ENBRIDGE INCOME FUND

Transcription

1 ENBRIDGE INCOME FUND Annual and Special Meeting of Holders of Ordinary Units To be held on May 3, 2010 In Calgary, Alberta NOTICE OF MEETING AND INFORMATION CIRCULAR and NOTICE OF PETITION WITH RESPECT TO A PLAN OF ARRANGEMENT INVOLVING ENBRIDGE INCOME FUND HOLDINGS INC., ENBRIDGE INCOME FUND, ENBRIDGE MANAGEMENT SERVICES INC., ENBRIDGE COMMERCIAL TRUST, ENBRIDGE INC. AND UNITHOLDERS OF ENBRIDGE INCOME FUND March 31, 2010

2 March 31, 2010 Dear Unitholders, You are invited to attend an annual and special meeting (the Meeting ) of the holders (the Unitholders ) of ordinary units ( Units ) of Enbridge Income Fund (the Fund ) to be held in the Lecture Theatre of The Metropolitan Conference Centre, Avenue SW, Calgary, Alberta at 1:30 p.m. (Calgary time) on May 3, 2010, for the purposes set forth in the accompanying Notice of Annual and Special Meeting of Unitholders. Enclosed with this letter is a Notice of Meeting, a Notice of Petition and Notice of Application for Final Order, an information circular (the Circular ) and a voting instruction form or form of proxy. At the Meeting, in addition to the election of the independent trustees of Enbridge Commercial Trust ( ECT ), the appointment of the auditors for the Fund for 2010 and certain proposed amendments to the Fund s governing agreement intended to address the transition to International Financial Reporting Standards, Unitholders will be asked to consider and vote upon a plan of arrangement under the Business Corporations Act (Alberta) (the Arrangement ) involving (among others) the Fund, ECT, Enbridge Inc. ( Enbridge ), the Fund s administrator, Enbridge Management Services Inc. (the Administrator ), the Unitholders and Enbridge Income Fund Holdings Inc. ( EIFH ) and, if the Arrangement is approved, the adoption of a shareholder rights plan by EIFH following the completion of the Arrangement. Under the Arrangement, the Units of all Unitholders other than Enbridge ( Public Unitholders ) and 5,000,000 of Enbridge s Units will be exchanged on a one-for-one basis for shares of EIFH ( EIFH Shares ), a newly incorporated Alberta corporation. It is expected that the EIFH Shares will be listed on the Toronto Stock Exchange, while the Units will be de-listed. The Arrangement will also give each of EIFH and Enbridge a right of first refusal over each other s Fund Units, provide each of them with a pre-emptive right to maintain its respective relative ownership level in the Fund upon any issuance of new Fund Units, and establish certain rights of appointment for Enbridge on the EIFH board of directors and ECT board of trustees. The liquidity right currently associated with the preferred units of ECT ( ECT Preferred Units ) will be replaced with an exchange right, entitling Enbridge, the holder of ECT Preferred Units, to exchange those units for Units of the Fund on a one-for-one basis, subject to adjustment. Each of these features is more fully described in the Circular. The Arrangement is being proposed primarily as a result of changes to Canadian federal income tax legislation relating to specified investment flow through trusts ( SIFTs ) that were announced by the Department of Finance (Canada) on October 31, 2006 and enacted into legislation (the SIFT Rules ) by the Government of Canada in June Upon completion of the Arrangement, it is expected that the Fund will continue its policy of paying out a high proportion of its distributable cash flow to its Unitholders and that EIFH will adopt a similar policy of paying out a high proportion of its available cash in the form of quarterly dividends to its shareholders. It is expected that following the completion of the Arrangement, EIFH will initially pay an annualized dividend of approximately $1.15 per EIFH Share, the same amount as the annualized distribution currently paid by the Fund on the Units. The Arrangement has been reviewed by a committee of independent trustees of ECT (the Special Committee ), with the assistance and guidance of independent legal, tax and financial advisors. The ECT board of trustees (with interested and non-independent trustees abstaining) has unanimously concluded that the Arrangement is fair to Public Unitholders, is in the best interests of the Fund and the Public Unitholders, and has recommended that Unitholders vote in favour of the resolution approving the Arrangement. At the Meeting, the Arrangement is required to be approved by at least (a) 66⅔% of the votes represented by all Unitholders attending the Meeting in person or by proxy, and (b) a simple majority of the votes represented by the Fund s Public Unitholders, excluding any related parties of Enbridge, attending the Meeting in person or by proxy. i

3 The Special Committee and the ECT board of trustees concluded that the Arrangement provides a number of compelling and strategic benefits to the Fund and its Unitholders, including, without limitation, the following: (a) although the Fund is not required to effect the Arrangement or any other conversion into a corporate structure, it is anticipated that long-term value to Unitholders will be enhanced if the Public Unitholders exchange all of, and Enbridge exchanges a portion of, their respective holdings in the Fund for EIFH Shares; (b) it is anticipated that the reorganized structure of the Fund will improve financial flexibility and access to debt and equity capital when compared with a scenario under which the Fund remains a publicly traded SIFT; (c) as a public corporation, EIFH should attract new investors, including non-resident investors, and provide, in the aggregate, a more active and attractive long-term market for the EIFH Shares than currently exists for the Units; (d) a conversion to a corporation may result in a higher equity valuation, as EIFH s financial and operational performance will be more easily valued by reference to its publicly-held peers in the energy infrastructure market, allowing it to more efficiently raise equity capital; (e) with the enhanced financial flexibility and improved access to capital that are anticipated, the Fund will likely be better positioned to pursue anticipated opportunities for expansion and growth than in a scenario in which it remains a publicly-traded SIFT; (e) EIFH will continue to be managed by the Administrator, a wholly-owned subsidiary of Enbridge, which has a proven track record for successfully developing and acquiring attractive energy infrastructure assets in keeping with the Fund s investment profile; (f) it is planned that the investor value proposition of EIFH be consistent with that of the original value proposition of the Fund, emphasizing a high payout of safe and dependable cash flow and opportunity for growth through investment in low-risk energy infrastructure assets; and (g) the replacement of the right to liquidate the ECT Preferred Units held by Enbridge with the right to exchange such ECT Preferred Shares for Units should further align Enbridge's interest with the interest of public investors in EIFH. The Circular contains a detailed description of the Arrangement, including information about the Fund, its subsidiaries and EIFH. The Circular also includes certain risk factors relating to the completion of the Arrangement and the potential consequences of exchanging Units for EIFH Shares in connection with the Arrangement. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors. Please complete and deliver your voting instruction form or form of proxy, delivered with the Circular, prior to April 29, 2010, in order to ensure your representation at the Meeting. On behalf of the Fund s Administrator and the ECT board of trustees, I would like to express our gratitude for the support our securityholders have demonstrated with respect to our decision to take the proposed Arrangement forward. We look forward to seeing you at the Meeting. Yours truly, James A. Schultz James A. Schultz, President, Enbridge Management Services Inc., as administrator of Enbridge Income Fund ii

4 TABLE OF CONTENTS NOTICE OF MEETING OF HOLDERS OF ORDINARY UNITS... 1 NOTICE OF PETITION AND NOTICE OF APPLICATION FOR FINAL ORDER... 3 GLOSSARY OF TERMS... 5 QUESTIONS AND ANSWERS SPECIAL MATTERS TO BE ACTED UPON AT THE MEETING INFORMATION CIRCULAR Introduction Forward-Looking Statements Notice to U.S. Unitholders SOLICITATION OF PROXIES VOTING OF UNITS General Voting by Beneficial Unitholders APPOINTMENT OF PROXIES REVOCATION OF PROXIES EXERCISE OF DISCRETION WITH RESPECT TO PROXIES PRINCIPAL HOLDERS OF UNITS AND RECORD DATE ANNUAL MATTERS TO BE ACTED UPON AT THE MEETING Receipt of Financial Statements Appointment of Auditors of the Fund Election of Independent ECT Trustees SPECIAL MATTERS TO BE ACTED UPON AT THE MEETING Amendments to Fund Trust Indenture Transition to IFRS Arrangement General Background to and Reasons for the Arrangement Strategic Review Special Committee Partial Conversion to a Corporation Arrangement Fairness Opinion Approval and Recommendation of the Special Committee and the ECT Board Outstanding Units and Required Vote Effect of the Arrangement on Unitholders Pre-Arrangement Structure Post-Arrangement Structure Effect of the Arrangement on Distributions Amended Governance and Ownership Arrangements Effect of the Arrangement on the DRIP Effect of the Arrangement on the Unitholder Rights Plan Details of the Arrangement Arrangement Agreement Procedure for the Arrangement Becoming Effective Approvals Conditions Precedent to the Arrangement Timing of Completion of the Arrangement Procedure for Exchange of Units Interests of Certain Persons or Companies in the Arrangement...41 Expenses of the Arrangement...42 Securities Law Matters...42 Judicial Developments...42 Experts...43 Certain Canadian Federal Income Tax Considerations...43 Certain United States Federal Income Tax Considerations...48 Information Concerning the Fund...51 Information Concerning EIFH...55 Risk Factors Relating to the Arrangement...55 Adoption of Shareholder Rights Plan by EIFH...56 REMUNERATION OF FUND TRUSTEE AND ECT TRUSTEES...57 Trustee Compensation Table...58 MANAGEMENT OF THE FUND AND ECT...58 Administration Agreement...59 Management Agreement...59 GP Services Agreement...60 Saskatchewan Agreement...60 The Administrator...60 EXECUTIVE COMPENSATION...61 PERFORMANCE GRAPH...62 INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS...63 INDEBTEDNESS...63 LIABILITY INSURANCE...63 THE FUND S GOVERNANCE PRACTICES...63 General...63 UNITHOLDER PROPOSALS...68 ADDITIONAL INFORMATION...68 APPROVAL...69 AUDITORS CONSENT...70 CONSENT OF CIBC WORLD MARKETS INC...71 APPENDIX A DISTRIBUTION AMENDMENTS RESOLUTION... A-1 APPENDIX B ACCOUNTING AMENDMENT RESOLUTION... B-1 APPENDIX C ARRANGEMENT RESOLUTION...C-1 APPENDIX D EIFH SHAREHOLDER RIGHTS PLAN RESOLUTION...D-1 APPENDIX E ARRANGEMENT AGREEMENT... E-1 APPENDIX F FAIRNESS OPINION... F-1 APPENDIX G INTERIM ORDER...G-1 APPENDIX H INFORMATION CONCERNING EIFH...H-1 i

5 ENBRIDGE INCOME FUND (an unincorporated open-ended trust created under the laws of the Province of Alberta) NOTICE OF MEETING OF HOLDERS OF ORDINARY UNITS The annual and special meeting (the Meeting ) of the holders ( Unitholders ) of ordinary units (the Units ) of Enbridge Income Fund (the Fund ) will be held on Monday, May 3, 2010 at 1:30 p.m. (Calgary time) in the Lecture Theatre of The Metropolitan Conference Centre, Avenue SW, Calgary, Alberta, for the purposes of: 1. receiving the consolidated financial statements of the Fund for the year ended December 31, 2009, together with the report of the auditors thereon; 2. appointing auditors of the Fund and authorizing the trustees of Enbridge Commercial Trust ( ECT ) to fix their remuneration; 3. directing and instructing CIBC Mellon Trust Company (the Fund Trustee ), the sole trustee of the Fund, as to the manner in which the Fund Trustee shall vote the units of ECT held by the Fund to elect the trustees of ECT who are unrelated to Enbridge Management Services Inc. (the Administrator ), the administrator of the Fund; 4. approving certain amendments to the Fund s trust indenture to prepare for upcoming changes to accounting standards applicable to the Fund, as a result of the implementation of International Financial Reporting Standards effective January 1, 2011; 5. approving a restructuring, by way of a plan of arrangement under section 193 of the Business Corporations Act (Alberta), of the Fund s public ownership and part of the ownership of Enbridge Inc. ( Enbridge ) such that the current public holdings in the Fund and 5,000,000 of Enbridge s Units are effectively exchanged, on a one-for-one basis, for shares in a newly incorporated corporation, Enbridge Income Fund Holdings Inc. ( EIFH ), that will hold a significant interest in the Fund (together with certain amendments relating to the governance and ownership of the Fund as further described in the accompanying information circular of the Fund dated March 31, 2010 (the Circular ) (the Arrangement ); 6. if the resolution relating to the Arrangement is passed, approving the adoption by EIFH of a shareholder rights plan to come into effect immediately and concurrently with the effective time of the Arrangement; and 7. transacting such other business that may properly come before the Meeting or any adjournment thereof. The Administrator has fixed March 16, 2010 as the record date for determining those Unitholders entitled to receive notice of and to vote at the Meeting. The Circular provides additional information relating to the matters to be dealt with at the Meeting and forms part of this notice. The quorum for the Meeting is one or more individuals present in person and being Unitholders, or representing, by proxy, Unitholders, who hold in the aggregate not less than 5% of the outstanding Units. 1

6 To be effective, proxies must be deposited with the Fund, c/o CIBC Mellon, P.O. Box 721, Agincourt, Ontario, M1S 0A1, Attention: Proxy Department, not later than 4:00 p.m. (Toronto time) on April 29, 2010, or, if the Meeting is adjourned, not later than 24 hours, excluding Saturdays, Sundays and statutory holidays in the Province of Ontario, prior to the time of any adjournment thereof. Dated at Calgary, Alberta, this 31 st day of March, By order of ENBRIDGE INCOME FUND, by its Administrator, ENBRIDGE MANAGEMENT SERVICES INC. James E.R. Lord James E.R. Lord Corporate Secretary, Enbridge Management Services Inc. 2

7 Action No IN THE COURT OF QUEEN S BENCH OF ALBERTA JUDICIAL DISTRICT OF CALGARY IN THE MATTER OF SECTION 193 OF THE BUSINESS CORPORATIONS ACT, R.S.A. 2000, C. B-9, AS AMENDED AND IN THE MATTER OF SECTIONS 21, 42 AND 43 OF THE TRUSTEE ACT, R.S.A. 2000, CHAPTER T-8, AS AMENDED AND IN THE MATTER OF A PROPOSED ARRANGEMENT INVOLVING ENBRIDGE INCOME FUND HOLDINGS INC., ENBRIDGE MANAGEMENT SERVICES INC., ENBRIDGE INCOME FUND, THE HOLDERS OF UNITS OF ENBRIDGE INCOME FUND ENBRIDGE COMMERCIAL TRUST, and ENBRIDGE INC. NOTICE OF PETITION AND NOTICE OF APPLICATION FOR FINAL ORDER NOTICE IS HEREBY GIVEN that a petition (the Petition ) has been filed in Action No (the Action ) commenced in the Court of Queen s Bench of Alberta (the Court ), Judicial District of Calgary, by Enbridge Income Fund Holdings Inc. ( EIFH ) with respect to a proposed arrangement (the Arrangement ) pursuant to section 193 of the Business Corporations Act, R.S.A., 2000, c. B-9 as amended (the ABCA ) that EIFH and Enbridge Management Services Inc. ( EMSI ), in its capacity as the administrator of Enbridge Income Fund (the Fund ), have agreed to implement under an arrangement agreement dated as of March 29, 2010, as amended March 31, 2010, following a plan of arrangement (the Plan of Arrangement ) involving EIFH, EMSI, the Fund, the holders (collectively, the Unitholders ) of units of the Fund, Enbridge Commercial Trust ( ECT ) and Enbridge Inc. (collectively, the Arrangement Parties ), in which EIFH has petitioned the Court: (a) (b) (c) (d) (e) (f) to consider the Arrangement (which is described in greater detail in the information circular of the Fund dated March 31, 2010 (the Circular ), accompanying this Notice of Petition and Notice of Application for Final Order); to declare that it is expedient to grant, and to grant, to the trustees of ECT and the trustee of the Fund the power necessary to carry out the steps required to be completed by the Fund under the Plan of Arrangement in the same fashion as, and using the procedure of, an arrangement with the meaning of section 193 of the ABCA with necessary and incidental changes to reflect that the Fund is a trust; to establish the procedure by which an annual and special meeting (the Meeting ) of the Unitholders will be called and conducted so that Unitholders may consider and, if thought to be advisable, pass, with or without variation, a special resolution approving the Arrangement (the Arrangement Resolution ); to declare that the Petition for the Arrangement is brought in good faith and that the Arrangement is fair and reasonable to all persons affected by the Arrangement, both from a procedural and substantive point of view, and to approve the Arrangement; to declare that the Arrangement will, upon filing Articles of Arrangement, become effective in accordance with its terms and will be binding on each of the Arrangement Parties at or after the time (the Effective Time ) at which the Arrangement becomes effective on the date (the Effective Date ) on which the Arrangement becomes effective; and to grant such other and further orders, declarations and directions as the Court may deem reasonable and necessary. 3

8 AND NOTICE IS FURTHER GIVEN that a copy of the said Petition and other documents in the proceedings will be furnished to any Unitholder or other interested party requesting the same from the solicitors for EIFH, McCarthy Tétrault LLP, Suite 3300, 421-7th Avenue SW, Calgary, Alberta T2P 4K9, Attention: Sean Smyth or from the Clerk of the Court. AND NOTICE IS FURTHER GIVEN that the Court granted an interim order (the Interim Order ) in this matter on March 31, 2010, which is appended to the Circular as Appendix G and in which the Court has given its directions as to calling and conducting the Meeting to have the Unitholders consider and, if deemed advisable, vote upon the Arrangement Resolution. AND NOTICE IS FURTHER GIVEN that, in the Interim Order, the Court has directed the said Petition and the application for a final order approving the arrangement (the Application for Final Order ) is to be heard at the Calgary Courts Centre, 601 5th Street S.W., Calgary, Alberta, on May 6, 2010 at 1:30 p.m. (Calgary time), or so soon thereafter as counsel may be heard. At the hearing of the Application for Final Order, the Court will be requested to consider the fairness and reasonableness of the Arrangement to all persons affected by the Arrangement from a substantive and procedural point of view. AND NOTICE IS FURTHER GIVEN that, as more fully described in the Interim Order, any Unitholder or any other interested party desiring to support or oppose the Petition may appear at the time of the hearing in person or by counsel for that purpose upon complying with the Interim Order. Any Unitholder or any other interested party desiring to appear at the hearing is required to follow the procedure set forth in the Interim Order. On complying with the procedure set forth in the Interim Order, the Unitholders and other interested parties will be entitled to be heard at the hearing of the Application for Final Order and to make representations as to the fairness and reasonableness of the Arrangement to all persons affected by the Arrangement from a substantive and procedural point of view. If you do not comply with the procedure set forth in the Interim Order and do not attend, in person or by counsel, at the hearing of the Application for Final Order, the Court may approve the Arrangement as presented, or may approve the Arrangement subject to such terms and conditions as the Court deems fit, without further notice. AND NOTICE IS FURTHER GIVEN that no further notice of the Petition or the Application for Final Order will be given and that, in the event the hearing of the Petition is adjourned, only those persons who have appeared before the Court at the hearing shall be served notice of the adjourned date. AND NOTICE IS FURTHER GIVEN that the Court has been advised by the solicitors for the Petitioner that Section 3(a)(10) of the United States Securities and Exchange Act of 1933, as amended (the 1933 Act ), provides an exemption from the registration requirements of the 1933 Act for an issuance and exchange of securities where the terms and conditions of such issuance and exchange are approved by a court expressly authorized by law to grant such approval, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear. If a final order is granted by the Court approving the Arrangement, EIFH, EMSI, the Fund and the other Arrangement Parties will rely upon the approval of the Court and its declaration of the fairness of the Arrangement, including the terms and conditions thereof and the issuance and exchanges of securities contemplated therein to the Unitholders, to form the basis of an exemption from the registration requirements of the 1933 Act pursuant to Section 3(a)(10) thereof with respect to the distribution of securities of EIFH to the Unitholders pursuant to the Arrangement and any other securities to be issued pursuant to the Arrangement. DATED at Calgary, Alberta this 31 st day of March, BY ORDER OF ENBRIDGE INCOME FUND by its Administrator, ENBRIDGE MANAGEMENT SERVICES INC. James E.R. Lord James E.R. Lord Corporate Secretary, Enbridge Management Services Inc. 4

9 GLOSSARY OF TERMS ABCA means the Business Corporations Act (Alberta), R.S.A. 2000, c B-9, together with any amendments thereto, including regulations promulgated thereunder; Accounting Amendment has the meaning set forth under the heading Amendments to Fund Trust Indenture Transition to IFRS Proposed Amendment Amendments by the Trustees ; Accounting Amendment Resolution means the resolution in respect of the Accounting Amendment, the full text of which is set forth in Appendix B to this Circular; Administration Agreement means the administrative services agreement dated June 27, 2003, as amended, among the Administrator, the Fund Trustee, the Fund and ECT pursuant to which the Administrator provides administrative services to the Fund; Administrator means EMSI; affiliate has the meaning ascribed thereto in the ABCA, unless the context requires otherwise; Amended DRIP means the amended and restated dividend reinvestment and share purchase plan of EIFH, pursuant to a dividend reinvestment plan agency agreement to be entered into between EIFH and CIBC Mellon Trust Company; Arrangement means the arrangement pursuant to section 193 of the ABCA as set forth in the Plan of Arrangement subject to any amendments or variations thereto made in accordance therewith or made at the direction of the Court; Arrangement Agreement means the agreement dated March 29, 2010, as amended March 31, 2010, among the Fund, EIFH, the Administrator, ECT and Enbridge pursuant to which such parties have proposed to implement the Arrangement and which is attached as Appendix E to this Circular; Arrangement Fairness Opinion means the opinion of the Financial Advisor dated March 29, 2010, a copy of which is attached as Appendix F to this Circular; Arrangement Parties means the parties to the Arrangement Agreement, being the Fund, the Administrator, ECT, Enbridge and EIFH; Arrangement Resolution means the resolution in respect of the Arrangement and other related matters to be considered at the Meeting, the full text of which is set forth in Appendix C to this Circular; Articles of Arrangement means one or more articles of arrangement in respect of the Arrangement required under subsection 193(10) of the ABCA to be filed with the Registrar after the Final Order has been granted, giving effect to the Arrangement; Beneficial Unitholders means Public Unitholders whose Units are registered in the name of a broker, custodian, nominee or other intermediary; Business has the meaning ascribed thereto in the Management Agreement; Canadian GAAP means Canada s current generally accepted accounting principles; CDS means CDS Clearing and Depository Services Inc.; Certificate means the confirmation of filing to be issued by the Registrar pursuant to subsection 193(11) of the ABCA giving effect to the Arrangement; 5

10 Circular means this information circular of the Fund dated March 31, 2010, together with all appendices hereto and documents incorporated by reference; Court means the Court of Queen s Bench of Alberta; CRA means the Canada Revenue Agency; Depository means CIBC Mellon Trust Company; Distribution Amendments has the meaning set forth under the heading Amendments to Fund Trust Indenture Transition to IFRS Proposed Amendments - Distributions ; Distribution Amendments Resolution means the resolution in respect of the Distribution Amendments, the full text of which is set forth in Appendix A to this Circular; DRIP means the distribution reinvestment and unit purchase plan of the Fund pursuant to the distribution reinvestment plan agency agreement, dated June 17, 2004, among the Fund, EMSI and CIBC Mellon Trust Company; ECT means Enbridge Commercial Trust, an unincorporated trust established under the laws of Alberta pursuant to the ECT Trust Indenture; ECT Board means the board of ECT Trustees; ECT Preferred Units means the class of trust units of ECT designated as Preferred Units in the ECT Trust Indenture and having the rights, privileges, restrictions and conditions described therein; ECT Trust Indenture means the trust indenture pursuant to which ECT was established, made as of December 20, 2002, as amended and restated as of June 30, 2003, August 18, 2003, May 4, 2004, July 1, 2005 and May 1, 2006 and as further amended on November 5, 2007; ECT Trustees means the trustees of ECT and, for greater certainty, is comprised of the Independent ECT Trustees and the Manager Trustees; ECT Units means the class of trust units of ECT designated as Common Units in the ECT Trust Indenture and having the rights, privileges, restrictions and conditions described therein; Effective Date means the date the Arrangement becomes effective under the ABCA, which is expected to be on or about December 15, 2010; Effective Time means the first moment on the Effective Date; EIFH means Enbridge Income Fund Holdings Inc., a corporation incorporated under the laws of Alberta; EIFH Administration Agreement means an agreement to be entered into between EMSI and EIFH pursuant to which EMSI will provide certain administrative services to EIFH; EIFH Board means the board of directors of EIFH; EIFH Share means a common share in the share capital of EIFH; EIFH Shareholder means a holder of EIFH Shares; EIFH Shareholder Rights Plan means the shareholder rights plan to be adopted by EIFH upon receipt of Unitholder approval at the Effective Time, substantially as described in Appendix D to this Circular; 6

11 EIFH Shareholder Rights Plan Resolution means the ordinary resolution, the full text of which is set forth in Appendix D of this Circular, to ratify, confirm and approve the EIFH Shareholder Rights Plan; EIFH Special Voting Share means the special voting share in the capital of EIFH, the rights, restrictions, privileges and conditions attached to which will entitle Enbridge to appoint one director of EIFH for so long as Enbridge and its affiliates hold or control, directly or indirectly, between 15% and 39% of the issued and outstanding EIFH Shares, provided that Enbridge will not exercise the votes attaching to the portion of EIFH Shares held by Enbridge representing its pro-rata representation on the EIFH Board in respect of the election of the remaining directors of EIFH at meetings of EIFH Shareholders; Eligible Unitholder means a beneficial holder of Units that is not a Non-Resident Unitholder or a Tax- Exempt Unitholder immediately before the Effective Time; EMSI means Enbridge Management Services Inc., a corporation incorporated under the laws of Canada; Enbridge means Enbridge Inc., a corporation continued under the laws of Canada; ESOSI means Enbridge (Saskatchewan) Operating Services Inc., an affiliate of the Administrator; Exchange Right means the right of the holder of ECT Preferred Units to exchange, at its option, such ECT Preferred Units for Units on a one-for-one basis, subject to adjustment in respect of anti-dilution and economic equivalence; Exchange Right Support Agreement means the agreement to be entered into among EIFH, the Fund, Enbridge and EMSI with respect to the Exchange Right; Exchanging Unitholders means the Public Unitholders and Enbridge in respect of 5,000,000 Units; Final Order means the final order of the Court approving the Arrangement pursuant to section 193(9) of the ABCA, as such order may be affirmed, amended or modified at any time prior to the Effective Time or, if appealed, then unless such appeal is withdrawn or denied, as affirmed or as amended on appeal; Financial Advisor means CIBC World Markets Inc.; Fund means Enbridge Income Fund, a trust established pursuant to the Fund Trust Indenture; Fund AIF means the annual information form of the Fund dated February 1, 2010 for the year ended December 31, 2009; Fund Delegation Agreement means the fund delegation agreement, dated June 30, 2003, among the Fund, the Fund Trustee and ECT pursuant to which the Fund Trustee delegated certain of its powers and duties to ECT; Fund MD&A means the management s discussion and analysis of the financial condition and results of operations of the Fund for the year ended December 31, 2009; Fund Trust Indenture means the trust indenture pursuant to which the Fund was established, made as of May 22, 2003, as amended and restated as of June 30, 2003, August 18, 2003 and May 1, 2006; Fund Trustee means CIBC Mellon Trust Company; IFRS means International Financial Reporting Standards; Independent ECT Trustee means an ECT Trustee who is independent (as such term is defined in National Instrument of the Canadian Securities Administrators) of the Administrator and any of its affiliates; 7

