or (b) of the definition of "Special
            Event" in Section 1.01 of the Purchase Provisions, unless prior to
            the occurrence of such Special Event, the Purchaser has notified the
            Company and the Partnership that such Special Event shall constitute
            a Mandatory Purchase Event under the Purchase Provisions.

                                      39



            (e) In the event of any (i) consolidation or merger of the
      Partnership with or into another Person in accordance with Section 16.1
      (other than a consolidation or merger in which the Partnership is the
      Surviving Business Entity and which does not result in any
      reclassification, conversion, exchange or cancellation of Outstanding
      Common Units) or (ii) sale or other disposition to another Person of all
      or substantially all of the assets of the Partnership (any of the
      foregoing, a "TRANSACTION"), lawful provision shall be made such that if
      the Limited Partners holding Common Units receive cash in the Transaction,
      except as provided in Section 14.3(b), the number of Outstanding I-Units
      will be increased automatically by a split of each Outstanding I-Unit, or
      fraction thereof, so that the Limited Partners holding such Outstanding
      I-Unit, or fraction thereof, own, per Outstanding I-Unit, or fraction
      thereof, a number of additional I-Units or fractions of I-Units equal to
      the cash received on a Common Unit as a result of the Transaction divided
      by the average of the daily Closing Prices per Listed Share for the 10
      consecutive Trading Days immediately prior to the effective date of the
      Transaction.

                                   ARTICLE VI
                      MANAGEMENT AND OPERATION OF BUSINESS

            6.1  MANAGEMENT.

            (a) Subject to Section 6.6(c), the General Partner shall conduct,
      direct and exercise full control over all activities of the Partnership.
      Except as otherwise expressly provided in this Agreement, all management
      powers over the business and affairs of the Partnership shall be
      exclusively vested in the General Partner, and no Limited Partner or
      Assignee shall have any right of control or management power over the
      business and affairs of the Partnership. In addition to the powers now or
      hereafter granted to a general partner of a limited partnership under
      applicable law or which are granted to the General Partner under any other
      provision of this Agreement, the General Partner, subject to Section 6.3,
      shall have full power and authority to do all things and on such terms as
      it, in its sole discretion, may deem necessary or desirable (i) to conduct
      the business of the Partnership, to exercise all powers set forth in
      Section 3.2 and to effectuate the purposes set forth in Section 3.1,
      including, without limitation, (A) the making of any expenditures, the
      lending or borrowing of money, the assumption or guarantee of, or other
      contracting for, indebtedness and other liabilities, the issuance of
      evidences of indebtedness and the incurring of any other obligations and
      the securing of same by mortgage, deed of trust or other lien or
      encumbrance; (B) the making of tax, regulatory and other filings, or
      rendering of periodic or other reports to governmental or other agencies
      having jurisdiction over the business or assets of the Partnership; (C)
      the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
      or exchange of any or all of the assets of the Partnership or the merger
      or other combination of the Partnership with or into another Person (the
      matters described in this clause (C) being subject, however, to any prior
      approval that may be required by Section 6.3); (D) the use of the assets
      of the Partnership (including, without limitation, cash on hand) for any
      purpose consistent with the terms of this Agreement, including, without
      limitation, the financing of the conduct of the operations of the
      Partnership or any Operating Subsidiary, the lending of funds to other
      Persons (including, without limitation, any Operating Subsidiary) and the
      repayment of obligations of the Partnership and any Operating

                                      40



      Subsidiary and the making of capital contributions to any Operating
      Subsidiary; (E) the negotiation, execution and performance of any
      contracts, conveyances or other instruments (including, without
      limitation, instruments that limit the liability of the Partnership
      under contractual arrangements to all or particular assets of the
      Partnership, with the other party to the contract to have no recourse
      against the General Partner or its assets other than its interest in
      the Partnership, even if same results in the terms of the transaction
      being less favorable to the Partnership than would otherwise be the
      case); (F) the distribution of Partnership cash; (G) the selection and
      dismissal of employees (including, without limitation, employees having
      titles such as "president," "vice president," "secretary" and "treasurer")
      agents, outside attorneys, accountants, consultants and contractors and
      the determination of their compensation and other terms of employment or
      hiring; (H) the maintenance of insurance for the benefit of the Partners
      and the Partnership and any Operating Subsidiary (including, without
      limitation, the assets and operations of the Partnership and any Operating
      Subsidiary); (I) the formation of, or acquisition of an interest in, and
      the contribution of property to, any further limited or general
      partnerships, limited liability companies, joint ventures or other
      relationships (including, without limitation, the acquisition of interests
      in, and the contributions of property to, any Operating Subsidiary from
      time to time); (J) the control of any matters affecting the rights and
      obligations of the Partnership, including, without limitation, the
      bringing and defending of actions at law or in equity and otherwise
      engaging in the conduct of litigation and the incurring of legal expense
      and the settlement of claims and litigation; (K) the indemnification of
      any Person against liabilities and contingencies to the extent permitted
      by law; (L) the entering into of listing agreements with the New York
      Stock Exchange and any other securities exchange and the delisting of
      some or all of the Units from, or requesting that trading be suspended on,
      any such exchange (subject to any prior approval that may be required
      under Section 1.6); and (M) the purchase, sale or other acquisition or
      disposition of Units; and (ii) to undertake any action in connection
      with the Partnership's participation in any Operating Subsidiary as a
      partner, member, shareholder or other equity interest holder or in
      connection with the exercise of the Partnership's rights as a member,
      shareholder or other equity interest holder of any Operating General
      Partner (including, without limitation, contributions or loans of funds
      by the Partnership to any Operating Subsidiary).

            (b) Notwithstanding any other provision of this Agreement, any
      Operating Subsidiary Agreement, the Delaware Act or any applicable law,
      rule or regulation, each of the Partners and Assignees and each other
      Person who may acquire an interest in Units hereby (i) approves, ratifies
      and confirms the execution, delivery and performance by the parties
      thereto of the First Mortgage Note Agreements, the First Mortgage Notes,
      the related mortgage, the revolving credit facility, the Operating
      Partnership Agreement, the Underwriting Agreement, the Conveyance
      Agreement, the LPL Contribution Agreement, the Distribution Support
      Agreement (as each of the foregoing is defined or otherwise described in
      the Registration Statement) and the other agreements described in or filed
      as part of the Registration Statement; (ii) agrees that the General
      Partner is authorized to execute, deliver and perform the agreements
      referred to in clause (i) of this sentence and the other agreements, acts,
      transactions and matters described in the Registration Statement on behalf
      of the Partnership without any further act, approval or vote of the
      Partners or the Assignees or the other Persons who may acquire an interest
      in Units; and

                                      41



      (iii) agrees that none of the execution, delivery or performance by the
      General Partner, the Partnership, any Operating Subsidiary or any
      Affiliate thereof of any agreement authorized or permitted under this
      Agreement (including, without limitation, the exercise by the General
      Partner or any Affiliate of the General Partner of the rights accorded
      pursuant to Article XVII) shall constitute a breach by the General
      Partner of any duty that the General Partner may owe the Partnership or
      the Limited Partners or the Assignees or any other Persons under this
      Agreement or of any duty stated or implied by law or equity.

            6.2  CERTIFICATE OF LIMITED PARTNERSHIP. The General Partner has
caused the Certificate of Limited Partnership to be filed with the Secretary of
State of the State of Delaware as required by the Delaware Act and shall use all
reasonable efforts to cause to be filed such other certificates or documents as
may be determined by the General Partner in its sole discretion to be reasonable
and necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware or any other state in
which the Partnership may elect to do business or own property. To the extent
that such action is determined by the General Partner in its sole discretion to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate of Limited Partnership and do
all things to maintain the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) under the laws
of the State of Delaware or of any other state in which the Partnership may
elect to do business or own property. Subject to the terms of Section 7.5(a),
the General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner or Assignee.

            6.3  RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY.

            (a) The General Partner may not, without written approval of the
      specific act by all of the Limited Partners or by other written instrument
      executed and delivered by all of the Limited Partners subsequent to the
      date of this Agreement, take any action in contravention of this
      Agreement, including, without limitation, (i) any act that would make it
      impossible to carry on the ordinary business of the Partnership, except as
      otherwise provided in this Agreement; (ii) possess Partnership property,
      or assign any rights in specific Partnership property, for other than a
      Partnership purpose; (iii) admit a Person as a Partner, except as
      otherwise provided in this Agreement; (iv) amend this Agreement in any
      manner, except as otherwise provided in this Agreement or applicable law;
      or (v) transfer its interest as general partner of the Partnership, except
      as otherwise provided in this Agreement.

            (b) Except as provided in Article XIV, the General Partner may not
      sell, exchange or otherwise dispose of all or substantially all of the
      Partnership's assets in a single transaction or a series of related
      transactions (including by way of merger, consolidation or other
      combination with any other Person) or approve on behalf of the Partnership
      the sale, exchange or other disposition of all or substantially all of the
      assets of Enbridge Energy, Limited Partnership, without the approval of
      the holders of at least a majority of the Outstanding Units; provided,
      however, that this provision shall not preclude or limit the General
      Partner's ability to mortgage, pledge, hypothecate or grant a

                                      42



      security interest in all or substantially all of the Partnership's assets
      or any Operating Subsidiary's assets and shall not apply to any forced
      sale of any or all of the Partnership's assets or any Operating
      Subsidiary's assets pursuant to the foreclosure of, or other realization
      upon, any such encumbrance. Without the approval of the holders of at
      least a majority of the Outstanding Units, the General Partner shall not,
      on behalf of the Partnership, consent to any amendment to the partnership
      agreement of Enbridge Energy, Limited Partnership or, except as expressly
      permitted by Section 6.9(d), take any action permitted to be taken by the
      limited partner of Enbridge Energy, Limited Partnership, in either case,
      that would adversely affect the Partnership as a limited partner of
      Enbridge Energy, Limited Partnership.

            (c) Unless approved by the affirmative vote of the holders of at
      least 66-2/3% of each class of the Outstanding Units, the General Partner
      shall not take any action or refuse to take any reasonable action the
      effect of which, if taken or not taken, as the case may be, would be to
      cause the Partnership or any Operating Subsidiary to be taxable as a
      corporation or otherwise taxed as an entity for federal income tax
      purposes.

            (d) At all times while serving as the general partner of the
      Partnership, the General Partner shall not make any dividend or
      distribution on, or repurchase any shares of, its stock or take any other
      action within its control if the effect of such dividend, distribution,
      repurchase or other action would be to reduce its net worth below an
      amount necessary to receive an Opinion of Counsel that the Partnership
      will be treated as a partnership for federal income tax purposes.

            6.4  REIMBURSEMENT OF THE GENERAL PARTNER.

            (a) Except as provided in this Section 6.4 and elsewhere in this
      Agreement or in any Operating Subsidiary Agreement, the General Partner
      shall not be compensated for its services as general partner of the
      Partnership or on behalf of any Operating General Partner or any Operating
      Subsidiary.

            (b) The General Partner shall be reimbursed on a monthly basis, or
      such other basis as the General Partner may determine in its sole
      discretion, for (i) all direct and indirect expenses it incurs or payments
      it makes on behalf of the Partnership and any Operating Subsidiary
      (including, without limitation, amounts paid to any Person to perform
      services for the Partnership or for the benefit of the Partnership or to
      or on behalf of any Operating Subsidiary or Operating General Partner),
      and (ii) that portion of the General Partner's or its Affiliates' legal,
      accounting, investor communications, utilities, telephone, secretarial,
      travel, entertainment, bookkeeping, reporting, data processing, office
      rent and other office expenses (including, without limitation, overhead
      charges), salaries, fees and other compensation and benefit expenses of
      employees, officers and directors, insurance, other administrative or
      overhead expenses and all other expenses, in each such case, necessary or
      appropriate to the conduct of the Partnership's business and allocable to
      the Partnership or otherwise incurred by the General Partner in connection
      with operating the Partnership's business (including, without limitation,
      expenses allocated to the General Partner by its Affiliates). Any accruals
      by the General Partner of the expected cost of providing all forms of
      post-retirement benefits to employees or

                                      43



      former employees of the General Partner and their beneficiaries and
      qualified dependents will be borne by the Partnership. The General
      Partner shall determine the fees and expenses that are allocable to the
      Partnership in any reasonable manner determined by the General Partner in
      its sole discretion. Such reimbursements shall be in addition to any
      reimbursement to the General Partner as a result of indemnification
      pursuant to Section 6.7.

            (c) Subject to Section 4.4(c), the General Partner in its sole
      discretion and without the approval of the Limited Partners may propose
      and adopt on behalf of the Partnership employee benefit plans (including,
      without limitation, plans involving the issuance of Units, other than
      I-Units), for the benefit of employees of the General Partner, any
      Operating General Partner, the Partnership, any Operating Subsidiary or
      any Affiliate of any of them in respect of services performed, directly or
      indirectly, for the benefit of the Partnership or any Operating
      Subsidiary.

            6.5  OUTSIDE ACTIVITIES.

            (a) After the date of this Agreement, the General Partner shall
      limit its activities to those required or authorized by this Agreement or
      the Omnibus Agreement.

            (b) Except as described in the Omnibus Agreement or as provided in
      Section 6.5(a), each Indemnitee is free to engage in any business,
      including any business that is in competition with the business of the
      Partnership. The General Partner and any other Persons affiliated with the
      General Partner may acquire Units or other Partnership Securities, in
      addition to those acquired by any of such Persons on the Closing Date, and
      shall be entitled to exercise all rights of an Assignee or Limited
      Partner, as applicable, relating to such Units or Partnership Securities,
      as the case may be.

            (c) Without limiting Sections 6.5(a) and 6.5(b), but notwithstanding
      anything to the contrary in this Agreement, the competitive activities of
      Indemnitees described in the Registration Statement are hereby approved by
      all Partners, and it shall not be deemed to be a breach of the General
      Partner's fiduciary duty for the General Partner to permit an Indemnitee
      to engage in a business opportunity in preference to or to the exclusion
      of the Partnership, provided such activities are not prohibited by the
      Omnibus Agreement.

            6.6  LOANS TO AND FROM THE GENERAL PARTNER; CONTRACTS WITH
AFFILIATES.

            (a) The General Partner or any Affiliate thereof may lend to the
      Partnership or any Operating General Partner or any Operating Subsidiary,
      and the Partnership and any Operating General Partner or any Operating
      Subsidiary may borrow, funds needed or desired by the Partnership and any
      Operating General Partner or any Operating Subsidiary for such periods of
      time as the General Partner may determine; provided, however, that the
      General Partner or any of its Affiliates may not charge the Partnership or
      any Operating General Partner or any Operating Subsidiary interest at a
      rate greater than the rate that would be charged the Partnership or any
      such Operating General Partner or Operating Subsidiary, as the case may be
      (without reference to the General Partner's

                                      44



      financial abilities or guarantees), by unrelated lenders on comparable
      loans. The Partnership or any Operating General Partner or any Operating
      Subsidiary, as the case may be, shall reimburse the General Partner or any
      of its Affiliates, as the case may be, for any costs (other than any
      additional interest costs) incurred by it in connection with the borrowing
      of funds obtained by the General Partner or any of its Affiliates and
      loaned to the Partnership or any such Operating General Partner or
      Operating Subsidiary.

            (b) The Partnership may lend or contribute to any Operating General
      Partner or any Operating Subsidiary, and any Operating General Partner or
      any Operating Subsidiary may borrow, funds on terms and conditions
      established in the sole discretion of the General Partner. The foregoing
      authority shall be exercised by the General Partner in its sole discretion
      and shall not create any right or benefit in favor of any Operating
      General Partner or any Operating Subsidiary or any other Person. The
      Partnership may not lend funds to the General Partner or any of its
      Affiliates, otherwise than for short-term funds management purposes.

            (c) The General Partner may itself, or may enter into an agreement,
      including the Delegation of Control Agreement, with any of its Affiliates
      to, render services to the Partnership. Any service rendered to the
      Partnership by the General Partner or any of its Affiliates shall be on
      terms that are fair and reasonable to the Partnership; provided, however,
      that the requirements of this Section 6.6(c) shall be deemed satisfied as
      to any transaction the terms of which are no less favorable to the
      Partnership than those generally being provided to or available from
      unrelated third parties. The provisions of Section 6.4 shall apply to the
      rendering of services described in this Section 6.6(c).

            (d) The Partnership may transfer assets to joint ventures, other
      partnerships, corporations or other business entities in which it is or
      thereby becomes a participant upon such terms and subject to such
      conditions as are consistent with this Agreement and applicable law.

            (e) Neither the General Partner nor any of its Affiliates shall
      sell, transfer or convey any property to, or purchase any property from,
      the Partnership, directly or indirectly, except pursuant to transactions
      that are fair and reasonable to the Partnership; provided, however, that
      the requirements of this Section 6.6(e) shall be deemed to be satisfied
      (i) as to the transactions effected pursuant to Sections 4.2 and 4.3 of
      the Second Amended and Restated Agreement or any substantially similar
      provisions of any Prior Agreement, the Conveyance Agreement, and any other
      transactions described in or contemplated by the Registration Statement,
      and (ii) as to any transaction the terms of which are no less favorable to
      the Partnership than those generally being provided to or available from
      unrelated third parties.

            (f) The General Partner and its Affiliates shall have no obligation
      to permit the Partnership or any Operating Subsidiary to use any
      facilities of the General Partner and its Affiliates, except as may be
      provided in contracts entered into from time to time specifically dealing
      with such use, nor shall there be any obligation of the General Partner or
      its Affiliates to enter into such contracts.

                                      45



            6.7  INDEMNIFICATION.

            (a) To the fullest extent permitted by law but subject to the
      limitations expressly provided in this Agreement, each Indemnitee shall be
      indemnified and held harmless by the Partnership from and against any and
      all losses, claims, damages, liabilities (joint or several), expenses
      (including, without limitation, legal fees and expenses), judgments,
      fines, settlements and other amounts arising from any and all claims,
      demands, actions, suits or proceedings, whether civil, criminal,
      administrative or investigative, in which any Indemnitee may be involved,
      or is threatened to be involved, as a party or otherwise, by reason of its
      status as (i) the General Partner, a Departing Partner or any of their
      Affiliates, (ii) an officer, director, employee, partner, agent or trustee
      of the General Partner, any Departing Partner or any of their Affiliates
      or (iii) a Person serving at the request of the Partnership in another
      entity in a similar capacity; provided, that in each case the Indemnitee
      acted in good faith, in a manner which such Indemnitee believed to be in,
      or not opposed to, the best interests of the Partnership and, with respect
      to any criminal proceeding, had no reasonable cause to believe its conduct
      was unlawful; provided, further, no indemnification pursuant to this
      Section 6.7 shall be available to the General Partner or Enbridge Inc.
      with respect to their respective obligations incurred pursuant to the
      Underwriting Agreement, the Conveyance Agreement or the Contribution
      Agreement (other than obligations incurred by the General Partner on
      behalf of the Partnership or any Operating Subsidiary). The termination of
      any action, suit or proceeding by judgment, order, settlement, conviction
      or upon a plea of nolo contendere, or its equivalent, shall not create a
      presumption that the Indemnitee acted in a manner contrary to that
      specified above. Any indemnification pursuant to this Section 6.7 shall be
      made only out of the assets of the Partnership.

            (b) To the fullest extent permitted by law, expenses (including,
      without limitation, reasonable legal fees and expenses) incurred by an
      Indemnitee in defending any claim, demand, action, suit or proceeding
      shall, from time to time, be advanced by the Partnership prior to the
      final disposition of such claim, demand, action, suit or proceeding upon
      receipt by the Partnership of an undertaking by or on behalf of the
      Indemnitee to repay such amount if it shall be determined that the
      Indemnitee is not entitled to be indemnified as authorized in this Section
      6.7.

            (c) The indemnification provided by this Section 6.7 shall be in
      addition to any other rights to which an Indemnitee may be entitled under
      any agreement, pursuant to any vote of the Partners, as a matter of law or
      otherwise, both as to actions in the Indemnitees' capacity as (i) the
      General Partner, a Departing Partner or an Affiliate thereof, (ii) an
      officer, director, employee, partner, agent or trustee of the General
      Partner, any Departing Partner or an Affiliate thereof or (iii) a Person
      serving at the request of the Partnership in another entity in a similar
      capacity, and shall continue as to an Indemnitee who has ceased to serve
      in such capacity and as to actions in any other capacity.

            (d) The Partnership may purchase and maintain (or reimburse the
      General Partner or its Affiliates for the cost of) insurance, on behalf of
      the General Partner and such other Persons as the General Partner shall
      determine, against any liability that may

                                      46



      be asserted against or expense that may be incurred by such Person in
      connection with the Partnership's activities, whether or not the
      Partnership would have the power to indemnify such Person against such
      liabilities under the provisions of this Agreement.

            (e) For purposes of this Section 6.7, the Partnership shall be
      deemed to have requested an Indemnitee to serve as fiduciary of an
      employee benefit plan whenever the performance by it of its duties to the
      Partnership also imposes duties on, or otherwise involves services by, it
      to the plan or participants or beneficiaries of the plan; excise taxes
      assessed on an Indemnitee with respect to an employee benefit plan
      pursuant to applicable law shall constitute "fines" within the meaning of
      Section 6.7 (a); and action taken or omitted by it with respect to an
      employee benefit plan in the performance of its duties for a purpose
      reasonably believed by it to be in the interest of the participants and
      beneficiaries of the plan shall be deemed to be for a purpose which is in,
      or not opposed to, the best interests of the Partnership.

            (f) In no event may an Indemnitee subject the Limited Partners to
      personal liability by reason of the indemnification provisions set forth
      in this Agreement.

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

            (h) The provisions of this Section 6.7 are for the benefit of the
      Indemnitees, their heirs, successors, assigns and administrators and shall
      not be deemed to create any rights for the benefit of any other Persons.

            (i) No amendment, modification or repeal of this Section 6.7 or any
      other provision hereof shall in any manner terminate, reduce or impair the
      right of any past, present or future Indemnitee to be indemnified by the
      Partnership, nor the obligation of the Partnership to indemnify any such
      Indemnitee under and in accordance with the provisions of this Section 6.7
      as in effect immediately prior to such amendment, modification or repeal
      with respect to claims arising from or relating to matters occurring, in
      whole or in part, prior to such amendment, modification or repeal,
      regardless of when such claims may arise or be asserted.

            6.8  LIABILITY OF INDEMNITEES.

            (a) Notwithstanding anything to the contrary set forth in this
      Agreement, no Indemnitee shall be liable for monetary damages to the
      Partnership, the Limited Partners, the Assignees or any other Persons who
      have acquired interests in the Units, for losses sustained or liabilities
      incurred as a result of any act or omission if such Indemnitee acted in
      good faith.

            (b) Subject to its obligations and duties as General Partner set
      forth in Section 6.1(a), the General Partner may exercise any of the
      powers granted to it by this Agreement and perform any of the duties
      imposed upon it hereunder either directly or by or through its agents, and
      the General Partner shall not be responsible for any misconduct

                                      47



      or negligence on the part of any such agent appointed by the General
      Partner in good faith. Notwithstanding the preceding sentence, the General
      Partner shall be responsible for any misconduct or negligence on the
      part of EEM in performing the Maximum Permitted Delegation.

            (c) Any amendment, modification or repeal of this Section 6.8 or any
      other provision hereof shall be prospective only and shall not in any way
      affect the limitations on the liability to the Partnership, the Limited
      Partners, the General Partner, and the Partnership's and General Partner's
      and any Operating General Partner's directors, officers and employees
      under this Section 6.8 as in effect immediately prior to such amendment,
      modification or repeal with respect to claims arising from or relating to
      matters occurring, in whole or in part, prior to such amendment,
      modification or repeal, regardless of when such claims may arise or be
      asserted.

            6.9  RESOLUTION OF CONFLICTS OF INTEREST.

            (a) Unless otherwise expressly provided in this Agreement or any
      Operating Subsidiary Agreement or the Omnibus Agreement, whenever a
      potential conflict of interest exists or arises between the General
      Partner or any of its Affiliates, on the one hand, and the Partnership,
      any Operating Subsidiary, any Partner or any Assignee, on the other hand,
      any resolution or course of action in respect of such conflict of interest
      shall be permitted and deemed approved by all Partners, and shall not
      constitute a breach of this Agreement, of any Operating Subsidiary
      Agreement, of any agreement contemplated herein or therein, or of any duty
      stated or implied by law or equity, if the resolution or course of action
      is or, by operation of this Agreement, is deemed to be, fair and
      reasonable to the Partnership. The General Partner shall be authorized in
      connection with its resolution of any conflict of interest to consider (i)
      the relative interests of any party to such conflict, agreement,
      transaction or situation and the benefits and burdens relating to such
      interest; (ii) any customary or accepted industry practices and any
      customary or historical dealings with a particular Person; (iii) any
      applicable generally accepted accounting or engineering practices or
      principles; and (iv) such additional factors as the General Partner
      determines in its sole discretion to be relevant, reasonable or
      appropriate under the circumstances. Nothing contained in this Agreement,
      however, is intended to nor shall it be construed to require the General
      Partner to consider the interests of any Person other than the
      Partnership. In the absence of bad faith by the General Partner, the
      resolution, action or terms so made, taken or provided by the General
      Partner with respect to such matter shall not constitute a breach of this
      Agreement or any other agreement contemplated herein or a breach of any
      standard of care or duty imposed herein or therein or under the Delaware
      Act or any other law, rule or regulation.

            (b) Whenever this Agreement or any other agreement contemplated
      hereby provides that the General Partner or any of its Affiliates is
      permitted or required to make a decision (i) in its "sole discretion" or
      "discretion" that it deems "necessary or appropriate" or under a grant of
      similar authority or latitude, the General Partner or such Affiliate shall
      be entitled to consider only such interests and factors as it desires and
      shall have no duty or obligation to give any consideration to any interest
      of, or factors affecting, the Partnership, any Operating Subsidiary, any
      Limited Partner or any

                                      48



      Assignee, or (ii) in "good faith" or under another express standard, the
      General Partner or such Affiliate shall act under such express standard
      and shall not be subject to any other or different standards imposed by
      this Agreement, any Operating Subsidiary Agreement, any other agreement
      contemplated hereby or under the Delaware Act or any other law, rule or
      regulation. In addition, any actions taken by the General Partner
      consistent with the standards of "reasonable discretion" set forth in
      the definitions of Available Cash or Cash from Operations shall not
      constitute a breach of any duty of the General Partner to the Partnership
      or the Limited Partners. The General Partner shall have no duty, express
      or implied, to sell or otherwise dispose of any asset of any Operating
      Subsidiary or of the Partnership, other than in the ordinary course of
      business. No borrowing by the Partnership or any Operating Subsidiary
      or the approval thereof by the General Partner shall be deemed to
      constitute a breach of any duty of the General Partner to the Partnership
      or the Limited Partners by reason of the fact that the purpose or effect
      of such borrowing is directly or indirectly to enable the General Partner
      to receive incentive distributions.

            (c) Whenever a particular transaction, arrangement or resolution of
      a conflict of interest is required under this Agreement to be "fair and
      reasonable" to any Person, the fair and reasonable nature of such
      transaction, arrangement or resolution shall be considered in the context
      of all similar or related transactions.

            (d) The Limited Partners hereby authorize the General Partner, on
      behalf of the Partnership as a limited partner or member of any Operating
      Subsidiary, to approve actions by any Operating General Partner similar to
      those actions permitted to be taken by the General Partner pursuant to
      this Section 6.9.

            6.10  OTHER MATTERS CONCERNING THE GENERAL PARTNER.

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

            (b) The General Partner may consult with legal counsel, accountants,
      appraisers, management consultants, investment bankers and other
      consultants and advisers selected by it, and any act taken or omitted in
      reliance upon the opinion (including, without limitation, an Opinion of
      Counsel) of such Persons as to matters that the General Partner reasonably
      believes to be within such Person's professional or expert competence
      shall be conclusively presumed to have been done or omitted in good faith
      and in accordance with such opinion.

            (c) The General Partner shall have the right, in respect of any of
      its powers or obligations hereunder, to act through any of its duly
      authorized officers and a duly appointed attorney or attorneys-in-fact.
      Each such attorney shall, to the extent provided by the General Partner in
      the power of attorney, have full power and authority to do and perform
      each and every act and duty that is permitted or required to be done by
      the General Partner hereunder.

                                      49



            (d) Any standard of care and duty imposed by this Agreement or under
      the Delaware Act or any applicable law, rule or regulation shall be
      modified, waived or limited as required to permit the General Partner to
      act under this Agreement or any other agreement contemplated by this
      Agreement and to make any decision pursuant to the authority prescribed in
      this Agreement, so long as such action is reasonably believed by the
      General Partner to be in the best interests of the Partnership.

            6.11 TITLE TO PARTNERSHIP ASSETS. Title to Partnership Assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partner or
Assignee, individually or collectively, shall have any ownership interest in
such Partnership Assets or any portion thereof. Title to any or all of the
Partnership Assets may be held in the name of the Partnership, the General
Partner or one or more nominees, as the General Partner may determine. The
General Partner hereby declares and warrants that any Partnership Assets for
which record title is held in the name of the General Partner shall be held
by the General Partner for the exclusive use and benefit of the Partnership
in accordance with the provisions of this Agreement; provided, however, that
the General Partner shall use its reasonable efforts to cause record title to
such assets (other than those assets in respect of which the General Partner
determines that the expense and difficulty of conveyancing makes transfer of
record title to the Partnership impracticable) to be vested in the
Partnership as soon as reasonably practicable. All Partnership Assets shall
be recorded as the property of the Partnership in its books and records,
irrespective of the name in which record title to such Partnership assets are
held.

            6.12  PURCHASE OR SALE OF CLASS A COMMON UNITS. Subject to
Section 5.10(d)(v), the General Partner may cause the Partnership to purchase
or otherwise acquire Class A Common Units. As long as Class A Common Units
are held by the Partnership or any Operating Subsidiary, such Class A Common
Units shall not be considered Outstanding for any purpose, except as
otherwise provided herein. The General Partner or any Affiliate of the
General Partner may also purchase or otherwise acquire and sell or otherwise
dispose of Class A Common Units for its own account, subject to the
provisions of Articles XI and XII.

            6.13  RELIANCE BY THIRD PARTIES. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were
the Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies that may
be available against such Person to contest, negate or disaffirm any action
of the General Partner in connection with any such dealing. In no event shall
any Person dealing with the General Partner or its representatives be
obligated to ascertain that the terms of this Agreement have been complied
with or to inquire into the necessity or expedience of any act or action of
the General Partner or its representatives. Each and every certificate,
document or other instrument executed on behalf of the Partnership by the
General Partner or its representatives shall be conclusive evidence in favor
of any and every Person relying thereon or claiming thereunder that (a) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (b) the Person
executing and delivering such certificate, document or instrument was duly
authorized and

                                      50



empowered to do so for and on behalf of the Partnership and (c) such
certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.

            6.14  REGISTRATION RIGHTS OF THE GENERAL PARTNER AND ITS
AFFILIATES.

            (a) If (i) the General Partner or any of its Affiliates (including,
      for purposes of this Section 6.14, Persons that are Affiliates at the date
      hereof notwithstanding that they may later cease to be Affiliates) hold
      Units or other Partnership Securities which it desires to sell and (ii)
      Rule 144 of the Securities Act (or any successor rule or regulation to
      Rule 144) is not available to enable the General Partner or such
      Affiliates to dispose of the number of Units or other Partnership
      Securities it desires to sell at the time it desires to do so, then upon
      the request of the General Partner or any of its Affiliates, the
      Partnership shall file with the Securities and Exchange Commission as
      promptly as practicable after receiving such request, and use all
      reasonable efforts to cause to become effective and remain effective for a
      reasonable period following its effective date, a registration statement
      or statements under the Securities Act registering the offering and sale
      of the number of Units or other Partnership Securities specified in the
      request. All registrations requested pursuant to this Section 6.14(a) are
      referred to as "DEMAND REGISTRATIONS." The Partnership may postpone for up
      to six months the filing or the effectiveness of a registration statement
      pursuant to a Demand Registration if (i) the General Partner or, (ii) if
      at the time a request for Demand Registration is submitted to the
      Partnership the Person requesting registration is an Affiliate of the
      General Partner, a majority of the independent directors of the General
      Partner, determines in its good faith judgment that a postponement of the
      requested registration for up to six months would be in the best interests
      of the Partnership and its Partners due to a pending transaction,
      investigation or other event. In connection with any Demand Registration,
      the Partnership shall promptly prepare and file (x) such documents as may
      be necessary to register or qualify the securities subject to such
      registration under the securities laws of such states as the Persons
      requesting registration shall reasonably request; provided, however, that
      no such qualification shall be required in any jurisdiction where, as a
      result thereof, the Partnership would become subject to general service of
      process or to taxation or qualification to do business as a foreign
      corporation doing business in such jurisdiction, and (y) such documents as
      may be necessary to apply for listing or to list the securities subject to
      such registration on such National Securities Exchange as the Persons
      requesting registration shall reasonably request, and do any and all other
      acts and things that may reasonably be necessary or advisable to enable
      such Persons to consummate a public sale of such securities in such
      states. Except as set forth in subsection (c) below, all costs and
      expenses of any such Demand Registration and offering shall be paid by the
      Persons requesting registration, without reimbursement by the Partnership.

            (b) If the Partnership shall at any time propose to file a
      registration statement under the Securities Act for an offering of
      securities of the Partnership for cash (other than pursuant to a Demand
      Registration or an offering relating solely to an employee benefit plan),
      the Partnership shall use its best efforts to include such number or
      amount of securities held by the General Partner and any of its Affiliates
      in such registration

                                      51



      statement as the General Partner or any of such Affiliates shall request.
      All registrations requested by the Purchaser pursuant to this Section
      6.14(b) are referred to herein as "PIGGYBACK REGISTRATIONS." If the
      proposed offering shall be an underwritten offering, then, in the event
      that the managing underwriter of such offering advises the General Partner
      or any of such Affiliates in writing that in its opinion the inclusion of
      all or some of the securities of the Persons requesting Piggyback
      Registration would adversely and materially affect the success of the
      offering, the Partnership shall include in such offering only that number
      or amount, if any, of securities of the Persons requesting Piggyback
      Registration which, in the opinion of the managing underwriter, will
      not so adversely and materially affect the offering. In connection with
      any Piggyback Registration, the General Partner or any of its Affiliates
      requesting registration shall bear the expense of all underwriting
      discounts and commissions attributable to the securities sold for their
      own respective accounts and shall reimburse the Partnership for all
      incremental costs incurred by the Partnership in connection with such
      registration resulting from the inclusion of the securities held by the
      General Partner or any of its Affiliates.

            (c) If underwriters are engaged in connection with any Demand or
      Piggyback Registration the Partnership shall provide indemnification,
      representations, covenants, opinions and other assurance to the
      underwriters in form and substance reasonably satisfactory to such
      underwriters. Further, in addition to and not in limitation of the
      Partnership's obligation under Section 6.7, the Partnership shall, to the
      fullest extent permitted by law, indemnify and hold harmless the General
      Partner or such other holder, its officers, directors and each Person who
      controls the General Partner or such other holder (within the meaning of
      the Securities Act) and any agent thereof (collectively, "INDEMNIFIED
      PERSONS") against any losses, claims, demands, actions, causes of action,
      assessments, damages, liabilities (joint or several), costs and expenses
      (including without limitation, interest, penalties and reasonable
      attorneys' fees and disbursements), resulting to, imposed upon, or
      incurred by an Indemnified Person, directly or indirectly, under the
      Securities Act or otherwise (hereinafter referred to in this Section
      6.14(c) as a "claim" and in the plural as "claims"), based upon, arising
      out of, or resulting from any untrue statement or alleged untrue statement
      of any material fact contained in any registration statement under which
      any securities were registered under the Securities Act or any state
      securities or Blue Sky laws, in any preliminary prospectus (if used prior
      to the effective date of such registration statement), or in any summary
      or final prospectus or in any amendment or supplement thereto (if used
      during the period the Partnership is required to keep the registration
      statement current), or arising out of, based upon or resulting from the
      omission or alleged omission to state therein a material fact required to
      be stated therein or necessary to make the statements made therein not
      misleading; provided, however, that the Partnership shall not be liable to
      the extent that any such claim arises out of, is based upon or results
      from an untrue statement or alleged untrue statement or omission or
      alleged omission made in such registration statement, such preliminary,
      summary or final prospectus or such amendment or supplement, in reliance
      upon and in conformity with written information furnished to the
      Partnership by or on behalf of such Indemnified Person specifically for
      use in the preparation thereof.

            (d) The provisions of Sections 6.14(a) and 6.14(b) shall continue to
      be applicable with respect to the General Partner and any of its
      Affiliates after the General

                                      52



      Partner ceases to be a Partner of the Partnership, during a period of two
      years subsequent to the effective date of such cessation and for so long
      thereafter as is required for the General Partner or any of its Affiliates
      to sell all of the Units or other Partnership Securities with respect to
      which the General Partner or any of its Affiliates have requested during
      such two-year period that a registration statement be filed; provided,
      however, that the Partnership shall not be required to file successive
      registration statements covering the same securities for which
      registration was demanded during such two-year period. The provisions of
      Section 6.14(c) shall continue in effect thereafter.

            (e) Any request to register Partnership Securities pursuant to this
      Section 6.14 shall (i) specify the Partnership Securities intended to be
      offered and sold by the Person making the request, (ii) express such
      Person's present intent to offer such shares for distribution, (iii)
      describe the nature or method of the proposed offer and sale of
      Partnership Securities, and (iv) contain the undertaking of such Person to
      provide all such information and materials and take all action as may be
      required in order to permit the Partnership to comply with all applicable
      requirements in connection with the registration of such Partnership
      Securities.

            6.15  DELEGATION TO EEM.

            (a) Pursuant to Section 6.6(c) of this Agreement and in accordance
      with Section 17-403(c) of the Delaware Act, the General Partner shall
      delegate to EEM, to the fullest extent permitted under this Agreement and
      Delaware law, all of the General Partner's power and authority to manage
      and control the business and affairs of the Partnership under the terms
      and conditions of the Delegation of Control Agreement; provided, however,
      that such delegation shall not cause the General Partner to cease to be
      the sole general partner of the Partnership; and provided further, that
      the General Partner shall not be relieved of any of its responsibilities
      or obligations to the Partnership or the Limited Partners as a result of
      such delegation. The General Partner shall retain all of its Partnership
      Interest, Percentage Interest, rights to Incentive Distributions, rights
      to allocations of Net Income and Net Losses, rights to allocations of Net
      Termination Gains and Net Termination Losses, and rights to distributions
      pursuant to Sections 5.3, 5.5, 5.7 and 14.3. The specific terms and
      conditions of the delegation to EEM are set forth in the Delegation of
      Control Agreement.

            (b) Notwithstanding anything to the contrary set forth in this
      Agreement, and except to the extent otherwise provided in the Delegation
      of Control Agreement, until such date as the Maximum Permitted Delegation
      is terminated in accordance with the Delegation of Control Agreement, the
      provisions of this Agreement that apply to the management and control of
      the Partnership, including, without limitation, Sections 6.1, 6.3, 6.4,
      6.9, 6.10 and 6.14, shall apply to EEM to the same extent as such
      provisions apply to the General Partner.

            (c) Notwithstanding anything to the contrary set forth in this
      Agreement, the provisions of Section 6.7 of this Agreement shall apply to
      EEM and any Person who is or was a manager, officer or director of EEM to
      the same extent as such provisions apply to

                                      53



      the General Partner and any Person who is or was an officer or director of
      the General Partner.

                                   ARTICLE VII
                 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

            7.1  LIMITATION OF LIABILITY. The Limited Partners and the
Assignees shall have no liability under this Agreement except as expressly
provided in this Agreement or the Delaware Act.

            7.2  MANAGEMENT OF BUSINESS. No Limited Partner or Assignee
(other than the General Partner, any of its Affiliates or any officer,
director, employee, partner, agent or trustee of the General Partner or any
of its Affiliates, in its capacity as such, if such Person shall also be a
Limited Partner or Assignee) shall take part in the operation, management or
control (within the meaning of the Delaware Act) of the Partnership's
business, transact any business in the Partnership's name or have the power
to sign documents for or otherwise bind the Partnership. The transaction of
any such business by the General Partner, any of its Affiliates or any
officer, director, employee, partner, agent or trustee of the General Partner
or any of its Affiliates, in its capacity as such, shall not affect, impair
or eliminate the limitations on the liability of the Limited Partners or
Assignees under this Agreement.

            7.3  OUTSIDE ACTIVITIES. Subject to the provisions of Section
6.5, which shall continue to be applicable to the Persons referred to
therein, regardless of whether such Persons shall also be Limited Partners or
Assignees, any Limited Partner or Assignee shall be entitled to and may have
business interests and engage in business activities in addition to those
relating to the Partnership, including, without limitation, business
interests and activities in direct competition with the Partnership or any
Operating Subsidiary. Neither the Partnership nor any of the other Partners
or Assignees shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee.

            7.4  RETURN OF CAPITAL. No Limited Partner shall be entitled to
the withdrawal or return of his Capital Contribution, except to the extent,
if any, that distributions made pursuant to this Agreement or upon
termination of the Partnership may be considered as such by law and then only
to the extent provided for in this Agreement. Except to the extent provided
by Article V or as otherwise expressly provided in this Agreement, no Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions or as to profits,
losses or distributions. Any such return shall be a compromise to which all
Partners and Assignees agree within the meaning of Section 17.502(b) of the
Delaware Act.

            7.5  RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP.

            (a) In addition to other rights provided by this Agreement or by
      applicable law, and except as limited by Section 7.5(b), each Limited
      Partner shall have the right, for a purpose reasonably related to such
      Limited Partner's interest as a limited partner in the Partnership, upon
      reasonable demand and at such Limited Partner's own expense:

                                      54



                  (i)  to obtain true and full information regarding the
            status of the business and financial condition of the
            Partnership;

                  (ii) promptly after becoming available, to obtain a copy of
            the Partnership's federal, state and local tax returns for each
            year;

                  (iii) to have furnished to him, upon notification to the
            General Partner, a current list of the name and last known business,
            residence or mailing address of each Partner;

                  (iv) to have furnished to him, upon notification to the
            General Partner, a copy of this Agreement and the Certificate of
            Limited Partnership and all amendments thereto;

                  (v) to obtain true and full information regarding the amount
            of cash and description and statement of the Agreed Value of any
            other Capital Contribution by each Partner and which each Partner
            has agreed to contribute in the future, and the date on which each
            became a Partner; and

                  (vi) to obtain such other information regarding the affairs of
            the Partnership as is just and reasonable.

            (b) Notwithstanding any other provision of this Agreement, the
      General Partner may keep confidential from the Limited Partners and
      Assignees for such period of time as the General Partner deems reasonable,
      any information that the General Partner reasonably believes to be in the
      nature of trade secrets or other information the disclosure of which the
      General Partner in good faith believes is not in the best interests of the
      Partnership or could damage the Partnership or any Operating Subsidiary or
      that the Partnership or any Operating Subsidiary is required by law or by
      agreements with third parties to keep confidential (other than agreements
      with Affiliates the primary purpose of which is to circumvent the
      obligations set forth in Section 7.5).

                                  ARTICLE VIII
                   BOOKS, RECORDS, ACCOUNTING AND REPORTS

            8.1  RECORDS AND ACCOUNTING. The General Partner shall keep or
cause to be kept at the principal office of the Partnership appropriate books
and records with respect to the Partnership's business including, without
limitation, all books and records necessary to provide to the Limited
Partners any information, lists and copies of documents required to be
provided pursuant to Section 7.5(a). Any books and records maintained by or
on behalf of the Partnership in the regular course of its business,
including, without limitation, the record of the Record Holders and Assignees
of Units or other Partnership Securities, books of account and records of
Partnership proceedings, may be kept on, or be in the form of, computer
disks, hard disks, punch cards, magnetic tape, photographs, micrographics or
any other information storage device, provided, that the books and records so
maintained are convertible into clearly legible written form within a
reasonable period of time. The books of the Partnership shall be maintained,
for financial reporting purposes, on an accrual basis in accordance with
generally accepted accounting principles.

                                      55


            8.2 FISCAL YEAR.  The fiscal year of the Partnership shall be the
calendar year.

            8.3 REPORTS.

            (a) As soon as practicable, but in no event later than 120 days
      after the close of each Partnership Year, the General Partner shall cause
      to be mailed to each Record Holder of a Unit as of a date selected by the
      General Partner in its sole discretion, an annual report containing
      financial statements of the Partnership for such Partnership Year,
      presented in accordance with generally accepted accounting principles,
      including a balance sheet and statements of operations, Partners' equity
      and cash flows, such statements to be audited by a firm of independent
      public accountants selected by the General Partner.

            (b) As soon as practicable, but in no event later than 90 days after
      the close of each calendar quarter except the last calendar quarter of
      each year, the General Partner shall cause to be mailed to each Record
      Holder of a Unit, as of a date selected by the General Partner in its sole
      discretion, a report containing unaudited financial statements of the
      Partnership and such other information as may be required by applicable
      law, regulation or rule of any National Securities Exchange on which the
      Units are listed for trading, or as the General Partner determines to be
      necessary or appropriate.

                                   ARTICLE IX
                                   TAX MATTERS

            9.1 PREPARATION OF TAX RETURNS. The General Partner shall arrange
for the preparation and timely filing of all returns of Partnership income,
gains, deductions, losses and other items required of the Partnership for
federal and state income tax purposes and shall use all reasonable efforts to
furnish, within 90 days of the close of each taxable year of the Partnership,
the tax information reasonably required by Unitholders for federal and state
income tax reporting purposes. The classification, realization and
recognition of income, gain, losses and deductions and other items shall be
on the accrual method of accounting for federal income tax purposes. The
taxable year of the Partnership shall be the calendar year.

            9.2 TAX ELECTIONS. Except as otherwise provided herein, the
General Partner shall in its sole discretion, determine whether to make any
available election pursuant to the Code; provided, however, that the General
Partner shall make the election under Section 754 of the Code in accordance
with applicable regulations thereunder. The General Partner shall have the
right to seek to revoke any such election (including, without limitation, the
election under Section 754 of the Code) upon the General Partner's
determination in its sole discretion that such revocation is in the best
interests of the Limited Partners and Assignees.

            9.3 TAX CONTROVERSIES. Subject to the provisions hereof, the
General Partner is designated the Tax Matters Partner (as defined in Section
6231 of the Code), and is authorized and required to represent the
Partnership (at the Partnership's expense) in connection with all
examinations of the Partnership's affairs by tax authorities, including,
without limitation, resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and costs associated
therewith. Each Partner and Assignee agrees to

                                      56



cooperate with the General Partner and to do or refrain from doing any or all
things reasonably required by the General Partner to conduct such proceedings.

            9.4 ORGANIZATIONAL EXPENSES. The Partnership shall elect to
deduct expenses, if any, incurred by it in organizing the Partnership ratably
over a 60-month period as provided in Section 709 of the Code.

            9.5 WITHHOLDING. Notwithstanding any other provision of this
Agreement, the General Partner is authorized to take any action that it
determines in its sole discretion to be necessary or appropriate to cause the
Partnership and any Operating Subsidiary to comply with any withholding
requirements established under the Code or any other federal, state or local
law, including, without limitation, pursuant to Sections 1441, 1442, 1445 and
1446 of the Code. To the extent that the Partnership is required to withhold
and pay over to any taxing authority any amount resulting from the allocation
or distribution of income to any Partner or Assignee (including, without
limitation, by reason of Section 1446 of the Code), the amount withheld shall
be treated as a distribution of cash for purposes of Section 4.6(a) in the
amount of such withholding from such Partner.

            9.6 ENTITY-LEVEL TAXATION. If legislation is enacted which causes
the Partnership to become treated as an association taxable as a corporation
for federal income tax purposes, then with respect to any calendar quarter
thereafter the Minimum Quarterly Distribution, First Target Distribution or
Second Target Distribution, as the case may be, shall be equal to the product
of (i) each such distribution amount multiplied by (ii) 1 minus the sum of
(x) the effective federal income tax rate applicable to the Partnership
(expressed as a percentage) plus (y) the effective overall state and local
income tax rate applicable to the Partnership (expressed as a percentage), in
each case, for the taxable year in which such quarter occurs (after taking
into account the benefit of any deduction allowable for federal income tax
purposes with respect to the payment of state and local income taxes).

            9.7 ENTITY-LEVEL DEFICIENCY COLLECTIONS. If the Partnership is
required by applicable law to pay any federal, state or local income tax on
behalf of, or withhold such amount with respect to, any Partner or Assignee
or any former Partner or Assignee (a) the General Partner shall cause the
Partnership to pay such tax on behalf of such Partner or Assignee or former
Partner or Assignee from the funds of the Partnership; (b) any amount so paid
on behalf of, or withheld with respect to, any Partner or Assignee shall be
treated as a distribution of cash to such Partner or Assignee for purposes of
Section 4.6(a); and (c) to the extent any such Partner or Assignee (but not a
former Partner or Assignee) is not then entitled to such distribution under
this Agreement, the General Partner shall be authorized, without the approval
of any Partner or Assignee, to amend this Agreement insofar as is necessary
to maintain the uniformity of intrinsic tax characteristics as to all Units
and to make subsequent adjustments to distributions in a manner which, in the
reasonable judgment of the General Partner, will make as little alteration as
practicable in the priority and amount of distributions otherwise applicable
under this Agreement, and will not otherwise alter the distributions to which
Partners and Assignees are entitled under this Agreement. If the Partnership
is permitted (but not required) by applicable law to pay any such tax on
behalf of any Partner or Assignee or former Partner or Assignee, the General
Partner shall be authorized (but not required) to cause the Partnership to
pay such tax from the funds of the Partnership and to take any action
consistent with this Section

                                      57



9.7. The General Partner shall be authorized (but not required) to take all
necessary or appropriate actions to collect all or any portion of a
deficiency in the payment of any such tax that relates to prior periods and
that is attributable to Persons who were Limited Partners or Assignees when
such deficiencies arose, from such Persons.

            9.8 OPINIONS OF COUNSEL. Notwithstanding any other provision of
this Agreement, if the Partnership is taxable for federal income tax purposes
as a corporation or otherwise taxed for federal income tax purposes as an
entity at any time and, pursuant to the provisions of this Agreement, an
Opinion of Counsel would otherwise be required to the effect that an action
will not cause the Partnership to become so taxable as a corporation or other
entity or to be treated as an association taxable as a corporation, such
requirement for an Opinion of Counsel shall be deemed automatically waived.

                                    ARTICLE X
                                UNIT CERTIFICATES

            10.1 UNIT CERTIFICATES. Upon the Partnership's issuance of Common
Units to any Person, the Partnership shall issue one or more Certificates in
the name of such Person evidencing the number of such Units being so issued.
Certificates shall be executed on behalf of the Partnership by the General
Partner. No Class A Common Unit Certificate shall be valid for any purpose
until it has been countersigned by the Transfer Agent. Upon the Partnership's
issuance of I-Units to any Person, or upon an increase of the number of
Outstanding I-Units, the General Partner shall make an entry in the
Partnership's I-Unit register reflecting such issuance or increase, as the
case may be, but no Certificates evidencing the number of I-Units so issued
or increased, as the case may be shall be issued.

            10.2 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

            (a) The General Partner shall cause to be kept on behalf of the
      Partnership a register (the "UNIT REGISTER") in which, subject to such
      reasonable regulations as it may prescribe and subject to the provisions
      of Section 10.2(b), the General Partner will provide for the registration
      and the transfer of Class A Common Units. The Transfer Agent is hereby
      appointed registrar and transfer agent for the purpose of registering and
      transferring Class A Common Units as herein provided. The Partnership
      shall not recognize transfers of Certificates representing Class A Common
      Units unless same are effected in the manner described in this Section
      10.2. Upon surrender for registration of transfer of any Units evidenced
      by a Certificate and subject to the provisions of Section 10.2(b), the
      General Partner on behalf of the Partnership will execute, and the
      Transfer Agent will countersign and deliver, in the name of the holder or
      the designated transferee or transferees, as required pursuant to the
      holder's instructions, one or more new Certificates evidencing the same
      aggregate number of Class A Common Units as was evidenced by the
      Certificate so surrendered.

            (b) Except as otherwise provided in Section 11.5, the Partnership
      shall not recognize any transfer of Class A Common Units until the
      Certificates evidencing such Units are surrendered for registration of
      transfer and such Certificates are accompanied by a Transfer Application
      duly executed by the transferee (or the transferee's attorney-in-

                                      58



      fact duly authorized in writing). No charge shall be imposed by the
      Partnership for such transfer, provided, that, as a condition to the
      issuance of any new Certificate under this Section 10.2, the General
      Partner may require the payment of a sum sufficient to cover any tax or
      other governmental charge that may be imposed with respect thereto.

            10.3 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

            (a) If any mutilated Certificate is surrendered to the Transfer
      Agent, the General Partner on behalf of the Partnership shall execute,
      and, upon its request, the Transfer Agent shall countersign and deliver in
      exchange therefor, a new Certificate evidencing the same number of Units
      as the Certificate so surrendered.

            (b) The General Partner on behalf of the Partnership shall execute,
      and, upon its request, the Transfer Agent shall countersign and deliver a
      new Certificate in place of any Certificate previously issued if the
      Record Holder of the Certificate:

                  (i) makes proof by affidavit, in form and substance
            satisfactory to the General Partner, that a previously issued
            Certificate has been lost, destroyed or stolen;

                  (ii) requests the issuance of a new Certificate before the
            Partnership has received notice that the Certificate has been
            acquired by a purchaser for value in good faith and without notice
            of an adverse claim;

                  (iii) if requested by the General Partner, delivers to the
            Partnership such security or indemnity as may be required by the
            General Partner, in form and substance satisfactory to the General
            Partner, with surety or sureties and with fixed or open penalty as
            the General Partner may direct, in its sole discretion, to indemnify
            the Partnership, the General Partner and the Transfer Agent against
            any claim that may be made on account of the alleged loss,
            destruction or theft of the Certificate; and

                  (iv) satisfies any other reasonable requirements imposed
            by the General Partner.

If a Limited Partner or Assignee fails to notify the Partnership within a
reasonable time after he has notice of the loss, destruction or theft of a
Certificate, and a transfer of the Units represented by the Certificate is
registered before the Partnership, the General Partner or the Transfer Agent
receives such notification, the Limited Partner or Assignee shall be precluded
from making any claim against the Partnership, the General Partner or the
Transfer Agent for such transfer or for a new Certificate.

            (c) As a condition to the issuance of any Certificate under this
      Section 10.3, the General Partner may require the payment of a sum
      sufficient to cover any tax or other governmental charge that may be
      imposed in relation thereto and any other expenses (including, without
      limitation, the fees and expenses of the Transfer Agent) connected
      therewith.

                                      59



            10.4 RECORD HOLDER. In accordance with Section 10.2(b), the
Partnership shall be entitled to recognize the Record Holder as the
Limited Partner or Assignee with respect to any Units and, accordingly,
shall not be bound to recognize any equitable or other claim to or
interest in such Units on the part of any other Person, whether or not
the Partnership shall have actual or other notice thereof, except as
otherwise provided by law or any applicable rule, regulation, guideline
or requirement of any National Securities Exchange on which the Units
are listed for trading. Without limiting the foregoing, when a Person
(such as a broker, dealer, bank, trust company or clearing corporation
or an agent of any of the foregoing) is acting as nominee, agent or in
some other representative capacity for another Person in acquiring
and/or holding Units, as between the Partnership on the one hand and
such other Persons on the other hand, such representative Person (a)
shall be the Limited Partner or Assignee (as the case may be) of record
and beneficially, (b) must execute and deliver a Transfer Application
and (c) shall be bound by this Agreement and shall have the rights and
obligations of a Limited Partner or Assignee (as the case may be)
hereunder and as provided for herein.

                                  ARTICLE XI
                            TRANSFER OF INTERESTS

            11.1 TRANSFER.

            (a) The term "transfer," when used in this Article XI with respect
      to a Partnership Interest, shall be deemed to refer to an appropriate
      transaction by which the General Partner assigns its Partnership Interest
      as General Partner to another Person or by which the holder of a Unit
      assigns such Unit to another Person who is or becomes an Assignee and
      includes a sale, assignment, gift, pledge, encumbrance, hypothecation,
      mortgage, exchange or any other disposition by law or otherwise.

            (b) No Partnership Interest shall be transferred, in whole or in
      part, except in accordance with the terms and conditions set forth in this
      Article XI. Any transfer or purported transfer of a Partnership Interest
      not made in accordance with this Article XI shall be null and void.

            11.2 TRANSFER OF GENERAL PARTNER'S PARTNERSHIP INTEREST.

            (a) The General Partner may transfer all, but not less than all, of
      its Partnership Interest as the General Partner to a single transferee if,
      but only if, (i) at least 66 2/3% of the Outstanding Units (excluding for
      purposes of such determination any Common Units held by the General
      Partner and its Affiliates and the number of I-Units that equal the number
      of Listed Shares and Voting Shares owned by the General Partner and its
      Affiliates) and a majority of the Outstanding I-Units voting as a separate
      class (excluding for purposes of such determination the number of I-Units
      that equal the number of Listed Shares and Voting Shares owned by the
      General Partner and its Affiliates) approve of such transfer and of the
      admission of such transferee as General Partner, (ii) the transferee
      agrees to assume the rights and duties of the General Partner and be bound
      by the provisions of this Agreement and (iii) the Partnership receives an
      Opinion of Counsel that such transfer would not result in the loss of
      limited liability of any Limited Partner or of any limited partner or
      member of any Operating Subsidiary or

                                      60



      cause the Partnership or any Operating Subsidiary to be taxable as a
      corporation or otherwise taxed as an entity for federal income tax
      purposes.

            (b) Neither Section 11.2(a) nor any other provision of this
      Agreement shall be construed to prevent (and all Partners do hereby
      consent to) (i) the transfer by the General Partner of all of its
      Partnership Interest as a General Partner to an Affiliate or (ii) the
      transfer by the General Partner of all its Partnership Interest as a
      General Partner upon its merger or consolidation with or other combination
      into any other Person or the transfer by it of all or substantially all of
      its assets to another Person if, in the case of a transfer described in
      either clause (i) or (ii) of this sentence, the rights and duties of the
      General Partner with respect to the Partnership Interest so transferred
      are assumed by the transferee and the transferee agrees to be bound by the
      provisions of this Agreement; provided, that, in either such case, such
      transferee furnishes to the Partnership an Opinion of Counsel that such
      merger, consolidation, combination, transfer or assumption will not result
      in a loss of limited liability of any Limited Partner or of any limited
      partner or member of any Operating Subsidiary or cause the Partnership or
      any Operating Subsidiary to be taxable as a corporation or otherwise taxed
      as an entity for federal income tax purposes. In the case of a transfer
      pursuant to this Section 11.2(b), the transferee or successor (as the case
      may be) shall be admitted to the Partnership as the General Partner
      immediately prior to the transfer of the Partnership Interest, and the
      business of the Partnership shall continue without dissolution.

            11.3 TRANSFER OF UNITS.

            (a) Units may be transferred only in the manner described in Section
      10.2. The transfer of any Units and the admission of any new Partner shall
      not constitute an amendment to this Agreement.

            (b) Until admitted as a Substituted Limited Partner pursuant to
      Article XII, the Record Holder of a Unit shall be an Assignee in respect
      of such Unit. Limited Partners may include custodians, nominees or any
      other individual or entity in its own or any representative capacity.

            (c) Each distribution in respect of Units shall be paid by the
      Partnership, directly or through the Transfer Agent or through any other
      Person or agent, only to the Record Holders thereof as of the Record Date
      set for the distribution. Such payment shall constitute full payment and
      satisfaction of the Partnership's liability in respect of such payment,
      regardless of any claim of any Person who may have an interest in such
      payment by reason of an assignment or otherwise.

            (d) A transferee who has completed and delivered a Transfer
      Application shall be deemed to have (i) requested admission as a
      Substituted Limited Partner, (ii) agreed to comply with and be bound by
      and to have executed this Agreement, (iii) represented and warranted that
      such transferee has the capacity and authority to enter into this
      Agreement, (iv) made the powers of attorney set forth in this Agreement
      and (v) given the consents and made the waivers contained in this
      Agreement.

                                      61



            11.4 RESTRICTIONS ON TRANSFERS. Notwithstanding the other
provisions of this Article XI, no transfer of any Unit or interest
therein of any Limited Partner or Assignee shall be made if such
transfer would (a) violate the then applicable federal or state
securities laws or rules and regulations of the Securities and Exchange
Commission, any state securities commission or any other governmental
authorities with jurisdiction over such transfer, (b) cause the
Partnership to be taxable as a corporation or otherwise taxed as an
entity for federal income tax purposes or (c) affect the Partnership's
existence or qualification as a limited partnership under the Delaware
Act.

            11.5 CITIZENSHIP CERTIFICATES; NON-CITIZEN ASSIGNEES.

            (a) If the Partnership or any Operating Subsidiary is or becomes
      subject to any federal, state or local law or regulation which, in the
      reasonable determination of the General Partner, provides for the
      cancellation or forfeiture of any property in which the Partnership or any
      Operating Subsidiary has an interest based on the nationality, citizenship
      or other status of a Limited Partner or Assignee, the General Partner may
      request any Limited Partner or Assignee to furnish to the General Partner,
      within 30 days after receipt of such request, an executed Citizenship
      Certification or such other information concerning his nationality,
      citizenship or other status (or, if the Limited Partner or Assignee is a
      nominee holding for the account of another Person, the nationality,
      citizenship or other status of such Person) as the General Partner may
      request. If a Limited Partner or Assignee fails to furnish to the General
      Partner within the aforementioned 30-day period such Citizenship
      Certification or other requested information or if upon receipt of such
      Citizenship Certification or other requested information the General
      Partner determines, with the advice of counsel, that a Limited Partner or
      Assignee is not an Eligible Citizen, the Units owned by such Limited
      Partner or Assignee shall be subject to redemption in accordance with the
      provisions of Section 11.6. In addition, the General Partner may require
      that the status of any such Limited Partner or Assignee be changed to that
      of a Non-citizen Assignee, and, thereupon, the General Partner shall be
      substituted for such Non-citizen Assignee as the Limited Partner in
      respect of his Units.

            (b) The General Partner shall, in exercising voting rights in
      respect of Units held by it on behalf of Non-citizen Assignees, distribute
      the votes in the same ratios as the votes of Limited Partners in respect
      of Units of the same class other than those of Non-citizen Assignees are
      cast, either for, against or abstaining as to the matter.

            (c) Upon dissolution of the Partnership, a Non-citizen Assignee
      shall have no right to receive a distribution in kind pursuant to Section
      14.4 but shall be entitled to the cash equivalent thereof, and the General
      Partner shall provide cash in exchange for an assignment of the
      Non-citizen Assignee's share of the distribution in kind. Such payment and
      assignment shall be treated for Partnership purposes as a purchase by the
      General Partner from the Non-citizen Assignee of his Partnership Interest
      (representing his right to receive his share of such distribution in
      kind).

            (d) At any time after he can and does certify that he has become an
      Eligible Citizen, a Non-citizen Assignee may, upon application to the
      General Partner, request

                                      62



      admission as a Substituted Limited Partner with respect to any Units of
      such Non-citizen Assignee not redeemed pursuant to Section 11.6, and
      upon the Non-citizen Assignee's admission pursuant to Section 12.2 the
      General Partner shall cease to be deemed to be the Limited Partner in
      respect of the Non-citizen Assignee's Units.

            11.6 REDEMPTION OF INTERESTS.

            (a) If at any time a Limited Partner or Assignee fails to furnish a
      Citizenship Certification or other information requested within the 30-day
      period specified in Section 11.5(a), or if upon receipt of such
      Citizenship Certification or other information the General Partner
      determines, with the advice of counsel, that a Limited Partner or Assignee
      is not an Eligible Citizen, the Partnership may, unless the Limited
      Partner or Assignee establishes to the satisfaction of the General Partner
      that such Limited Partner or Assignee is an Eligible Citizen or has
      transferred his Units to a Person who furnishes a Citizenship
      Certification to the General Partner prior to the date fixed for
      redemption as provided below, redeem the Partnership Interest of such
      Limited Partner or Assignee as follows:

                  (i) The General Partner shall, not later than the 30th day
            before the date fixed for redemption, give notice of redemption to
            the Limited Partner or Assignee, at his last address designated on
            the records of the Partnership or the Transfer Agent, by registered
            or certified mail, postage prepaid. The notice shall be deemed to
            have been given when so mailed. The notice shall specify the
            Redeemable Units, the date fixed for redemption, the place of
            payment, that payment of the redemption price will be made upon
            surrender of the Certificate evidencing the Redeemable Units and
            that on and after the date fixed for redemption no further
            allocations or distributions to which the Limited Partner or
            Assignee would otherwise be entitled in respect of the Redeemable
            Units will accrue or be made.

                  (ii) The aggregate redemption price for Redeemable Units shall
            be an amount equal to the Current Market Price (the date of
            determination of which shall be the date fixed for redemption) of
            Units of the class to be so redeemed multiplied by the number of
            Units of each such class included among the Redeemable Units. The
            redemption price shall be paid, in the sole discretion of the
            General Partner, in cash or by delivery of a promissory note of the
            Partnership in the principal amount of the redemption price, bearing
            interest at the rate of 10% annually and payable in three equal
            annual installments of principal together with accrued interest,
            commencing one year after the redemption date.

                  (iii) Upon surrender by or on behalf of the Limited Partner or
            Assignee, at the place specified in the notice of redemption, of the
            Certificate evidencing the Redeemable Units, duly endorsed in blank
            or accompanied by an assignment duly executed in blank, the Limited
            Partner or Assignee or his duly authorized representative shall be
            entitled to receive the payment therefor.

                                      63



                  (iv) After the redemption date, Redeemable Units shall no
            longer constitute issued and Outstanding Units.

            (b) The provisions of this Section 11.6 shall also be applicable to
      Units held by a Limited Partner or Assignee as nominee of a Person
      determined to be other than an Eligible Citizen.

            (c) Nothing in this Section 11.6 shall prevent the recipient of a
      notice of redemption from transferring his Units before the redemption
      date if such transfer is otherwise permitted under this Agreement. Upon
      receipt of notice of such a transfer, the General Partner shall withdraw
      the notice of redemption, provided, the transferee of such Units certifies
      in the Transfer Application that he is an Eligible Citizen. If the
      transferee fails to make such certification, such redemption shall be
      effected from the transferee on the original redemption date.

            (d) If the Partnership is or becomes subject to any federal, state
      or local law or regulation which, in the reasonable determination of the
      General Partner, provides for the cancellation or forfeiture of any
      property in which the Partnership or any Operating Subsidiary has an
      interest, based on the nationality (or other status) of the General
      Partner, whether or not in its capacity as such, the Partnership may,
      unless the General Partner has furnished a Citizenship Certification or
      transferred its Partnership Interest or Units to a Person who furnishes a
      Citizenship Certification prior to the date fixed for redemption, redeem
      the Partnership Interest or Interests of the General Partner in the
      Partnership, which redemption shall also constitute redemption of the
      general partner interest of the general partner of any Operating
      Subsidiary. If such redemption includes a redemption of the Combined
      Interest, the redemption price thereof shall be equal to the aggregate sum
      of the Current Market Price (the date of determination for which shall be
      the date fixed for redemption) of each class of Units then Outstanding, in
      each such case multiplied by the number of Units of such class into which
      the Combined Interest would then be convertible under the terms of Section
      13.3(b) if the General Partner were to withdraw or be removed as the
      General Partner (the date of determination for which shall be the date
      fixed for redemption). The redemption price shall be paid in cash or by
      delivery of a promissory note of the Partnership in the principal amount
      of the redemption price, bearing interest at the rate of 10% annually and
      payable in three equal annual installments of principal, together with
      accrued interest, commencing one year after the redemption date.

                                   ARTICLE XII
                              ADMISSION OF PARTNERS

            12.1 INTENTIONALLY OMITTED.

            12.2 ADMISSION OF SUBSTITUTED LIMITED PARTNERS. By transfer
of a Unit in accordance with Article XI, the transferor shall be deemed
to have given the transferee the right to seek admission as a
Substituted Limited Partner subject to the conditions of, and in the
manner permitted under, this Agreement. A transferor of a Certificate
shall, however, only have the authority to convey to a purchaser or
other transferee who does not execute and deliver a

                                      64




Transfer Application (i) the right to negotiate such Certificate to a
purchaser or other transferee and (ii) the right to transfer the right to
request admission as a Substituted Limited Partner to such purchaser or other
transferee in respect of the transferred Units. Each transferee of a Unit
(including, without limitation, any nominee holder or an agent acquiring such
Unit for the account of another Person) who executes and delivers a Transfer
Application shall, by virtue of such execution and delivery, be an Assignee
and be deemed to have applied to become a Substituted Limited Partner with
respect to the Units so transferred to such Person. Such Assignee shall
become a Substituted Limited Partner (i) at such time as the General Partner
consents thereto, which consent may be given or withheld in the General
Partner's sole discretion, and (ii) when any such admission is shown on the
books and records of the Partnership. If such consent is withheld, such
transferee shall be an Assignee. An Assignee shall have an interest in the
Partnership equivalent to that of a Limited Partner with respect to
allocations and distributions, including, without limitation, liquidating
distributions, of the Partnership. With respect to voting rights attributable
to Units that are held by Assignees, the General Partner shall be deemed to
be the Limited Partner with respect thereto and shall, in exercising the
voting rights in respect of such Units on any matter, vote such Units at the
written direction of the Assignee who is the Record Holder of such Units. If
no such written direction is received, such Units will not be voted. An
Assignee shall have no other rights of a Limited Partner.

            12.3 ADMISSION OF SUCCESSOR GENERAL PARTNER. A successor General
Partner approved pursuant to Section 13.1 or the transferee of or successor
to all of the General Partner's Partnership Interest pursuant to Section 11.2
who is proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective immediately
prior to the withdrawal or removal of the General Partner pursuant to Section
13.1 or the transfer of the General Partner's Partnership Interest pursuant
to Section 11.2; provided, however, that no such successor shall be admitted
to the Partnership until such successor has complied with the terms of
Sections 11.2(a)(ii) and (a)(iii). Any such successor shall carry on the
business of the Partnership without dissolution. In each case, the admission
shall be subject to the successor General Partner executing and delivering to
the Partnership an acceptance of all of the terms and conditions of this
Agreement and such other documents or instruments as may be required to
effect the admission.

            12.4 ADMISSION OF ADDITIONAL LIMITED PARTNERS.

            (a) A Person (other than the General Partner or a Substituted
      Limited Partner) who makes a Capital Contribution to the Partnership in
      accordance with this Agreement shall be admitted to the Partnership as an
      Additional Limited Partner only upon furnishing to the General Partner (i)
      evidence of acceptance in form satisfactory to the General Partner of all
      of the terms and conditions of this Agreement, including, without
      limitation, the power of attorney granted in Section 1.4, and (ii) such
      other documents or instruments as may be required in the discretion of the
      General Partner to effect such Person's admission as an Additional Limited
      Partner.

            (b) Notwithstanding anything to the contrary in this Section 12.4,
      no Person shall be admitted as an Additional Limited Partner without the
      consent of the General Partner, which consent may be given or withheld in
      the General Partner's sole discretion.

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      The admission of any Person as an Additional Limited Partner shall
      become effective on the date upon which the name of such Person is
      recorded on the books and records of the Partnership, following the
      consent of the General Partner to such admission.

            12.5 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED
PARTNERSHIP. To effect the admission to the Partnership of any Partner,
the General Partner shall take all steps necessary and appropriate under
the Delaware Act to amend the records of the Partnership and, if
necessary, to prepare as soon as practical an amendment of this
Agreement and, if required by law, to prepare and file an amendment to
the Certificate of Limited Partnership and may for this purpose, among
others, exercise the power of attorney granted pursuant to Section 1.4.

                                  ARTICLE XIII
                        WITHDRAWAL OR REMOVAL OF PARTNERS

            13.1 WITHDRAWAL OF THE GENERAL PARTNER.

            (a) The General Partner shall be deemed to have withdrawn from the
      Partnership upon the occurrence of any one of the following events (each
      such event herein referred to as an "EVENT OF WITHDRAWAL"):

                  (i)  the General Partner voluntarily withdraws from the
            Partnership by giving written notice to the other Partners;

                  (ii) the General Partner transfers all of its rights as
            General Partner pursuant to Section 11.2;

                  (iii) the General Partner is removed pursuant to Section
            13.2;

                  (iv) the General Partner (A) makes a general assignment for
            the benefit of creditors; (B) files a voluntary bankruptcy petition;
            (C) files a petition or answer seeking for itself a reorganization,
            arrangement, composition, readjustment, liquidation, dissolution or
            similar relief under any law; (D) files an answer or other pleading
            admitting or failing to contest the material allegations of a
            petition filed against the General Partner in a proceeding of the
            type described in clauses (A)-(C) of this sentence; or (E) seeks,
            consents to or acquiesces in the appointment of a trustee, receiver
            or liquidator of the General Partner or of all or any substantial
            part of its properties;

                  (v) a final and non-appealable judgment is entered by a court
            with appropriate jurisdiction ruling that the General Partner is
            bankrupt or insolvent, or a final and non-appealable order for
            relief is entered by a court with appropriate jurisdiction against
            the General Partner, in each case under any federal or state
            bankruptcy or insolvency laws as now or hereafter in effect; or

                  (vi) a certificate of dissolution or its equivalent is filed
            for the General Partner, or 90 days expire after the date of notice
            to the General Partner of revocation of its charter without a
            reinstatement of its charter, under the laws of its state of
            incorporation.

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      In no event shall the Maximum Permitted Delegation pursuant to the terms
and conditions of the Delegation of Control Agreement and this Agreement be
deemed an Event of Withdrawal.

      If an Event of Withdrawal specified in this Section 13.1(a)(iv), (v) or
(vi) occurs, the withdrawing General Partner shall give written notice to the
Limited Partners within 30 days after such occurrence. The Partners hereby agree
that only the Events of Withdrawal described in this Section 13.1 shall result
in the withdrawal of the General Partner from the Partnership.

            (b) Withdrawal of the General Partner from the Partnership upon the
      occurrence of an Event of Withdrawal will not constitute a breach of this
      Agreement under the following circumstances: (i) at any time that the
      General Partner voluntarily withdraws by giving at least 90 days' advance
      notice to the Limited Partners, such withdrawal to take effect on the date
      specified in such notice; or (ii) at any time that the General Partner
      ceases to be a General Partner pursuant to Section 13.1(a)(ii) or is
      removed pursuant to Section 13.2. If the General Partner gives a notice of
      withdrawal pursuant to Section 13.1(a)(i), holders of at least a majority
      of the Outstanding Units (excluding for purposes of such determination
      Common Units owned by the General Partner and its Affiliates and the
      number of I-Units that equal the number of Listed Shares and Voting Shares
      owned by the General Partner and its Affiliates) may, prior to the
      effective date of such withdrawal, elect a successor General Partner. If,
      prior to the effective date of the General Partner's withdrawal, a
      successor is not selected by the Limited Partners as provided herein or
      the Partnership does not receive an Opinion of Counsel that following the
      election of a successor General Partner, the General Partner's withdrawal
      would not result in the loss of limited liability of any Limited Partner
      or of any limited partner or member of any Operating Subsidiary or cause
      the Partnership or any Operating Subsidiary to be taxable as a corporation
      or otherwise taxed as an entity for federal tax purposes (a "WITHDRAWAL
      OPINION OF COUNSEL"), the Partnership shall be dissolved in accordance
      with Section 14.1. If a successor General Partner is elected and a
      Withdrawal Opinion of Counsel is rendered, such successor shall be
      admitted (subject to Section 12.3) immediately prior to the effective time
      of the withdrawal or removal of the Departing Partner and shall continue
      the business of the Partnership without dissolution.

            13.2 REMOVAL OF THE GENERAL PARTNER. The General Partner may
be removed with or without Cause if such removal is approved by at least
66 2/3% of the Outstanding Common Units voting as a separate class
(excluding for purposes of such determination Common Units held by the
General Partner and its Affiliates) and a majority of the Outstanding
I-Units voting as a separate class (excluding for purposes of such
determination the number of I-Units that equal the number of Listed
Shares and Voting Shares owned by the General Partner and its
Affiliates). Any such action by the Limited Partners for removal of the
General Partner must also provide for the election and succession of a
new General Partner. Such removal shall be effective immediately
following the admission of the successor General Partner pursuant to
Article XII. The right of the Limited Partners to remove the General
Partner shall not exist or be exercised unless the Partnership has
received an Opinion of Counsel opining as to the matters covered by a
Withdrawal Opinion of Counsel.

                                      67



            13.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER.

            (a) In the event of (i) withdrawal of the General Partner under
      circumstances where such withdrawal does not violate this Agreement or
      (ii) removal of the General Partner by the Limited Partners under
      circumstances where Cause does not exist, the Departing Partner shall, at
      its option exercisable prior to the effective date of the departure of
      such Departing Partner, promptly receive from its successor in exchange
      for its Partnership Interest as General Partner an amount in cash equal to
      the fair market value of the Departing Partner's Partnership Interest as
      General Partner, such amount to be determined and payable as of the
      effective date of its departure. If the General Partner withdraws under
      circumstances where such withdrawal violates this Agreement or if the
      General Partner is removed by the Limited Partners under circumstances
      where Cause exists, the General Partner's successor shall have the option
      described in the immediately preceding sentence, and the Departing Partner
      shall not have such option. In either event, the Departing Partner shall
      be entitled to receive all reimbursements due such Departing Partner
      pursuant to Section 6.4, including, without limitation, any
      employee-related liabilities (including, without limitation, severance
      liabilities), incurred in connection with the termination of any employees
      employed by the General Partner for the benefit of the Partnership or any
      Operating Subsidiary. Subject to Section 13.3(b), the Departing Partner
      shall, as of the effective date of its departure, cease to share in any
      allocations or distributions with respect to its Partnership Interest as
      the General Partner and Partnership income, gain, loss, deduction and
      credit will be prorated and allocated as set forth in Section 5.2(g).

      For purposes of this Section 13.3(a), the fair market value of the
Departing Partner's Partnership Interest as the general partner of the
Partnership herein (the "DEPARTING INTEREST") shall be determined by agreement
between the Departing Partner and its successor or, failing agreement within 30
days after the effective date of such Departing Partner's departure, by an
independent investment banking firm or other independent expert selected by the
Departing Partner and its successor, which, in turn, may rely on other experts
and the determination of which shall be conclusive as to such matter. If such
parties cannot agree upon one independent investment banking firm or other
independent expert within 45 days after the effective date of such departure,
then the Departing Partner shall designate an independent investment banking
firm or other independent expert, the Departing Partner's successor shall
designate an independent investment banking firm or other independent expert,
and such firms or experts shall mutually select a third independent investment
banking firm or independent expert, which shall determine the fair market value
of the Departing Interest. In making its determination, such independent
investment banking firm or other independent expert shall consider the then
current trading price of Units on any National Securities Exchange on which
Units are then listed, the value of the Partnership's assets, the rights and
obligations of the General Partner and other factors it may deem relevant.

            (b) If the Departing Interest is not acquired in the manner set
      forth in Section 13.3(a), the Departing Partner shall become a Limited
      Partner and the Departing Interest shall be converted into Class A Common
      Units pursuant to a valuation made by an investment banking firm or other
      independent expert selected pursuant to Section 13.3(a), without reduction
      in such Partnership Interest (but subject to proportionate dilution by

                                      68



      reason of the admission of its successor). Any successor General Partner
      shall indemnify the Departing Partner as to all debts and liabilities of
      the Partnership arising on or after the date on which the Departing
      Partner becomes a Limited Partner. For purposes of this Agreement,
      conversion of the General Partner's Partnership Interest to Class A Common
      Units will be characterized as if the General Partner contributed its
      Partnership Interest to the Partnership in exchange for the newly-issued
      Class A Common Units.

            (c) If the option described in Section 13.3(a) is not exercised by
      the party entitled to do so, the successor General Partner shall, at the
      effective date of its admission to the Partnership, contribute to the
      capital of the Partnership cash in an amount such that its Capital
      Account, after giving effect to such contribution and any adjustments made
      to the Capital Accounts of all Partners pursuant to Section 4.6(d)(i),
      shall be equal to that percentage of the Capital Accounts of all Partners
      that is equal to its Percentage Interest as the General Partner. In such
      event, each successor General Partner shall, subject to the following
      sentence, be entitled to such Percentage Interest of all Partnership
      allocations and distributions and any other allocations and distributions
      to which the Departing Partner was entitled. In addition, such successor
      General Partner shall cause this Agreement to be amended to reflect that,
      from and after the date of such successor General Partner's admission, the
      successor General Partner's interest in all Partnership distributions and
      allocations shall be 2%, and that of the holders of Outstanding Units
      shall be 98%.

            13.4 [INTENTIONALLY OMITTED].

            13.5 WITHDRAWAL OF LIMITED PARTNERS. No Limited Partner
shall have any right to withdraw from the Partnership; provided,
however, that when a transferee of a Limited Partner's Units becomes a
Record Holder, such transferring Limited Partner shall cease to be a
Limited Partner with respect to the Units so transferred.

                                   ARTICLE XIV
                           DISSOLUTION AND LIQUIDATION

            14.1 DISSOLUTION. The Partnership shall not be dissolved by
the admission of Substituted Limited Partners or Additional Limited
Partners or by the admission of a successor General Partner in
accordance with the terms of this Agreement. Upon the removal or
withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership. The Partnership shall
dissolve, and its affairs should be wound up, upon:

            (a) the expiration of its term as provided in Section 1.5;

            (b) an Event of Withdrawal of the General Partner as provided in
      Section 13.1 (a), unless a successor is named as provided in Section
      13.1(b) or Section 13.2, as the case may be;

            (c) an election to dissolve the Partnership by the General
      Partner that is approved by at least 66 2/3% of the Outstanding Units
      (and all Limited Partners hereby expressly consent that such
      approval may be effected upon written consent of at least 66 2/3% of
      the Outstanding Units);

                                      69



            (d) entry of a decree of judicial dissolution of the
      Partnership pursuant to the provisions of the Delaware Act; or

            (e) the sale of all or substantially all of the assets and
      properties of the Partnership or Enbridge Energy, Limited
      Partnership.

            14.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER
DISSOLUTION. Upon (i) dissolution of the Partnership following an Event
of Withdrawal caused by the withdrawal or removal of the General Partner
and a failure of the requisite number of Partners to appoint a successor
General Partner as provided in Section 13.1 or 13.2, as the case may be,
then within an additional 90 days or (ii) dissolution of the Partnership
upon an event constituting an Event of Withdrawal described in Section
13.1(a)(iv), then within 180 days thereafter, at least a majority of the
Outstanding Units may elect to reconstitute the Partnership and continue
its business on the same terms and conditions set forth in this
Agreement by forming a new limited partnership on terms identical to
those set forth in this Agreement and having as a general partner a
Person approved by the holders of at least a majority of the Outstanding
Units. Upon any such election by the holders of at least a majority of
the outstanding Units, all Partners shall be bound thereby and shall be
deemed to have approved thereof. Unless such an election is made with
the applicable time period as set forth above, the Partnership shall
conduct only activities necessary to wind up its affairs. If such an
election is so made, then:

            (a) the reconstituted Partnership shall continue until the end of
      the term set forth in Section 1.5 unless earlier dissolved in accordance
      with this Article XIV;

            (b) if the successor General Partner is not the former General
      Partner, then the interest of the former General Partner shall be treated
      thenceforth as the interest of a Limited Partner and converted into Class
      A Common Units in the manner provided in Section 13.3(b); and

            (c) all necessary steps shall be taken to cancel this Agreement and
      the Certificate of Limited Partnership and to enter into and, as
      necessary, to file a new partnership agreement and certificate of limited
      partnership, and the successor general partner may for this purpose
      exercise the powers of attorney granted the General Partner pursuant to
      Section 1.4; provided that the right of at least a majority of Outstanding
      Units to approve a successor general partner and to reconstitute and to
      continue the business of the Partnership shall not exist and may not be
      exercised unless the Partnership has received an Opinion of Counsel that
      (x) the exercise of the right would not result in the loss of limited
      liability of any Limited Partner and (y) neither the Partnership, the
      reconstituted limited partnership nor any Operating Subsidiary would
      become taxable as a corporation or otherwise be taxed as an entity for
      federal income tax purposes upon the exercise of such right to continue.

            14.3 LIQUIDATION. Upon dissolution of the Partnership,
unless the Partnership is continued under an election to reconstitute
and continue the Partnership pursuant to Section 14.2, the General
Partner, or in the event the General Partner has been dissolved or
removed, become bankrupt as set forth in Section 13.1 or withdrawn from
the Partnership, a liquidator or liquidating committee approved by at
least 66 2/3% of the Outstanding Units, shall be the

                                      70



Liquidator. The Liquidator (if other than the General Partner) shall be
entitled to receive such compensation for its services as may be
approved by at least 66 2/3% of the Outstanding Units. The Liquidator
shall agree not to resign at any time without 15 days' prior written
notice and (if other than the General Partner) may be removed at any
time, with or without Cause by notice of removal approved by at least 66
2/3% of the Outstanding Units. Upon dissolution, removal or resignation
of the Liquidator, a successor and substitute Liquidator (who shall have
and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by at least 66 2/3% of the
Outstanding Units. The right to approve a successor or substitute
Liquidator in the manner provided herein shall be deemed to refer also
to any such successor or substitute Liquidator approved in the manner
herein provided. Except as expressly provided in this Article XIV, the
Liquidator approved in the manner provided herein shall have and may
exercise, without further authorization or consent of any of the parties
hereto, all of the powers conferred upon the General Partner under the
terms of this Agreement (but subject to all of the applicable
limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 6.3(b))
to the extent necessary or desirable in the good faith judgment of the
Liquidator to carry out the duties and functions of the Liquidator
hereunder for and during such period of time as shall be reasonably
required in the good faith judgment of the Liquidator to complete the
winding up and liquidation of the Partnership as provided for herein.
The Liquidator shall liquidate the assets of the Partnership, and apply
and distribute the proceeds of such liquidation in the following order
of priority, unless otherwise required by mandatory provisions of
applicable law:

            (a) the payment to creditors of the Partnership, including, without
      limitation, Partners who are creditors, in the order of priority provided
      by law; and the creation of a reserve of cash or other assets of the
      Partnership for contingent liabilities in an amount, if any, determined by
      the Liquidator to be appropriate for such purposes;

            (b) to all Partners in accordance with the positive balances in
      their respective Capital Accounts after taking into account adjustments to
      such Capital Accounts pursuant to Section 5.1(c);

            (c) to all Partners in accordance with their respective
      Percentage Interests.

            14.4 DISTRIBUTIONS IN KIND. Notwithstanding the provisions
of Section 14.3, which require the liquidation of the assets of the
Partnership, but subject to the order of priorities set forth therein,
if prior to or upon dissolution of the Partnership the Liquidator
determines that an immediate sale of part or all of the Partnership's
assets would be impractical or would cause undue loss to the Partners,
the Liquidator may, in its absolute discretion, defer for a reasonable
time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including, without limitation, those to
Partners as creditors) or distribute to the Partners, in lieu of cash,
as tenants in common and in accordance with the provisions of Section
14.3, undivided interests in such Partnership assets as the Liquidator
deems not suitable for liquidation. Any such distributions in kind shall
be made only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interest of the Limited Partners,
and shall be subject to such conditions relating to the disposition and
management of such properties as the Liquidator deems reasonable and
equitable and to any agreement governing the operation of such
properties at such time. The Liquidator shall determine the fair market
value of any property distributed in

                                      71



kind using such reasonable method of valuation as it may adopt.
Notwithstanding the foregoing, the Liquidator may not make distributions in
kind unless all of the Listed Shares are owned by the General Partner and its
Affiliates.

            14.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon the
completion of the distribution of Partnership cash and property as provided
in Sections 14.3 and 14.4, the Partnership shall be terminated and the
Certificate of Limited Partnership and all qualifications of the Partnership
as a foreign limited partnership in jurisdictions other than the State of
Delaware shall be canceled and such other actions as may be necessary to
terminate the Partnership shall be taken.

            14.6 REASONABLE TIME FOR WINDING UP. A reasonable time shall be
allowed for the orderly winding up of business and affairs of the Partnership
and the liquidation of its assets pursuant to Section 14.3 in order to
minimize any losses otherwise attendant upon such winding up, and the
provisions of this Agreement shall remain in effect between the Partners
during the period of liquidation.

            14.7 RETURN OF CAPITAL. The General Partner shall not be
personally liable for the return of the Capital Contributions of the Limited
Partners, or any portion thereof, it being expressly understood that any such
return shall be made solely from Partnership assets.

            14.8 CAPITAL ACCOUNT RESTORATION. No Limited Partner shall have
any obligation to restore any negative balance in its Capital Account upon
liquidation of the Partnership. The General Partner shall be obligated to
restore any negative balance in its Capital Account upon liquidation of its
interest in the Partnership by the end of the taxable year of the Partnership
during which such liquidation occurs, or, if later, within 90 days after the
date of such liquidation.

            14.9 WAIVER OF PARTITION.  Each Partner hereby waives any right
to partition of the Partnership property.

                                   ARTICLE XV
         AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

            15.1 AMENDMENT TO BE ADOPTED SOLELY BY GENERAL PARTNER. Each
Limited Partner agrees that the General Partner (pursuant to its powers of
attorney from the Limited Partners and Assignees), without the approval of
any Limited Partner or Assignee, may amend any provision of this Agreement,
and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:

            (a) a change in the name of the Partnership, the location of the
      principal place of business of the Partnership, the registered agent of
      the Partnership or the registered office of the Partnership;

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

                                      72



            (c) a change that, in the sole discretion of the General Partner, is
      reasonable and necessary or appropriate to qualify or continue the
      qualification of the Partnership as a limited partnership or a partnership
      in which the limited partners have limited liability under the laws of any
      state or that is necessary or advisable in the opinion of the General
      Partner to ensure that the Partnership will not be taxable as a
      corporation or otherwise taxed as an entity for federal income tax
      purposes;

            (d) a change (i) that, in the sole discretion of the General
      Partner, does not adversely affect the Limited Partners in any material
      respect, (ii) that is necessary or appropriate to satisfy any
      requirements, conditions, guidelines or interpretations contained in any
      opinion, interpretative release, directive, order, ruling or regulation of
      any federal or state agency or judicial authority or contained in any
      federal or state agency or judicial authority or contained in any federal
      or state statute (including, without limitation, the Delaware Act) or that
      is necessary or appropriate to facilitate the trading of the Units
      (including, without limitation, the division of Outstanding Units into
      different classes to facilitate uniformity of tax consequences within such
      classes of Units) or comply with any rule, regulation, interpretative
      release, guideline or requirement of any National Securities Exchange on
      which the Units are or will be listed for trading, compliance with any of
      which the General Partner determines in its sole discretion to be in the
      best interests of the Partnership and the Limited Partners or (iii) that
      is required to effect the intent of the provisions of this Agreement or is
      otherwise contemplated by this Agreement;

            (e) an amendment that is necessary, in the Opinion of Counsel, to
      prevent the Partnership or the General Partner or its directors or
      officers from in any manner being subjected to the provisions of the
      Investment Company Act of 1940, as amended, the Investment Advisers Act of
      1940, as amended, or "plan asset" regulations adopted under the Employee
      Retirement Income Security Act of 1974, as amended, whether or not
      substantially similar to plan asset regulations currently applied or
      proposed by the United States Department of Labor;

            (f) subject to the terms of Section 4.4, an amendment that the
      General Partner determines in its sole discretion to be necessary or
      appropriate in connection with the authorization for issuance of any class
      or series of Units pursuant to Section 4.4;

            (g)   Intentionally Omitted;

            (h)   Intentionally Omitted;

            (i)   any amendment expressly permitted in this Agreement to
      be made by the General Partner acting alone;

            (j)   an amendment effected, necessitated or contemplated by a
      Merger Agreement approved in accordance with Section 16.3; or

            (k)   any other amendments substantially similar to the
      foregoing.


                                       73



            15.2  AMENDMENT PROCEDURES.

            (a) Except as provided in Sections 15.1 and 15.3, all amendments to
      this Agreement shall be made in accordance with the following
      requirements. Amendments to this Agreement may be proposed solely by the
      General Partner. Each such proposal shall contain the text of the proposed
      amendment. If an amendment is proposed, the General Partner shall seek the
      written approval of the requisite percentage of Outstanding Units or call
      a meeting of the Limited Partners to consider and vote on such proposed
      amendment. A proposed amendment shall be effective upon its approval by
      the holders of at least 66 2/3% of the Outstanding Units unless a greater
      or different percentage is required under this Agreement; provided that,
      in addition to such approval, if the effect of any amendment would have a
      material adverse effect, as determined in the sole discretion of the
      General Partner, on the rights or preferences of any class of Outstanding
      Units in relation to any other class of Outstanding Units, the approval of
      the holders of at least a majority of the Outstanding Units of the class
      so affected, voting separately as a class, shall be required to adopt such
      amendment (excluding for purposes of such determination, in the case of a
      vote of the Record Holders of I-Units, the number of I-Units that equal
      the number of Listed Shares and Voting Shares owned by the General Partner
      and its Affiliates). The General Partner shall notify all Record Holders
      upon final adoption of any proposed amendment.

            (b) In addition to any other vote that may be required under the
      terms of this Agreement, and without limitation of the General Partner's
      authority to adopt amendments to this Agreement as contemplated in Section
      15.1, any amendments to Section 5.10(d) shall require the approval of a
      majority of the Outstanding I-Units, voting as a separate class (excluding
      for purposes of such determination the number of I-Units that equals the
      number of Listed Shares and Voting Shares owned by the General Partner and
      its Affiliates).

            15.3  AMENDMENT REQUIREMENTS.

            (a) Notwithstanding the provisions of Sections 15.1 and 15.2, no
      provision of this Agreement that establishes a percentage of Outstanding
      Units required to take any action shall be amended, altered, changed,
      repealed or rescinded in any respect that would have the effect of
      reducing such voting requirement unless such amendment is approved by the
      written consent or the affirmative vote of Unitholders whose aggregate
      percentage of Outstanding Units constitutes not less than the required
      percentage of Outstanding Units sought to be reduced.

            (b) Notwithstanding the provisions of Sections 15.1 and 15.2, no
      amendment to this Agreement may (i) enlarge the obligations of any Limited
      Partner without such Limited Partner's consent, which may be given or
      withheld in its sole discretion, (ii) modify the amounts distributable to
      the General Partner in respect of its general partner interest in the
      Partnership or any Operating Subsidiary or modify the amounts reimbursable
      or otherwise payable to the General Partner or any of its Affiliates by
      the Partnership, (iii) change Section 14.1(a) or (c), (iv) restrict in any
      way any action by or rights of the General Partner as set forth in this
      Agreement without the General Partner's



                                       74



      consent (which may be given or withheld in the sole discretion of the
      General Partner) or (v) change the term of the Partnership or, except
      as set forth in Section 14.1(c), give any Person the right to dissolve
      the Partnership.

            (c) Except as otherwise provided, and without limitation of the
      General Partner's authority to adopt amendments to this Agreement as
      contemplated in Section 15.1, the General Partner may amend the
      Partnership Agreement without the approval of Unitholders, except that any
      amendment that would have a material adverse effect on the holders of any
      type or class of Outstanding Units must be approved by the holders of not
      less than 66 2/3% of the Outstanding Units of such type or class.

            (d) Notwithstanding any other provision of this Agreement, except
      for amendments pursuant to Section 6.3 or 15.1, no amendments shall become
      effective without the approval of the Record Holders of at least 95% of
      the Units unless the Partnership obtains an Opinion of Counsel to the
      effect that (a) such amendment will not cause the Partnership or any
      Operating Subsidiary to be taxable as a corporation or otherwise taxed as
      an entity for federal income tax purposes and (b) such amendment will not
      affect the limited liability of any Limited Partner or any limited partner
      of Enbridge Energy, Limited Partnership under applicable law.

            (e) This Section 15.3 shall only be amended with the approval of the
      Record Holders of not less than 95% of the Outstanding Units.

            15.4  MEETINGS. All acts of Limited Partners to be taken
hereunder shall be taken in the manner provided in this Article XV. Meetings
of the Limited Partners may be called by the General Partner or by Limited
Partners owning 20% or more of the Outstanding Units of the class for which a
meeting is proposed. Limited Partners shall call a meeting by delivering to
the General Partner one or more requests in writing stating that the signing
Limited Partners wish to call a meeting and indicating the general or
specific purposes for which the meeting is to be called. Within 60 days after
receipt of such a call from Limited Partners or within such greater time as
may be reasonably necessary for the Partnership to comply with any statutes,
rules, regulations, listing agreements or similar requirements governing the
holding of a meeting or the solicitation of proxies for use at such a
meeting, the General Partner shall send a notice of the meeting to the
Limited Partners either directly or indirectly through the Transfer Agent. A
meeting shall be held at a time and place determined by the General Partner
on a date not more than 60 days after the mailing of notice of the meeting.
Limited Partners shall not vote on matters that would cause the Limited
Partners to be deemed to be taking part in the management and control of the
business and affairs of the Partnership so as to jeopardize the Limited
Partners' limited liability under the Delaware Act or the law of any other
state in which the Partnership is qualified to do business.

            15.5  NOTICE OF A MEETING. Notice of a meeting called pursuant to
Section 15.4 shall be given to the Record Holders in writing by mail or other
means of written communication in accordance with Section 18.1. The notice
shall be deemed to have been given at the time when deposited in the mail or
sent by other means of written communication.

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            15.6  RECORD DATE. For purposes of determining the Limited
Partners entitled to notice of or to vote at a meeting of the Limited
Partners or to give approvals without a meeting as provided in Section 15.11,
the General Partner may set a Record Date, which shall not be less than 10
nor more than 60 days before (a) the date of the meeting (unless such
requirement conflicts with any rule, regulation, guideline or requirement of
any National Securities Exchange on which the Units are listed for trading,
in which case the rule, regulation, guideline or requirement of such exchange
shall govern) or (b) in the event that approvals are sought without a
meeting, the date by which Limited Partners are requested in writing by the
General Partner to give such approvals.

            15.7  ADJOURNMENT. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting and a new Record
Date need not be fixed, if the time and place thereof are announced at the
meeting at which the adjournment is taken, unless such adjournment shall be
for more than 45 days. At the adjourned meeting, the Partnership may transact
any business which might have been transacted at the original meeting. If the
adjournment is for more than 45 days or if a new Record Date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given in
accordance with this Article XV.

            15.8  WAIVER OF NOTICE; APPROVAL OF MEETING; APPROVAL OF MINUTES.
The transactions of any meeting of Limited Partners, however called and
noticed, and whenever held, shall be as valid as if had at a meeting duly
held after regular call and notice, if a quorum is present either in person
or by proxy, and if, either before or after the meeting, each of the Limited
Partners entitled to vote, present in person or by proxy, signs a written
waiver of notice or an approval of the holding of the meeting or an approval
of the minutes thereof. All waivers and approvals shall be filed with the
Partnership records or made a part of the minutes of the meeting. Attendance
of a Limited Partner at a meeting shall constitute a waiver of notice of the
meeting, except when the Limited Partner disapproves, at the beginning of the
meeting, the transaction of any business because the meeting is not lawfully
called or convened, and except that attendance at a meeting is not a waiver
of any right to disapprove the consideration of matters required to be
included in the notice of the meeting, but not so included, in either case if
the disapproval is expressly made at the meeting.

            15.9  QUORUM. The holders of 66 2/3% of the Outstanding Units of
the class for which a meeting has been called represented in person or by
proxy shall constitute a quorum at a meeting of Limited Partners of such
class unless any such action by the Limited Partners requires approval by
holders of a majority in interest of such Units, in which case the quorum
shall be a majority. At any meeting of the Limited Partners duly called and
held in accordance with this Agreement at which a quorum is present, the act
of Limited Partners holding Outstanding Units that in the aggregate represent
at least 66 2/3% of the Outstanding Units entitled to vote and be present in
person or by proxy at such meeting shall be deemed to constitute the act of
all Limited Partners, unless a greater or different percentage is required
with respect to such action under the provisions of this Agreement, in which
case the act of the Limited Partners holding Outstanding Units that in the
aggregate represent at least such greater or different percentage shall be
required. The Limited Partners present at a duly called or held meeting at
which a quorum is present may continue to transact business until
adjournment, notwithstanding the withdrawal of enough Limited Partners to
leave less than a quorum, if any action taken (other than adjournment) is
approved by the required percentage of Outstanding Units specified in this



                                       76




Agreement. In the absence of a quorum, any meeting of Limited Partners may be
adjourned from time to time by the affirmative vote of a majority of the
Outstanding Units represented either in person or by proxy, but no other
business may be transacted, except as provided in Section 15.7.

            15.10 CONDUCT OF MEETING. The General Partner shall have full
power and authority concerning the manner of conducting any meeting of the
Limited Partners or solicitation of approvals in writing, including, without
limitation, the determination of Persons entitled to vote, the existence of a
quorum, the satisfaction of the requirements of Section 15.4, the conduct of
voting, the validity and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as
chairman of any meeting and shall further designate a Person to take the
minutes of any meeting, in either case including, without limitation, a
Partner or a director or officer of the General Partner. All minutes shall be
kept with the records of the Partnership maintained by the General Partner.
The General Partner may make such other regulations consistent with
applicable law and this Agreement as it may deem advisable concerning the
conduct of any meeting of the Limited Partners or solicitation of approvals
in writing, including, without limitation, regulations in regard to the
appointment of proxies, the appointment and duties of inspectors of votes and
approvals, the submission and examination of proxies and other evidence of
the right to vote, and the revocation of approvals in writing.

            15.11 ACTION WITHOUT A MEETING. Any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if an approval
in writing setting forth the action so taken is signed by Limited Partners
holding not less than the minimum percentage of the Outstanding Units that
would be necessary to authorize to take such action at a meeting at which all
the Limited Partners were present and voted. Prompt notice of the taking of
action without a meeting shall be given to the Limited Partners who have not
approved in writing. The General Partner may specify that any written ballot
submitted to Limited Partners for the purpose of taking any action without a
meeting shall be returned to the Partnership within the time period, which
shall be not less than 20 days, specified by the General Partner. If a ballot
returned to the Partnership does not vote all of the Units held by the
Limited Partner, the Partnership shall be deemed to have failed to receive a
ballot for the Units that were not voted. If approval of the taking of any
action by the Limited Partners is solicited by any Person other than by or on
behalf of the General Partner, the written approvals shall have no force and
effect unless and until (a) they are deposited with the Partnership in care
of the General Partner, (b) approvals sufficient to take the action proposed
are dated as of a date not more than 90 days prior to the date sufficient
approvals are deposited with the Partnership and (c) an Opinion of Counsel is
delivered to the General Partner to the effect that the exercise of such
right and the action proposed to be taken with respect to any particular
matter (i) will not cause the Limited Partners to be deemed to be taking part
in the management and control of the business and affairs of the Partnership
so as to jeopardize the Limited Partners' limited liability, (ii) will not
jeopardize the status of the Partnership as a partnership, or cause the
Partnership to be taxable as a corporation or otherwise taxed as an entity,
under applicable tax laws and regulations and (iii) is otherwise permissible
under the state statutes then governing the rights, duties and liabilities of
the Partnership and the Partners.



                                       77



            15.12 VOTING AND OTHER RIGHTS.

            (a) Only those Record Holders of Units on the Record Date set
      pursuant to Section 15.6 shall be entitled to notice of, and to vote at, a
      meeting of Limited Partners or to act with respect to matters as to which
      holders of the Outstanding Units have the right to vote or to act. All
      references in this Agreement to votes of, or other acts that may be taken
      by, the holders of Outstanding Units shall be deemed to be references to
      the votes or acts of the Record Holders of such Outstanding Units.

            (b) With respect to Units that are held for a Person's account by
      another Person (such as a broker, dealer, bank, trust company or clearing
      corporation, or an agent of any of the foregoing), in whose name such
      Units are registered, such broker, dealer or other agent shall, in
      exercising the voting rights in respect of such Units on any matter, and
      unless the arrangement between such Persons provides otherwise, vote such
      Units in favor of, and at the direction of, the Person who is the
      beneficial owner, and the Partnership shall be entitled to assume it is so
      acting without further inquiry. The provisions of this Section 15.12(b)
      (as well as all other provisions of this Agreement) are subject to the
      provisions of Section 10.4.


                                   ARTICLE XVI
                                     MERGER

            16.1  AUTHORITY. Subject to Section 5.10(d) and(e), the
Partnership may merge or consolidate with one or more corporations, business
trusts or associations, real estate investment trusts, common law trusts or
unincorporated businesses, including, without limitation, a general
partnership or limited partnership, formed under the laws of the State of
Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation (a "MERGER AGREEMENT") in
accordance with this Article.

            16.2  PROCEDURE FOR MERGER OR CONSOLIDATION. Merger or
consolidation of the Partnership pursuant to this Article XVI requires the
prior approval of the General Partner. If the General Partner shall
determine, in the exercise of its sole discretion, to consent to the merger
or consolidation, the General Partner shall approve the Merger Agreement,
which shall set forth:

            (a)   The names and jurisdictions of formation or organization
      of each of the business entities proposing to merge or consolidate;

            (b) The name and jurisdictions of formation or organization of the
      business entity that is to survive the proposed merger or consolidation
      (hereafter designated as the "SURVIVING BUSINESS ENTITY");

            (c)   The terms and conditions of the proposed merger or
      consolidation;

            (d) The manner and basis of exchanging or converting the equity
      securities of each constituent business entity for, or into, cash,
      property or general or limited partnership interests, rights, securities
      or obligations of the Surviving Business Entity and (i) if any general or
      limited partnership interests, securities or rights of any constituent
      business entity are not to be exchanged or converted solely for, or into,
      cash, property or



                                       78




      general or limited partnership interests, rights, securities or
      obligations of the Surviving Business Entity, the cash, property or
      general or limited partnership interests, rights, securities
      or obligations of any limited partnership, corporation, trust or other
      entity (other than the Surviving Business Entity) which the holders of
      such general or limited partnership interest are to receive in exchange
      for, or upon conversion of their securities or rights, and (ii) in the
      case of securities represented by certificates, upon the surrender of such
      certificates, which cash, property or general or limited partnership
      interests, rights, securities or obligations of the Surviving Business
      Entity or any limited partnership, corporation, trust or other entity
      (other than the Surviving Business Entity), or evidences thereof, are to
      be delivered;

            (e) A statement of any amendments or other changes in the
      constituent documents (the articles or certificate of incorporation,
      articles of trust, declaration of trust, certificate or agreement of
      limited partnership or other similar charter or governing document), or
      the adoption of new constituent documents, in either case as contemplated
      in Section 17-211(g) of the Delaware Act, of the Surviving Business Entity
      to be effected by such merger or consolidation;

            (f) The effective time of the merger, which may be the date of the
      filing of the certificate of merger pursuant to Section 16.4 or a later
      date specified in or determinable in accordance with the Merger Agreement;
      provided that if the effective time of the merger is to be later than the
      date of the filing of the certificate of merger, it shall be fixed no
      later than the time of the filing of the certificate of merger and stated
      therein; and

            (g) Such other provisions with respect to the proposed merger or
      consolidation as are deemed necessary or appropriate by the General
      Partner.

            16.3  APPROVAL BY LIMITED PARTNERS OF MERGER OR CONSOLIDATION.

            (a) The General Partner of the Partnership, upon its approval of the
      Merger Agreement, shall direct that the Merger Agreement be submitted to a
      vote of Limited Partners whether at a meeting or by written consent, in
      either case in accordance with the requirements of Article XV. A copy or a
      summary of the Merger Agreement shall be included in or enclosed with the
      notice of a meeting or the written consent.

            (b) The Merger Agreement shall be approved upon receiving the
      affirmative vote or consent of the holders of at least 66 2/3% of the
      Outstanding Units, unless the Merger Agreement contains any provision
      which, if contained in an amendment to this Agreement, the provisions of
      this Agreement or the Delaware Act would require the vote or consent of a
      greater percentage of the Outstanding Units of the Limited Partners or of
      any class of Limited Partners, in which case such greater percentage vote
      or consent shall be required for approval of the Merger Agreement.

            (c) After such approval by vote or consent of the Limited Partners,
      and at any time prior to the filing of the certificate of merger pursuant
      to Section 16.4, the merger or consolidation may be abandoned pursuant to
      provisions therefor, if any, set forth in the Merger Agreement.



                                       79


            16.4  CERTIFICATE OF MERGER. Upon the required approval by the
General Partner and Limited Partners of a Merger Agreement, a certificate of
merger shall be executed and filed with the Secretary of State of the State
of Delaware in conformity with the requirements of the Delaware Act.

            16.5  EFFECT OF MERGER.

            (a)   Upon the effective date of the certificate of merger:

                  (i) all of the rights, privileges and powers of each of the
            business entities that has merged or consolidated, and all property,
            real, personal and mixed, and all debts due to any of those business
            entities and all other things and causes of action belonging to each
            of those business entities shall be vested in the Surviving Business
            Entity and, after the merger or consolidation, shall be the property
            of the Surviving Business Entity to the extent they were part of
            each constituent business entity;

                  (ii) the title to any real property vested by deed or
            otherwise in any of those constituent business entities shall not
            revert and shall not be in any way impaired because of the merger or
            consolidation;

                  (iii) all rights of creditors and all liens on or security
            interest in property of any of those constituent business entities
            shall be preserved unimpaired; and

                  (iv) all debts, liabilities and duties of those constituent
            business entities shall attach to the Surviving Business Entity, and
            may be enforced against it to the same extent as if the debts,
            liabilities and duties had been incurred or contracted by it.

            (b) A merger or consolidation effected pursuant to this Article XVI
      shall not be deemed to result in a transfer or assignment of assets or
      liabilities from one entity to another having occurred.

            16.6  MERGER WITH EEM UPON TAX STATUS EVENT.

            (a) Subject to Section 16.3, upon or at any time following the
      occurrence of a Tax Status Event, if the Record Holder of Voting Shares
      determines to exercise its right to merge EEM with or into the Partnership
      or any Subsidiary, the General Partner shall cause the Partnership or such
      Subsidiary to merge with or into EEM in accordance with the provisions of
      this Section 16.6.

            (b) If the Record Holder of Voting Shares determines to exercise its
      right to cause a merger as described in Section 7.03(a) of the LLC
      Agreement, the General Partner shall execute and deliver or cause to be
      executed and delivered the Merger Agreement and shall execute, deliver
      and/or file or cause to be executed, delivered and/or filed, pursuant to
      the Delaware Act or other applicable Law, all other documents, instruments
      or certificates deemed by it necessary or appropriate to effectuate such
      merger and, subject to Section 16.6(c), such merger shall have the effects
      provided in the



                                       80



      Certificate of Merger, the Merger Agreement and under the Delaware Act and
      any other applicable Law.

            (c) The Merger Agreement executed in connection with any merger of
      the EEM pursuant to this Section 16.6 shall provide that, at the effective
      time of such merger, each Record Holder of Listed Shares, in exchange for
      the total number of Listed Shares owned by such Record Holder shall
      receive, and the Partnership shall issue or pay to such Record Holder, as
      applicable, a number of whole Class A Common Units and an amount of cash
      in lieu of fractional Class A Common Units such that (i) the product of
      the number of whole Class A Common Units so received by such Record Holder
      and the Closing Price of one Class A Common Unit on the last Trading Day
      prior to the effective time of such merger, plus (ii) the amount of cash
      received by such Record Holder, is equal to the product of the number of
      Listed Shares owned by such Record Holder and the Closing Price of one
      Listed Share on the last Trading Day prior to the effective time of such
      merger. For purposes of this Section 16.6(c), the term "Class A Common
      Units" shall include any other security issued by the Partnership in
      exchange for Listed Shares in lieu of Class A Common Units that is in all
      respects substantially similar to Class A Common Units.

                                  ARTICLE XVII
                             RIGHT TO ACQUIRE UNITS

            17.1   RIGHT TO ACQUIRE UNITS.

            (a) Notwithstanding any provision of this Agreement, if at any time
      less than 15% of the aggregate number of Listed Shares then outstanding
      plus the aggregate number of Common Units then Outstanding are held by
      Persons other than the General Partner and its Affiliates, the General
      Partner shall then have the right (which right it may assign and transfer
      to the Partnership or any Affiliate of the General Partner) exercisable in
      its sole discretion, to purchase all, but not less than all, of the Common
      Units then Outstanding held by Persons other than the General Partner and
      its Affiliates, at the Optional Purchase Price, but only if Enbridge Inc.
      elects to purchase all, but not less than all, of the outstanding Listed
      Shares that are not held by Enbridge Inc. and its Affiliates pursuant to
      Section 4 of the Purchase Provisions. As used in this Agreement, "OPTIONAL
      PURCHASE PRICE" means a price that is equal to the greatest of (A) the
      Current Market Price for the Common Units as of the date five days prior
      to the date that the notice described in Section 17.1(b) is mailed, (B)
      the highest price paid by the General Partner or any of its Affiliates for
      a Common Unit purchased during the 90 calendar day period preceding the
      date that the notice described in Section 17.1(b) is mailed, (C) the
      Current Market Price for the Listed Shares as of the date five days prior
      to the date that the notice described in Section 17.1(b) is mailed, and
      (D) the highest price paid by the General Partner or any of its Affiliates
      for a Listed Share purchased during the 90 calendar day period preceding
      the date that the notice described in Section 17.1(b) is mailed. To the
      extent that the price paid for Listed Shares or Common Units in clauses
      (B) or (D) is paid in securities, the value of such securities shall be
      the Closing Price for such securities on the day the purchase of the
      Listed Shares or Common Units is effected. To the extent that the price
      paid for Listed Shares or Common Units in clauses (B) or (D) is paid other
      than



                                       81


      in cash or securities, the value of such other consideration (and
      therefore the price paid for such Listed Shares or Common Units) shall be
      determined in good faith by the Board of Directors of the General Partner.
      As used in this Agreement, (i) "CURRENT MARKET PRICE" of a security listed
      or admitted to trading on any National Securities Exchange means the
      average of the daily Closing Prices for such security for the 20
      consecutive Trading Days immediately prior to, but not including, such
      date; (ii) "CLOSING PRICE" for any day means (1) the last sale price on
      such day, regular way, or in case no such sale takes place on such day,
      the average of the closing bid and asked prices on such day, regular way,
      in either case as reported in the principal consolidated transaction
      reporting system with respect to securities listed or admitted to trading
      on the New York Stock Exchange or, (2) if such securities are not listed
      or admitted to trading on the New York Stock Exchange as reported in the
      principal consolidated transaction reporting system with respect to
      securities listed on the principal National Securities Exchange on which
      such securities are listed or admitted to trading or, if such securities
      are not listed or admitted to trading on any National Securities Exchange,
      the last quoted price on such day or, (3) if not so quoted, the average of
      the high bid and low asked prices on such day in the over-the-counter
      market, as reported by the National Association of Securities Dealers,
      Inc. Automated Quotation System or such other system then in use, or (4)
      if on any such day such securities are not quoted by any such
      organization, the average of the closing bid and asked price on such day
      as furnished by a professional market maker making a market in such
      securities selected by the Board of Directors of the General Partner, or
      (5) if on any such day no market maker is making a market in such
      securities, the fair value of such securities on such day as determined
      reasonably and in good faith by the Board of Directors of the General
      Partner; and (iii) "TRADING DAY" means a day on which the principal
      National Securities Exchange on which such securities are listed or
      admitted to trading is open for the transaction of business or, if such
      securities are not listed or admitted to trading on any National
      Securities Exchange, a day on which banking institutions in New York City
      generally are open. Notwithstanding anything herein to the contrary, the
      Current Market Price of one Class B Common Unit shall be deemed to be the
      same as the Current Market Price of one Class A Common Unit.