12 Independent ECT Trustees Approval Requirement means the requirement that the approval of a majority of the Independent ECT Trustees will be required in the following circumstances: (a) (b) (c) the disposition of any material assets or equipment which are used in operating the Business, other than in the ordinary course of business; for so long as EIFH owns 20% or more of the Units, a Significant Transaction; and the approval of, amendment to or any material deviation from the current distribution policy of the Fund; Interim Order means the interim order of the Court concerning the Arrangement under section 193(4) of the ABCA containing declarations and directions with respect to the Arrangement and the holding of the Meeting, as such order may be affirmed, amended or modified by the Court; Liquidity Right means the right of the holder of ECT Preferred Units, exercisable at any time, to request ECT to purchase for cancellation all or a portion of the ECT Preferred Units in accordance with the terms and conditions set forth in the ECT Trust Indenture; Management Agreement means the management agreement between ECT and the Administrator dated June 27, 2003 and amended as of May 1, 2006, pursuant to which the Administrator provides management services to ECT; Manager Trustees means the three ECT Trustees appointed by the Administrator; Meeting means the annual and special meeting of Unitholders to be held on May 3, 2010 to consider, among other things, the Arrangement and related matters, and any adjournments thereof; MI means Multilateral Instrument Protection of Minority Security Holders in Special Transactions; Non-Resident means (i) a person who is not a resident of Canada, and not deemed to be resident in Canada for the purposes of the Tax Act, or (ii) a partnership that is not a Canadian partnership within the meaning of the Tax Act; Non-Resident Unitholder means a beneficial holder of Units that is a Non-Resident; Notice of Meeting means the notice regarding the Meeting accompanying this Circular; Plan of Arrangement means the plan of arrangement attached as Schedule A to the Arrangement Agreement, as amended, modified or supplemented from time to time in accordance with the terms thereof; Pre-emptive Right means, in the event of a determination by the ECT Board to issue additional Units, the right granted to each of Enbridge and EIFH to acquire that number of Units that is proportional to their respective pre-issuance economic interest in the Fund, inclusive of any ECT Preferred Units in the case of Enbridge; Public Unitholders means Unitholders other than Enbridge; Registrar means the Registrar of Corporations duly appointed under the ABCA; related parties has the meaning ascribed to such term in MI ; ROFR means the right granted to each of Enbridge and EIFH to acquire from the other Units proposed to be sold pursuant to a bona fide offer to purchase, except such right shall not apply in the event of a transfer by Enbridge or EIFH of some or all Units to an affiliate; 8

13 SIFT means a specified investment flow through trust or partnership, as defined in the Tax Act; SIFT Rules means the legislative provisions governing the taxation of SIFT trusts and SIFT partnerships and their unitholders or partners, which were announced by the Minister of Finance (Canada) on October 31, 2006 and which were enacted on June 22, 2007, pursuant to Bill C-52; Significant Transaction means (i) an amendment to the Fund Trust Indenture other than as otherwise permitted in section 9.2 of the Fund Trust Indenture; (ii) the sale, lease or exchange of all or substantially all of the property of the Fund, other than (a) in the ordinary course of business, (b) in specie redemptions permitted under the Fund Trust Indenture, or (c) in order to acquire ECT Units (as defined in the Fund Trust Indenture) and ECT Notes (as defined in the Fund Trust Indenture) in connection with pursuing the purposes of the Fund; (iii) the termination, liquidation or winding up of the Fund, other than otherwise permitted in the Fund Trust Indenture; or (iv) a combination, merger or similar transaction involving the Fund and any other person that is not an affiliate (as defined in the Fund Trust Indenture) or associate (as defined in the Fund Trust Indenture) of the Fund if, following such transaction, the holders (or affiliates thereof) of equity interests in such other person (such holders being determined immediately prior to the entering into of such transaction) hold, directly or indirectly, more than 50% of the outstanding voting rights attributable to securities of the entity which results from such combination, merger or other transaction; Special Committee means the special committee of Independent ECT Trustees formed in connection with the proposal of the Administrator; Subsequent Mailing has the meaning ascribed under the heading Arrangement Certain Canadian Federal Income Tax Considerations Holders Resident in Canada Participation in the Arrangement ; Subsidiary has the meaning ascribed to such term in the ABCA, with such modifications as necessary so that the definition applies in the event the person is not a corporation and, for greater certainty, includes any limited partnership, joint venture, trust, limited liability company, unlimited liability company or other entity, whether or not having legal status, that would constitute a subsidiary if such entity were a corporation; Tag-Along Rights means, in the event of a third party offer for not less than 90% of Enbridge s combined interest in the Units, ECT Preferred Units and EIFH Shares, the obligation of the third party to extend the offer to the EIFH Shares held by the public on economically equivalent terms and conditions; Tax Act means the Income Tax Act, R.S.C. 1985, C.1 (5th Supp), as amended, including the regulations promulgated thereunder, as amended from time to time; Tax Election has the meaning ascribed under the heading Arrangement Certain Canadian Federal Income Tax Considerations Holders Resident in Canada Participation in the Arrangement ; Tax-Exempt Unitholder means a beneficial holder of Units that is exempt from tax under Part I of the Tax Act; TSX means the Toronto Stock Exchange; Unit means a unit designated by the Fund Trust Indenture as an ordinary unit of the Fund; Unitholder Rights Plan means the unitholder rights plan pursuant to the unitholder rights plan agreement dated June 30, 2003 between the Fund and CIBC Mellon Trust Company, as rights agent; Unitholders means holders from time to time of Units; Unitholders Agreement means the agreement to be entered into among EIFH, the Fund, Enbridge and EMSI to provide for the Tag-Along Rights and the ROFR; U.S. Exchange Act means the United States Securities Exchange Act of 1934, as amended; and 9

14 U.S. Securities Act means the United States Securities Act of 1933, as amended. 10

15 QUESTIONS AND ANSWERS SPECIAL MATTERS TO BE ACTED UPON AT THE MEETING Why am I receiving this information? In addition to the usual annual matters to be acted upon at the Meeting, the Circular provides a detailed description of certain special matters to be acted upon at the Meeting that will require Unitholders to vote on special resolutions. These special matters are described under the heading Special Matters to be Acted Upon at the Meeting beginning on page 25 of the Circular and include the Arrangement, as well as certain changes to the Fund s organizing documents relating to governance and ownership of the Fund and other changes that are proposed to deal with upcoming accounting rule changes that are unrelated to the Arrangement. Please give this material your careful consideration and if you require assistance, consult your financial or other professional advisors. How can I vote? Please ensure that you register your vote by following the instructions under the headings Voting of Units, Appointment of Proxies and Revocation of Proxies beginning on page 17 of the Circular and on your voting instruction form or proxy form. Voting is quick and easy and your vote is important. THE ARRANGEMENT What are the specifics of the Arrangement on which I am being asked to vote? More complete details can be found under the heading Special Matters to be Acted Upon at the Meeting Arrangement beginning on page 27 of the Circular, but the key elements of the Arrangement are as follows: 1. All Units held by the Public Unitholders, and 5,000,000 Units held by Enbridge, will be exchanged automatically, on a one-for-one basis, for shares in a new TSX-listed corporation called Enbridge Income Fund Holdings Inc. As a result, the Public Unitholders will hold approximately 80% of the issued and outstanding EIFH Shares and Enbridge will hold the remaining approximately 20% of the issued and outstanding EIFH Shares. In turn, EIFH will hold approximately 73% of the issued and outstanding Units and Enbridge will hold the remaining approximately 27% of the issued and outstanding Units. 2. After the Arrangement, Enbridge will have the right to appoint one director of EIFH for so long as Enbridge holds between 15% and 39% of the issued and outstanding EIFH Shares provided that Enbridge will not exercise the votes attaching to the portion of EIFH Shares held by Enbridge representing its pro-rata representation on the EIFH Board in respect of the election of the remaining directors of EIFH at meetings of EIFH Shareholders. For greater certainty, where Enbridge holds more than 39% of the issued and outstanding EIFH Shares, while it will no longer have the right to appoint one director of EIFH, it will be entitled to exercise all of the votes attaching to the EIFH Shares held by Enbridge in respect of the election of all directors of EIFH at meetings of EIFH Shareholders. For so long as EIFH is a reporting issuer, it will have a minimum of three independent directors. Enbridge will also have the right to appoint a number of ECT Trustees roughly in proportion to its ownership of the issued and outstanding Units. Enbridge will also have the right to exchange its non-voting ECT Preferred Units for Units of the Fund on a one-for-one basis, subject to adjustment in respect of anti-dilution and economic equivalence. For details, see Special Matters to be Acted Upon at the Meeting Arrangement Amended Governance and Ownership Arrangements Appointment of EIFH Director by Enbridge, Appointment of ECT Trustees and Changes to Rights of ECT Preferred Unitholders beginning on page 33 of the Circular. 3. EIFH and Enbridge will each have a pre-emptive right to subscribe for new Units issued by the Fund, in proportion to their respective ownership interests prior to the issuance, including, in the case of Enbridge, its ownership interest held through the ECT Preferred Units. EIFH and Enbridge will also each have a right of first refusal on any Units proposed to be sold by the other, except in the case of transfers to their respective affiliates. For details, see Special Matters to be Acted Upon at the 11

16 Meeting Arrangement Amended Governance and Ownership Arrangements Pre-Emptive Right to Acquire Units and Right of First Refusal on Sale of Units on page 34 of the Circular. 4. EIFH Shareholders will have the right to be included, on an economically equivalent basis, in any proposed transaction under which Enbridge would effectively sell its interest in EIFH, the Fund and ECT. For details, see Special Matters to be Acted Upon at the Meeting Arrangement Amended Governance and Ownership Arrangements Actions Affecting the Fund on page 34 of the Circular. 5. For an overview of certain risks relating to the Arrangement, please refer to Special Matters to be Acted Upon at the Meeting Arrangement Risk Factors Relating to the Arrangement and Appendix H Information Concerning EIFH Risk Factors on pages 55 and H-9, respectively, of the Circular. Is the business or strategy of the Fund changing? No, the Fund s core business and strategy will remain consistent with its current value proposition of combining a high and dependable payout of cash flow from low-risk energy infrastructure with the opportunity for growth in the payout through development and acquisition of additional assets with a similar risk profile. What are the rationale for and benefits of the Arrangement? The Arrangement is a response to the changes affecting both the Fund and the income trust sector generally, as a result of the Canadian federal government s new tax on distributions made by publicly traded income trusts and partnerships that are scheduled to take effect in Given the impact of the tax rule change, the ECT Trustees and the Administrator believe that the Arrangement as proposed will allow the Fund to more effectively sustain its high payout of reliable cash flow while at the same time ensuring the ongoing financial flexibility and access to capital necessary to pursue attractive growth opportunities. For details, see Special Matters to be Acted Upon at the Meeting Arrangement Background to and Reasons for the Arrangement, Strategic Review, Special Committee, Partial Conversion to a Corporation, Arrangement Fairness Opinion and Approval and Recommendation of the Special Committee and the ECT Board beginning on page 27 of the Circular. How can I determine whether or not the Arrangement is fair to me as a Unitholder? The Arrangement is subject to Multilateral Instrument Protection of Minority Security Holders in Special Transactions. The Special Committee of Independent ECT Trustees, all of whom are independent of Enbridge, was formed to review, consider and negotiate the terms of the proposal of the Administrator. The Special Committee engaged its own legal counsel and tax advisor, Macleod Dixon LLP, and financial advisor, CIBC World Markets. The Financial Advisor has provided a fairness opinion that, as at March 29, 2010 and subject to the assumptions, explanations and limitations contained therein, the consideration to be received by the Public Unitholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Public Unitholders. The fairness opinion is described more fully under the heading Special Matters to be Acted Upon at the Meeting Arrangement Arrangement Fairness Opinion on page 30 of the Circular and a copy of it can be found in Appendix F to the Circular. On March 29, 2010, the Special Committee unanimously determined (with one member absent): (a) that the proposed Arrangement is fair to Public Unitholders (all Unitholders other than Enbridge); (b) that the proposed Arrangement is in the best interests of the Fund and the Public Unitholders; and (c) to recommend that Unitholders vote in favour of the Arrangement Resolution. The ECT Board met immediately after the Special Committee meeting on March 29, 2010 and reiterated the determinations and recommendations made by the Special Committee. How will this affect distributions I currently receive? Once the Arrangement has been completed, EIFH s dividends will constitute taxable dividends paid by a taxable Canadian corporation for Canadian income tax purposes. EIFH will designate such taxable dividends as eligible dividends for purposes of the enhanced gross-up and dividend tax credit rules in the Tax Act to the extent permitted by the Tax Act. The general tax considerations for Canadian and United States holders 12

17 of EIFH Shares are discussed under the headings Special Matters to be Acted Upon at the Meeting Arrangement Certain Canadian Federal Income Tax Considerations and Certain United States Federal Income Tax Considerations beginning on page 43 of the Circular. Upon completion of the Arrangement, it is expected that the Fund will continue its policy of paying out a high proportion of its distributable cash flow to its unitholders and that EIFH will adopt a similar policy of paying out a high proportion of its available cash in the form of quarterly dividends to its shareholders. The adoption of a quarterly dividend payment cycle will enable more effective management of working capital within the Fund and will align EIFH s dividend payout practice with that of many of its corporate energy infrastructure peers. It is expected that following completion of the Arrangement, EIFH will initially pay an annualized dividend of approximately $1.15 per EIFH Share, the same amount as the annualized distribution currently paid by the Fund on the Units. The Administrator expects that the first dividend will be paid in mid-january to EIFH Shareholders of record on December 31, 2010 and subsequent dividends paid on a quarterly basis. For details, see Special Matters to be Acted Upon at the Meeting Arrangement Effect of the Arrangement on Distributions on page 32 of the Circular. What Unitholder approval is required for the Arrangement? The Arrangement is required to be approved by both at least (a) 66⅔% of all of the votes represented by all Unitholders attending the meeting in person or by proxy, and (b) a simple majority of the votes represented by the Fund s Public Unitholders attending the meeting in person or by proxy, excluding the votes attached to Units controlled by Enbridge and any related party of Enbridge. This two-stage voting process is required to ensure that the Public Unitholders have the opportunity to approve or disapprove the Arrangement independent of Enbridge and its related parties. See Special Matters to be Acted Upon at the Meeting Arrangement Outstanding Units and Required Vote on page 31 of the Circular. No dissent rights will be granted in connection with the Arrangement as such rights are not required by the Fund Trust Indenture or the Interim Order. See Arrangement Approvals Dissent Rights on page 39 of the Circular. Why may Canadian residents wish to file Tax Elections to obtain a tax deferral? Subject to an Eligible Unitholder making a valid Tax Election with EIFH, the exchange of Units for EIFH Shares pursuant to the Arrangement is a taxable transaction under the Tax Act. Accordingly, to the extent that the fair market value of the EIFH Shares received pursuant to the Arrangement exceeds the adjusted cost base of the Units to a taxable Unitholder, such Unitholder may be subject to tax in Canada in respect of such inherent gain. If such a Unitholder that is an Eligible Unitholder wishes to obtain a full or partial tax deferral, a Tax Election must be completed in respect of the Units that are exchanged for EIFH Shares pursuant to the Arrangement. The Tax Election materials will be mailed to Unitholders in the Subsequent Mailing as soon as practicable on or about the Effective Date. Further information regarding the Tax Election will be made available on the Fund s website at The Fund has advised that EIFH will not execute or file Tax Elections that are received by EIFH after February 28, 2011, and that EIFH intends to forward to the CRA and applicable provincial or territorial taxation authorities all properly completed elections received by February 28, 2011 on or before March 31, It is recommended that all Eligible Unitholders who wish to enter into one or more Tax Elections give their immediate attention to this matter and consult the instructions in the Subsequent Mailing immediately upon the receipt thereof and/or consult the website for additional information. Eligible Unitholders are urged to consult their own tax advisors with respect to the advisability of making the Tax Election, including in connection with computing the adjusted cost base of their Units and determining the Elected Amount (as defined herein). See Certain Canadian Federal Income Tax Considerations Holders Resident in Canada - Participation in the Arrangement on page 44 of the Circular. 13

18 THE FUND TRUST INDENTURE AMENDMENTS FOR IFRS Why am I being asked to approve changes to the Fund Trust Indenture? In 2011, the accounting rules governing the Fund s financial reporting will change from Canadian GAAP as it currently exists to IFRS. Absent the recommended amendments, differences between IFRS and Canadian GAAP would have the result of materially changing the way that the Units are accounted for. These changes would likely make the Fund s financial statements more difficult to interpret, which could lead to adverse capital markets consequences. The proposed amendments to the Fund Trust Indenture are intended to achieve a more consistent accounting treatment for the Units after the implementation of IFRS to permit the Fund to respond to other similar future accounting changes and to accommodate any changes to the interpretation of the changes to accounting standards over the long term. For details, see Special Matters to be Acted Upon at the Meeting Amendment to Trust Indenture Transition to IFRS beginning on page 25 of the Circular. How are these amendments going to affect the business or my distributions? The change is not expected to have any effect on how the business is managed, the expected payout and amount of distributions by the Fund or the manner in which the amount of cash distributions by the Fund are determined in the future. What Unitholder approval is required for the Fund Trust Indenture Amendments? The amendments to the Fund Trust Indenture to accommodate the adoption of IFRS are required to be approved by at least 66⅔% of all of the votes represented by all Unitholders attending the meeting in person or by proxy. 14

19 ENBRIDGE INCOME FUND INFORMATION CIRCULAR Introduction This Circular is furnished in connection with the solicitation of proxies by and on behalf of the Fund by CIBC Mellon Trust Company, as the sole trustee of the Fund, pursuant to the Fund Trust Indenture, and by the Administrator, for use at the Meeting and any adjournment thereof. No person has been authorized to give any information or make any representation in connection with the Arrangement or any other matters to be considered at the Meeting other than those statements and representations contained in this Circular. All capitalized terms used in this Circular and not otherwise defined have the meanings set forth under Glossary of Terms beginning on page 5 of this Circular. Information in this Circular is given as of March 31, 2010 unless otherwise stated. Forward-Looking Statements In the interest of providing Unitholders and potential investors with information about the Fund and its subsidiaries, including management s assessment of the Fund s and its subsidiaries future plans and operations, certain information provided in this Circular constitutes forward looking statements or information (collectively, forward looking statements ). This information may not be appropriate for other purposes. Forward looking statements are typically identified by words such as anticipate, expect, project, estimate, forecast, plan, intend, target, believe and similar words suggesting future outcomes or statements regarding an outlook. In particular, forward looking information and statements in this Circular and the documents incorporated by reference herein include but are not limited to: expectations regarding the Arrangement; the satisfaction of conditions in respect of the Arrangement; the receipt and timing of the Final Order and regulatory approvals; the effect, outcome, results and perceived benefits of the Arrangement; and dividends to be paid by EIFH following the completion of the Arrangement; expected scope and in service dates for projects under construction; expected timing and amount of recovery of capital costs of assets; expected future actions of regulators; expected future corporate restructuring; expected cash available for distribution; and expected future distributions to Unitholders and taxability thereof. Although the Fund believes that these forward looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about: the timely receipt of required regulatory approvals; the expected supply and demand for crude oil, natural gas and natural gas liquids; prices of crude oil, natural gas and natural gas liquids; expected exchange rates; inflation; interest rates; the availability and price of labour and pipeline construction materials; operational reliability; customer project approvals; maintenance of support and regulatory approvals for the Fund s projects; and anticipated in service dates and weather. Assumptions regarding the expected supply and demand of crude oil, natural gas and natural gas liquids, and the prices of these commodities, are material to and underlay all forward looking statements. These factors are relevant to 15

20 all forward looking statements as they may impact current and future levels of demand for the Fund s services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Fund operates, may impact levels of demand for the Fund s services and cost of inputs, and are therefore inherent in all forward looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward looking statement cannot be determined with certainty, particularly with respect to expected earnings and associated per Unit amounts, or estimated future distributions. The most relevant assumptions associated with forward looking statements on projects under construction, including estimated in service dates, and expected capital expenditures include: the availability and price of labour and pipeline construction materials; the effects of inflation on labour and material costs; the effects of interest rates on borrowing costs; and the impact of weather and customer and regulatory approvals on construction schedules. The Fund s forward looking statements are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic and competitive conditions, exchange rates, interest rates and commodity prices, including but not limited to those risks and uncertainties discussed in this Circular and in the Fund s other filings with Canadian securities regulators. The impact of any one risk, uncertainty or factor on a particular forward looking statement is not determinable with certainty as these are interdependent and the Fund s future course of action depends on management s assessment of all information available at the relevant time. Except to the extent required by law, the Fund assumes no obligation to publicly update or revise any forward looking statements made in this Circular or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward looking statements, whether written or oral, attributable to the Fund or persons acting on the Fund s behalf, are expressly qualified in their entirety by these cautionary statements. Notice to U.S. Unitholders The EIFH Shares to be issued to Unitholders in exchange for Units under the Arrangement have not been and will not be registered under the U.S. Securities Act, and such securities are being issued to Unitholders in reliance on the exemption from registration set forth in section 3(a)(10) thereof. The solicitation of proxies for the Meeting is not subject to the requirements of section 14(a) of the U.S. Exchange Act. Accordingly, the solicitations and the Arrangement contemplated in this Circular are made in the United States for securities of a Canadian issuer in accordance with Canadian corporate and securities laws and the Circular has been prepared solely in accordance with disclosure requirements applicable in Canada. Unitholders in the United States should be aware that such requirements are different from those of the United States applicable to registration statements under the U.S. Securities Act and proxy statements under the U.S. Exchange Act. Financial statements included or incorporated by reference in this Circular have been prepared in accordance with Canadian generally accepted accounting principles and are subject to Canadian auditing and auditor independence standards. Consequently, such financial statements are not comparable in all respects to financial statements prepared in accordance with U.S. generally accepted accounting principles and that are subject to United States auditing and auditor independence standards. The enforcement of civil liabilities under United States securities laws may be affected adversely by the fact that the Fund and EIFH are or will be organized or incorporated outside the United States, that some of their respective officers, directors and trustees are residents of countries other than the United States, and that all or a substantial portion of the assets of the Fund are located outside the United States. Under the rules of the U.S. Securities and Exchange Commission, the U.S. Securities Act imposes restrictions on the resale of securities received pursuant to the Arrangement by Persons who were affiliates of EIFH within 90 days before the Effective Date or who are affiliates" of EIFH after the Arrangement. See The Arrangement Securities Law Matters United States. SOLICITATION OF PROXIES Solicitation of proxies for the Meeting will be primarily by mail, but may also be undertaken by way of telephone, facsimile or oral communication by the Fund Trustee and by officers of the Administrator. The cost of such solicitation will be borne by the Administrator and reimbursed by the Fund. 16

21 The Administrator has fixed March 16, 2010 as the record date for determining those Unitholders entitled to receive the Notice of Meeting and to vote at the Meeting. General VOTING OF UNITS On a show of hands, every Unitholder present in person or represented by proxy (and entitled to vote) has one vote. On a poll or ballot, every Unitholder present in person or by proxy has one vote for each Unit held. On any ballot that may be called for, the persons designated in the enclosed form of proxy will vote for, withhold from voting or vote against a resolution in respect of the Units for which they are appointed by proxy, in accordance with the instructions of the Unitholder indicated on the proxy. In the absence of instructions with respect to a particular resolution, the Units will be voted FOR the resolution as indicated under the appropriate headings in this Circular. The form of proxy prepared and distributed by or on behalf of the Fund confers discretionary authority with respect to amendments of or variations to the matters identified in the Notice of Meeting and other matters that may properly come before the Meeting. At the date of this Circular, neither the Fund Trustee nor the Administrator is aware of any amendments of, variations to, or other matters to come before the Meeting in addition to, those matters identified and summarized in the Notice of Meeting. Voting by Beneficial Unitholders As a result of the Fund s registration system, all Units held by Public Unitholders are registered under the name of CDS & Co. CDS & Co. is an entity that acts as a clearing agent for intermediaries (each an Intermediary ), which include institutions or other market participants such as banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered registered retirement savings plans, registered retirement income funds, registered education savings plans and similar plans. Units held by Intermediaries can only be voted (for a resolution, or to withhold from voting on a resolution) upon the instructions of the Beneficial Unitholder. The Fund does not normally know the identity of the Beneficial Unitholder, for whose benefit the Units registered in the name of CDS & Co. are held. In accordance with the requirements of National Instrument of the Canadian Securities Administrators, the Fund has distributed the Notice of Meeting, the Circular and the form of proxy, (collectively, the Meeting Materials ) and the Fund s annual report, which includes management s discussion and analysis and the audited consolidated financial statements for the year ended December 31, 2009, (collectively the Financial Materials ) to CDS & Co. and the Intermediaries for distribution to Beneficial Unitholders. Intermediaries are required to forward the Meeting Materials and Financial Materials to Beneficial Unitholders unless a Beneficial Unitholder has waived the right to receive them. Often, Intermediaries will use service companies to forward these materials to Beneficial Unitholders. Generally, Beneficial Unitholders who have not waived the right to receive Meeting Materials will be given either: (a) (b) a voting instruction form ( Voting Instruction Form ) which must be completed and signed by the Beneficial Unitholder in accordance with the directions on the Voting Instruction Form and returned to the Intermediary (or its agent). In some cases, Beneficial Unitholders may complete the Voting Instruction Form by telephone, the internet, or fax; or a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of Units beneficially owned by the Beneficial Unitholder but which is otherwise not completed. This form of proxy need not be signed by the Beneficial Unitholder. In this case, the Beneficial Unitholder who wishes to submit a proxy should otherwise properly complete the form of proxy and deliver it to the Fund or its transfer agent as set out in the Notice of the Meeting. 17