            (b) If the General Partner, any Affiliate of the General Partner or
      the Partnership elects to exercise the right to purchase Common Units
      granted pursuant to Section 17.1(a), the General Partner shall deliver to
      the Transfer Agent written notice of such election to purchase (the
      "NOTICE OF ELECTION TO PURCHASE") and shall cause the Transfer Agent to
      mail a copy of such Notice of Election to Purchase to the Record Holders
      of Common Units (as of a Record Date selected by the General Partner) at
      least 10, but not more than 60 days prior to the Purchase Date. Such
      Notice of Election to Purchase shall also be published in daily newspapers
      of general circulation printed in the English language and published in
      the Borough of Manhattan, New York. The Notice of Election to Purchase
      shall specify the Purchase Date and the price (determined in accordance
      with Section 17.1(a)) at which Common Units will be purchased and state
      that the General Partner, its Affiliate or the Partnership, as the case
      may be, elects to purchase such Common Units, upon surrender of
      Certificates representing such Common Units in exchange for payment, at
      such office or offices of the Transfer Agent as the Transfer Agent may
      specify, or as may be required by any National Securities Exchange on
      which the Common Units are listed or admitted to trading. Any such Notice
      of



                                       82



      Election to Purchase mailed to a Record Holder of Common Units at his
      address as reflected in the records of the Transfer Agent shall be
      conclusively presumed to have been given whether or not the owner receives
      such notice. On or prior to the Purchase Date, the General Partner, its
      Affiliate or the Partnership, as the case may be, shall deposit with the
      Transfer Agent cash in an amount sufficient to pay the aggregate purchase
      price of all of the Common Units to be purchased in accordance with this
      Section 17.1. If the Notice of Election to Purchase shall have been duly
      given as aforesaid at least 10 days prior to the Purchase Date, and if on
      or prior to the Purchase Date the deposit described in the preceding
      sentence has been made for the benefit of the holders of Common Units
      subject to purchase as provided herein, then from and after the Purchase
      Date, notwithstanding that any Certificate shall not have been surrendered
      for purchase, all rights of the holders of such Common Units (including,
      without limitation, any rights pursuant to Articles IV, V and XIV) shall
      thereupon cease, except the right to receive the purchase price
      (determined in accordance with Section 17.1(a)) for the Common Units
      therefor, without interest, upon surrender to the Transfer Agent of the
      Certificates representing such Common Units, and such Common Units shall
      thereupon be deemed to be transferred to the General Partner, its
      Affiliate or the Partnership, as the case may be, on the record books of
      the Transfer Agent and the Partnership, and the General Partner or any
      Affiliate of the General Partner, or the Partnership, as the case may be,
      shall be deemed to be the owner of all such Common Units from and after
      the Purchase Date and shall have all rights as the owner of such Common
      Units (including, without limitation, all rights as owner pursuant to
      Articles IV, V and XIV).

            (c) At any time from and after the Purchase Date, a holder of an
      Outstanding Common Unit subject to purchase as provided in this Section
      17.1 may surrender his Certificate, as the case may be, evidencing such
      Common Unit to the Transfer Agent in exchange for payment of the amount
      described in Section 17.1(a), therefor without interest thereon.


                                  ARTICLE XVIII
                               GENERAL PROVISIONS

            18.1  ADDRESSES AND NOTICES. Any notice, demand, request or
report required or permitted to be given or made to a Partner or Assignee
under this Agreement shall be in writing and shall be deemed given or made
when delivered in person or when sent by first-class United States mail or by
other means of written communication to the Partner or Assignee at the
address described below. Any notice, payment or report to be given or made to
a Partner or Assignee hereunder shall be deemed conclusively to have been
given or made, and the obligation to give such notice or report or to make
such payment shall be deemed conclusively to have been fully satisfied, upon
sending of such notice, payment or report to the Record Holder of such Unit
at his address as shown on the records of the Transfer Agent or as otherwise
shown on the records of the Partnership, regardless of any claim of any
Person who may have an interest in such Unit or the Partnership Interest of a
General Partner by reason of any assignment or otherwise. An affidavit or
certificate of making of any notice, payment or report in accordance with the
provisions of this Section 18.1 executed by the General Partner, the Transfer
Agent or the mailing organization shall be prima facie evidence of the giving
or making of such notice, payment or report. If any notice, payment or report
addressed to a Record Holder at the address



                                       83



of such Record Holder appearing on the books and records of the Transfer
Agent or the Partnership is returned by the United States Post Office marked
to indicate that the United States Postal Service is unable to deliver it,
such notice, payment or report and any subsequent notices, payments and
reports shall be deemed to have been duly given or made without further
mailing (until such time as such Record Holder or another Person notifies the
Transfer Agent or the Partnership of a change in his address) if they are
available for the Partner or Assignee at the principal office of the
Partnership for a period of one year from the date of the giving or making of
such notice, payment or report to the other Partners and Assignees. Any
notice to the Partnership shall be deemed given if received by the General
Partner at the principal office of the Partnership designated pursuant to
Section 1.3. The General Partner may rely and shall be protected in relying
on any notice or other document from a Partner, Assignee or other Person if
believed by it to be genuine.

            18.2  TITLES AND CAPTIONS. All article or section titles or
captions in this Agreement are for convenience only. They shall not be deemed
part of this Agreement and in no way define, limit, extend or describe the
scope or intent of any provisions hereof. Except as specifically provided
otherwise, references to "Articles" and "Sections" are to Articles and
Sections of this Agreement.

            18.3  PRONOUNS AND PLURALS. Whenever the context may require, 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.

            18.4  FURTHER ACTION. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as
may be necessary or appropriate to achieve the purposes of this Agreement.

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

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

            18.7  CREDITORS.  None of the provisions of this Agreement shall
be for the benefit of, or shall be enforceable by, any creditor of the
Partnership.

            18.8  WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement
or to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement
or condition.

            18.9  COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute an agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto or, in
the case



                                       84



of a Person acquiring a Unit, upon executing and delivering a Transfer
Application as herein described, independently of the signature of any other
party.

            18.10 APPLICABLE LAW.  This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
regard to the principles of conflicts of law.

            18.11 INVALIDITY OF PROVISIONS. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.

            18.12 AMENDMENTS TO REFLECT GP REORGANIZATION AGREEMENT. In
addition to the amendments to this Agreement contained in the GP
Reorganization Agreement and notwithstanding any other provision of this
Agreement to the contrary, this Agreement shall be deemed to be further
amended and modified to the extent necessary, but only to the extent
necessary, to carry out the purposes and intent of the GP Reorganization
Agreement.



                                       85



      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                    GENERAL PARTNER:

                                    ENBRIDGE ENERGY COMPANY, INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________

                                    LIMITED PARTNERS:

                                    All Limited Partners now and hereafter
                                    admitted as limited partners of the
                                    Partnership, pursuant to Powers of Attorney
                                    now and hereafter executed in favor of, and
                                    granted and delivered to, the General
                                    Partner.

                                    By:   Enbridge Energy Company,  Inc.,
                                          General Partner, as
                                          attorney-in-fact for all Limited
                                          Partners pursuant to the Powers
                                          of Attorney granted pursuant to
                                          Section 1.4.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________








                                       86

EX-5.1

                                                                     EXHIBIT 5.1


                       [VINSON & ELKINS L.L.P. LETTERHEAD]


July __, 2002



Enbridge Energy Management, L.L.C.
Enbridge Energy Partners, L.P.
1100 Louisiana, Suite 3300
Houston, Texas 77002

Ladies and Gentlemen:

We have acted as counsel to (i) Enbridge Energy Management, L.L.C., a Delaware
limited liability company (the "Company"), in connection with the proposed
offering by the Company of 10,000,000 shares (11,500,000 shares if the
over-allotment option granted to the underwriters is exercised in full) of the
Company representing limited liability company interests with limited voting
rights (the "Shares") and (ii) Enbridge Energy Partners, L.P., a Delaware
limited partnership (the "Partnership"), in connection with the proposed sale by
the Partnership of limited partnership interests denominated as i-units (the
"i-units") to the Company for a portion of the net proceeds of the offering of
the Shares. A Registration Statement (as amended by Amendment No. 1 thereto, the
"Registration Statement") has been filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), (i) by the Company on Form S-1 (Registration No. 333-89552)
relating to the Shares and (ii) by the Partnership on Form S-3 (Registration No.
333-89588) with respect to the i-units to be sold by the Partnership to the
Company.

As the basis for the opinions hereinafter expressed, we examined such statutes,
including the Delaware Revised Uniform Limited Partnership Act (the "Delaware
Limited Partnership Act") and the Delaware Limited Liability Company Act (the
"Delaware LLC Act"), corporate records and documents, certificates of corporate
and public officials and other instruments and documents as we deemed necessary
or advisable for the purposes of this opinion. In such examination, we assumed
the authenticity of all documents submitted to us as originals and the
conformity with the original documents of all documents submitted to us as
copies.

Based upon the foregoing, subject to the limitations, assumptions and
qualifications set forth herein, and having due regard for such legal
considerations as we deem relevant, we are of the opinion that:

      1.    The Company is a limited liability company, validly existing and in
            good standing under the Delaware LLC Act;



Enbridge Energy Management, L.L.C.
Enbridge Energy Partners, L.P.
Page 2
July __, 2002



      2.    The Partnership is a limited partnership, validly existing and in
            good standing under the Delaware Limited Partnership Act;

      3.    The issuance of the Shares to be issued by the Company in the
            offering has been duly authorized by the Company, and upon the
            issuance and delivery thereof in accordance with the terms of the
            Underwriting Agreement and the receipt by the Company of the
            purchase price therefor after the due execution and delivery of the
            Amended and Restated LLC Agreement of the Company and the Purchase
            Provisions, such Shares will be legally issued, fully paid and
            nonassessable; and

      4.    The issuance of the i-units to be issued by the Partnership to the
            Company in connection with the offering of the Shares has been duly
            authorized by the Partnership, and upon the issuance and delivery
            thereof as set forth in the Registration Statement and the receipt
            by the Partnership of the purchase price therefor after the due
            execution and delivery of the Third Amended and Restated Partnership
            Agreement of the Partnership, such i-units will be legally issued,
            fully paid and nonassessable.

The foregoing opinion is based on and limited to the Delaware LLC Act, the
Delaware Limited Partnership Act and the relevant laws of the United States of
America, and we render no opinion with respect to the laws of any other
jurisdiction.

We hereby consent to the reference to us under the heading "Legal Matters" in
the Prospectus forming part of the Registration Statement and to the filing of
this opinion with the Commission as Exhibit 5.1 to the Registration Statement,
but we do not thereby admit that we are within the class of persons whose
consent is required under the provisions of the Securities Act or the rules and
regulations of the Commission thereunder.



                                Very truly yours,



                                Vinson & Elkins L.L.P.

EX-8.1

                                                                     Exhibit 8.1


                       [VINSON & ELKINS L.L.P. LETTERHEAD]



July 2, 2002



Enbridge Energy Management, L.L.C.
1100 Louisiana, Suite 3300
Houston, Texas 77002

      Re:   Enbridge Energy Management, L.L.C. - Registration Statement on
            Form S-1

Ladies and Gentlemen:

      We have acted as counsel to Enbridge Energy Management, L.L.C. (the
"Company") and Enbridge Energy Partners, L.P. (the "Partnership") in connection
with the offer and sale of up to 11,500,000 shares representing limited
liability company interests in the Company pursuant to a Registration Statement
on Form S-1 (Registration No. 333-89552) (the "Registration Statement"). In
connection therewith, we prepared the discussion set forth under the caption
"Material Tax Consequences" in the Registration Statement (the "Discussion").
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Registration Statement.

      All statements of legal conclusions contained in the Discussion, unless
otherwise noted, are our opinion with respect to the matters set forth therein
as of the effective date of the Registration Statement. In addition, we are of
the opinion that the federal income tax discussion in the Registration Statement
with respect to those matters as to which no legal conclusions are provided is
an accurate discussion of such federal income tax matters (except for the
representations and statements of fact of the Company and the Partnership,
included in such Discussion, as to which we express no opinion).

      We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Registration Statement.
This consent does not constitute an admission that we are "experts" within the
meaning of such term as used in the Securities Act of 1933, as amended.



                                Very truly yours,

                               /s/ VINSON & ELKINS L.L.P.

EX-10.1

                                                                    Exhibit 10.1





                             CONTRIBUTION AGREEMENT


                            DATED AS OF MAY 16, 2002

                                 BY AND BETWEEN

                          ENBRIDGE ENERGY COMPANY, INC.


                                       AND

                         ENBRIDGE ENERGY PARTNERS, L.P.





                                TABLE OF CONTENTS


                                                                                                           
ARTICLE 1 CERTAIN DEFINITIONS.....................................................................................1

   1.1      CERTAIN DEFINED TERMS.................................................................................1
   1.2      REFERENCES, GENDER, NUMBER............................................................................2

ARTICLE 2 CONTRIBUTION............................................................................................2

   2.1      CONTRIBUTION..........................................................................................2

ARTICLE 3 CONSIDERATION FOR CONTRIBUTION..........................................................................2

   3.1      CONSIDERATION.........................................................................................2
   3.2      ASSUMPTION OF EECI MIDCOAST DEBT......................................................................2
   3.3      POST-CLOSING ADJUSTMENT...............................................................................2
   3.4      GOODWILL CLOSING ADJUSTMENT...........................................................................5

ARTICLE 4 REPRESENTATIONS AND WARRANTIES..........................................................................5

   4.1      REPRESENTATIONS AND WARRANTIES OF EECI................................................................5
   4.2      REPRESENTATIONS AND WARRANTIES OF MLP................................................................22

ARTICLE 5 ACCESS TO INFORMATION..................................................................................24

   5.1      GENERAL ACCESS.......................................................................................24
   5.2      CONFIDENTIAL INFORMATION.............................................................................24

ARTICLE 6 CONVERSION OF THE COMPANY AND RESTRUCTURING ACTIONS....................................................25

   6.1      CONVERSION AND RESTRUCTURING ACTIONS.................................................................25
   6.2      DOCUMENTS............................................................................................25

ARTICLE 7 ASBESTOS AND NORM......................................................................................26


ARTICLE 8 COMPANY JOINDER........................................................................................26

   8.1      JOINDER BY COMPANY...................................................................................26
   8.2      MLP APPROVAL.........................................................................................26

ARTICLE 9 COVENANTS OF EECI AND MLP..............................................................................27

   9.1      CONDUCT OF BUSINESS PENDING CLOSING..................................................................27
   9.2      QUALIFICATIONS ON CONDUCT............................................................................29
   9.3      PUBLIC ANNOUNCEMENTS.................................................................................29
   9.4      ACTIONS AND EFFORTS BY PARTIES.......................................................................30
   9.5      PENDING REGULATORY RATE CASES........................................................................30
   9.6      CASUALTY LOSS........................................................................................30
   9.7      FURTHER ASSURANCES...................................................................................31
   9.8      RECORDS..............................................................................................31
   9.9      MAINTENANCE OF MIDCOAST INDEMNIFICATION PROVISIONS...................................................32
   9.10     COMPANY NAME; LOGOS, ETC.............................................................................32
   9.11     SERVICE AGREEMENTS...................................................................................32
   9.12     HSR FILINGS..........................................................................................32
   9.13     NOTICE OF BASIS FOR INDEMNIFICATION CLAIMS...........................................................32


                                        i


   9.14     ROLE OF SPECIAL COMMITTEE............................................................................32
   9.15     KPC COST OF SERVICE..................................................................................33
   9.16     SUBSTITUTE GUARANTIES................................................................................33
   9.17     RIGHTS TO BAMAGAS FIRM CAPACITY PAYMENTS.............................................................33
   9.18     CERTIFIED COPIES OF CERTAIN DOCUMENTS................................................................34
   9.19     MIDCOAST RELATED DEBT................................................................................34
   9.20     INTENTIONALLY DELETED................................................................................34
   9.21     UNCOLLECTED ACCOUNTS RECEIVABLE......................................................................34
   9.22     MIDCOAST RELATED DEBT................................................................................34

ARTICLE 10 TAX MATTERS...........................................................................................34

   10.1     ASSET CONTRIBUTION CHARACTERIZATION FOR FEDERAL INCOME TAX PURPOSES..................................34
   10.2     LIABILITY FOR TAXES..................................................................................34
   10.3     TAX PROCEEDINGS......................................................................................36
   10.4     TAX RETURNS..........................................................................................36
   10.5     TAX ALLOCATION ARRANGEMENTS..........................................................................37
   10.6     COOPERATION AND EXCHANGE OF INFORMATION..............................................................37
   10.7     REMEDIAL ALLOCATION METHOD...........................................................................38
   10.8     SURVIVAL OF OBLIGATIONS..............................................................................38
   10.9     CONFLICT.............................................................................................38
   10.10       GOODWILL..........................................................................................38

ARTICLE 11 CLOSING CONDITIONS....................................................................................38

   11.1     EECI'S CLOSING CONDITIONS............................................................................38
   11.2     MLP'S CLOSING CONDITIONS.............................................................................39

ARTICLE 12 CLOSING...............................................................................................40

   12.1     CLOSING..............................................................................................40
   12.2     EECI'S CLOSING OBLIGATIONS...........................................................................40
   12.3     MLP'S CLOSING OBLIGATIONS............................................................................41
   12.4     PAYMENT OF CASH PAYMENT..............................................................................41

ARTICLE 13 EFFECT OF CLOSING.....................................................................................41

   13.1     SURVIVAL.............................................................................................41

ARTICLE 14 LIMITATIONS...........................................................................................42

   14.1     DISCLAIMER OF WARRANTIES AND REPRESENTATIONS.........................................................42
   14.2     DAMAGES..............................................................................................43
   14.3     ENVIRONMENTAL RELEASE................................................................................44

ARTICLE 15 INDEMNIFICATION.......................................................................................44

   15.1     INDEMNIFICATION BY MLP...............................................................................44
   15.2     INDEMNIFICATION BY EECI..............................................................................45
   15.3     INDEMNIFICATION AND DEFENSE PROCEDURES...............................................................45
   15.4     LIABILITY LIMITATIONS................................................................................48
   15.5     COVENANT REGARDING ACTIONS OF EECI REGARDING ITS ASSETS..............................................49
   15.6     EXCLUSIVE REMEDY.....................................................................................49


                                       ii


ARTICLE 16 TERMINATION; REMEDIES.................................................................................49

   16.1     TERMINATION..........................................................................................49
   16.2     EXCLUSIVE REMEDY.....................................................................................50

ARTICLE 17 MISCELLANEOUS.........................................................................................50

   17.1     COUNTERPARTS.........................................................................................50
   17.2     GOVERNING LAW........................................................................................50
   17.3     ENTIRE AGREEMENT.....................................................................................51
   17.4     EXPENSES.............................................................................................51
   17.5     NOTICES..............................................................................................51
   17.6     SUCCESSORS AND ASSIGNS...............................................................................52
   17.7     AMENDMENTS AND WAIVERS...............................................................................53
   17.8     APPENDICES, SCHEDULES AND EXHIBITS...................................................................53
   17.9     INTERPRETATION.......................................................................................53
   17.10       ARBITRATION.......................................................................................53
   17.11       AGREEMENT FOR THE PARTIES' BENEFIT ONLY...........................................................55
   17.12       ATTORNEYS' FEES...................................................................................55
   17.13       SEVERABILITY......................................................................................56
   17.14       TIME OF ESSENCE...................................................................................56




                                       iii



                                   APPENDICES

                     
Appendix A            -    Definitions

                           EXHIBITS

Exhibit 3.3           -    Pro Forma Closing Date Balance Sheet
Exhibit 9.10          -    License Agreement
Exhibit 12.2(a)(i)    -    Assignment of Membership Interests
Exhibit 12.2(a)(ii)   -    Assignment of Partnership Interest
Exhibit 12.2(a)(vi)   -    Assumption Agreement
Exhibit 12.2(c)       -    Affidavit of Non-Foreign Status
SCHEDULES
Schedule 1.1A         -    List of Pipeline Systems
Schedule 3.3(f)       -    KGS Contracts
Schedule 4.1(g)(1)(A) -    Financial Statements
Schedule 4.1(g)(1)(B) -    Pro Forma March 2002 Balance Sheet
Schedule 4.1(g)(2)    -    Liabilities
Schedule 4.1(g)(3)    -    Accounts Receivable Disclosure
Schedule 4.1(h)       -    Conflict
Schedule 4.1(i)       -    EECI's Consents
Schedule 4.1(j)       -    Company's Actions
Schedule 4.1(k)       -    Compliance with Laws
Schedule 4.1(n)       -    Material Contracts
Schedule 4.1(o)       -    Events Subsequent to Report Time
Schedule 4.1(p)       -    Environmental
Schedule 4.1(q)       -    Tax Returns
Schedule 4.1(r)A      -    Company Subsidiaries (Pre-Restructuring Actions)
Schedule 4.1(r)B      -    Company Subsidiaries (Post-Restructuring Actions)
Schedule 4.1(r)C      -    Other Equity Interests and Jointly Owned Persons
Schedule 4.1(s)       -    Non-Compliance with Material Contracts
Schedule 4.1(t)       -    Insurance Policies
Schedule 4.1(v)       -    Personal Property
Schedule 4.1(w)       -    Other Real Property
Schedule 4.1(x)       -    Licenses, Permits
Schedule 4.1(y)       -    Company Benefit Plans
Schedule 4.1(z)       -    Collective Bargaining Agreements
Schedule 4.1(aa)      -    Intellectual Property
Schedule 4.2(e)       -    MLP's Consents
Schedule 6.1A         -    Current Organizational Structure of Company
Schedule 6.1B         -    Company and Company Subsidiaries Structure Following
                              Restructuring Actions
Schedule 9.1          -    Conduct of Business
Schedule 9.11         -    Service Agreements
Schedule 9.16         -    Guaranties
Schedule 10.1         -    Tax Allocations




                                       iv


                             CONTRIBUTION AGREEMENT

       THIS CONTRIBUTION AGREEMENT (this "AGREEMENT"), dated as of May 16, 2002,
is entered into by and between Enbridge Energy Company, Inc., a Delaware
corporation ("EECI"), and Enbridge Energy Partners, L.P., a Delaware limited
partnership ("MLP"). Enbridge Midcoast Energy, Inc., a Texas corporation (such
entity, before and after the Conversion Step described in the Recitals below, is
referred to herein as the "COMPANY"), joins in this Agreement for the purposes
set forth in Section 8.1. Capitalized terms used below are defined as set forth
in Section 1.1.

                                 R E C I T A L S

       1. Among other things, the Company owns, directly or indirectly through
the Company Subsidiaries, certain interstate and intrastate pipelines, gathering
systems, gas processing plants and treatment facilities, crude oil pipeline
systems, trucks and railcars for transportation of liquid products and other
assets relating to the treatment, processing, transmission and transportation of
natural gas, crude oil and liquid products in various states, including Texas,
Louisiana, Mississippi, Kansas, Tennessee, Alabama, Oklahoma, New York, Arkansas
and Missouri.

       2.     The Company is a wholly owned subsidiary of EECI.

       3. After the date of this Agreement but prior to the Closing, EECI will
form a single member limited liability company ("HOLDINGS LLC"), and will
contribute 0.001% of the Company Shares to Holdings LLC (the "CONTRIBUTION
STEP").

       4. Immediately following the Contribution Step and prior to the Closing,
the Company will be converted into a Texas limited partnership and its partners
will be (i) EECI, as the owner of a 99.999% limited partner interest, and (ii)
Holdings LLC, as the owner of a 0.001% general partner interest (the "CONVERSION
STEP").

       5. EECI desires to contribute, assign, transfer and convey to MLP, and
MLP desires to accept from EECI, as a capital contribution, after the Conversion
Step, (i) all the membership interests in and to Holdings LLC and (ii) all the
limited partner interests in and to the Company, upon and subject to the terms
of this Agreement.

       NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the parties hereto agree as follows:

                                    ARTICLE 1
                               CERTAIN DEFINITIONS

       1.1 CERTAIN DEFINED TERMS. Unless the context otherwise requires, the
respective terms defined in Appendix A attached hereto and incorporated herein
by this reference shall, when used herein, have the respective meanings therein
specified, with each such definition to be equally applicable both to the
singular and the plural forms of the term so defined.





       1.2 REFERENCES, GENDER, NUMBER. All references in this Agreement to an
"Article," "Section," "subsection," "Exhibit" or "Schedule" shall be to an
Article, Section, subsection, Exhibit or Schedule of this Agreement, unless the
context requires otherwise. Unless the context otherwise requires, the words
"this Agreement," "hereof," "hereunder," "herein," "hereby," or words of similar
import shall refer to this Agreement as a whole and not to a particular Article,
Section, subsection, clause or other subdivision hereof. Whenever the context
requires, the words used herein shall include the masculine, feminine and neuter
gender.

                                    ARTICLE 2
                                  CONTRIBUTION

       2.1 CONTRIBUTION. On and subject to the terms and conditions of this
Agreement, EECI agrees to contribute, assign, transfer and convey to MLP, and
MLP agrees to accept from EECI, as a capital contribution, (i) the Membership
Interests and (ii) EECI's Partnership Interest, in each case following the
Conversion Step (collectively, the "OWNERSHIP INTERESTS").

                                    ARTICLE 3
                         CONSIDERATION FOR CONTRIBUTION

       3.1 CONSIDERATION. The parties acknowledge that the consideration to be
received by EECI for the transactions contemplated hereby is $929,100,000 (the
"TOTAL CONSIDERATION"), which amount consists of the Midcoast Related Debt, the
Cash Payment and the GP Contribution Credit. In consideration of the
contribution described in Section 2.1, upon Closing, (a) EECI shall (i) receive
the Cash Payment (which Cash Payment shall be funded by a lender in connection
with new debt incurred directly or indirectly by MLP and for which debt such
lender shall have recourse to EECI as the general partner of MLP) and (ii) be
deemed to have satisfied EECI's obligations (A) to pay for its acquisition of an
additional 1% general partner interest in MLP pursuant to the Reorganization
Agreement to the extent the value of such interest exceeds the value of EECI's
1.0101% general partner interest in OLP that is part of the consideration being
exchanged for such additional 1% general partner interest and (B) to make an
additional capital contribution pursuant to the MLP Partnership Agreement (after
giving effect to amendments thereto as a result of the Reorganization
Agreement), assuming an issuance by MLP of up to $469,500,000 of additional
units, (the sum of such deemed payment and capital contribution is herein
referred to as the "GP CONTRIBUTION CREDIT") and (b) MLP shall assume, directly
(in accordance with Section 3.2) and indirectly (as a result of the contribution
of the Ownership Interests pursuant to Section 2.1), the Midcoast Related Debt.
On or before the fifth (5th) day prior to the Closing, EECI shall provide
written notice to MLP setting forth the amount of the outstanding Midcoast
Related Debt as of the Closing.

       3.2    ASSUMPTION OF EECI MIDCOAST DEBT. Upon Closing, MLP shall assume
the EECI Midcoast Debt pursuant to the Assumption Agreement.

       3.3    POST-CLOSING ADJUSTMENT.

              (a)    PREPARATION OF THE CLOSING DATE BALANCE SHEET. As soon as
practicable after the Closing, and in any event within sixty (60) days following
the Closing Date, PricewaterhouseCoopers LLP ("PWC") shall prepare the Closing
Date Balance Sheet setting


                                        2


forth the combined Capitalization of the Company Group calculated immediately
prior to the Effective Time (the "CLOSING DATE CAPITALIZATION"). Such Closing
Date Balance Sheet shall be prepared, except as this Agreement provides
otherwise, in accordance with GAAP (as in effect as of the date of this
Agreement) applied on a basis consistent with that used in, and presented on the
same basis as, the Pro Forma Closing Date Balance Sheet attached hereto as
Exhibit 3.3, except that the working capital for the Closing Date Balance Sheet
shall be determined in accordance with GAAP (as may be adjusted in connection
with Section 3.3(f)).

              (b) REVIEW OF CLOSING DATE BALANCE SHEET. PWC shall submit the
Closing Date Balance Sheet, when prepared, to MLP and EECI. Each of MLP and EECI
shall have the right, with its representatives and accountants other than PWC,
to review the work papers of PWC used in preparing the Closing Date Balance
Sheet and shall have reasonable access to the personnel of PWC for purposes of
verifying the accuracy and fairness of presentation and compliance with this
Agreement of the Closing Date Balance Sheet.

              (c) OBJECTIONS TO CLOSING DATE BALANCE SHEET. If MLP or EECI
disagrees with the calculation of the Closing Date Capitalization shown on the
Closing Date Balance Sheet, it shall, within 30 days after its receipt of the
Closing Date Balance Sheet, deliver a written notice to the other party (a
"DISAGREEMENT NOTICE"), setting forth its calculation of the Closing Date
Capitalization and specifying, in reasonable detail, those items or amounts in
the Closing Date Balance Sheet and/or the Closing Date Capitalization as to
which MLP or EECI, as applicable, disagrees and the reasons for such
disagreement. Each of MLP and EECI shall be deemed to have agreed with all items
and amounts contained in the Closing Date Balance Sheet and the Closing Date
Capitalization other than those specified in a timely Disagreement Notice. If
neither MLP nor EECI delivers a Disagreement Notice to the other party within
such 30-day period, MLP and EECI, as applicable, shall be deemed to have
accepted the Closing Date Balance Sheet and the Closing Date Capitalization,
whereupon the Closing Date Balance Sheet and the Closing Date Capitalization
shall become final and binding as to such non-objecting party.

              (d) RESOLUTION OF CLOSING DATE BALANCE SHEET DISPUTES. If a
Disagreement Notice is timely delivered pursuant to this Section 3.3, the
parties shall use their good faith efforts to reach agreement on the disputed
items or amounts in order to determine the adjustment to the Cash Payment. If
the parties do not resolve all disputed items or amounts within thirty (30) days
after delivery of the Disagreement Notice, then the disputed items and amounts
will be submitted for determination to a nationally recognized independent
accounting firm mutually selected by MLP and EECI or, if MLP and EECI cannot
agree, as recommended by PWC. EECI and MLP may submit to such accounting firm
any facts which they deem relevant to the determination. The written report of
such accounting firm shall be delivered to EECI and MLP within thirty (30) days
after such disputed items and amounts are submitted to such accounting firm for
determination. The determination of such accounting firm shall be final and
binding upon EECI and MLP for all purposes and shall not be subject to challenge
before any court of law or arbitration tribunal. EECI and MLP agree that
judgment may be entered upon the determination of such accounting firm in any
court having jurisdiction over the party against which such determination is to
be enforced. The fees and expenses of PWC and any other accounting firm (other
than an accounting firm retained by either MLP or EECI to review the Closing
Date Balance Sheet) shall be borne equally by EECI and MLP, with 50% of the
total of


                                        3


such fees and expenses included as current liabilities on the Closing Date
Balance Sheet. Any fees and expenses of EECI's and MLP's own independent public
accountants incurred in connection with their review of the Closing Date Balance
Sheet shall be borne by the party retaining such independent public accountants.

              (e) TOTAL CONSIDERATION ADJUSTMENT. If the Closing Date
Capitalization, as finally determined pursuant to this Section 3.3, is less than
the Target Capitalization, then EECI will pay to MLP, within two (2) Business
Days, by wire transfer of immediately available funds, the amount of such
shortfall plus interest from the Closing Date on such shortfall at the Agreed
Rate. If the Closing Date Capitalization, as finally determined pursuant to this
Section 3.3, is greater than the Target Capitalization, then MLP will pay to
EECI, within two (2) Business Days, by wire transfer of immediately available
funds, the amount of such excess plus interest from the Closing Date on such
excess at the Agreed Rate. Any payment under this Section 3.3 shall be deemed an
adjustment of the Total Consideration. If MLP is required to make payment to
EECI pursuant to this Section 3.3(e), then such payment shall be funded by a
lender in connection with new debt incurred directly or indirectly by MLP and
such lender shall have recourse to EECI as the general partner of MLP for such
debt.

              (f) For the purposes of this Section 3.3, "CAPITALIZATION" shall
be defined as sum of (x) the combined total assets minus the combined total
liabilities of the Company Group, in each case without duplication of amounts
plus (y) the Midcoast Related Debt less the EECI Midcoast Debt, adjusted as
follows:

                     (1)    elimination of the amount of the accounts receivable
(less any reserves) (A) attributable to the Bamagas Firm Capacity Payment, to
the extent such accounts receivable relate to time periods prior to the Closing,
and (B) arising in connection with the Contracts described in Schedule 3.3(f),
to the extent such accounts receivable relate to the time period prior to
Closing; it being agreed that no other accounts receivable shall be eliminated
(whether or not past due);

                     (2)    elimination of the Excluded Assets;

                     (3)    elimination of the Liabilities of the Excluded
                            Subsidiaries;

                     (4)    without giving effect to any casualty losses
occurring from and after the date of this Agreement until Closing or any
insurance proceeds received therefor;

                     (5)    without giving effect to changes in GAAP between the
date of this Agreement and the Closing Date; and

                     (6)    the amount of other comprehensive income and related
offsetting assets and liabilities shall be the same as in the Pro Forma Closing
Date Balance Sheet; and

                     (7)    the amount of the deferred income taxes and related
offsetting adjustment to retained earnings shall be the same as in the Pro Forma
Closing Date Balance Sheet.


                                        4


       3.4 GOODWILL CLOSING ADJUSTMENT. Prior to the Closing, EECI shall cause
an independent third party to allocate, as of the Closing Date, the Total
Consideration among the Assets using the residual method as specified under
Section 1060 of the Code (the "APPRAISAL"). If the value of the Midcoast
Goodwill is determined by the Appraisal to be greater than $217,500,000, then on
or before the 30th day following the Closing, EECI shall pay to MLP an amount
equal to the product of (x) 0.182 multiplied by (y) the difference between (A)
$207,500,000 and (B) the actual value of the Midcoast Goodwill determined by the
Appraisal. If the value of the Midcoast Goodwill is determined by the Appraisal
to be less than $197,500,000, then, on or before the 30th day following the
Closing, MLP shall pay EECI an amount equal to the product of (x) 0.182
multiplied by (y) the difference between (A) the actual value of the Midcoast
Goodwill determined by the Appraisal and (B) $207,500,000. Any payment under
this Section 3.4 shall be deemed an adjustment to the Total Consideration.

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

       4.1    REPRESENTATIONS AND WARRANTIES OF EECI. Except as set forth in the
Schedules prepared by EECI and attached hereto, EECI represents and warrants to
MLP as follows:

              (a)    ORGANIZATION AND QUALIFICATION OF EECI. EECI is a
corporation duly incorporated and organized, validly existing and in good
standing under the laws of the State of Delaware.

              (b) ORGANIZATION AND QUALIFICATION OF THE COMPANY AND COMPANY
SUBSIDIARIES. On the date of this Agreement, the Company is a corporation duly
incorporated and organized, validly existing and in good standing under the laws
of the State of Texas and has the requisite corporate power and authority under
its Organic Documents and the laws of the state of its incorporation to carry on
its business as it is now being conducted. Each of the Company Subsidiaries is
an Entity duly incorporated or formed, as the case may be, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
formation and has the requisite corporate, limited liability company or
partnership power and authority, as the case may be, under its Organic Documents
and the laws of the state of its incorporation or formation to carry on its
business as it is now being conducted. The Company and each of the Company
Subsidiaries is duly qualified to do business and is in good standing in each
jurisdiction in which the Assets owned or leased by it make such qualification
necessary, except where the failures to so qualify or to be in good standing, in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect. As of the Closing, the Company will be a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Texas and will have the requisite partnership power and authority under its
Organic Documents and the laws of the state of its formation to carry on its
business as it is then being conducted. As of the Closing, Holdings LLC will be
a limited liability company duly formed, validly existing and in good standing
under the laws of the State of Delaware and will have the requisite limited
liability company power and authority to carry on its business as it is then
being conducted. EECI has made available to MLP true and complete copies of the
Organic Documents of each of the Company and each of the Company Subsidiaries
existing as of the date of this Agreement.


                                        5


              (c) AUTHORITY. EECI has all requisite corporate power and
authority to execute and deliver this Agreement and the Transaction Documents
required to be executed by it and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Transaction Documents required to be executed by EECI and the transactions
contemplated hereby or thereby have been duly and validly authorized by all
requisite corporate action on the part of EECI. The Company has all requisite
corporate (and at Closing will have all requisite partnership) power and
authority to execute and deliver this Agreement and the Transaction Documents
required to be executed by it and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Transaction Documents required to be executed by the Company and the
transactions contemplated hereby and thereby have been duly and validly
authorized by all requisite corporate action (and will be duly and validly
authorized by all requisite partnership action) on the part of the Company.

              (d) ENFORCEABILITY. This Agreement has been, and as of the
Closing, the Transaction Documents to which EECI or the Company is a party will
be, duly executed and delivered by EECI and the Company, as applicable, and,
assuming due and valid authorization, execution and delivery hereof and thereof
by the other parties thereto, this Agreement constitutes, and as of the Closing,
the Transaction Documents will constitute, legal, valid and binding agreements
of EECI and the Company, as applicable, enforceable against EECI and the
Company, as applicable, in accordance with their respective terms, subject to
(i) applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general application with respect to creditors, (ii) general
principles of equity and (iii) the power of a court to deny enforcement of
remedies generally based upon public policy.

              (e) OWNERSHIP INTERESTS. (1) Immediately prior to the Closing,
EECI will hold of record and own beneficially the Ownership Interests, in each
case free and clear of any security interests, liens, options, warrants,
purchase rights, adverse claims or other encumbrances (except as created by this
Agreement in favor of MLP and restrictions on sales to the public of securities
under applicable securities laws). As of the Closing, Holdings LLC will hold of
record and own beneficially the Holdings' Partnership Interest, free and clear
of any security interests, liens, options, warrants, purchase rights, adverse
claims or other encumbrances (except as created by this Agreement in favor of
MLP and restrictions on sales to the public of securities under applicable
securities laws). Upon the purchase of the Ownership Interests by MLP as
contemplated by this Agreement, MLP will obtain good and valid title to all
Ownership Interests free and clear of all security interests, liens, options,
warrants, purchase rights, adverse claims or other encumbrances (other than
those created by MLP and restrictions on sales to the public of securities under
applicable securities laws).

              (2) Upon the Closing, MLP will be the sole limited partner of the
Company with a 99.999% limited partner interest in the Company represented by
EECI's Partnership Interest; such limited partner interest will be duly
authorized and validly issued in accordance with the partnership agreement of
the Company and the Texas Revised Uniform Limited Partnership Act and shall be
fully paid (to the extent required under the Partnership Agreement of the
Company) and nonassessable (except as such nonassessability may be affected by
Section 6.07 of the Texas Revised Uniform Limited Partnership Act).


                                        6


              (3) Upon the Closing, Holdings will be the sole general partner of
the Company with a 0.001% general partner interest in the Company represented by
the Holdings' Partnership Interest; such general partner interest will be duly
authorized and validly issued in accordance with the partnership agreement of
the Company and the Texas Revised Uniform Limited Partnership Act.

              (4) Upon the Closing, MLP will own 100% of the Membership
Interests; such membership interests have been duly authorized and validly
issued in accordance with the limited liability company agreement of Holdings
and the Delaware Limited Liability Company Act and are fully paid (to the extent
required under the limited liability company agreement of the Company) and
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware Limited Liability Company Act).

              (5) There is not outstanding (i) any convertible or exchangeable
security, call, preemptive right, option, warrant, purchase right, or other
contract or commitment (other than this Agreement) that could require EECI or
any of its Affiliates to sell, issue, transfer or otherwise dispose of any
equity interest in or other security of the Company or Holdings LLC or (ii) any
voting trust, proxy or other agreement or understanding with respect to the
voting of any equity interest in or other security of the Company or Holdings
LLC.

              (f) COMPANY CAPITALIZATION. The entire authorized capital stock of
the Company as of the date of this Agreement consists of 1,000 shares of common
stock, par value $1.00 per share (the "COMPANY SHARES"), all of which shares are
issued and outstanding as of the date of this Agreement and are owned
beneficially and of record by EECI, free and clear of any security interests,
liens, options, warrants, purchase rights, adverse claims or other encumbrances
(except as created by this Agreement and restrictions on sales to the public of
securities under applicable securities laws). All of the Company Shares have
been duly authorized and validly issued and are fully paid and nonassessable.

              (g)    COMPANY FINANCIAL MATTERS.

                     (1)    COMPANY FINANCIAL STATEMENTS. SCHEDULE 4.1(g)(1)(A)
contains true and complete copies of (i) the Unaudited Interim Financials, and
(ii) the Audited Financials (collectively, the "FINANCIAL STATEMENTS"). The
Financial Statements present fairly, in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby (except for the absence
of footnotes with respect to the Unaudited Interim Financials), the consolidated
financial condition of the Company, the Company Subsidiaries and the Excluded
Subsidiaries as of the dates of the balance sheets included in the Financial
Statements and the consolidated results of operations of the Company, the
Company Subsidiaries and the Excluded Subsidiaries for such periods. SCHEDULE
4.1(g)(1)(B) sets forth a pro forma unaudited consolidated balance sheet of the
Company and the Company Subsidiaries as of March 31, 2002 (the "PRO FORMA MARCH
2002 BALANCE SHEET"). The Pro Forma March 2002 Balance Sheet was prepared in
accordance with GAAP applied on a consistent basis for the period covered
thereby (except for the absence of footnotes).

                     (2)    ABSENCE OF UNDISCLOSED LIABILITIES. Except as set
forth in SCHEDULE 4.1(g)(2) and the environmental matters set forth in SCHEDULE
4.1(p), to EECI's


                                        7


knowledge, there are no Liabilities relating to or arising out of the operation
or conduct of the Company Group's businesses prior to the Closing Date that are
of a nature required under GAAP to be disclosed, reflected or reserved against
in the Financial Statements or in the notes thereto other than (i) Liabilities
disclosed, reflected or reserved against in the Financial Statements, (ii)
Liabilities incurred since the Report Time in the ordinary course of business
consistent with past practice of the Company Group's businesses, and (iii)
Liabilities that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

                     (3)    ACCOUNTS RECEIVABLE. All accounts receivable of the
Company and the Company Subsidiaries, whether reflected on the Recent Date
Balance Sheet or subsequently created, have arisen from bona fide sale or
service transactions in the ordinary course of business. Except as disclosed in
SCHEDULE 4.1(g)(3), to the knowledge of EECI, all such accounts receivable are
collectible at the aggregate recorded amounts thereof, net of any applicable
reserves for doubtful accounts reflected on the Recent Date Balance Sheet or, in
the case of subsequently created accounts, in the books and records of any
member of the Company Group. Except as disclosed on SCHEDULE 4.1(g)(3), to the
knowledge of EECI, each member of the Company Group has title to its accounts
receivable, free and clear of any security interest, lien, option, warrant,
purchase right or other encumbrance (except as created by this Agreement).
Except as set forth in SCHEDULE 4.1(g)(3), since the Report Time to the date of
this Agreement, there have not been any write-offs as uncollectible of any
accounts receivable of any member of the Company Group.

              (h) NO CONFLICT OR VIOLATION. Except as disclosed on SCHEDULE
4.1(h) and assuming (i) receipt of all consents, approvals, authorizations,
waivers, permits, certificates and orders disclosed in SCHEDULE 4.1(i), (ii)
compliance with the HSR Act and (iii) that all filings and permits contemplated
by or required to be obtained on account of the actions to be taken in
accordance with the terms of Article 6 are made, neither the execution and
delivery of this Agreement nor the consummation of the transactions (including
the Restructuring Actions) and performance of the terms and conditions
contemplated hereby by EECI nor the execution, delivery and performance by EECI,
the Company or any member of the Company Group of the Transaction Documents nor
the performance of the Restructuring Actions by EECI, the Company or any member
of the Company Group will (1) conflict with or result in a violation or breach
of any provision of the Organic Documents of EECI or any member of the Company
Group, (2) with or without due notice or lapse of time or both, conflict with or
result in a violation or breach of or a default (or give rise to any right of
termination, cancellation or acceleration) under any agreement, indenture or
other instrument under which EECI or any member of the Company Group is bound,
(3) violate or conflict with any Law applicable to EECI or any member of the
Company Group or the Assets, (4) to the knowledge of EECI, result in any third
party having the right to exercise a Preference Right on a change of control
under any Material Contract, or (5) result in the creation of any lien, security
interest or other encumbrance upon any Asset or any of the Ownership Interests,
in each case other than such conflicts, violations, breaches, defaults,
terminations, cancellations, accelerations or other matters that, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

              (i)    CONSENTS. Except for (i) the Post-Closing Consents, (ii)
permits, filings or notices, the failure of which to obtain or with which to
comply, individually or in the aggregate,


                                        8


could not reasonably be expected to have a Material Adverse Effect, (iii) the
filings and permits contemplated by or required to be obtained on account of the
actions to be taken in accordance with the terms of Article 6 (including the
Restructuring Actions), (iv) the requirements of the HSR Act and (v) the
consents, permits, filings or notices set forth in SCHEDULE 4.1(i), no consent
or permit of, or filing with or notification to, any Person is required (1) for
or in connection with the execution and delivery of this Agreement or the other
Transaction Documents by EECI or any member of the Company Group, (2) for or in
connection with the consummation of the transactions and performance of the
terms and conditions contemplated hereby or by the other Transaction Documents
by EECI, the Company or any member of the Company Group (including the
Contribution Step, the Conversion Step and the Restructuring Actions) or (3) to
effect the legality, validity, binding effect or enforceability of such
transactions.

              (j) ACTIONS. Except as set forth on SCHEDULE 4.1(j) and with
respect to Actions relating to Environmental Liabilities for which EECI's sole
representation and warranty is set forth in Section 4.1(p), there is no Action
pending to which EECI or any member of the Company Group is a party or of which
EECI, any member of the Company Group or any of their respective Assets is a
subject or, to the knowledge of EECI, threatened against EECI, any member of the
Company Group or any of their respective Assets (i) seeking to prevent or delay
the Closing or (ii) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

              (k)    COMPLIANCE WITH LAWS.

                     (1)    Except as set forth on SCHEDULE 4.1(k), to the
knowledge of EECI, each member of the Company Group has complied with all Laws,
other than such non-compliance as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

                     (2)    Except as set forth on SCHEDULE 4.1(k) and except
for any matters that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, no member of the Company Group has
received any written communication from any Governmental Authority or any third
party that alleges that the business of any such member may not be in compliance
in any respect with, or may be subject to Liability under, any Law. To EECI's
knowledge, there are no investigations or reviews pending or threatened by any
Governmental Authority relating to any alleged violations of Law arising out of
the operation of the business of any of the members of the Company Group, which
violations, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. Except as set forth on SCHEDULE 4.1(k), there is
no outstanding writ, judgment, stipulation, injunction, decree, determination,
award or other order of any Governmental Authority specifically against any
member of the Company Group or EECI that relates to the business or Assets of
any member of the Company Group that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

                     (3)    Notwithstanding the foregoing, EECI makes no
representation or warranty, express or implied, under this Section 4.1(k)
relating to (i) any Environmental Law or any Tax Law or (ii) any of the Company
or the Company Subsidiaries' title to any Assets or the existence or
non-existence of any title defect.


                                        9


              (l) BROKERAGE FEES AND COMMISSIONS. Except for fees and
commissions payable to A.G. Edwards & Sons Inc., neither EECI nor any Affiliate
of EECI has, directly or indirectly, incurred any obligation or entered into any
agreement for any investment banking, brokerage or finder's fee or commission in
connection with this Agreement or in respect of the transactions contemplated by
this Agreement for which MLP or any member of the Company Group shall incur any
Liability.

              (m) BANKRUPTCY. There are no bankruptcy, reorganization or
rearrangement proceedings under any bankruptcy, insolvency, reorganization,
moratorium or other similar laws with respect to creditors pending against,
being contemplated by, or, to the knowledge of EECI, threatened against EECI or
any member of the Company Group.

              (n) MATERIAL CONTRACTS. SCHEDULE 4.1(n) and SCHEDULE 9.11
collectively contain a complete and accurate list of all Contracts of one or
more of the following categories to which any member of the Company Group is a
party or by which it or any of the Assets is bound:

                     (1)    each Contract with EECI or any Affiliate of EECI
(other than any member of the Company Group) under which EECI or any Affiliate
of EECI (other than any member of the Company Group) has been providing or
causing to be provided since the Report Time, goods, materials, supplies,
facilities or services of any kind to any member of the Company Group;

                     (2)    those Contracts, the gross profits attributable to
which have, as of the date of this Agreement, constituted in the aggregate at
least 80% of the gross profits generated by the Pipeline Systems associated with
such Contracts for the twelve-month period prior to the Recent Date Balance
Sheet;

                     (3)    each Contract existing as of the date of this
Agreement, including any indenture, trust agreement, loan agreement, note or
other debt security, under which any member of the Company Group has outstanding
indebtedness for borrowed money or the deferred purchase price of property or
services;

                     (4)    each Contract under which any member of the Company
Group is or will be obligated by virtue of a prepayment arrangement, a
"take-or-pay" arrangement, a production payment or any other arrangement to
transport or deliver hydrocarbons at some future time without then or thereafter
receiving full payment therefor, or to make payment at some future time for
hydrocarbons or the transportation or delivery of hydrocarbons previously
purchased or transported;

                     (5)    each Contract by any member of the Company Group
that includes any Capitalized Lease, any agreement of surety or any Debt
Guaranty or, except those Contracts entered into in the ordinary course of
business, any Guaranty (other than any Debt Guaranty) or any agreement of
indemnification;

                     (6)    each Contract that includes any covenant or
agreement of any member of the Company Group, which purports to restrict the
business activity of any member


                                       10


of the Company Group or limit the freedom of any such Person to compete with any
other Person;

                     (7)    each joint venture, partnership, investment or other
Contract (A) involving a sharing of profits or losses relating to all or any
portion of the business of any member of the Company Group or (B) requiring any
such Person to invest funds in or make loans to, or purchase any securities of,
another Person, venture or other business enterprise;

                     (8)    each Contract giving a third party rights to buy any
member of the Company Group's assets, stock or other equity interests with a
fair market value in excess of $1,000,000 on a change of control or a change in
ownership of any member of the Company Group or Holdings LLC;

                     (9)    each Contract providing for commissions, fees or
royalty or other payments by or to any Person based on sales, purchases or
profits, other than direct payments for goods, materials, supplies or services;

                     (10)   each licensing or other Contract respecting patents,
trademarks, service marks, copyrights or other intellectual property;

                     (11)   other than any Derivative Contract entered into in
the ordinary course of business, each Contract (including, but not limited to,
hedges, options, swaps, caps, collars or any other type of Derivative Contract)
to which any member of the Company Group is a party that is designed to protect
any party to such Contract against fluctuations in interest rates, currency
exchange rates or the prices of commodities and raw materials;

                     (12)   each Contract existing as of the date of this
Agreement for capital expenditures, including maintenance expenses that should
be capitalized in accordance with GAAP, in excess of $1,000,000 and all such
Contracts which, in the aggregate, relate to such expenditures in excess of
$10,000,000;

                     (13)   each Contract relating to or providing for the
creation of a security interest in, or the mortgaging of, pledging of or other
encumbrance to secure payment of borrowed money or any deferred purchase price
of property or services on, any Assets; and

                     (14)   other than the New Services Agreement, any
management service, consulting or other similar type Contract that commits any
member of the Company Group to pay aggregate fees or other compensation of more
than $500,000 in any calendar year.

              True copies of all such Material Contracts that are written, have
been made available to MLP and the MLP has been advised of the material terms of
any oral Material Contracts. Except as would not have, individually or in the
aggregate, a Material Adverse Effect, none of the Material Contracts have been
amended, modified or supplemented except as set forth in SCHEDULE 4.1(n) or
SCHEDULE 9.11. Except as set forth in SCHEDULE 4.1(n) and as could not
reasonably be expected to have a Material Adverse Effect, in the case of each
Material Contract, no member of the Company Group (A) has received any
prepayment, advance payment or deposit thereunder, (B) except as may be agreed
in connection with the KPC Agreed Settlement, (C) has granted a discount from
the stated contract price for its sales or services


                                       11


thereunder from and after the Effective Time, or (D) has any refund or repayment
obligation thereunder, with respect to any goods or capacity purchased, sold,
leased, transported, stored or handled by or on its behalf.

              (o) EVENTS SUBSEQUENT TO REPORT TIME. Except in each case as set
forth in SCHEDULE 4.1(o), since the Report Time each member of the Company Group
has engaged in business in a manner consistent with its past practices, and
there has not been any:

                     (1)    destruction, damage to, or casualty loss of any
Assets of any member of the Company Group, whether or not covered by insurance,
or, to the knowledge of EECI, any occurrence or existence of any circumstance,
condition, event or state of facts, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;

                     (2)    incurrence or assumption by any member of the
Company Group of any indebtedness for borrowed money or the deferred purchase
price for property or services, or of any Guaranty in respect of any thereof,
other than the Midcoast Related Debt;

                     (3)    material change in accounting policies or practices
(including any change in depreciation or amortization policies) by any member of
the Company Group as of the date of this Agreement or as may be required by
changes in GAAP after the date of this Agreement;

                     (4)    sale, lease or other disposition of any Assets of
any member of the Company Group, except (A) sales of inventory, natural gas
liquids, natural gas or oil in the ordinary course of business, (B) any item of
personal property or equipment having a value of less than $100,000 individually
or $1,000,000 in the aggregate, or (C) sales of any item of personal property,
equipment or fixtures that is surplus or has been taken out of service or
replaced in the ordinary course of business and consistent with past practices
of the Company Group;

                     (5)    merger or consolidation by any member of the Company
Group with any other entity or any acquisition by any member of the Company
Group of any other entity except as contemplated by Article 6 (including the
Restructuring Actions);

                     (6)    transaction entered into by any member of the
Company Group outside its ordinary course of business, except as contemplated by
Article 6 (including the Restructuring Actions);

                     (7)    material change in any Tax policies, methods or
elections by any member of the Company Group, except as a result of the
Restructuring Actions;

                     (8)    (A) share repurchase or redemption, dividend or
other distribution in respect of the Company Shares or (B) other transactions
between any member of the Company Group and EECI or any Affiliate of EECI (other
than any member of the Company Group) that are not consistent with past
practices or permitted under Article 6 (including the Restructuring Actions);


                                       12


                     (9)    labor dispute or grievance or work stoppages or
threats thereof by or with respect to persons employed by any member of the
Company Group or any member of the EECI Group for the benefit of any member of
the Company Group that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect;

                     (10)   settlement (excluding any KPC Agreed Settlement)
entered into or consent made to any order, decree or judgment relating to or
arising out of any Action relating to any member of the Company Group that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;

                     (11)   to the knowledge of EECI, claim or filing, or any
threatened claim or filing, made by any third party or Governmental Authority
challenging the legality, validity or propriety of the pipeline tariff rates
charged by any member of the Company Group or any Material Contract;

                     (12)   pledge of the Company Shares, the Ownership
Interests or the Holdings' Partnership Interest or, except for Permitted
Encumbrances, mortgage of any Asset;

                     (13)   change in the conduct or manner of the non-financial
operations of any member of the Company Group that, individually or in the
aggregate, has or could reasonably be expected to have a Material Adverse
Effect, except as contemplated by Article 6 (including the Restructuring
Actions);

                     (14)   any changes made by any member of the Company Group
in the terms of payment by any customers of any member of the Company Group for
services that member performs or goods it sells the effect of which is to enable
the Company Group to recognize revenues in its statement of operations for any
period ending prior to the Effective Time which, but for that change, the
Company Group would not so recognize before a period beginning after the
Effective Time;

                     (15)   any changes in the practices of any member of the
Company Group respecting the performance of ordinary maintenance and repairs
respecting its Assets or the accrual of its accounts payable the effect of which
is to enable the Company Group to accrue current expenses in its statement of
operations for any period beginning after the Effective Time which, but for that
change, the Company Group would so accrue in a period ending at or prior to the
Effective Time;

                     (16)   grant or commitment or promise to grant any
Preference Right; or

                     (17)   except for any KPC Agreed Settlement, waiver of
rights, or claims or cancellation, or agreement to cancel any Liability owing to
any member of the Company Group that, individually or in the aggregate, are
material to the Company considered as a single enterprise.

              (p) ENVIRONMENTAL MATTERS. The sole representations and warranties
of EECI with respect to environmental matters (including Environmental Laws,
Environmental Conditions, Environmental Liabilities and other matters affecting
or relating to the environment) are set forth in this Section 4.1(p). To the
extent representations and warranties in other Sections


                                       13


of this Agreement could apply to any such environmental matters, such
representations and warranties shall be construed to exclude all such
environmental matters and to apply to matters other than such environmental
matters. Except as set forth in SCHEDULE 4.1(p) and as could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect,
to the knowledge of EECI, (i) the business operations of each of the members of
the Company Group are being conducted in compliance with all limitations,
restrictions, standards and requirements established under Environmental Laws
and there is no condition that is reasonably likely to prevent or materially
interfere with compliance by any member of the Company Group with Environmental
Laws, (ii) no member of the Company Group is required by Environmental Laws to
conduct any removal, remediation, or similar corrective action, (iii) there is
no obligation, undertaking or Liability arising out of or relating to
Environmental Laws that any member of the Company Group has agreed to, assumed
or retained, by contract or otherwise, or that has been imposed on any member of
the Company Group by any writ, injunction, decree, order or judgment, (iv) there
are no Actions pending or threatened against any member of the Company Group
that arise out of or relate to Environmental Laws, Environmental Conditions or
Environmental Liabilities and (v) there is no existing Environmental Condition
for which any member of the Company Group could reasonably be expected to be
liable for removal, remediation or similar corrective action under Environmental
Laws.

              (q)    TAX MATTERS. Except as set forth in SCHEDULE 4.1(q):

                     (1)    All material Tax Returns required to be filed by or
with respect to the Company and all members of the Company Group or their
income, business, assets (including the Excluded Assets), activities or
operations and any affiliated, consolidated, combined, unitary or similar group
(a "GROUP") of which the Company or any member of the Company Group or any
predecessor thereof is or was a member, have been or will be duly filed on a
timely basis. All such Tax Returns are true, correct and complete, and all Taxes
owed by the Company, all members of the Company Group, all predecessors thereof
and any Group of which the Company or any member of the Company Group or any
predecessor thereof is or was a member which are or have become due for all
periods ending on or before the date hereof have been timely paid in full; the
amounts of Taxes for which provision has been made in the Recent Date Balance
Sheet (as adjusted subsequently for operations in the ordinary course of
business) will be sufficient to cover the payment of all Taxes, whether or not
assessed or disputed, which are, or are hereafter found to be, or to have been,
due by or with respect to all members of the Company Group up to and through the
periods ending on the dates thereof; there are and, as of the Closing, will be,
no encumbrances on any Assets that arose in connection with any failure (or
alleged failure) by any member of the Company Group to pay any Tax.

                     (2)    The Company and/or the Company Group and their
predecessors have, in all material respects (i) withheld amounts from the
compensation of employees of the Company Group in compliance with all
withholding and similar provisions of the Code and any and all other applicable
Laws, (ii) paid, or caused to be withheld and paid all Taxes on amounts paid by
the Company Group to independent contractors, creditors and other Persons for
which withholding on payments is required by Law, and (iii) complied with all
information and backup withholding requirements with respect to such payments.