22 The purpose of these procedures is to permit Beneficial Unitholders to direct the voting of the Units that they beneficially own. A Beneficial Unitholder receiving a Voting Instruction Form cannot use that Voting Instruction Form to vote Units directly at the Meeting, as the Voting Instruction Form must be returned as directed by the Intermediary (or its agent) well in advance of the Meeting in order to have the Units voted. Although Beneficial Unitholders may not be recognized directly at the Meeting for the purposes of voting Units registered in the name of CDS & Co., a Beneficial Unitholder may attend the Meeting as proxyholder for the registered Unitholder and vote their Units in that capacity. Beneficial Unitholders who wish to attend the Meeting and indirectly vote their own Units as proxyholder for the registered Unitholder should enter their own names in the blank space on the form of proxy or Voting Instruction Form provided to them and return the properly completed proxy or Voting Instruction Form to their Intermediary (or agent) well in advance of the Meeting, in accordance with the instructions provided by such Intermediary (or agent). Beneficial Unitholders who receive Voting Instruction Forms, forms of proxies or other voting materials from an Intermediary (or its agent) should complete and return such form of proxies or voting materials in accordance with the instructions on such materials, including those instructions regarding when and where the proxy or proxy authorization form is to be delivered, in order to properly vote their Units at the Meeting. APPOINTMENT OF PROXIES To be effective, proxies must be deposited with the Fund, c/o CIBC Mellon, P.O. Box 721, Agincourt, Ontario, M1S 0A1, Attention: Proxy Department, not later than 4:00 p.m. (Toronto time) on April 29, 2010, or, if the Meeting is adjourned, not later than 24 hours, excluding Saturdays, Sundays and statutory holidays in the Province of Ontario, prior to the time of any adjournment thereof. The persons named as proxyholders in the enclosed form of proxy are a trustee of ECT and the President of the Administrator. A Beneficial Unitholder who wishes to appoint some other person as his or her representative at the Meeting should strike out the names of the designated proxyholders in the form of proxy, enter his or her own name in the blank space on the form of proxy or Voting Instruction Form provided to them and return the properly completed proxy or Voting Instruction Form to their Intermediary (or its agent) well in advance of the Meeting in accordance with the instructions provided by such Intermediary (or agent). REVOCATION OF PROXIES A Unitholder who has given a proxy has the power to revoke it before the proxy is exercised. A Unitholder may revoke the proxy with an instrument in writing, including another proxy, signed and delivered to the Fund Trustee as provided above under the heading Appointment of Proxies. The document used to revoke a proxy must be in writing and completed and signed by the Unitholder or his or her attorney authorized in writing or, if the Unitholder is a corporation, under its corporate seal or by an officer or duly authorized attorney thereof. A Unitholder may also revoke a proxy in any other manner permitted by law, prior to the exercise of such proxy on any particular matter. A Beneficial Unitholder who wishes to revoke a proxy should follow any revocation instructions set forth on the form of proxy or Voting Instruction Form provided to them by their Intermediary (or its agent). EXERCISE OF DISCRETION WITH RESPECT TO PROXIES The Units represented by the Fund s form of proxy or Voting Instruction Form will be voted for, voted against, or withheld from voting on, any motion, by ballot or otherwise, in accordance with any indicated instructions. In the absence of such direction, such Units will be voted FOR the resolutions referred to in items 1, 2, 3, 4, 5 and 6 of the proxy or Voting Instruction Form. If any amendment of or variation to the matters identified in the Notice of Meeting is proposed at the Meeting or any adjournment thereof, or if any other matters properly come before the Meeting or any adjournment thereof, the enclosed proxy or Voting Instruction Form confers discretionary authority to vote on such amendments or variations or such other 18

23 matters according to the best judgment of the appointed proxyholder. As at the date of this Circular, neither the Fund Trustee nor the Administrator is aware of any amendments or variations to, or other matters to come before the Meeting in addition to those matters identified and summarized in the Notice of Meeting. PRINCIPAL HOLDERS OF UNITS AND RECORD DATE The only registered Unitholders of the Fund are CDS & Co. and Enbridge. To the best of the knowledge of the officers of the Administrator, no person beneficially owns or exercises control or direction over Units which carry more than 10% of the voting rights attached to all Units other than Enbridge, which owns 14,500,000 Units, representing approximately 41.9% of the votes attaching to all of the Units. Unitholders of record as of the close of business on March 16, 2010 are entitled to receive notice of and vote at the Meeting. As of the close of business on March 31, 2010, there were a total of 34,625,000 Units issued and outstanding. No person who becomes a Unitholder after March 16, 2010 will be entitled to vote at the Meeting or any adjournment thereof. Receipt of Financial Statements ANNUAL MATTERS TO BE ACTED UPON AT THE MEETING The audited consolidated financial statements of the Fund for the year ended December 31, 2009 (the Financial Statements ) will be presented at the Meeting. Appointment of Auditors of the Fund PricewaterhouseCoopers LLP, Chartered Accountants ( PwC ), have been acting as auditors of the Fund since its inception. The ECT Board, with the advice of the Audit Committee of the ECT Board, recommends the re-appointment of PwC as auditors of the Fund. The persons named in the enclosed form of proxy or Voting Instruction Form intend to vote FOR the resolution appointing PwC as auditors of the Fund to hold office until the next annual meeting of Unitholders or until their successors are appointed, and authorizing the ECT Trustees to fix the remuneration of the auditors, unless the Unitholder who has given the proxy has directed that the Units represented thereby be withheld from voting in respect of the appointment of auditors of the Fund. Additional information relating to the Audit Committee and remuneration of PwC is contained in the Fund AIF, under the heading Fund Trustees, Audit Committee and Management External Auditor Service Fees. The Fund AIF is filed on SEDAR at and a copy of the Fund AIF is also posted on the Fund s website, under the heading Investor Relations Reports & Filings. Election of Independent ECT Trustees Directions to the Fund Trustee The Fund is the only holder of ECT Units. Under the Fund Trust Indenture, Unitholders must, by way of an ordinary resolution passed by the affirmative votes of the holders of more than 50% of the votes cast by Unitholders, direct and instruct the Fund Trustee as to the manner in which the Fund Trustee shall vote the ECT Units to elect Independent ECT Trustees. The ECT Trust Indenture provides that there will be not less than five, nor more than 15, ECT Trustees. The ECT Board may establish the number of ECT Trustees by resolution and has passed a resolution fixing the number of ECT Trustees at eight. The term of office of each ECT Trustee continues until the next annual meeting of holders of ECT Units or (if an election or appointment of ECT Trustees is not held at such meeting or if such meeting does not occur) the time at which his or her successor is elected or appointed, or earlier if an ECT Trustee otherwise resigns, dies or is removed or disqualified pursuant to the terms of the ECT Trust Indenture. 19

24 During the term of the Management Agreement, the Administrator is entitled to appoint that number of ECT Trustees equal to, in the case where the total number of ECT Trustees is an even number, one half of that total number less one and, in all other cases, one half of that total number rounded down to the nearest whole number. As a result, three of the eight ECT Trustees to serve after the Meeting will be appointed by the Administrator. The Administrator is also entitled to propose the nominees for the election of the remaining five ECT Trustees, who must be Independent ECT Trustees. At least three of the ECT Trustees must be Independent ECT Trustees as long as the Fund (and, following the Effective Time of the Arrangement, EIFH) is a reporting issuer (or equivalent) in any jurisdiction in Canada. Pursuant to the ECT Trust Indenture, the current Independent ECT Trustees must approve the Independent ECT Trustees proposed for election by the Administrator and the Independent ECT Trustees proposed for election herein have been so approved. Independent ECT Trustees Proposed for Election The persons named in the enclosed form of proxy or Voting Instruction Form intend to vote FOR the resolution directing and instructing the Fund Trustee, as the holder of ECT Units, to vote for the election of the five proposed nominees who are independent of the Administrator and whose names are set out below, as Independent ECT Trustees, unless the Unitholder who has given such proxy has directed that the Units represented thereby be withheld from voting on this matter. The Fund Trustee and the Administrator do not contemplate that any of the proposed nominees will be unable to serve as Independent ECT Trustees but, if that should occur for any reason prior to the Meeting, the persons named in the enclosed form of proxy or Voting Instruction Form reserve the right to vote for another nominee in their discretion. The five nominees proposed for election as Independent ECT Trustees are listed in the table below. All Independent ECT Trustee nominees are presently ECT Trustees. Units Beneficially Owned or Controlled (1) Current Public Board Memberships (2) Nominee for Election as Independent ECT Trustee Company RICHARD H. AUCHINLECK Calgary, Alberta Trustee Since: 2003 Age: 58 10,000 10,000 ConocoPhillips (integrated energy) Attendance: Board 6/6 (in 2009) Audit Committee 4/4 Independent Committee (3) 1/1 Special Committee (4) 2/2 TELUS Corporation (telecom) Term on Board 2001-present 2003-present Committee/ Chair Presiding Director Director Affairs (Chair) Executive Committee Corporate Governance (Chair) Pension Mr. Auchinleck is a member of the Audit Committee of the ECT Board. He has been a professional corporate director since 2001, when he retired as President and Chief Executive Officer of Gulf Canada after a 25-year career with Gulf. In addition to his current board memberships, Mr. Auchinleck has also served in the past five years on the board of Red Mile Entertainment, Inc. Mr. Auchinleck holds a Bachelor of Applied Science degree in Chemical Engineering from the University of British Columbia. 20

25 Units Beneficially Owned or Controlled (1) Current Public Board Memberships (2) Nominee for Election as Independent ECT Trustee Company CATHERINE M. (KAY) BEST Calgary, Alberta Trustee Since: June, 2006 Age: 56 Attendance: Board 6/6 (in 2009) Audit Committee 4/4 Independent Committee (3) 1/1 Special Committee (4) 2/2-8,000 Canadian Natural Resources Limited (oil & gas) Superior Plus Income Fund (diversified business trust) Term on Board 2003-present 2007-present Committee/ Chair Audit (Chair) Compensation Health, Safety & Environment Audit Ms. Best is a professional corporate director and is the Chair of the Audit Committee of the ECT Board. Ms. Best was the Executive Vice-President, Risk Management and Chief Financial Officer of the Calgary Health Region from 2000 until March 2009, responsible for all finance functions. She is a Chartered Accountant and a Fellow of the Chartered Accountants as awarded by the Institute of Chartered Accountants of Alberta. Before joining the Calgary Health Region, Ms. Best worked with Ernst & Young in Calgary for 19 years, the last 10 as Corporate Audit Partner. Ms. Best is also a graduate of the Directors Education Program, Corporate Governance College of the Institute of Corporate Directors. J. LORNE BRAITHWAITE Thornhill, Ontario Trustee Since: 2003 Age: 68 9,309 10,237 Enbridge (energy transportation & distribution) 1989-present Corporate Social Responsibility Human Resources & Compensation Jannock Properties Limited (real estate development) 2000-present Audit Compensation Corporate Governance Attendance: Board 5/6 (in 2009) Mr. Braithwaite is President and CEO of Build Toronto, an organization established by the City of Toronto to engage private and public sector partners in the development of underutilized City of Toronto real estate, a position he has held since April He has also been a professional corporate director since he retired from Cambridge Shopping Centres Limited in 2001, after 23 years as its President and Chief Executive Officer. In addition to the public board memberships noted above, Mr. Braithwaite is also a director of Bata Shoe Corporation (Chair, Audit Committee and member, Compensation Committee), Enbridge Gas Distribution Inc. (member, Audit Committee) and Northern Group Retail Ltd., and is Chairman of the Investment Advisory Committee of the Board for the Canada Post Pension Plan. Mr. Braithwaite holds a Masters of Business Administration from the University of Western Ontario. 21

26 Units Beneficially Owned or Controlled (1) Current Public Board Memberships (2) Nominee for Election as Independent ECT Trustee Company M. ELIZABETH CANNON Calgary, Alberta Trustee Since: 2003 Age: 47 Attendance: Board 5/6 (in 2009) Independent Committee (3) 0/1 Special Committee (4) 2/2 Term on Board Committee/ Chair 10,000 10, Dr. Cannon has been selected as the next President of the University of Calgary to be effective July 1, Dr. Cannon is currently Dean of the Schulich School of Engineering at the University of Calgary and was appointed to that position in July 2006 after over 15 years within the faculty, the last 10 as a Professor of Geomatics Engineering. From 2002 to 2003, Dr. Cannon was also a Special Advisor to the President, University of Calgary where she worked with the President, the Provost and other university leaders to provide advice on the University s academic plan. Dr. Cannon holds a Ph.D., Master of Sciences and Bachelor of Sciences in Geomatics Engineering from the University of Calgary, and a Bachelor of Sciences in Mathematics from Acadia University. GORDON G. TALLMAN Calgary, Alberta Trustee Since: 2003 Age: 67 10, ,000 Big Rock Brewery Ltd. (5) (beverages) Oilsands Quest Inc. (oilsands exploration) PFB Corporation (building products) 2001-present 2006-present 2002-present Audit (Chair) Audit Governance (Chair) Audit Governance (Chair) Compensation & Human Resources Attendance: Board 6/6 (in 2009) Audit Committee 4/4 Independent Committee (3) 1/1 Special Committee (4) 2/2 Mr. Tallman is Chairman of the ECT Board and a member of the Audit Committee of the ECT Board. He has been a professional corporate director since 2002, when he retired as the Senior Vice President, Prairies Region, Royal Bank of Canada, after a 41-year career with the Royal Bank. Mr. Tallman is also a director of two privately held businesses, ECL Group of Companies Ltd. and Enerjet (Chair). In addition to his current public company board memberships, Mr. Tallman has also served in the past five years on the board of CV Technologies Inc. (Chair until October 31, 2008), Canadian Utilities Limited, Mount Royal College Foundation and Investment Saskatchewan Inc. Mr. Tallman is a graduate of the Directors Education Program, Corporate Governance College of the Institute of Corporate Directors. Notes: (1) The information contained in the preceding table as to Units beneficially owned or controlled is not within the knowledge of the Fund or the Administrator, has been provided by the respective nominees individually, and is effective as of March 2, 2009 and March 16, 2010, as applicable. (2) Companies identified are only those listed on a North American stock exchange and exclude ECT. (3) During 2009, the ECT Board established an Independent Committee comprised exclusively of Independent ECT Trustees, which served during May and June of 2009 to review the terms of a transaction recommended by the Administrator and involving the provision of credit facility financing to the Fund from an affiliate of the Administrator. (4) During 2009, the ECT Board established a Special Committee comprised exclusively of Independent ECT Trustees, which has served since November of 2009 to review the Arrangement described elsewhere in this Circular. (5) Big Rock Brewery Ltd. is a subsidiary of Big Rock Income Trust. 22

27 Manager Trustee Appointees Under the terms of the ECT Trust Indenture, the Administrator is entitled to appoint three Manager Trustees who, together with the Independent ECT Trustees elected at the Meeting, will comprise all of the ECT Board. The following table sets forth certain information with respect to the Manager Trustees to be re-appointed effective as of the date of the Meeting: Units Beneficially Owned or Controlled (1) Current Public Board Memberships (2) Manager Trustee Appointees Company J. RICHARD BIRD Calgary, Alberta Trustee Since: 2002 Age: ,000 (3) 110,000 (3) Bird Construction Income Fund (formerly Bird Construction Company Limited) (construction) Attendance: Board 6/6 (in 2009) Term on Board 1987-present Committee/ Chair Audit Personnel and Safety Mr. Bird has been Executive Vice President, Chief Financial Officer and Corporate Development of Enbridge since January, 2008 and has been a senior executive officer of Enbridge for over 15 years. Mr. Bird joined Enbridge in 1995 after holding senior financial and corporate development executive positions at a number of other companies. Mr. Bird is also a director of Enbridge Pipelines Inc. and Enbridge Gas Distribution Inc. Mr. Bird holds a Bachelor of Arts from the University of Manitoba, and a Masters of Business Administration and Ph.D. from the University of Toronto. Mr. Bird is also a graduate of the Advanced Management Program at the Harvard Business School. DAVID T. ROBOTTOM Calgary, Alberta Trustee Since: June, 2006 Age: Gaz Métro inc. (4) (energy distribution) 2006-present Executive Attendance: Board 6/6 (in 2009) Mr. Robottom was appointed Executive Vice President, Law of Enbridge effective January 1, 2010 and has been a senior executive officer of Enbridge since June He is responsible for the corporate legal and information technology functions of Enbridge. Immediately prior to joining Enbridge, Mr. Robottom was a senior partner with Stikeman Elliott LLP, a major Canadian law firm, from February 2004 to May Prior thereto, Mr. Robottom was a senior partner at Fraser Milner Casgrain LLP, another national Canadian law firm, and served as Chief Executive Officer of that firm from February 1999 to February Mr. Robottom holds Bachelor of Commerce (With Distinction), Master of Business Administration and Bachelor of Laws degrees and is a graduate of the Advanced Management Program at the Harvard Business School. 23

28 Manager Trustee Appointees STEPHEN J. WUORI Calgary, Alberta Trustee Since: 2003 Age: 52 Units Beneficially Owned or Controlled (1) Current Public Board Memberships (2) Company Term on Board 5,000 5,000 Enbridge Energy Company, Inc. (5) (pipeline) 2006-present Committee/ Chair Executive Attendance: Board 5/6 (in 2009) Mr. Wuori has been Executive Vice President, Liquids Pipelines of Enbridge since January, 2008 and has been a senior executive officer of Enbridge for over 11 years. Mr. Wuori is also a director of Enbridge Pipelines Inc. Mr. Wuori has over 29 years of operations and business experience at Enbridge, and holds a Bachelor of Science (Civil Engineering) from Michigan Technological University and is a graduate of the Advanced Management Program at the Harvard Business School. Notes: (1) The information contained in the preceding table as to Units beneficially owned or controlled is not within the knowledge of the Fund or the Administrator, has been provided by the respective appointees individually, and is effective as of March 2, 2009 and March 16, 2010, as applicable. (2) Companies identified are only those listed on a North American stock exchange and exclude ECT. (3) Mr. Bird is not the beneficial owner of 25,000 of these Units, which are held by Ontario Inc. Mr. Bird exercises joint control and direction over these Units. (4) Gaz Métro inc. is the general partner of Gaz Métro Limited Partnership. (5) Enbridge Energy Company, Inc. and Enbridge Energy Management, L.L.C. are the general partner and delegate of the general partner, respectively, of Enbridge Energy Partners, L.P. Interlocking Board Memberships The following table lists the ECT Trustees and proposed nominees for election or appointment as ECT Trustees who served together as directors on the boards of other corporations or entities during the financial year ended December 31, Director/Trustee Corporation/Entity (1) Enbridge Gas Distribution Inc. (2) Enbridge Pipelines Inc. (2) J.R. Bird J.L. Braithwaite S.J. Wuori Notes: (1) Companies identified are only those either listed on a North American stock exchange or having reporting issuer (or US equivalent) status and exclude ECT. (2) Although Enbridge Gas Distribution Inc. and Enbridge Pipelines Inc. are considered public corporations because they are reporting issuers in Canada, both corporations are wholly-owned subsidiaries of Enbridge and do not have any equity securities held by the public. Skills and Experience A board with a broad mix of skills is better able to oversee the range of issues that arise with a business such as the Fund s. The Administrator and the ECT Board have established an experience matrix that shows the ECT Trustees collective mix of experience in 13 categories that are important to the Fund s business. It will also inform and enhance succession planning and recruiting activities for the ECT Board, when needed. 24

29 Skill/Experience Managing to Leading Growth Experience driving strategic direction and leading growth of an organization. International Experience working in a major organization with global operations where the Fund is or could be active. CEO/Senior Officer Experience as a CEO or senior officer of a publicly listed company or major organization. Governance/Board Experience as a board member of a publicly listed company or major organization. Operations Experience in the oil and gas/energy (including pipelines) industries, and knowledge of markets, financials, operational issues, regulatory concerns and technology. Sustainable Development Understanding of the constituents of sound sustainable development practices and their relevance to corporate success. Marketing Expertise Marketing experience in the energy marketing industry combined with a strong knowledge of market participants. Investment Banking/Mergers & Acquisitions Experience in investment banking or in major mergers and acquisitions. Financial Literacy Experience in financial accounting and reporting and corporate finance, especially with respect to debt and equity markets and familiarity with internal financial controls, Canadian or US GAAP and/or IFRS. Information Technology Experience in information technology with major implementations of management systems. Health, Safety, Environment and Social Responsibility Thorough understanding of industry regulations and public policy and leading practices of workplace safety, health, the environment and social responsibility. Government Relations Experience in, or a strong understanding of, the workings of government and public policy in Canada and internationally. Emerging Sectors Experience in sectors which the Fund is developing or hopes to develop a presence, including power generation and new energy technologies. Trustees with Significant Senior Level Experience Additional Disclosure Relating To ECT Trustees To the knowledge of the Administrator, the following nominee proposed for election as an ECT Trustee is a director of a company that was, during the past ten years, the subject of a cease trade or similar order or an order that denied the company access to any exemption under securities legislation, for a period of more than 30 consecutive days: Mr. Tallman was a director of CV Technologies Inc. when it became subject to a cease trade order issued by the Alberta Securities Commission on April 19, 2007 for failure to file financial statements. Similar cease trade orders were issued by the Ontario Securities Commission and the British Columbia Securities Commission. The Alberta Securities Commission revoked the cease trade order on June 22, 2007, and the Ontario Securities Commission and the British Columbia Securities Commission followed with similar revocations shortly thereafter. Mr. Tallman is no longer a director of CV Technologies Inc. SPECIAL MATTERS TO BE ACTED UPON AT THE MEETING Amendments to Fund Trust Indenture Transition to IFRS Background for Amendments Transition to IFRS As described in the Fund MD&A, under the heading Future Accounting Policy Changes International Financial Reporting Standards (IFRS), IFRS will replace Canadian GAAP in 2011 for publicly accountable enterprises, including the Fund. The Fund s management is currently assessing the impact of IFRS. Under IFRS, Units as currently constituted may be regarded as a liability rather than equity (they are currently categorized under Canadian GAAP as equity). This interpretation is influenced by the Units redemption feature as outlined in Article 6 of the Fund Trust Indenture. Section 5.1 of the Fund Trust Indenture, which imposes limits on the nature of reserves that can be maintained in the discretion of the Administrator and thereby deducted from a period s Distributable Cash Flow (as defined in the Fund Trust 25

30 Indenture) and Section 5.4 of the Fund Trust Indenture which indicates, in part, that in each year, the aggregate amount payable by the Fund for distributions to Unitholders shall not be less than the Fund s net income for the year, as calculated in accordance with the Tax Act. The Units are categorized as puttable financial instruments under IFRS by virtue of the right of redemption available to holders of the Units. Under IFRS, puttable financial instruments are generally considered liabilities. However, as an exception to the definition of a financial liability, puttable financial instruments may be classified as an equity instrument if certain conditions are satisfied, including the condition that the instrument does not include any other contractual obligation to deliver cash or another financial asset. A mandatory requirement to distribute net income may constitute a contractual requirement to deliver cash, resulting in Units being considered a liability for purposes of IFRS and distributions on such Units being presented as interest expense on the Fund s income statement. Should this interpretation be correct and applicable to the Fund, the financial statements of the Fund would be materially affected upon adoption of IFRS, making the Fund s financial statements more difficult to interpret. Such an impact could lead to adverse capital markets consequences for the Fund. Proposed Amendments - Distributions Accordingly, and as part of the Fund s transition to IFRS, the Administrator is seeking Unitholder approval authorizing it, if and when the Administrator considers it necessary or desirable, to amend the Fund Trust Indenture to remove the requirement to make mandatory distributions as set forth in Sections 5.1 and 5.4 of the Fund Trust Indenture and make such other consequential amendments as the Administrator may deem necessary, thus permitting greater discretion to the Fund in this regard (collectively, the Distribution Amendments ). The Administrator believes that the proposed Distribution Amendments are in the best interests of the Fund and its Unitholders as they will provide the Administrator with the discretion to set distribution rates in accordance with what is in the best interests of the Fund and the Unitholders each year. The intent of this proposed change is to respond to a potential accounting reclassification. The change would not have an effect on how the Administrator has declared distributions in the past, nor would the change impact the currently expected amount of distributions or the manner in which cash distributions are determined. If such authority is granted, the Administrator intends to implement the Distribution Amendments as soon as reasonably practicable after the Meeting, unless the proposed amendments are no longer required to address the concerns under IFRS, or the Administrator determines that an alternative or superior solution to address the issue is available. The Administrator has also requested an advance tax ruling from the CRA, to confirm the tax impact of making the proposed Distribution Amendments, and will proceed with the Distribution Amendments only if the ruling provides sufficient assurance that there will be no substantial adverse tax impact resulting from implementing the Distribution Amendments. Proposed Amendment Amendments by the Trustees The Fund is currently in the process of evaluating the potential impact of IFRS on its consolidated financial statements. This will be an ongoing process as the International Accounting Standards Board issues new standards and interpretations. The Fund s consolidated financial performance and financial position, as disclosed in the current Canadian GAAP financial statements, may be significantly different when presented in accordance with IFRS. Without the delegated authority for the Administrator and the ECT Board to make amendments to the Fund Trust Indenture and ECT Trust Indenture in connection with changes in accounting standards, the Fund and ECT may be unable to make necessary or desirable amendments to their trust indentures in connection with IFRS related accounting changes. To assist the Fund with its transition to IFRS, the Administrator and the ECT Board have determined that it would be desirable to be able to make such amendments or modifications to the Fund Trust Indenture and ECT Trust Indenture without the requirement to obtain Unitholder approval, in the same manner as the trust indentures currently permit the Administrator and the ECT Board to act as they relate to changes in taxation laws. Accordingly, the Administrator and the ECT Board are seeking Unitholder approval of amendments to Section 9.2 in each of the Fund Trust Indenture and ECT Trust Indenture to permit the Administrator and the ECT Board to make amendments to the Fund Trust Indenture and ECT Trust Indenture that are necessary or desirable, given the 26

31 impact that would otherwise occur on the Fund as a result of changes in accounting standards (the Accounting Amendment ). The Accounting Amendment will not result in any material changes to the Unitholders, but rather is contemplated in order to assist the Fund to implement changes that will assist in its transition to IFRS. The Administrator and the ECT Board will still be obligated to determine whether any such change is necessary or desirable in the circumstances, and all other matters that are currently required to be approved by Unitholders pursuant to the Fund Trust Indenture and ECT Trust Indenture will remain unchanged. Voting and Approval of Resolutions The full text of each of the Distribution Amendments Resolution and the Accounting Amendment Resolution is set out in Appendices A and B to this Circular, respectively. To be effective, each of these resolutions must be passed by more than 66⅔ of the votes cast by Unitholders at the Meeting. The persons named in the enclosed form of proxy intend to vote at the meeting FOR both the Distribution Amendments Resolution and the Accounting Amendment Resolution, unless a Unitholder has specified in the applicable form of proxy or Voting Instruction Form that such Unitholder s Units are to be voted against the resolution. Arrangement General At the Meeting, you will be asked to approve the Arrangement. The Arrangement, if approved, is to be completed pursuant to the Plan of Arrangement and related transactions. The Arrangement involves the conversion of the public interest and part of the holdings of Enbridge in the Fund into a corporate form using a newly established Alberta corporation, EIFH. Following the completion of the Arrangement, it is expected that the EIFH Board will be comprised of five independent directors and one director appointed by Enbridge (in accordance with the rights attached to the EIFH Special Voting Share issued to Enbridge and described in Appendix H - Directors and Executive Officers Appointment of EIFH Director by Enbridge ) and the administration and management of EIFH will be performed by the Administrator under arrangements substantially the same as those under which it currently provides such services to the Fund. See Management of the Fund and ECT Administration Agreement for a description of the current administrative services arrangement between the Administrator and the Fund. Background to and Reasons for the Arrangement On October 31, 2006, the Minister of Finance (Canada) (the Minister ) announced the SIFT Rules. The SIFT Rules apply a tax at the trust level on certain income earned by, among other entities, publicly-traded mutual fund trusts, at a rate of tax comparable to the combined federal and provincial corporate tax rate and treat distributions of such income to unitholders as taxable dividends. Under the SIFT Rules, publicly-traded trusts existing on October 31, 2006 generally have had a four year transition period during which they would not be subject to the SIFT Rules until 2011, provided such trusts experience only normal growth and no undue expansion before such time. On December 15, 2006, the Minister released guidance concerning, among other things, what would be considered normal growth for the purposes of the SIFT Rules. Historically, the Fund has not been liable for any amounts of income tax under the Tax Act because it generally is entitled to deduct (and has fully deducted) distributions to Unitholders in computing its income that would otherwise be subject to tax. Commencing in 2011, the Fund will be liable, under the SIFT Rules, to pay income tax under the Tax Act at a rate comparable to the combined federal and provincial corporate tax rate on certain distributions to Unitholders. The ECT Board and the Administrator believe that investment interest in the trust sector has declined as a result of the announcement and subsequent enactment of the SIFT Rules. Since the Minister s announcement, the TSX Income Trust Index has underperformed the broader TSX Composite Index by approximately 19% (through March 23, 2010). Total debt and equity capital raised by the income trust sector 27

32 has fallen from $21.0 billion in 2005, prior to the Minister s announcement to approximately $9.3 billion in Strategic Review In the months immediately following announcement of the SIFT Rules, the Administrator updated the ECT Board with respect to the potential impact and significance of the proposed tax changes to the Fund, including the impact upon the Fund s growth and distribution strategy. Since the second quarter of 2007, the Administrator has carried out more detailed review and analyses concerning the strategic direction for the Fund and considered the relative merits of a broad range of strategic alternatives. A key priority that emerged from this review was the preservation of the Fund s original investor value proposition following the application of the SIFT Rules to the Fund. This value proposition combines a high and dependable payout of cash flow from low-risk energy infrastructure assets with the opportunity for growth in the cash flow through development and acquisition of additional assets with a similar risk profile. The ECT Board and the Administrator believe that the proposed Arrangement will allow the Fund to more effectively sustain its value proposition enabling a high payout of reliable cash flow while at the same time providing for the ongoing financial flexibility and access to capital necessary to pursue attractive growth opportunities. Special Committee On October 30, 2009, the Administrator made a proposal to the ECT Board in connection with the partial conversion of the Fund that, following negotiations with the Administrator, resulted in the proposed Arrangement. Based on Enbridge s significant economic interest in the Fund, its role as sponsor and parent corporation of the Administrator and certain features in the Arrangement proposal that involve contractual arrangements directly with Enbridge, the ECT Board recognized the potential for actual or apparent conflicts of interest in evaluating the Arrangement proposal. Consequently, the ECT Board determined that the Arrangement proposal needed to be reviewed and approved by the Special Committee, as a condition to submitting the Arrangement proposal to Unitholders for approval. The Special Committee was established by the ECT Board consisting of Ms. Catherine (Kay) M. Best as Chair and Dr. Elizabeth Cannon and Messrs. Richard H. Auchinleck and Gordon G. Tallman. In conducting its review, the Special Committee retained and has been assisted by independent financial, legal and tax advisors. The ECT Board approved a mandate for the Special Committee whereby, among other things, the Special Committee was mandated: (a) to review and consider the proposal of the Administrator; (b) if considered advisable by the Special Committee, to identify, consider and assess other alternatives available to the Fund; (c) to determine whether such proposal or alternative, as the case may be, is fair to the Public Unitholders; and (d) to determine whether such proposal or alternative, as the case may be, is in the best interests of the Fund and the Public Unitholders. From the period beginning in December 2009 and ending in March 2010, the Special Committee met 12 times with its financial advisor and legal counsel to evaluate the proposed Arrangement and the other alternatives that may be available to the Fund. The Special Committee considered a number of strategic alternatives as well as issues relating to the proposed Arrangement, including the tax consequences of the proposed Arrangement, the impact of the proposed Arrangement on the governance structure of the Fund, the terms of the ECT Preferred Units and the merits of a modest cash payment to Unitholders as had been proposed by the Administrator to be paid in connection with the proposed Arrangement and financed through an incremental debt facility at EIFH. The Special Committee concluded that certain amendments to the proposed Arrangement would be necessary or desirable and sought such amendments through discussions and negotiations among the Special Committee, the Administrator, Enbridge and their respective advisors. Included among the changes was the elimination of the proposed modest cash payment in connection with the Arrangement. The Special Committee and the Administrator determined that such cash payment would not meaningfully enhance Unitholder value and that EIFH would be better served to retain financial flexibility for future investment in the Fund. With respect to governance of the Fund, the Special Committee considered the proposal to eliminate the Liquidity Right in exchange for the Exchange Right pursuant to which Enbridge would have the right to exchange the ECT Preferred Units for Units and the ability to appoint additional Enbridge representatives to the ECT Board, which nominees would constitute a majority of the ECT Board following the exchange of a sufficient number of the ECT Preferred Units. The Special Committee, after 28

33 receiving the advice of its financial advisor and legal counsel, was satisfied that these governance changes were more than offset by the governance protections and the Tag-Along Rights negotiated by the Special Committee and the overall merits of the partial conversion of the Fund. The Special Committee, after a thorough analysis of material information and relevant considerations, including but not limited to, the terms and conditions of the proposal of the Administrator and the proposed changes to the governance of the Fund, capital requirements, distribution policy, the evolving economic environment, growth opportunities available to the Fund, access to capital and debt markets, the current and future tax treatment of the Fund compared to corporations and overall industry trends and activity levels, determined that the Arrangement is fair to the Public Unitholders and is in the best interests of the Fund and the Public Unitholders, and recommends that Unitholders vote in favour of the Arrangement Resolution. Partial Conversion to a Corporation The Special Committee, the ECT Board and the Administrator have determined that enhanced Unitholder value could be realized and delivered in the long term more effectively through a reorganized corporate structure than is otherwise possible through the existing trust structure. The Special Committee and the ECT Board concluded that the Arrangement provides a number of compelling and strategic benefits to the Fund and Unitholders, including, without limitation, the following: (a) (b) (c) (d) (e) (f) (g) (h) although the Fund is not required to effect the Arrangement or any other conversion into a corporate structure, it is anticipated that long-term value to Unitholders will be enhanced if the Public Unitholders exchange all of, and Enbridge exchanges a portion of, their respective holdings in the Fund for EIFH Shares; it is anticipated that the reorganized structure of the Fund will improve financial flexibility and access to debt and equity capital when compared with a scenario under which the Fund remains a publicly-traded SIFT; as a public corporation, EIFH should attract new investors, including Non-Resident investors, and provide, in the aggregate, a more active and attractive long-term market for the EIFH Shares than currently exists for the Units; a conversion to a corporation may result in a higher equity valuation, as EIFH s financial and operational performance will be more easily valued by reference to its publicly-held peers in the energy infrastructure market, allowing it to more efficiently raise equity capital; with the enhanced financial flexibility and improved access to capital that are anticipated, the Fund will likely be better positioned to pursue anticipated opportunities for expansion and growth than in a scenario in which it remains a publicly-traded SIFT; EIFH will continue to be managed by the Administrator, a wholly-owned subsidiary of Enbridge which has a proven track record for successfully developing and acquiring attractive energy infrastructure assets in keeping with the Fund s investment profile; it is planned that the investor value proposition of EIFH be consistent with that of the original value proposition of the Fund emphasizing a high payout of safe and dependable cash flow and opportunity for growth through investment in low-risk energy infrastructure assets; and the replacement of the right to liquidate the ECT Preferred Units held by Enbridge with the right to exchange such ECT Preferred Shares for Units should further align Enbridge's interest with the interest of public investors in EIFH. In addition, the Arrangement will have the consequential effect of providing Unitholders with access to certain statutory rights of corporate shareholders that are not currently included in the governance structure of the Fund, such as an oppression remedy and a dissent and valuation right in certain situations. Certain previously disclosed risk factors applicable only to ownership of Units, such as the theoretical risk of personal 29

34 liability to Unitholders for business liabilities of the Fund, will cease to apply to an investment in the EIFH Shares after the Effective Time of the Arrangement. Arrangement Fairness Opinion The Special Committee retained the Financial Advisor as its financial advisor with respect to the Arrangement. In connection with this mandate, the Financial Advisor has provided the Special Committee with the Arrangement Fairness Opinion. The Arrangement Fairness Opinion is addressed to the Special Committee and the ECT Board and concludes that, in the opinion of the Financial Advisor, as of the date of the Arrangement Fairness Opinion and subject to the assumptions, explanations and limitations contained therein, the consideration to be received by the Public Unitholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Public Unitholders. The full text of the Arrangement Fairness Opinion which sets forth the assumptions made, matters considered and explanations and limitations on the review undertaken by the Financial Advisor in connection with its Fairness Opinion, is attached as Appendix F to this Circular. The summary of the Arrangement Fairness Opinion in this Circular is qualified in its entirety by reference to the full text of the Arrangement Fairness Opinion. The Arrangement Fairness Opinion is not a recommendation as to whether or not Unitholders should vote in favour of the Arrangement Resolution. Unitholders are urged to carefully review and consider the Arrangement Fairness Opinion in its entirety. Approval and Recommendation of the Special Committee and the ECT Board Following its extensive review, the Special Committee met on March 29, 2010 to discuss the merits of the Arrangement proposal in detail with the Financial Advisor and legal counsel. During this meeting, the Special Committee reviewed in detail the terms of the Arrangement proposal and the negotiations with the Administrator undertaken to date. The Financial Advisor delivered its verbal opinion, subsequently delivered in writing, that as of the date thereof and subject to the assumptions, explanations and limitations contained therein, the consideration to be received by the Public Unitholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Public Unitholders. The Special Committee then received advice from its legal counsel on its duties and responsibilities generally, and in particular, with respect to the Arrangement proposal. The Special Committee considered the relative advantages and disadvantages of the Arrangement proposal and the financial and legal advice it received, following which the Special Committee unanimously determined (with one member absent): (a) that the proposed Arrangement is fair to Public Unitholders; (b) that the proposed Arrangement is in the best interests of the Fund and the Public Unitholders; and (c) to recommend that Unitholders vote in favour of the Arrangement Resolution. The ECT Board met immediately after the Special Committee meeting held on March 29, 2010 and, among other things, reviewed the matters that were considered during the meeting of the Special Committee and subsequently accepted the recommendations of the Special Committee. The Manager Trustees declared their interest in the proposed Arrangement. These officers of Enbridge and the Administrator abstained from voting with respect to any matters related to the Arrangement proposal. The ECT Board subsequently unanimously (with the Manager Trustees who are officers of Enbridge and the Administrator abstaining) determined, among other things, that the proposed Arrangement is fair to Public Unitholders, is in the best interests of the Fund and the Public Unitholders, and recommended that Unitholders vote in favour of the Arrangement Resolution. In reaching its conclusions and formulating their recommendation, the Special Committee and the ECT Board considered, among others, the following factors: (a) (b) in order to finance acquisition opportunities and organic growth in the most cost-effective manner, the Fund requires the ability to raise capital efficiently through equity. However, the decline in investor interest in the trust sector as a result of the SIFT Rules and the uncertainty surrounding the income trust structure has generally resulted in a decline in trading valuations for securities of income trusts. The Fund s cost of capital and ability to execute value enhancing growth initiatives are expected to be less attractive if it remains under the current structure; partial conversion to a corporate structure would allow investors to more easily compare EIFH against its peers in the North American energy infrastructure sector; 30

35 (c) (d) (e) (f) (g) Eligible Unitholders may obtain a full or partial deferral of any gain that may otherwise arise on the exchange of Units for EIFH Shares pursuant to the Arrangement by making a valid tax election with EIFH. See Arrangement Certain Canadian Federal Income Tax Considerations Participation in the Arrangement ; the Non-Resident ownership limitations applicable to the Fund impose a potential constraint on the Fund s ability to target and attract foreign investors that would not exist for EIFH; the Arrangement Resolution must receive the appropriate Unitholder and Public Unitholder approvals in order to be adopted; the Plan of Arrangement must be sanctioned by the Court; and the Arrangement Fairness Opinion that, as of the date of the Arrangement Fairness Opinion and subject to the assumptions, explanations and limitations contained therein, the consideration to be received by the Public Unitholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Public Unitholders; The foregoing discussion of the information and factors considered and given weight by the Special Committee and the ECT Board is not intended to be exhaustive. In reaching the determination to approve and recommend the Arrangement Resolution, the ECT Board did not assign any relative or specific weight to the factors that were considered, and individual ECT Trustees may have given different weight to each factor. There are risks associated with the Arrangement, including that some of the potential benefits set forth in this Circular may not be realized or that there may be significant costs associated with realizing such benefits. See Arrangement Risk Factors. Outstanding Units and Required Vote The beneficial interests in the Fund are represented by the Units, which vote as a single class in all matters. As of the Record Date, there were 34,625,000 Units issued and outstanding. Only registered Unitholders of record at the close of business on the Record Date, or their respective proxies, are entitled to attend and vote at the Meeting. Unitholders entitled to vote at and attend the Meeting are entitled to one vote for each Unit held by them. Pursuant to the provisions of MI and the Interim Order, the Arrangement Resolution must be passed by at least (i) 66 2/3% of the votes cast by all Unitholders present in person or represented by proxy at the Meeting; and (ii) a majority of the votes cast by Unitholders present in person or represented by proxy at the Meeting excluding the votes attached to Units owned, controlled or directed by Enbridge, the directors and senior officers of Enbridge and, to the knowledge of the Administrator and its directors and senior officers, after reasonable inquiry, such other persons whose votes may not be included in determining minority approval of a business combination pursuant to MI See Arrangement Approvals Unitholder Approvals. Effect of the Arrangement on Unitholders Pursuant to the Arrangement, Enbridge will exchange 5,000,000 of its 14,500,000 Units and Public Unitholders will exchange all of their Units for EIFH Shares, in each case, on a one-for-one basis. Exchanging Unitholders will retain the same pro rata indirect financial interest in the Fund, through the EIFH Shares, as the direct financial interest which they currently hold. The Arrangement will result in Exchanging Unitholders holding 25,125,000 EIFH Shares, with Enbridge holding 5,000,000 EIFH Shares, representing approximately 20% of the EIFH Shares, and the Public Unitholders holding 20,125,000 EIFH Shares, representing approximately 80% of the EIFH Shares. Enbridge will be participating in the Arrangement as an Exchanging Unitholder to reinforce the alignment of interests between Enbridge and EIFH and to affirm that EIFH will continue under the sponsorship of Enbridge. The Arrangement will result in EIFH holding 25,125,000 Units, representing approximately 73% of the Units, and Enbridge holding 9,500,000 Units, representing approximately 27% of the Units. 31

36 Pursuant to the Arrangement, the EIFH Shares will be listed on the TSX in substitution for the Units, and the Units will be de-listed. See Details of the Arrangement Approvals Stock Exchange Approval. Pre-Arrangement Structure The following diagram illustrates the current structure of the Fund. 1. A corporation continued under the laws of Canada. 2. An unincorporated trust governed by the laws of the Province of Alberta. Post-Arrangement Structure On the Effective Date, immediately following the completion of the Arrangement, the Exchanging Unitholders will be the sole EIFH Shareholders, and EIFH and Enbridge will own all of the issued and outstanding Units. The following diagram illustrates the organizational structure of EIFH immediately following the completion of the Arrangement. (1) A corporation continued under the laws of Canada. (2) A corporation incorporated under the laws of the Province of Alberta. (3) An unincorporated trust governed by the laws of the Province of Alberta. (4) The ECT Preferred Units will be exchangeable into Units pursuant to the Exchange Right. 32

37 Effect of the Arrangement on Distributions Upon completion of the Arrangement, it is expected that EIFH will adopt a policy similar to that of the Fund in paying out a high proportion of its available cash in the form of quarterly dividends to EIFH Shareholders. The adoption of a quarterly dividend payment cycle will enable more effective management of working capital within the Fund and will align EIFH s dividend payout practice with that of many of its corporate energy infrastructure peers. It is expected that following completion of the Arrangement, EIFH will initially pay an annualized dividend of approximately $1.15 per EIFH Share, the same amount as the annualized distribution currently paid by the Fund on the Units. However, the amount of any dividends payable by EIFH will be at the discretion of the EIFH Board and may vary depending on, among other things, EIFH s earnings, financial requirements for EIFH and its subsidiaries, the satisfaction of solvency tests imposed by the ABCA for the declaration and payment of dividends and other conditions existing from time to time. The Administrator expects that the first dividend will be paid in mid-january to EIFH Shareholders of record on December 31, 2010 and subsequent dividends paid on a quarterly basis. Amended Governance and Ownership Arrangements Appointment of EIFH Director by Enbridge In connection with the Arrangement, EIFH will issue to Enbridge the EIFH Special Voting Share, pursuant to which (i) Enbridge will be entitled to appoint one director of EIFH for so long as Enbridge holds between 15% and 39% of the issued and outstanding EIFH Shares, and (ii) Enbridge will not exercise the votes attaching to the portion of EIFH Shares held by Enbridge representing its pro-rata representation on the EIFH Board in respect of the election of the remaining directors of EIFH at meetings of EIFH Shareholders (the Director Appointment Right ). Where Enbridge beneficially owns or controls, directly or indirectly, more than 39% of the issued and outstanding EIFH Shares, the Director Appointment Right shall cease and Enbridge shall be entitled to exercise all of the votes attached to the EIFH Shares held by Enbridge in respect of the election of all directors of EIFH at meetings of EIFH Shareholders. See Appendix H - Information Concerning EIFH Directors and Executive Officers - Appointment of EIFH Director by Enbridge. A nominating committee will be established by the EIFH Board and such committee will put forth the nominees for the remaining directors to be elected to the board of directors of EIFH to be voted upon by EIFH Shareholders at annual meetings of EIFH Shareholders. For so long as EIFH is a reporting issuer, it will have a minimum of three independent directors. Appointment of ECT Trustees The current method for electing and appointing the ECT Trustees, including the contractual right of appointment of the Administrator, is described elsewhere in this Circular, under the heading Matters to be Acted Upon at the Meeting Election of Independent ECT Trustees Directions to the Fund Trustee. The terms of the Arrangement will amend this contractual right in the ECT Trust Indenture so that Enbridge will in the future be entitled to appoint a number of ECT Trustees that is approximately equivalent to its pro-rata interest in Units. The following chart sets out what will be the composition of the ECT Board at the relevant levels of ownership of Units by Enbridge or its affiliates: Ownership of Units by Enbridge or its affiliates ECT Board Size Number of ECT Trustees appointed by Enbridge 1 Unit to 10% 6 1 More than 10% to 25% 7 2 More than 25% to 50% 8 3 More than 50% to 60% 9 5 More than 60% to 70%

38 Ownership of Units by Enbridge or its affiliates ECT Board Size Number of ECT Trustees appointed by Enbridge More than 70% 10 7 Notwithstanding this amended appointment right of Enbridge, while the ECT Trust Indenture will no longer require that the ECT Board be composed of a majority of Independent ECT Trustees, for so long as EIFH remains a reporting issuer, ECT will have a minimum of three Independent ECT Trustees who will be selected in accordance with the current provisions of the ECT Trust Indenture, whereby the current Independent ECT Trustees must approve the Independent ECT Trustees proposed for election by the Administrator. Actions affecting the Fund Pursuant to amendments proposed to be made to the Fund Trust Indenture and the ECT Trust Indenture in connection with the Arrangement, the approval of a majority of the Independent ECT Trustees will be required, following the completion of the Arrangement, in the following circumstances: (a) (b) (c) the disposition of any material assets or equipment which are used in operating the Business, other than in the ordinary course of business; for so long as EIFH owns 20% or more of the Units, a Significant Transaction; and the approval of, amendment to or any material deviation from the current distribution policy of the Fund. In addition, pursuant to the Tag-along Rights, in the event that a third party makes an offer for not less than 90% of Enbridge s combined interest in the Units, ECT Preferred Units and EIFH Shares, then such third party shall be obligated to extend the offer to the EIFH Shares held by the public on economically equivalent terms and conditions. Pre-Emptive Right to Acquire Units Pursuant to amendments proposed to be made to the Fund Trust Indenture, in connection with the Arrangement, EIFH and Enbridge will receive identical pre-emptive rights to acquire Units in the event the Fund issues additional Units in the future. The Pre-emptive Right will entitle EIFH and Enbridge to acquire that number of Units which is proportional to their respective pre-issuance economic interest in the Fund, inclusive, in the case of Enbridge, of the ECT Preferred Units held by Enbridge. Any Units not subscribed for by one party can be acquired in full, or in part, by the other. If any Units are unsubscribed, the Fund will be entitled to seek additional investors other than EIFH or Enbridge. Right of First Refusal on Sale of Units In connection with the Arrangement and pursuant to the Unitholders Agreement, EIFH and Enbridge will receive identical rights of first refusal on any Units proposed to be sold by the other, pursuant to a bona fide purchase and sale agreement. The ROFR will not apply to a transfer by EIFH or Enbridge of some or all of their respective Units to an affiliate. Changes to Rights of the Holder of ECT Preferred Units After the completion of the Arrangement, Enbridge will continue to hold 38,023,750 ECT Preferred Units, representing 100% of the issued and outstanding ECT Preferred Units. The Arrangement will result in the following amendments to the attributes of the ECT Preferred Units: (i) the elimination of the Liquidity Right; and (ii) the creation of the Exchange Right pursuant to amendments to the ECT Trust Indenture and the entering into of the Exchange Right Support Agreement. The replacement of the Liquidity Right with the 34

39 Exchange Right recognizes the significant ongoing financial interest of Enbridge in the Fund. A more detailed description of the Liquidity Right is set out under the heading Description of ECT Liquidity Rights of Holders of ECT Preferred Units in the Fund AIF. Management Agreement Pursuant to the Management Agreement, the Administrator is entitled to receive an annual incentive fee equal to 25% of the amount by which cash distributions to Unitholders in respect of the applicable year exceeds $0.825 per Unit. Based on the manner in which the incentive fee is currently calculated under the Management Agreement, the Administrator would potentially be entitled to a higher incentive fee if the Arrangement is approved and the Fund is no longer a SIFT. Accordingly, the manner in which the incentive fee is currently calculated pursuant to the Management Agreement will be modified so that the incentive fee to which the Administrator is entitled following the Arrangement is not materially different from what it would be entitled to if the Fund were to become a SIFT. Effect of the Arrangement on the DRIP Pursuant to the Arrangement, it is proposed that the Fund shall assign the DRIP to EIFH and EIFH shall amend and restate the DRIP so that, among other things, all existing participants in the DRIP will be deemed to be participants in the Amended DRIP without any further action on their part. The Amended DRIP shall provide that, among other things, (i) holders of EIFH Shares may direct their cash dividends to be reinvested in additional EIFH Shares which may, at the discretion of the Administrator, be purchased by CIBC Mellon Trust Company, in its capacity as the plan agent, through the facilities of the TSX ( Market Purchase Option ), be issued directly from the treasury of EIFH ( Treasury Issuance Option ) or be acquired through a combination of the Market Purchase Option and the Treasury Issuance Option, and (ii) subject to applicable law and regulatory filings, holders of EIFH Shares will be entitled to make optional cash payments (minimum of $300 and a maximum of $3,000 per quarter) to the plan agent for the purchase of additional EIFH Shares on the same basis as dividends. Holders of Units who are not existing participants in the DRIP but who wish to participate in the DRIP (and the Amended DRIP following the Effective Date) may do so by notifying the investment dealer through which they hold their Units anytime until November 30, Following the Effective Date, holders of EIFH Shares who were not participants in the DRIP but who wish to participate in the Amended DRIP may do so by notifying the investment dealer through which they hold their EIFH Shares any time after the Effective Date. Effect of the Arrangement on the Unitholder Rights Plan Following the completion of the Arrangement, the Fund proposes to terminate the Unitholder Rights Plan and EIFH proposes to adopt the EIFH Shareholder Rights Plan, subject to the approval of such adoption by Unitholders at the Meeting. See Adoption of Shareholder Rights Plan by EIFH and Appendix H - Information Concerning EIFH Shareholder Rights Plan. Details of the Arrangement At the Effective Time, the following transactions shall occur and shall be deemed to occur sequentially in the order set out below, except as otherwise expressly provided. To the extent that such transactions involve Enbridge, EIFH or any securities thereof or are governed by section 193 of the ABCA, such transactions shall occur without any further act or formality pursuant to section 193 of the ABCA. All other transactions shall occur by means of the appropriate action being taken on the part of the appropriate parties to effect such transactions at the Effective Time. Amendment to the Fund Trust Indenture (a) the Fund Trust Indenture shall be amended or amended and restated to the extent necessary to provide for the Pre-emptive Right, the Exchange Right and the Independent ECT Trustees Approval Requirement and in any and all other respects as may be necessary or desirable in connection with or to facilitate the Arrangement as described in the Plan of Arrangement; 35