                                       14


                     (3)    No member of the Company Group, nor any Group of
which any member of the Company Group or any predecessor thereof is or was a
member, is currently under audit by any Taxing authority and, except as could
not reasonably be expected to have a Material Adverse Effect (determined without
giving effect to the Conversion Step or the Restructuring Actions), no taxing
authority has advised any member of the Company Group that it has assessed or
intends to assess any additional Taxes for any Tax period ending on or before
the date hereof. There is no dispute or claim concerning any Tax Liability of
any member of the Company Group that has been raised by any Governmental
Authority in writing as to which EECI or any member of the Company Group has any
knowledge.

                     (4)    There are no outstanding agreements or waivers by or
with respect to any member of the Company Group that extend the statutory period
of limitations applicable to any Tax Returns or the payment of, or assessment
of, any Tax, or containing any agreements or arrangements with any Taxing
authority that may affect Taxes of any member of the Company Group following the
Closing.

                     (5)    No member of the Company Group is a party to or
bound by, or has any obligation under, any Tax sharing, indemnity or allocation
agreement or similar agreement or arrangement.

                     (6)    EECI is not a foreign person within the meaning of
Section 1445 of the Code; no member of the Company Group is or owns any interest
in any controlled foreign corporation as defined in section 957 of the Code,
foreign personal holding company as defined in section 552 of the Code, passive
foreign investment company as defined in section 1297 of the Code or other
entity the income of which is or could be required to be included in the income
of any member of the Company Group.

                     (7)    To the knowledge of EECI, the Company was from its
date of inception and prior to the conversion to a limited partnership as
contemplated by Article 6 hereof properly treated as a corporation pursuant to
Section 7701(a)(3) of the Code and any corresponding provision of state and
local law and, following the conversion to a limited partnership as contemplated
by Article 6, will be treated as a disregarded entity for federal income tax
purposes pursuant to Treas. Reg. 301.7701-3(b) through the Closing Date. No
election has been made, to the knowledge of EECI, or prior to Closing will be
made, under Treas. Reg. 301.7701-3(c) with respect to the Company.

                     (8)    No member of the Company Group is liable (under
principles similar to Treas. Reg. 1.1502-6) for any Tax payable by reason of the
income or property of any Person other than any member of the Company Group on
account of the inclusion of any member of the Company Group in any combined,
consolidated, unitary or similar group.

              (r) SUBSIDIARIES. SCHEDULE 4.1(r)A sets forth the Company
Subsidiaries as of the date of this Agreement. As of the Closing, the Company
Subsidiaries will be as described in SCHEDULE 4.1(r)B. Except as set forth in
SCHEDULE 4.1(r)C, the Company owns, directly or indirectly, 100% of the capital
stock or other equity interests of each of the Company Subsidiaries, free and
clear of any security interests, liens, options, warrants, purchase rights,
adverse claims or other encumbrances (except as created in this Agreement).
There is not


                                       15


outstanding (i) any convertible or exchangeable security, call, preemptive
right, option, warrant, purchase right, or other contract or commitment (other
than this Agreement) that could require any of the Company Subsidiaries to sell,
issue, transfer, or otherwise dispose of any equity interest or other security
or (ii) any voting trust, proxy, or other agreement or understanding with
respect to the voting of any equity interest in or other security of any Company
Subsidiary. To the knowledge of EECI, the Company does not own an equity
interest in any Person (i) other than the Company Subsidiaries, and (ii) prior
to the consummation of the Restructuring Actions, the Excluded Subsidiaries.

              (s) COMPLIANCE WITH MATERIAL CONTRACTS. Each Material Contract, in
all material respects, is in full force and effect and constitutes a valid and
binding contract enforceable in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
Laws of general application with respect to creditors, (ii) general principles
of equity and (iii) the power of a court to deny enforcement of remedies
generally based upon public policy. Except as set forth in SCHEDULE 4.1(s), no
member of the Company Group is in breach or violation of, or default under, any
Material Contract, and there does not exist any event that, with the giving of
notice or the lapse of time or both, would constitute such a breach, violation
or default by any member of the Company Group, except for such breaches,
violations and defaults as to which requisite waivers or consents have been
obtained or that, individually or in the aggregate, are not having and could not
reasonably be expected to have a Material Adverse Effect. Except as set forth on
SCHEDULE 4.1(s), to the knowledge of EECI, the parties (other than any member of
the Company Group) to any Material Contract are not in breach or violation of or
default under such Material Contract, and there does not exist any event that,
with the giving of notice or the lapse of time or both, would constitute such a
breach or default by such parties, except such breaches, violations and defaults
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.

              (t) INSURANCE. Attached hereto as SCHEDULE 4.1(t) is a true and
complete list of all insurance policies and contracts of insurance in force on
the date hereof with respect to the businesses or Assets of any member of the
Company Group, including all such policies and contracts obtained by EECI under
the Sulphur River Agreement but excluding all title insurance policies. All such
policies and contracts of insurance are in full force and effect, all premiums
due thereon have been paid by the Company Group or EECI or its Affiliates, and
each member of the Company Group is otherwise in compliance in all material
respects with the terms and provisions of its policies. As of the Effective
Time, no premium under such policies and contracts of insurance shall be payable
for any period ending at or prior to the Effective Time. As of the date of this
Agreement, none of the members of the Company Group or EECI or any of its other
Affiliates has received notice or other communication from an issuer of any
insurance policy or contract of insurance listed on SCHEDULE 4.1(t) of any
material increase of any deductibles, retained amounts or premiums payable
thereunder.

              (u) PIPELINE SYSTEM TITLE. To the knowledge of EECI, the Company
and/or the Company Subsidiaries have Defensible Title in and to the Pipeline
System Interests and the Pipeline System Interests on which the Pipeline Systems
are located (other than pump stations, storage sites or work sites adjacent to
or near such Pipeline Systems) are contiguous, except for such failures to have
Defensible Title or to be contiguous that, individually or in the aggregate,


                                       16


would not reasonably be expected to have a Material Adverse Effect. To the
knowledge of EECI, the entirety of the Pipeline Systems is located on or beneath
land covered by such Pipeline System Interests, except for such failures that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

              (v) PERSONAL PROPERTY. Except as set forth in SCHEDULE 4.1(v), to
the knowledge of EECI, each item of material personal property (including leased
personal property) included in the Assets, including the Pipeline Systems, is in
an operable state of repair adequate to maintain normal operations in a manner
consistent with the recent practices of the Company and the Company
Subsidiaries, and no regularly scheduled maintenance relating to any such item
has been deferred, except for defects, failures to maintain and deferrals that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

              (w) OTHER REAL PROPERTY. To the knowledge of EECI, SCHEDULE 4.1(w)
sets forth a complete list of all material real property interests (whether fee
interests, leasehold interests or other real property interests) owned by any of
the Company or any of the Company Subsidiaries and used or held for use
primarily in the operation of the conduct of such Person's business, in each
case, other than (i) leases, easements, licenses, rights-of-way or real property
use agreements involving annual payments of less than $25,000 each and which are
not material to the operations of the Company, and (ii) the Pipeline Systems
Interests, and (iii) easements, rights-of-way, surface leases, fee parcels and
licenses for compressor stations, pump stations and storage and work sites
adjacent to the Pipeline Systems. To the knowledge of EECI, the Company and/or
the Company Subsidiaries have Defensible Title with respect to the real property
interests described in SCHEDULE 4.1(w) and in Section 4.1(w)(iii) above, except
for such failures to have Defensible Title that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
To the knowledge of EECI, each material fixture and improvement owned or leased
by any of the Company or any of the Company Subsidiaries and located on the real
property described in SCHEDULE 4.1(w) and in Section 4.1(w)(iii) above is in an
operable state of repair adequate to maintain normal operations in a manner
consistent with the recent practices of the Company and the Company Subsidiaries
and no regularly scheduled maintenance relating to any such fixture or
improvement has been deferred, except for defects, failures to maintain and
deferrals that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

              (x) LICENSES; PERMITS. Each member of the Company Group has all
licenses, permits and authorizations (other than licenses or permits for the use
of land) issued or granted by any Governmental Authority that are necessary for
the conduct of its business in accordance with Law, except where the failures to
have any such licenses, permits and authorizations, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
Except as set forth on SCHEDULE 4.1(x) and except for any exceptions set forth
in Section 4.1(i), all such licenses, permits and authorizations are validly
held by the appropriate member of the Company Group except for such failures
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.


                                       17


              (y)    EMPLOYEE BENEFIT MATTERS.

                     (1)    SCHEDULE 4.1(y) contains a complete and correct list
of all Company Benefit Plans. With respect to each Company Benefit Plan, as
applicable and to the knowledge of EECI: (A) the plan is in substantial
compliance with the Code and ERISA, including all reporting and disclosure
requirements of Part 1 of Subtitle B of Title I of ERISA; (B) the appropriate
Form 5500 has been timely filed for each year of its existence or a "top-hat"
statement was timely filed with the Department of Labor pursuant to Department
of Labor Regulation section 2520.104-23; (C) there has been no transaction
described in section 406 or section 407 of ERISA or section 4975 of the Code
unless exempt under section 408 of ERISA or section 4975 of the Code, as
applicable; (D) the bonding requirements of section 412 of ERISA have been
satisfied; (E) there is no issue pending nor any issue resolved adversely to any
member of the Company Group which may subject such member of the Company Group
to the payment of a penalty, interest, tax or other amount that, individually or
in the aggregate, would be material; (F) all contributions or other amounts
payable by any member of the Company Group with respect to the plan, to the
extent material, have either been paid or accrued in such member of the Company
Group's Financial Statements; and (G) no notice has been given or received by
any member of the Company Group of a material increase or proposed increase in
the cost of the plan. There are no pending or, to the knowledge of EECI,
threatened claims (other than routine claims for benefits), actions,
arbitrations, investigations or suits by, on behalf of, against or relating to
any Company Benefit Plan or their related trusts (or other funding
arrangements), other than actions taken by the Company or an ERISA Affiliate
with respect to the pending termination or merger of the same. With respect to
each Company Benefit Plan, the Company has made available to MLP true and
correct copies of each of the following documents, to the extent applicable to
such plan:

                            (A)    the Company Benefit Plan and any amendments
       thereto (or if the Company Benefit Plan is not a written agreement, a
       description thereof);

                            (B)    the most recent annual Form 5500 report filed
       with the IRS;

                            (C)    the trust agreement, group annuity contract
       or other funding agreement that provides for the funding of the Company
       Benefit Plan;

                            (D)    the most recent financial statement; and

                            (E)    the most recent determination letter received
       from the IRS with respect to each Company Benefit Plan that is intended
       to qualify under section 401 of the Code.

                     (2)    No member of the Company Group has (i) any
obligation to contribute to or any Liability with respect to a pension plan that
is or was subject to the provisions of Title IV of ERISA or section 412 of the
Code, or (ii) any obligation to contribute to or any Liability with respect to a
voluntary employees beneficiary association that is or was intended to satisfy
the requirements of section 501(c)(9) of the Code.

                     (3)    All Company Benefit Plans that are intended to
qualify under section


                                       18


401(a) of the Code have been submitted to and approved as qualifying under
section 401(a) of the Code by the IRS or the applicable remedial amendment
period will not have ended prior to the Closing Date.

                     (4)    No member of the Company Group has any employees.

                     (5)    With respect to any ERISA Affiliate (including those
not located in the United States), any benefit plans maintained by it for the
benefit of its directors, officers, employees or former employees (or any of
their beneficiaries) are in compliance with applicable laws pertaining to such
plans in the jurisdiction of such entity, except where such failure to be in
compliance could not, either individually or in the aggregate, have a Material
Adverse Effect.

              (z)    LABOR MATTERS.

                     (i)    No member of the Company Group is a party to any
collective bargaining or similar agreement with respect to any employee of the
Company Group;

                     (ii)   to EECI's knowledge, each member of the Company
Group is in substantial compliance (A) with the collective bargaining agreements
identified in SCHEDULE 4.1(z), if any, and (B) with all applicable Laws
respecting employment and employment practices, terms and the conditions of
employment, wages and hours, occupational safety and health, and are not engaged
in any unfair labor or unfair employment practices, except where the failures to
so comply, individually or in the aggregate, could not have a Material Adverse
Effect;

                     (iii)  there is no unfair labor practice charge or
complaint against any member of the Company Group pending (with service of
process having been made, or written notice of investigation or inquiry having
been served, on any member of the Company Group), or to the knowledge of EECI
threatened (or pending without service of process having been made, or written
notice of investigation or inquiry having been served, on any member of the
Company Group), before the National Labor Relations Board or any court;

                     (iv)   to EECI's knowledge, there is no labor strike, or
other material dispute, slowdown or stoppage pending against any member of the
Company Group;

                     (v)    no union certification or decertification petition
has been filed (with service of process having been made on any member of the
Company Group), or to the knowledge of EECI threatened (or pending without
service of process having been made on a member of the Company Group), and, to
EECI's knowledge, no union authorization campaign has been conducted, within the
past twenty-four months;

                     (vi)   no grievance proceeding or arbitration proceeding
arising out of or under any collective bargaining agreement is pending (with
service of process having been made on any member of the Company Group), or to
the knowledge of EECI threatened (or pending without service of process having
been made on any member of the Company Group), against any member of the Company
Group;

                     (vii)  there are no charges, investigations, administrative
proceedings or formal complaints of discrimination (including discrimination
based upon sex, sexual


                                       19


harassment, age, marital status, race, national origin, sexual preference,
handicap, disability or veteran status) pending (with service of process having
been made, or written notice of investigation or inquiry having been served, on
any member of the Company Group), or to the knowledge of EECI threatened (or
pending without service of process having been made, or written notice of
investigation or inquiry having been served, on any member of the Company
Group), before the Equal Employment Opportunity Commission or federal, state or
local agency or court against any member of the Company Group;

                     (viii) there are no charges, investigations, administrative
proceedings or formal complaints of overtime or minimum wage violations pending
(with service of process having been made, or written notice of investigation or
inquiry having been served on any member of the Company Group), or to the
knowledge of EECI threatened (or pending without service of process having been
made, or written notice of investigation or inquiry having been served, on any
member of the Company Group), before the Department of Labor or any other
Governmental Authority;

                     (ix)   there are no citations, investigations,
administrative proceedings or formal complaints of violations of local, state or
federal occupational safety and health laws pending (with service of process
having been made, or written notice of investigation or inquiry having been
served, on any member of the Company Group), or to the knowledge of EECI pending
without service of process having been made, or written notice of investigation
or inquiry having been served, on any member of the Company Group before the
Occupational Safety and Health Administration or any Governmental Authority
against any member of the Company Group; and

                     (x)    there is no Action pending (with service of process
having been made, or written notice of investigation or inquiry having been
served, on any member of the Company Group), or to the knowledge of EECI,
threatened, in respect to which any current or former director, officer,
employee or agent of any member of the Company Group is or may be entitled to
claim indemnification from any member of the Company Group (A) pursuant to their
respective charters or bylaws, (B) as provided in any indemnification agreement
to which any member of the Company Group is a party or (C) pursuant to
applicable Law that has, or would have, a Material Adverse Effect.

              (aa) INTELLECTUAL PROPERTY. Except for intellectual property
rights referenced in SCHEDULE 4.1(aa), the members of the Company Group own, or
are licensed or otherwise have the right to use, all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights, copyrights, technology, know-how, processes and other
proprietary intellectual property rights and computer programs which are
material to the condition (financial or otherwise) or conduct of the business
and operations of the members of the Company Group taken as a whole, except
where the failures to own, be licensed or have the right to use could not
reasonably be expected to have a Material Adverse Effect. Other than
intellectual property rights or claims regarding intellectual property rights
referenced in SCHEDULE 4.1(aa), to EECI's knowledge, (i) the use of such
patents, patent rights, trademarks, trademark rights, service marks, service
mark rights, trade names, copyrights, technology, know-how, processes and other
proprietary intellectual property rights and computer programs by each member of
the Company Group does not infringe on the rights of any Person, subject to such


                                       20


claims and infringements as do not, in the aggregate, give rise to any Liability
on the part of any member of the Company Group which could reasonably be
expected to have a Material Adverse Effect, and (ii) no Person is, in any manner
that could reasonably be expected to have a Material Adverse Effect, infringing
on any right of any member of the Company Group with respect to any such
patents, patent rights, trademarks, trademark rights, service marks, service
mark rights, trade names, copyrights, technology, know-how, processes and other
proprietary intellectual property rights and computer programs. Other than
intellectual property rights or claims regarding intellectual property rights
referenced in SCHEDULE 4.1(aa), no Actions are pending or, to EECI's knowledge,
threatened that any member of the Company Group is infringing or otherwise
adversely affecting the rights of any Person with regard to any patent, license,
trademark, trade name, service mark, copyright or other intellectual property
right.

              (bb)   EXCLUDED ASSETS. None of the assets that is an Excluded
Asset is used in the operation of the Company Group's business as currently
conducted.

              (cc) SUFFICIENCY OF ASSETS. The assets necessary to conduct the
business of the Company and Company Subsidiaries, as such business is conducted
on the Closing Date, are, or will be at Closing, included in the Assets, except
where the failures to own or lease such Assets could not reasonably be expected
to have a Material Adverse Effect. Notwithstanding the foregoing, this Section
4.1(cc) shall not constitute a representation or warranty with respect to the
title of the Company and/or the Company Subsidiaries to any assets used by any
such Person in its business.

              (dd) PUBLIC UTILITY HOLDING COMPANY ACT. Neither EECI nor any
member of the Company Group is, or will be upon the Closing, a "holding
company," a "public utility company" or a "gas utility company," under the
Public Utility Holding Company Act of 1935, as amended (the "ACT"). EECI and the
members of the Company Group are, and will be upon the Closing, exempt from any
obligation, duty or liability imposed on them under the Act solely by reason of
being a "subsidiary company" of a "holding company" under the Act. All
descriptive terms used herein have the meanings defined in the Act.

              (ee) INVESTMENT COMPANY ACT. No member of the Company Group is, or
will be upon the Closing, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and EECI is not required to register
under the Investment Company Act of 1940, as amended.

              (ff) HOLDINGS LLC. Except for actions taken in connection with the
Restructuring Actions, as of the Closing, Holdings LLC will have conducted no
business and, except for the Holdings' Partnership Interest and any Liabilities
arising therefrom, will have no assets, Liabilities (other than those arising
from the Holdings' Partnership Interest) or properties.

              (gg) ALIENS. All employees of the EECI Group who perform services
for members of the Company Group are, to the knowledge of EECI, (i) citizens of
the United States or (ii) not citizens of the United States, but, in accordance
with the IRCA and other applicable federal Laws, are either (A) immigrants
authorized to work in the United States or (B) nonimmigrants authorized to work
in the United States for that member of the Company


                                       21


Group in their specific jobs, except where failures to comply with those Laws
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

              (hh) KGS RECEIVABLES. Except for the Contracts listed on SCHEDULE
3.3(f), there is no Contract between Kansas Gas Service and a member of the
Company Group under which Kansas Gas Service is disputing, as of the date of
this Agreement, the amounts payable to such member by Kansas Gas Service under
the terms of such Contract.

              (ii)   SULPHUR RIVER AGREEMENT. Prior to the closing of the
transactions under the Sulphur River Agreement, EECI transferred and assigned to
Enbridge Pipelines (NE Texas) L.L.C., Enbridge Pipelines (NE Texas Liquids)
L.L.C. and Enbridge Gathering (Texarkana) L.L.C. all of EECI's rights under the
Sulphur River Agreement.

Notwithstanding anything in Section 4.1 to the contrary, any representation or
warranty made by EECI that covers and/or relates to any Pass Through Asset shall
be deemed to (i) have been made to the knowledge of EECI (regardless of whether
or not such representation or warranty is qualified by knowledge) and (ii)
relate only to events occurring or continuing during the Specified Ownership
Period.

       4.2    REPRESENTATIONS AND WARRANTIES OF MLP. MLP represents and warrants
to EECI as follows:

              (a) ORGANIZATION AND QUALIFICATION. MLP is a limited partnership
duly formed, validly existing and in good standing under the laws of the State
of Delaware and has the requisite partnership power under its Organic Documents
and the laws of the State of Delaware to carry on its business as it is now
being conducted.

              (b) AUTHORITY. MLP has all requisite partnership power and
authority to execute and deliver this Agreement and the Transaction Documents
required to be executed by it and to perform its obligations under this
Agreement and the Transaction Documents. The execution, delivery and performance
of this Agreement and the Transaction Documents required to be executed by MLP
and the transactions contemplated hereby and thereby have been duly and validly
authorized by all requisite partnership action on the part of MLP.

              (c) ENFORCEABILITY. This Agreement has been, and as of the
Closing, the Transaction Documents to which MLP is a party will be, duly
executed and delivered by MLP, and, assuming due and valid authorization,
execution and delivery hereof and thereof by the other parties thereto, this
Agreement constitutes, and as of the Closing, the Transaction Documents will
constitute, legal, valid and binding agreements of MLP enforceable against MLP
in accordance with their terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium and other similar Laws of general
application with respect to creditors, (ii) general principles of equity and
(iii) the power of a court to deny enforcement of remedies generally based upon
public policy.

              (d)    NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement nor the consummation of the transactions and
performance of the terms and conditions contemplated hereby by MLP or the
execution, delivery and performance by MLP of the Transaction Documents will (i)
conflict with or result in a violation or breach of any


                                       22



provision of the Organic Documents of MLP, (ii) with or without due notice or
lapse of time or both, conflict with or result in a violation or breach of or a
default (or give rise to any right of termination, cancellation or acceleration)
under any agreement, indenture or other instrument under which MLP is bound,
(iii) violate or conflict with any Law applicable to MLP, (iv) to the knowledge
of MLP, result in any third party having the right to exercise a Preference
Right on a change of control of any asset under any Material Contract; or (v)
result in the creation of any lien, security interest or other encumbrance upon
any Asset or any of the Ownership Interests, in each case (except with respect
to clause (i) of this Section 4.2(d)), other than such conflicts, violations,
breaches, defaults, terminations, cancellations, accelerations or other matters
as, individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on MLP or MLP's ability to perform obligations with
respect to the transactions contemplated by this Agreement.

              (e) CONSENTS. Except for the consents, permits, filings or notices
expressly described and set forth in SCHEDULE 4.2(e) and requirements of the HSR
Act, no consent or permit of, or filing with or notification to, any Person is
required (i) for or in connection with the execution and delivery of this
Agreement or the other Transaction Documents by MLP, (ii) for or in connection
with the consummation of the transactions and performance of the terms and
conditions contemplated hereby by or by the other Transaction Documents by MLP,
or (iii) to effect the legality, validity, binding effect or enforceability of
such transactions.

              (f) ACTIONS. There is no Action pending against MLP or, to the
knowledge of MLP, threatened against MLP (i) seeking to prevent or delay the
Closing or (ii) that, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on MLP or MLP's ability to perform
obligations with respect to the transactions contemplated by this Agreement.

              (g) BROKERAGE FEES AND COMMISSIONS. Neither MLP nor any Affiliate
of MLP has, directly or indirectly, incurred any obligation or entered into any
agreement for any investment banking, brokerage or finder's fee or commission in
connection with this Agreement or in respect of the transactions contemplated by
this Agreement for which EECI (except in its capacity as general partner of MLP)
or EECI's Affiliates (other than any member of the Company Group) shall incur
any Liability. MLP shall be responsible for and pay all fees and commissions
payable to A.G. Edwards & Sons, Inc. in connection with the transactions
contemplated hereby or any transaction relating to the financing of this
transaction.

              (h) NO DISTRIBUTION. MLP is an experienced and knowledgeable
investor in the pipeline transportation and gathering, processing and treating
of natural gas and other products businesses, MLP is able to bear the economic
risks of its acquisition and ownership of the Ownership Interests and the
Assets, and MLP is capable of evaluating (and has evaluated) the merits and
risks of the Company, the Company Subsidiaries and the Assets and MLP's
acquisition and ownership of the Ownership Interests. Prior to entering into
this Agreement, MLP was advised by its counsel and such other Persons it has
deemed appropriate concerning this Agreement, the Company, the Company
Subsidiaries and the Assets. MLP is an "accredited investor," as such term is
defined in Regulation D of the Securities Act of 1933, as amended, and will
acquire the Membership Interests for its own account and not with a view to a
sale or


                                       23


distribution thereof in violation of the Securities Act of 1933, as amended, and
the rules and regulations thereunder, any applicable state blue sky laws or any
other applicable securities laws.

              (i) BANKRUPTCY. There are no bankruptcy, reorganization or
rearrangement proceedings under any bankruptcy, insolvency, reorganization,
moratorium or other similar Laws with respect to creditors pending against,
being contemplated by, or to the knowledge of MLP, threatened against MLP.

                                    ARTICLE 5
                              ACCESS TO INFORMATION

       5.1    GENERAL ACCESS. Until the Closing Date (or earlier termination of
this Agreement):

              (a) BOOKS AND RECORDS. EECI shall cause each member of the Company
Group to permit MLP and its representatives to have reasonable access at
reasonable times in the Company Group's and EECI's offices, and in a manner so
as not to interfere unduly with the business operations of any member of the
Company Group or EECI, to the books, records, contracts, title opinions, title
files, ownership maps, assignments and documents relating to the Company Group
and the Assets. Any information furnished pursuant to this Section 5.1(a) or
consultation pursuant to Section 5.1(c) shall occur under circumstances
appropriate to maintain intact the attorney-client privilege, if any, as to
privileged communications and attorney work product.

              (b) INSPECTION OF PROPERTY, PLANT AND EQUIPMENT. EECI shall cause
each member of the Company Group, subject to any required consent of any third
Person, to permit MLP and its representatives at reasonable times and at MLP's
sole risk, cost and expense, to conduct, in the presence of any member of the
Company Group or EECI's representatives, reasonable inspections of the Assets
constituting property, plant or equipment. MLP shall repair any damage to the
Assets resulting from such inspections and MLP does hereby indemnify and hold
harmless, release and agree to defend the EECI Group from and against any and
all Liabilities to the extent arising from MLP's inspection of the Assets,
INCLUDING ANY LIABILITY BASED UPON THE JOINT OR CONCURRENT ORDINARY NEGLIGENCE
OF ANY EECI INDEMNIFIED PERSON.

              (c) EECI AND COMPANY PERSONNEL AND REPRESENTATIVES. MLP and its
representatives shall be given the opportunity to ask questions of, and receive
answers from, personnel of EECI and the Company Group and the accountants,
lawyers and other professionals employed or used by EECI or any member of the
Company Group with respect to the Company Group and the Assets and the
transactions contemplated hereby; provided, however, that (i) such actions shall
not interfere with the ordinary course of the Company Group's businesses or
require any personnel to provide any information not relating to EECI's
representations and warranties hereunder or the conditions to Closing hereunder
and (ii) no answer given in response to any such questions shall constitute a
representation, warranty, covenant or agreement of EECI or any member of the
Company Group.

       5.2    CONFIDENTIAL INFORMATION. Unless and until the Closing occurs, MLP
agrees to maintain all information made available to it pursuant to this
Agreement confidential and to


                                       24


cause its Affiliates and their respective directors, officers, employees,
agents, representatives, consultants and advisors to maintain all information
made available to them pursuant to this Agreement confidential, except (i) as
required by Law, administrative process or any standards or rules of any stock
exchange to which MLP or any of its Affiliates is subject, (ii) for information
which is available to the public on the date hereof, or thereafter becomes
available to the public other than as a result of a breach of this Section 5.2
or (iii) to the extent that MLP must disclose the same in any court or
arbitration proceedings brought by it to enforce its rights hereunder.

                                    ARTICLE 6
               CONVERSION OF THE COMPANY AND RESTRUCTURING ACTIONS

       6.1    CONVERSION AND RESTRUCTURING ACTIONS.

              (a) CONTRIBUTION STEP AND CONVERSION STEP. Prior to the Closing,
EECI, at EECI's sole cost and expense, shall (i) form Holdings LLC as a single
member LLC under the Delaware Limited Liability Company Act, with EECI holding
of record and beneficially all Membership Interests, (ii) contribute 0.001% of
the Company Shares to Holdings LLC, (iii) cause the Company to be converted in
accordance with the Texas Business Corporation Act and the Texas Revised Uniform
Limited Partnership Act into a Texas limited partnership, with the conversion of
the Company to be accomplished in a manner that (A) results in (1) a 0.001%
general partner interest in the Company being held of record and beneficially by
Holdings LLC, and (2) a 99.999% limited partner interest in the Company being
held of record and beneficially by EECI and (B) causes the Company (after the
Conversion Step) to retain or succeed to all properties, assets, Liabilities and
obligations of the Company prior to such conversion (other than the Excluded
Assets and the Liabilities associated therewith). The foregoing actions shall be
taken by EECI in compliance with all Laws. The name of the Company (after the
Conversion Step) shall be "Enbridge Midcoast Energy, L.P." or such other name as
may be agreed upon by EECI and MLP.

              (b) RESTRUCTURING ACTIONS. As of the date hereof, the current
organizational structure of the Company, the Company Subsidiaries and the
Excluded Subsidiaries is set forth in SCHEDULE 6.1A. On or before the Closing
Date, EECI shall take and cause the Company, the Company Subsidiaries and its
other Affiliates to take such actions, including distributions, dividends,
mergers, conversions and dissolutions (collectively, the "RESTRUCTURING
ACTIONS"), as are necessary in order to cause the structure of the Company and
the Company Subsidiaries immediately prior to Closing to be as set forth in
SCHEDULE 6.1B. As part of the Restructuring Actions, EECI shall assign or
otherwise transfer, or cause to be assigned or otherwise transferred, all
Excluded Assets and the Liabilities associated therewith to EECI or EECI's
designee.

       6.2    DOCUMENTS.

              (a) EECI shall use its reasonable efforts to provide to MLP: (a)
on or before May 22, 2002, drafts of (i) the Organic Documents of Holdings LLC
to be in place after the Contribution Step and (ii) the Organic Documents of the
Company to be in place after the Conversion Step and (b) on or before June 7,
2002, drafts of any other document, certificate or


                                       25


instrument to be executed by EECI, MLP, their respective Affiliates or any
member of the Company Group in connection with the Restructuring Actions,
including, without limitation, the agreement of limited partnership of each of
MLP and OLP that reflect proposed amendments thereto to effect the issuance and
sale of the i-units by MLP and the 2% general partner interest in MLP. MLP shall
provide to EECI any comments it may have to such documents within five (5)
Business Days after its receipt of such documents and the parties shall attempt
to resolve any differences they may have with respect to such documents as
expeditiously as possible.

              (b) EECI will deliver to MLP on or prior to the occurrence of the
Conversion Step, true and complete copies of the Organic Documents of the
Company as a limited partnership, Holdings LLC and each other member of the
Company Group.

                                    ARTICLE 7
                                ASBESTOS AND NORM

       MLP acknowledges that the Sulphur River Assets may currently contain
asbestos or asbestos containing materials or naturally occurring radioactive
materials ("NORM") and that special procedures may be required for the
assessment, remediation, removal, abatement, transportation or disposal of such
asbestos, asbestos containing materials and NORM. Notwithstanding anything
contained in this Agreement to the contrary, but without limiting EECI's express
indemnity obligations hereunder, the Company will indemnify EECI for, and pay or
cause one or more other members of the Company Group to pay, all costs, expenses
and other Liabilities associated with the assessment, remediation, removal,
abatement, transportation and disposal of the asbestos, asbestos containing
materials or NORM associated with the Sulphur River Assets and for which EECI is
liable or obligated to indemnify Sulphur River Seller under the Sulphur River
Agreement. In case any owner of the Sulphur River Assets prior to EECI and
Sulphur River Seller is liable for any of such costs, expenses and other
Liabilities, the Company will be subordinated to any rights of EECI to seek
recovery thereof from that prior owner.

                                    ARTICLE 8
                                 COMPANY JOINDER

       8.1 JOINDER BY COMPANY. For and in consideration of the premises, the
terms and conditions of this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Company, the Company joins in and becomes a party to this Agreement for the
purposes set forth in this Section 8.1. Effective from and after the Closing,
the Company hereby accepts and adopts this Agreement as its own direct contract
and agreement with EECI to the extent of the actions and obligations required or
stipulated in this Agreement to be performed or complied with by the Company.
Nothing in this Section 8.1 limits EECI's obligations under this Agreement.

       8.2    MLP APPROVAL. As the owner and holder of the Ownership Interests
following the Closing, MLP expressly approves of and gives its consent to the
Company's covenants and agreements in Section 8.1.


                                       26


                                    ARTICLE 9
                            COVENANTS OF EECI AND MLP

       9.1 CONDUCT OF BUSINESS PENDING CLOSING. Subject to Section 9.2, from the
date hereof through the Closing, except as disclosed in SCHEDULE 9.1, or as
otherwise consented to or approved by MLP (which consent or approval shall not
be unreasonably withheld or delayed), EECI covenants and agrees that:

              (a)    CHANGES IN BUSINESS. It will not permit any member of the
Company Group to:

                     (1)    except as contemplated by Article 6 (including the
Restructuring Actions), conduct its business in any manner other than in the
ordinary course of business consistent with its past practices;

                     (2)    enter into, amend or otherwise modify in any
material respect, or assign or terminate prior to the stated term thereof any
Material Contract, except (i) for contracts which expire by their terms, (ii)
for actions taken by such Person in the ordinary course of its business
consistent with its past practices, (iii) as provided in Section 9.11 or (iv) as
contemplated by Article 6 (including the Restructuring Actions);

                     (3)    except as contemplated by Article 6 (including the
Restructuring Actions), declare or pay any dividends, or make any distributions,
in respect of, or issue any of, its equity securities or securities convertible
into its equity securities, or repurchase, redeem or otherwise acquire any such
securities or make or propose to make any other change in its capitalization;

                     (4)    except as contemplated by Article 6 (including the
Restructuring Actions), merge into or with or consolidate with any other Person
or acquire all or substantially all of the business or assets of any other
Person;

                     (5)    except as contemplated by Article 6 (including the
Restructuring Actions), (i) amend its certificate of incorporation or by-laws or
similar organizational documents, or (ii) issue, sell, transfer, pledge, dispose
of or encumber any shares of any class or series of its capital stock or other
equity interests, or securities convertible into or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of any class or series of its capital stock or other equity interests;

                     (6)    purchase any securities of any Person, except for
investments made in the ordinary course of business and consistent with prior
practices and except as contemplated by Article 6 (including the Restructuring
Actions);

                     (7)    enter into any new or acquire any Derivative
Contract, or modify, amend or extend the terms of any existing Derivative
Contract other than (in each case) in the ordinary course of business consistent
with its past practices;

                     (8)    engage in any trading transactions constituting
trading operations under GAAP;


                                       27


                     (9)    enter into any Capitalized Lease, any Debt Guaranty
or any agreement of surety or, except in the ordinary course of business, any
Guaranty (other than any Debt Guaranty) or any agreement of indemnification;

                     (10)   other than New Intercompany Debt, incur any
indebtedness for borrowed money or the deferred purchase price of property or
services;

                     (11)   other than pursuant to the requirements of existing
Contracts, sell, lease or otherwise dispose of any of the Assets, except (i)
Assets sold, leased or otherwise disposed of in the ordinary course of business
consistent with past practices and (ii) any item of personal property, equipment
or fixtures which is surplus or not operational or has a value of less than
$100,000 individually or $1,000,000 in the aggregate;

                     (12)   enter into any Contract for the acquisition of any
business or the start-up of any new business;

                     (13)   waive any claims or rights of substantial value;

                     (14)   except as contemplated by Article 6 (including the
Restructuring Actions), take any action or enter into any Contract with respect
to or in contemplation of any liquidation, dissolution, recapitalization,
reorganization or other winding up of its business or operations;

                     (15)   except with respect to any KPC Agreed Settlement,
enter into or agree to any settlement or compromise of any pending or threatened
Action, unless the settlement involves the payment of money damages by such
Person of not more than $100,000, in the aggregate, and does not impose an
injunction or similar equitable relief upon such Person or materially impair any
such Person's defense of any other Action then pending or, to the knowledge of
EECI, threatened against such Person;

                     (16)   except as contemplated by Article 6 (including the
Restructuring Actions) (i) change its accounting policies or practices
(including any change in depreciation or amortization policies), except as
required under GAAP and disclosed in writing to MLP, (ii) make or change an
election relating to Taxes, (iii) adopt or change an accounting method related
to Taxes, unless required under GAAP and disclosed in writing to MLP, (iv) enter
into any closing agreement related to Taxes, (v) settle any claim or assessment
to Taxes or (vi) consent to any claim or assessment relating to Taxes or any
waiver of the statute of limitations for any such claim or assessment;

                     (17)   write-off as uncollectible any accounts receivable
of such Person, except for write-offs (A) in the ordinary course of business and
consistent with past practices that, individually or in the aggregate, could not
be reasonably expected to have a Material Adverse Effect, and (B) that are or
will be reflected on the Closing Date Balance Sheet; or

                     (18)   commit to do any of the foregoing actions.

              (b)    ENCUMBRANCES. It will not permit any member of the Company
Group to create any express lien or security interest on any Assets, except to
the extent (i) required or


                                       28


permitted incident to the operation of the Assets and the business of any member
of the Company Group pursuant to this Section 9.1, or (ii) required by any
Contract existing on the date of this Agreement and set forth on SCHEDULE 9.1.

              (c)    OPERATION OF ASSETS. It will cause each member of the
Company Group to:

                     (1)    cause the Assets that it owns to be maintained and
operated in the ordinary course of business in accordance with past practices of
such member, maintain insurance now in force and naming such member as a
beneficiary and pay or cause to be paid all costs and expenses in connection
therewith when due;

                     (2)    maintain and keep such member's Contracts in full
force and effect, except (i) for Contracts which expire by their terms or which
are not needed to operate such Person's business in its ordinary course and (ii)
as provided in Section 9.11;

                     (3)    use such member's reasonable efforts to maintain its
relationships with suppliers, customers and others having material business
relations with such member;

                     (4)    timely pay when due all Taxes required to be paid
(other than Taxes being contested in good faith in the ordinary course of
business) and timely file all Tax Returns and all reports required to be filed
with any Governmental Authority to the extent such Taxes, returns or reports
relate to the Assets or such member's business; and

                     (5)    maintain and keep all material licenses, permits and
authorizations issued or granted to such member that are necessary or for the
conduct of its business, as currently conducted.

              (d) PREFERENCE RIGHTS. No member of the Company Group shall grant
or create any Preference Right with respect to the Assets owned by it except (i)
in connection with the performance by such Person of an obligation or agreement
existing on the date hereof and disclosed in SCHEDULE 9.1, or pursuant to this
Agreement or (ii) in connection with the acquisition of Assets after the Report
Time if granting or creating such Preference Right is a condition of such
acquisition and MLP has consented in writing to the granting of such Preference
Right.

       9.2 QUALIFICATIONS ON CONDUCT. Except for any actions prohibited by
Sections 9.1(a)(3) through 9.1(a)(17), Sections 9.1(c)(4) or (5), or Section
9.1(d), EECI and each member of the Company Group may take (or not take, as the
case may be) any of the actions described in Section 9.1 to the extent
reasonably necessary under emergency circumstances (or if required or
prohibited, as the case may be, pursuant to Law) and provided MLP is notified as
soon thereafter as practicable.

       9.3 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, without the prior
written approval of the other parties hereto, which approval shall not be
unreasonably withheld, no party hereto will issue, or permit any agent or
Affiliate of it to issue, any press releases or otherwise make, or cause any
agent or Affiliate of it to make, any public statements with respect to this
Agreement and the transactions contemplated hereby, except (i) where such
release or statement is deemed in good faith by the releasing party to be
required by Law or under the rules and


                                       29


regulations of any public stock exchange on which the shares of such party or
any of its Affiliates are listed, (ii) with respect to the press release
announcing the execution of this Agreement or (iii) in connection with any
public statements relating to the public offering of securities to secure
financing for MLP. In each case to which such exception applies, the releasing
party will use its reasonable best efforts to provide a copy of such release or
statement to the other party prior to releasing or making the same.

       9.4 ACTIONS AND EFFORTS BY PARTIES. Without limiting the respective
warranties, representations, covenants and agreements of the parties contained
herein, each of the parties agrees to use its reasonable efforts to satisfy the
conditions to Closing set forth in Article 11 and to refrain from taking any
action within its control which would cause a breach of a representation or
warranty set forth herein. Without limiting the respective warranties,
representations, covenants and agreements of the parties contained herein, each
of the parties agrees to use its reasonable efforts (and to cause its Affiliates
to use their reasonable efforts) to refrain from taking any action within its
control which would cause a breach of any of its representations and warranties
contained in Article 4 or which would prevent it from delivering to the other
party the certificate which it is required to deliver pursuant to Section
11.1(b) or 11.2(b), as the case may be. EECI and MLP each agrees to promptly
advise each other in writing if such party obtains knowledge of the occurrence
of any matter or event that, to its knowledge, could reasonably be expected to
result in a breach of any of such party's representations, warranties, covenants
or agreements in this Agreement. In connection with the continuing operations of
the Company and the Company Subsidiaries between signing of this Agreement and
the Closing, EECI and the Company shall use reasonable efforts to consult in
good faith on a regular and frequent basis with the representatives of MLP to
report material operational developments and the general status of ongoing
operations of the Company and the Company Subsidiaries. EECI and MLP acknowledge
that any such consultation shall not constitute (i) a waiver by MLP or EECI of
any rights it may have under this Agreement or any Transaction Documents or (ii)
any warranty or representation by EECI.

       9.5 PENDING REGULATORY RATE CASES. Prior to the Closing, EECI will not
initiate or participate in any settlement discussions, except in consultation
with MLP, regarding (i) the remand in Missouri Public Service Commission v.
FERC, D.C. Circuit No. 99-1203, decided December 15, 2000, (ii) the rate case
filed on August 27, 1999 in FERC Docket No. RP99-485, (iii) all cases pending
before the Missouri Public Service Commission, including the Actual Cost
Adjustment proceedings in GR-96-450, GR-98-167, GR-99-304, GR-2000-425 and
GR-2001-382 or (iv) the litigation pending in Johnson County, Kansas in Case No.
99-C06574 or any appeal or remand of such litigation (the Actions described in
clauses (i) through (iv) being "Pending Regulatory Cases") from the date hereof
until the Effective Time. EECI promptly on receipt shall provide to MLP copies
of any notices, correspondence, orders or other documents in respect of the
Pending Regulatory Cases that it receives from any third party or Governmental
Authority.

       9.6    CASUALTY LOSS.

              (a) If all or any material portion of the Assets are damaged or
destroyed by fire or other casualty before the Closing, either party may, at its
option, terminate this Agreement by written notice to the other party prior to
Closing. If neither party elects to terminate this


                                       30


Agreement as aforesaid, the parties shall proceed to close the transactions
contemplated hereby, in which event EECI shall assign to MLP, or cause to be
assigned, all of the EECI Group's right, title and interest, if any, in any
claim under any applicable insurance policies in respect of such casualty. If
the total amount of any such insurance proceeds is not sufficient to fully
repair and/or replace the damaged facilities to return them to their pre-damage
or destruction operating condition and repair, the amount of such shortfall
shall, at the option of EECI, either be paid by EECI to MLP or will reduce the
amount of Total Consideration by the amount of such shortfall.

              (b) If the casualty loss does not involve all or any material
portion of the Assets, then the parties shall be obligated to close the
transaction contemplated herein according to the terms hereof, notwithstanding
such casualty loss, and EECI shall, at the election of EECI, either: (i) repair
and/or replace the damaged facilities to their pre-damage or destruction
operating condition and repair prior to Closing, at its expense; or (ii) (A) pay
the deductible due under the insurance policy or policies insuring the same and
deliver or assign or cause to be delivered or assigned to MLP, at Closing, any
and all of the insurance proceeds received by any member of the EECI Group or
the rights of any member of the EECI Group to proceeds attributable to such
casualty loss and (B) pay to MLP any other amount required to repair and/or
replace the damaged facilities in excess of such insurance proceeds.

              (c) For the purposes of this Section, a "MATERIAL PORTION" means
any casualty loss where the uninsured portion of the Company Group's Liability
associated therewith is equal to or greater than $20,000,000. For purposes of
this Section 9.6(c) only, the term "Liability" shall include indirect and
consequential losses (including any losses on account of lost profits or
opportunities or business interruption).

       9.7 FURTHER ASSURANCES. EECI and MLP each agrees that from time to time
after the Closing Date, each of them will execute and deliver or cause their
respective Affiliates (including each member of the Company Group) to execute
and deliver such further instruments, and take (or cause their respective
Affiliates, including each member of the Company Group, to take) such other
action, as may be necessary to carry out the purposes and intents of this
Agreement. Nothing in this Section shall cause any representation, warranty,
covenant or agreement contained in other Sections or provisions of this
Agreement to survive later than the time stipulated for the survival of such
representation, warranty, covenant or agreement in Section 13.1.

       9.8 RECORDS. MLP agrees to maintain (or cause each member of the Company
Group to maintain) the Company Records until the fifth anniversary of the
Closing Date (or for such longer period of time as EECI shall advise MLP in
writing is necessary in order to have Company Records available with respect to
open years for tax audit purposes), or, if any of the Company Records pertain to
any claim or dispute pending on the fifth anniversary of the Closing Date, MLP
shall maintain any of the Company Records designated by EECI until such claim or
dispute is finally resolved and the time for all appeals has been exhausted. MLP
shall provide (and cause each member of the Company Group to provide) EECI and
its representatives reasonable access to and the right to copy the Company
Records for the purposes of (i) preparing and delivering any accounting provided
for under this Agreement and adjusting, prorating and settling the charges and
credits provided for in this Agreement, (ii) complying with any Law affecting
EECI's interest in the Company Shares, the Membership Interests or EECI's


                                       31


Partnership Interest, Holdings LLC's interest in the Holdings' Partnership
Interest or the Company's or the Company Subsidiaries' interest in the Assets
prior to the Closing Date, (iii) preparing Tax returns, (iv) responding to or
disputing any Tax audit or (v) asserting, defending or otherwise dealing with
any claim or dispute under this Agreement or with respect to the Company Group
or the Assets. During the period set forth in this Section 9.8, none of MLP, the
Company Group or any of their Affiliates shall destroy any Company Records
without giving EECI sixty (60) days' advance written notice thereof and the
opportunity, at EECI's expense, to obtain such Company Records prior to their
destruction.

       9.9 MAINTENANCE OF MIDCOAST INDEMNIFICATION PROVISIONS. In addition to
and without limiting the Company's and MLP's respective obligations under
Articles 14 and 15, the Company shall perform all the obligations of the
"Surviving Corporation," "the Company" and the "Parent" under Section 5.4 of the
Midcoast Agreement (as such terms are defined therein). On or prior to the
Closing, EECI shall cause Enbridge, Inc. to assign all of its rights, if any,
under the Midcoast Agreement to the Company and upon the receipt of such
assignment the Company agrees to perform all of Enbridge, Inc.'s obligations, if
any, under the Midcoast Agreement.

       9.10 COMPANY NAME; LOGOS, ETC. At Closing, EECI shall execute and
deliver, or cause to be executed and delivered, to the Company a license
agreement in the form attached hereto as Exhibit 9.10 pursuant to which EECI or
an Affiliate of EECI shall grant to each member of the Company Group a license
to use the "Enbridge" name and certain "Enbridge" logos on the terms set forth
therein.

       9.11 SERVICE AGREEMENTS. The service agreements listed in SCHEDULE 9.11
between a member of the Company Group and EECI or an Affiliate of EECI (other
than a member of the Company Group) shall be terminated on or before Closing,
and the Company shall, and/or shall cause members of the Company Group, to enter
into new services agreements with EECI or an Affiliate of EECI (other than a
member of the Company Group) (collectively, "NEW SERVICES AGREEMENT") on the
same economic terms as those agreements listed in SCHEDULE 9.11.

       9.12 HSR FILINGS. Within ten (10) Business Days after the date hereof,
each party will file or cause its ultimate parent entity (within the meaning of
the HSR Act) to file all materials required to be filed by it under the HSR Act
and will promptly file any supplemental materials required and will comply in
all material respects with the requirements of the HSR Act.

       9.13 NOTICE OF BASIS FOR INDEMNIFICATION CLAIMS. So long as EECI or any
of its Affiliates is the general partner of MLP, whenever EECI or any of its
Affiliates obtains knowledge that MLP has been damaged and may have a claim
relating thereto for indemnification under Article 15, then EECI shall promptly
give written notice of that claim, described in reasonable detail, to the Audit,
Finance and Risk Committee of MLP.

       9.14 ROLE OF SPECIAL COMMITTEE. With respect to (A) any action, notice,
consent, approval or waiver that is required to be taken or given or may be
taken or given by MLP prior to Closing pursuant to Sections 3.3, 6.2, 9.1, 9.2,
9.3, 9.4, 9.5, 9.6, 9.18, 11.2 or 16.1, (B) any amendment of this Agreement in
any of the other Transaction Documents prior to Closing, or (C) approval of the
KPC Agreed Settlement prior to Closing, such action, notice, consent, approval


                                       32


or waiver shall be taken or given by the Special Committee of MLP on behalf of
MLP. With respect to any notice required to be given or that may be given to MLP
prior to the Closing and any consultation to be undertaken with MLP pursuant to
Section 9.4 or 9.5, such notice shall be given to, and such consultation shall
be undertaken with, the Special Committee of MLP acting on behalf of MLP.
Neither this Agreement nor any of the Transaction Documents may be amended prior
to the Closing without the consent of the Special Committee of MLP on behalf of
MLP.

       9.15 KPC COST OF SERVICE. On or before each KPC Payment Date, EECI agrees
to pay to MLP or its designee an amount equal to the KPC Cost of Service
Difference ("KPC SERVICE AMOUNT PAYMENT"). Notwithstanding anything herein to
the contrary, if MLP or its Affiliates are permitted by FERC, upon a final
non-appealable order in the KPC Rate Case, to impose a surcharge relating to any
KPC Service Amount previously collected during the KPC Payment Obligation
Period, then the amount of such surcharge actually received by MLP or its
designee (or any of MLP's Affiliates) shall be distributed in the following
manner:

              (i) first, MLP and EECI shall each receive 50% of the amount of
such surcharge until MLP has received an amount equal to the KPC Accumulated
Payment Deficiency;

              (ii) second, EECI shall receive 100% of the amount of any
remaining surcharge, if any, until the total payments to EECI, including amounts
paid under clause (i) above, equal the Cumulative KPC Service Amount Payments;
and

              (iii)  third, MLP shall receive any remaining surcharge, if any.

       9.16 SUBSTITUTE GUARANTIES. MLP acknowledges the list of Guaranties set
forth in SCHEDULE 9.16 and agrees to use its reasonable efforts prior to the
Closing to cooperate with EECI and/or its Affiliates to terminate each such
Guaranty (including offering to substitute a Guaranty of the MLP or one of its
Affiliates for such Guaranty) and procure from the existing obligee the release
of the guarantor that is a party to such Guaranty from any and all liability
from and under such Guaranty, which release shall take effect at the Closing. To
the extent that EECI and/or its Affiliates are not able to terminate any such
Guaranty and obtain any such release prior to the Closing in accordance with
clause (ii) of the preceding sentence, MLP agrees (a) to continue to use its
reasonable efforts thereafter to effect such a termination and release and (b)
to indemnify the EECI Group to the extent of any Liabilities that such guarantor
may incur or suffer as a result of being required to perform any obligations
under, or to defend against any claim made or threatened to be made in
connection with, any such Guaranties from and after the Closing. This
indemnification shall be in addition to the indemnification provided pursuant to
Section 15.1.

       9.17 RIGHTS TO BAMAGAS FIRM CAPACITY PAYMENTS. If any payment is made by
EECI to MLP in connection with its indemnity obligation under Section 15.2(c),
then, contemporaneously with such payment, MLP shall cause Bamagas to assign any
and all rights to collect from Calpine and its Affiliates the Bamagas Firm
Capacity Payments in respect of which such payment was made or, if such rights
are non-assignable, MLP shall cause Bamagas to pursue, at


                                       33


the direction of EECI and at EECI's sole cost and expense, all remedies
available at law or in equity against Calpine for such Bamagas Firm Capacity
Payments.

       9.18 CERTIFIED COPIES OF CERTAIN DOCUMENTS. As promptly as practicable
following (i) any of the Restructuring Actions involving a merger or conversion
of any Company Subsidiary or (ii) the Conversion Step, EECI shall provide to MLP
copies of the articles and certificates of merger or conversion or similar
filings with respect to such actions made with applicable Governmental
Authorities, certified by the applicable Governmental Authority.

       9.19 MIDCOAST RELATED DEBT. In connection with the Midcoast Related Debt,
on or prior to the Closing, EECI shall obtain from its Affiliates that are the
payees under such debt all consents required from such Affiliates thereunder to
consummate the transactions contemplated hereby, including the assumption by MLP
of the EECI Midcoast Debt.

       9.20   INTENTIONALLY DELETED.

       9.21 UNCOLLECTED ACCOUNTS RECEIVABLE. With respect to any accounts
receivable that are eliminated from the computation of Capitalization under
Section 3.3(f), at EECI's request, MLP shall pursue or cause a member of the
Company Group to pursue for EECI's benefit, at EECI's direction and sole cost
and expense, all remedies available at law or in equity against the payors of
such accounts receivable to collect such amounts. MLP shall pay to EECI any
amounts received from such payors in payment of any such receivables.

       9.22 MIDCOAST RELATED DEBT. EECI shall not permit the Company Group to
incur additional New Intercompany Debt so as to cause the aggregate principal
and accrued and unpaid interest under the Midcoast Related Debt that will be
outstanding as of Closing to exceed $900,000,000.

                                   ARTICLE 10
                                   TAX MATTERS

       10.1 ASSET CONTRIBUTION CHARACTERIZATION FOR FEDERAL INCOME TAX PURPOSES.
The parties intend that the separate existence of the Company apart from EECI
shall be disregarded for federal income Tax purposes (and for purposes of any
state income Tax for which such treatment is permitted or required) at the time
of the Closing and that the contribution of the Ownership Interests shall, for
purposes of such Taxes, constitute a contribution to MLP by EECI of the assets
owned by the Company at the time of the Closing subject to the provisions of
Section 721 of the Code. Unless required by applicable Tax Law, neither party
shall take any action inconsistent with such treatment, including, without
limitation, the filing of any election under Treas. Reg. 301.7701-3 for a period
that includes the Closing. EECI and MLP will allocate the Total Consideration
among the assets of the Company Subsidiaries as set forth on SCHEDULE 10.1.

       10.2   LIABILITY FOR TAXES.

              (a) Except to the extent such Taxes are accrued as a Liability on
the Closing Date Balance Sheet, EECI shall be liable for, and shall indemnify
and hold MLP, the Company and their Affiliates harmless from, (i) any Taxes
caused by or resulting from the Restructuring


                                       34


Actions, the Conversion Step and the Contribution Step, and any other actions
taken in anticipation or pursuance thereof, (ii) any Taxes imposed on or
incurred by any member of the Company Group arising out of the inclusion of any
member of the Company Group in any Group by reason of Treasury Regulation
ss.1.1502-6 or any analogous state, local or foreign law or regulation; (iii)
any Taxes imposed on or incurred by any member of the Company Group (or any
Group with respect to the taxable items of any member of the Company Group) for
any taxable period ending before or including the Closing Date (or the portion,
determined as described in paragraph (c) of this Section 10.2, of any such Taxes
for any taxable period beginning on or before and ending after the Closing Date
which is allocable to the portion of such period occurring on or before the
Closing Date (the "PRE-CLOSING PERIOD")) except for Taxes arising from
transactions by any member of the Company Group outside the ordinary course of
business after the Closing, (iv) any Taxes resulting from the income, business,
property or operations of the Excluded Assets, (v) any Taxes imposed on EECI or
a Group that includes EECI with respect to the assets and operations of any
member of the Company Group for any period or portion of a period during the
Midcoast Ownership Period, (vi) any Taxes arising from any breach by EECI of its
representations and warranties contained in Section 4.1(q) or its covenants in
Section 10.1, and (vii) any reasonable attorneys' fees or other reasonable costs
incurred by MLP, any member of the Company Group or any Affiliate thereof in
connection with any payment from EECI under this Section 10.2(a).

              (b) From and after the Closing, MLP shall be liable for, and shall
indemnify and hold EECI and its Affiliates (other than the Company Group)
harmless from, (i) any Taxes imposed on or incurred by or with respect to any
member of the Company Group for which EECI is not liable under Section 10.2(a),
(ii) any Taxes arising from any breach by MLP of its covenants in Section 10.1,
and (iii) any reasonable attorneys' fees or other reasonable costs incurred by
EECI or any Affiliate thereof in connection with any payment from MLP under this
Section 10.2(b).

              (c) Whenever it is necessary for purposes of Section 10.2(a) or
Section 10.2(b) to determine the portion of any Taxes imposed on or incurred by
any member of the Company Group (or any Group) for a taxable period beginning on
or before and ending after the Closing Date which is allocable to the
Pre-Closing Period, the determination shall be made, in the case of property, ad
valorem or similar Taxes (which are not measured by, or based upon, production)
or franchise or capital Taxes (which are not measured by, or based upon, net
income), by multiplying such Taxes by a fraction, the numerator of which is the
number of days in the Pre-Closing Period and the denominator of which is the
total number of days in such Tax period, and, in the case of other Taxes, by
assuming that the Pre-Closing Period constitutes a separate taxable period of
the Company and by taking into account the actual taxable events occurring
during such period (except that exemptions, allowances and deductions for a
taxable period beginning on or before and ending after the Closing Date that are
calculated on an annual or periodic basis, such as the deduction for
depreciation in any state jurisdiction that does not follow the federal income
tax characterization described in Section 10.1 above, shall be apportioned to
the Pre-Closing Period ratably on a per diem basis).

              (d) EECI and MLP will, to the extent permitted by applicable Law,
elect with the relevant taxing authorities to (i) apply the characterization of
the contribution of the Ownership Interests described in Section 10.1 above, or,
(ii) if such an election is not available,


                                       35


to close all taxable periods of any member of the Company Group as of the close
of business on the Closing Date.