40 Amendment to the ECT Trust Indenture (b) the ECT Trust Indenture shall be amended or amended and restated to the extent necessary to provide for the Exchange Right, the composition of the ECT Board, the Independent ECT Trustees Approval Requirement and in any and all other respects as may be necessary or desirable in connection with or to facilitate the Arrangement as described in the Plan of Arrangement; Execution of the Unitholders Agreement and Exchange Right Support Agreement (c) EIFH, the Fund, Enbridge and EMSI shall enter into the Unitholders Agreement and the Exchange Right Support Agreement; Execution of the EIFH Administration Agreement (d) EMSI and EIFH shall enter into the EIFH Administration Agreement; Amendment to EIFH Articles of Incorporation (e) EIFH s Articles of Incorporation shall be amended to establish the minimum and maximum number of directors at six and 15, respectively; Exchange of Public Unitholders Units for EIFH Shares (f) all of the Units held by Public Unitholders shall be transferred to EIFH and, in exchange, EIFH shall issue to such Public Unitholders EIFH Shares on the basis of one EIFH Share for each Unit so transferred; Exchange of Enbridge s 5,000,000 Units for 5,000,000 EIFH Shares (g) 5,000,000 Units held by Enbridge shall be transferred to EIFH and, in exchange, EIFH shall issue to Enbridge EIFH Shares on the basis of one EIFH Share for each Unit so transferred; Issuance of EIFH Special Voting Share (h) One (1) EIFH Special Voting Share will be issued to Enbridge; Cancellation of a Certain EIFH Share (i) the one (1) EIFH Share issued to Enbridge in connection with the organization of EIFH shall be purchased for cancellation by EIFH for the consideration of one dollar ($1.00) per such EIFH Share, and shall be cancelled; Assignment, Amendment and Restatement of the DRIP (j) the Fund shall assign the DRIP to EIFH and EIFH shall amend and restate the DRIP so that, among other things, all existing participants in the DRIP will be deemed to be participants in the Amended DRIP without any further action on their part and holders of EIFH Shares may participate in the Amended DRIP with respect to any cash dividends declared and paid by EIFH on the EIFH Shares; and Organization of EIFH (k) EIFH shall be organized as follows: (i) the registered office of EIFH shall be located at Suite 3000, st Street S.W., Calgary, Alberta, T2P 3L8; 36

41 (ii) (iii) the directors of EIFH as at the Effective Time shall be the directors identified in this Circular. See Appendix H Information Concerning EIFH Directors and Executive Officers. Such directors shall hold office until the first annual meeting of EIFH Shareholders or until their successors are duly elected or appointed; and the first auditors of EIFH shall be PwC. The first auditors of EIFH shall hold office until the first annual meeting of EIFH Shareholders or until their successors are duly elected or appointed. Arrangement Agreement The Arrangement is being effected pursuant to the Arrangement Agreement. The Arrangement Agreement contains covenants, representations and warranties of the Arrangement Parties and various conditions precedent, both mutual and with respect to each of the Arrangement Parties. The Arrangement Agreement is attached as Appendix E to this Information Circular and reference is made thereto for the full text thereof. Procedure for the Arrangement Becoming Effective The Arrangement is proposed to be carried out pursuant to Section 193 of the ABCA. The following procedural steps must be taken for the Arrangement to become effective: (a) (b) (c) (d) the Arrangement must be approved by the Unitholders in the manner set forth in the Interim Order; the Arrangement must be approved by the Court pursuant to the Final Order; all conditions precedent to the Arrangement, including those set forth in the Arrangement Agreement, must be satisfied or waived by the appropriate parties; and the Final Order and Articles of Arrangement in the form prescribed by the ABCA must be filed with the Registrar and the Registrar must issue a Certificate. The Arrangement will be effective on the date shown on the Certificate issued by the Registrar. Approvals Unitholder Approvals As a result of the terms of the Interim Order and the provisions of the Fund Trust Indenture and the ECT Trust Indenture, the Arrangement must be approved by a special resolution of Unitholders. The Arrangement constitutes a business combination for the purposes of MI because Enbridge, as a related party of the Fund by virtue of its ownership of more than 10% of the Units, is a party to contractual arrangements that were negotiated at the same time as the Arrangement and are conditional upon the completion of the Arrangement. See Arrangement Amended Governance and Ownership Arrangements. MI requires that, in addition to the approval of the Arrangement Resolution by at least 66⅔% of the votes cast by all Unitholders present in person or represented by proxy at the Meeting, the Arrangement Resolution must also be approved by a simple majority of the votes cast by Unitholders, excluding the votes attached to Units owned, controlled or directed by Enbridge, the directors and senior officers of Enbridge and, to the knowledge of the Administrator and its directors and senior officers, after reasonable inquiry, such other persons whose votes may not be included in determining minority approval of a business combination pursuant to MI

42 To the knowledge of the Fund and the Administrator, after reasonable inquiry, the only persons whose votes should be excluded in determining minority approval of the Arrangement are listed in the table below. The information as the Units beneficially owned or over which control or direction is exercised, not being within the knowledge of the Fund, has been furnished by the respective directors and officers of Enbridge and the directors and officers of the Administrator. Name Number of Units Enbridge 14,500,000 Directors and Officers of Enbridge and the Administrator J. Richard Bird 110,000 Wanda Opheim 15,142 Patrick D. Daniel 15,000 J. Lorne Braithwaite 10,237 Al Monaco 8,150 Stephen J. Wuori 5,000 Stephen J.J. Letwin 5,000 James A. Schultz 4,265 C. K. Gruending 3,174 John K. Whelen 2,500 David K. Wudrick 1,584 Leigh S. Cruess 500 Alison T. Love 385 L. M. Luison 328 Total 14,681,265 Notes: (1) The information contained in the preceding table as to Units beneficially owned or controlled is not within the knowledge of the Fund or the Administrator, has been provided by the respective appointees individually, and is effective as of March 16, Following the Arrangement, Enbridge will have certain rights that it does not currently have. These rights could enable Enbridge to increase its interest in the Fund. Enbridge will be entitled to appoint a number of ECT Trustees that is approximately equivalent to its pro rata voting interest in the Fund. In the event that Enbridge owns a majority of the voting interests in the Fund in the future, it will be entitled to appoint a majority of the ECT Trustees. 1. Changes to Rights of the Holder of ECT Preferred Units In connection with the Arrangement and pursuant to the Exchange Right to be introduced into the Fund Trust Indenture and the ECT Trust Indenture, the ECT Preferred Units will be exchangeable on a one for one basis, subject to adjustments in respect of anti-dilution and economic equivalence, for Units. Enbridge holds 38,023,750 ECT Preferred Units. If Enbridge exchanged all of its ECT Preferred Units for Units, it would hold 47,523,750 Units or approximately 65% of the issued and outstanding Units based on the currently issued and outstanding Units and ECT Preferred Units. As a result, Enbridge would be entitled to appoint 6 of 9 ECT Trustees. 2. Pre-emptive Right to Acquire Units In connection with the Arrangement and pursuant to the Pre-emptive Right to be provided for in the Fund Trust Indenture, EIFH and Enbridge will receive identical pre-emptive rights to acquire Units in the event that the Fund issues Units in the future. The Pre-emptive Right will entitle EIFH and Enbridge to acquire that number of Units which is proportional to their respective pre-issuance economic interest in the Fund. The ECT Preferred Units, all of which are held by Enbridge, will be included in the pre-issuance economic interest of Enbridge. To the extent that Enbridge exercises a pre-emptive right but EIFH does not, then Enbridge s voting interest in the Fund would increase. 3. Right of First Refusal on Sale of Units 38

43 In connection with the Arrangement, and pursuant to the Unitholders Agreement, EIFH and Enbridge will receive identical rights of first refusal on any Units proposed to be sold by the other pursuant to a bona fide offer to purchase. In the event that Enbridge exercises a right of first refusal in connection with Units held by EIFH, then Enbridge s voting interest in the Fund would increase. 4. Appointment of EIFH Director In connection with the Arrangement, Enbridge will be entitled to appoint one director for so long as Enbridge holds between 15% and 39% of the issued and outstanding EIFH Shares, provided that Enbridge will not exercise the votes attaching to the portion of EIFH Shares held by Enbridge representing its pro-rata representation on the EIFH Board in respect of the election of the remaining directors of EIFH at meetings of EIFH Shareholders (the Director Appointment Right ). Where Enbridge beneficially owns or controls, directly or indirectly, more than 39% of the issued and outstanding EIFH Shares, the Director Appointment Right shall cease and Enbridge shall be entitled to exercise all of the votes attached to the EIFH Shares held by Enbridge in respect of the election of all directors of EIFH at meetings of EIFH Shareholders. As of the Record Date, Enbridge held 14,500,000 Units (representing approximately 41.9% of the issued and outstanding Units). To the knowledge of the Fund, no person other than Enbridge beneficially owns or exercises control or direction over more than 10% of all issued and outstanding Units. To the knowledge of the Administrator, there have been no prior valuations of the Fund, Units, or the property of the Fund in the 24 month period prior to the date of this Circular. No formal valuation is required in connection with the Arrangement pursuant to section 4.3 of MI The persons named in the enclosed form of proxy intend to vote at the meeting FOR the Arrangement Resolution, unless a Unitholder has specified in the applicable form of proxy or Voting Instruction Form that such Unitholder s Units are to be voted against the resolution. Notwithstanding the approval by the Unitholders of the Arrangement Resolution, the approval of the Arrangement by the Court, or both, the ECT Board, without further notice to or approval of the Unitholders, may amend or terminate the Arrangement Agreement or the Plan of Arrangement pursuant to the terms as set out in the Arrangement Agreement or may decide not to proceed with the Arrangement and to revoke the Arrangement Resolution at any time prior to the Arrangement becoming effective under the ABCA. The full text of the Arrangement Resolution is attached as Appendix C to this Information Circular. Dissent Rights No dissent rights will be granted in connection with the Arrangement as such rights are not required by the Fund Trust Indenture or the Interim Order. In obtaining the Interim Order, the following representations were made to the Court regarding the basis for the Arrangement not providing for dissent rights: (a) (b) (c) (d) (e) dissent rights are not required to be granted to shareholders in the context of an arrangement pursuant to section 193 of the ABCA; the underlying beneficial entitlements of the Unitholders are not affected by the Arrangement; there is a liquid public market in which Unitholders can trade their Units if they are dissatisfied with the terms of the Arrangement; the approval of the Arrangement Resolution pursuant to MI is required before any application to the Court for approval of the Arrangement can proceed; before the Arrangement can be implemented, the Court must first determine and declare that the Arrangement and the procedure relating thereto are fair to the persons affected, both from a substantive and a procedural point of view; and 39

44 (f) before the Arrangement can be implemented, all Unitholders and all other interested persons shall have the right to be heard. Court Approvals Interim Order On March 31, 2010, the Court granted the Interim Order facilitating the calling of the Meeting and prescribing the conduct of the Meeting and other matters. The Interim Order is attached as Appendix G to this Information Circular. Final Order The ABCA provides that an arrangement requires Court approval. Subject to the terms of the Arrangement Agreement, and if the Arrangement Resolution is approved by Unitholders at the Meeting in the manner required by the Interim Order, EIFH will make an application to the Court for the Final Order. The application for the Final Order approving the Arrangement is scheduled for May 6, 2010 at 1:30 p.m. (Calgary time), or as soon thereafter as counsel may be heard in Calgary, Alberta. At the hearing, any Unitholder and any other interested party who wishes to participate or to be represented or to present evidence or argument may do so, subject to filing with the Court and serving upon the Fund a notice of intention to appear together with any evidence or materials which such party intends to present to the Court, on or before 4:00 p.m. (Calgary time) on April 30, Service of such notice shall be effected by service upon the solicitors for the Fund: McCarthy Tétrault LLP, Suite 3300, 421-7th Avenue SW, Calgary, Alberta T2P 4K9, Attention: Sean Smyth. The EIFH Shares to be issued to Unitholders pursuant to the Arrangement will not be registered under the U.S. Securities Act, in reliance upon the exemption from registration provided by Section 3(a)(10) thereof. The Court will be advised prior to the hearing of the application for the Final Order that if the terms and conditions of the Arrangement are approved by the Court, the securities issued to Unitholders pursuant to the Arrangement will not require registration under the U.S. Securities Act. The Fund has been advised by its counsel, McCarthy Tétrault LLP, that the Court has broad discretion under the ABCA when making orders with respect to the Arrangement and that the Court will consider, among other things, the fairness and reasonableness of the Arrangement, both from a substantive and a procedural point of view. The Court may approve the Arrangement, either as proposed or as amended, in any manner the Court may direct, subject to compliance with such terms and conditions, if any, as the Court thinks fit. Depending upon the nature of any required amendments, the Fund may determine not to proceed with the Arrangement. Stock Exchange Listing Approvals It is a condition to the completion of the Arrangement that the TSX shall have conditionally approved the substitutional listing of the EIFH Shares issuable pursuant to the Arrangement. The TSX has conditionally approved the substitutional listing of the EIFH Shares issuable pursuant to the Arrangement, subject only to filing certain required documents with the TSX which cannot be filed prior to the Effective Date. The Units will be delisted upon such substitutional listing. Conditions Precedent to the Arrangement The respective obligations of the Arrangement Parties to consummate the transactions contemplated by the Arrangement Agreement, and in particular the Arrangement, are subject to the satisfaction, on or before the Effective Date or such other time specified, of a number of conditions, any of which may be waived by the mutual consent of such parties without prejudice to their right to rely on any other of such conditions. These conditions include, without limitation: 40

45 (a) (b) (c) (d) (e) the Arrangement Resolution shall have been approved by the requisite number of votes cast by the Unitholders and the Public Unitholders at the Meeting in accordance with the provisions of the Interim Order and any applicable regulatory requirements; the Final Order shall have been granted in form and substance satisfactory to the Arrangement Parties, acting reasonably, not later than December 15, 2010 or such later date as they may agree, provided that such date shall be no later than December 31, 2010; the Articles of Arrangement and all necessary related documents, in form and substance satisfactory to the Arrangement Parties, acting reasonably, shall have been accepted for filing by the Registrar together with the Final Order in accordance with subsection 193(9) of the ABCA; the TSX shall have conditionally approved the substitutional listing of the EIFH Shares to be issued pursuant to the Arrangement, subject only to the filing of required documents which cannot be filed prior to the Effective Date; and the ECT Board shall not have determined in its sole and absolute discretion that to proceed with the Arrangement would not be in the best interests of the Fund, ECT, the Unitholders and the holders of units of ECT, other than Enbridge and any affiliate of Enbridge. Timing of Completion of the Arrangement If the Meeting is held as scheduled and is not adjourned and the other necessary conditions at that point in time are satisfied or waived, EIFH will apply for the Final Order approving the Arrangement on May 6, If the Final Order is obtained on May 6, 2010 in form and substance satisfactory to the Arrangement Parties, and all other conditions set forth in the Arrangement Agreement are satisfied or waived, the Fund will retain its trust structure until the last month upon which such structure will have a tax benefit under the Tax Act, being December, The Fund expects the Effective Date will be on or about December 15, Procedure for Exchange of Units As the Units trade in the book entry system and no certificates are issued to non-registered holders, no certificates for the EIFH Shares will be issued to Beneficial Unitholders following the completion of the Arrangement and Beneficial Unitholders do not need to take any action involving their Units. On or about the Effective Date, the Fund will deliver to CDS a certificate evidencing the aggregate number of EIFH Shares to be issued to former Unitholders in connection with the Arrangement. Interests of Certain Persons or Companies in the Arrangement The ECT Trustees, the directors and officers of the Administrator and their associates or affiliates, as a group, beneficially own, directly or indirectly, an aggregate of approximately 271,586 Units, representing approximately 0.8% of the outstanding Units. Immediately after the completion of the Arrangement, assuming no change to their Unit ownership, it is anticipated that the current ECT Trustees, the directors and officers of the Administrator and their affiliates or associates, as a group, would beneficially own, directly or indirectly, an aggregate of approximately 271,586 EIFH Shares, representing approximately 1.1% of the outstanding EIFH Shares. The information as to Units beneficially owned, not being within the knowledge of the Fund, has been furnished by the respective ECT Trustees and the directors and officers of the Administrator and is effective as of March 16, The completion of the Arrangement will involve a number of matters that result in ongoing arrangements between EIFH and Enbridge and certain of its affiliates. These matters are described in Appendix H Information Concerning EIFH General Development of the Business. 41

46 Expenses of the Arrangement The estimated costs to be incurred by the Fund with respect to the Arrangement and related matters including, without limitation, financial advisory, accounting and legal fees, and the preparation, printing and mailing of this Information Circular and other related documents and agreements, are expected to be approximately $1.8 million. Securities Law Matters Canada All securities to be issued under the Arrangement, including, without limitation, the EIFH Shares to be issued to the Exchanging Unitholders, will be issued in reliance on exemptions from prospectus and registration requirements of applicable Canadian securities laws and, following completion of the Arrangement, the EIFH Shares will generally be freely tradeable (other than as a result of any control block restrictions which may arise by virtue of the ownership thereof) under applicable Canadian securities laws of the provinces and territories of Canada. United States The EIFH Shares to be issued under the Arrangement to Unitholders will not be registered under the U.S. Securities Act. Such securities will be issued in reliance upon the exemption from registration provided by Section 3(a)(10) of the U.S. Securities Act. Section 3(a)(10) exempts securities issued in exchange for one or more outstanding securities from the general requirement of registration where the terms and conditions of the issuance and exchange of such securities have been approved by a court of competent jurisdiction, after a hearing upon the fairness of the terms and conditions of the issuance and exchange at which all persons to whom the securities will be issued have the right to appear and receive timely notice thereof. The Court is authorized to conduct a hearing at which the fairness of the terms and conditions of the Arrangement will be considered. The Court granted the Interim Order on March 31, 2010 and, subject to the approval of the Arrangement by Unitholders, a hearing on the Arrangement will be held on May 6, 2010 by the Court. See Arrangement-Approvals - Court Approvals - Final Order above. The EIFH Shares to be held by Exchanging Unitholders following completion of the Arrangement will be freely tradable in the U.S. under U.S. federal securities laws, except by persons who were affiliates of EIFH within 90 days before the Effective Date or who are affiliates of EIFH after the Arrangement. Persons who may be deemed to be affiliates of an issuer include individuals or entities that control, are controlled by, or are under common control with, the issuer, and generally include executive officers and directors of the issuer as well as principal shareholders of the issuer. Any resale of such EIFH Shares by such an affiliate may be subject to the registration requirements of the U.S. Securities Act, absent an exemption therefrom. Subject to certain limitations, such affiliates may immediately resell EIFH Shares outside the United States without registration under the U.S. Securities Act pursuant to Regulation S. Persons who are affiliates of EIFH after the Arrangement may only resell their EIFH Shares in the United States pursuant to Rule 144 under the U.S. Securities Act in accordance with the volume, current public information and manner of sale limitations of Rule 144. The foregoing discussion is only a general overview of certain requirements of United States securities laws applicable to the securities received upon completion of the Arrangement. All holders of such securities are urged to consult with counsel to ensure that the resale of their securities complies with applicable securities legislation. Judicial Developments The Plan of Arrangement will be implemented pursuant to section 193 of the ABCA which provides that, where it is impractical for a corporation to effect an arrangement under any other provisions of the ABCA, a corporation may apply to the Court for an order approving the arrangement proposed by such corporation. Although there have been a number of judicial decisions considering this section and applications to various arrangements, there have not been, to the knowledge of the Fund or EIFH, any recent significant 42

47 decisions which would apply in this instance. Unitholders should consult their legal advisors with respect to the legal rights available to them in relation to the Arrangement. Experts Certain legal matters relating to Canadian law in connection with the Arrangement are to be passed upon by McCarthy Tétrault LLP, on behalf of the Fund, EMSI, EIFH and Enbridge and certain legal matters relating to United States law in connection with the Arrangement are to be passed upon by Sullivan & Cromwell LLP, on behalf of the Fund, EMSI and EIFH. Certain legal matters relating to the Arrangement are to be passed upon by Macleod Dixon LLP, on behalf of the Special Committee. The partners and associates of each of McCarthy Tétrault LLP, Sullivan & Cromwell LLP and Macleod Dixon LLP will hold less than 1% of the outstanding EIFH Shares upon completion of the Arrangement. None of the aforementioned persons or companies, nor any director, officer or employee of any of the aforementioned persons or companies, is or is expected to be elected, appointed or employed as a director, officer or employee of EIFH or of any associate or affiliate of EIFH. Certain Canadian Federal Income Tax Considerations In the opinion of McCarthy Tétrault LLP, counsel to the Fund ( Counsel ), the following is, as of the date of this Circular, a fair and adequate summary of the principal Canadian federal income tax considerations under the Tax Act in respect of the Arrangement and the holding of EIFH Shares generally applicable to a Unitholder owning Units who, for the purposes of the Tax Act and at all relevant times, (i) holds its Units and will hold its EIFH Shares as capital property, and (ii) deals at arm s length with and is not affiliated with the Fund or EIFH (a Holder ). The Units and the EIFH Shares will generally constitute capital property to a Holder provided that the Holder does not hold or use such securities in the course of carrying on business in which the Holder buys or sells securities, and the Holder did not acquire such securities in one or more transactions considered to be an adventure or concern in the nature of trade. Certain Holders who are Resident Holders, as defined below, and who might not otherwise be considered to hold their Units as capital property may, in certain circumstances, be entitled to have such securities and every other Canadian security (as defined in the Tax Act), treated as capital property in the taxation year of the election and in all subsequent taxation years by making the irrevocable election permitted by subsection 39(4) of the Tax Act. Such election can also apply to treat EIFH Shares acquired pursuant to the Arrangement as capital property to the Holder thereof other than to a Holder who files a valid joint election with EIFH pursuant to section 85 of the Tax Act as described in greater detail below. Holders contemplating making such an election should consult their own tax advisors. This summary is not applicable to a Holder: (i) that is a financial institution (as defined in the Tax Act) for the purpose of the mark-to-market rules; (ii) an interest in which is a tax shelter investment (as defined in the Tax Act); (iii) that is a specified financial institution (as defined in the Tax Act); (iv) that is exempt from tax under Part I of the Tax Act; or (v) that has made a functional currency election under the Tax Act to determine its Canadian tax results in a currency other than Canadian currency. All such Holders should consult their own tax advisors. This summary is based upon the provisions of the Tax Act and the regulations thereunder (the Regulations ) in force as of the date hereof, and Counsel s understanding based on publicly available published materials of the current administrative policies and assessing practices of the CRA and specific proposals (the Tax Proposals ) to amend the Tax Act and the Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof. No assurance can be given that the Tax Proposals will be enacted as currently proposed, or at all. This summary is not exhaustive of all possible Canadian federal income tax consequences and, except for the Tax Proposals, does not take into account or anticipate any change in law, whether by legislative, administrative or judicial action or decision and does not take into account any provincial, territorial, or foreign tax consequences which may differ significantly from those discussed herein. This summary is of a general nature only and should not be construed as, nor is it intended to be, legal or tax advice or representations to any particular Unitholder. Accordingly, Unitholders should consult 43

48 their own tax advisors with respect to the income tax consequences of the Arrangement and the holding of EIFH Shares having regard to their own particular circumstances. Holders Resident in Canada The following portion of the summary is generally applicable to a Holder that is or is deemed to be, at all relevant times and for the purposes of the Tax Act and any applicable income tax treaty, a resident of Canada ( Resident Holder ). Participation in the Arrangement Subject to the discussion below regarding the joint election under section 85 of the Tax Act, a Resident Holder who disposes of Units pursuant to the Arrangement will realize a capital gain (or a capital loss) to the extent that the fair market value of the EIFH Shares received in exchange for such Units exceeds (or is exceeded by) the aggregate of the adjusted cost base of such Units to the Resident Holder plus reasonable costs of disposition. The cost to the Resident Holder of any EIFH Shares received on the exchange of such Resident Holder s Units would be the fair market value of the EIFH Shares at the time of the exchange. See below under heading Taxation of Capital Gains and Capital Losses. A Resident Holder that is an Eligible Unitholder may make a joint election (the Tax Election ) with EIFH pursuant to subsection 85(1) of the Tax Act (or, in the case of a Unitholder that is a partnership, pursuant to subsection 85(2) of the Tax Act) and thereby obtain a full or partial tax-deferred rollover for purposes of the Tax Act in respect of the exchange of such Eligible Unitholder s Units for EIFH Shares. The extent of such rollover will depend on the amount specified in the Tax Election (the Elected Amount ) and the adjusted cost base to the Eligible Unitholder of such Units immediately before the Effective Time. Provided that the Elected Amount equals the aggregate adjusted cost base to the Eligible Unitholder of the Units, the exchange of Units for EIFH Shares can occur on a fully tax-deferred basis. For Canadian federal income tax purposes, the relevant Tax Election form is Form T2057, entitled Election on Disposition of Property by a Taxpayer to a Taxable Canadian Corporation (or, if the Eligible Unitholder is a partnership, Form T2058, entitled Election on Disposition of Property by a Partnership to a Taxable Canadian Corporation ). Eligible Unitholders should consult their own tax advisors to obtain and complete such forms and to determine whether any separate provincial or territorial election forms are required. Where Units are held as partnership property, a partner designated by the partnership must file one copy of Form T2058 on behalf of all members of the partnership. Such Form T2058 must be accompanied by a list containing the name, address and social insurance number or tax account number of each partner as well as a letter signed by each partner authorizing the designated partner to complete and file the form. In general, where a Tax Election under section 85 is made: (a) (b) the Elected Amount in respect of the Units may not be less than the lesser of the adjusted cost base to the Eligible Unitholder of the Units determined immediately before the Effective Time, and the fair market value of the Units at that time; and the Elected Amount in respect of the Units may not exceed fair market value thereof immediately before the Effective Time. Where an Eligible Unitholder and EIFH make a Tax Election by duly completing and filing such election with the CRA (and an applicable provincial taxation authority), the tax treatment to the Eligible Unitholder generally will result in the Eligible Unitholder being deemed to dispose of the Units for proceeds of disposition equal to the Elected Amount and to acquire the EIFH Shares at an aggregate cost equal to the Elected Amount. As such, to the extent that the Elected Amount exceeds the adjusted cost base of the Units disposed of, a capital gain will result. See below under heading Taxation of Capital Gains and Capital Losses. 44