              (e) MLP agrees to pay to EECI any refund received after the
Closing Date by MLP or its Affiliates, including the Company Group, in respect
of any Taxes for which EECI is liable under Section 10.2(a), except to the
extent such refund is shown as an asset on the Closing Date Balance Sheet. EECI
agrees to pay to MLP any refund received by EECI or its Affiliates (other than
any member of the Company Group) in respect of any Taxes for which MLP is liable
under Section 10.2(b). The parties shall cooperate in order to take all
necessary steps to claim any such refund. Any such refund received by a party or
its Affiliate for the account of the other party shall be paid to such other
party within thirty (30) days after such refund is received.

       10.3 TAX PROCEEDINGS. In the event MLP, any member of the Company Group
or any of their Affiliates receives notice (the "PROCEEDING NOTICE") of any
examination, claim, adjustment or other proceeding with respect to the Liability
of any member of the Company Group for Taxes for any period for which EECI is or
may be liable under Section 10.2(a), MLP shall notify EECI in writing thereof
(the "MLP NOTICE") no later than the earlier of (a) thirty (30) days after the
receipt by MLP, any member of the Company Group or any of their Affiliates of
the Proceeding Notice, or (b) ten (10) days prior to the deadline for responding
to the Proceeding Notice as to any such Taxes for which EECI is or may be liable
under Section 10.2(a). EECI shall be entitled at its expense to control or
settle the contest of such examination, claim adjustment or other proceeding,
provided EECI notifies MLP in writing that it desires to do so no later than the
earlier of (i) thirty (30) days after receipt of the MLP Notice or (ii) five (5)
days prior to the deadline for responding to the Proceeding Notice. EECI may
not, without the consent of MLP (which consent MLP may reasonably withhold),
agree to any settlement which would result in an increase in the amount of Taxes
for which MLP, its partners or any member of the Company Group is or may be
liable under Section 10.2(b). The parties shall cooperate with each other and
with their respective Affiliates, and will consult with each other, in the
negotiation and settlement of any proceeding described in this Section 10.3.

       10.4   TAX RETURNS.

              (a) EECI shall cause to be included in the consolidated federal
income Tax Returns (and the state income Tax Returns of any state that permits
consolidated, combined or unitary income Tax Returns) of the EECI Tax Group (as
defined herein) for all periods ending on or before the Closing Date, all Tax
items of all members of the Company Group which are required to be included
therein, shall cause such Tax Returns to be timely filed with the appropriate
taxing authorities, and shall be responsible for the timely payment (and
entitled to any refund) of all Taxes due with respect to the periods covered by
such Tax Returns. For purposes of this Agreement "EECI TAX GROUP" means the
affiliated group of corporations within the meaning of section 1504 of the
Internal Revenue Code of 1986, as amended, which files a consolidated federal
income Tax Return and as to which EECI is the common parent, and, in the case of
any combined or unitary Tax Return, the group of corporations filing such Tax
Return that includes EECI or its operations.

              (b) With respect to any Tax Return covering a taxable period
ending on or before the Closing Date that is required to be filed after the
Closing Date with respect to any


                                       36


member of the Company Group that is not described in paragraph (a) above, EECI
shall cause such Tax Return to be prepared, shall cause to be included in such
Tax Return all Tax items required to be included therein, shall cause such Tax
Return to be filed timely with the appropriate taxing authority, and shall be
responsible for the timely payment (and entitled to any refund) of all Taxes due
with respect to the period covered by such Tax Return.

              (c) With respect to any Tax Return covering a taxable period
beginning on or before the Closing Date and ending after the Closing Date that
is required to be filed after the Closing Date with respect to the Company Group
and their assets and operations, MLP shall cause such Tax Return to be prepared,
shall cause to be included in such Tax Return all Tax items required to be
included therein, shall file timely such Tax Return with the appropriate taxing
authority, and shall be responsible for the timely payment of all Taxes due with
respect to the period covered by such Tax Return. MLP shall determine, in
accordance with the provisions of Section 10.2(c), the amount of Tax due with
respect to the period prior to and including the Closing Date (the
"CONTRIBUTOR'S TAX") and shall notify EECI of its determination of the
Contributor's Tax. EECI shall pay to MLP an amount equal to the Contributor's
Tax not later than five days after the filing of such Tax Return. Any refund
attributable to Tax Returns filed pursuant to this Section 10.4(c) shall be
apportioned between MLP and EECI in a manner consistent with calculation of the
Contributor's Tax.

       10.5 TAX ALLOCATION ARRANGEMENTS. Effective as of the Closing, all
Liabilities and obligations between any member of the Company Group, on the one
hand, and EECI and any Affiliates thereof (other than any member of the Company
Group), on the other hand, under any Tax indemnity, sharing, allocation or
similar agreement or arrangement in effect prior to the Closing shall be
extinguished in full, and any Liabilities or rights existing under any such
agreement or arrangement shall cease to exist and shall no longer be
enforceable. EECI and its Affiliates shall execute any documents necessary to
effectuate the provisions of this Section 10.5.

       10.6 COOPERATION AND EXCHANGE OF INFORMATION. Each party will provide, or
cause to be provided, to the other party copies of all correspondence received
from any Governmental Authority by such party or any of its Affiliates in
connection with the Liability of any member of the Company Group for Taxes for
any period for which such other party is or may be liable under Section 10.2(a)
or Section 10.2(b). The parties will provide each other with such cooperation
and information as they may reasonably request of each other in preparing or
filing any Tax Return or claim for refund, in determining a Liability or a right
of refund or in conducting any audit or other proceeding in respect of Taxes
imposed on the parties or their respective Affiliates. The parties and their
Affiliates will preserve and retain all Tax Returns, schedules, work papers and
all material records or other documents relating to any such Tax Returns,
claims, audits or other proceedings until the expiration of the statutory period
of limitations (including extensions) of taxable periods to which such documents
relate and until the final determination of any payments which may be required
with respect to such periods under this Agreement and shall make such documents
available to the other party or any Affiliate thereof, and their respective
officers, employees and agents, upon reasonable notice and at reasonable times,
it being understood that such representatives shall be entitled to make copies
of any such books and records relating to any member of the Company Group as
they shall deem necessary. Any information obtained pursuant to this Section
10.6 shall be kept confidential,


                                       37


except as may be otherwise necessary in connection with the filing of Tax
Returns or claims for refund or in conducting any audit or other proceeding.
Each party shall provide the cooperation and information required by this
Section 10.6 at its own expense.

       10.7   REMEDIAL ALLOCATION METHOD. EECI shall cause the MLP to elect the
remedial allocation method under Treas. Reg.ss.1.704-3(d), if available, with
respect to the Assets, except as provided in Section 10.10.

       10.8   SURVIVAL OF OBLIGATIONS. The obligations of the parties set forth
in this Article 10 shall be unconditional and absolute and shall remain in
effect without limitation as to time.

       10.9 CONFLICT. In the event of a conflict between the provisions of this
Article 10 and any other provisions of this Agreement, the provisions of this
Article 10 shall control.

       10.10  GOODWILL. The parties agree that the Midcoast Goodwill shall not
be amortized for tax purposes by the MLP.

                                   ARTICLE 11
                               CLOSING CONDITIONS

       11.1 EECI'S CLOSING CONDITIONS. The obligation of EECI to proceed with
the Closing contemplated hereby is subject, at the option of EECI, to the
satisfaction or waiver by EECI, on or prior to the Closing Date, of the
following conditions:

              (a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The (i)
representations and warranties of MLP contained in this Agreement shall be true
and correct in all material respects (and in all respects, in the case of
representations and warranties which are qualified by materiality or a Material
Adverse Effect) on and as of the Closing Date as though made as of the Closing
Date, and (ii) covenants and agreements of MLP to be performed on or before the
Closing Date in accordance with this Agreement shall have been duly performed in
all material respects (and in all respects, in the case of covenants and
agreements which are qualified by materiality).

              (b) OFFICER'S CERTIFICATE. EECI shall have received a certificate
dated as of the Closing Date, executed on behalf of MLP by a duly authorized
officer of MLP, to the effect that the conditions set forth in subsection (a) of
this Section 11.1 have been satisfied.

              (c) TRANSACTION DOCUMENTS. MLP shall have delivered (or cause to
be delivered) at Closing, all Transaction Documents that MLP is required to
execute and/or deliver to EECI pursuant to Section 12.3.

              (d) NO ACTION. On the Closing Date, no Action (excluding any such
matter initiated by EECI or any of its Affiliates) shall be pending or
threatened before any court or governmental agency or body of competent
jurisdiction seeking to enjoin or restrain the consummation of the Closing or
recover damages from EECI or any Affiliate of EECI resulting therefrom.


                                       38


              (e) NO EXISTING ORDER. No order, writ, injunction or decree shall
have been entered and be in effect by any court of competent jurisdiction or any
Governmental Authority, and no statute, rule, regulation or other requirement
shall have been promulgated or enacted and be in effect, that restrains, enjoins
or invalidates the transactions contemplated hereby.

              (f) CONSENTS. All consents, licenses and approvals from all third
parties or Governmental Authorities (other than Post-Closing Consents and such
consents, licenses and approvals the failure of which to obtain or with which to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect) necessary or appropriate for EECI to consummate
the transactions contemplated by this Agreement shall have been received. Any
applicable waiting period under the HSR Act relating to the transaction as
contemplated hereby shall have expired or been terminated.

              (g) SUBSTITUTE GUARANTIES. To the extent obtained, MLP shall have
provided evidence satisfactory to EECI and its Affiliates of the releases and
substitute Guaranties required by Section 9.16 of this Agreement.

       11.2 MLP'S CLOSING CONDITIONS. The obligation of MLP to proceed with the
Closing contemplated hereby is subject, at the option of MLP, to the
satisfaction, or waiver by MLP, on or prior to the Closing Date, of the
following conditions:

              (a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The (i)
representations and warranties of EECI contained in this Agreement shall be true
and correct in all material respects (and in all respects, in the case of
representations and warranties which are qualified by materiality or a Material
Adverse Effect) on and as of the Closing Date as though made as of the Closing
Date, and (ii) covenants and agreements of EECI to be performed on or before the
Closing Date in accordance with this Agreement shall have been duly performed in
all material respects (and in all respects, in the case of covenants and
agreements which are qualified by materiality).

              (b) OFFICER'S CERTIFICATE. MLP shall have received a certificate
dated as of the Closing Date, executed on behalf of EECI by a duly authorized
officer of EECI, to the effect that the conditions set forth in subsections (a)
and (g) of this Section 11.2 have been satisfied.

              (c)    TRANSACTION DOCUMENTS. EECI shall have delivered (or cause
to be delivered) at the Closing, all Transaction Documents that EECI or the
Company is required to deliver to MLP pursuant to Section 12.2.

              (d) NO ACTION. On the Closing Date, no Action (excluding any such
matter initiated by MLP or any of its Affiliates) shall be pending or threatened
before any court or governmental agency or body of competent jurisdiction
seeking to enjoin or restrain the consummation of the Closing or recover damages
from MLP or any Affiliate of MLP resulting therefrom.

              (e) FINANCING. MLP shall have obtained (on terms satisfactory to
it) the third-person financing required to satisfy its obligations under Article
III.


                                       39


              (f) NO EXISTING ORDER. No order, writ, injunction or decree shall
have been entered and be in effect by any court of competent jurisdiction or any
Governmental Authority, and no statute, rule, regulation or other requirement
shall have been promulgated or enacted and be in effect, that restrains, enjoins
or invalidates the transactions contemplated hereby.

              (g) NO INTERIM MATERIAL ADVERSE CHANGE. Except for changes
resulting on account of the KPC Rate Case, there shall have been no Interim
Material Adverse Effect since the Report Time.

              (h)    FAIRNESS OF TRANSACTION. The Special Committee of the Board
of Directors of EECI shall not have withdrawn or qualified its approval of this
Agreement and the transactions contemplated hereby.

              (i) CONTRIBUTION AND CONVERSION STEPS AND RESTRUCTURING ACTIONS.
The Contribution Step and the Conversion Step as contemplated by Section 6.1
hereof shall have occurred, and MLP shall have been satisfied with the
Restructuring Actions and such Restructuring Actions shall have occurred.

              (j) CONSENTS. All consents, licenses and approvals from all third
parties or Governmental Authorities (other than Post-Closing Consents and such
consents, licenses and approvals the failure of which to obtain or with which to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect) necessary or appropriate for MLP to consummate
the transactions contemplated by this Agreement and conduct the businesses of
the Company Group immediately following Closing shall have been received. Any
applicable waiting period under the HSR Act relating to the transaction as
contemplated hereby shall have expired or been terminated.

                                   ARTICLE 12
                                     CLOSING

       12.1   CLOSING. The Closing shall be held on the Closing Date at 10:00
a.m., local time, at the office of Vinson & Elkins L.L.P., 1001 Fannin, Suite
2300, Houston, Texas, or at such other time or place as EECI and MLP may
otherwise agree in writing.

       12.2   EECI'S CLOSING OBLIGATIONS. At Closing, EECI and its Affiliates,
as applicable, shall execute and deliver, or cause to be executed and delivered,
to MLP the following:

              (a) (i) the Assignment of the Membership Interest, (ii) the
Assignment of Partnership Interest, (iii) a certified copy, dated as of a recent
date, of the certificate of conversion of the Company from the Secretary of the
State of Texas, (iv) a certified copy, dated as of a recent date, of the
certificate of formation of Holdings LLC from the Secretary of the State of
Delaware, (v) a certificate of good standing for Holdings LLC certified as of a
recent date by the Secretary of the State of Delaware, and (vi) the Assumption
Agreement;

              (b) the officer's certificate of EECI referred to in Section
11.2(b), with such exceptions thereto which are scheduled in such certificate
with respect to matters discovered, occurring or arising after the date of this
Agreement as may be necessary to make the statements contained therein true and
correct;


                                       40


              (c) a non-foreign affidavit, as such affidavit is referred to in
Section 1445(b)(2) of the Code, in the form attached hereto as EXHIBIT 12.2(c7),
dated as of the Closing Date;

              (d) a copy, certified as of the Closing Date, by EECI's Secretary
or Assistant Secretary, as the case may be, of the resolutions duly adopted by
the Board of Directors of EECI authorizing the transactions contemplated by this
Agreement;

              (e)    the New Service Agreement executed at or prior to the
Closing Date by an officer of the Company; and

              (f) any other agreements, instruments and documents which are
required by other terms of this Agreement to be executed and/or delivered by
EECI or the Company to MLP at the Closing.

       12.3 MLP'S CLOSING OBLIGATIONS. At Closing, MLP and its Affiliates, as
applicable, shall (i) deliver, or cause to be delivered, the Cash Payment to
EECI in immediately available funds to the bank account specified by EECI to MLP
on or prior to the Closing Date and (ii) execute and deliver, or cause to be
executed and delivered, to EECI the following:

              (a) the officer's certificate of MLP referred to in Section
11.1(b), with such exceptions thereto which are scheduled in such certificate
with respect to matters discovered, occurring or arising after the date of this
Agreement as may be necessary to make the statements contained therein true and
correct;

              (b) a copy, certified as of the Closing Date, by MLP's Secretary
or Assistant Secretary, as the case may be, of the resolutions duly adopted by
the Board of Directors of EECI authorizing the transactions contemplated by this
Agreement; and

              (c) any other agreements, instruments and documents which are
required by other terms of this Agreement to be executed and/or delivered by MLP
to EECI at the Closing, including the Assumption Agreement.

       12.4   PAYMENT OF CASH PAYMENT. At Closing, MLP shall cause the Cash
Payment to be paid to EECI.

                                   ARTICLE 13
                                EFFECT OF CLOSING

       13.1 SURVIVAL. (a) The representations, warranties, covenants and
agreements of the parties set forth herein and in any certificate delivered in
connection herewith with respect to any of those representations, warranties,
covenants and agreements will survive the Closing and the Effective Time until
the day that is two years from the Effective Time, whereupon they will terminate
and expire, except as follows:

                  (1)      the representations and warranties of EECI:


                                       41


                            (A) under Sections 4.1(q), 4.1(y) and 4.1(gg), shall
                     survive until the 90th day after the expiration of the
                     applicable statues of limitations (including all periods of
                     extension and tolling); and

                            (B) under Sections 4.1(e) and 4.1(r), shall survive
                     until the day that is four years from the Effective Time;

                     (2)    the covenants and agreements of EECI:

                            (A) under Sections 9.6, 9.7, 9.13 and 9.15 and
                     Articles 10, 13, 14, 15 (other than Section 15.2(c) and
                     Section 15.2(d)) and 17 shall survive indefinitely or for
                     such shorter period as may be stipulated in such
                     provisions;

                            (B) under Section 15.2(c) shall survive until
                     Calpine has paid the Bamagas Firm Capacity Payment for a
                     three-month period (whether or not such three-month period
                     occurs prior to or after the Closing) without any written
                     communication asserting that such payment is subject to
                     refund to Calpine because of the Calpine Dispute; and

                            (C) under Section 15.2(d) shall survive until the
                     day that is four years from the Effective Time;

                     (3) the covenants and agreements of MLP and/or the Company,
              as the case may be, under Sections 8.1, 9.7, 9.8, 9.9, 9.15, 9.16,
              9.17 and 9.21 and Articles 7, 10, 13, 14, 15 and 17 shall survive
              indefinitely or for such shorter period as may be stipulated in
              such provisions;

provided, however, that the applicable time period specified above in the case
of any representation, warranty, covenant or agreement of EECI will be computed
excluding from that computation any time during which EECI is in violation of
Section 9.13 with respect to any indemnification claim arising out of the breach
of such representation, warranty, covenant or agreement.

                     (b)    After a representation, warranty, covenant or
agreement has expired under Section 13.1(a), no damage claim will or may be made
or prosecuted, through an Action or otherwise, by any Person who would have been
entitled to damages hereunder on the basis of that representation, warranty,
covenant or agreement prior to its termination and expiration, provided that no
damage claim based on a representation, warranty, covenant or agreement
hereunder written notice of which damage claim is presented prior to the
termination and expiration of that representation, warranty, covenant or
agreement to the Person or Persons from which damages are then being or
thereafter may be sought on the basis of that representation, warranty, covenant
or agreement will be affected in any way by that termination and expiration.

                                   ARTICLE 14
                                   LIMITATIONS

       14.1   DISCLAIMER OF WARRANTIES AND REPRESENTATIONS. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER PROVISION OF


                                       42


THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT EECI IS NOT
MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, BEYOND THOSE REPRESENTATIONS OR WARRANTIES EXPRESSLY GIVEN IN THIS
AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE
AND WITHOUT LIMITING THE EXPRESS REPRESENTATIONS AND WARRANTIES OF EECI
CONTAINED IN THIS AGREEMENT, EECI HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT COMMON OR CIVIL LAW, BY
STATUTE OR OTHERWISE, RELATING OR WITH RESPECT TO (A) ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF
CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (B) ANY INFRINGEMENT BY EECI, ANY
OF ITS AFFILIATES OR ANY OF THE COMPANY GROUP OF ANY PATENT OR PROPRIETARY RIGHT
OF ANY THIRD PARTY, (C) ANY ENVIRONMENTAL MATTERS (INCLUDING ANY ENVIRONMENTAL
CONDITION), (D) THE ACCURACY OR COMPLETENESS OF THE INFORMATION, RECORDS, DATA
AND INTERPRETATIONS NOW, HERETOFORE OR HEREAFTER MADE AVAILABLE TO MLP IN
CONNECTION WITH THIS AGREEMENT BY EECI, ANY AFFILIATE OF EECI, ANY OF COMPANY
GROUP OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, REPRESENTATIVE, INVESTMENT
BANKER, COUNSEL, CONSULTANT OR ADVISOR OF SUCH PERSONS, AND (E) THE COMPANY'S OR
ANY OF THE COMPANY SUBSIDIARIES' TITLE TO ANY OF THE ASSETS.

       14.2 DAMAGES. NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY
OTHER PROVISION OF THIS AGREEMENT, EECI AND MLP AGREE THAT THE RECOVERY BY
EITHER PARTY HERETO OF ANY DAMAGES OR OTHER LIABILITIES SUFFERED OR INCURRED BY
IT AS A RESULT OF ANY BREACH BY THE OTHER PARTY OF ANY OF ITS REPRESENTATIONS,
WARRANTIES OR OBLIGATIONS UNDER THIS AGREEMENT SHALL BE LIMITED TO THE ACTUAL
DAMAGES AND/OR LIABILITIES SUFFERED OR INCURRED BY THE NON-BREACHING PARTY AS A
RESULT OF THE BREACH BY THE BREACHING PARTY OF ITS REPRESENTATIONS, WARRANTIES
OR OBLIGATIONS HEREUNDER AND IN NO EVENT SHALL THE BREACHING PARTY BE LIABLE TO
THE NON-BREACHING PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR
PUNITIVE DAMAGES (INCLUDING ANY DAMAGES ON ACCOUNT OF LOST PROFITS OR
OPPORTUNITIES OR BUSINESS INTERRUPTION) SUFFERED OR INCURRED BY THE
NON-BREACHING PARTY AS A RESULT OF THE BREACH BY THE BREACHING PARTY OF ANY OF
ITS REPRESENTATIONS, WARRANTIES OR OBLIGATIONS HEREUNDER. For purposes of the
foregoing, actual damages may however, include indirect consequential, special,
exemplary or punitive damages to the extent (i) the injuries or losses resulting
in or giving rise to such damages are incurred or suffered by a Person that is
not an Indemnified Person or an Affiliate of any Indemnified Person and (ii)
such damages are recovered against an Indemnified Person by a Person that is not
an Indemnified Person or an Affiliate of any Indemnified Person. This Section
14.2 shall operate only to limit a party's liability and shall not operate to
increase or expand any contractual obligation of a party


                                       43


hereunder or cause any contractual obligation of a party hereunder to survive
longer than provided in Section 13.1.

       14.3 ENVIRONMENTAL RELEASE. From and after Closing but subject to EECI's
indemnity obligations under Section 15.2 as long as such indemnity survives with
respect to any Environmental Liability, the MLP Indemnified Persons shall have
no rights to recovery or indemnification for Environmental Liabilities or any
environmental matters under this Agreement or Law (including any Environmental
Law), and all rights or remedies which any MLP Indemnified Person may have at or
under Law (including any Environmental Law) with respect to any Environmental
Liabilities or environmental matters are expressly waived. FROM AND AFTER
CLOSING, BUT WITHOUT LIMITING OR RELEASING EECI'S INDEMNITY OBLIGATIONS UNDER
SECTION 15.2, MLP AND ALL MLP INDEMNIFIED PERSONS DO HEREBY AGREE, WARRANT AND
COVENANT TO RELEASE, ACQUIT AND FOREVER DISCHARGE EECI AND ALL EECI INDEMNIFIED
PERSONS FROM ANY AND ALL CLAIMS, DEMANDS AND CAUSES OF ACTION OF WHATSOEVER
NATURE, INCLUDING WITHOUT LIMITATION ALL CLAIMS, DEMANDS AND CAUSES OF ACTION
FOR CONTRIBUTION AND INDEMNITY UNDER STATUTE, COMMON OR CIVIL LAW, WHICH COULD
BE ASSERTED NOW OR IN THE FUTURE AND THAT RELATE TO OR IN ANY WAY ARISE OUT OF
ENVIRONMENTAL LIABILITIES OR ENVIRONMENTAL MATTERS. FROM AND AFTER CLOSING AND
EXCEPT FOR THE RIGHTS AND REMEDIES IN CONNECTION WITH EECI'S INDEMNITY
OBLIGATIONS UNDER SECTION 15.2, MLP, EACH OF THE COMPANY GROUP AND ALL OTHER MLP
INDEMNIFIED PERSONS WARRANT, AGREE AND COVENANT NOT TO SUE OR INSTITUTE
ARBITRATION AGAINST EECI OR ANY EECI INDEMNIFIED PERSON UPON ANY CLAIM, DEMAND
OR CAUSE OF ACTION FOR INDEMNITY AND CONTRIBUTION THAT HAVE BEEN ASSERTED OR
COULD BE ASSERTED FOR ANY ENVIRONMENTAL LIABILITIES OR ENVIRONMENTAL MATTERS.

                                   ARTICLE 15
                                 INDEMNIFICATION

       15.1 INDEMNIFICATION BY MLP. From and after the Closing, the Company
shall pay, perform, fulfill and discharge all Company Liabilities. Subject to
the limitations of Section 13.1 and Article 14, effective as of the Closing, MLP
(and the Company with respect to all Company Liabilities under clause (a) of
this Section 15.1) hereby indemnifies and holds harmless EECI, EECI's Affiliates
(other than any member of the Company Group), each of their respective past,
present and future directors, officers, employees, consultants and agents, and
each of the directors, officers, heirs, executors, successors and assigns of any
of the foregoing (collectively, the "EECI INDEMNIFIED PERSONS") from and against
(a) any and all Company Liabilities incurred by or asserted against any of the
EECI Indemnified Persons, INCLUDING ANY COMPANY LIABILITY BASED ON THE SOLE,
JOINT OR CONCURRENT NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY OF THE EECI
INDEMNIFIED PERSON OR ANY OTHER THEORY OF LIABILITY, WHETHER IN LAW (WHETHER
COMMON, CIVIL OR STATUTORY) OR EQUITY and (b) any Liability resulting from any
breach or nonfulfillment of any representation, warranty, covenant or agreement
on the part of MLP which is expressly set forth in this Agreement.


                                       44


       15.2 INDEMNIFICATION BY EECI. Subject to the provisions of Section 15.4
and the limitations of Section 13.1 and Article 14, effective as of the Closing,
EECI hereby indemnifies and holds harmless MLP, each member of the Company
Group, each of their respective present and future directors, officers,
employees, consultants and agents, and each of the directors, officers, heirs,
executors, successors and assigns of any of the foregoing (collectively, the
"MLP INDEMNIFIED PERSONS") from and against (a) any Liability resulting from any
breach or nonfulfillment of any representation, warranty, covenant or agreement
on the part of EECI which is expressly set forth in this Agreement, (b) any and
all Excluded Liabilities, (c) the failure of Calpine to pay any Bamagas Firm
Capacity Payments because of the Calpine Dispute, except with respect to any
Bamagas Firm Capacity Payment for which the accounts receivable thereto was
eliminated in computing the Capitalization under Section 3.3(f) and (d) any
breach by Bamagas under the Bamagas Contracts that arises on account of the
contribution of the Company (and, indirectly, the Company Subsidiaries) to MLP
or the Restructuring Actions.

         For purposes of this Section 15.2, whether EECI has breached any of its
representations and warranties herein shall be determined without giving effect
to any qualification as to materiality, Material Adverse Effect, or concepts of
similar import.

       15.3 INDEMNIFICATION AND DEFENSE PROCEDURES. A Person that is entitled to
be indemnified under Section 5.1, 15.1 and/or 15.2 is herein referred to as an
"INDEMNIFIED PERSON" and the party that is obligated to indemnify an Indemnified
Person under Section 5.1 or 15.2 is herein referred to as the "INDEMNIFYING
PARTY" with respect to the matter for which it is obligated to indemnify such
Indemnified Person. All claims for indemnification under Sections 15.1 and 15.2
shall be asserted and resolved as follows:

              (a) If a third party claim for which an Indemnified Person is
entitled to indemnity under Sections 5.1(b), 15.1 and/or 15.2 (an "INDEMNIFIED
CLAIM") is made against an Indemnified Person, and if MLP or EECI intends to
seek indemnity with respect thereto by or from an Indemnifying Party pursuant to
Sections 5.1(b), 15.1 and/or 15.2, then the party electing to seek indemnity on
behalf of such indemnified Person shall promptly transmit to the Indemnifying
Party a written notice ("CLAIM NOTICE") (i) notifying such Indemnifying Party of
such Indemnified Claim and request indemnity on behalf of such Indemnified
Person with respect to such Indemnified Claim under Sections 5.1(b), 15.1 and/or
15.2, as the case may be, (ii) setting forth the full name, address for all
notices and the authorized representatives of such Indemnified Person with
respect to such Indemnified Claim, and (iii) describing in reasonable detail the
nature of the Indemnified Claim, including a copy of all papers served with
respect to such Indemnified Claim (if any) and the basis of such request for
indemnification under Sections 5.1(b), 15.1 and/or 15.2, as the case may be.
Failure to provide such Claim Notice promptly shall not affect the right of the
Indemnified Person to indemnification hereunder except to the extent the
Indemnifying Party is prejudiced thereby; provided that, the Indemnifying Party
shall not be obligated to defend, indemnify or otherwise hold harmless an
Indemnified Person with respect to a third party claim until a Claim Notice
meeting the foregoing requirements is furnished to the Indemnifying Party by the
party seeking indemnity hereunder. Within thirty (30) days after receipt of any
Claim Notice (the "ELECTION PERIOD"), the Indemnifying Party shall notify the
party who sent the Claim Notice (A) whether the Indemnifying Party disputes its
potential liability to indemnify the Indemnified Person under Sections 5.1(b),
15.1 and/or 15.2, as the case may be, with respect to such third party claim and
(B) whether the Indemnifying


                                       45


Party desires to defend the Indemnified Person against such third party claim;
provided that, if the Indemnifying Party fails to so notify the Indemnified
Person during the Election Period, the Indemnifying Party shall be deemed to
have elected to dispute such liability and not to defend against such third
party claim. The aforesaid election or deemed election by the Indemnifying Party
not to assume the defense of the Indemnified Person with respect to such
Indemnified Claim, however, shall be subject to the right of the Indemnifying
Party to subsequently assume the defense of the Indemnified Person with respect
to such Indemnified Claim at any time prior to settlement or final determination
thereof.

              (b) If the Indemnifying Party notifies the party who sent the
Claim Notice within the Election Period that the Indemnifying Party (i) does not
dispute its liability to indemnify the Indemnified Person under Sections 5.1(b),
15.1 and/or 15.2, as the case may be (or reserves the right to dispute whether
such claim is an Indemnified Claim under Section 15.1 and/or 15.2) and (ii)
elects to assume the defense of such Indemnified Person with respect to such
third party claim, then the Indemnifying Party shall have the right to defend,
at its sole cost and expense, such third party claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 15.3(b). If an Indemnifying
Party elects pursuant to the foregoing to assume the defense of an Indemnified
Person with respect to a third party claim which is subsequently determined not
to be an Indemnified Claim, then, without limiting any action the Indemnifying
Party may have on account of actual fraud, the Indemnifying Party shall not be
entitled to recover from the other party or the Indemnified Person the costs and
expenses incurred by the Indemnifying Party in providing such defense. The
Indemnifying Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof; provided that the Indemnifying
Party shall not enter into any settlement agreement (or settle or compromise any
such third party claim in a manner) which provides for or results in any payment
by or Liability of the Indemnified Person of or for any damages or other amount,
any lien, charge or encumbrance on any property of the Indemnified Person, any
finding of responsibility or liability on the part of the Indemnified Person or
any sanction or restriction upon the conduct of any business by the indemnified
Person without the Indemnified Person's express written consent, which consent
shall not be unreasonably withheld. The Indemnified Person is hereby authorized,
at the sole cost and expense of the Indemnifying Party (but only if the
Indemnified Person is actually entitled to indemnification hereunder), to file,
during the Election Period, any motion, answer or other pleadings which the
Indemnified Person shall deem necessary or appropriate to protect its interests
or those of the Indemnifying Party and not reasonably expected to be prejudicial
to the Indemnifying Party. If requested by the Indemnifying Party, the
Indemnified Person agrees, at the sole cost and expense of the Indemnifying
Party, to cooperate with the Indemnifying Party and its counsel in contesting
any such third party claim which the Indemnifying Party elects to contest,
including the making of any related counterclaim or cross-complaint against any
Person (other than an MLP Indemnified Person, if the Indemnified Person is an
MLP Indemnified Person, or an EECI Indemnified Person, if the Indemnified Person
is an EECI Indemnified Person). The Indemnified Person may participate in, but
not control, any defense or settlement of any third party claim controlled by
the Indemnifying Party pursuant to this Section 15.3(b), and the Indemnified
Person shall bear its own costs and expenses with respect to such participation.
The prosecution of the defense of a third party claim with reasonable diligence
shall include the taking of such action (including the posting of a bond,
deposit or other security) as may be necessary to prevent any action to


                                       46


foreclose a lien against or attachment of the property of the Indemnified Person
for payment of such third party claim.

              (c) If the Indemnifying Party (i) fails to notify the party who
sent the Claim Notice within the Election Period that the Indemnifying Party
elects to defend the Indemnified Person pursuant to Section 15.3(b) or (ii)
elects to defend the Indemnified Person pursuant to Section 15.3(b) but fails to
prosecute the defense of (or to settle) the third party claim with reasonable
diligence, then the Indemnified Person shall have the right to defend, at the
sole cost and expense of the Indemnifying Party (but only if the Indemnified
Person is actually entitled to indemnification hereunder), the third party claim
by all appropriate proceedings, which proceedings shall be promptly and
vigorously prosecuted by the Indemnified Person to a final conclusion or
settled. Unless and until such defense is assumed by the Indemnifying Party as
permitted in Section 15.3(a), the Indemnified Person shall have full control of
such defense and proceedings; provided, however, that the Indemnifying Party,
without assuming the defense of such Indemnified Claim, may participate in, but
not control, any defense or settlement controlled by the Indemnified Person
pursuant to this Section 15.3(c), and the Indemnifying Party shall bear its own
costs and expenses with respect to such participation. The Indemnified Person
may not enter into any compromise or settlement of such third party claim,
without the Indemnifying Party's express written consent, which shall not be
unreasonably withheld.

              (d) If an Indemnified Person is entitled to indemnity under
Sections 5.1(b), 15.1 and/or 15.2 for a claim or other matter which does not
involve a third party claim, and if MLP or EECI intends to seek indemnity on
behalf of an Indemnified Person with respect thereto by or from an Indemnifying
Party pursuant to Sections 5.1(b), 15.1 and/or 15.2, then the party electing to
seek indemnity on behalf of an Indemnified Person shall promptly transmit to the
Indemnifying Party a written notice describing in reasonable detail the nature
of such claim or other matter, the Indemnified Person's best estimate of the
amount of damages attributable to such claim or other matter and the basis for
the Indemnified Person's entitlement to indemnification under Sections 5.1(b),
15.1 and/or 15.2, as the case may be. If the Indemnifying Party does not notify
the party who sent such notice within thirty (30) days from its receipt of such
notice that the Indemnifying Party does not dispute such claim for indemnity,
the Indemnifying Party shall be deemed to have disputed such claim.

              (e) To the extent any claim, action, suit or proceeding includes
one or more Indemnified Claims with respect to an Indemnified Person and one or
more third party claims which are not Indemnified Claims with respect to such
Indemnified Person, any such non-Indemnified Claim insofar as it is with respect
to such Indemnified Person shall not be covered by the indemnity in Sections
15.1 and 15.2, the Indemnifying Party shall not be obligated to undertake,
conduct and control the defense or settlement of such non-Indemnified Claim
insofar as it is with respect to such Indemnified Person, and such Indemnified
Person shall be responsible for its own defense and settlement of such
non-Indemnified Claim. The seeking by a party of indemnity hereunder on behalf
of any Indemnified Person with respect to any third party claim or other claim
or matter shall not prevent such party from then or thereafter also seeking
indemnity hereunder on behalf of any other Indemnified Person with respect to
such third party claim or other claim or matter and shall not prevent the other
party from seeking indemnity hereunder on behalf of any Indemnified Person with
respect to the same third party claim or other claim or matter.


                                       47


       15.4   LIABILITY LIMITATIONS.

              (a) Notwithstanding anything herein provided to the contrary, EECI
shall have no Liability to MLP or any other MLP Indemnified Person pursuant to
Sections 15.2(a) or for any breach by EECI of this Agreement, except with
respect to Liabilities arising by virtue of any breach by EECI of its
representations and warranties under Section 4.1(e) and 4.1(r) and Liabilities
arising under any of Sections 9.5, 9.6, 9.15, 15.2(b), 15.2(c), 15.2(d) or
Article 10, unless and until the aggregate amount of all Liabilities covered by
Section 15.2, exceeds the sum of $20,000,000. EECI shall be liable in accordance
with the other terms of this Agreement for those Liabilities in excess of
$20,000,000 subject to the further provisions of this Section 15.4. EECI shall
be liable for all Liabilities arising by virtue of any breach by EECI of its
representations and warranties under Sections 4.1(e) and 4.1(r) and for all
Liabilities arising under Sections 9.5, 9.6, 9.15, 15.2(b), 15.2(c), 15.2(d) and
Article 10.

              (b) Notwithstanding anything herein provided to the contrary,
except as hereinafter provided in this Section 15.4(b), the maximum aggregate
Liability of EECI to MLP and the other MLP Indemnified Persons pursuant to
Section 15.2(a) (other than with respect to Sections 4.1(e) and 4.1(r)) shall be
limited to $150,000,000. EECI's Liability for its indemnification pursuant to
Section 15.2(a) with respect to any breach by EECI of its representation and
warranty under Sections 4.1(e) and 4.1(r) or with respect to any breach by EECI
of any of its covenants and agreements under Sections 9.5, 9.6, 9.15, 15.2(b),
15.2(c), 15.2(d) or Article 10 shall not be limited under this Agreement.

              (c) The Liabilities or other adverse consequences giving rise to
any indemnification obligation hereunder shall be limited to the actual loss
suffered by the Indemnified Person (that is, reduced by any insurance payment or
recoupment received, realized or retained by the Indemnified Person as a result
of the events giving rise to the claim for indemnification, net of any expenses
related to the receipt or collection of such proceeds, payment or recoupment,
including premium adjustments, if any), but not any reduction in Taxes of the
Indemnified Person (or the affiliated group of which it is a member) occasioned
by such Liabilities or other adverse consequences.

              (d) EECI, MLP, the Company Group and each other Indemnified Person
shall cooperate with the Indemnifying Party with respect to resolving any
Indemnified Claim with respect to which either EECI or MLP is obligated to
indemnify an Indemnified Person under this Article 15, including making
commercially reasonable efforts to mitigate or resolve any such Indemnified
Claim and providing the others with reasonable access to such Indemnified
Person's records (other than those subject to attorney-client or attorney work
product privilege) and personnel having relevant information with respect to the
Indemnified Claim. Without limiting the foregoing, to the extent it may legally
do so each party agrees to assign or cause the assignment to the Indemnifying
Party with respect to an Indemnified Claim any and all of the rights and
remedies that the Indemnified Person may have with respect to such Indemnified
Claim against any Person (other than EECI, MLP, any member of the Company Group
or any Affiliate of EECI, MLP or any member of the Company Group or any
insurance carrier or bonding or surety company of the Indemnified Person)
pursuant to any claims, rights and agreements of or for indemnification,
guarantee, contribution, reimbursement or similar assurances which are the
subject of such Indemnified Claim.


                                       48


              (e) Each party agrees to maintain all records and information made
available to it pursuant to Section 15.4(d) confidential and to cause its
directors, officers, employees, agents, representatives, consultants and
advisors to maintain all records and information made available to them pursuant
to this Section confidential, except (i) as required by Law, administrative
process or any standards or rules of any stock exchange to which such party or
any of its Affiliates is subject, (ii) for information which is available to the
public on the date hereof, or thereafter becomes available to the public other
than as a result of a breach of this Section 15.4(e), and (iii) to the extent
that such party must disclose the same in any court or arbitration proceedings
brought by it to enforce its rights hereunder.

       15.5 COVENANT REGARDING ACTIONS OF EECI REGARDING ITS ASSETS. For so long
as EECI has an indemnification obligation pursuant to Section 15.2(a), 15.2(c)
or 15.2(d), it will not make any dividend or distribution on its stock, or
repurchase any shares of its stock, or sell or otherwise dispose of any assets
or take any other action within its control if the effect of such action would
cause its net worth (excluding accumulated other comprehensive income), as
calculated under GAAP on a consolidated basis, to be less than $290,000,000.

       15.6 EXCLUSIVE REMEDY. After Closing, absent actual fraud, the indemnity
provisions of this Article 15 shall be the sole and exclusive remedy of each
party for or on account of any breach by the other party of any of such other
party's representations and warranties under this Agreement. THE PARTIES
ACKNOWLEDGE AND AGREE THAT, ABSENT ACTUAL FRAUD, THE REMEDIES SET FORTH IN THIS
AGREEMENT, INCLUDING THE DEDUCTIBLES, LIABILITY LIMITS, SURVIVAL PERIODS,
DISCLAIMERS AND LIMITATIONS ON REMEDIES, ARE INTENDED TO BE, AND SHALL BE, THE
EXCLUSIVE REMEDIES WITH RESPECT TO ANY ASPECT OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT. EXCEPT WITH RESPECT TO CAUSES OF ACTION OR CLAIMS FOR ACTUAL
FRAUD, EACH PARTY HEREBY RELEASES, WAIVES AND DISCHARGES, AND COVENANTS NOT TO
SUE WITH RESPECT TO, ANY CAUSE OF ACTION OR CLAIM NOT EXPRESSLY PROVIDED FOR IN
THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, CLAIMS UNDER STATE OR FEDERAL
SECURITIES LAWS AND CLAIMS, AVAILABLE AT COMMON LAW OR BY STATUTE.

                                   ARTICLE 16
                              TERMINATION; REMEDIES

       16.1   TERMINATION.

              (a)    TERMINATION OF AGREEMENT. This Agreement and the
transactions contemplated hereby may be terminated at any time prior to the
Closing:

                     (1)    by the mutual consent of EECI and MLP;

                     (2)    if the Closing has not occurred by the close of
business on October 31, 2002, then (i) by EECI if any condition specified in
Section 11.1 has not been satisfied on or before such close of business, and
shall not theretofore have been waived by EECI, or (ii) by MLP if any condition
specified in Section 11.2 has not been satisfied on or


                                       49


before such close of business, and shall not theretofore have been waived by
MLP; provided, in each case, that the failure to consummate the transactions
contemplated hereby on or before such date did not result from the failure by
the party or parties seeking termination of this Agreement to fulfill any
undertaking or commitment provided for herein on the part of such party or
parties that is required to be fulfilled on or prior to Closing;

                     (3)    by MLP, if a material default shall have been made
in the observance or performance by EECI or the Company of any agreements and
covenants of EECI or the Company contained herein, or if there shall have been a
material breach by EECI or the Company of any representations or warranties
contained herein and, in each case, such default or breach is not cured within
thirty (30) days after receipt by EECI or the Company of written notice from MLP
of such default or breach;

                     (4)    by EECI, if a material default shall have been made
in the observance or performance by MLP of any agreements and covenants of MLP
contained herein, or if there shall have been a material breach by MLP of any
representations or warranties contained herein and, in each case, such default
or breach is not cured within thirty (30) days after receipt by MLP of written
notice from EECI of such default or breach;

                     (5)    by either party, if there shall be any order, writ,
injunction or decree of any Governmental Authority binding EECI, the Company or
MLP that prohibits or restrains EECI, the Company or MLP from consummating the
transactions contemplated hereby; or

                     (6)    by either party pursuant to Section 9.6

              (b) EFFECT OF TERMINATION. In the event of termination of this
Agreement by EECI, on the one hand, or MLP, on the other hand, pursuant to
Section 16.1(a), written notice thereof shall forthwith be given by the
terminating party or parties to the other party or parties hereto, and this
Agreement shall thereupon terminate; provided, however, that following such
termination MLP will continue to be bound by its obligations set forth in
Sections 5.1(b)(ii) and 5.2. If this Agreement is terminated as provided herein
all filings, applications and other submissions made to any Governmental
Authority shall, to the extent practicable, be withdrawn from the Governmental
Authority to which they were made.

       16.2 EXCLUSIVE REMEDY. Prior to Closing, the remedy of termination
provided in Section 16.1 shall be each party's sole and exclusive remedy for any
breach or default by the other party of this Agreement, all other remedies being
expressly waived.

                                   ARTICLE 17
                                  MISCELLANEOUS

       17.1 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

       17.2   GOVERNING LAW. THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE GOVERNED BY AND INTERPRETED IN


                                       50


ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW RULES THAT WOULD DIRECT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION; PROVIDED, HOWEVER, THAT MATTERS
CONCERNING TITLE TO THE ASSETS SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE JURISDICTION WHERE SUCH ASSETS ARE LOCATED.

       17.3 ENTIRE AGREEMENT. This Agreement and the Appendices, Schedules and
Exhibits hereto and the Transaction Documents contain the entire agreement
between the parties with respect to the subject matter hereof and there are no
agreements, understandings, representations or warranties between the parties
other than those set forth or referred to herein.

       17.4 EXPENSES. Except as provided in Sections 3.3(d) and 17.12, all other
costs and expenses incurred by each party hereto in connection with all things
required to be done by it hereunder, including attorney's fees and accountant
fees, shall be borne by the party incurring same.

       17.5 NOTICES. All notices authorized or required by any of the provisions
of this Agreement, unless otherwise specifically provided, shall be in writing
and delivered in person or by United States or Canadian mail, courier service,
telegram, or telephone facsimile, postage or charges prepaid, and addressed to
the parties at the respective addresses set forth below:

                      
       If to EECI:          Enbridge Energy Company, Inc.
                            1100 Louisiana, Suite 3300
                            Houston, Texas  77002-5217
                            Attention:  President
                            Telephone Number:  713-821-2054
                            Facsimile Number:  713-821-2229

       With a copy to:      PRIOR TO THE CLOSING
                            Vinson & Elkins L.L.P.
                            2300 First City Tower
                            1001 Fannin Street
                            Houston, Texas  77002-6760
                            Attention:  Robin S. Fredrickson
                            Telephone Number:  713-758-2450
                            Facsimile Number:  713-615-5850

       If to MLP:           PRIOR TO THE CLOSING
                            Enbridge Energy Partners, L.P.
                            1100 Louisiana, Suite 3300
                            Houston, Texas  77002-5217
                            Attention:  Special Committee
                            Telephone Number:  713-821-2028
                            Facsimile Number:  713-821-2229


                               51


                            Ernest C. Hambrook
                            c/o Enbridge Energy Partners, L.P.
                            1100 Louisiana, Suite 3300
                            Houston, Texas  77002-5217
                            Attention:  Special Committee
                            Telephone Number:  713-821-2028
                            Facsimile Number:  713-821-2229

                            Charles A. Russell
                            c/o Enbridge Energy Partners, L.P.
                            1100 Louisiana, Suite 3300
                            Houston, Texas  77002-5217
                            Attention:  Special Committee
                            Telephone Number:  713-821-2028
                            Facsimile Number:  713-821-2229

                            AFTER THE CLOSING
                            Enbridge Energy Partners, L.P.
                           1100 Louisiana, Suite 3300
                            Houston, Texas 77002-5217
                            Attention: Corporate Secretary of General Partner and,
                                       in the case of the applicability of Section 9.13, The
                                       Audit,  Finance and Risk Committee
                            Telephone Number:  713-821-2028
                            Facsimile Number:  713-821-2229

       With copies to:      PRIOR TO THE CLOSING
                            Baker Botts L.L.P.
                            One Shell Plaza
                            910 Louisiana
                            Houston, Texas  77002-4995
                            Attention:  Joshua Davidson
                            Telephone Number:  713-229-1234
                            Facsimile Number:  713-229-1522




Any party may, by written notice so delivered to the other, change the address
to which delivery shall thereafter be made. In connection with any notice to be
given to MLP under this Agreement, MLP shall not be deemed to have received such
notice solely by virtue of EECI's knowledge of the subject matters of such
notice.

       17.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the respective rights and obligations of the
parties hereto shall not be assignable or delegable by any party hereto without
the express written consent of the non-assigning or non-delegating party.


                                       52


       17.7 AMENDMENTS AND WAIVERS. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Any
party hereto may, only by an instrument in writing, waive compliance by another
party hereto with any term or provision of this Agreement on the part of such
other party hereto to be performed or complied with. The waiver by any party
hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach.

       17.8   APPENDICES, SCHEDULES AND EXHIBITS. All Appendices, Schedules and
Exhibits hereto which are referred to herein are hereby made a part hereof and
incorporated herein by such reference.

       17.9 INTERPRETATION. It is expressly agreed that this Agreement shall not
be construed against any party, and no consideration shall be given or
presumption made, on the basis of who drafted this Agreement or any particular
provision hereof or who supplied the form of Agreement. Each party agrees that
this Agreement has been purposefully drawn and correctly reflects its
understanding of the transaction that this Agreement contemplates. In construing
this Agreement:

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

              (b)    the word "includes" and its derivatives mean "includes, but
is not limited to" and corresponding derivative expressions;

              (c) a defined term has its defined meaning throughout this
Agreement and each Appendix, Exhibit and Schedule to this Agreement, regardless
of whether it appears before or after the place where it is defined;

              (d) each Exhibit and Schedule is a part of this Agreement, but if
there is any conflict or inconsistency between the main body of this Agreement
(including Appendix A, which shall be considered part of the main body of this
Agreement) and any Exhibit or Schedule, the provisions of the main body of this
Agreement shall prevail;

              (e)    the headings and titles herein are for convenience only and
shall have no significance in the interpretation hereof;

              (f) the inclusion of a matter on a Schedule in relation to a
representation or warranty shall not be deemed an indication that such matter
necessarily would, or may, breach such representation or warranty absent its
inclusion on such Schedule; and

              (g)    references to "dollars" or "$" shall mean the lawful
currency of the United States.

       17.10  ARBITRATION.

              (a) Except as provided in Section 3.3, it is agreed, as a
severable and independent arbitration agreement separately enforceable from the
remainder of this Agreement,


                                       53


that if the parties hereto, the Company, the Indemnified Persons or their
respective successors, assigns, heirs or legal representatives of any of the
foregoing are unable to amicably resolve any dispute or difference arising under
or out of, in relation to or in any way connected with this Agreement (whether
contractual, tortuous, equitable, statutory or otherwise), such matter shall be
finally and exclusively referred to and settled by arbitration under the
Commercial Arbitration Rules of the American Arbitration Association ("AAA");
provided that, the foregoing shall not prevent EECI, the Company or their
Affiliates from seeking specific performance, an injunction or other equitable
relief with respect to their rights under Section 5.2 through judicial means in
any jurisdiction. In the event of any conflict between the Commercial
Arbitration Rules of the AAA and the provisions of this Section 17.10, the
provisions of this Section 17.10 shall govern and control.

              (b) The arbitration shall be heard and determined by three (3)
arbitrators. Each side shall appoint an arbitrator of its choice within fifteen
(15) days of the submission of a notice of arbitration. The party-appointed
arbitrators shall in turn appoint a presiding arbitrator of the tribunal within
fifteen (15) days following the appointment of both party-appointed arbitrators.
If the party-appointed arbitrators cannot reach agreement on a presiding
arbitrator of the tribunal and/or one party fails or refuses to appoint its
party-appointed arbitrator within the prescribed period, the appointing
authority for the presiding arbitrator and/or such party-appointed arbitrator
shall be the AAA, who, in each case, shall appoint an independent arbitrator who
does not have any financial interest in the dispute, controversy or claim or any
bear relationship to either party. If an arbitrator should die, withdraw or
otherwise become incapable of serving, or refuse to serve, a successor
arbitrator shall be selected and appointed in the same manner as the original
arbitrator.

              (c)    Unless otherwise expressly agreed in writing by the parties
to the arbitration proceedings:

                     (1)    The arbitration proceedings shall be held in
Houston, Texas;

                     (2)    The arbitration proceedings shall be conducted in
the English language and the arbitrator(s) shall be fluent in the English
language;

                     (3)    The arbitrators shall be and remain at all times
wholly independent and impartial;

                     (4)    The arbitration proceedings shall be conducted under
the Commercial Arbitration Rules of the AAA, as amended from time to time;

                     (5)    Any procedural issues not determined under the
arbitration rules selected pursuant to Section 17.10(c)(4) shall be determined
by the arbitration act and any other applicable laws of the State of Texas,
other than those laws which would refer the matter to another jurisdiction;

                     (6)    All decisions and awards by the arbitration tribunal
shall be made by majority vote;


                                       54


                     (7)    The decision of a majority of the arbitrators shall
be reduced to writing; shall be final and binding without the right of appeal;
and shall be the sole and exclusive remedy regarding any claims, counterclaims,
issues or accountings presented to the arbitrators; any damage awards by the
arbitrators shall be stated in dollars, and promptly paid in dollars free of any
deduction or offset; and any costs or fees incident to enforcing the award shall
to the maximum extent permitted by law be charged against the party resisting
such enforcement;

                     (8)    Consequential, indirect, special, exemplary,
punitive or other similar damages shall not be allowed except those payable to
third parties (and permitted under Section 14.2) for which Liability is
allocated among the parties by the arbitration award;

                     (9)    Any award of damages shall include interest from the
date of any breach or violation of this Agreement, as determined by the
arbitration award, and from the date of the award until paid in full, at the
Agreed Rate in effect at the end of the first trading day of each month during
which such amount was owed;

                     (10)   The costs of the arbitration proceedings (including
attorneys' fees and costs) shall be borne in the manner determined by the
arbitrator(s);

                     (11)   Judgment upon the award may be entered in any court
having jurisdiction over the person or the assets of the party owing the
judgment, or application may be made to such court for a judicial acceptance of
the award and an order of enforcement, as the case may be; and

                     (12)   The arbitration shall proceed in the absence of a
party who, after due notice, fails to answer or appear; an award shall not be
made solely on the default of a party, but the arbitrator(s) shall require the
party who is present to submit such evidence as the arbitrator(s) may determine
is reasonably required to make an award.

       17.11 AGREEMENT FOR THE PARTIES' BENEFIT ONLY. This Agreement is for the
sole benefit of MLP, EECI and their respective successors and assigns as
permitted herein and no other Person shall be entitled to enforce this
Agreement, rely on any representation, warranty, covenant or agreement contained
herein, receive any rights hereunder or be a third party beneficiary of this
Agreement. Any Indemnified Person which is a third party shall be indemnified
and held harmless under the terms of this Agreement only to the extent that a
party expressly elects to exercise such right of indemnity and hold harmless on
behalf of such third party Indemnified Person pursuant to Section 15.3; and no
party shall have any direct Liability or obligation to any third party or be
liable to any third party for any election or non-election or any act or failure
to act under or in regard to any term of this Agreement. Any claim for indemnity
or hold harmless hereunder on behalf of an Indemnified Person must be made and
administered by a party to this Agreement. Any claim on behalf of an Indemnified
Person may only be brought against the defaulting party or parties.

       17.12 ATTORNEYS' FEES. The prevailing party in any legal proceeding
brought under or to enforce this Agreement shall be additionally entitled to
recover court costs and reasonable attorneys' fees from the non-prevailing
party.


                                       55


       17.13 SEVERABILITY. If any term, provision or condition of this
Agreement, or any application thereof, is held invalid, illegal or unenforceable
in any respect under any Law, this Agreement shall be reformed to the extent
necessary to conform, in each case consistent with the intention of the parties,
to such Law, and to the extent such term, provision or condition cannot be so
reformed, then such term, provision or condition (or such invalid, illegal or
unenforceable application thereof) shall be deemed deleted from (or prohibited
under) this Agreement, as the case may be, and the validity, legality and
enforceability of the remaining terms, provisions and conditions contained
herein (and any other application such term, provision or condition) shall not
in any way be affected or impaired thereby. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

       17.14 TIME OF ESSENCE. Time is of the essence in this Agreement. If the
date specified in this Agreement for giving any notice or taking any action is
not a Business Day (or if the period during which any notice is required to be
given or any action taken expires on a date which is not a Business Day), then
the date for giving such notice or taking such action (and the expiration date
of such period during which notice is required to be given or action taken)
shall be the next day which is a Business Day.

              [The remainder of this page intentionally left blank]


                                       56



       IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties as of the day first above written.


                                   ENBRIDGE ENERGY COMPANY, INC.


                                   By: /s/ DAN C. TUTCHER
                                       ------------------------
                                   Name:  Dan C. Tutcher
                                       ------------------------
                                   Title: President
                                       ------------------------



                                   ENBRIDGE ENERGY PARTNERS, L.P.

                                   By:  Enbridge Energy Company, Inc., its
                                        General Partner

                                        By: /s/ CHRIS KAITSON
                                            ------------------------
                                        Name:  Chris Kaitson
                                            ------------------------
                                        Title: Corporate Secretary
                                            ------------------------

       The Company hereby joins in and becomes a party to this Agreement for the
purposes set forth in Section 8.1.

                                   ENBRIDGE MIDCOAST ENERGY, INC.


                                   By: /s/ DAN C. TUTCHER
                                       ------------------------
                                   Name:  Dan C. Tutcher
                                       ------------------------
                                   Title: President
                                       ------------------------


                                       57


                                   APPENDIX A
                                       TO
                             CONTRIBUTION AGREEMENT

                                   DEFINITIONS

       "AAA" shall be as defined in Section 17.10(a).

       "ACT" shall be as defined in Section 4.1(dd).

       "ACTION" shall mean any action, suit, proceeding, condemnation,
investigation, inquiry or audit by or before any court or other Governmental
Authority, whether of a civil, criminal, administrative, investigative or
private nature and irrespective of the initiator thereof, or any arbitration
proceeding or alternate dispute resolution procedure.

       "AFFILIATE" shall mean, as to the Person specified, any Person
controlling, controlled by or under common control with such specified Person;
provided, however, that (i) with respect to EECI, the term "Affiliate" shall
exclude each member of the MLP Group, (ii) with respect to MLP, the term
"Affiliate" shall exclude each member of the EECI Group and (iii) the Company
Group shall be deemed to be Affiliates (x) prior to the Closing, of EECI and (y)
on and after the Closing, of MLP. The concept of control, controlling or
controlled, as used in the aforesaid context, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of another, whether through the ownership of voting securities, by
contract or otherwise. No Person shall be deemed an Affiliate of any Person
solely by reason of the exercise or existence of rights, interests or remedies
under this Agreement.

       "AGREED RATE" shall mean an annual rate of interest equal to the lesser
of (i) the rate charged by Bank of America, N.A. from time to time as its prime
or base rate and (ii) the maximum rate of interest allowed by applicable Law.

       "AGREEMENT" shall be as defined in the introductory paragraph to this
Agreement.

       "APPRAISAL" shall be as defined in Section 3.4.