49 The Fund has advised that it intends to provide to Unitholders on or about the Effective Date specific instructions and all forms (both federal, provincial and territorial) that may be required to make the Tax Election in a subsequent mailing (the Subsequent Mailing ), and that it will also provide information on the Fund s website at It is the sole responsibility of the Eligible Unitholder who wishes to take advantage of the tax deferral provided for by section 85 of the Tax Act (and any corresponding provincial or territorial legislation) to attend to the proper completion of the forms required under the Tax Act (and any corresponding provincial or territorial legislation). The Fund, EIFH or any nominee thereof will not be responsible for the proper completion of any Tax Election form, except for the obligation of EIFH to sign and forward to the CRA (and any applicable provincial or territorial taxation authority) such duly completed Tax Election that are received by EIFH by February 28, The Fund, EIFH or any nominee thereof will not be responsible or liable for taxes, interest, penalties, damages or expenses resulting from the failure by anyone to properly complete any form of Tax Election. In order for the CRA (and any applicable provincial or territorial taxation authority) to accept a Tax Election without a late filing penalty being payable by the Eligible Unitholder, the election, duly completed and executed by both the Eligible Unitholder and EIFH, must be received by such tax authorities on or before the day that is the earliest of the days on or before which either EIFH or the Eligible Unitholder is required to file an income tax return for the taxation year in which the disposition occurs. Provided that the Arrangement occurs on December 15, 2010, the earliest applicable filing deadline generally would be March 31, Eligible Unitholders are urged to consult their own tax advisors as soon as possible respecting the deadlines applicable to their own particular circumstances. The Fund has advised that EIFH will not execute or file Tax Elections that are received by EIFH after February 28, 2011, and that EIFH intends to forward to the CRA and applicable provincial or territorial taxation authorities all properly completed elections received by February 28, 2011 on or before March 31, It is recommended that all Eligible Unitholders who wish to enter into one or more Tax Elections give their immediate attention to this matter and consult the instructions in the Subsequent Mailing immediately upon the receipt thereof and/or consult the website for additional information. Eligible Unitholders are urged to consult their own tax advisors with respect to the advisability of making the Tax Election, including in connection with computing the adjusted cost base of their Units and determining the Elected Amount. Eligible Unitholders are also referred to Information Circular 76-19R3 and Interpretation Bulletin IT- 291R3 issued by the CRA for further information respecting the Tax Election. Resident Holders wishing to make the Tax Election should consult their own tax advisors. The comments herein with respect to such elections are provided for general assistance only. Generally, the adjusted cost base of the EIFH Shares acquired in exchange for Units must be averaged with the adjusted cost base of any other EIFH Shares held by the Resident Holder as capital property at a point in time to determine the adjusted cost base of each EIFH Share held at such time. Dividends on EIFH Shares In the case of a Resident Holder who is an individual (other than certain trusts), dividends received or deemed to be received on the EIFH Shares will be included in computing the Resident Holder's income, and will be subject to the normal gross-up and dividend tax credit rules applicable to dividends paid by taxable Canadian corporations under the Tax Act, including the enhanced gross-up and dividend tax credit applicable to any dividend designated as an "eligible dividend" in accordance with the provisions of the Tax Act. Taxable dividends received by an individual (including certain trusts) may give rise to a liability for alternative minimum tax as calculated under detailed rules set out in the Tax Act. Dividends received or deemed to be received on the EIFH Shares by a Resident Holder that is a corporation will generally be included in the corporation's gross income for the taxation year in which such dividends are received and will generally be deductible in computing the corporation's taxable income. A 45

50 Resident Holder that is a private corporation (as defined in the Tax Act) or any other corporation controlled, whether because of a beneficial interest in one or more trusts or otherwise, by or for the benefit of an individual (other than a trust) or a related group of individuals (other than trusts), may be liable to pay a refundable tax of 33% under Part IV of the Tax Act on dividends received (or deemed to be received) in the taxation year on the EIFH Shares to the extent such dividends are deductible in computing such Resident Holder s taxable income for the year. Disposing of EIFH Shares A disposition or a deemed disposition of an EIFH Share by a Resident Holder (except to EIFH or in a tax-deferred rollover transaction) will generally result in the Resident Holder realizing a capital gain (or a capital loss) in the year of the disposition equal to the amount by which the proceeds of disposition of the EIFH Share are greater (or less) than the aggregate of the Resident Holder's adjusted cost base thereof and any reasonable costs of disposition. The cost of an EIFH Share to a Resident Holder will generally be the average of the cost of all EIFH Shares held by such Resident Holder as capital property. Such capital gain (or capital loss) will be subject to the tax treatment described below under Taxation of Capital Gains and Capital Losses. Taxation of Capital Gains and Capital Losses Generally, one-half of any capital gain (a taxable capital gain ) realized by a Resident Holder in a taxation year must be included in the Resident Holder's income for the year, and one-half of any capital loss (an allowable capital loss ) realized by a Resident Holder in a taxation year must be deducted from taxable capital gains realized by the Resident Holder in that year. Allowable capital losses for a taxation year in excess of taxable capital gains for that year may, generally, be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances described in the Tax Act. The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition of a EIFH Share may be reduced by the amount of dividends received or deemed to be received by the Resident Holder on such shares (or on shares for which such shares have been substituted) to the extent and under the circumstances described in the Tax Act. Similar rules may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns EIFH Shares, directly or indirectly, through a partnership or a trust. Resident Holders to whom these rules may be relevant should consult their own tax advisors. A Resident Holder that is throughout the year a Canadian-controlled private corporation (as defined in the Tax Act) may be liable to pay, in addition to tax otherwise payable under the Tax Act, a refundable tax on certain investment income including taxable capital gains. Eligibility for Investment Subject to the provisions of any particular plan and provided that the EIFH Shares are listed on the TSX (or other designated stock exchange as defined in the Tax Act) at the particular time or that EIFH is otherwise a public corporation (within the meaning of the Tax Act), the EIFH Shares, at the particular time, will be qualified investments under the Tax Act for trusts governed by registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered education savings plans, registered disability savings plans and tax-free savings accounts ( TFSA ). The EIFH Shares will not be a prohibited investment for a trust governed by a TFSA provided that the holder of the TFSA deals at arm s length with EIFH for the purposes of the Tax Act and does not have a significant interest (within the meaning of the Tax Act) in EIFH, or a corporation, partnership or trust with which EIFH does not deal at arm s length for the purposes of the Tax Act. Holders Not Resident in Canada This portion of the summary is generally applicable to a Unitholder that is not and is not deemed to be, at all relevant times and for the purposes of the Tax Act and any applicable tax treaty, a resident of Canada and does not use or hold, and is not deemed to use or hold, its Units or the EIFH Shares received 46

51 upon the Arrangement in carrying on a business in Canada and is not an insurer who carries on an insurance business in Canada and elsewhere (a Non-Resident Holder ). Participation in the Arrangement A Non-Resident Holder who disposes of Units pursuant to the Arrangement will not be subject to tax in Canada in respect of such disposition, unless the Units constitute taxable Canadian property to the Non- Resident Holder at the time of disposition and the Non-Resident Holder is not entitled to relief under an applicable tax treaty between Canada and the Non-Resident Holder s country of residence. The Units will generally not be taxable Canadian property to a Non-Resident Holder at the time of disposition provided that: (i) the Non-Resident Holder, persons with whom the Non-Resident Holder does not deal at arm s length (within the meaning of the Tax Act), or the Non-Resident Holder together with such persons, did not own or have an interest in or option in respect of 25% or more of the issued Units at any time during the 60 month period preceding the time of disposition; (ii) the Fund is a mutual fund trust (within the meaning of the Tax Act) at the time of disposition; and (iii) the Units are not otherwise deemed to be taxable Canadian property pursuant to specific rules contained in the Tax Act. Based in part on representations of the Administrator as to certain factual matters, the Fund is currently a mutual fund trust for purposes of the Tax Act and is expected to continue to be a mutual fund trust at the time the Units are disposed of pursuant to the Arrangement. On March 4, 2010, the Minister of Finance (Canada) announced Tax Proposals that included proposed amendments ( TCP Amendments ) to the Tax Act s definition of taxable Canadian property which are intended to narrow the scope of taxable Canadian property in respect of determinations to be made after March 4, Under the TCP Amendments, in order for units of a mutual fund trust to constitute taxable Canadian property, in addition to the requirements in (i) to (iii) of the preceding paragraph, more than 50% of the fair market value of the trust unit must be derived directly or indirectly from real or immovable property situated in Canada, Canadian resource properties, timber resource properties (all within the meaning of the Tax Act) and/or options in respect of or interests in any of the foregoing types of properties. It is the understanding of the Administrator that more than 50% of the fair market value of the Units is derived directly or indirectly from real or immoveable property situated in Canada. Dividends on EIFH Shares Dividends paid or deemed to be paid to a Non-Resident Holder on EIFH Shares will be subject to Canadian withholding tax at the rate of 25% unless such rate is reduced under the provisions of a tax treaty between Canada and the Non-Resident Holder's country of residence. Where the Non-Resident Holder is a resident of the United States for the purposes of the Canada-United States Tax Convention (1980) and is the beneficial owner of the dividends, the rate of Canadian withholding tax is generally reduced to 15%. Disposing of EIFH Shares A Non-Resident Holder will generally not be liable to Canadian income tax on a disposition or deemed disposition of EIFH Shares unless the Non-Resident Holder's EIFH Shares are, or are deemed to be, taxable Canadian property to the Non-Resident Holder at the time of disposition and the Non-Resident Holder is not entitled to relief under an applicable tax treaty between Canada and the country of residence of the Non-Resident Holder. Generally, EIFH Shares will not be taxable Canadian property to a Non-Resident Holder at the time of disposition provided that: (i) the Non-Resident Holder, persons not dealing at arm's length with such Non- Resident Holder or the Non-Resident Holder together with all such persons did not own or have an interest or option in respect of 25% or more of the issued and outstanding shares of any class or series of the capital stock of EIFH at any time during the 60 month period ending preceding the time of disposition, (ii) such shares are listed on a designated stock exchange (as defined in the Tax Act, which includes the TSX) at that time, and (iii) the EIFH Shares are not otherwise deemed to be taxable Canadian property pursuant to specific rules contained in the Tax Act. 47

52 Pursuant to the TCP Amendments, the definition of taxable Canadian property is proposed to be amended such that in order for shares of the capital stock of a corporation that is listed on a designated stock exchange (which includes the TSX) to constitute taxable Canadian property, in addition to the requirements in (i) to (iii) in the preceding paragraph, more than 50% of the fair market value of the share must be derived directly or indirectly from real or immovable property situated in Canada, Canadian resource properties, timber resource properties (all as defined in the Tax Act) and/or options in respect of or interest in of any of the foregoing types of property. It is the understanding of the Administrator that following the completion of the Arrangement, more than 50% of the fair market value of the EIFH Shares will be derived directly or indirectly from real or immoveable property situated in Canada. Certain United States Federal Income Tax Considerations The following summary describes certain U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) with respect to (i) the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement and (ii) holding and disposing of EIFH Shares received pursuant to the Arrangement. The following summary does not purport to be a complete analysis of all of the potential U.S. federal income tax considerations that may be relevant to particular U.S. Holders in light of their particular circumstances nor does it deal with persons that are subject to special tax rules, such as brokers, dealers in securities or currencies, financial institutions, mutual funds, insurance companies, tax-exempt entities, qualified retirement plans or other tax-deferred accounts, regulated investment companies, common trust funds, U.S. Holders subject to the alternative minimum tax, corporations that accumulate earnings to avoid U.S. federal income tax, persons holding Units as part of a straddle, hedge or conversion transaction or as part of a synthetic security or other integrated transaction, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, U.S. Holders that have a functional currency other than the U.S. dollar, U.S. expatriates, and persons that acquired Units in a compensation transaction. In addition, this summary does not address persons who own or have owned, directly, indirectly or constructively, 10% or more (by vote) of the Units or EIFH Shares. The following summary does not address the U.S. federal income tax considerations applicable to any Unitholder that will own, actually or constructively, five percent or more of the total voting power or value of the stock of EIFH immediately after the Effective Time (a Five Percent Holder ). Any Unitholder that believes that it could become a Five Percent Holder should consult its own tax advisor regarding the U.S. federal, state, local and non-u.s. tax considerations applicable to it, including the requirement to file a gain recognition agreement in order to obtain non-recognition treatment with respect to the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement. The following is based on the Internal Revenue Code of 1986, as amended (the IRC ), Treasury regulations promulgated thereunder ( Treasury Regulations ), and administrative rulings and court decisions, in each case as in effect on the date hereof, all of which are subject to change, possibly with retroactive effect. No rulings have been or will be sought from the Internal Revenue Service (the IRS ) regarding any matter discussed in this Information Circular, and counsel to the Fund has not rendered any legal opinion regarding any of the tax considerations summarized herein. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax aspects set forth below. As used herein, the term U.S. Holder means a beneficial owner of Units that is (i) a citizen or individual resident of the U.S., (ii) a corporation (or an entity classified as a corporation for U.S. federal tax purposes) created or organized in or under the laws of the U.S. or any political subdivision thereof, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (A) a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons, within the meaning of Section 7701(a)(30) of the IRC, have authority to control all of its substantial decisions or (B) it has properly elected under applicable Treasury Regulations to continue to be treated as a U.S. person. The tax treatment of a partner in a partnership (or other entity classified as a partnership for U.S. federal tax purposes) may depend on both the partnership s and the partner s status. Partnerships that are beneficial owners of Units, and partners in such partnerships, should consult their own tax advisors 48

53 regarding the U.S. federal, state, local and non-u.s. tax considerations applicable to them with respect to the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement. TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, UNITHOLDERS ARE HEREBY NOTIFIED THAT: (i) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS INFORMATION CIRCULAR IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY UNITHOLDERS OR EIFH SHAREHOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE IRC; (ii) SUCH DISCUSSION IS BEING USED IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (iii) UNITHOLDERS AND EIFH SHAREHOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR. This summary is of a general nature only. It is not intended to constitute, and should not be construed to constitute, legal or tax advice to any particular Unitholder or EIFH Shareholder. Unitholders and EIFH Shareholders should consult their own tax advisors regarding the tax considerations applicable to them in their particular circumstances. Disposition of Units Pursuant to the Arrangement The U.S. federal income tax consequences to a U.S. Holder with respect to the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement (the Share Exchange ) depend in part on whether such exchange will qualify as a tax-free exchange under the IRC. The Share Exchange should qualify as a tax-free exchange under Section 351 of the IRC. However, this conclusion is based on certain factual assumptions including that, immediately after the exchange, at least 80% of EIFH Shares will be held by former Unitholders who disposed of their Units in exchange for EIFH Shares pursuant to the Arrangement. The Fund believes that such factual assumptions, including the 80% assumption discussed in the previous sentence, will be satisfied. However, certain of these factual assumptions are not within the Fund s control. The Fund plans to take the position that the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement qualifies as a tax-free exchange under Section 351 of the IRC and the rest of this discussion so assumes. Subject to the passive foreign investment company ( PFIC ) rules summarized below, a U.S. Holder should not recognize any income, gain or loss upon the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement. If the Arrangement does not result in the recognition of gain or loss, a U.S. Holder s tax basis in EIFH Shares received pursuant to the Arrangement generally will equal the U.S. Holder s adjusted tax basis in the Units disposed of pursuant to the Arrangement and the U.S. Holder s holding period with respect to such EIFH Shares generally will include the U.S. Holder s holding period with respect to the Units disposed of pursuant to the Arrangement. Holding EIFH Shares Received Pursuant to the Arrangement Subject to the PFIC rules summarized below, the gross amount of distributions paid to a U.S. Holder with respect to EIFH Shares received pursuant to the Arrangement will be included in the gross income of such U.S. Holder as dividend income to the extent EIFH has either current earnings and profits (for the entire taxable year in which the distribution is made) or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will first be treated as a tax-free return of capital, causing a reduction in the U.S. Holder s adjusted tax basis in the Holdings shares with respect to which the distribution was made, and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such Holdings shares. A U.S. Holder of EIFH Shares must include in gross income the amount of any Canadian tax withheld from a distribution even though such U.S. Holder does not in fact receive such amount. Any distributed amounts treated as a dividend for U.S. federal income tax purposes will be taxable to a U.S. Holder when such U.S. Holder actually or constructively receives such amount. Such amounts will not be eligible for the dividends received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. The amount treated as a dividend that a U.S. Holder must include in gross income will be the U.S. dollar value of the Canadian dollar payments made, determined at the spot Canadian dollar /U.S. dollar rate on the date the distributed amount is includible in such U.S. Holder s gross income, 49

54 regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date a U.S. Holder includes the payment in gross income to the date such U.S. Holder converts the payment into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income, and such gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. Dividends will be income from sources outside the U.S. and will, depending on a U.S. Holder s circumstances, be either passive or general income for purposes of computing the foreign tax credit allowable to you. Subject to the PFIC rules summarized below, any gain or loss realized by a U.S. Holder on the sale or other taxable disposition of EIFH Shares received in pursuant to the Arrangement will be subject to U.S. federal income tax as capital gain or loss (which will be long-term capital gain or loss if the holding period for such Holdings shares exceeds one year on the date of such sale or other taxable disposition) in an amount equal to the difference, if any, between the amount realized upon such sale or other taxable disposition and such U.S. Holder s tax basis in its EIFH Shares. Long-term capital gain of individuals and other noncorporate U.S. Holders is generally taxed at preferential rates. Deductions for capital losses are subject to significant limitations under the IRC. Any gain or loss will generally be treated as derived from sources within the United States for foreign tax credit limitation purposes. PFIC Rules A non-u.s. corporation generally will be classified as a PFIC for U.S. federal income tax purposes for any taxable year during which either (i) at least 75% of the corporation s gross income is passive income or (ii) on average, at least 50% of the gross value of the corporation s assets is attributable to assets that produce passive income or are held for the production of passive income. For this purpose, passive income generally includes, among other categories of income, dividends, interest, certain rents and royalties and gains from the disposition of passive assets. Based on the structure of the Fund and its Subsidiaries, the Fund does not believe that it is currently treated as a corporation classified as a PFIC, nor does the Fund believe that it was treated as a corporation classified as a PFIC for prior taxable years. However, no assurance can be given that the Fund is not treated as a corporation currently classified as a PFIC or that the Fund was not treated as a corporation classified as a PFIC for such prior taxable years. Additionally, the Fund does not expect that EIFH will be treated as a PFIC at the time of the Arrangement or will become a PFIC for the foreseeable future but this conclusion is a factual determination that is made annually and thus may be subject to change. If the Fund was classified as a PFIC for any taxable year during which a U.S. Holder held Units and did not have certain elections in effect, such U.S. Holder may be subject to adverse U.S. federal income tax rules in respect of the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement and/or holding EIFH Shares. In particular, if the Fund is currently or was previously treated as a PFIC with respect to such U.S. Holder but EIFH is not treated as a PFIC with respect to such U.S. Holder at the time of the Arrangement, then, under proposed Treasury Regulations, the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement might constitute a fully taxable transaction to such U.S. Holder for U.S. federal income tax purposes. In such a case, the U.S. Holder generally will be taxed at the highest ordinary income tax rates then in effect on any gain realized on the disposition of Units in exchange for EIFH Shares pursuant to the Arrangement, and generally will also be subject to a special interest charge with respect to any such gain. Each U.S. Holder should consult its own tax advisor regarding the U.S. federal income tax considerations that would be applicable to it if the Fund were classified as a PFIC for any taxable year during which the U.S. Holder held Units. If EIFH were to be treated as a PFIC, unless a U.S. Holder elects to be taxed annually on a mark-tomarket basis with respect to the shares gain realized on the sale or other disposition of a U.S. Holder s EIFH Shares would in general not be treated as capital gain. Instead, a U.S. Holder would be treated as if it had realized such gain and certain "excess distributions" ratably over its holding period for the EIFH Shares and would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. With certain exceptions, a U.S. 50

55 Holder s EIFH Shares will be treated as stock in a PFIC if EIFH were a PFIC at any time during such U.S. Holder s holding period in its EIFH Shares. Dividends paid by EIFH will not be eligible for the special tax rates applicable to qualified dividend income if EIFH is treated as a PFIC with respect to the U.S. Holder either in the taxable year of the distribution or the preceding taxable year, but instead will be taxable at rates applicable to ordinary income. Backup Withholding and Information Reporting In general, information reporting will apply to distributions made with respect to, and proceeds received on the disposition of, EIFH Shares that are paid to a U.S. Holder within the United States (and, in certain cases, outside of the United States), unless the U.S. Holder establishes that it is an exempt recipient, such as a corporation. Backup withholding may apply to such payment if the U.S. Holder fails to timely provide a taxpayer identification number or certification of exempt status or fails to report dividend and interest income in full. Backup withholding tax is not an additional tax. A U.S. Holder subject to the backup withholding rules will be allowed a credit of the amount withheld against such U.S. Holder s U.S. federal income tax liability and, if backup withholding tax results in an overpayment of U.S. federal income tax, such U.S. Holder may be entitled to a refund, provided that the requisite information is correctly furnished to the IRS in a timely manner. U.S. Holders should consult their own tax advisors as to the information reporting and backup withholding tax rules. THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO UNITHOLDERS WITH RESPECT TO (1) THE DISPOSITION OF UNITS IN EXCHANGE FOR EIFH SHARES PURSUANT TO THE ARRANGEMENT AND (2) HOLDING AND DISPOSING OF EIFH SHARES RECEIVED PURSUANT TO THE ARRANGEMENT. UNITHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR PARTICULAR CIRCUMSTANCES. Information Concerning the Fund Structure of the Fund The Fund is an unincorporated open-ended trust established under the laws of the Province of Alberta on May 22, 2003 by the Fund Trust Indenture, as amended and restated from time to time. In 2006, the Fund and ECT Trust Indentures were amended to expand the scope of the Fund and the Trust s respective permitted business activities, from pipeline and energy transportation business to energy infrastructure business and related activities. The Units are currently traded on the TSX under the symbol ENF.UN. The Fund commenced operations on June 30, 2003 and is administered by the Administrator, a wholly owned subsidiary of Enbridge. The Administrator also provides management services to ECT, a subsidiary of the Fund. The head office and principal business office of the Fund is located at 3000, 425-1st Street S.W., Calgary, Alberta, T2P 3L8. The following chart illustrates the structural relationships among the Fund, its subsidiary entities, EMSI and Enbridge, excluding immaterial subsidiaries for which total revenue and total assets are less than 10% of consolidated revenue and total assets. 51

56 (1) An unincorporated trust governed by the laws of the Province of Alberta. (2) A corporation continued under the laws of Canada. (3) A limited partnership established under the laws of the Province of Alberta. (4) A corporation incorporated under the laws of the Province of Saskatchewan. (5) A corporation incorporated under the laws of the Province of Alberta. (6) A general partnership established under the laws of the Province of Alberta that holds a 33.3% interest in each of the Magrath and Chin Chute Wind Power Projects. (7) Entities included in the Green Power segment. (8) Entities included in the Alliance Canada segment. (9) Entities included in the Saskatchewan System segment. (10) Enbridge holds 100% of the ECT Preferred Units. (11) A subsidiary of Enbridge that provides all services required to operate and administer the business of the Saskatchewan System. (12) A subsidiary of Enbridge that administers Enbridge Income Fund and manages Enbridge Commercial Trust. (13) A general partnership formed under the laws of the Province of Alberta and registered in Saskatchewan. Summary Description of the Business of the Fund The Fund conducts business through three operating segments: Alliance Canada includes the Fund s 50% interest in the Canadian portion of the Alliance System. Revenue from Alliance Canada accounts for 71.4% ( %) of the Fund s total revenue. The Alliance System, comprised of Alliance Canada and Alliance US, transports natural gas from supply areas in northwestern Alberta and northeastern British Columbia to delivery points near Chicago, Illinois. Saskatchewan System owns and operates crude oil and liquids pipeline systems primarily connecting producing fields in southern Saskatchewan and southwestern Manitoba with the mainline pipeline of Enbridge for transportation to the United States. Revenue from the Saskatchewan System accounts for 25.0% ( %) of the Fund s total revenue. 52

57 Green Power includes entities that produce electricity from renewable and alternative energy sources and consists of a 50% interest in each of NRGreen (which owns and operates waste heat power generation facilities) and the SunBridge wind power project as well as a 33% interest in each of the Magrath and Chin Chute wind power projects. Revenue from Green Power accounts for 3.6% ( %) of the Fund s total revenue. Documents Incorporated by Reference Information in respect of the Fund is incorporated by reference in this Circular from documents filed with securities regulatory authorities in Canada. Copies of the documents may be obtained on request without charge from the Corporate Secretary of the Fund at Suite 3000, 425 1st Street S.W., Calgary Alberta, T2P 3L8 and are also available electronically at The following documents of the Fund, filed with the various securities commissions or similar authorities in the jurisdictions where the Fund is a reporting issuer, are specifically incorporated by reference into and form an integral part of this Information Circular: 1. the Fund AIF; 2. the audited consolidated financial statements of the Fund as at and for the years ended December 31, 2009 and 2008, respectively, together with the notes thereto and the auditors report thereon; and 3. the Fund MD&A. Any documents of the type described in Section 11.1 of Form F1 Short Form Prospectus, filed by the Fund with the securities commissions or similar authorities in the provinces of Canada subsequent to the date of this Information Circular and prior to the Effective Date shall be deemed to be incorporated by reference in this Information Circular. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Circular to the extent that a statement contained herein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Circular. Effect of Arrangement on Election of Independent ECT Trustees The current method for electing and appointing the ECT Trustees, including the contractual right of appointment of the Administrator, is described elsewhere in this Circular, under the heading Matters to be Acted Upon at the Meeting Election of Independent ECT Trustees Directions to the Fund Trustee. The terms of the Arrangement will amend this contractual right so that Enbridge will in the future be entitled to appoint a number of ECT Trustees that is approximately equivalent to its pro-rata voting interest in ECT, up to a maximum of seven out of ten ECT Trustees when Enbridge holds more than 70% but less than 100% of the issued and outstanding Units. Notwithstanding this amended appointment right of Enbridge, for so long as EIFH remains a reporting issuer, ECT will have a minimum of three Independent ECT Trustees which will be selected in accordance with the current provisions of the ECT Trust Indenture, whereby the current Independent ECT Trustees must approve the Independent ECT Trustees proposed for election by the Administrator. See Arrangement Amended Governance and Ownership Arrangements Appointment of ECT Trustees. 53