       "ASSETS" shall mean all the assets and properties of the Company and the
Company Subsidiaries, tangible and intangible, real, personal and mixed, shown
on the Recent Date Balance Sheet, together with any other asset or property
acquired by the Company or any Company Subsidiary after the date of such Recent
Date Balance Sheet up to Closing and including, without limitation, the Pipeline
Systems, the Williams/Transco Assets, the Sulphur River Assets, the Hobart Ranch
Plant, and after the purchase of the Hanover Compressors occurs (if occurring
prior to Closing), the Hanover Compressors, but excluding (i) the Excluded
Assets and (ii) such assets and properties which are sold or otherwise disposed
of in the ordinary course of the business of the Company or any of the Company
Subsidiaries, or as otherwise sold, transferred or disposed of in accordance
with this Agreement.

       "ASSIGNMENT OF MEMBERSHIP INTEREST" means the assignment of membership
interests in the form of EXHIBIT 12.2(a)(i).


                                  Appendix A-1


       "ASSIGNMENT OF PARTNERSHIP INTEREST" means the assignment of partnership
interests in the form of EXHIBIT 12.2(a)(ii).

       "ASSUMPTION AGREEMENT" means the assumption agreement in the form of
EXHIBIT 12.2(a)(vi).

       "AUDIT, FINANCE AND RISK COMMITTEE" means the Audit, Finance and Risk
Committee of the Board of Directors of EECI and any committee of the Board of
Directors of EECI that succeeds to the audit functions of the Audit, Finance and
Risk Committee.

       "AUDITED FINANCIALS" shall mean the audited consolidated income statement
of the Company and the Company Subsidiaries for the fiscal year ended December
31, 2001, together with the audited consolidated cash flow statement for such
fiscal year and the audited consolidated balance sheet for such fiscal year,
which statements and balance sheet include the Excluded Assets and the
Liabilities relating to the Excluded Assets.

       "BAMAGAS" shall mean Enbridge Pipelines (Bamagas Intrastate) Inc.
(formerly known as BAMAGAS Company).

       "BAMAGAS CONTRACTS" shall mean (i) that certain Natural Gas Pipeline
Construction and Transportation Agreement dated June 2000, between Bamagas and
Calpine, as amended by first Amendment to Natural Gas Pipeline Construction and
Transportation Agreement, dated September 1, 2001 between Bamagas and Calpine,
and (ii) Natural Gas Pipeline Transportation Agreement dated June 2000, between
Bamagas and Calpine, as amended by First Amendment to Natural Gas Transportation
Agreement dated September 1, 2001 between Bamagas and Calpine.

       "BAMAGAS FIRM CAPACITY PAYMENT" shall mean the sum of the monthly amounts
payable by Calpine pursuant to Section 6.1 of each of the Bamagas Contracts with
respect to the agreement by Bamagas under each such Contract to make the
capacity of the pipeline covered by such Contract up to the "Firm Transportation
Quantity" (as such term is defined in such Contract).

       "BUSINESS DAY" shall mean any day which is not a Saturday, Sunday or
legal holiday recognized by the United States of America.

       "CALPINE" shall mean Calpine Energy Services, L.P.

       "CALPINE DISPUTE" shall mean the dispute between Calpine and Bamagas
regarding the payment of the Firm Capacity Payment as more particularly
described in (i) letter dated March 1, 2002 to Roman J. Bakke, Manager Fuel
Supply, Eastern Region of Calpine from Rich Adams, Director of Operations and
Technology of Enbridge Pipelines (Bamagas Intrastate) Inc., (ii) letter dated
April 5, 2002 to John Loiacono, Director, West Asset Team Enbridge (U.S.) Inc.
from Roman J. Bakke, Manager Fuel Supply-Eastern Region of Calpine, and (iii)
letter dated April 25, 2002 to David Croucher, Contract Administration, Enbridge
(U.S.) Inc. from Roman J. Bakke, Manager Fuel Supply-Eastern Region of Calpine.

       "CAPITAL LEASE" means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.


                                  Appendix A-2


       "CAPITAL STOCK" means, with respect to: (i) any corporation, any share,
or any depositary receipt or other certificate representing any share, of an
equity ownership interest in that corporation; and (ii) any other Entity, any
share, membership or other percentage interest, unit of participation or other
equivalent (however designated) of an equity interest in that Entity.

       "CAPITALIZATION" shall be as defined in Section 3.3(f).

       "CASH PAYMENT" shall mean an amount in cash equal to the amount remaining
after subtracting from $929,100,000 (i) the aggregate amount of outstanding
principal and accrued interest balances under the Midcoast Related Debt and (ii)
the value of the GP Contribution Credit.

       "CLAIM NOTICE" shall be as defined in Section 15.3(a).

       "CLOSING" shall be the consummation of the transaction contemplated by
Article 12.

       "CLOSING DATE" shall mean (i) June 30, 2002, or (ii) such other date as
may be mutually agreed to in writing by EECI and MLP. Upon written notice from
EECI or MLP to the other party, the Closing Date shall be extended to any
subsequent Business Day that is reasonably convenient to such other party,
provided that such date is not earlier than the fifth Business Day following the
date such notice is received by such other party and is not later than October
31, 2002.

       "CLOSING DATE BALANCE SHEET" shall mean the unaudited consolidated
balance sheet of the Company and the Company Subsidiaries immediately prior to
Closing, prepared in accordance with Section 3.3.

       "CLOSING DATE CAPITALIZATION" shall be as defined in Section 3.3(a).

       "CODE" shall mean the Internal Revenue Code of 1986, as amended, together
with all regulations promulgated thereunder.

       "COMPANY" shall be as defined in the introductory paragraph to this
Agreement and Article 6.

       "COMPANY BENEFIT PLAN" shall mean (1) any employee welfare benefit plan
or employee pension benefit plan as defined in sections 3(1) and 3(2) of ERISA,
including, but not limited to, a plan that provides retirement income or results
in deferrals of income by employees for periods extending to their terminations
of employment or beyond, and a plan that provides medical, surgical or hospital
care benefits or benefits in the event of sickness, accident, disability, death
or unemployment and (2) any other material employee benefit agreement or
arrangement that is not an ERISA plan, including without limitation, any
deferred compensation plan, incentive plan, bonus plan or arrangement, stock
option plan, stock purchase plan, stock award plan, golden parachute agreement,
severance pay plan, dependent care plan, cafeteria plan, employee assistance
program, scholarship program, employment contract, retention incentive
agreement, noncompetition agreement, consulting agreement, confidentiality
agreement, vacation policy, or other similar plan or agreement or arrangement
that is maintained by or contributed to by any


                                  Appendix A-3


member of the Company Group, or with respect to which any member of the Company
Group has any Liability.

       "COMPANY GROUP" shall mean the Company, the Company Subsidiaries and
(following the Contribution Step) Holdings LLC.

       "COMPANY LIABILITIES" means, without duplication of amounts, all
Liabilities of the Company Group exclusive of all Excluded Liabilities.

       "COMPANY RECORDS" shall mean any and all of the Company Group's books,
records, contracts, agreements and files existing on the Closing Date.

       "COMPANY SUBSIDIARIES" shall mean: (i) as of the date of this Agreement,
the Persons named in SCHEDULE 4.1(r)A hereof; and (ii) following the completion
of the Restructuring Actions, the Persons named in SCHEDULE 4.1(r)B hereof.

       "COMPANY SHARES" shall be as defined in Section 4.1(f).

       "CONTRACT" means any contract, agreement, commitment, instrument or
undertaking (written or oral and including all written or oral amendments or
supplements thereto or modifications thereof).

       "CONTRIBUTION STEP" shall be as defined in the Recitals to this
Agreement.

       "CONTRIBUTOR'S TAX" shall be as defined in Section 10.4(c).

       "CONVERSION STEP" shall be as defined in the Recitals to this Agreement.

       "CUMULATIVE KPC SERVICE AMOUNT PAYMENTS" means the sum of the KPC Service
Amount Payments.

       "DEBT GUARANTY" shall mean any Guaranty of indebtedness for borrowed
money or the deferred purchase price of property or services.

       "DEFENSIBLE TITLE" shall mean good and indefeasible title free and clear
of all liens, security interests and encumbrances, subject to and except for any
Permitted Encumbrances. The parties agree that obligations relating to
imbalances with respect to the transportation, storage, distribution or other
handling of natural gas, crude oil or any other products transported on the
Pipeline Systems are reflected in the Financial Statements and are not the
subject of Defensible Title.

       "DERIVATIVE CONTRACT" shall mean (i) any Contract relating to the
purchase or sale of financial or other futures, (ii) any put or call option
relating to cash, securities or commodities, or (iii) any interest rate swap
contract or other Contract relating to the hedging of interest rate risks.

       "DISAGREEMENT NOTICE" shall be as defined in Section 3.3(c).

       "EECI" shall be as defined in the introductory paragraph to this
Agreement.


                                  Appendix A-4


       "EECI GROUP" means, other than members of the MLP Group, each Entity in
which Parent owns (directly or indirectly) any Capital Stock.

       "EECI TAX GROUP" shall be as defined in Section 10.4(a).

       "EECI MIDCOAST DEBT" shall mean all principal and accrued and unpaid
interest owing by EECI and its subsidiaries as of the Closing pursuant to that
certain Promissory Note dated May 15, 2002 from EECI to Enbridge (U.S.) Inc.
(amount advanced: $375,000,000).

       "EECI'S PARTNERSHIP INTEREST" shall mean the 99.999% limited partner
interest in the Company held by EECI after the Conversion Step.

       "EECI INDEMNIFIED PERSONS" shall be as defined in Section 15.1.

       "EFFECTIVE TIME" shall mean 7:00 a.m. CST on the Closing Date.

       "ELECTION PERIOD" shall be as defined in Section 15.3(a).

       "ENTITY" means any sole proprietorship, corporation, partnership of any
kind having a separate legal status, limited liability company, business trust,
unincorporated organization or association, mutual company, joint stock company
or joint venture.

       "ENVIRONMENTAL CONDITION" shall mean (i) the existence prior to the
Closing Date of Hazardous Substances in or on the soil, sediments, surface water
or groundwater, to the extent the levels of any such Hazardous Substances exceed
naturally occurring background levels, or (ii) any operating practice or similar
course of conduct by EECI or its Affiliates or any member of the Company Group
with respect to the Assets that existed or commenced prior to the Closing Date
with respect to matters governed by or regulated under Environmental Laws.

       "ENVIRONMENTAL LAWS" shall mean all applicable laws, regulations,
enforceable requirements that have the effect of law, orders, decrees,
judgments, injunctions, permits, approvals, authorizations, licenses, or
variances issued, promulgated, or entered into by any Governmental Authority, as
they may exist prior to, on or after the Closing Date, relating to the
environment, preservation or reclamation of natural resources, human health and
safety, or to the management (including treatment, storage, disposal or other
handling), release or threatened release of Hazardous Substances, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 by the Small Business Liability Relief and
Brownfields Revitalization Act, 42 U.S.C. Section 9601, et seq., the Oil
Pollution Act of 1990, as amended, 33 U.S.C. Sections 2701 et seq., the Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33
U.S.C. Sections 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C.
Sections 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
Sections 2601 et seq., the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Sections 11001 et seq., the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. Sections 300(f) et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Sections 6901 et seq., the Endangered Species Act,
16 U.S.C. Sections 1531 et seq., the Marine Mammal Protection Act, 16 U.S.C.
Sections 1361 et seq., the Occupational Safety and Health Act of 1970, the Texas


                                  Appendix A-5


Health & Safety Code, the Texas Natural Resources Code, the Texas Water Code,
and any similar or implementing federal, state or local law, and all amendments
thereto or regulations promulgated thereunder. For purposes of Section 4.1(p),
(i) Environmental Laws shall only include Environmental Laws as they existed on
the Closing Date and (ii) Environmental Laws, as used in the definitions of
Environmental Condition, Environmental Liabilities and Hazardous Substance,
shall only include Environmental Laws as they existed on the Closing Date.

       "ENVIRONMENTAL LIABILITIES" shall mean any Liabilities (whether incurred,
existing or first occurring on, before or after the Closing Date) incurred or
imposed (i) pursuant to any order, notice of responsibility, directive,
injunction, judgment or similar document arising out of, in connection with, or
under Environmental Laws, (ii) pursuant to any claim by a Governmental Authority
or other Person for personal injury, property damage, damage to natural
resources, remediation, payment or reimbursement of response costs pursuant to
common law or statute and related to the use, disposal, management, release or
threatened release of Hazardous Substances, or (iii) as a result of an
Environmental Condition.

       "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

       "ERISA AFFILIATE" shall mean any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA.

       "EXCLUDED ASSETS" shall mean the following:

       (i) (a) originals of all of the Company Group's federal income Tax
Returns, federal income Tax filings and other Company Records relating to
federal income Taxes, and (b) the right to retain copies (but not originals) of
all other Company Records; and

       (ii) the capital stock, membership interests, partnership interests and
other equity interests in the Excluded Subsidiaries and all of the assets of
such Excluded Subsidiaries.

       "EXCLUDED LIABILITIES" means: (i) all Liabilities of the Excluded
Subsidiaries; (ii) all Taxes for the payment of which EECI is obligated under
Article 10; (iii) all Liabilities for the payment of which any one or more
members of MLP would be liable solely by reason of being an ERISA Affiliate of
Parent or any of its other Affiliates; (iv) all Liabilities to the extent
arising out of or attributable to any of the Company Group's use or dealing with
prior to the Closing of any logo, service mark, copyright, trade name or
trademark of or associated with EECI or any Affiliate of EECI or any business of
EECI or of any Affiliate of EECI, except as provided in the license agreement
entered into pursuant to Section 9.9; (v) all indebtedness for borrowed money of
EECI that is not EECI Midcoast Debt, Midcoast Related Debt or indebtedness
incurred by EECI on behalf of MLP in EECI's capacity as general partner of MLP;
and (vi) all liabilities of EECI relating to assets other than the Company
Subsidiaries and Assets (other than Liabilities arising on account of EECI's
status as general partner of MLP).

       "EXCLUDED SUBSIDIARIES" shall mean Arcadia/Midcoast Pipeline of New York,
LLC, Midcoast del Bajio SA de CV, Midcoast Anadarko Gas Services, LLC, Midcoast
Anadarko Energy Services, LLC, Midcoast Gas Pipeline, Inc., Midcoast Energy
Marketing, Inc., Midcoast


                                  Appendix A-6


Canada Energy Services, Inc., Midcoast Canada Operating Corporation, Midcoast
Nova Scotia, G.P. and Midcoast Nova Scotia, L.P.

       "FERC" shall mean the Federal Energy Regulatory Commission.

       "FINANCIAL STATEMENTS" shall be as defined in Section 4.1(g)(1).

       "GAAP" shall mean United States generally accepted accounting principles
as in effect from time to time.

       "GOVERNMENTAL AUTHORITY" shall mean (i) the United States of America or
the Government of Canada, (ii) any state, province, county, municipality or
other governmental subdivision within the United States of America or Canada,
(iii) any court or any governmental department, commission, board, bureau,
agency or other instrumentality of the United States of America or Canada, or of
any state, province, county, municipality or other governmental subdivision
within the United States of America or Canada, and (iv) any arbitration tribunal
having jurisdiction over EECI, MLP or any member of the Company Group.

       "GP CONTRIBUTION CREDIT" shall be as defined in Section 3.1.

       "GROUP" shall be as defined in Section 4.1(q).

       "GUARANTY" means, for any specified Person, without duplication, any
Liability, contingent or otherwise, of that Person guaranteeing or otherwise
becoming liable for any obligation of any other Person (the "PRIMARY OBLIGOR")
in any manner, whether directly or indirectly, and including any Liability of
the specified Person, direct or indirect, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) that obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment of
that obligation, (ii) to purchase property or other assets, securities or
services for the purpose of assuring the owner of that obligation of the payment
of that obligation or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay that obligation; provided, that the term
"Guaranty" does not include endorsements for collection or deposit in the
ordinary course of the endorser's business.

       "HANOVER COMPRESSORS" shall mean the compressors described in Gas
Compressor Equipment Master Rental and Servicing Agreement dated March 21, 2000
between Hanover Compressor Company and Sulphur River Gathering, L.P.
(predecessor in interest to Enbridge Pipelines (NE Texas) L.P., and Gas
Compressor Equipment Master Rental and Servicing Agreement dated June 8, 2001
between Hanover Compression Limited Partnership and Sulphur River Gathering,
L.P. (predecessor in interest to Enbridge Pipelines (NE Texas) L.P.) that are
purchased by Enbridge Pipelines (NE Texas) L.P. prior to Closing.

       "HAZARDOUS SUBSTANCE" shall mean all regulated radioactive materials or
substances, hazardous or toxic substances, wastes or chemicals, petroleum
(including crude oil and any fraction thereof) or petroleum by-products,
asbestos or asbestos-containing materials, polychlorinated biphenyls and any
other chemicals, materials or substances that are designated,



                                  Appendix A-7


classified or regulated as hazardous or toxic or as a pollutant or contaminant
under or pursuant to any Environmental Law.

       "HOBART RANCH PLANT" shall mean the assets acquired by Enbridge Pipeline
(Texas Gathering) Inc. pursuant to the Hobart Ranch Plant Agreement.

       "HOBART RANCH PLANT AGREEMENT" shall mean that certain Purchase and Sale
Agreement dated April 30, 2002 among Duke Energy Field Services, L.P.,
Midcontinent Gathering & Processing Company, LLC and Enbridge Pipelines (Texas
Gathering) Inc.

       "HOLDINGS LLC" shall be as defined in the Recitals to this Agreement.

       "HOLDINGS' PARTNERSHIP INTEREST" shall mean the 0.001% general partner
interest in the Company owned by Holdings LLC after the Conversion Step.

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

       "INDEMNIFIED CLAIM" shall be as defined in Section 15.3(a).

       "INDEMNIFIED PERSON" shall mean either a MLP Indemnified Person or an
EECI Indemnified Person, as the context requires, and "Indemnified Persons"
shall mean the MLP Indemnified Persons or the EECI Indemnified Persons, as the
context requires.

       "INDEMNIFYING PARTY" shall be as defined in Section 15.3(a).

       "INTERIM MATERIAL ADVERSE EFFECT" shall mean, with respect to the
consequences of any fact or circumstance (including the occurrence or
non-occurrence of any event), that such fact or circumstance is causing or is
reasonably expected to cause, directly, indirectly or consequentially, singly or
in the aggregate with other facts and circumstances, any damages to the Company
Group considered as a single enterprise in excess of $20,000,000 (in each case,
taken as a whole, and without taking into account any insurance, indemnities,
contributions and other rights of recovery from third parties which may be
included in the Assets and payable in respect thereof), excluding any effect
resulting from any change in economic, industry or market conditions (whether
general or regional in nature or limited to any area where any Assets are
located) or from any changes in Law.

       "IRCA" means the Immigration Reform and Control Act of 1986.

       "IRS" shall mean the Internal Revenue Service.

       "KNOWLEDGE," "KNOWN" or words of similar import (i) when used with
respect to EECI or any member of the Company Group, shall mean the actual
knowledge of any fact, circumstance or condition by a current officer of such
Person assuming the reasonable inquiry by such officer of those employees of
such Person at a managerial (including field supervisors) or higher level that
would normally be responsible for the matter to which such fact, circumstance or
condition relates, (ii) when used with respect to MLP, shall mean the actual
knowledge of any fact, circumstance or condition obtained by the members of the
Special Committee of MLP in


                                  Appendix A-8


connection with its evaluation of the transactions contemplated by this
Agreement through communications with its advisors performing due diligence
functions and similar functions on behalf of such Special Committee of MLP in
connection with the transactions contemplated by this Agreement. References
herein to "actual knowledge" do not include imputed knowledge.

       "KPC ACCUMULATED PAYMENT DEFICIENCY" means $1,000,000 for each calendar
year during the KPC Payment Obligation Period; provided, however, that such
amount shall be prorated for any period less than 365 days during the KPC
Payment Obligation Period.

       "KPC AGREED SETTLEMENT" shall mean any settlement of the KPC Rate Case
entered into by a member of the Company Group prior to the Closing as is agreed
to in writing by MLP.

       "KPC COST OF SERVICE DIFFERENCE" means the positive difference between
the KPC Minimum Cost of Service Amount and the KPC Service Amount during each
calendar year in the KPC Payment Obligation Period; provided, however, that in
no event shall the KPC Cost of Service Difference exceed $2,900,000 for any
calendar year; provided, further, however, that the KPC Cost of Service
Difference for any period less than 365 days shall be prorated based on the
number of days in such period.

       "KPC MINIMUM COST OF SERVICE AMOUNT" shall mean an amount equal to
$22,900,000 per year; provided, however, that the amount for any period less
than 365 days shall be prorated based on the number of days in such period.

       "KPC PAYMENT COMMENCEMENT DATE" shall mean the date that is the earlier
to occur of (i) the effective date of rates resulting from a settlement of the
KPC Rate Case and (ii) the effective date of rates resulting from a final order
of the FERC not subject to rehearing in the KPC Rate Case.

       "KPC PAYMENT DATE" means each December 31 during the KPC Payment
Obligation Period and a day not more than 30 days after the last day in the KPC
Payment Obligation Period.

       "KPC PAYMENT OBLIGATION PERIOD" shall mean the period of time commencing
on the KPC Payment Commencement Date and continuing up to the KPC Payment
Termination Date.

       "KPC PAYMENT TERMINATION DATE" shall mean the date that is the earlier of
(x) the fifth anniversary date of the Closing Date and (y) the date that rates
for the KPC Pipeline System which include a cost of service for the KPC Pipeline
System in an amount greater than $22,900,000 per calendar year become effective
pursuant to a final nonappealable order of the FERC (whether pursuant to
settlement or otherwise); provided, however, that EECI shall be obligated to pay
to MLP the KPC Cost of Service Difference, if any, for each year or portion
thereof prior to the KPC Payment Termination Date.

       "KPC PIPELINE SYSTEM" means the Pipeline System operated by Kansas
Pipeline Company.

       "KPC RATE CASE" shall mean that certain action pending before FERC under
FERC Docket No. RP99-485, et al, Kansas Pipeline Company (KPC).


                                  Appendix A-9


       "KPC SERVICE AMOUNT" shall mean the cost of service for the KPC Pipeline
System established by a final order of the FERC (whether pursuant to settlement
or otherwise) not subject to rehearing in the KPC Rate Case; provided, however,
in the event that the FERC issues an order during the KPC Payment Obligation
Period (other than an order under the KPC Rate Case), then for purposes of
calculating the KPC Cost of Service Difference subsequent to the issuance of
such order, the KPC Service Amount shall be the cost of service for the KPC
Pipeline System established by such new FERC order.

       "KPC SERVICE AMOUNT PAYMENT" shall be as defined in Section 9.15.

       "LAW" shall mean any applicable statute, law (including civil and common
law), ordinance, regulation, rule, ruling, order, writ, injunction, decree or
other official act of or by any Governmental Authority.

       "LIABILITIES" of any specified Person or group of Persons means, without
duplication of amounts, any and all debts, losses, liabilities, duties, claims
(including those arising out of any demand, assessment, settlement, judgment or
compromise relating to any actual or threatened Action), Taxes, costs and
expenses (including any attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending any Action), matured or
unmatured, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, known or unknown, including any of the foregoing arising under,
out of or in connection with any Action, any order or consent decree of any
Governmental Authority, any award of any arbitrator, any Law, on account of any
former employee, or any contract, commitment or undertaking (including any
employee benefit plan or arrangement or employment agreement) of such Person or
group of Persons.

       "LICENSE AGREEMENT" means the license agreement in the form of EXHIBIT
9.10.

       "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect valued in
excess of $20,000,000 which is reasonably likely to occur on the business,
results of operations, cash flows, value of the Assets or financial condition of
the Company Group (taken as a whole) as existing and conducted on the date of
this Agreement (in each case, after taking into account any insurance,
indemnities, contributions and other rights of recovery from third parties which
may be included in the Assets and payable in respect thereof), excluding any
effect resulting from any change in economic, industry or market conditions
(whether general or regional in nature or limited to any area where any Assets
are located) or from any change in Law.

       "MATERIAL CONTRACT" shall mean (i) each of the Contracts described in
SCHEDULE 4.1(n) and SCHEDULE 9.11 and (ii) each of the Midcoast Agreement, the
Sulphur River Agreement, the Williams/Transco Agreement and Hobart Ranch Plant
Agreement and each contract entered into pursuant to the Midcoast Agreement, the
Sulphur River Agreement, the Williams/Transco Agreement and Hobart Ranch Plant
Agreement.

       "MEMBERSHIP INTERESTS" shall mean all of the limited liability company
interests, including all membership interests and other equity interests, in
Holdings LLC.

       "MIDCOAST AGREEMENT" means the Agreement and Plan of Merger dated as of
March 15, 2001 by and among Parent, Marlin Acquisition Inc. and Midcoast Energy
Resources, Inc.


                                  Appendix A-10


       "MIDCOAST ASSETS" shall mean the assets of Midcoast Energy Resources,
Inc. and its subsidiaries as of the closing under the Midcoast Agreement.

       "MIDCOAST GOODWILL" shall mean the goodwill and going concern value, as
such terms are defined for purposes of Section 197(d)(1) of the Code, that are
associated with the Midcoast Assets.

       "MIDCOAST OWNERSHIP PERIOD" shall mean the period of time from May 11,
2001 up to the Closing Date.

       "MIDCOAST RELATED DEBT" shall mean (i) the EECI Midcoast Debt, (ii) the
New Intercompany Debt, and (iii) all principal and accrued and unpaid interest
owing as of the Closing under that certain (A) Demand Promissory Note from the
Company to EECI dated March 8, 2002 (original amount advanced: $181,000,000.00),
which note shall, as of the Closing Date, be owned by Enbridge (U.S.) Inc., (B)
Promissory Note from the Company to Enbridge (U.S.) Inc. dated December 17, 2001
(original amount advanced: $40,000,000.00), (C) Promissory Note from the Company
to Enbridge (U.S.) Inc. dated December 17, 2001 (original amount advanced:
$85,000,000.00), (D) Promissory Note from the Company to Enbridge (U.S.) Inc.
dated December 17, 2001 (original amount advanced: $100,000,000.00), (E)
Subordinated Promissory Note from Enbridge Pipelines (NE Texas L.L.C. to
Enbridge Hungary Liquidity Management Limited Liability Company dated March 27,
2002 in the principal amount of $90,000,000.00, and (F) Subordinated Promissory
Note from Midcoast Kansas General Partner, Inc. to Enbridge Hungary Liquidity
Management Limited Liability Company dated September 5, 2001 in the principal
amount of $90,000,000.00.

       "MLP" shall be as defined in the introductory paragraph to this
Agreement.

       "MLP GROUP" means (i) MLP and (ii) each Entity in which MLP owns
(directly or indirectly) any Capital Stock.

       "MLP INDEMNIFIED PERSONS" shall be as defined in Section 15.2.

       "MLP NOTICE" shall be as defined in Section 10.3.

       "MLP PARTNERSHIP AGREEMENT" shall mean the Amended and Restated Agreement
of Limited Partnership of MLP dated April 15, 1997, as amended.

       "NEW INTERCOMPANY DEBT" shall mean all principal and accrued and unpaid
interest owing as of the Closing Date with respect to any additional debt
incurred from and after the date of this Agreement up to Closing by a member of
the Company Group that is owed to an Affiliate of EECI (other than a member of
the Company Group).

       "NEW SERVICES AGREEMENT" shall be as defined in Section 9.11.

       "NORM" shall be as defined in Article 7.

       "OLP" means Enbridge Energy, Limited Partnership, a Delaware limited
partnership.


                                  Appendix A-11


       "ORGANIC DOCUMENTS" means, with respect to any Entity at any time, in
each case as amended, modified and supplemented at that time, (i) the articles
or certificate of formation, incorporation or organization (or the equivalent
organizational documents) of that Entity, (ii) the bylaws or limited liability
company agreement or regulations (or the equivalent governing documents) of that
Entity and (iii) each document setting forth the designation, amount and
relative rights, limitations and preferences of any class or series of that
Entity's Capital Stock or of any rights in respect of that Entity's Capital
Stock.

       "OWNERSHIP INTERESTS" shall be as defined in Section 2.1.

       "PARENT" means Enbridge Inc., a Canadian corporation.

       "PASS THROUGH ASSETS" means the Sulphur River Assets, the
Williams/Transco Assets and the Hobart Ranch Plant.

       "PENDING REGULATORY CASES" shall be as defined in Section 9.5.

       "PERMITTED ENCUMBRANCES" shall mean any of the following matters:

       (a) all agreements, leases, instruments, documents, liens, encumbrances,
and other matters which are described in any Schedule or Exhibit to this
Agreement;

       (b) any (i) inchoate liens or charges constituting or securing the
payment of expenses which were incurred incidental to the conduct of the Company
Group's businesses or the operation, repair, construction, improvement or
maintenance of the Assets and (ii) materialman's, mechanics', repairman's,
employees', contractors', operators' or other similar liens, security interests
or charges for liquidated amounts arising in the ordinary course of business
incidental to the conduct of the Company Group's businesses or the operation,
repair, construction, improvement or maintenance of the Assets, in the case of
each of (i) and (ii) securing amounts the payment of which is are not delinquent
and that will be paid in the ordinary course of business or, if delinquent, that
are being contested in good faith with any Action to foreclose or attach any
Assets on account thereof properly stayed; provided, that, EECI shall be
responsible for, and shall promptly pay when due, all amounts finally determined
to be owed that are the subject of such contest, other than amounts which are
the obligation of MLP under Article 10 or that are or will be taken into account
in the Closing Date Balance Sheet;

       (c) any liens for Taxes not yet delinquent or, if delinquent, that are
being contested in good faith in the ordinary course of business with any Action
to foreclose or attach the Assets on account thereof properly stayed; provided,
that, EECI shall be responsible for, and shall promptly pay when due, all
amounts finally determined to be owed that are the subject of such contest,
other than amounts which have been established in accordance with GAAP and will
be taken into account in the Closing Date Balance Sheet;

       (d) any liens or security interests created by Law or reserved in leases,
rights-of-way or other real property interests for rental or for compliance with
the terms of such leases, rights-of-way or other real property interests,
provided payment of the Liability secured is not delinquent or, if delinquent,
is being contested in good faith in the ordinary course of business with any
Action to foreclose or attach the Assets on account thereof properly stayed;
provided,


                                  Appendix A-12


that EECI shall be responsible for, and shall promptly pay when due, all amounts
finally determined to be owed that are the subject of such contest, other than
amounts which have been established in accordance with GAAP and will be taken
into account in the Closing Date Balance Sheet;

       (e)    all Transfer Requirements;

       (f) any titles or rights asserted by any Person to (i) tidelands, or
lands comprising the shores or beds of navigable or perennial rivers and steams,
lakes, bays or other bodies of water, (ii) lands beyond the line of the harbor
or bulkhead lines as established or changed by any Governmental Authority, (iii)
filled-in lands or artificial islands, (iv) statutory water rights, including
riparian rights, and (v) the area extending from the line of mean low tide of
any body of water to the line of vegetation, or the rights of access to that
area or any easement along or across that area;

       (g) all prior reservations of minerals in and under or that may be
produced from any of the lands constituting part of the Assets or on which any
of the Assets are located;

       (h) with the exception of liens or charges, all leases, restrictive
covenants, encumbrances, contracts, agreements, instruments, obligations,
discrepancies, conflicts, shortages in area or boundary lines, encroachments or
protrusions, or overlapping of improvements, defects, irregularities and other
matters affecting any Asset that, individually or in the aggregate, could not
interfere materially with the operation, value or use of such Asset or any other
Assets in the Company Group's businesses;

       (i)    any defect that has been cured by the applicable statutes of
limitations or statutes for prescription;

       (j) any defect affecting (or the termination or expiration of) any
easement, right-of-way, leasehold interest, license or other real property
interest which has been replaced by an easement, right-of-way, leasehold
interest, license or other real property interest covering substantially the
same rights to use the land or the portion thereof used by any member of the
Company Group in connection with its businesses;

       (k) rights reserved to or vested in any Governmental Authority to control
or regulate any of the Assets or any of the Company Group's businesses and all
Laws of such authorities, including any building or zoning ordinances and all
Environmental Laws;

       (l) any agreement, contract, lease, instrument, lien, encumbrance,
permit, amendment, extension or other matter entered into by EECI or any member
of the Company Group in accordance with the terms of this Agreement or in
compliance with the approvals or directives of MLP made pursuant to this
Agreement;

       (m) transportation, shipment, storage, treatment, processing, sale
purchase, handling or other similar agreements relating to the Pipeline Systems;
and

       (n) a defect (other than on account of a mortgage, lien or security
interest) which does not result in a diminution in present value of any Pipeline
System of more than $10,000;


                                  Appendix A-13


provided that the aggregate diminution in present value attributable to defects
under this clause (n) shall not exceed $1,000,000. For purposes of this clause
(n), a group of related defects shall constitute a single defect.

       "PERSON" shall mean any Governmental Authority or any natural person,
Entity, estate, trust, union or employee organization or, for the purpose of the
definition of "ERISA Affiliate," any trade or business.

       "PIPELINE SYSTEMS" shall mean the natural gas and crude oil pipelines and
gathering systems owned by the Company and/or the Company Subsidiaries and being
comprised of the systems described in SCHEDULE 1.1A.

       "PIPELINE SYSTEM INTERESTS" shall mean the easements, rights-of-way,
surface leases, fee parcels and licenses that are necessary or required for the
ownership or operation of the Pipeline Systems.

       "POST-CLOSING CONSENTS" shall mean (i) any consent, approval or permit
of, or filing with or notice to, any Governmental Authority, railroad company or
public utility which has issued or granted any permit, license, right-of-way,
lease or other authorizations permitting any part of the Pipeline Systems to
cross or be placed on land owned or controlled by such Governmental Authority,
railroad company or public utility and (ii) any consent, approval or permit of,
or filing with or notice to, any third party that is customarily obtained or
made after closing in connection with transactions similar in nature to the
transactions contemplated hereby.

       "PRE-CLOSING PERIOD" shall have the meaning set forth in Section 10.2(a).

       "PREFERENCE RIGHT" shall mean any right or agreement that enables or may
enable any Person to purchase or acquire any Asset or any interest therein or
portion thereof as a result of or in connection with the sale, assignment,
encumbrance or other transfer (or the proposed sale, assignment, encumbrance or
other transfer) of any Asset or any interest therein or portion thereof or any
change in control of the owner of such Asset.

       "PROCEEDING NOTICE" shall have the meaning set forth in Section 10.3.

       "PRO FORMA CLOSING DATE BALANCE SHEET" shall mean the pro forma Closing
Date Balance Sheet attached hereto as Exhibit 3.3, which has been prepared on a
basis consistent with the Recent Date Balance Sheet, except as described in
Section 3.3(f), and except that the amount of the working capital shall be zero.

       "PRO FORMA MARCH 2002 BALANCE SHEET" shall be as defined in Section
4.1(g).

       "PWC" shall be as defined in Section 3.3(a).

       "RECENT DATE BALANCE SHEET" shall mean the unaudited consolidated balance
sheet of the Company, the Company Subsidiaries, the Excluded Assets and the
Liabilities of the Excluded Subsidiaries as of March 31, 2002.


                                  Appendix A-14


       "REORGANIZATION AGREEMENT" shall mean the Reorganization Agreement to be
executed by EECI, MLP, Enbridge Energy, Limited Partnership and Enbridge
Pipelines (Lakehead) L.L.C., which will provide for, among other things, the
reorganization of the equity ownership structure of Enbridge Energy, Limited
Partnership.

       "REPORT TIME" shall mean March 31, 2002.

       "RESTRUCTURING ACTIONS" shall be as defined in Section 6.1(b).

       "SPECIAL COMMITTEE" shall mean the committee of the Board of Directors of
EECI, comprised of the two independent directors of such Board, which was
created by resolution of the Board on January 4, 2001 and reaffirmed on March
21, 2002.

       "SPECIFIED OWNERSHIP PERIOD" shall mean, with respect to the Sulphur
River Assets, the period of time from March 1, 2002 up to the Closing Date, and,
with respect to the Transco Williams Assets, the period of time from January 2,
2002 up to the Closing Date.

       "SULPHUR RIVER AGREEMENT" means the Purchase and Sale Agreement made the
13th day of January, 2002, by and between Sulphur River Seller and EECI.

       "SULPHUR RIVER ASSETS" shall mean those assets acquired by Enbridge
Pipelines (NE Texas) L.L.C., Enbridge Pipelines (NE Texas Liquids) L.L.C. and
Enbridge Gathering (Texarkana) L.L.C., pursuant to that certain Purchase and
Sale Agreement dated January 13, 2002, among Sulphur River Gathering LP., SR
Arkansas Gathering LP., SR Crude Gathering LP., SR Liquids Pipeline, LP.,
Sulphur River Resources, L.C., and EECI.

       "SULPHUR RIVER SELLER" means collectively Sulphur River Resources, L.C.,
a Texas limited liability company, and each of the following Texas limited
partnerships: Sulphur River Gathering LP, SR Arkansas Gathering LP, SR Crude
Gathering LP and SR Liquids Pipeline LP.

       "TARGET CAPITALIZATION" shall mean the combined Capitalization of the
Company Group set forth in the Pro Forma Closing Date Balance Sheet.

       "TAX" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, parking, employment, excise, severance, stamp,
occupation, premium, windfall profits, customs duties, capital stock, franchise,
profits, withholding, back-up 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, together with all interest, fines,
penalties and additions thereto.

       "TAX RETURN" shall mean any return, information return or statement or
report required by Law to be filed with respect to Taxes.

       "TOTAL CONSIDERATION" shall be as defined in Section 3.1.

       "TRANSACTION DOCUMENTS" shall mean this Agreement, the License Agreement,
the Assignment of Membership Interest, the Assignment of Partnership Interest,
the Assumption Agreement, the New Services Agreement and all other agreements,
instruments, certificates and


                                  Appendix A-15


documents which are required by the terms of this Agreement to be executed
and/or delivered by MLP or the Company to EECI, or by EECI to MLP or the
Company, at Closing.

       "TRANSFER REQUIREMENT" shall mean any consent, approval, authorization or
permit of, or filing with or notification to, any Person which is required to be
obtained, made or complied with for or in connection with any sale, assignment,
transfer or encumbrance of any Asset or any interest therein.

       "UNAUDITED INTERIM FINANCIALS" shall mean the unaudited consolidated
income statement of the Company and the Company Subsidiaries for the three month
period ended March 31, 2002, together with the unaudited consolidated cash flow
statement for such period and the Recent Date Balance Sheet, which statements
include the Excluded Assets and Liabilities of the Excluded Subsidiaries.

       "WILLIAMS/TRANSCO AGREEMENTS" shall mean the agreements referenced in the
definition of "Williams/Transco Assets".

       "WILLIAMS/TRANSCO ASSETS" shall mean those assets acquired by Enbridge
Pipelines (Texas Gathering) Inc. pursuant to that certain (i) Asset Purchase and
Sale Agreement dated October 10, 2001, between WFS Gathering Company, L.L.C. and
Enbridge Pipelines (Texas Gathering) Inc. (Tilden Plant and Gathering System)
and (ii) Asset Purchase and Sale Agreement dated October 10, 2001 between
WFS-Liquids Company and Enbridge Pipelines (Texas Gathering) Inc. (Bee County
Gas Plant).


                                  Appendix A-16

EX-10.2

                                                                    Exhibit 10.2


                       FORM OF TAX INDEMNIFICATION AGREEMENT

     This TAX INDEMNIFICATION AGREEMENT (the "Agreement") dated as of
_________, 2002 is entered into between Enbridge Inc., an Alberta, Canada
corporation ("Enbridge"), and Enbridge Energy Management, L.L.C., a Delaware
limited liability company ("Management").

                                   RECITALS

    WHEREAS, Management was formed pursuant to the Limited Liability Company
Agreement of Enbridge Energy Management, L.L.C. dated as of _______________,
2002 which was amended by the Amended and Restated Limited Liability Company
Agreement of Enbridge Energy Management, L.L.C. (the "Management L.L.C.
Agreement").

    WHEREAS, Management authorized the issuance of two classes of limited
liability company interests consisting of the "Listed Shares" and the "Voting
Shares," the rights and obligations of which are more specifically described in
the Management L.L.C. Agreement.

    WHEREAS, Enbridge Energy Partners, L.P., a Delaware limited partnership
(the "MLP"), pursuant to the Third Amended and Restated Agreement of Limited
Partnership of Enbridge Energy Partners, L.P. (the "MLP Partnership
Agreement"), authorized the issuance of the new class of partnership interest
hereinafter referred to as the "I-Units."

    WHEREAS, Management issued one Voting Share to EECI (as defined herein) in
exchange for $1,000.

    WHEREAS, Management issued and sold Listed Shares to the public.

    WHEREAS, Management applied the net proceeds from the issuance and sale of
such Voting Share and Listed Shares to acquire I-Units from the MLP in exchange
for $_________. In addition, Management purchased the Purchase Rights (as
defined herein) and its rights under this Agreement from Enbridge for $500,000.

    WHEREAS, Enbridge has agreed to indemnify Management for certain tax
consequences attributable to the Indemnifiable Events described below.

    NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

                                   AGREEMENT

    1.  DEFINITIONS.  For purposes of this Agreement, the following terms shall
have the following meanings. Any reference to any person shall include such
person and its permitted successors and assigns. Except where expressly stated
otherwise, any agreement referred to in this Agreement shall mean such
agreement as amended, supplemented or modified from time to time in accordance
with the applicable provisions thereof. Capitalized terms not otherwise defined
herein have the meaning assigned them in the Management L.L.C. Agreement.




    "After-Tax Basis" means in respect of any amount received or accrued by any
Person (or in the case of a payee which is a pass-through or disregarded entity
for the relevant Tax purposes, the Persons who are required to take into
account any items of income, gain, loss or deduction with respect to such
entity) (the "base amount"), the base amount supplemented by a further payment,
if necessary, to such Person such that, after reduction for all Taxes actually
imposed on such Person as a result of the receipt or accrual of the base amount
and such further payment (after giving effect to all deductions and credits, if
any, actually utilized by such Person arising from the event or circumstance
giving rise to the base amount), the net amount received by such Person shall
be equal to the base amount.

    "Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or
Canada or the states of New York or Texas or the province of Alberta shall not
be regarded as a Business Day.

    "Change in Law" means the occurrence after the date hereof of (i) the
enactment of, or amendment to, any provision of the Code, Treasury Regulations
thereunder or any administrative pronouncement, (ii) the enactment of, or
amendment to, any provision of the Tax law of any state (or political
subdivision thereof) in which Management is subject to Tax, or (iii) the
issuance of a Final Determination of the United States Supreme Court or the
United States Court of Appeals for the federal judicial circuit to which appeal
would lie from a case concerning Indemnifiable Events relating to Management;
PROVIDED, THAT (x) a change in the rate of any Tax shall not be treated as a
Change in Law, and (y) an administrative pronouncement shall be treated as a
Change in Law only if Management provides Enbridge a written opinion of
independent, nationally-recognized tax counsel selected by Management (such
counsel and form of opinion to be reasonably satisfactory to Enbridge) to the
effect that such counsel is unable to conclude that a Reasonable Basis exists
to take a position contrary to such administrative pronouncement.

    "Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time. Any reference herein to a specific section or sections of
the Code shall be deemed to include a reference to any corresponding provision
of successor law.

    "Common Unit" has the meaning set forth in the MLP Partnership Agreement.

    "EECI" means Enbridge Energy Company, Inc., a Delaware corporation, the
sole general partner of the MLP and the owner of the Voting Shares.

    "Enbridge" is defined in the introduction to this Agreement.

    "Final Determination," in respect of Enbridge, the MLP or Management
means: (i) a decision, judgment, decree or other order by any court of
competent jurisdiction, which decision, judgment, decree or other order has
become final after all appeals allowable by law as of right and hereunder by
either party to the action have been exhausted or the time for filing such
appeals has expired; (ii) a closing agreement entered into under section 7121
of the Code or any other settlement agreement entered into with the applicable
taxing authority in connection with an administrative or judicial proceeding
(including a state or local proceeding); (iii) the expiration of the time for
instituting a suit with respect to a claimed deficiency; or (iv) the


                                       2



expiration of the time for instituting a claim for refund, or if such a claim
were filed, the expiration of the time for instituting a suit with respect
thereto.

    "Indemnifiable Event" means either (i) an increase, as a result of a Change
in Law, an audit by the applicable taxing authority or any action taken by
Enbridge or EECI that is inconsistent with the Tax Assumptions, in the sum of
Taxes imposed on, payable by, or withheld from payments to Management, over the
sum of Taxes, if any, Management would have paid or incurred in such year or
shorter tax period with respect thereto based on the Tax Assumptions, computed
in each case as provided in Section 4, (ii) any insufficiency or inadequacy of
cash to pay Taxes as contemplated by the definition of "Tax Assumptions" (which
insufficiency or inadequacy shall be treated as additional Tax for purposes of
Section 3(a)(1)), or (iii) any of the situations described in the last sentence
of Section 3(a)(3).

    "Indemnity Amount" has the meaning set forth in Section 3(a)(1).

    "Interest Rate" means the applicable federal rate (within the meaning of
section 1274(d) of the Code).

    "IRS" means the United States Internal Revenue Service.

    "I-Unit" is defined in the recitals to this Agreement. The terms and
provisions of the I-Units are more specifically set forth in the MLP
Partnership Agreement.

    "Listed Shares" means the ownership interests in Management described in
the recitals to this Agreement, the rights and obligations of which are more
specifically described in the Management L.L.C. Agreement.

    "Management" is defined in the introduction to this Agreement.

    "Management L.L.C. Agreement" is defined in the recitals to this Agreement.

    "Management Subsidiary" means any limited liability company, partnership,
corporation, joint venture or other entity that is, directly or indirectly,
wholly-owned by Management.

    "MLP" is defined in the recitals to this Agreement.

    "MLP Partnership Agreement" is defined in the recitals to this Agreement.

    "Non-Taxable" means in respect of any transaction, event or circumstance,
not causing or giving rise to the realization or recognition of any taxable
income or other basis for the imposition of Tax.

    "Purchase Rights" means the rights and obligations associated with the
optional and mandatory purchase of Listed Shares by Enbridge, the terms and
provisions of which are more specifically set forth in Annex A of the
Management L.L.C. Agreement.

    "Realized Tax Savings" shall have the meaning set forth in Section 3(a)(3).


                                       3



    "Reasonable Basis" for a position exists if tax counsel may properly advise
reporting such position on a Tax return in accordance with Formal Opinion
85-352 of the American Bar Association or any successor thereto.

    "Revenue Agent's Report" means a report sent to a taxpayer under cover of a
transmittal (30 day) letter relating to proposed adjustments in such taxpayer's
United States federal income tax liability referred to in Treasury Regulation
Section 601.105(c)(2)(i).

    "Tax" or "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions or withholdings (including, without limitation, income,
franchise, gross receipts, sales, rental, use, turnover, value added, property
(tangible and intangible), excise and stamp taxes) of any nature whatsoever,
together with any and all assessments, penalties, fines, additions and interest
relating thereto, provided, however, that the term "Tax" or "Taxes" does not
include any Texas franchise taxes, or any assessments, penalties, fines,
additions or interest relating thereto.

    "Tax Assumptions" means the following assumptions with respect to the basis
of taxation of Management and its capability to pay Taxes to which it may be
subject relative to the cash which it has available to pay such Taxes:

    (1)  The formation and capitalization of Management and all transactions
         related or incidental thereto (including, without limitation, this
         Agreement), its issuance of Listed Shares and Voting Shares and its
         acquisition of I-Units in the MLP will be Non-Taxable to Management.

    (2)  Management's receipt of the Purchase Rights from Enbridge will be
         Non-Taxable to Management.

    (3)  Management's transfer of the Purchase Rights to the holders of Listed
         Shares will be Non-Taxable to Management.

    (4)  Management is treated as a corporation for United States federal, state
         and local income Tax purposes.

    (5)  Each Listed Share and Voting Share is treated as an ownership interest
         in Management, and each owner of a Listed Share or a Voting Share is
         treated as a shareholder of Management, for United States federal,
         state and local income Tax purposes.

    (6)  The MLP is treated as a partnership for United States federal, state
         and local income Tax purposes.

    (7)  Management, by virtue of its ownership of I-Units in the MLP, is
         treated as a partner in the MLP for United States federal, state and
         local income Tax purposes.

    (8)  The allocation of MLP Tax Items, as set forth in the MLP Partnership
         Agreement, is respected for United States federal, state and local
         income Tax purposes.


                                       4



    (9)   Management's ownership of additional I-Units following cash
          distributions to holders of Common Units, occurring pursuant to the
          MLP Partnership Agreement, is Non-Taxable to Management.

    (10)  Distributions of additional Listed Shares and Voting Shares by
          Management to holders of Listed Shares and Voting Shares, made
          pursuant to the Management L.L.C. Agreement, are Non-Taxable to
          Management.

    (11)  To the extent that Management engages in the management and control
          of, or provides services to, the MLP, any reimbursement of Management
          by the MLP or EECI (or Affiliates of either) in respect of its
          services and other expenses incurred by Management will, after the
          payment by Management of any fees or expenses incurred by Management
          in respect of the management and control of, or services provided to,
          the MLP, be adequate to pay all Taxes, if any, payable by Management
          by virtue of either (i) its management and control of, or services
          provided to, the MLP, or (ii) the receipt of such reimbursement from
          the MLP or EECI (or Affiliates of either).

    (12)  The only assets owned by Management for federal income Tax purposes,
          other than cash, are I-Units in the MLP.

    (13)  If there is a sale, exchange, redemption or other disposition of
          I-Units owned by Management or a complete or partial liquidation of
          the MLP, the cash received by Management pursuant thereto will be
          sufficient to satisfy any Tax payable by Management as a result of
          such sale, exchange, redemption, liquidation or other disposition.

    "Tax Items" means items of income, gain, loss, deduction and credit for
income Tax purposes.

    "Treasury Regulations" means temporary or final United States Treasury
regulations.

    "Voting Shares" means the ownership interest in Management held by EECI,
the rights and obligations of which are more specifically set forth in the
Management L.L.C. Agreement.

    2.  TAX REPRESENTATIONS.  Management represents, warrants and covenants to
Enbridge, and Enbridge represents, warrants and covenants to Management that,
for all United States federal, state and local income Tax purposes:

        (a)  It will treat Management as a corporation.

        (b)  It will treat the owners of Listed Shares and Voting Shares as
    shareholders of Management.

        (c)  It will treat the distributions by Management of additional Listed
    Shares and Voting Shares to holders of Listed Shares and Voting Shares made
    pursuant to the Management L.L.C. Agreement as Non-Taxable.



                                       5



                (d)   It will treat the MLP as a partnership and will treat
         Management as a partner of the MLP with respect to its ownership of
         I-Units.

                (e)   It will respect the allocation of Tax Items made with
         respect to the I-Units owned by Management as provided in the MLP
         Partnership Agreement.

                (f)   It will prepare and file all Tax elections, Tax returns
         and information returns on a basis consistent with the treatment
         described in (a) through (e) and will not take any contrary position
         on any Tax return or information return or take any other action that
         is inconsistent with such treatment.

Notwithstanding anything to the contrary herein, neither Enbridge nor
Management shall be obligated to take a position subsequent to (i) a Final
Determination to the contrary or (ii) the receipt of a written opinion of
independent, nationally-recognized tax counsel selected by Management (such
counsel and form of opinion to be reasonably satisfactory to Enbridge) to the
effect that, due solely to a Change in Law, such counsel is unable to conclude
that a Reasonable Basis exists to take such position.

In addition to the foregoing, Management agrees that it shall otherwise use
its reasonable best efforts, consistent with applicable Tax Law, to minimize
the amount of Taxes for which indemnification may be available hereunder.

         3.     INDEMNIFICATION AND REIMBURSEMENTS.

                (a)   INDEMNITY OBLIGATION; REIMBURSEMENT FOR REALIZED TAX
         SAVINGS.

                      (1)   IN GENERAL.  Upon the occurrence of an
                Indemnifiable Event, Enbridge shall become obligated, in
                accordance with the terms of this Agreement, to the extent
                Management does not have sufficient cash to pay the additional
                Taxes, to pay as an indemnity such amounts as, on an After-Tax
                Basis, shall be equal to the amount of the additional Taxes
                incurred by Management as a result of such Indemnifiable Event
                (the "Indemnity Amount"). In addition, the Indemnity Amount
                shall be increased, on an After-Tax Basis, by the amount of
                all reasonable out-of-pocket expenses incurred by Management
                that would not otherwise have been incurred by Management, and
                that have not otherwise been previously paid by Enbridge to
                Management as result of: (i) any Indemnifiable Event or (ii)
                any determination by Management of the existence or amount of
                any Realized Tax Savings.

                      (2)   INCREASE FOR INTEREST.  The Indemnity Amount shall
                be increased by an amount equal to interest accrued at the
                Interest Rate on the amount of indemnified Taxes that have
                actually been paid to the IRS or other applicable taxing
                authority by Management from the assumed date of payment of
                such Taxes (as provided in Section 4(b)), provided that (x) a
                payment of Taxes in respect of which Enbridge has advanced
                funds to Management pursuant to Section 5(d) shall not accrue
                interest and (y) such interest shall cease to accrue if the
                payment date of the Indemnity Amount is delayed as a result of
                the failure of Management to

                                       6



                provide notice and computations to Enbridge within a reasonable
                time pursuant to Section 3(b).

                      (3)   REIMBURSEMENT FOR REALIZED TAX SAVINGS.  To the
                extent that any Indemnity Amount is paid pursuant to this
                Section 3 in respect of an Indemnifiable Event, Management
                shall reimburse Enbridge for any Tax savings (i) which are
                realized and which Management would not have realized but for
                such Indemnifiable Event and (ii) which are actually received
                or recognized by Management in the form of cash or a cash
                savings at a time when such cash or cash savings is not
                otherwise required by Management to pay its legal obligations,
                including, without limitation, its Taxes, and excluding the
                obligation created by this Section 3(a)(3) ("Realized Tax
                Savings").  Management shall pay any Realized Tax Savings
                within 15 days of the earlier of (i) Management determining
                that such Realized Tax Savings exist or (ii) any final
                determination, pursuant to Section 6, that any such Realized
                Tax Savings exist and are available for payment pursuant to
                this Section 3(a)(3). Notwithstanding the foregoing,
                Management shall not be required to make any payment pursuant
                to this Section 3(a)(3) to the extent that the amount of such
                payment would exceed (i) the amount of all prior payments by
                Enbridge to Management pursuant to Section 3(a)(1) with
                respect to the Indemnifiable Event which gave rise to the
                Realized Tax Savings, less (ii) the amount of all prior
                payments by Management pursuant to this Section 3(a)(3) with
                respect to such Indemnifiable Event. If for any reason any
                Realized Tax Savings paid to Enbridge pursuant to this Section
                3(a)(3) or taken into account in computing the amount of any
                indemnity payable hereunder pursuant to Section 3(a)(1) shall,
                as a result of a Final Determination or otherwise, be
                unavailable, such unavailability shall be treated as an
                Indemnifiable Event subject to indemnification by Enbridge
                pursuant to Section 3(a)(1), above.

                (b)   DATE FOR PAYMENT.  The amount payable by Enbridge
         pursuant to Section 3(a) shall be paid upon the occurrence of the
         latest of:

                      (1)   subject to Section 6 and the next sentence, 15
                Business Days after the receipt by Enbridge of a notice from
                Management accompanied by its computations in accordance with
                Section 6;

                      (2)   if any such indemnity payment relates to an
                Indemnifiable Event that is contested pursuant to Section 5,
                15 Business Days after the date of a Final Determination with
                respect to such Indemnifiable Event; and

                      (3)   in the case of, and to the extent such amount
                payable by Enbridge pursuant to Section 3(a) relates to, the
                redemption or other disposition of the MLP I-Units, and
                subject to Section 6 and the next sentence, 15 Business Days
                after the redemption or other disposition of the MLP I-Units.

The date required for payment pursuant to the preceding sentence shall be
delayed until 15 Business Days after delivery to Enbridge of any verification
requested pursuant to Section 6.

                                       7



         4.     COMPUTATIONAL ASSUMPTIONS.

                (a)   IN GENERAL.  For purposes of (i) computing the amount of
         Taxes payable as a result of an Indemnifiable Event and (ii) the
         definition of "After-Tax Basis," Management shall be assumed to be
         subject to United States federal income Tax at the maximum effective
         statutory rate generally applicable to corporations for the relevant
         period or periods, and to the extent Management is subject to state
         and local income Taxes it shall be assumed to be subject to state and
         local income taxes at the composite rate equal to the highest
         generally applicable composite rate for corporations whose principal
         place of business is such state or local jurisdiction.

                (b)   DUE DATE FOR TAXES; DATE OF REALIZED TAX SAVINGS.  Taxes
         will be assumed to be payable on the later of (i) the due date,
         without extensions, of the Tax return on which such Taxes are
         reported or (ii) the date on which such Taxes are actually paid to
         the IRS or other applicable taxing authority. Realized Tax Savings
         pursuant to Section 3(a)(3) will be assumed to be realized on the
         date when the cash or cash savings from such Realized Tax Savings is
         realized by Management and is not otherwise required by Management to
         pay its legal obligations.

         5.     CONTESTS; RECORDS.

                (a)   NOTICE OF CLAIM.  If Management receives written notice
         (including in the form of a proposed Revenue Agent's Report) of any
         action by the IRS or other taxing authority that, if successful,
         would result in an Indemnifiable Event for which Enbridge may be
         required to indemnify Management hereunder, Management hereby agrees
         promptly to notify Enbridge in writing of such claim (but a failure
         to do so will not diminish Enbridge's obligations under this
         Agreement except to the extent that (i) Enbridge is harmed by such
         failure and (ii) at the time such notification should have been
         provided, either (A) Enbridge and its Affiliates collectively were
         not the Record Holders of a majority of the Voting Shares then
         outstanding or (B) a majority of the members of the Board of
         Directors of Management consisted of independent directors as
         required by the principal National Securities Exchange on which
         Listed Shares were listed or admitted to trading, the Securities and
         Exchange Commission or applicable Law); PROVIDED, HOWEVER, that if
         EECI receives any such notice as the tax matters partner of the MLP,
         Enbridge shall be deemed to have received notice under this Section
         5(a).

                (b)   AGREEMENT TO CONTEST.  Subject to Section 5(d) and
         provided the conditions set forth in Section 5(c) are satisfied, (i)
         Management agrees to contest (or join in contesting) in good faith
         such claim and agrees not to settle such claim without the written
         approval of Enbridge, (ii) subject to clause (iii) of this Section
         5(b), the conduct of the contest shall be controlled by Management
         (or such other person as Management shall have designated, subject to
         Enbridge's right of involvement set forth in this Section 5) and
         (iii) Enbridge shall have the right, upon its election in writing to
         Management and at its sole expense, to control the contest of such
         claim (including the defense, prosecution, settlement or compromise
         thereof), and Management shall take such action in connection with
         contesting such claim as Enbridge shall reasonably request in writing


                                       8



         from time to time, including the selection of counsel and experts and
         the execution of powers of attorney.

                (c)   CONDITIONS TO INDEMNIFIED PARTY'S OBLIGATION TO CONTEST
         AND NOT SETTLE.

                      (1)   Prior to taking any action to contest the claim
                described in Section 5(a), and again prior to any appeal of an
                adverse judicial decision, Enbridge shall have delivered to
                Management a written opinion of independent, nationally-
                recognized tax counsel selected by Enbridge (such counsel and
                form of opinion to be reasonably satisfactory to Management) to
                the effect that there is a Reasonable Basis for contesting such
                action or proposed action by the IRS or other taxing authority;

                      (2)   Enbridge shall have agreed to pay, on an After-Tax
                Basis as verified under Section 6, and shall be currently
                paying for Management, all reasonable out-of-pocket expenses
                (including reasonable attorneys fees of legal counsel
                reasonably selected by Management or Enbridge, as applicable)
                that Management shall incur in connection with contesting such
                action or proposed action; and

                      (3)   the amount of the indemnity that would be payable
                hereunder (which shall include prospective exposure in future
                tax years attributable to the position being challenged) shall
                exceed U.S. $5,000.

                (d)   REFUND CLAIMS.  If Management or Enbridge, as
         applicable, shall determine in its reasonable discretion that
         Management shall pay the Tax claimed and sue for a refund, Enbridge
         must either, at its option and to the extent necessary for the
         contest to proceed, (i) promptly advance to Management on an
         interest-free basis sufficient funds to pay the Tax payable with
         respect thereto or (ii) pay to Management the amount payable pursuant
         to Section 3 (but without regard to the time of payment in Section
         3(b)) with respect to such claim.

                (e)   TIME AT WHICH OBLIGATIONS OPERATIVE.  In any
         circumstance where judicial review shall be unavailable, Enbridge's
         right to cause a contest hereunder, and Management's obligation to
         contest hereunder, shall become operative at the earliest time such a
         contest may, pursuant to law, be initiated, provided that Enbridge
         has then satisfied all of the necessary preconditions to the exercise
         of its contest rights.

                (f)   DEFERRAL OF INDEMNIFICATION.  If Enbridge shall have
         requested Management to contest such claim as above provided and
         shall have duly complied and remains in compliance with all the terms
         of this Section 5, Enbridge's liability for indemnification shall be
         deferred (as provided in Section 3) until a Final Determination of
         the liability of Management. At such time, Enbridge shall become
         obligated for the payment of any indemnification hereunder resulting
         from the outcome of such contest, and, to the extent funds were
         advanced by Enbridge pursuant to Section 5(d), Management shall
         become obligated to refund to Enbridge any amount received as a
         refund by Management or credited to Management and fairly
         attributable to advances by

                                       9



         Enbridge, net of any Taxes attributable to the receipt of such refund
         or credit. Within 15 Business Days following such Final Determination,
         any amounts due hereunder shall be paid first by set off against each
         other and then either:

                      (1)   Enbridge shall pay to Management any excess of the
                full amount due hereunder over the amount of any advances
                previously made by Enbridge and applied against its indemnity
                obligation as aforesaid; or

                      (2)   Management shall repay to Enbridge any excess of
                such advances, net of any Taxes attributable to Management's
                receipt of such refund or credit, over such full amount due
                hereunder, together with any interest received from the IRS or
                other taxing authority by Management that is properly
                attributable to such advances during the period such advances
                were outstanding and that is in excess of the amount of any
                Taxes attributable to Management's receipt or accrual of such
                interest.

                (g)   RECORDS AND PARTICIPATION.

                      (1)   INDEMNIFIED PARTY.  Management shall provide
                Enbridge with all documents and information related to the
                contest as may be reasonably requested by Enbridge, shall keep
                Enbridge fully informed, shall afford Enbridge the opportunity
                to attend and participate in any meetings or negotiations with
                the IRS or other taxing authority regarding such contest and
                shall otherwise fully cooperate with Enbridge in good faith in
                connection with such contest.  Management will consult in good
                faith with (and, in the event that Enbridge has not exercised
                its contest control rights under Section 5(b)(iii), consider
                in good faith suggestions by) Enbridge and its counsel
                regarding relevant aspects of the progress and nature of any
                such contest, provided that nothing in this Agreement shall
                require Management to provide Enbridge with proprietary
                information relating to the identity of Management's
                shareholders, owners, members or lenders.

                      (2)   ENBRIDGE.  Within a reasonable time under the
                circumstances after reasonable written request therefor from
                Management, Enbridge shall provide such information and copies
                of records as are within its control to enable Management to
                fulfill its Tax return filing, audit and litigation
                obligations in connection with the transactions contemplated
                by the Management L.L.C. Agreement, provided that nothing in
                this Agreement shall require Enbridge to provide Management
                with its Tax returns.

         6.     VERIFICATION.  The results of all computations to be made with
respect to Management under this Agreement, together with a statement
describing in reasonable detail the manner in which such computations were
made, shall be delivered to Enbridge in writing. Preparation and delivery of
such computations shall be pursued diligently, in a timely manner and in good
faith, and notice of an Indemnifiable Event and delivery of such computations
to Enbridge shall be made within a reasonable time under the circumstances. If
Enbridge so requests within 10 Business Days after receipt of such
computations, any determination shall be

                                      10




reviewed by the independent accounting firm who regularly audits Management,
who shall be asked to verify, after consulting with Enbridge and Management,
whether Management's computations are correct, and to report its conclusions
(within 20 Business Days upon being requested to verify and determine the
correct computation) to both Enbridge and Management. Enbridge also may request
that such accounting firm review Management's Tax returns for any year to
determine if Management is required to make any payment pursuant to Section
3(a)(3). Management and Enbridge hereby agree to provide such accountants with
all information and materials as shall be reasonably necessary or desirable in
connection herewith. Any information provided to such accountants by any person
shall be and remain the exclusive property of such person and shall be deemed
by the parties to be (and the accountants shall confirm in writing that they
shall treat such information as) the private, proprietary and confidential
property of such person, and no person other than such person and the
accountants shall be entitled thereto, and all such materials shall be returned
to such person. The reasonable fees and expenses of the accountants in
verifying an amount pursuant to this Agreement shall be paid by Enbridge;
provided, that Management and not Enbridge shall be required to pay such fees
if the computations provided by Management were not prepared in good faith. The
parties hereto agree that the sole responsibility of the accountants hereunder
shall be to verify calculations hereunder and that all matters of
interpretation of this Agreement shall not be within the scope of the
accountant's responsibilities.

    7.  EXTENSION AND ADJUSTMENT OF AGREEMENT IN THE CASE OF MANAGEMENT
SUBSIDIARIES.  To the extent that Management forms one or more Management
Subsidiaries to perform any activities or hold any assets (including I-Units)
which Management is permitted under the Management L.L.C. Agreement to perform
or hold directly, (i) the indemnity and other provisions of this Agreement
shall be automatically extended to include and take into account, in addition
to Management, any such Management Subsidiary, (ii) to the extent such
Management Subsidiary is recognized as an entity separate from Management for
the applicable Tax purpose, the Management Subsidiary shall be indemnified by
Enbridge to the same extent that Management would have been indemnified had it
performed such activities (and received any related reimbursements or payments)
or held such assets directly, and (iii) correlative adjustments to the terms
and definitions of this Agreement and their application shall be made, to the
extent appropriate to the context, to take into account the legal existence of
such Management Subsidiary, the actual ownership of assets and/or performance
of activities by the Management Subsidiary and the applicable tax status of the
Management Subsidiary (E.G., as a disregarded or recognized entity for the
applicable Tax purpose) and to avoid any duplication of payments made pursuant
to this Agreement.

    8.  LATE PAYMENTS.  Except as otherwise provided in this Agreement, any
amount payable to Management or Enbridge under this Agreement not paid when due
shall bear interest from the date due to the date paid at the Interest Rate.

    9.  NO DUPLICATION OF PAYMENTS.  Nothing contained in this Agreement shall
be construed to permit Management to receive payment with respect to an
Indemnifiable Event hereunder more than once, to permit Management to receive
payment with respect to an Indemnifiable Event in duplication of any payment
with respect to such Indemnifiable Event previously received by any transferor
of Management's interest, to permit any third-party


                                      11



beneficiary hereof to recover any amount hereunder or to require Management to
pay any Realized Tax Savings arising out of any Indemnifiable Event more than
once.

    10.  NOTICES.  All notices and other communications shall be given in the
manner, to the respective addresses, and shall become effective as provided in
the Management L.L.C. Agreement except to the extent otherwise expressly
provided herein, except that notices or communications shall be directed to
Enbridge at:

                                 Enbridge Inc.
                                        [Address]
                                 ----------------------------
                                        [Address]
                                 ----------------------------
                                 Attn:
                                       ----------------------
                                 [Phone Number]:
                                 ----------------------------

    11.  ASSIGNMENT.  The obligations and liabilities of Enbridge and
Management arising under this Agreement are expressly made for the benefit of,
and shall be enforceable by, Management and Enbridge and their respective
successors and permitted assigns.  It is expressly provided that Enbridge may
assign to Enbridge (U.S.) Inc. or any other Affiliate of Enbridge, and such
assignee may assume, Enbridge's obligations, rights and/or liabilities under
this Agreement.  Any assignment by Enbridge of any of its obligations or
liabilities hereunder will not relieve Enbridge of any such obligations or
liabilities without the consent of Management.

    12.  SURVIVAL.

         (a) The obligations, rights and liabilities of Enbridge and Management
    hereunder shall continue in full force and effect (notwithstanding the
    cancellation, sale, exchange, redemption or other disposition of Listed
    Shares, or the dissolution, liquidation or termination of Management, the
    MLP or Enbridge) until the 180th day following the expiration of the
    relevant statute of limitations for all relevant taxable years (taking into
    account all extensions thereof).

         (b) Notwithstanding Section 12(a) or anything in this Agreement to the
    contrary:

               (i)  if as a result of a change in the tax status of the MLP,
         Management consummates a merger with or into the MLP or a subsidiary of
         the MLP pursuant to Section 7.03 of the Management L.L.C. Agreement,
         this Agreement shall terminate immediately following the effective time
         of such merger and the obligations, rights and liabilities of Enbridge
         and Management hereunder shall not continue in force or effect as of
         that time, PROVIDED, HOWEVER, that any obligations, rights and
         liabilities of Enbridge and Management arising with respect to periods
         ending on or before the effective time of such merger shall not
         terminate and shall continue in full force and effect as provided in
         Section 12(a);

               (ii)  if a Special Event that is not a Mandatory Purchase Event
         occurs or the general partner of the MLP is removed by the limited
         partners of the MLP, this Agreement shall terminate immediately prior
         to the occurrence of such Special Event or upon such removal and the
         obligations, rights and liabilities of


                                      12



         Enbridge and Management hereunder shall not continue in force or
         effect as of that time, PROVIDED, HOWEVER, that any obligations,
         rights and liabilities of Enbridge and Management arising with respect
         to periods before that time shall not terminate and shall continue in
         full force and effect as provided in Section 12(a); and

               (iii)  if Management is dissolved or liquidated pursuant to
         Section 7.01(a)(iii) of the Management L.L.C. Agreement, this
         Agreement shall terminate immediately prior to the Dissolution Event
         associated with such dissolution or liquidation and the obligations,
         rights and liabilities of Enbridge and Management shall not continue
         in force or effect as of that time, PROVIDED, HOWEVER, that any
         obligations, rights and liabilities of Enbridge and Management arising
         with respect to periods before that time shall not terminate and shall
         continue in full force and effect as provided in Section 12(a).

    13.  METHOD OF PAYMENT.  All payments to be made to a party pursuant to
this Agreement shall be made in United States Dollars by wire transfer to such
bank account of such party as such party from time to time shall have directed
in writing at least five (5) Business Days prior to the due date thereof.

    14.  GOVERNING LAW.  THIS TAX INDEMNIFICATION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND WITHOUT REGARD TO
ANY CONFLICT OF LAW PROVISIONS.

    15.  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, and
such counterparts together shall constitute and be one and the same instrument.

    16.  MISCELLANEOUS.

         (a) SEVERABILITY.  Any provision of this Agreement which is prohibited
    or unenforceable in any jurisdiction shall, as to such jurisdiction, be
    ineffective to the extent of such prohibition or unenforceability without
    invalidating the remaining provisions hereof, and any such prohibition or
    unenforceability in any jurisdiction shall not invalidate or render
    unenforceable such provision in any other jurisdiction, unless the
    provisions declared prohibited as unenforceable are essential to effectuate
    the intent of the parties with respect to the Agreement taken as a whole.
    To the extent permitted by applicable Law, each of the parties hereto
    hereby agrees that any provision hereof that renders any other term or
    provision hereof invalid or unenforceable in any respect shall be modified,
    but only to the extent necessary to avoid rendering such other term or
    provision invalid or unenforceable, and such modification shall be
    accomplished in a manner that most nearly preserves the benefit of the
    parties' bargains hereunder.

         (b) AMENDMENTS.  Neither this Agreement nor any of the terms hereof may
    be terminated, amended, supplemented, waived or modified orally, but only
    by an


                                      13



    instrument in writing signed by the party against which the enforcement of
    the termination, amendment, supplement, waiver or modification is sought.

         (c) HEADINGS.  The section and paragraph headings in this Agreement
    are for convenience of reference only and shall not modify, define, expand
    or limit any of the terms or provisions hereof.

         (d) NO INTENDED THIRD PARTY BENEFICIARIES.  There are no intended third
    party beneficiaries of this Agreement.

          [The remainder of this page has been left intentionally blank]





















                                      14



    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.


                                      ENBRIDGE INC.



                                      By:
                                          ----------------------------------
                                      Name:
                                            --------------------------------
                                      Title:
                                             -------------------------------




                                      ENBRIDGE ENERGY MANAGEMENT, L.L.C.



                                      By:
                                          ----------------------------------
                                      Name:
                                            --------------------------------
                                      Title:
                                             -------------------------------




                                      ENBRIDGE ENERGY PARTNERS, L.P.


                                      By: Enbridge Energy Company, Inc.,
                                          its general partner



                                      By:
                                          ----------------------------------
                                      Name:
                                            --------------------------------
                                      Title:
                                             -------------------------------



                 [SIGNATURE PAGE TO TAX INDEMNIFICATION AGREEMENT]

EX-10.3

                                                                    Exhibit 10.3


                         DELEGATION OF CONTROL AGREEMENT



                         DATED AS OF [__________], 2002



                                      AMONG



                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.

                          ENBRIDGE ENERGY COMPANY, INC.

                                       AND

                         ENBRIDGE ENERGY PARTNERS, L.P.





                         DELEGATION OF CONTROL AGREEMENT

      This DELEGATION OF CONTROL AGREEMENT (this "AGREEMENT") dated as of
[_____________________], 2002 (the "EFFECTIVE DATE"), is among Enbridge Energy
Management, L.L.C., a Delaware limited liability company ("Management"),
Enbridge Energy Company, Inc., a Delaware corporation (the "GENERAL PARTNER")
and Enbridge Energy Partners, L.P., a Delaware limited partnership (the "MLP").

                                 R E C I T A L S

      WHEREAS, the General Partner is the sole general partner of the MLP; and

      WHEREAS, the General Partner desires to delegate to Management all of the
General Partner's power and authority to manage and control the business and
affairs of the MLP to the fullest extent permitted under that certain Third
Amended and Restated Agreement of Limited Partnership of the MLP dated as of
even date herewith (the "MLP PARTNERSHIP AGREEMENT"); and

      WHEREAS, Management desires to accept such delegation; and

      WHEREAS, SECTION 6.6(C) of the Master Partnership Agreement and Section
17-403(c) of the Delaware Revised Uniform Limited Partnership Act permit such
delegation; and

      WHEREAS, the MLP wishes to confirm hereby its agreement with the terms of
this Agreement relating to the management and control of its business and
affairs by Management and certain other agreements for the benefit of the
General Partner, Management, their Affiliates and certain Indemnitees and
Indemnified Parties; and

      WHEREAS, concurrently with the execution of this Agreement, Management is
issuing and selling in an initial public offering (the "OFFERING") its shares
representing limited liability company interests in Management (the "LISTED
SHARES"), and the MLP is issuing to Management its i-units representing limited
partner interests in the MLP.

      NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

                                   ARTICLE I
                      DEFINITIONS AND RULES OF CONSTRUCTION

      SECTION 1.01. DEFINITIONS. Capitalized terms used but not defined in this
Agreement shall have the meanings given to them in the MLP Partnership
Agreement.

      SECTION 1.02. RULES OF CONSTRUCTION. The following provisions shall be
applied wherever appropriate herein:

                  (i) "herein," "hereby," "hereunder," "hereof," "hereto" and
            other equivalent words shall refer to this Agreement as an entirety
            and not




            solely to the particular portion of this Agreement in which any such
            word is used;

                  (ii) "including" means "including without limitation" and is a
            term of illustration and not of limitation;

                  (iii) all definitions set forth herein shall be deemed
            applicable whether the words defined are used herein in the singular
            or the plural;

                  (iv) unless otherwise expressly provided, any term defined
            herein by reference to any other document shall be deemed to be
            amended herein to the extent that such term is subsequently amended
            in such document;

                  (v) references herein to other documents and agreements shall
            mean such documents and agreements as amended and restated from time
            to time;

                  (vi) wherever used herein, any pronoun or pronouns shall be
            deemed to include both the singular and plural and to cover all
            genders;

                  (vii) neither this Agreement nor any other agreement, document
            or instrument referred to herein or executed and delivered in
            connection herewith shall be construed against any Person as the
            principal draftsperson hereof or thereof;

                  (viii) the section headings appearing in this Agreement are
            inserted only as a matter of convenience and in no way define,
            limit, construe or describe the scope or extent of such Section, or
            in any way affect this Agreement; and

                  (ix) any references herein to a particular Section, Article,
            Exhibit or Schedule means a Section or Article of, or an Exhibit or
            Schedule to, this Agreement unless another agreement is specified.

                                   ARTICLE II
                         DELEGATION AND RELATED MATTERS

      SECTION 2.01. DELEGATION TO MANAGEMENT.

            (a) The General Partner hereby irrevocably delegates to Management,
to the fullest extent permitted under the MLP Partnership Agreement and Delaware
law, all of the General Partner's power and authority to manage and control the
business and affairs of the MLP (such delegation being referred to herein as the
"MAXIMUM PERMITTED DELEGATION"), subject to termination only in accordance with
ARTICLE IV hereof, and all provisions in this Agreement are qualified to the
extent required in order for all such


                                      -2-


provisions to be consistent, now and in the future, with the Maximum Permitted
Delegation.

            (b) Notwithstanding the delegation provided for in SECTION 2.01(A),
the General Partner is not hereby withdrawing as general partner, or otherwise,
from the MLP, and the General Partner is retaining all of its Partnership
Interests and Percentage Interests and all of its rights to profits, losses,
distributions and allocations from the MLP, and none of the foregoing are hereby
being assigned or transferred to Management.

      SECTION 2.02. CONTINUED RESPONSIBILITY OF GENERAL PARTNER. Notwithstanding
the making by the General Partner of the Maximum Permitted Delegation to
Management, the General Partner shall remain responsible to the MLP for actions
taken or omitted by Management within the scope of such delegation as if the
General Partner had itself taken or omitted to take any such actions. The
General Partner's responsibility to the MLP is not expanded or limited by this
Agreement and shall be in effect to the same extent and on the same terms and
conditions as specified in the MLP Partnership Agreement or under Delaware law.
The General Partner shall be entitled to monitor Management's performance under
this Agreement and shall have the right and power to direct Management to take,
or to cease from taking, any action that would constitute a breach of the MLP
Partnership Agreement. The General Partner shall have access to the books,
records and documents of the MLP and Management and to any of their officers,
directors and employees to monitor Management's performance under this
Agreement.

      SECTION 2.03. ACCEPTANCE OF DELEGATION BY MANAGEMENT. Management hereby
accepts the Maximum Permitted Delegation and agrees to perform the Maximum
Permitted Delegation according to the standards specified in ARTICLE III hereto.

      SECTION 2.04. APPROVAL BY GENERAL PARTNER. Without expanding or limiting
the definition of Maximum Permitted Delegation, the taking by Management of the
following actions shall require the prior written approval of the General
Partner:

                  (i) amend or propose an amendment to the MLP Partnership
            Agreement;

                  (ii) allow a merger or consolidation involving the MLP;

                  (iii) allow a sale or exchange of all or substantially all of
            the assets of the MLP; or

                  (iv) dissolve or liquidate the MLP.

      SECTION 2.05. USE OF AFFILIATES BY MANAGEMENT. Management may perform the
Maximum Permitted Delegation either directly or through one or more Affiliates.
If Management performs all or any part of the Maximum Permitted Delegation
through any Affiliate, (i) Management shall remain fully responsible for actions
taken or omitted by the Affiliate and (ii) for purposes of ARTICLES I through V,
Management and all such Affiliates shall be taken together and treated as
Management.


                                      -3-


                                  ARTICLE III
                                POWERS AND DUTIES

      SECTION 3.01. STANDARDS OF PERFORMANCE.

            (a) In performing the Maximum Permitted Delegation, Management shall
be responsible to the General Partner and the MLP to the same extent and
according to the same standards as would have been applicable to the General
Partner in favor of the MLP had the General Partner continued to exercise the
delegated power and authority directly. Management shall owe the same duties and
responsibilities, shall receive the same benefits, shall be entitled to the same
procedural protections and indemnifications and shall be governed by the same
standards that would apply to the General Partner with respect to the MLP, but
for this Agreement. If the power and/or authority of the General Partner are
modified pursuant to a subsequent amendment and/or restatement of the MLP
Partnership Agreement, changes in Delaware law or otherwise, then the power and
authority delegated to Management shall be modified on the same basis.

            (b) Without limiting the generality of the foregoing, SECTIONS 6.8,
6.9 and 6.10 of the MLP Partnership Agreement shall be applicable to
Management's performance of the Maximum Permitted Delegation.

      SECTION 3.02. RESOLUTION OF CONFLICTS OF INTEREST. Without limiting the
generality of SECTION 3.01, all potential and actual conflicts of interest that
exist or arise between the General Partner, Management and any of their
respective Affiliates, on the one hand, and the MLP, any of its subsidiaries,
any Partner or any Assignee, on the other hand, shall be resolved in accordance
with SECTION 6.9 of the MLP Partnership Agreement.

      SECTION 3.03. RELIANCE ON COUNSEL, ETC. Without limiting the generality of
SECTION 3.01, Management may rely on SECTION 6.10 of the MLP Partnership
Agreement to the same extent as the General Partner.

      SECTION 3.04. RELIANCE BY THIRD PARTIES. Without limiting the generality
of SECTION 3.01, Management may rely on SECTION 6.13 of the MLP Partnership
Agreement to the same extent as the General Partner.

      SECTION 3.05. INDEMNIFICATION. Without limiting the generality of SECTION
3.01, Management is an "Indemnitee" and an "Affiliate" with respect to the
General Partner and the MLP (as each of those terms is defined in ARTICLE II of
the MLP Partnership Agreement). Management and its officers and directors and
all other persons covered thereby shall be entitled to mandatory indemnity and
shall be entitled to be held harmless by the MLP to the extent that the General
Partner is entitled to indemnity under the MLP Partnership Agreement, subject to
the conditions provided in the MLP Partnership Agreement. The General Partner
hereby deems it advisable that such indemnification and holding harmless shall
(rather than may) be done and provided by the MLP to the fullest extent and
subject to the conditions provided in the MLP Partnership Agreement.


                                      -4-


The General Partner and the other parties specified in the MLP Partnership
Agreement shall continue to be entitled to the benefits of the indemnity
provisions set forth therein.

      SECTION 3.06. DAMAGE LIMITATIONS. Without limiting the generality of
SECTION 3.01, the provisions of SECTION 6.8 of the MLP Partnership Agreement
shall be applicable to Management.

      SECTION 3.07. REIMBURSEMENT.

            (a) Without limiting the generality of SECTION 3.01, Management
shall be entitled to the benefit of SECTION 6.4 of the MLP Partnership
Agreement, which allows the General Partner to be reimbursed by the MLP for
direct, indirect, necessary and/or appropriate expenses it incurs or payments it
makes on behalf of the MLP, or which are allocable to or otherwise reasonably
incurred by the General Partner or the MLP, including reimbursement for all fees
and expenses incurred in connection with the performance of its obligations
under the Securities Act of 1933, as amended, the Securities Act of 1934, as
amended, and any other federal and state laws, including, fees and expenses of
legal counsel, accountants and financial advisors. Such reimbursements shall be
made in such form, to such persons and at such intervals as Management shall
determine in its sole discretion. The General Partner shall continue to be
entitled to be reimbursed as provided in the MLP Partnership Agreement.

            (b) Notwithstanding anything to the contrary in this Agreement, so
long as the Maximum Permitted Delegation continues in effect, Management shall
be entitled to be reimbursed by the MLP for foreign, state and local taxes not
otherwise paid or reimbursed pursuant to the Tax Indemnification Agreement dated
as of even date herewith between Management and Enbridge Inc.

                                   ARTICLE IV
                            TERMINATION OF DELEGATION

      SECTION 4.01. TERMINATION. The Maximum Permitted Delegation under this
Agreement commences on the Effective Date and shall continue in effect until the
earliest to occur of any of the following, at which time such delegation shall
cease and terminate as provided below:

                  (i) All outstanding Listed Shares shall become owned by the
            General Partner or its Affiliates (including, without limitation,
            Enbridge Inc. ("ENBRIDGE") or its Affiliates) and such termination
            of the Maximum Permitted Delegation shall have been approved by the
            General Partner and Management at which time the Maximum Permitted
            Delegation shall cease; or

                  (ii) The General Partner shall withdraw or shall be removed as
            general partner of the MLP, at which time the Maximum Permitted
            Delegation shall cease; or


                                      -5-


                  (iii) A termination of the Maximum Permitted Delegation shall
            have been approved by (A) General Partner, (B) Management and (C)
            holders (other than the General Partner and its Affiliates) of a
            majority of the outstanding Listed Shares (excluding any Listed
            Shares owned by the General Partner and its Affiliates).

                                   ARTICLE V
                                  MISCELLANEOUS

      SECTION 5.01. FURTHER ACTION. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking actions as
may be necessary or appropriate to achieve the purposes of this Agreement.

      SECTION 5.02. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors and
permitted assigns. This Agreement may not be assigned, in whole or in part, by
any party to this Agreement without the written consent of the other parties to
this Agreement.

      SECTION 5.03. INTEGRATION. This Agreement and the other instruments and
agreements specifically referenced herein constitute the entire agreement among
the parties hereto.

      SECTION 5.04. CREDITORS. None of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of any party
hereto.

      SECTION 5.05. WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition.

      SECTION 5.06. COUNTERPARTS. This Agreement may be executed in
counterparts, all of which together shall constitute an agreement binding on all
parties hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart.

      SECTION 5.07. APPLICABLE LAW. This Agreement shall be subject to and
governed by the laws of the State of Delaware, excluding any conflicts of law
rule or principle that might refer the construction or interpretation hereof to
the laws of another state.

      SECTION 5.08. INVALIDITY OF PROVISIONS. If any provision of this Agreement
is or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.

      SECTION 5.09. AMENDMENTS. This Agreement may be amended by an agreement in
writing signed by Management, the General Partner and the MLP without the vote,
approval or consent of the holders of Listed Shares, unless such amendment
would, as determined in the sole discretion of the board of directors of
Management, materially


                                      -6-


adversely affect the rights or preferences of such holders of Listed Shares or
would reduce the time for any notice to which such holders of Listed Shares may
be entitled, in which case such amendment shall require the affirmative vote or
consent of the holders of at least a majority of the Listed Shares then
Outstanding (as that term is defined in Management's limited liability company
agreement).

      SECTION 5.10. COVENANT OF GENERAL PARTNER. The General Partner hereby
covenants and agrees that it shall not withdraw as general partner of the MLP so
long as any of the Listed Shares are owned by any persons other than Enbridge or
its Affiliates.


                                      -7-



      IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the Effective Date.


                                 ENBRIDGE ENERGY MANAGEMENT, L.L.C.


                                 By:
                                       ---------------------------------------
                                 Name:
                                       ---------------------------------------
                                 Title:
                                       ---------------------------------------


                                 ENBRIDGE ENERGY COMPANY, INC.


                                 By:
                                       ---------------------------------------
                                 Name:
                                       ---------------------------------------
                                 Title:
                                       ---------------------------------------


                                 ENBRIDGE ENERGY PARTNERS, L.P.
                                 By:   Enbridge Energy Company, Inc.,
                                       as general partner


                                 By:
                                       ---------------------------------------
                                 Name:
                                       ---------------------------------------
                                 Title:
                                       ---------------------------------------




               SIGNATURE PAGE TO DELEGATION OF CONTROL AGREEMENT

EX-10.4

                                                                    EXHIBIT 10.4

                          AMENDED AND RESTATED TREASURY

                               SERVICES AGREEMENT



                      DATED AS OF [_________________], 2002



                                      AMONG



                                  ENBRIDGE INC.



                          ENBRIDGE ENERGY COMPANY, INC.



                                       AND



                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.





             AMENDED AND RESTATED TREASURY SERVICES AGREEMENT

      This AMENDED AND RESTATED TREASURY SERVICES AGREEMENT (this
"AGREEMENT") is made as of [__________], 2002 (the "EFFECTIVE DATE"),
among Enbridge Inc. (f/k/a IPL Energy Inc.), a Canadian corporation
("ENBRIDGE"), Enbridge Energy Company, Inc. (f/k/a Lakehead Pipe Line
Company, Inc.), a Delaware corporation ("EECI"), and Enbridge Energy
Management, L.L.C., a Delaware limited liability company ("MANAGEMENT").

                                    RECITALS

      WHEREAS, Enbridge and EECI are parties to that certain Treasury Services
Agreement dated as of January 1, 1996 (the "Treasury Services Agreement")
pursuant to which Enbridge provides to EECI certain treasury services; and

      WHEREAS, EECI is the sole general partner of Enbridge Energy
Partners, L.P. (f/k/a Lakehead Pipe Line Partners, L.P.), a Delaware
limited partnership (the "MLP"); and

      WHEREAS, pursuant to a Delegation of Control Agreement among Management,
EECI and the MLP dated as of even date herewith, EECI has delegated to
Management the power and authority to manage and control the business and
affairs of the MLP; and

      WHEREAS, the parties desire to amend and restate the Treasury Services
Agreement as set forth herein to make Management a party so that the services
provided by Enbridge under this Agreement for the benefit of the MLP will be
provided to Management; and

      WHEREAS, Enbridge will continue to provide certain services under this
Agreement to EECI in its individual capacity.

      NOW, THEREFORE, for and in consideration of the mutual covenants contained
in this Agreement, the parties hereto hereby agree to amend and restate the
Treasury Services Agreement as follows:

                                    ARTICLE I
                              PROVISION OF SERVICES

      SECTION 1.1 PROVISION OF SERVICES.

            (a) Enbridge shall provide the services set forth on EXHIBIT A (the
"TREASURY SERVICES") to Management in connection with Management's management
and control of the MLP.

            (b) Enbridge shall provide such of the Treasury Services to EECI as
EECI shall request from time to time.

            (c) The services to be provided hereunder shall be provided from
time to time at such times and pursuant to such instructions and specifications
as Management and EECI shall provide.


                                        1


       SECTION 1.2 FEES.

            (a) Commencing on the Effective Date of this Agreement and ending on
December 31, 2002, and for each fiscal year of Management thereafter, Management
shall pay to Enbridge an annual fee equal to the product of Enbridge's total
forecasted North American treasury expenses for Enbridge's corresponding fiscal
year, multiplied by a percentage equal to the following:

                  (i)   the percentage amount of North American treasury
expenses attributable to Management in the prior year; or

                  (ii) if either party proposes a variation to the percentage
amount from that used for the previous year, a percentage amount mutually agreed
upon by the Vice-President and Treasurer of Enbridge and the Controller of
Management.

            (b) Commencing on the Effective Date of this Agreement and ending on
December 31, 2002, and for each fiscal year of EECI thereafter, EECI shall pay
to Enbridge an annual fee equal to the product of Enbridge's total forecasted
North American treasury expenses for Enbridge's corresponding fiscal year,
multiplied by a percentage equal to the following:

                  (i)   the percentage amount of North American treasury
expenses attributable to EECI in the prior year; or

                  (ii) if either party proposes a variation to the percentage
amount from that used for the previous fiscal year, a percentage amount mutually
agreed upon by the Vice-President and Treasurer of Enbridge and the Controller
of EECI.

            (c) The percentage amount to be borne by Management and EECI will
reflect a fair and reasonable allocation to each of them of the total treasury
expenses for the applicable year. If material, an adjustment will be made for
the difference between the year's actual treasury expenses compared to the
year's forecasted treasury expenses.

            (d) Any fees payable hereunder for periods less than a full fiscal
year shall be prorated for the period services were provided based on the actual
number of days elapsed and a year of 365 days.

       SECTION 1.3 PAYMENT OF FEES.

            (a) The fees to be paid pursuant to SECTION 1.2 shall be paid by
Management and EECI in 12 equal monthly installments within 30 days of receiving
a communication from Enbridge regarding fees for the Treasury Services.

            (b) For services attributable to the MLP, Enbridge shall, at
Management's request, directly bill the MLP for such services.

      SECTION 1.4 TERM. The provisions of this Article I will apply in respect
of treasury expenses until this Agreement is terminated or amended in accordance
with SECTION 2.1 or SECTION 2.17, respectively.


                                        2


       SECTION 1.5 U.S. DOLLARS.  All amounts payable under this Agreement are
expressed, and shall be paid, in U.S. dollars.

                                   ARTICLE II
                                  MISCELLANEOUS

       SECTION 2.1 TERMINATION. The obligations of a party to this Agreement may
be terminated by such party upon 30 days' prior written notice to the other
parties. Such termination shall not relieve a terminating party of its
obligations up to and including the date of termination.

      SECTION 2.2 NO JOINT VENTURE. This Agreement is not intended to create,
and shall not be construed as creating, any relationship of partnership, agency,
joint venture or association for profit between the parties.

      SECTION 2.3 NO FIDUCIARY DUTIES. The parties hereto shall not have any
fiduciary obligations or duties to the other parties by reason of this
Agreement. Subject to the Omnibus Agreement among EECI, the MLP, Enbridge
Pipelines Inc. and Management dated as of even date herewith, any party hereto
may conduct any activity or business for its own profit whether or not such
activity or business is in competition with any activity or business of the
other party.

      SECTION 2.4 LIMITATION OF DAMAGES. In providing the Treasury Services,
Enbridge shall not be liable for damages to Management or EECI for any delays or
errors in providing the Treasury Services or for loss of data or records save
and except where said delays or errors are the result of the willful misconduct,
gross negligence or breach of this Agreement by Enbridge or its agents.

      SECTION 2.5 NO REPRESENTATIONS OR WARRANTIES. The Treasury Services shall
be provided on the basis that Enbridge does not make any warranties or
representations, express or implied, with respect to the Treasury Services save
and except that the Treasury Services shall be provided by qualified personnel
in a professional and timely manner.

      SECTION 2.6 RELEASE. Management and EECI hereby release Enbridge from any
claims which they may have with respect to the provision of the Treasury
Services unless such claims are the result of the willful misconduct or gross
negligence of Enbridge or a breach of this Agreement by Enbridge.

      SECTION 2.7 INDEMNIFICATION. Management and EECI shall indemnify and hold
Enbridge harmless from and against any loss, damage, claim, liability, debt,
obligation or expense (including reasonable legal fees and disbursements)
incurred or suffered by Enbridge and relating in any way to this Agreement or
the provision of the Treasury Services, excluding any loss, damage, claim,
liability, debt, obligation or expense resulting from or arising from or in
connection with a negligent act or omission of Enbridge or a breach of this
Agreement by Enbridge.

      SECTION 2.8 FORCE MAJEURE. If any party to this Agreement is rendered
unable by force majeure to carry out its obligations under this Agreement, other
than Management's or EECI's obligation to make payments to Enbridge as provided
for herein, that party shall give the other parties prompt written notice of the
force majeure with reasonably full particulars


                                        3


concerning it. Thereupon, the obligations of the party giving the notice,
insofar as they are affected by the force majeure, shall be suspended during,
but no longer than the continuance of, the force majeure. The affected party
shall use all reasonable diligence to remove or remedy the force majeure
situation as quickly as practicable.

      The requirement that any force majeure situation be removed or remedied
with all reasonable diligence shall not require the settlement of strikes,
lockouts or other labour difficulty by the party involved, contrary to its
wishes. Rather, all such difficulties, may be handled entirely within the
discretion of the party concerned.

      The term "force majeure" means any one or more of:

            (a)   an act of God;

            (b)   a strike, lockout, labour difficulty or other
industrial disturbance;

            (c)   an act of a public enemy, war, blockade, insurrection
or public riot;

            (d)   lightning, fire, storm, flood or explosion;

            (e)   governmental action, delay, restraint or inaction;

            (f)   judicial order or injunction;

            (g)   material shortage or unavailability of equipment; or

            (h) any other cause or event, whether of the kind specifically
enumerated above or otherwise, which is not reasonably within the control of the
party claiming suspension.

      SECTION 2.9 FURTHER ACTS. Each party shall from time to time, and at all
times, do such further acts and execute and deliver all such further deeds and
documents as shall be reasonably requested by another party in order to fully
perform and carry out the terms of this Agreement.

      SECTION 2.10 TIME OF THE ESSENCE. Time is of the essence in this
Agreement.

      SECTION 2.11 NOTICES. Any notice, request, demand, direction or other
communication required or permitted to be given or made under this Agreement to
a party shall be in writing and may be given by hand delivery, postage prepaid
first-class mail delivery, delivery by a reputable international courier service
guaranteeing next business day delivery or by facsimile (if confirmed by one of
the foregoing methods) to such party at its address noted below:


                                        4


            (a)   in the case of Enbridge, to:

                  Enbridge Inc.
                  3000 425 - 1st Street S.W.
                  Calgary, Alberta T2P 3L8
                  Attention:  Vice-President, Finance
                  Facsimile:  (403) 231-4848

            (b)   in the case of EECI, to:

                  Enbridge Energy Company, Inc.
                  1100 Louisiana, Suite 3330
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

            (c)   in the case of Management, to:

                  Enbridge Energy Management, L.L.C.
                  1100 Louisiana, Suite 3300
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

or at such other address of which notice may have been given by such party in
accordance with the provisions of this Section.

      SECTION 2.12 COUNTERPARTS. This Agreement may be executed in several
counterparts, no one of which needs to be executed by all of the parties. Such
counterpart, including a facsimile transmission of this Agreement, shall be
deemed to be an original and shall have the same force and effect as an
original. All counterparts together shall constitute but one and the same
instrument.

      SECTION 2.13 APPLICABLE LAW. The provisions of this Agreement shall be
construed in accordance with the laws of the Province of Alberta and the laws of
Canada applicable therein, excluding any conflicts of law rule or principle that
might refer the construction or interpretation hereof to the laws of another
jurisdiction.

      SECTION 2.14 BINDING EFFECT; ASSIGNMENT. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by any
party hereto without the prior written consent of the other party.


                                        5


      SECTION 2.15 RULES OF CONSTRUCTION. The following provisions shall be
applied wherever appropriate herein:

      (i) "herein," "hereby," "hereunder," "hereof," "hereto" and other
equivalent words shall refer to this Agreement as an entirety and not solely to
the particular portion of this Agreement in which any such word is used;

      (ii)  "including" means "including without limitation" and is a
term of illustration and not of limitation;

      (iii) all definitions set forth herein shall be deemed applicable whether
the words defined are used herein in the singular or the plural;

      (iv) unless otherwise expressly provided, any term defined herein by
reference to any other document shall be deemed to be amended herein to the
extent that such term is subsequently amended in such document;

      (v) references herein to other documents and agreements shall mean such
documents and agreements as amended and restated from time to time;

      (vi) wherever used herein, any pronoun or pronouns shall be deemed to
include both the singular and plural and to cover all genders;

      (vii) this Agreement shall not be construed against any person as
the principal draftsperson hereof;

      (viii) the section headings appearing in this Agreement are inserted only
as a matter of convenience and in no way define, limit, construe or describe the
scope or extent of such Section, or in any way affect this Agreement; and

      (ix) any references herein to a particular Section, Article, Exhibit or
Schedule means a Section or Article of, or an Exhibit or Schedule to, this
Agreement unless another agreement is specified.

      SECTION 2.16 CONFIDENTIALITY OF INFORMATION.

            (a) Each party to this Agreement agrees to keep all information
provided by the other party (the "DISCLOSING PARTY") to it (the "RECEIVING
PARTY") confidential, and a receiving party shall not, without the prior consent
of an authorized senior officer of the disclosing party, disclose any part of
such information which is not available in the public domain from public or
published information or sources except:

                  (i) to those of its employees who require access to the
information in connection with performance of the Treasury Services by a
receiving party under this Agreement;


                                        6


                  (ii) as in the receiving party's judgment may be appropriate
to be disclosed in connection with the provision by the receiving party of the
Treasury Services hereunder;

                  (iii) as the receiving party may be required to disclose in
connection with the preparation by the receiving party or any of its affiliates
of reporting documents, including annual financial statements, annual reports
and any filings or disclosure required by statute, regulation or order of a
regulatory authority; and

                  (iv) to such legal and accounting advisors, valuers and other
experts as in the receiving party's judgment may be appropriate or necessary in
order to permit the receiving party to rely on the services of such persons in
carrying out the receiving party's duties under this Agreement.

            (b)   The covenants and agreements of the parties to this
Agreement shall not apply to any information:

                  (i) which is lawfully in the receiving party's possession or
in the possession of its professional advisors or its personnel, as the case may
be, at the time of disclosure and which was not acquired directly or indirectly
from the disclosing party;

                  (ii) which is at the time of disclosure in, or after
disclosure falls into, the public domain through no fault of the receiving party
or its personnel;

                  (iii) which, subsequent to disclosure by the disclosing party,
is received by the receiving party from a third party who, insofar as is known
to the receiving party, is lawfully in possession of such information and not in
breach of any contractual, legal or fiduciary obligation to the disclosing party
and who has not required the receiving party to refrain from disclosing such
information to others; and

                  (iv) disclosure of which the receiving party reasonably deems
necessary to comply with any legal or regulatory obligation which the receiving
party believes in good faith it has.

      SECTION 2.17 INTELLECTUAL PROPERTY.

            (a) In this SECTION 2.18, "INTELLECTUAL PROPERTY" means the rights
to (i) inventions, (ii) all granted patents for inventions, including reissue
thereof, (iii) copyrights, (iv) industrial designs, (v) trademarks, (vi) trade
secrets, (vii) know-how and (viii) any other industrial or intellectual property
right, in every country where same exists from time to time, all applications
therefor, the right to make applications therefor and the right to claim
priority therefrom as provided by international convention.

            (b) All Intellectual Property that is conceived, developed,
produced, substantiated, or first reduced to practice by Enbridge in the course
of performing the Treasury Services pursuant to this Agreement shall accrue to
and be owned by Management or EECI, as the case may be, subject only to the
grantback of a non-exclusive, worldwide, royalty-free, perpetual right and
license to Enbridge to reproduce, translate, modify, revise, make, use and


                                        7


have made that Intellectual Property as reasonably required in connection with
the internal business purposes of Enbridge.

      SECTION 2.18 INVALIDITY OF PROVISIONS. In the event that one or more of
the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality or
enforceability of the remaining provisions hereof shall not be affected or
impaired thereby. Each of the provisions of this Agreement is hereby declared to
be separate and distinct.

      SECTION 2.19 MODIFICATION; AMENDMENT. Subject to obtaining the necessary
regulatory approvals, this Agreement may not be modified or amended except by an
instrument in writing signed by each of the parties hereto or by their
respective successors or permitted assigns.

      SECTION 2.20 ENTIRE AGREEMENT. This Agreement constitutes the whole and
entire agreement between the parties hereto and supersedes any prior agreement,
undertaking, declarations, commitments or representations, verbal or oral, in
respect of the subject matter hereof.

                            [Signature Page Follows]


                                        8


      IN WITNESS WHEREOF, the parties hereto have executed this Agreement with
effect as of the date first above written.

                                    ENBRIDGE INC.



                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________

                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    ENBRIDGE ENERGY COMPANY, INC.



                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    ENBRIDGE ENERGY MANAGEMENT, L.L.C.



                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


      SIGNATURE PAGE TO AMENDED AND RESTATED TREASURY SERVICES AGREEMENT



                                    EXHIBIT A

      Treasury Services to Management and EECI:

      (a) Acting as primary interface between Management/EECI and
financial markets.

      (b) Short-term money management (investment of surplus funds and
short-term borrowing).

      (c) Servicing long-term debt and equity obligations.

      (d) Banking arrangements (compensation, operating lines of credit, letters
of credit, advice on banking and cash management issues).

      (e) Advice relating to interest rate, foreign exchange, counterparty
credit and commodity price risk management.

      (f) Advice on major lease versus buy financing decisions, and
project financing as required.

      (g) Advice on existing public and private debt and the structure and
arrangement of new debt and equity financing as required.

      (h) Acting as primary interface with external credit rating
agencies.

      (i) Participation in preparation for rate hearings and planning, corporate
finance and cash management issues.

      (j) Use of financial systems for maintenance of treasury information,
financial risk management and generation of treasury transaction records.


                                       A-1

EX-10.5

                                                                   Exhibit 10.5

                         OPERATIONAL SERVICES AGREEMENT



                      DATED AS OF [_________________], 2002



                                      AMONG



                             ENBRIDGE PIPELINES INC.



                       ENBRIDGE OPERATIONAL SERVICES, INC.



                          ENBRIDGE ENERGY COMPANY, INC.



                                       AND



                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.




                         OPERATIONAL SERVICES AGREEMENT

      This OPERATIONAL SERVICES AGREEMENT (this "AGREEMENT") is made as of
[_______], 2002 (the "EFFECTIVE DATE") among Enbridge Pipelines Inc.
(f/k/a Interprovincial Pipe Line Inc.), a Canadian corporation
("ENBRIDGE"), Enbridge Energy Company, Inc. (f/k/a Lakehead Pipe Line
Company, Inc.), a Delaware corporation ("EECI"), Enbridge Operational
Services, Inc., a Canadian corporation ("EOSI") and Enbridge Energy
Management, L.L.C., a Delaware limited liability company ("MANAGEMENT").

                                     RECITALS

      WHEREAS, Enbridge and EECI are parties to that certain Services Agreement
dated as of January 1, 1992 (the "SERVICES AGREEMENT") pursuant to which
Enbridge provides to EECI certain operational services; and

      WHEREAS, EECI is the sole general partner of Enbridge Energy
Partners, L.P. (f/k/a Lakehead Pipe Line Partners, L.P.), a Delaware
limited partnership ("the MLP"); and

      WHEREAS, pursuant to a Delegation of Control Agreement among Management,
EECI and the MLP dated as of even date herewith (the "DELEGATION OF CONTROL
AGREEMENT"), EECI has delegated to Management the power and authority to manage
and control the business and affairs of the MLP; and

      WHEREAS, the parties desire to amend and restate the Services Agreement to
make EOSI a party and to make Management a party so that the services provided
by Enbridge and EOSI under this Agreement for the benefit of the MLP will be
provided to Management; and

      WHEREAS, Enbridge will continue to provide certain services under this
Agreement to EECI in its individual capacity.

      NOW, THEREFORE, for and in consideration of the mutual covenants contained
in this Agreement, the parties hereto hereby agree to amend and restate the
Services Agreement as follows:

                                    ARTICLE I
                              PROVISION OF SERVICES

            SECTION 1.1. PROVISION OF SERVICES.

                  (a) Enbridge and EOSI shall provide Management, for use by
      Management in connection with serving as the delegee of the power to
      manage and control the MLP, with certain services as set forth on EXHIBIT
      A (the "OPERATIONAL SERVICES") during the term of this Agreement and for
      such additional periods as the parties may agree.

                  (b) Enbridge and EOSI shall provide EECI with such of the
      Operational Services as EECI shall request from time to time during the
      term of this Agreement and for such additional periods as the parties may
      agree.


                                       1


                  (c) The services to be provided hereunder shall be provided
      from time to time at such times and pursuant to such instructions and
      specifications as Management and EECI shall provide.

            SECTION 1.2. CHANGE OF SERVICES.

                  (a) Enbridge, EOSI and Management shall have the right at any
      time during the term of this Agreement to request any changes in the
      Operational Services provided to Management, and such changes shall in no
      way affect the rights or obligations of EECI hereunder.

                  (b) Enbridge, EOSI and EECI shall have the right at any time
      during the term of this Agreement to request any changes in the
      Operational Services provided to EECI, and such changes shall in no way
      affect the rights or obligations of Management hereunder.

                  (c) Any change in the Operational Services shall be authorized
      in writing and evidenced by an amendment to EXHIBIT A, which amendment
      shall be signed by the parties affected thereby. Unless otherwise agreed
      in writing, the provisions of this Agreement shall apply to all changes in
      the Operational Services.

            SECTION 1.3. GENERAL SERVICES NONEXCLUSIVE.

                  (a) Subject to SECTION 1.4, Enbridge and EOSI may provide the
      Operational Services to any other person from time to time.

                  (b) Management and EECI shall not be obliged to acquire the
      Operational Services exclusively from Enbridge or EOSI but shall remain
      free to acquire such services from any other sources which they feel are
      appropriate, without the prior written approval of Enbridge or EOSI.

            SECTION 1.4. COMMITMENT OF RESOURCES.

                  (a) Enbridge and EOSI agree to commit on a priority basis
      sufficient resources in providing services hereunder in order that
      Management may reasonably rely on Enbridge's and EOSI's ability to assist
      Management in carrying out its responsibilities as the delegee of the
      power to manage and control the MLP. Enbridge and EOSI will provide
      services to the MLP required of Management as such delegee of such power
      pursuant to the applicable provisions of the Delegation of Control
      Agreement and the Third Amended and Restated Agreement of Limited
      Partnership of the MLP dated as of even date herewith (the "MLP
      Partnership Agreement"). Notwithstanding anything herein to the contrary,
      Enbridge shall continue to perform the services provided under this
      Agreement as long as Management is the delegee of the power to manage and
      control the MLP, or until such time as this Agreement is terminated by
      mutual agreement between Enbridge, EOSI and Management.


                                       2


                  (b) Enbridge and EOSI agree to commit on a priority basis
      sufficient resources in providing services hereunder in order that EECI
      may reasonably rely on Enbridge's and EOSI's ability to assist EECI in
      carrying out its day to day operations.

            SECTION 1.5. AUTHORIZATION OF EMPLOYEES.

                  (a) Management shall execute any and all documents necessary
      to effectuate the authorization of Enbridge's and EOSI's employees to
      represent and bind Management and the MLP in the provision of services by
      Enbridge and EOSI pursuant to this Agreement. Such authorization by
      Management of the employees of Enbridge and EOSI shall be in accordance
      with and pursuant to the authority guidelines adopted by the Board of
      Directors of Management, Enbridge and of EOSI and in accordance with the
      general authority guidelines set forth in the General Procedures Manuals
      for Management, Enbridge and EOSI.

                  (b) EECI shall execute any and all documents necessary to
      effectuate the authorization of Enbridge's and EOSI's employees to
      represent and bind EECI in the provision of services by Enbridge and EOSI
      pursuant to this Agreement. Such authorization by EECI of the employees of
      Enbridge and EOSI shall be in accordance with and pursuant to the
      authority guidelines adopted by the Board of Directors of EECI, Enbridge
      and of EOSI and in accordance with the general authority guidelines set
      forth in the General Procedures Manuals for EECI, Enbridge and EOSI.

                                   ARTICLE II
                                  COMPENSATION

            SECTION 2.1. PAYMENT FOR SERVICES.

                  (a) Management agrees to pay Enbridge and EOSI for the
      provision of the Operational Services under this Agreement (other than
      under SECTION 6.3) a fee determined on the basis of an estimate of a
      proportionate allocation of Enbridge's and EOSI's appropriate departmental
      costs, net of amounts charged to other affiliated persons and amounts
      identifiable as costs of Enbridge or EOSI, as the case may be,
      exclusively, as agreed to by respective managers of Management, Enbridge
      and EOSI.

                  (b) EECI agrees to pay Enbridge and EOSI for the provision of
      Operational Services under this Agreement a fee determined on the basis of
      an estimate of a proportionate allocation of Enbridge's and EOSI's
      appropriate departmental costs, net of amounts charged to other affiliated
      persons and amounts identifiable as costs of Enbridge or EOSI, as the case
      may be, exclusively, as agreed to by respective managers of EECI, Enbridge
      and EOSI.

            SECTION 2.2. SPECIAL SERVICES. Management and EECI may from time to
time request Enbridge and/or EOSI to provide special services additional to the
Operational Services. Management or EECI, as appropriate, shall pay Enbridge's
or EOSI's, as the case may be, costs and expenses incurred in the provision of
such special services in the manner and at the times specified in SECTION 3.1.


                                       3


            SECTION 2.3. DIRECT BILLING OF THE MLP. For services attributable to
the MLP, Enbridge or EOSI shall, at Management's request, directly bill the MLP
for such services.

            SECTION 2.4. U.S. DOLLARS. All amounts payable under this Agreement
are expressed, and shall be paid, in U.S. dollars.

                                   ARTICLE III
                         TERMS OF PAYMENT AND ACCOUNTING

            SECTION 3.1. CALCULATION AND SUBMISSION OF CHARGES. Enbridge and
EOSI shall submit charges to Management and EECI at the end of each month
calculated on the basis of one-twelfth (1/12) of the estimated annual costs of
the services provided hereunder, accompanied by such supporting documentation as
agreed upon from time to time by the parties hereto. The fee will be adjusted if
necessary following the completion of each year of this Agreement based on the
actual costs for the services provided hereunder.

                                    ARTICLE IV
                                AUDIT REQUIREMENTS

            SECTION 4.1. ACCESS TO BOOKS AND RECORDS. Management and EECI, or
their duly authorized representatives, will have access at all reasonable times,
during the term of this Agreement and for a period of three (3) years
thereafter, to Enbridge's and EOSI's books, records, data stored in computers
and all documentation pertaining to Enbridge's and EOSI's services rendered
under this Agreement for the purpose of auditing and verifying the costs of such
services or for any reasonable purpose. Enbridge or EOSI shall not charge
Management or EECI for any cost it may incur in connection with such audit.
Enbridge and EOSI agree to promptly reimburse Management and EECI for audit
claims resolved in the Management's or EECI's favor.

            SECTION 4.2. DOCUMENT RETENTION. Enbridge will preserve for a period
of six (6) years after termination of this Agreement all documents mentioned in
SECTION 4.1, and for longer periods upon specific request.

                                    ARTICLE V
                          LIABILITY AND INDEMNIFICATION

            SECTION 5.1. INDEMNIFICATION OF MANAGEMENT AND EECI. Enbridge and
EOSI will:

                  (a) indemnify and save harmless Management and EECI from and
      against all claims, actions, losses, expenses, costs and damages of every
      nature and kind whatsoever which Management and/or EECI (or their
      respective officers, employees or agents) may suffer as a result of the
      negligence of Enbridge or EOSI in the provision or non-provision of
      services under this Agreement;

                  (b) defend any claim or suit brought against Management and/or
      EECI based upon such loss or damage; and


                                       4


                  (c) pay all costs and expenses including legal fees incurred
      by Management and/or EECI in connection with claim or suit.

            SECTION 5.2. INDEMNIFICATION OF THE MLP. Pursuant to Section 2.6(d)
of that certain Omnibus Agreement dated as of even date herewith between EECI,
Management, the MLP and Enbridge (the "OMNIBUS AGREEMENT"), the obligations of
Enbridge under SECTION 5.1 of this Agreement shall extend to the MLP.

            SECTION 5.3. INDEMNIFICATION OF ENBRIDGE AND EOSI BY MANAGEMENT AND
EECI. Management and EECI will:

                  (a) indemnify and save harmless Enbridge and EOSI from and
      against all claims, actions, losses, expenses, costs or damages of every
      nature and kind whatsoever that Enbridge or EOSI (or their respective
      officers, employees or agents) may suffer as a result of the negligence of
      Management and EECI, respectively, in obtaining necessary services under
      this Agreement.

                  (b)   defend any claim or suit brought against Enbridge
      or EOSI based upon such loss or damage; and

                  (c) pay all costs and expenses including legal fees incurred
      by Enbridge or EOSI, in connection with such claim or suit.

            SECTION 5.4. INDEMNIFICATION OF ENBRIDGE BY MLP. The indemnification
provided to Management as the delegee of the power to manage and control the MLP
pursuant to the Delegation of Control Agreement and the MLP Partnership
Agreement, is hereby incorporated by reference and the indemnity provided in
said Agreement is hereby extended to Enbridge and EOSI as an Indemnitee.

                                    ARTICLE VI
                           TRANSPORTATION RELATIONSHIP

            SECTION 6.1. TRANSPORTATION OBLIGATIONS OF MANAGEMENT. Management
agrees to transport within the United States through the crude oil and liquid
petroleum pipeline system located in the United States that is owned by Enbridge
Energy, Limited Partnership, a Delaware limited partnership (the "OPERATING
PARTNERSHIP") (the "LAKEHEAD SYSTEM"), subject to the Operating Partnership's
applicable rates, rules and regulations, all liquid hydrocarbons delivered by
Enbridge from the Enbridge System (as defined below) into the Lakehead System.

            SECTION 6.2.. INVOICE RIGHTS OF MANAGEMENT. As consideration for the
transportation by Management of liquid hydrocarbons through the Lakehead System
pursuant to SECTION 6.1, Management shall be entitled to invoice directly each
shipper (a "SHIPPER") whose liquid hydrocarbons are transported through the
Lakehead System, such amounts as the Operating Partnership may from time to time
be permitted to charge pursuant to the Operating Partnership's applicable rates,
rules and regulations; PROVIDED, HOWEVER, that, as between Enbridge and
Management, Management shall bear all risk of default or non-payment by a
Shipper of the amount so charged.