58 Capital Structure The beneficial interests in the Fund are represented and constituted by the Units. An unlimited number of Units may be issued and, as at the date hereof, 34,625,000 Units are outstanding. Unitholders are entitled to receive non-cumulative distributions if, as and when declared by the ECT Board in accordance with the Fund Trust Indenture. Units are redeemable at the demand of the Unitholder at any time, in whole or in part, in accordance with the terms of the Fund Trust Indenture. The Unitholders are entitled to receive any proceeds from the sale of any property of the Fund remaining after the payment of all known liabilities and obligations of the Fund. Price Range and Trading Volume of Units The outstanding Units are listed and posted for trading on the TSX under the trading symbol ENF.UN. The following table sets forth the price range for and trading volume of the Units as reported by the TSX for the periods indicated. Month High ($/Unit) Low ($/Unit) Close ($/Unit) Volume Traded April ,000 May ,900 June ,200 July ,800 August ,600 September ,900 October ,500 November ,482,400 December ,200 January ,900 February ,100 March ,600 On March 26, 2010, the last trading day on which the Units traded prior to announcement of the approval of the Arrangement by the ECT Board, the closing price of the Units was $ On March 31, 2010, the closing price of the Units was $ Summary Financial Information Following the completion of the Arrangement, EIFH will hold 25,125,000 Units, representing approximately 73% of the outstanding Units and EIFH will account for such investment using the equity method of accounting under Canadian GAAP. There are no contingent issuances of securities by the Fund contemplated in connection with the Arrangement, but future transactions could affect EIFH s proportionate interest. The following chart provides summary information as to the assets, liabilities and results of operations of the Fund for the periods indicated: Summary Financial Information (1) As at and for the years ended December 31, 2009 and 2008 (millions of Canadian dollars) December 31, 2009 December 31, 2008 Total Assets 1, ,858.2 Total Liabilities 1, ,596.3 Revenues Earnings Notes: (1) Summary financial information has been extracted from the Financial Statements prepared in accordance with Canadian GAAP. The audit opinions on the Financial Statements for the periods presented were issued without reservation. 54

59 Auditors, Transfer Agent and Registrar The auditor of the Fund is PricewaterhouseCoopers LLP, Chartered Accountants. The transfer agent and registrar for the Units is CIBC Mellon Trust Company. Additional Information Additional information relating to the Fund is available on SEDAR at Financial information concerning the Fund is provided in its financial statements for the year ended December 31, 2009, and the accompanying Fund MD&A, all of which are incorporated herein by reference and can be accessed on SEDAR. Information Concerning EIFH Structure of EIFH EIFH was incorporated on March 26, 2010 pursuant to the provisions of the ABCA for the sole purpose of participating in the Arrangement. Immediately following the completion of the Arrangement, Exchanging Unitholders will hold 25,125,000 EIFH Shares. Enbridge will hold 5,000,000 EIFH Shares, or approximately 20%, of the EIFH Shares, and the Public Unitholders will hold 20,125,000 EIFH Shares, or approximately 80%, of the EIFH Shares. After the Arrangement, EIFH will hold approximately 73% of the Units and Enbridge will hold the remaining approximately 27%. The business of EIFH will be limited to the ownership of its interest in the Fund. EIFH will become a reporting issuer in all of the provinces of Canada and will become subject to the informational reporting requirements under the securities laws of such jurisdictions as a result of the Arrangement. The head and principal office of EIFH is located at 3000, 425 1st Street S.W., Calgary, Alberta T2P 3L8. EIFH. Reference is made to Appendix H Information About EIFH for a more detailed description of Risk Factors Relating to the Arrangement An investment in EIFH Shares as a result of the Arrangement is subject to certain risks. In addition to the risk factors described under the headings Alliance Canada Business Risks, Saskatchewan System Business Risks, Green Power Business Risks and Risk Management in the Fund MD&A, Risk Factors in the Fund AIF and the risk factors described in Appendix H Information Concerning EIFH, which are specifically incorporated by reference into this Circular, Unitholders should carefully consider the following additional risk factors before making a decision regarding the Arrangement Resolution. Tax Matters Associated with the Arrangement Subject to making the joint election with EIFH under section 85 of the Tax Act, the exchange of Units for EIFH Shares pursuant to the Arrangement is a taxable transaction to Unitholders under the Tax Act. See Arrangement - Certain Canadian Federal Income Tax Considerations Participation in the Arrangement. The Tag-Along Rights entitle holders of EIFH Shares, other than Enbridge and its affiliates, to receive an offer to purchase the EIFH Shares in the event a third party agrees to acquire at least 90% of the ECT Preferred Units, Units and EIFH Shares beneficially owned by Enbridge or its affiliates. The term preferred share rules in the Tax Act are intended to apply to shares which can reasonably be regarded as a debt substitute. We do not believe that the Tag-Along Rights would cause EIFH Shares to be considered to be a debt substitute. However, the definition of term preferred share in the Tax Act is broadly worded. There can be no assurance that the CRA or a court of competent jurisdiction may not conclude that the EIFH Shares that are the subject of the Tag-Along Rights do not constitute term preferred shares. Generally speaking, where the EIFH Shares constitute term preferred shares for purposes of the Tax Act, the Canadian income 55

60 tax consequences may be materially different to a holder thereof that is a specified financial institution (as defined in the Tax Act) and holds, together with persons not dealing at arm s length with such holders, more than 10% of the issued and outstanding EIFH Shares. The term preferred share rules in the Tax Act are complex and the foregoing discussion is not a complete summary of all of the potential consequences of EIFH Shares being considered to be term preferred shares. Holders to whom these rules may be relevant are urged to consult their own tax advisors with regard to their own particular circumstances. Failure to Realize the Anticipated Benefits of the Arrangement The Fund and EIFH are proposing to complete the Arrangement to create the opportunity to realize certain benefits including, among others, those set forth in this Circular under the heading Arrangement Partial Conversion to a Corporation. Achieving the anticipated benefits depends in part on the ability of EIFH and the Fund to realize the anticipated growth opportunities arising from the Arrangement. A variety of factors, including those set forth in or incorporated by reference in this Circular, may adversely affect the ability to achieve the anticipated benefits of the Arrangement. Conditions Precedent and Required Regulatory Approvals The completion of the Arrangement in the form contemplated by the Plan of Arrangement is subject to a number of conditions precedent, some of which are outside the control of the Fund, including, without limitation, obtaining receipt of Unitholder approval at the Meeting, regulatory approvals, approval by the TSX of the substitutional listing of the EIFH Shares to be issued pursuant to the Arrangement and the Final Order. There can be no certainty, nor can the Fund provide any assurance, that these conditions will be satisfied or, if satisfied, as to when they will be satisfied. Failure to obtain the Final Order on terms acceptable to the Fund and EIFH would likely result in the decision being made not to proceed with the Arrangement. If any of the required regulatory and third party approvals cannot be obtained on terms satisfactory to the ECT Board or at all, the Plan of Arrangement may have to be amended in order to mitigate against the negative consequence of the failure to obtain any such approval, and accordingly, the benefits available to Unitholders resulting from the Arrangement may be reduced. Alternatively, in the event that the Plan of Arrangement cannot be amended so as to mitigate against the negative consequences of the failure to obtain a required regulatory or third party approval, the Arrangement may not proceed at all. If the Arrangement is not completed, the market price of the Units may be adversely affected. Adoption of Shareholder Rights Plan by EIFH The Fund currently has in place the Unitholder Rights Plan which was confirmed by Unitholders at the annual meeting of Unitholders on May 4, Following completion of the Arrangement, EIFH proposes to adopt the EIFH Shareholder Rights Plan, a description of which is included in Appendix D to this Circular. At the Meeting, Unitholders will be asked to consider and vote to ratify, confirm and approve the EIFH Shareholder Rights Plan. On March 26, 2010, the EIFH Board voted to adopt the EIFH Shareholder Rights Plan. The EIFH Shareholder Rights Plan is designed to ensure the fair treatment of EIFH Shareholders in connection with any take-over bid for EIFH and to provide the EIFH Board and EIFH Shareholders with sufficient time to fully consider any unsolicited take-over bid. The EIFH Shareholder Rights Plan also provides the EIFH Board with time to pursue, if appropriate, other alternatives to maximize shareholder value in the event of a take-over bid. The adoption of the EIFH Shareholder Rights Plan received conditional acceptance by the TSX on March 19, The EIFH Shareholder Rights Plan will be contained in an agreement to be entered into with CIBC Mellon Trust Company, as rights agent. The principal terms of the EIFH Shareholder Rights Plan will be substantially the same as the principal terms of the Unitholder Rights Plan as described in the Fund AIF, incorporated by reference into this Circular and available on The EIFH Board has determined that the EIFH Shareholder Rights Plan will be in the best interest of EIFH and holders of EIFH Shares and recommends that Unitholders vote in favour of the EIFH Shareholder Rights Plan Resolution, the full text of which is set forth in Appendix D to this Circular. 56

61 Unless specified in a form of proxy or Voting Instruction Form that the Units represented by the proxy shall be voted against the EIFH Shareholder Rights Plan Resolution, it is the intention of the persons designated in the enclosed proxy or Voting Instruction Form to vote FOR the approval of the EIFH Shareholder Rights Plan. REMUNERATION OF FUND TRUSTEE AND ECT TRUSTEES Pursuant to the Fund Trust Indenture, the Fund Trustee is entitled to receive for its services as the trustee of the Fund: (i) such reasonable compensation as shall be negotiated between the Administrator on behalf of the Fund and the Fund Trustee; (ii) reimbursement of the Fund Trustee s reasonable out-of-pocket expenses incurred in acting as the trustee of the Fund; and (iii) fair and reasonable remuneration for services rendered to the Fund in any other capacity, which services may include, without limitation, services as the transfer agent for the Fund or any Units. For the services rendered as trustee and registrar and transfer agent to the Fund and services rendered as trustee under a note indenture of ECT during the year ended December 31, 2009, the Fund Trustee was paid approximately $21,026 ( $46,000). Pursuant to the ECT Trust Indenture, the Independent ECT Trustees are entitled to receive for their services as ECT Trustees such reasonable compensation as the ECT Board may determine from time to time, as well as reimbursement of their out-of-pocket expenses incurred in acting as ECT Trustees. The Manager Trustees are not entitled to receive any remuneration for their services as ECT Trustees, but are entitled to reimbursement from ECT of their out-of-pocket expenses incurred in acting as ECT Trustees. The following tables set forth the various retainers and fees and the amounts of such retainers and fees payable to the Independent ECT Trustees during the twelve-month period ended December 31, 2009: Board and Audit Committee Description Trustee Retainer Chair of the Board Retainer Audit Committee Chair Retainer Meeting Fee (1) Travel Fee (2) Amount $25,000 per annum $20,000 per annum $12,500 per annum $1,250 per meeting $1,500 per meeting Independent Committee (3) Description Amount Independent Committee Chair Retainer $3,000 Independent Committee Meeting Fee (1) $1,250 per meeting Special Committee (4) Description Amount Special Committee Chair Retainer $6,000 Special Committee Member Retainer $2,000 Special Committee Meeting Fee (1) $1,500 per meeting Notes: (1) A meeting fee is paid for attendance at board or committee meetings or while otherwise engaged in business related to the Fund. (2) A travel fee is paid to a trustee who travels out of their principal province of residence to attend a board or committee meeting. (3) During 2009, the ECT Board established an Independent Committee comprised exclusively of Independent ECT Trustees, which served during May and June of 2009 to review the terms of a transaction recommended by the Administrator and involving the provision of credit facility financing to the Fund from an affiliate of the Administrator. (4) During 2009, the ECT Board established a Special Committee comprised exclusively of Independent ECT Trustees, which has served since November of 2009 to review the Arrangement proposal described elsewhere in this Circular. 57

62 Trustee Compensation Table During the year ended December 31, 2009, ECT provided the Independent ECT Trustees with the following compensation, in accordance with the rules and compensation plans described above, for serving in their respective capacities as ECT Trustees and members of committees of the ECT Board: Fees Earned/Total Compensation (1) Name ($) Richard H. Auchinleck 43,250 Catherine M. (Kay) Best 58,750 J. Lorne Braithwaite 32,750 M. Elizabeth Cannon 35,750 Gordon G. Tallman 63,250 Note: (1) During 2009, Independent ECT Trustee compensation included only the fee-based compensation listed above and did not include any share-based awards, option-based awards, non-equity incentive plan compensation, pension, or other compensation. The ECT Board has established a voluntary minimum ownership guideline requiring each trustee to hold a personal investment in Units with a value equal to four times the annual trustee retainer and that they attain the target ownership level within a period of four years from the date of the approval of the guideline (May 3, 2004), or the date of their election or appointment, whichever is later. Information regarding ECT Trustee ownership of Units is set forth earlier in this Circular under the heading Annual Matters to be Acted Upon at the Meeting - Election of Independent ECT Trustees. MANAGEMENT OF THE FUND AND ECT The Fund Trustee has no active role in the management of the Fund and there are no individual trustees of the Fund itself. Responsibility for the management and administration of the Fund has been generally delegated to the Administrator pursuant to the Administration Agreement. The authority of the Fund Trustee has generally been delegated to the ECT Board pursuant to the Fund Delegation Agreement and to the Administrator pursuant to the Administration Agreement. Day-to-day management and general administration of ECT itself has been delegated to the Administrator pursuant to the Management Agreement. None of the Fund, ECT or any of their respective wholly-owned subsidiaries has any employees. Consequently, these businesses, including the business of one of ECT s two largest operating investments, Enbridge Pipelines (Saskatchewan) Inc. and its subsidiaries ( Enbridge Saskatchewan ), are managed and operated through service agreements with the Administrator and, in some cases, affiliates of the Administrator as described below. Alliance Pipeline Limited Partnership ( Alliance Canada ) is ECT s other largest operating investment, in which ECT holds an indirect 50% interest. There is no service agreement between the Administrator and Alliance Canada since Alliance Canada is managed by its general partner, Alliance Pipeline Ltd., which has a management team and staff of its own. From the Fund s perspective, governance oversight for Alliance Canada is accomplished through representation of the Administrator on the Alliance Canada board and the ECT Board s role in overseeing the management activities of the Administrator. Management oversight for ECT s other investments, including its 50% and 33% interests in the businesses comprising its Green Power segment, is accomplished through representation, along with the other respective arm s length third party owners of each business, in proportion to each owner s respective ownership interest, on the various boards and management committees of those businesses. Based on its representative participation on these boards and committees, the Administrator oversees the management and operations of the Green Power businesses and reports to the ECT Board, to fulfil the Fund s own governance oversight requirements. Day-to-day operation of the wind power businesses in the Green Power segment rests with other owners of the projects in each case except for the 50% owned SunBridge Wind Power Project, which the owners have agreed will be operated on a day-to-day basis by employees of Enbridge Pipelines Inc., an affiliate of the Administrator. Alliance Canada operates the waste heat power 58

63 generation business included in the Green Power segment, as the existing facilities for that business are located along the Alliance Canada pipeline. Administration Agreement Pursuant to the Administration Agreement, the Administrator has agreed to provide general administrative and support services to the Fund to administer the operations of the Fund including, without limitation, those necessary to: (i) ensure compliance by the Fund with its continuous disclosure obligations under applicable securities legislation; (ii) provide investor relations services; (iii) prepare and cause to be provided to Unitholders all information to which Unitholders are entitled under the Fund Trust Indenture and under applicable laws; (iv) call and hold meetings of Unitholders and prepare, approve and arrange for the distribution of required materials, including notices of meetings and information circulars, in respect of all such meetings; (v) compute, determine and direct distributions to Unitholders; (vi) attend to all administrative and other matters arising in connection with any redemptions of Units; and (vii) undertake and perform all acts, duties and responsibilities in connection with acquiring or disposing of assets and property for and on behalf of the Fund of whatever nature or kind. In consideration for providing the services under the Administration Agreement, the Administrator receives a base fee of $50,000 per annum, subject to annual adjustment for inflation. The Administrator is also entitled to be reimbursed for all out-of-pocket and third party fees, costs and expenses reasonably incurred by the Administrator or its affiliates in carrying out the Administrator s obligations and duties under the Administration Agreement. The reimbursement of Fund expenses to the Administrator is not intended to provide the Administrator with any financial gain or loss. During the year ended December 31, 2009, the Administrator received a base fee of $59,315 ( $58,380) pursuant to the Administration Agreement. The Administration Agreement has an initial 20-year term and is automatically renewable for additional successive terms of five years, unless terminated earlier by the Administrator. The Administration Agreement may be immediately terminated by either party in the event of: (i) certain events of insolvency, receivership or liquidation of the other party; (ii) the termination of the Management Agreement; or (iii) a breach by the other party in the performance of a material obligation under the Administration Agreement (other than as a result of the occurrence of a force majeure event) which is not remedied within 60 days after notice of such breach has been delivered, or when not reasonably capable of being remedied within 60 days after notice thereof has been delivered, such party fails to commence and diligently pursue steps to remedy such breach, and such termination has been authorized by a resolution passed by more than 50% of the Unitholders entitled to vote on such resolution at a meeting of Unitholders. Management Agreement Pursuant to the Management Agreement, the Administrator has agreed to provide all aspects of management and general administration to ECT, including, without limitation: (i) overseeing the business and affairs of ECT and reporting to the ECT Board with respect thereto at such times as may be requested from time to time by the ECT Board; (ii) developing, implementing and monitoring a strategic plan for ECT; (iii) developing acquisition strategies and investigating potential acquisitions and analyzing the feasibility of potential acquisitions; (iv) carrying out acquisitions or dispositions and related financings; (v) preparing an annual management plan for approval by the ECT Board; (vi) assisting in connection with any financing of ECT or its affiliates; (vii) assisting ECT with the preparation, planning and coordinating of meetings of the ECT Board; and (viii) providing oversight and direction of the investments in Alliance Canada, Alliance Pipeline Ltd. (the general partner of Alliance Canada) and Enbridge Saskatchewan, including through representation on the boards of directors of Alliance Pipeline Ltd., Enbridge Saskatchewan and other investments of ECT from time to time. In consideration for providing the services under the Management Agreement, the Administrator receives: (i) a base fee of $50,000 per annum, subject to annual adjustment for inflation; and (ii) an annual incentive fee equal to 25% of the amount by which the cash distributions to Unitholders in respect of the applicable year exceeds $0.825 per Unit. The Administrator is also entitled to be reimbursed for all out-of-pocket and third party fees, costs and expenses reasonably incurred by the Administrator or its affiliates in carrying out the Administrator s obligations and duties under the Management Agreement. The reimbursement of ECT expenses to the Administrator is not intended to provide the Administrator with any 59

64 financial gain or loss. During the year ended December 31, 2009, the Administrator received a base fee of $59,315 ( $58,380) and an incentive fee of approximately $7.9 million ( $5.0 million) pursuant to the Management Agreement. The Management Agreement has an initial 20-year term and is automatically renewable for additional successive terms of five years unless terminated earlier by the Administrator. The Management Agreement may be immediately terminated, without compensation, by either party on the occurrence of: (i) certain events of insolvency, receivership or liquidation of the other party; (ii) the termination of the Administration Agreement; or (iii) a breach by the other party in the performance of a material obligation under the Management Agreement (other than as a result of the occurrence of a force majeure event) which is not remedied within 60 days after notice of such breach has been delivered, or when not reasonably capable of being remedied within 60 days after notice thereof has been delivered, such party fails to commence and diligently pursue steps to remedy such breach, and such termination has been authorized by a resolution passed by more than 50% of the Unitholders entitled to vote on such resolution, whether cast in person or by proxy, at a meeting of Unitholders at which a quorum was present. ECT may also terminate the Management Agreement, without compensation, if there is a substantial deterioration in the business of ECT rendering its performance to be materially below the performance of similar income trusts in Canada, the substantial deterioration is caused by the Administrator (and not by reasons outside the Administrator s control) and the Administrator fails to remedy the reason for the deterioration in performance, as identified by the ECT Board, by the later of the date that is three months after the ECT Board notifies the Administrator of the performance issue in writing and the date on which the Unitholders approve the termination, on a 66⅔% basis, by written resolution or by vote at a meeting of Unitholders. GP Services Agreement Pursuant to a services agreement dated June 30, 2003 between the Administrator and Enbridge Income Partners GP Inc. (the GP Services Agreement ), the Administrator has agreed to provide Enbridge Income Partners GP Inc. ( GP ), the general partner of Enbridge Income Partners LP, with all services as may be required or advisable, from time to time, in order to operate and administer the business of GP. The GP Services Agreement had an initial five-year term and has been renewed pursuant to its terms for a subsequent five-year renewal term. In consideration for providing services to GP under the GP Services Agreement, the Administrator will receive a fee equal to 115% of its costs and expenses reasonably incurred in the course of providing such services. During the year ended December 31, 2009, the Administrator received fees of $5,000 (2008-$5,004) pursuant to the GP Services Agreement. Saskatchewan Agreement Pursuant to a services agreement dated June 30, 2003 among the Administrator, ESOSI and Enbridge Saskatchewan (the Saskatchewan Services Agreement ), the Administrator has retained the services of ESOSI to provide Enbridge Saskatchewan with all services as may be required or advisable, from time to time, in order to operate and administer the business of Enbridge Saskatchewan, including, without limitation, pipeline operating services and general and administrative services. The Saskatchewan Services Agreement had an initial five-year term and has been renewed pursuant to its terms for a subsequent five-year renewal term. In consideration for providing services to Enbridge Saskatchewan under the Saskatchewan Services Agreement, ESOSI receives an amount equal to all costs and expenses reasonably incurred in the course of providing such services. The amounts paid under the Saskatchewan Services Agreement are not intended to provide ESOSI with any financial gain or loss. During the year ended December 31, 2009, ESOSI received payments of $18.0 million (2008-$15.5 million) pursuant to the Saskatchewan Services Agreement. The Administrator The Administrator is a wholly-owned subsidiary of Enbridge. The head office of the Administrator is located at 3000, 425 1st Street S.W., Calgary, Alberta, T2P 3L8. 60

65 The following individuals are the directors and senior officers of the Administrator: Name and Municipality of Residence J. Richard Bird Calgary, Alberta Stephen J. Wuori Calgary, Alberta David T. Robottom Calgary, Alberta James A. Schultz Millarville, Alberta John K. Whelen Calgary, Alberta David K. Wudrick Calgary, Alberta Leigh D. Kelln Calgary, Alberta James E.R. Lord Calgary, Alberta Position with the Administrator Director Director Director President Vice President, Business Development & Chief Financial Officer Treasurer Controller Corporate Secretary Principal Occupation Executive Vice President, Chief Financial Officer & Corporate Development, Enbridge Executive Vice President, Liquids Pipelines, Enbridge Executive Vice President, Law, Enbridge Senior Vice President, Green Energy, Enbridge Senior Vice President, Corporate Development, Enbridge Director, Treasury, Enbridge Director, Financial Reporting, Enbridge Senior Legal Counsel, Enbridge EXECUTIVE COMPENSATION Neither the Fund nor any of its wholly-owned subsidiary entities has any employees. All services necessary to operate the Fund and its wholly-owned subsidiary entities are provided by the Administrator or its affiliates through the various agreements described in Management of the Fund and ECT. All of the officers and directors of the Administrator are employees of Enbridge. The compensation of the Administrator s officers and directors is determined and paid exclusively by Enbridge and does not impact the financial position of the Fund, the Administrator or any of their respective subsidiaries. For a discussion of the executive compensation for Enbridge, the parent corporation of both the Administrator and ESOSI and the sponsor of the Fund, readers are referred to the Management Information Circular of Enbridge most recently filed with Canadian securities commissions, which contains comprehensive executive compensation disclosure for that corporation. For a discussion of the executive compensation for Enbridge Pipelines Inc., readers are referred to the Annual Information Form of Enbridge Pipelines Inc. most recently filed with Canadian securities commissions. This document includes comprehensive executive compensation disclosure for the executive management of Enbridge Pipelines Inc., which includes Mr. Stephen J. Wuori and Ms. Cynthia L. Hansen, the individuals who, among other roles within Enbridge and Enbridge Pipelines Inc., effectively served as the senior executive and financial officers of Enbridge Saskatchewan during the 2009 fiscal year, through their respective positions as either the Chair or Vice President of Enbridge Pipelines (Saskatchewan) Inc. The fee payable from Enbridge Saskatchewan to ESOSI pursuant to the Saskatchewan Services Agreement described in Management of the Fund and ECT Saskatchewan Agreement includes an amount that is indirectly attributable to the reimbursement of certain corporate head office expenses for Enbridge Pipelines Inc. and Enbridge. No part of this corporate overhead reimbursement amount is directly attributable to the salary or remuneration for services of any particular individual and to the knowledge of the Administrator, after inquiry, on average less than 1.3% of the salary of any individual corporate office employee of either of these corporations, including executive managers, is indirectly included in the Saskatchewan Services Agreement fee payable by Enbridge Saskatchewan. The Fund holds a 50% interest in Alliance Canada, which is a reporting issuer in all of the provinces of Canada. For a discussion of the executive compensation for Alliance Canada, readers are referred to the Annual Information Form of Alliance Canada most recently filed with Canadian securities commissions. This 61

66 document includes comprehensive executive compensation disclosure for all of Alliance Canada s named executive officers. The Management Information Circular of Enbridge and the respective Annual Information Forms of Enbridge Pipelines Inc. and Alliance Canada are all filed with Canadian securities regulators and available for reference on SEDAR. PERFORMANCE GRAPH The following chart compares the Fund s total Unitholder return (assuming reinvestment of distributions) for an individual who invested $100 in ordinary units of the Fund on December 31, 2004 with the cumulative total return of the S&P/TSX Composite Index for the five-year period ended December 31, As indicated in Management s Discussion & Analysis for the Fund s financial year ended December 31, 2009, the Fund s objectives are to provide a predictable flow of distributable cash and to increase, where prudent, cash distributions on a per Unit basis. Since the variable component of the Manager s compensation, the incentive fee discussed above, is directly linked to the amount of cash distributions made to Unitholders, the Manager s incentive fee has increased over the relevant five-year period in direct proportion to increases in Unitholder distributions during the same period. Generally speaking, executive compensation at Alliance Canada follows from the design of the compensation program and reflects a trend of relatively stable cash distributions to its owners. Additional information about the Manager s incentive fee compensation is included in this Circular under the heading Management of the Fund and ECT Management Agreement and additional information about the compensation for Alliance Canada s named executive officers is available in the publicly filed Annual Information Form of Alliance Canada. Based on the design of these contractual arrangements and compensation programs, trends in the Manager s compensation and that of Alliance Canada executives generally correlate more closely to cash distribution trends than to overall unitholder return trends. 62