                                       5


            SECTION 6.3. TRANSPORTATION OBLIGATIONS OF ENBRIDGE. Enbridge agrees
to transport within Canada through the crude oil and liquid petroleum pipeline
system located in Canada that is owned and operated by Enbridge and certain of
its affiliates (the "ENBRIDGE SYSTEM"), subject to Enbridge's applicable rates,
rules and regulations, all liquid hydrocarbons delivered by Management from the
Lakehead System into the Enbridge System.

            SECTION 6.4. INVOICE RIGHTS OF ENBRIDGE. As consideration for the
transportation by Enbridge of liquid hydrocarbons through the Enbridge System
pursuant to Section 6.3, Enbridge shall be entitled to invoice directly each
Shipper whose liquid hydrocarbons are transported through the Enbridge System,
such amounts as Enbridge may from time to time be permitted to charge pursuant
to Enbridge's applicable rates, rules and regulations; PROVIDED, HOWEVER, that,
as between Management and Enbridge, Enbridge shall bear all risk of default or
non-payment by a Shipper of the amount so charged.

                                   ARTICLE VII
                             TERMINATION OF SERVICES

            SECTION 7.1. TERM; TERMINATION RIGHTS. The term of this Agreement
shall commence as of the Effective Date above and shall continue until
terminated with this SECTION 7.1. Subject to SECTION 7.2, any party shall have
the right at any time to terminate all or any part of the services provided
under this Agreement as to itself upon not less than 30 days' prior written
notice. Such termination shall not relieve a terminating party of its
obligations up to and including the date of termination.

            SECTION 7.2. OBLIGATIONS UPON TERMINATION. Pursuant to SECTION
2.6(c) of the Omnibus Agreement, to the extent that Enbridge is providing
services under this Agreement to Management as the delegee of the power to
manage and control the MLP as of the effective date of:

      (i)   withdrawal by EECI as the general partner of the MLP;

      (ii)  removal of EECI as the general partner of the MLP under
circumstances where "cause" exists; or

      (iii) transfer of the capital stock of EECI to any person that is
not an Affiliate of Enbridge,

then Enbridge shall be obligated to provide such services on substantially the
same terms and conditions as provided in this Agreement, to the MLP for twelve
(12) months following such effective date, but shall have no such obligation
under this Agreement thereafter.

                                   ARTICLE VIII
                                  MISCELLANEOUS

            SECTION 8.1. NO JOINT VENTURE. This Agreement is not intended to
create, and shall not be construed as creating, any relationship of partnership,
agency, joint venture or association for profit between the parties.


                                       6


            SECTION 8.2. NO FIDUCIARY DUTIES. The parties hereto shall not have
any fiduciary obligations or duties to the other parties by reason of this
Agreement. Subject to the Omnibus Agreement among EECI, the MLP, Enbridge and
Management dated as of even date herewith, any party hereto may conduct any
activity or business for its own profit whether or not such activity or business
is in competition with any activity or business of the other party.

            SECTION 8.3. NO REPRESENTATIONS OR WARRANTIES. The services to be
provided hereunder shall be provided on the basis that Enbridge and EOSI do not
make any warranties or representations, express or implied, with respect to such
services save and except that such services shall be provided by qualified
personnel in a professional and timely manner.

            SECTION 8.4. FORCE MAJEURE. If either party to this Agreement is
rendered unable by force majeure to carry out its obligations under this
Agreement, other than Management's or EECI's obligation to make payments to
Enbridge and EOSI as provided for herein, that party shall give the other
parties prompt written notice of the force majeure with reasonably full
particulars concerning it. Thereupon, the obligations of the party giving the
notice, insofar as they are affected by the force majeure, shall be suspended
during, but no longer than the continuance of, the force majeure. The affected
party shall use all reasonable diligence to remove or remedy the force majeure
situation as quickly as practicable.

      The requirement that any force majeure situation be removed or remedied
with all reasonable diligence shall not require the settlement of strikes,
lockouts or other labor difficulty by the party involved, contrary to its
wishes. Rather, all such difficulties, may be handled entirely within the
discretion of the party concerned.

      The term "force majeure" means any one or more of:

      (a)   an act of God;

      (b)   a strike, lockout, labor difficulty or other industrial
      disturbance;

      (c)   an act of a public enemy, war, blockade, insurrection or
      public riot;

      (d)   lightning, fire, storm, flood or explosion;

      (e)   governmental action, delay, restraint or inaction;

      (f)   judicial order or injunction;

      (g)   material shortage or unavailability of equipment; or

      (h)   any other cause or event, whether of the kind specifically
      enumerated above or otherwise, which is not reasonably within the control
      of the party claiming suspension.

            SECTION 8.5, FURTHER ACTS. Each party shall from time to time, and
at all times, do such further acts and execute and deliver all such further
deeds and documents as shall be reasonably requested by another party in order
to fully perform and carry out the terms of this Agreement.


                                       7


            SECTION 8.6. TIME OF THE ESSENCE. Time is of the essence in this
Agreement.

            SECTION 8.7. NOTICES. Any notice, request, demand, direction or
other communication required or permitted to be given or made under this
Agreement to a party shall be in writing and may be given by hand delivery,
postage prepaid first-class mail delivery, delivery by a reputable international
courier service guaranteeing next business day delivery or by facsimile (if
confirmed by one of the foregoing methods) to such party at its address noted
below:

      (a)   in the case of Enbridge, to:

                  Enbridge Pipelines Inc.
                  3000 425 - 1st Street S.W.
                  Calgary, Alberta  T2P 3L8
                  Attention:  President
                  Facsimile:  (403) 231-3920

      (b)   in the case of EECI, to:

                  Enbridge Energy Company, Inc.
                  1100 Louisiana, Suite 3330
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

      (c)   in the case of EOSI, to:

                  Enbridge Operational Services, Inc.
                  10201 Jasper Avenue
                  Edmonton, Alberta  T5J 2J9
                  Attention:  President
                  Facsimile:  (780) 420-5389

      (d)   in the case of Management, to:

                  Enbridge Energy Management, L.L.C.
                  1100 Louisiana, Suite 3300
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

or at such other address of which notice may have been given by such party in
accordance with the provisions of this Section.

            SECTION 8.8. COUNTERPARTS. This Agreement may be executed in several
counterparts, no one of which needs to be executed by all of the parties. Such
counterpart, including a facsimile transmission of this Agreement, shall be
deemed to be an original and shall


                                       8


have the same force and effect as an original. All counterparts together shall
constitute but one and the same instrument.

            SECTION 8.9. APPLICABLE LAW. In the provision of services hereunder,
the parties shall comply with and observe all applicable laws, regulations and
orders of any proper authority having jurisdiction over the services provided.
This Agreement shall be construed in accordance with the laws of the Province of
Alberta and the laws of Canada applicable therein, excluding any conflicts of
law rule or principle that might refer the construction or interpretation hereof
to the laws of another jurisdiction.

            SECTION 8.10. BINDING EFFECT; ASSIGNMENT. This Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by any
party hereto without the prior written consent of the other parties.

            SECTION 8.11. RULES OF CONSTRUCTION. The following provisions shall
be applied wherever appropriate herein:

       (i)    "herein," "hereby," "hereunder," "hereof," "hereto" and other
              equivalent words shall refer to this Agreement as an entirety and
              not solely to the particular portion of this Agreement in which
              any such word is used;

       (ii)   "including" means "including without limitation" and is a term of
              illustration and not of limitation;

       (iii)  all definitions set forth herein shall be deemed applicable
              whether the words defined are used herein in the singular or the
              plural;

       (iv)   unless otherwise expressly provided, any term defined herein by
              reference to any other document shall be deemed to be amended
              herein to the extent that such term is subsequently amended in
              such document;

       (v)    references herein to other documents and agreements shall mean
              such documents and agreements as amended and restated from time to
              time;

       (vi)   wherever used herein, any pronoun or pronouns shall be deemed to
              include both the singular and plural and to cover all genders;

       (vii)  this Agreement shall not be construed against any person as the
              principal draftsperson hereof;

       (viii) the section headings appearing in this Agreement are inserted only
              as a matter of convenience and in no way define, limit, construe
              or describe the scope or extent of such Section, or in any way
              affect this Agreement; and

       (ix)   any references herein to a particular Section, Article, Exhibit or
              Schedule means a Section or Article of, or an Exhibit or Schedule
              to, this Agreement unless another agreement is specified.


                                       9


            SECTION 8.12. CONFIDENTIALITY OF INFORMATION.

                  (a) Each party to this Agreement agrees to keep all
      information provided by the other party (the "DISCLOSING PARTY") to it
      (the "RECEIVING PARTY") confidential, and a receiving party shall not,
      without the prior consent of an authorized senior officer of the
      disclosing party, disclose any part of such information which is not
      available in the public domain from public or published information or
      sources except:

                        (i) to those of its employees who require access to the
      information in connection with performance of the Operational Services by
      a receiving party under this Agreement;

                        (ii) as in the receiving party's judgment may be
      appropriate to be disclosed in connection with the provision by the
      receiving party of the Operational Services hereunder;

                        (iii) as the receiving party may be required to disclose
      in connection with the preparation by the receiving party or any of its
      affiliates of reporting documents, including annual financial statements,
      annual reports and any filings or disclosure required by statute,
      regulation or order of a regulatory authority; and

                        (iv) to such legal and accounting advisors, valuers and
      other experts as in the receiving party's judgment may be appropriate or
      necessary in order to permit the receiving party to rely on the services
      of such persons in carrying out the receiving party's duties under this
      Agreement.
                  (b)   The covenants and agreements of the parties to
      this Agreement shall not apply to any information:

                        (i) which is lawfully in the receiving party's
      possession or in the possession of its professional advisors or its
      personnel, as the case may be, at the time of disclosure and which was not
      acquired directly or indirectly from the disclosing party;

                        (ii) which is at the time of disclosure in, or after
      disclosure falls into, the public domain through no fault of the receiving
      party or its personnel;

                        (iii) which, subsequent to disclosure by the disclosing
      party, is received by the receiving party from a third party who, insofar
      as is known to the receiving party, is lawfully in possession of such
      information and not in breach of any contractual, legal or fiduciary
      obligation to the disclosing party and who has not required the receiving
      party to refrain from disclosing such information to others; and

                        (iv) disclosure of which the receiving party reasonably
      deems necessary to comply with any legal or regulatory obligation which
      the receiving party believes in good faith it has.


                                       10


            SECTION 8.13. INTELLECTUAL PROPERTY.

                  (a) In this SECTION 8.14, "Intellectual Property" means the
      rights to (i) inventions, (ii) all granted patents for inventions,
      including reissue thereof, (iii) copyrights, (iv) industrial designs, (v)
      trademarks, (vi) trade secrets, (vii) know-how and (viii) any other
      industrial or intellectual property right, in every country where same
      exists from time to time, all applications therefor, the right to make
      applications therefor and the right to claim priority therefrom as
      provided by international convention.

                  (b) All Intellectual Property that is conceived, developed,
      produced, substantiated, or first reduced to practice by Enbridge in the
      course of performing the Operational Services pursuant to this Agreement
      shall accrue to and be owned by the Management or EECI, as the case may
      be, subject only to the grantback of a non-exclusive, worldwide,
      royalty-free, perpetual right and license to Enbridge to reproduce,
      translate, modify, revise, make, use and have made that Intellectual
      Property as reasonably required in connection with the internal business
      purposes of Enbridge.

            SECTION 8.14. INVALIDITY OF PROVISIONS. In the event that one or
more of the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality or
enforceability of the remaining provisions hereof shall not be affected or
impaired thereby. Each of the provisions of this Agreement is hereby declared to
be separate and distinct.

            SECTION 8.15. MODIFICATION; AMENDMENT. Subject to obtaining the
necessary regulatory approvals, this Agreement may not be modified or amended
except by an instrument in writing signed by each of the parties hereto or by
their respective successors or permitted assigns.

            SECTION 8.16. ENTIRE AGREEMENT. This Agreement constitutes the whole
and entire agreement between the parties hereto and supersedes any prior
agreement, undertaking, declarations, commitments or representations, verbal or
oral, in respect of the subject matter hereof.



                            [Signature Page Follows]



                                       11


      IN WITNESS WHEREOF, the parties hereto have executed this Agreement with
effect as of the date first above written.

                                    ENBRIDGE PIPELINES INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________

                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________



                                    ENBRIDGE ENERGY COMPANY, INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________



                                    ENBRIDGE OPERATIONAL SERVICES, INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________



                                    ENBRIDGE ENERGY MANAGEMENT, L.L.C.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________



               SIGNATURE PAGE TO OPERATIONAL SERVICES AGREEMENT



                                    EXHIBIT A
        to Operational Services Agreement dated [____________], 2002
                     between Enbridge Pipelines, Inc.,
                         Enbridge Energy Company, Inc.,
                  Enbridge Operational Services, Inc., and
                     Enbridge Energy Management, L.L.C.

Enbridge and EOSI shall provide Management (referred to herein collectively with
the MLP as "MANAGEMENT") and EECI (to the extent necessary) with certain
services in general, including:

(a)   providing executive, administrative and other services on an "as
      required" basis to Management and EECI;

(b)   tracking all shipments of liquid hydrocarbons and natural gas within
      the pipeline systems in Canada and the United States;

(c)   monitoring capacity available in Canada and the United States to transport
      liquid hydrocarbons, as well as identifying "bottlenecks" where capacity
      is, or will become, inadequate to meet all shippers' requirements;

(d)   scheduling all shipments of liquid hydrocarbons in Canada and the
      United States; and

(e)   in co-operation with Management and EECI, and subject to applicable laws,
      codes and local requirements, setting standards for integrity, operation,
      maintenance and replacement of the pipeline systems in Canada and the
      United States.

In particular, Enbridge and EOSI will provide Management and EECI with the
following services:

1.    Maintain their respective tariff lists comprising shippers and other
      interested parties.

2.    Receive tenders/nominations on their behalf, schedule and co-ordinate
      monthly receipt and delivery levels, pumping rates, inventory levels, and
      daily pump orders.

3.    Determine working stock requirements of Lakehead and EECI's systems.

4.    Provide advisory services with respect to oil measurement activities.

5.    Provide short and long term pumping forecasts.

6.    Provide oil accounting services, including preparation of invoices
      for transportation services, and co-coordinating accounting
      practices and procedures.

7.    Provide advisory services with respect to specifications for control
      system hardware and software requirements so as to assure compatibility
      between all portions of the Enbridge System and the Lakehead System.


                                      A-1


8.    Provide computer application development and support services for all
      computer applications that are required so as to assure compatibility
      between the Enbridge System and the Lakehead System.

9.    Provide advisory services and assistance for the MLP's systems
      computer equipment and software acquisition, implementation and
      maintenance.

10.   Provide computer time and resources for the MLP's systems computer
      applications and other computer services for Management and EECI.

11.   Provide advisory services and assistance with respect to
      telecommunications, control circuits and related communication
      services.

12.   Provide patrol and other aircraft services.

13.   Provide advisory services with respect to Management and EECI
      pipeline operating standards and procedures.

14.   Provide advisory services with respect to electrical standards.

15.   Determine electric power requirements and costs as well as advise as to
      changes or alterations to equipment desirable for increased efficiency.

16.   Provide planning studies and recommend as to short and long term facility
      needs to meet throughput requirements and to improve operational integrity
      of the Enbridge System and the Lakehead System.

17.   Carrying out hydraulic studies which are required for facility planning
      and design and to optimize Enbridge System and Lakehead System operations.

18.   Provide engineering services related to Lakehead System operations,
      existing facilities and, as required, for new facilities.

19.   Undertake Lakehead System revenue and tariff studies.


                                      A-2

EX-10.6

                                                                    Exhibit 10.6


               GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT



                   DATED AS OF [_________________], 2002



                                      AMONG



                        ENBRIDGE EMPLOYEE SERVICES, INC.,



                         ENBRIDGE ENERGY COMPANY, INC.,



                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.



                                       AND



                              ENBRIDGE (U.S.) INC.







               GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT

      This GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT (this
"AGREEMENT") is made as of [___________], 2002 (the "EFFECTIVE DATE") among
Enbridge Employee Services, Inc., a Delaware corporation ("ENBRIDGE"),
Enbridge (U.S.) Inc. (f/k/a IPL Energy (U.S.A.) Inc.), a Delaware
corporation ("ENBRIDGE U.S."), Enbridge Energy Company, Inc. (f/k/a
Lakehead Pipe Line Company, Inc.), a Delaware corporation ("EECI"), and
Enbridge Energy Management, L.L.C., a Delaware limited liability company
("MANAGEMENT").

                                    RECITALS

      WHEREAS, Enbridge U.S. and EECI are parties to that certain Services
Agreement dated as of January 1, 1996 (the "SERVICES AGREEMENT") pursuant
to which Enbridge U.S. provides to EECI certain general and administrative
services; and

      WHEREAS, EECI is the sole general partner of Enbridge Energy
Partners, L.P. (f/k/a Lakehead Pipe Line Partners, L.P.), a Delaware
limited partnership (the "MLP"); and

      WHEREAS, pursuant to a Delegation of Control Agreement among Management,
EECI and the MLP dated as of even date herewith (the "DELEGATION OF CONTROL
AGREEMENT"), EECI has delegated to Management the power and authority to manage
and control the business and affairs of the MLP; and

      WHEREAS, the parties desire to amend and restate the Services Agreement as
set forth herein to make Management a party so that the services provided by
Enbridge under this Agreement for the benefit of the MLP will be provided to
Management; and

      WHEREAS, Enbridge will continue to provide certain services under this
Agreement to EECI in its individual capacity; and

      WHEREAS, the parties desire to add Enbridge as a party hereto and to
terminate the obligations of Enbridge U.S. hereunder.

      NOW THEREFORE, for and in consideration of the mutual covenants contained
in this Agreement, the parties hereto hereby agree to amend and restate the
Services Agreement as follows:

                                    ARTICLE I
                              PROVISION OF SERVICES

      SECTION 1.1. PROVISION OF SERVICES.

            (a) Enbridge shall provide Management, for use by Management in
connection with serving as the delegee of the power to manage and control the
MLP, with certain services as set forth in EXHIBIT A (the "GENERAL SERVICES")
during the term of this Agreement and for such additional periods as Enbridge
and Management may agree.



            (b) Enbridge shall provide EECI with such of the General Services as
EECI shall request from time to time during the term of this Agreement and for
such additional periods as Enbridge and EECI may agree.

            (c) The services to be provided hereunder shall be provided from
time to time at such times and pursuant to such instructions and specifications
as Management and EECI shall provide.

      SECTION 1.2. CHANGE OF SERVICES.

            (a) Enbridge and Management shall have the right at any time during
the term of this Agreement to request any changes in the General Services
provided to Management, and such changes shall in no way affect the rights or
obligations of EECI hereunder.

            (b) Enbridge and EECI shall have the right at any time during the
term of this Agreement to request any changes in the General Services provided
to EECI, and such changes shall in no way affect the rights or obligations of
Management hereunder.

            (c) Any change in the General Services shall be authorized in
writing and evidenced by an amendment to EXHIBIT A, which amendment shall be
signed by the parties affected thereby. Unless otherwise agreed in writing, the
provisions of this Agreement shall apply to all changes in the General Services.

      SECTION 1.3. GENERAL SERVICES NONEXCLUSIVE.

            (a) Subject to SECTION 1.4, Enbridge may provide the General
Services to any person from time to time.

            (b) Management and EECI shall not be obliged to acquire General
Services exclusively from Enbridge but shall remain free to acquire such
services from any other sources which they feel are appropriate, without the
prior written approval of Enbridge.

      SECTION 1.4. COMMITMENT OF RESOURCES.

            (a) Enbridge agrees to commit on a priority basis sufficient
resources in providing services hereunder in order that Management may
reasonably rely on Enbridge's ability to assist Management in carrying out its
responsibilities as the delegee of the power to manage and control the MLP.
Enbridge will provide services to the MLP required of Management as such delegee
of such power pursuant to the applicable provisions of the Delegation of Control
Agreement and the Third Amended and Restated Agreement of Limited Partnership of
the MLP dated as of even date herewith (the "MLP PARTNERSHIP AGREEMENT").
Notwithstanding anything herein to the contrary, Enbridge shall continue to
perform the services provided under this Agreement as long as Management is the
delegee of the power to manage and control the MLP, or until such time as this
Agreement is terminated by mutual agreement between Enbridge and Management.


                                       2


            (b) Enbridge agrees to commit on a priority basis sufficient
resources in providing services hereunder in order that EECI may reasonably rely
on Enbridge's ability to assist EECI in carrying out its day to day operations.

      SECTION 1.5. AUTHORIZATION OF EMPLOYEES.

            (a) Management shall execute any and all documents necessary to
effectuate the authorization of Enbridge's employees to represent and bind
Management and the MLP in the provision of services by Enbridge pursuant to this
Agreement. Such authorization by Management of the employees of Enbridge shall
be in accordance with and pursuant to the authority guidelines adopted by the
Board of Directors of Management and of Enbridge and in accordance with the
general authority guidelines set forth in the General Procedures Manuals for
Management and Enbridge.

            (b) EECI shall execute any and all documents necessary to effectuate
the authorization of Enbridge's employees to represent and bind EECI in the
provision of services by Enbridge pursuant to this Agreement. Such authorization
by EECI of the employees of Enbridge shall be in accordance with and pursuant to
the authority guidelines adopted by the Board of Directors of EECI and of
Enbridge and in accordance with the general authority guidelines set forth in
the General Procedures Manuals for EECI and Enbridge.

                                   ARTICLE II
                                  COMPENSATION

      SECTION 2.1. EXPENSE REIMBURSEMENT.

            (a) Management agrees to reimburse Enbridge for all direct and
indirect expenses it incurs or payments it makes on behalf of Management or the
MLP hereunder.

            (b) EECI agrees to reimburse Enbridge for all direct and indirect
expenses it incurs or payments it makes on behalf of EECI hereunder.

      SECTION 2.2. SPECIAL SERVICES. Management and EECI may from time to time
request Enbridge to provide special services additional to the General Services.
Management or EECI, as appropriate, shall pay Enbridge's costs and expenses
incurred in the provision of such special services in the manner and at the time
specified in SECTION 3.1.

      SECTION 2.3. DIRECT BILLING OF THE MLP. For services attributable to the
MLP, Enbridge shall, at Management's request, directly bill the MLP for such
services.

      SECTION 2.4. U.S. DOLLARS. All amounts payable under this Agreement are
expressed, and shall be paid, in U.S. dollars.

                                   ARTICLE III
                         TERMS OF PAYMENT AND ACCOUNTING

      SECTION 3.1. CALCULATION AND SUBMISSION OF CHARGES. Enbridge shall submit
charges to Management, EECI and/or the MLP at the end of each month calculated
on the basis of actual


                                       3


cost of services provided, accompanied by such supporting documentation as
agreed upon from time to time by the parties hereto. Charges shall be adjusted
if necessary following the completion of each year of this Agreement based on
actual annual costs for the services provided hereunder.

                                   ARTICLE IV
                               AUDIT REQUIREMENTS

      SECTION 4.1. ACCESS TO BOOKS AND RECORDS. Enbridge and Management and
Enbridge and EECI, or their respective duly authorized representatives, will
have access at all reasonable times, during the term of this Agreement and for a
period of one (1) year thereafter, to each other's books, records, data stored
in computers and all documentation pertaining to the other's services rendered
under this Agreement for the purpose of auditing and verifying the costs of such
services or for any reasonable purpose. The parties shall not charge each other
for any cost incurred in connection with such audit. The parties agree to
promptly reimburse each other for audit claims resolved in the audited party's
favor.

      SECTION 4.2. DOCUMENT RETENTION. The parties will preserve for a period of
six (6) years after termination of this Agreement all documents mentioned in
SECTION 4.1, and for longer periods upon specific request.

                                    ARTICLE V
                          LIABILITY AND INDEMNIFICATION

      SECTION 5.1. INDEMNIFICATION OF MANAGEMENT AND EECI.

            (a)   Enbridge will:

                        (i) indemnify and hold harmless Management and EECI from
                  and against all claims, actions, losses, expenses, costs or
                  damages of every nature and kind whatsoever that Management
                  and/or EECI (or their respective officers, employees or
                  agents) may suffer as a result of the gross negligence,
                  willful misconduct or breach by Enbridge of this Agreement in
                  the provision or non-provision of services under this
                  Agreement;

                        (ii) defend any claim or suit brought against Management
                  and/or EECI based upon such loss or damage; and

                        (iii) pay all costs and expenses including legal fees
                  incurred by Management and/or EECI, in connection with such
                  claim or suit.

            (b) Notwithstanding anything herein contained, the MLP and any
affiliated partnership shall not be a third party beneficiary of the indemnity
contained in this SECTION 5.1.

      SECTION 5.2. INDEMNIFICATION OF ENBRIDGE BY MANAGEMENT AND EECI.
Management and EECI will:


                                       4


            (a) indemnify and save harmless Enbridge from and against all
claims, actions, losses, expenses, costs or damages of every nature and kind
whatsoever that Enbridge (or its officers, employees or agents) may suffer as a
result of the gross negligence, willful misconduct or breach by Management and
EECI of this Agreement, respectively, in obtaining necessary services under this
Agreement.

            (b) defend any claim or suit brought against Enbridge based upon
such loss or damage; and

            (c) pay all costs and expenses including legal fees incurred by
Enbridge, in connection with such claim or suit.

      SECTION 5.3. INDEMNIFICATION OF ENBRIDGE BY MLP. The indemnification
provided to Management as the delegee of the power to manage and control the MLP
pursuant to the Delegation of Control Agreement and the MLP Partnership
Agreement, is hereby incorporated by reference and the indemnity provided in
said Agreement is hereby extended to Enbridge as an Indemnitee.

                                   ARTICLE VI
                                  MISCELLANEOUS

      SECTION 6.1. TERM; TERMINATION. The term of this Agreement shall commence
as of the Effective Date above and shall continue until terminated in accordance
with this SECTION 6.1. Except as provided in SECTION 1.4, any party shall have
the right at any time to terminate all or any part of this Agreement as to
itself upon thirty (30) days' prior written notice. The obligations of Enbridge
U.S. hereunder are hereby terminated as of the Effective Date.

      SECTION 6.2. NO JOINT VENTURE. This Agreement is not intended to create,
and shall not be construed as creating, any relationship of partnership, agency,
joint venture or association for profit between the parties.

      SECTION 6.3. NO FIDUCIARY DUTIES. The parties hereto shall not have any
fiduciary obligations or duties to the other parties by reason of this
Agreement. Subject to the Omnibus Agreement among EECI, the MLP, Enbridge
Pipelines Inc. and Management dated as of even date herewith, any party hereto
may conduct any activity or business for its own profit whether or not such
activity or business is in competition with any activity or business of the
other party.

      SECTION 6.4. NO REPRESENTATIONS OR WARRANTIES. The services to be provided
hereunder shall be provided on the basis that Enbridge does not make any
warranties or representations, express or implied, with respect to such services
save and except that such services shall be provided by qualified personnel in a
professional and timely manner.

      SECTION 6.5. FORCE MAJEURE. If any party to this Agreement is rendered
unable by force majeure to carry out its obligations under this Agreement, other
than Management's or EECI's obligation to reimburse Enbridge for expenses as
provided for herein, that party shall give the other parties prompt written
notice of the force majeure with reasonably full particulars concerning it.
Thereupon, the obligations of the party giving the notice, insofar as they are
affected by the force majeure, shall be suspended during, but no longer than the
continuance of,


                                       5


the force majeure. The affected party shall use all reasonable diligence to
remove or remedy the force majeure situation as quickly as practicable.

      The requirement that any force majeure situation be removed or remedied
with all reasonable diligence shall not require the settlement of strikes,
lockouts or other labor difficulty by the party involved, contrary to its
wishes. Rather, all such difficulties, may be handled entirely within the
discretion of the party concerned.

      The term "force majeure" means any one or more of:

            (a)   an act of God;

            (b)   a strike, lockout, labor difficulty or other industrial
disturbance;

            (c)   an act of a public enemy, war, blockade, insurrection or
public riot;

            (d)   lightning, fire, storm, flood or explosion;

            (e)   governmental action, delay, restraint or inaction;

            (f)   judicial order or injunction;

            (g)   material shortage or unavailability of equipment; or

            (h)   any other cause or event, whether of the kind specifically
enumerated above or otherwise, which is not reasonably within the control of the
party claiming suspension.

      SECTION 6.6. FURTHER ACTS. Each party shall from time to time, and at all
times, do such further acts and execute and deliver all such further deeds and
documents as shall be reasonably requested by another party in order to fully
perform and carry out the terms of this Agreement.

      SECTION 6.7. TIME OF THE ESSENCE. Time is of the essence in this
Agreement.

      SECTION 6.8. NOTICES. Any notice, request, demand, direction or other
communication required or permitted to be given or made under this Agreement to
a party shall be in writing and may be given by hand delivery, postage prepaid
first-class mail delivery, delivery by a reputable international courier service
guaranteeing next business day delivery or by facsimile (if confirmed by one of
the foregoing methods) to such party at its address noted below:

            (a)   in the case of Enbridge U.S., to:

                  Enbridge (U.S.) Inc.
                  3000 425 - 1st Street S.W.
                  Calgary, Alberta T2P 3L8
                  Attention:  President
                  Facsimile:  (403) 231-3920


                                       6


            (b)   in the case of Enbridge to:

                  Enbridge Employee Services, Inc.
                  1100 Louisiana, Suite 3300
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

            (c)   in the case of EECI, to:

                  Enbridge Energy Company, Inc.
                  1100 Louisiana, Suite 3300
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

            (d)   in the case of Management, to:

                  Enbridge Energy Management, L.L.C.
                  1100 Louisiana, Suite 3300
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

or at such other address of which notice may have been given by such party in
accordance with the provisions of this Section.

      SECTION 6.9. COUNTERPARTS. This Agreement may be executed in several
counterparts, no one of which needs to be executed by all of the parties. Such
counterpart, including a facsimile transmission of this Agreement, shall be
deemed to be an original and shall have the same force and effect as an
original. All counterparts together shall constitute but one and the same
instrument.

      SECTION 6.10. APPLICABLE LAW. In the provision of the services hereunder
the parties shall comply with and observe all applicable laws, regulations and
orders of any proper authority having jurisdiction over the services provided.
This Agreement shall be construed in accordance with the laws of the State of
Minnesota, excluding any conflicts of law rule or principle that might refer to
the construction or interpretation hereof to the laws of another jurisdiction.

      SECTION 6.11. BINDING EFFECT; ASSIGNMENT. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by any
party hereto without the prior written consent of the other parties.


                                       7


      SECTION 6.12. RULES OF CONSTRUCTION. The following provisions shall be
applied wherever appropriate herein:

       (i)    herein," "hereby," "hereunder," "hereof," "hereto" and other
              equivalent words shall refer to this Agreement as an entirety and
              not solely to the particular portion of this Agreement in which
              any such word is used;

       (ii)   "including" means "including without limitation" and is a term of
              illustration and not of limitation;

       (iii)  all definitions set forth herein shall be deemed applicable
              whether the words defined are used herein in the singular or the
              plural;

       (iv)   unless otherwise expressly provided, any term defined herein by
              reference to any other document shall be deemed to be amended
              herein to the extent that such term is subsequently amended in
              such document;

       (v)    references herein to other documents and agreements shall mean
              such documents and agreements as amended and restated from time to
              time;

       (vi)   wherever used herein, any pronoun or pronouns shall be deemed to
              include both the singular and plural and to cover all genders;

       (vii)  this Agreement shall not be construed against any person as the
              principal draftsperson hereof;

       (viii) the section headings appearing in this Agreement are inserted only
              as a matter of convenience and in no way define, limit, construe
              or describe the scope or extent of such Section, or in any way
              affect this Agreement; and

       (ix)   any references herein to a particular Section, Article, Exhibit or
              Schedule means a Section or Article of, or an Exhibit or Schedule
              to, this Agreement unless another agreement is specified.

      SECTION 6.13. CONFIDENTIALITY OF INFORMATION.

            (a) Each party to this Agreement agrees to keep all information
provided by the other party (the "DISCLOSING PARTY") to it (the "RECEIVING
PARTY") confidential, and a receiving party shall not, without the prior consent
of an authorized senior officer of the disclosing party, disclose any part of
such information which is not available in the public domain from public or
published information or sources except:

                        (i) to those of its employees who require access to the
                  information in connection with performance of the General
                  Services by a receiving party under this Agreement;


                                       8


                        (ii) as in the receiving party's judgment may be
                  appropriate to be disclosed in connection with the provision
                  by the receiving party of the General Services hereunder;

                        (iii) as the receiving party may be required to disclose
                  in connection with the preparation by the receiving party or
                  any of its affiliates of reporting documents, including annual
                  financial statements, annual reports and any filings or
                  disclosure required by statute, regulation or order of a
                  regulatory authority; and

                        (iv) to such legal and accounting advisors, valuers and
                  other experts as in the receiving party's judgment may be
                  appropriate or necessary in order to permit the receiving
                  party to rely on the services of such persons in carrying out
                  the receiving party's duties under this Agreement.

            (b)   The covenants and agreements of the parties to this
Agreement shall not apply to any information:

                        (i) which is lawfully in the receiving party's
                  possession or in the possession of its professional advisors
                  or its personnel, as the case may be, at the time of
                  disclosure and which was not acquired directly or indirectly
                  from the disclosing party;

                        (ii) which is at the time of disclosure in, or after
                  disclosure falls into, the public domain through no fault of
                  the receiving party or its personnel;

                        (iii) which, subsequent to disclosure by the disclosing
                  party, is received by the receiving party from a third party
                  who, insofar as is known to the receiving party, is lawfully
                  in possession of such information and not in breach of any
                  contractual, legal or fiduciary obligation to the disclosing
                  party and who has not required the receiving party to refrain
                  from disclosing such information to others; and

                        (iv) disclosure of which the receiving party reasonably
                  deems necessary to comply with any legal or regulatory
                  obligation which the receiving party believes in good faith it
                  has.

      SECTION 6.14. INTELLECTUAL PROPERTY.

            (a) In this SECTION 6.16, "INTELLECTUAL PROPERTY" means the rights
to (i) inventions, (ii) all granted patents for inventions, including reissue
thereof, (iii) copyrights, (iv) industrial designs, (v) trademarks, (vi) trade
secrets, (vii) know-how and (viii) any other industrial or intellectual property
right, in every country where same exists from time to time, all applications
therefor, the right to make applications therefor and the right to claim
priority therefrom as provided by international convention.


                                       9


            (b) All Intellectual Property that is conceived, developed,
produced, substantiated, or first reduced to practice by Enbridge in the course
of performing the General Services pursuant to this Agreement shall accrue to
and be owned by the Management or EECI, as the case may be, subject only to the
grantback of a non-exclusive, worldwide, royalty-free, perpetual right and
license to Enbridge to reproduce, translate, modify, revise, make, use and have
made that Intellectual Property as reasonably required in connection with the
internal business purposes of Enbridge.

      SECTION 6.15. INVALIDITY OF PROVISIONS. In the event that one or more of
the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality or
enforceability of the remaining provisions hereof shall not be affected or
impaired thereby. Each of the provisions of this Agreement is hereby declared to
be separate and distinct.

      SECTION 6.16. MODIFICATION; AMENDMENT. Subject to obtaining the necessary
regulatory approvals, this Agreement may not be modified or amended except by an
instrument in writing signed by each of the parties hereto or by their
respective successors or permitted assigns.

      SECTION 6.17. ENTIRE AGREEMENT. This Agreement constitutes the whole and
entire agreement between the parties hereto and supersedes any prior agreement,
undertaking, declarations, commitments or representations, verbal or oral, in
respect of the subject matter hereof.



                            [Signature Page Follows]


                                      10


      IT WITNESS WHEREOF, the parties hereto have executed this Agreement with
effect as of the date first above written.


                                    ENBRIDGE EMPLOYEE SERVICES, INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    ENBRIDGE (U.S.) INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    ENBRIDGE ENERGY COMPANY, INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________



                                    ENBRIDGE ENERGY MANAGEMENT, L.L.C.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________



        SIGNATURE PAGE TO GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT



                                    EXHIBIT A

      Attached to and made a part of General and Administrative Services
Agreement dated [_________], 2002 between Enbridge Employee Services,
Inc., Enbridge (U.S.) Inc., Enbridge Energy Company, Inc., and Enbridge
Energy Management, L.L.C.

                           SERVICES TO BE PROVIDED BY
                        ENBRIDGE EMPLOYEE SERVICES, INC.

1.    Provide accounting and tax planning and compliance services
      including preparation of financial statements and income tax returns.

2.    Provide administrative, executive, legal, human resources, and
      computer support services.

3.    Arrange insurance coverage as required.

4.    Provide all administrative and operational services required to operate
      the "Lakehead System" and facilitate the business and affairs of
      Management and the MLP. Such services include, but are not limited to, the
      services set forth in Schedule I attached hereto and made a part hereof.

5.    Provide such other services as may be requested.


                                      A-1



                                  SCHEDULE "I"

   TO GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT DATED [___________], 2002
             BETWEEN ENBRIDGE EMPLOYEE SERVICES, INC. ("ENBRIDGE"),
 ENBRIDGE (U.S.) INC. ("ENBRIDGE U.S."), ENBRIDGE ENERGY COMPANY, INC. ("EECI")
              AND ENBRIDGE ENERGY MANAGEMENT, L.L.C. ("MANAGEMENT")
- --------------------------------------------------------------------------------

Enbridge shall provide Management (referred to herein collectively with the MLP
as "Management") and EECI (to the extent necessary) with certain services in
general, including:

PUBLIC AND GOVERNMENT AFFAIRS

- -     Provide oversight, consulting and coordination of internal and external
      communications activities to meet Management's and EECI's goals through
      the implementation of strategic communication, public relations and
      government relations plans.

- -     Provide regulatory rate compliance and the related determination of
      pipeline tariff rates, Provide coordination and preparation of forecasts,
      budgets and long range plans.


ENGINEERING

Manage capital projects, planning and complete engineering studies to help
reduce operating costs, increase pipeline throughput, reduce safety hazards, and
decrease operational and environmental risks on the pipeline system.


ENVIRONMENT DEPARTMENT

Formulate, propose and carry out action plans to comply with regulatory
mandates, Management's and EECI's environmental requirements, and maintain the
integrity of the pipeline right-of-way, leased and fee-owned properties.


FINANCE

- -     Provide internal management and external financial reporting. Ensure
      compliance with related financial reporting requirements. Provide general
      accounting services such as, but not limited to, general ledger and
      accounts payable functions.

- -     Provide tax compliance requirements including income, property and
      sales/use. Also provide related audits and appeals, planning, forecasting
      and accounting. Provide risk management services and the related
      administration, including claims and accounting.


                                   SCHEDULE I
                                     Page 1



- -     Provide the coordination and preparation of capital budgets and related
      plant accounting records. Provides the procurement of goods and services
      as required to meet the operating needs of Management and EECI.

- -     Provide primary communication link between Management and EECI and the
      investors, analysts and brokers.


AUDIT SERVICES

Provide the internal audit function. Assist management in assuring that
Management and EECI maintain adequate internal controls to safeguard
Management's and EECI's assets.


HUMAN RESOURCES

Provide human resource services including recruiting and selection;
compensation; benefits and benefit accounting, training and development;
employee relations; labor relations support; relocation services; equal
employment opportunity compliance; and payroll services.


INFORMATION SYSTEMS

Provide computer and telecommunications related services including the following
areas: computer help desk; data, voice and video communications; network
management; business applications development, integration and support; data
center operations; technology assessment and selection; and pipeline control
system support.


LAW DEPARTMENT

Facilitate business purposes by supervising, advising and monitoring all legal
matters concerning Management and EECI and their respective operations. Provide
legal advice to all department and district personnel. Some of these roles
include Legal Compliance Program, documentation for transactions, review of
initiatives, negotiations of contracts and settlements and general legal advice
regarding business transactions and initiatives.


OPERATIONS AND OPERATIONAL SERVICES

- -     Monitor and assess performance and provide overall direction with respect
      to operations and maintenance for the pipeline systems. Oversee and direct
      pipeline repair and alteration, tank repair, right-of-way monitoring and
      equipment operation as well as numerous support tasks. Provide interface
      with outside parties and regulatory agencies as necessary to complete
      overall direction and support tasks. Operate, maintain and oversee


                                   SCHEDULE I
                                     Page 2


      the operation of the electrical and mechanical station and terminal
      equipment on the pipeline system. Maximize and optimize the efficient
      utilization of the pipeline system.

- -     Provide interfacing with Enbridge Inc. as required on intercompany
      operational issues.


SAFETY/COMPLIANCE

Coordinate safety training and compliance issues throughout the pipeline
systems.


OTHER

Rights of way and other services as required.


                                   SCHEDULE I
                                     Page 3

EX-10.7

                                                                    Exhibit 10.7





                                OMNIBUS AGREEMENT

                       DATED AS OF [_______________], 2002

                                      AMONG

                          ENBRIDGE ENERGY COMPANY, INC.


                         ENBRIDGE ENERGY PARTNERS, L.P.


                             ENBRIDGE PIPELINES INC.


                                       AND


                       ENBRIDGE ENERGY MANAGEMENT, L.L.C.






                                OMNIBUS AGREEMENT

      This OMNIBUS AGREEMENT (this "Agreement"), dated as of
[____________], 2002, is entered into among Enbridge Energy Company, Inc.
(f/k/a Lakehead Pipe Line Company, Inc.), a Delaware corporation ("EECI"),
Enbridge Energy Partners, L.P. (f/k/a Lakehead Pipe Line Partners, L.P.),
a Delaware limited partnership (the "MLP"), Enbridge Pipelines Inc. (f/k/a
Interprovincial Pipe Line Inc.), a Canadian corporation ("ENBRIDGE"), and
Enbridge Energy Management, L.L.C., a Delaware limited liability company
("MANAGEMENT").

                                    RECITALS

      WHEREAS, the MLP, EECI and Enbridge are parties to that certain
Distribution Support Agreement dated as of December 27, 1991 (the "DISTRIBUTION
SUPPORT AGREEMENT") pursuant to which such parties entered into certain
covenants and agreements with each other in connection with the formation of the
MLP; and

      WHEREAS, EECI is the sole general partner of the MLP; and

      WHEREAS, pursuant to a Delegation of Control Agreement among Management,
EECI and the MLP dated as of even date herewith (the "DELEGATION OF CONTROL
AGREEMENT"), EECI has delegated to Management the power and authority to manage
and control the business and affairs of the MLP; and

      WHEREAS, the parties desire to amend and restate the Distribution Support
Agreement as set forth herein to make Management a party and to make other
changes desired by the parties and permitted under SECTION 6.6 of the
Distribution Support Agreement.

      NOW, THEREFORE, for and in consideration of the mutual covenants contained
in this Agreement, the parties hereto hereby agree to amend and restate the
Distribution Support Agreement as follows:

                                    ARTICLE I
                                   [RESERVED]


                                   ARTICLE II
                              DISTRIBUTION SUPPORT

      SECTION 2.1.   [RESERVED]

      SECTION 2.2.   [RESERVED]

      SECTION 2.3.   [RESERVED]

      SECTION 2.4.   [RESERVED]

      SECTION 2.5.   [RESERVED]



      SECTION 2.6.

            (a)   [RESERVED]

            (b) Enbridge hereby grants to the MLP and Enbridge Energy, Limited
Partnership, a Delaware limited partnership (the "OPERATING PARTNERSHIP"), a
worldwide non-exclusive royalty-free right and license for so long as an
Affiliate of Enbridge serves as general partner of the MLP and the Operating
Partnership, respectively, and to each of their respective subsidiaries, for so
long as such subsidiary is controlled, directly or indirectly, by the MLP or
Operating Partnership, as the case may be, to use (i) the blue oil drop symbol
which has been used in the past by Enbridge and EECI and (ii) the Enbridge
Energy Spiral (the blue oil drop symbol and the Enbridge Energy Spiral being
collectively referred to as the "SYMBOLS") and related goodwill. The MLP and the
Operating Partnership (i) agree to maintain the quality of services provided in
connection with the Symbols to a level at least as high as the quality standards
of Enbridge in its use of the Symbols and (ii) acknowledge that Enbridge is the
owner of the Symbols with full right, title and interest therein and that all
use by any of them of the Symbols shall inure to the benefit of Enbridge.

            (c) To the extent that Enbridge is providing services to Management
under the Operational Services Agreement dated as of even date herewith between
Enbridge, EECI and Management (the "OPERATIONAL SERVICES AGREEMENT") as of the
effective date of (i) withdrawal by EECI as the general partner of the MLP, (ii)
removal of EECI as general partner of the MLP under circumstances where "cause"
exists or (iii) transfer of the capital stock of EECI to any Person that is not
an Affiliate of Enbridge, then Enbridge shall be obligated to provide such
services on substantially the same terms and conditions as provided in the
Operational Services Agreement, to the MLP for twelve months following such
effective date, but shall have no such obligation under the Operational Services
Agreement thereafter.

            (d) The obligations of Enbridge under Article 5 (Liability and
Indemnification) of the Operational Services Agreement shall extend to the MLP
and the Operating Partnership upon the same terms as provided in the Operational
Services Agreement with respect to Management and EECI.

            (e) As used in this Agreement, "Affiliate" means, with respect to
any person, any other person that directly or indirectly controls, is controlled
by or is under common control with, the person in question. As used herein, the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a person,
whether through ownership of voting securities, by contract or otherwise.

                                   ARTICLE III
                                   [RESERVED]

                                   ARTICLE IV
                                CHANGE IN CONTROL

      SECTION 4.1. ASSIGNMENT UPON CHANGE OF CONTROL. In the event of a Change
of Control of EECI, Enbridge may assign its obligations under this Agreement to
the controlling person of EECI if, after taking into account the Change of
Control transaction, the unsecured


                                       2


long-term debt credit rating of such controlling person as assigned by a
nationally recognized statistical rating organization would be, after giving
effect to such Change of Control transaction, at least equal to the unsecured
long-term debt credit rating of Enbridge as assigned by a nationally recognized
statistical rating organization immediately before such Change of Control
transaction.

      SECTION 4.2. DEFINITION OF CHANGE OF CONTROL. A "CHANGE OF CONTROL" shall
be deemed to have occurred at such time as Enbridge shall no longer own,
directly or indirectly, at least 50% of the outstanding capital stock of EECI.

                                    ARTICLE V
                             BUSINESS OPPORTUNITIES

      SECTION 5.1. PROHIBITED ACTIVITIES OF EECI. EECI agrees that its sole
business will be to act as general partner of the MLP, to manage certain
subsidiaries and to undertake ancillary activities. EECI shall not permit any
subsidiary to engage in or acquire any business that is in direct material
competition with the business of the MLP or Operating Partnership conducted
immediately following the Closing Date.

      SECTION 5.2. PROHIBITED ACTIVITIES OF ENBRIDGE AND ITS OTHER SUBSIDIARIES.
No provision of this Agreement shall restrict the ability of Enbridge and its
Affiliates other than EECI to engage in any business. However, so long as an
Affiliate of Enbridge is the general partner of the Partnership and the
Operating Partnership, Enbridge and its subsidiaries other than EECI ("OTHER
SUBSIDIARIES") shall not engage in or acquire any business that is in direct
material competition with the current business of the MLP (which term, for
purposes of this Section, includes the Operating Partnership); PROVIDED,
HOWEVER, that

            (i) Enbridge and its other subsidiaries shall not be restricted from
      continuing to engage in businesses, including the normal development of
      those businesses in which they were engaged as of December 27, 1991 (the
      "CLOSING DATE"), which then were or may in the future be in competition
      with the MLP, including the potential reversal of Enbridge's line from
      Sarnia, Ontario to Montreal, Quebec to transport crude oil from Montreal
      to Sarnia;

            (ii) such restriction shall be limited geographically only to those
      routes and products in respect of which the MLP, as of the Closing Date,
      provides transportation (so that, for example, Enbridge and its other
      subsidiaries would be permitted to acquire a crude oil pipeline business
      in which transportation is made over routes or involving products not
      served by the MLP at the Closing Date);

            (iii) Enbridge and its other subsidiaries shall not be prohibited
      from acquiring any competitive business as part of a larger acquisition so
      long as the majority of the value of the business or assets acquired, in
      Enbridge's reasonable judgment, is not attributable to such competitive
      business; and

            (iv) Enbridge and its other subsidiaries shall not be prohibited
      from acquiring any competitive business if such business is first offered
      for acquisition to the MLP and


                                       3


      the MLP fails to approve, after submission to Unitholder vote, the making
      of such acquisition.

The approval of the holders of a majority of the outstanding Units in the MLP
(excluding for this purpose any Units held by EECI or any of its Affiliates) is
required for the MLP to exercise its right to accept such an offer.

      Except as specified above, Enbridge and its other subsidiaries are not
restricted by this Agreement from engaging in businesses which may be in
competition with the MLP

                                   ARTICLE VI
                                  MISCELLANEOUS

      SECTION 6.1. NO JOINT VENTURE. This Agreement is not intended to create,
and shall not be construed as creating, any relationship of partnership, agency,
joint venture or association for profit between the parties.

      SECTION 6.2. NO FIDUCIARY DUTIES. The parties hereto shall not have any
fiduciary obligations or duties to the other parties by reason of this
Agreement. Absent anything in this Agreement to the contrary, any party hereto
may conduct any activity or business for its own profit whether or not such
activity or business is in competition with any activity or business of the
other party.

      SECTION 6.3. BENEFIT OF AGREEMENT. The covenants and agreements contained
in this Agreement are for the sole benefit of the parties hereto and shall not
be construed as conferring, and are not intended to confer, any direct, indirect
or third-party beneficiary rights on any other persons, including without
limitation, the Limited Partners of the MLP.

      SECTION 6.4. NOTICES. Any notice, request, demand, direction or other
communication required or permitted to be given or made under this Agreement to
a party shall be in writing and may be given by hand delivery, postage prepaid
first-class mail delivery, delivery by a reputable international courier service
guaranteeing next business day delivery or sent by facsimile (if confirmed by
one of the foregoing methods) to such party at its address noted below:

            (a)   in the case of EECI, to:

                  Enbridge Energy Company, Inc.
                  1100 Louisiana, Suite 3330
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229


                                       4


            (b)   in the case of the MLP, to:

                  Enbridge Energy Partners, L.P.
                  1100 Louisiana, Suite 3300
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

            (c)   in the case of Enbridge, to:

                  Enbridge Pipelines Inc.
                  3000 425 - 1st Street S.W.
                  Calgary, Alberta T2P 3L8
                  Attention:  President
                  Facsimile:  (403) 231-5787

            (d)   in the case of Management, to:

                  Enbridge Energy Management, L.L.C.
                  1100 Louisiana, Suite 3300
                  Houston, Texas  77002
                  Attention:  President
                  Facsimile:  (713) 821-2229

or at such other address of which notice may have been given by such party in
accordance with the provisions of this Section.

      SECTION 6.5. FURTHER ACTS. Each party shall from time to time, and at all
times, do such further acts and execute and deliver all such further deeds and
documents as shall be reasonably requested by another party in order to fully
perform and carry out the terms of this Agreement.

      SECTION 6.6. COUNTERPARTS. This Agreement may be executed in several
counterparts, no one of which needs to be executed by all of the parties. Such
counterpart, including a facsimile transmission of this Agreement, shall be
deemed to be an original and shall have the same force and effect as an
original. All counterparts together shall constitute but one and the same
instrument.

      SECTION 6.7. APPLICABLE LAW. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Texas, excluding any
conflicts of law rule or principle that might refer the construction or
interpretation hereof to the laws of another jurisdiction.

      SECTION 6.8. BINDING EFFECT; ASSIGNMENT. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. This agreement may not be assigned by any
party hereto without the prior written consent of the other party.


                                       5


      SECTION 6.9. RULES OF CONSTRUCTION. The following provisions shall be
applied wherever appropriate herein:

       (i)    "herein," "hereby," "hereunder," "hereof," "hereto" and other
              equivalent words shall refer to this Agreement as an entirety and
              not solely to the particular portion of this Agreement in which
              any such word is used;

       (ii)   "including" means "including without limitation" and is a term of
              illustration and not of limitation;

       (iii)  all definitions set forth herein shall be deemed applicable
              whether the words defined are used herein in the singular or the
              plural;

       (iv)   unless otherwise expressly provided, any term defined herein by
              reference to any other document shall be deemed to be amended
              herein to the extent that such term is subsequently amended in
              such document;

       (v)    references herein to other documents and agreements shall mean
              such documents and agreements as amended and restated from time to
              time;

       (vi)   wherever used herein, any pronoun or pronouns shall be deemed to
              include both the singular and plural and to cover all genders;

       (vii)  this Agreement shall not be construed against any person as the
              principal draftsperson hereof;

       (viii) the section headings appearing in this Agreement are inserted only
              as a matter of convenience and in no way define, limit, construe
              or describe the scope or extent of such Section, or in any way
              affect this Agreement; and

       (ix)   any references herein to a particular Section, Article, Exhibit or
              Schedule means a Section or Article of, or an Exhibit or Schedule
              to, this Agreement unless another agreement is specified.

       SECTION 6.10. INVALIDITY OF PROVISIONS. In the event that one or more of
the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality or
enforceability of the remaining provisions hereof shall not be affected or
impaired thereby. Each of the provisions of this Agreement is hereby declared to
be separate and distinct.

       SECTION 6.11. MODIFICATION; AMENDMENT. The parties hereto, by mutual
agreement in writing, may amend, modify or supplement this Agreement; PROVIDED,
HOWEVER, that if any such amendment, modification or supplement adversely
affects the holders of the MLP's Class A Units then such amendment, modification
or supplement shall require the approval of the Record Holders (as defined in
the MLP's Partnership Agreement of more than 50% of the then outstanding holders
of the MLP's Class A Units (excluding Class A Units held by Enbridge or any of
its Affiliates). Subject to obtaining the necessary regulatory approvals, this
Agreement


                                       6


may not be modified or amended except by an instrument in writing signed by each
of the parties hereto or by their respective successors or permitted assigns.

       SECTION 6.12. ENTIRE AGREEMENT. This Agreement constitutes the whole and
entire agreement between the parties hereto and supersedes any prior agreement,
undertaking, declarations, commitments or representations, verbal or oral, in
respect of the subject matter hereof.



                            [Signature Page Follows]


                                       7


     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.

                                    ENBRIDGE ENERGY COMPANY, INC.



                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    ENBRIDGE ENERGY PARTNERS, L.P.

                                    By:   Enbridge Energy Company, Inc.,
                                          its General Partner

                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    ENBRIDGE PIPELINES INC.


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________


                                    ENBRIDGE ENERGY MANAGEMENT, L.L.C.



                                    By:   ____________________________________
                                    Name: ____________________________________
                                    Title:____________________________________



                     SIGNATURE OF PAGE TO OMNIBUS AGREEMENT

EX-23.2

                                                                   EXHIBIT 23.2



                           CONSENT OF MCCARTHY TETRAULT


We hereby consent to the reference to us under the headings "Risk Factors -
Risks Related to Conflicts of Interest and Limitations on Fiduciary Duties"
and "Legal Matters" in the Prospecuts forming part of this Amendment No. 1 to
the Registration Statement, but we do not thereby admit that we are within
the class of persons whose consent is required under the provisions of the
Securities Act or the rules and regulations of the Commission thereunder.




/s/ McCarthy Tetrault LLP

McCarthy Tetrault LLP


Calgary, Alberta
July 8, 2002

EX-23.3

                                                                    Exhibit 23.3




                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the use in this Amendment No. 1 to Registration
Statement on Form S-1 (No. 333-89552) of our report dated May 23, 2002
relating to the balance sheet of Enbridge Energy Management, L.L.C. at May
23, 2002, which appears in such Registration Statement.  We also consent to
the reference to us under the heading "Experts" in such Registration
Statement.


PricewaterhouseCoopers LLP

Houston, Texas
July 5, 2002

EX-23.4

                                                                    Exhibit 23.4




                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the use in this Amendment No. 1 to Registration
Statement on Form S-1 (No 333-89552) of our report dated January 24, 2002
relating to the consolidated financial statements of Enbridge Energy
Partners, L.P. We also consent to the incorporation by reference in this
Amendment No. 1 to Registration Statement on Form S-3 (No. 333-89588) of our
report dated January 24, 2002 relating to the consolidated financial
statements, which appears in Enbridge Energy Partners, L.P.'s Annual Report
on Form 10-K for the year ended December 31, 2001.  We also consent to the
reference to us under the heading "Experts" in such Registration Statement.


PricewaterhouseCoopers LLP

Houston, Texas
July 5, 2002

EX-23.5

                                                                    Exhibit 23.5




                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in this Amendment No. 1
to Registration Statement on Form F-3 (No. 333-89618) of our report dated
January 25, 2002 relating to the consolidated financial statements, which
appears in Enbridge Inc.'s Annual Report on Form 40-F for the year ended
December 31, 2001.  We also consent to the reference to us under the heading
"Experts" in such Registration Statement.


PricewaterhouseCoopers LLP
Chartered Accountants

Calgary, Alberta, Canada
July 5, 2002

EX-23.6

                                                                    Exhibit 23.6




                      CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the use in this Amendment No. 1 to Registration
Statement on Form S-1 (No. 333-89552) of our reports dated May 15, 2002
relating to the consolidated financial statements of Enbridge Midcoast
Energy, Inc. (formerly known as Midcoast Energy Resources, Inc.) as of
December 31, 2001 and for the period from May 1, 2001 to December 31, 2001
and as of December 31, 2000 and 1999 and for the periods from January 1, 2001
to April 30, 2001, and for the years ended December 31, 2000 and 1999, which
appear in such Registration Statement.  We also consent to the reference to
us under the heading "Experts" in such Registration Statement.


PricewaterhouseCoopers LLP

Houston, Texas
July 5, 2002

EX-23.7

                                                                    Exhibit 23.7




                        CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in this Amendment No. 1
to Registration Statement on Form S-3 (No. 333-89588) of our report dated
January 25, 2002 relating to the consolidated statements of financial
position of Enbridge Energy Company, Inc., which appears in Enbridge Energy
Partners, L.P.'s Current Report on Form 8-K dated February 25, 2002.  We also
consent to the reference to us under the heading "Experts" in such
Registration Statement.


PricewaterhouseCoopers LLP

Houston, Texas
July 5, 2002