67 INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS Other than as disclosed in this Circular and in the consolidated financial statements of the Fund for the fiscal period ended December 31, 2009, the Fund is not aware of any material interest of any current or proposed ECT Trustee, or the Administrator or its affiliates or their respective directors or officers, or any other informed person (as that term is defined in National Instrument Continuous Disclosure Obligations), in any transaction since December 31, 2008, or in any proposed transaction, that has materially affected or will materially affect the Fund. INDEBTEDNESS At no time since the formation of the Fund did any current or former ECT Trustee or current or former director or officer of the Administrator, or any associate of any such person, incur any indebtedness to the Fund or incur any indebtedness to any other entity which is, or any time has been, the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Fund. LIABILITY INSURANCE The Fund maintains insurance for the benefit of the trustees, directors and officers of the Fund, ECT and Enbridge Income Partners LP and their respective subsidiaries and the directors and officers of the Administrator, as a group, in connection with the performance by them of the duties of their offices. The total annual amount of insurance coverage available is US$40 million per claim and policy aggregate, with a US$200,000 deductible for each claim (payable by the Fund) for which the Fund grants indemnification. The insurance premium for the policy period from June 30, 2009 to June 30, 2010, paid by the Fund, was US $155,750 ( US $155,750). THE FUND S GOVERNANCE PRACTICES The Administrator and the ECT Board are committed to maintaining a high standard of corporate governance for the Fund. The Administrator and the ECT Trustees have continued to assess the Fund s governance policies and practices in light of regulatory initiatives in Canada that have been adopted to improve corporate governance, as well as the evolving standards and expectations for governance in the Canadian capital markets. The primary national governance-related regulatory initiatives in Canada are National Instrument Disclosure of Corporate Governance Practices ( NI ) and National Policy Corporate Governance Guidelines ( NP ). NI requires issuers to disclose the corporate governance practices that they have adopted. NP provides guidance on governance practices. The Fund is also subject to National Instrument Audit Committees ( NI ), which prescribes certain requirements in relation to audit committees. The Fund s governance practices were thoroughly reviewed in response to the initial implementation of NI , NP and NI and the Administrator and the ECT Board continue to review its governance practices on an annual and ongoing basis, in reference to evolving standards and expectations. The Administrator and the ECT Board are of the view that the Fund s governance structures, systems and practices generally conform with the guidelines in NP (the Guidelines ), to the extent consistent with the structure of the Fund and ECT and the terms of the Fund Trust Indenture, the ECT Trust Indenture and the other agreements to which the Fund and ECT are parties. General Disclosure of the Fund s governance practices, as required by NI , is set out below. In exercising its powers and discharging its duties under the Administration Agreement and the Fund Trust Indenture, the Administrator is required to act with the same degree of diligence and care that a reasonably prudent administrator of an income fund in Canada, having responsibilities of a similar nature to those set forth in the Administration Agreement and the Fund Trust Indenture, would exercise in comparable 63

68 circumstances. Similar obligations are placed on the Administrator in respect of the discharge of its duties under the Management Agreement and the ECT Trust Indenture. Both the Administration Agreement and Management Agreement are filed and available for reference on SEDAR and also described more fully elsewhere in this Circular under Management of the Fund and ECT. The ECT Trustees have duties as contemplated in the ECT Trust Indenture. The ECT Trustees review, monitor and approve the annual management plan and any strategic plan prepared by the Administrator. They must also review and approve any material deviations from a previously approved management or strategic plan that are proposed by the Administrator. The ECT Trustees have also assumed responsibility for understanding the principal risks associated with the Fund s business and for annually reviewing the implementation of risk management systems with the Administrator. The Audit Committee of the ECT Board has also engaged the services of the Enbridge Internal Audit Services group, under an Audit Services Agreement between ECT and Enbridge dated as of February 23, 2005, to provide internal audit services directly to ECT and the Fund and support the ECT Trustees in their governance-related duties. Under this agreement, the service provider is responsible for using a systematic and disciplined approach to independently evaluate and recommend improvements to the effectiveness of ECT and the Fund s risk management, control and governance processes. While day-to-day management of the Fund and ECT has mainly been generally delegated to the Administrator, the ECT Trustees fulfill their responsibility for the broader stewardship of the Fund and ECT s assets through the structures, activities and procedures described in this section. 1. The ECT Board of Trustees (a) The ECT Trust Indenture provides that there will be not less than five, nor more than 15, ECT Trustees. There are currently eight ECT Trustees in total, including five Independent ECT Trustees and three Manager Trustees, and it is proposed that there will be the same number of ECT Trustees and Independent Trustees after the Meeting. The Independent ECT Trustees are, by way of instructions to the Fund s Trustee, elected annually by the Unitholders and must be independent of the Administrator. The ECT Trustees adopted a Trustee Retirement Policy in 2008, which prescribes generally that ECT Trustees will retire at the next annual meeting of Unitholders after their 70th birthday. An ECT Trustee may remain on the board for an additional two years by request, with unanimous ECT Trustee approval. Additional information about the Independent ECT Trustees and the process by which they are nominated and elected is included elsewhere in this Circular under Matters to be Acted Upon at the Meeting - Election of Independent ECT Trustees. (b) (c) (d) (e) Three of the ECT Trustees are appointees of the Administrator and, as a result, are not considered independent. Additional information about these Manager Trustees is included elsewhere in this Circular under Matters to be Acted Upon at the Meeting - Election of Independent ECT Trustees. A majority of five of the current eight ECT Trustees are independent. The Fund s contractual governance structures also follow and reinforce the Guidelines that a majority of ECT Trustees should be independent. The ECT Trust Indenture requires, among other things, that a majority of the ECT Trustees be Independent ECT Trustees and that the nominees proposed for election as Independent ECT Trustees must be approved by the Independent ECT Trustees then in office. Some ECT Trustees are also directors of other public issuers. Additional information about these outside directorships is included elsewhere in this Circular under Matters to be Acted Upon at the Meeting - Election of Independent ECT Trustees. The Independent ECT Trustees have adopted a practice of meeting in camera, both with the Manager Trustees but without any of the Administrator s management team in attendance, and also without either the Administrator s management team or the Manager Trustees in attendance, as a routine part of each regularly scheduled ECT Board meeting. During the 64

69 Fund s most recently completed financial year, the Independent ECT Trustees held five such in camera meetings. Depending on the substance of the discussion at these in camera meetings, the Independent ECT Trustees will generally either communicate the outcome of the meeting directly to the Manager Trustees, the officers of the Administrator, or both, after the in camera session or at a subsequent meeting. The members of the Audit Committee, all of whom are Independent ECT Trustees, also hold an in camera session at the end of each Audit Committee meeting, where they meet with the internal audit services provider, the Fund s external auditor and as a committee, alone. (f) (g) On August 18, 2003, the ECT Trustees appointed Mr. G.G. Tallman, an Independent ECT Trustee, as Chair of the ECT Board. The Chair of the ECT Board, as the presiding ECT Board member manages the affairs of the ECT Board to achieve effective relations with ECT Board members, unitholders, stakeholders and the public, together with the Committees of the ECT Board as constituted from time to time, and the Administrator. Information about the ECT Board and committee meeting attendance record of each ECT Trustee and Audit Committee member is included elsewhere in this Circular under Matters to be Acted Upon at the Meeting - Election of Independent ECT Trustees. 2. Board Mandate The ECT Board has adopted Terms of Reference for the ECT Board, a current copy of which is filed on SEDAR and available for reference on the Fund s website, under the heading Governance Trustees Board of Trustees Terms of Reference. 3. Position Descriptions (a) (b) The ECT Board has included position descriptions for the Chair of the ECT Board and the Chair of the Audit Committee in the respective Terms of Reference for the ECT Board and Audit Committee. A copy of the Terms of Reference for the ECT Board is filed on SEDAR and available for reference on the Fund s website, under the heading Governance Trustees Board of Trustees Terms of Reference and a copy of the Terms of Reference for the Audit Committee of the ECT Board is included on the Fund s website under the heading Governance Audit Committee Audit Committee Terms of Reference and as Appendix A to the Fund AIF. There is no CEO of the Fund or ECT, although there is a Chairman of the ECT Board, who is an Independent ECT Trustee. It is not considered necessary to have a specific position description for the President of the Administrator since the scope and substance of the Administrator s duties and limits on those duties are set out in the Administration Agreement and the Management Agreement, each of which are filed on SEDAR and discussed elsewhere in this Circular under Management of the Fund and ECT. 4. Orientation and Continuing Education (a) Following their appointment on June 30, 2003, each of the original ECT Trustees received presentations on the business and operations of the Fund s two principal assets, Alliance Canada and the Enbridge Saskatchewan System. ECT Trustees appointed since that time have also received similar presentations, as well as a comprehensive overview of the Fund s governance, controls and management systems, structures, policies and procedures, as applicable. Each ECT Trustee has also been provided with a Trustees Manual that contains general information about the Fund and its structure as well as copies of the Fund s key policies including disclosure and insider trading policies, copies of the Fund s material contracts and copies of the Terms of Reference for the ECT Board, Audit Committee and for the individual trustee. It is expected that any future new ECT Trustee would receive similar presentations and information. 65

70 (b) The Administrator periodically arranges site-visits for the ECT Trustees to visit the operations of the Fund s investments. In addition to regular operational and project updates from management, the Administrator also periodically arranges for presentations from internal and external subject matter experts, outside of formal board meeting times, on topics including operational, economic, strategic, financial, accounting, legal and governance matters relevant to the Fund, to provide continuing education for the ECT Board. 5. Ethical Business Conduct (a) (b) (c) Since neither the Fund nor any of its wholly-owned subsidiaries has any employees and the Fund Trustee and the ECT Trustees have delegated the day-to-day management and administration of the Fund and ECT s business to the Administrator, the ECT Board have not adopted a written code. However, both Enbridge and Alliance Pipeline Ltd. have adopted written codes of ethical business conduct that apply to nearly all of the individuals involved in the operation and management of the businesses in which the Fund holds investments. Copies of these codes have been filed by Enbridge and Alliance Canada, respectively, on SEDAR. To monitor compliance with these codes, the ECT Trustees have established a process for annually soliciting a report regarding compliance with these respective codes, as applicable to the Fund s investments. These reports are received directly from Enbridge, in respect of those applicable individuals subject to the Enbridge code, and indirectly from Alliance Canada, through the Administrator s representation on the Alliance Pipeline Ltd. board of directors, in respect of those applicable individuals subject to the Alliance Pipeline Ltd. code. The ECT Trust Indenture also provides a detailed set of rules intended to ensure the ECT Trustees exercise independent judgment in considering transactions and agreements to which an ECT Trustee, or an officer of either the Fund or ECT, is a party or in relation to which any of them has a material interest in a party. Generally speaking, these rules require disclosure of the interest, limit participation of the affected party in decisions relating to the applicable transaction or agreement, and provide for additional oversight by Independent ECT Trustees in certain cases. The Terms of Reference for an Individual Trustee also impose explicit duties on ECT Trustees themselves to speak and act independently as well as identify and appropriately address any potential personal or business related conflicts, real or perceived, that arise in connection with their role as an ECT Trustee. The Management Agreement also contains provisions requiring disclosure of material conflicts of interest by the Administrator, as well as a process for management of such conflicts by the ECT Trustees. Under the Terms of Reference for the ECT Board, the ECT Trustees explicitly assume responsibility for requiring that the Administrator operate at all times within applicable laws and regulations and to the highest ethical and moral standards. In addition, all of the directors and officers of the Administrator are also employees of Enbridge and are subject to the Statement on Business Conduct adopted by that company s board of directors. Certain governance matters were also addressed when the structure of the Fund was developed and are reflected in various agreements. For example, in addition to the provisions summarized elsewhere in this Circular ensuring a majority of Independent ECT Trustees, any material changes to the terms of the Administration Agreement or the Management Agreement must be approved by the Independent ECT Trustees and any contract with, or acquisition from, the Administrator or any of its affiliates must be reviewed and approved by the Independent ECT Trustees. 6. Nomination of Independent ECT Trustees (a) Historically, when the ECT Board has added a new ECT Trustee, the Independent ECT Trustees then in office have reviewed proposed nominees identified by an ad hoc Nominating Committee comprised of the Manager Trustees and one Independent ECT Trustee selected by the Independent ECT Trustees. As part of the assessment process 66

71 described in greater detail under item 9 below, the ECT Board regularly considers the mix of skill sets and experience represented on the ECT Board, in relation to the ECT Board s effectiveness and the Fund s needs. The ECT Board does not mandate any predetermined mix of skill sets or experience, but uses its ongoing assessment process to inform a consideration of the requirements at the time that vacancies or potential vacancies are identified. The Administrator and the ECT Board have established an experience matrix that shows the ECT Trustees collective mix of experience in 13 categories that are important to the Fund s business. The information collected through the creation of this matrix, which is summarized in this Circular under the heading Election of Independent Trustees Skills and Experience, will also inform and enhance succession planning and recruiting activities for the ECT Board, when needed. (b) (c) The ECT Trustees do not have a standing nominating committee composed entirely of Independent ECT Trustees, although pursuant to the Fund and ECT s contractual governance structures, only those nominees approved by the Independent ECT Trustees may be included as nominees for election in the annual proxy-related materials of the Fund. If and when established, Nominating Committees are established by the Board on an ad hoc basis, as deemed necessary. The Board determines the responsibilities, powers and operation of the Committee at the time that the Committee is struck. 7. Compensation (a) (b) (c) (d) The current Independent ECT Trustee compensation program was approved by the ECT Board during the 2008 fiscal year. The Administrator reviews the compensation program for the Independent ECT Trustees, including the Chairman and the chair of any committees, on an annual basis. The Administrator evaluates known general industry marketplace practices and conditions, the roles and responsibilities of the ECT Board, and also benchmarks the ECT Trustees compensation program in comparison with the programs of a suitable peer group. The Administrator may also engage the services of an outside consultant to provide specific support in evaluating these factors. If changes are deemed appropriate, the Administrator then makes recommendations to the ECT Board regarding the Independent ECT Trustee compensation program and, pursuant to the ECT Trust Indenture, the compensation program is to be approved by the ECT Board. Neither the Fund nor any of its wholly-owned subsidiary entities have any employees. The Administrator manages the Fund s day-to-day business and is compensated in accordance with the agreements described in Management of the Fund and ECT. The operations of the Fund s operating investments are also managed through the service agreements and relationships described in that section of this Circular. All of the officers and directors of the Administrator are employees of Enbridge. Enbridge has sole and exclusive authority to determine the compensation of these individuals and their remuneration is paid directly by Enbridge, rather than the Fund, the Administrator, or any of their respective subsidiaries including ECT. Consequently, individual executive compensation is not within the scope of the ECT Board s duties and the ECT Trustees do not have a compensation committee composed entirely of Independent ECT Trustees. For the reasons expressed in (b) above, the ECT Trustees do not have a compensation committee. The Administrator did not engage the services of any outside consultants to review ECT Trustee compensation rates during the most recently completed fiscal year. 67

72 8. Other Board Committees The ECT Trustees do not have any standing committees other than the Audit Committee, although the ECT Board annually evaluates its committee structure in reference to board effectiveness and the Fund s needs as part of the assessment process described below under item 9. During 2009, the ECT Board established two separate ad hoc committees of Trustees in response to needs identified by the ECT Board. Each of the two ad hoc committees established during 2009 were comprised exclusively of Independent ECT Trustees. The first committee, the Independent Committee, was established in May 2009 to review and, if deemed appropriate, approve the terms of a transaction recommended by the Administrator and involving the provision of a $100 million credit facility financing to the Fund from an affiliate of the Administrator. The credit facility terms were ultimately approved and the financing was implemented and remains in place. Ms. Best served as Chair of the Independent Committee and its other members were Mr. Auchinleck, Dr. Cannon and Mr. Tallman. The Independent Committee retained its own independent legal advisor to support its mandate. The second committee, the Special Committee, was established in November 2009 to independently review and provide its recommendations regarding the Arrangement. Ms. Best served as Chair of the Special Committee and its other members were Mr. Auchinleck, Dr. Cannon and Mr. Tallman. The Special Committee retained its own independent legal, financial and tax advisors to support its mandate. 9. Assessments Since 2004, the ECT Trustees have conducted an annual survey of all ECT Trustees to assess the effectiveness of the ECT Board as a group and the Audit Committee as a group. The assessment program also involves an individual peer assessment of the respective Chairs of the ECT Board and the Audit Committee by the members of those respective bodies. Each ECT Trustee or member of the Audit Committee, as applicable, completes a written survey and returns the survey to the Corporate Secretary of the Administrator, who compiles the results under the supervision of either the Chair of the ECT Board or Chair of the Audit Committee, as applicable. The Chair of the ECT Board and Chair of the Audit Committee then present the results to the ECT Board and the Audit Committee, respectively. The Administrator, with input from the ECT Board, has also developed a form of individual trustee assessment program that can be implemented in the future, at the ECT Board s discretion. UNITHOLDER PROPOSALS The Fund Trust Indenture contains provisions that permit Unitholders to submit proposals to be considered for inclusion in the Fund s information circular for its annual meeting of Unitholders. In order to submit a proposal, Unitholders must meet the requirements and follow the procedures detailed in the Fund Trust Indenture, a copy of which is accessible on the Fund s website and on SEDAR. In order for a proposal to be considered at the 2011 annual meeting of Unitholders, it must be received by the Administrator by December 1, In the event that that Arrangement is completed on or before January 1, 2011, the ABCA, which governs EIFH, also permits EIFH Shareholders to submit proposals to be considered in the information circular of EIFH for its annual meeting of shareholders. In order for a proposal to be considered at the 2011 annual meeting of EIFH Shareholders, it must be received by the Administrator by February 2, ADDITIONAL INFORMATION Additional information relating to the Fund is available on SEDAR at or on the Fund s website at The 2009 annual report (the Annual Report ) to Unitholders, which contains financial information about the Fund including the Financial Statements and the Fund MD&A, 68

73 is included with the general mailing of this Circular to registered Unitholders and Beneficial Unitholders who opted to receive it. The Annual Report, the Notice of Meeting and the Circular are available for viewing and electronic delivery on the Fund s website, under the heading Investor Relations Reports & Filings. Additional copies of the Annual Report are available, upon request, from the Investor Relations group of Enbridge. You may contact Enbridge Inc. by: mail at 3000, 425 1st Street S.W. Calgary, Alberta, Canada, T2P 3L8; telephone at ; and through the Fund s website under the heading Contact Us Investor Kit. APPROVAL The ECT Board has approved the contents of this Circular and the sending of it to the Unitholders. DATED as of the 31 st day of March, James E.R. Lord James E.R. Lord, Corporate Secretary, Enbridge Management Services Inc. 69

74 AUDITORS CONSENT We have read the management information circular of Enbridge Income Fund (the Fund dated March 31, 2010 relating to annual matters and certain special matters including the plan of arrangement involving the Fund, Enbridge Income Fund Holdings Inc., Enbridge Management Services Inc., Enbridge Commercial Trust, Enbridge Inc. and holders of units of the Fund. We have complied with Canadian generally accepted standards for an auditor s involvement with offering documents. We consent to the incorporation by reference in the above-mentioned Circular of our report to the unitholders of the Fund on the consolidated financial position of the Fund as at December 31, 2009 and 2008 and the consolidated statements of earnings, comprehensive income, unitholders equity and cash flows for each of the years in the two year period ended December 31, Our report is dated February 1, (signed) PricewaterhouseCoopers LLP Chartered Accountants Calgary, Alberta March 31,

75 CONSENT OF CIBC WORLD MARKETS INC. Dated: March 31, 2010 To the Special Committee and Board of Trustees of Enbridge Commercial Trust We hereby consent to the references to our firm name and to the reference to our fairness opinion dated March 29, 2010 contained under the headings Questions and Answers Special Matters to be Acted upon at the Meeting, Special Matters to be Acted upon at the Meeting Arrangement - Arrangement Fairness Opinion, Special Matters to be Acted upon at the Meeting Arrangement - Approval and Recommendation of the Special Committee and the ECT Board and the inclusion of the text of our opinion dated March 29, 2010 as Appendix F to the information circular of Enbridge Income Fund dated March 31, Our fairness opinion was given as at March 29, 2010 and remains subject to the assumptions, explanations and limitations contained therein. In providing our consent, we do not intend that any person other than the Special Committee and the Board of Trustees of Enbridge Commercial Trust shall be entitled to rely upon our opinion. (signed) CIBC World Markets Inc. 71

76 APPENDIX A DISTRIBUTION AMENDMENTS RESOLUTION WHEREAS it is desirable that an amendment be made to the Trust Indenture of Enbridge Income Fund (the Fund ) dated as of June 30, 2003, as amended and restated on May 1, 2006 and as otherwise amended from time to time, ( Fund Trust Indenture ); and WHEREAS the Unitholders do not intend the amendments to the Fund Trust Indenture contemplated in this resolution to result in a resettlement of the Fund; BE IT RESOLVED AS A SPECIAL RESOLUTION THAT: 1. The following amendments to the Fund Trust Indenture are hereby authorized and approved: (a) (b) Section 5.1(g) be deleted in its entirety and the following substituted therefor: (g) any amount, as determined in the discretion of the Administrator (herein referred to as the Reserve Amount ). ; Section 5.4(b) be deleted in its entirety and the following substituted therefor: (b) So as to ensure the allocation and distribution, to Unitholders, of all of the Income of the Fund, Net Realized Capital Gains and any other applicable amounts so that the Fund will not have any liability for tax under the Income Tax Act in any year, the amount, if any, by which the Income of the Fund and Net Realized Capital Gains exceed the aggregate of: (i) (ii) such part of the taxable capital gains of the Fund for the calendar year required to be retained by the Fund to maximize its capital gains refund for such year, unless the Administrator has given written notice to the Trustee that this clause 5.4(b)(i) is not to apply to the Fund for that year by the end of the year; and any amount that became payable by the Trustee during the calendar year to Unitholders in respect of their Units (other than amounts that became payable to Unitholders on the redemption of their Units), shall, without any further actions on the part of the Trustee unless the Trustee otherwise, in its absolute discretion, determines another amount (including a nil amount), be payable to Unitholders of record as of the close of business on the last Distribution Record Date in such year provided, for further certainty, that any distributions payable pursuant to this subsection 5.4(b) shall be payable and paid, pari passu, on all Units (both Ordinary Units and Subordinated Units) in the same currency, amount per Unit, and nature (cash or in-kind). (c) Any further amendments of the Fund Trust Indenture to the extent necessary to give effect to the foregoing. 2. CIBC Mellon Trust Company, as the trustee of the Fund and Enbridge Management Services Inc. (the Administrator ) be and are each hereby authorized and empowered to execute or cause to be executed in the name and on behalf of the Fund, or to deliver or cause to be delivered all such documents, agreements and instruments including, without limitation, an amendment to the Fund Trust Indenture, or an amendment and restatement thereof, and do or cause to be done all such other acts and things as they shall determine to be necessary or desirable in order to carry out the intent of this resolution and the matters authorized hereby, such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing. A-1

77 APPENDIX B ACCOUNTING AMENDMENT RESOLUTION WHEREAS it is desirable that an amendment be made to the Trust Indenture of Enbridge Income Fund (the Fund ) dated as of June 30, 2003, as amended and restated on May 1, 2006 and as otherwise amended from time to time, ( Fund Trust Indenture ); and WHEREAS the Unitholders do not intend the amendment to the Fund Trust Indenture contemplated in this resolution to result in a resettlement of the Fund; BE IT RESOLVED AS A SPECIAL RESOLUTION THAT: 1. The following amendments to the Fund Trust Indenture are hereby authorized and approved: (a) (b) Section 9.2(b)(iv) be deleted in its entirety and the following substituted therefor: (iv) making amendments hereto which, in the opinion of the Trustee, are necessary or desirable in the interests of the Unitholders as a result of changes in taxation laws or accounting standards (including, without limitation, changes arising from the implementation of International Financial Reporting Standards, or IFRS), or in their respective interpretation or administration; ; Any further amendments of the Fund Trust Indenture to the extent necessary to give effect to the foregoing. 2. CIBC Mellon Trust Company, as the trustee of the Fund and Enbridge Management Services Inc. (the Administrator ) be and are each hereby authorized and empowered to execute or cause to be executed in the name and on behalf of the Fund, or to deliver or cause to be delivered all such documents, agreements and instruments including, without limitation, an amendment to the Fund Trust Indenture, or an amendment and restatement thereof, and do or cause to be done all such other acts and things as they shall determine to be necessary or desirable in order to carry out the intent of this resolution and the matters authorized hereby, such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing. B-1

78 APPENDIX C ARRANGEMENT RESOLUTION BE IT RESOLVED as a special resolution of the holders of units ( Units ) of the Enbridge Income Fund (the Fund ) that: 1. the plan of arrangement (the Arrangement ) under section 193 of the Business Corporations Act (Alberta) (the ABCA ), attached as Schedule A to the arrangement agreement dated 29, 2010, as amended March 31, 2010, among the Fund, Enbridge Management Services Inc. (the Administrator ), Enbridge Income Fund Holdings Inc. ( EIFH ), Enbridge Commercial Trust ( ECT ) and Enbridge Inc. (the Arrangement Agreement ), and all transactions contemplated thereby be and are hereby authorized and approved; 2. the Arrangement Agreement substantially in the form attached as Appendix E to the information circular of the Fund dated March 31, 2010, together with such amendments or variations thereto made in accordance with the terms of the Arrangement Agreement as may be approved by any officer or director of the Administrator, such approval to be evidenced conclusively by the execution and delivery of any such amendments or variations, is hereby, confirmed, ratified and approved; 3. the amendments to the trust indenture of the Fund made as of May 22, 2003, as amended and restated as of June 30, 2003, August 18, 2003 and May 1, 2006 that are contemplated by the Arrangement are hereby authorized and approved; 4. CIBC Mellon Trust Company, as trustee of the Fund, be and is hereby authorized, directed and instructed to vote the units of ECT in favour of the special resolution authorizing the amendments to the trust indenture of ECT, as amended and restated on May 1, 2007 and supplemented on November 5, 2007, contemplated by the Arrangement; 5. notwithstanding the approval by the Unitholders of this special resolution, the approval of the Arrangement by the Court of Queen s Bench of Alberta, or both, the board of trustees of ECT, without further notice to or approval of the Unitholders, may amend or terminate the Arrangement Agreement or the Plan of Arrangement pursuant to the terms as set out in the Arrangement Agreement or may decide not to proceed with the Arrangement and to revoke this special resolution at any time prior to the Arrangement becoming effective under the ABCA; and 6. any officer or director of the Administrator be and is hereby authorized for and on behalf of the Fund and EIFH to execute and deliver all documents and instruments and to take all such other actions as such officer or director may deem necessary or desirable to implement this resolution and the matters authorized hereby, including the transactions required by the Arrangement, such determinations to be conclusively evidenced by the execution and delivery of such documents and other instruments or the taking of any such actions. C-1

79 APPENDIX D EIFH SHAREHOLDER RIGHTS PLAN RESOLUTION BE IT RESOLVED as an ordinary resolution of the holders of units of the Enbridge Income Fund (the Fund ) that: 1. The shareholder rights plan, containing the terms and conditions substantially as set forth in the shareholder rights plan agreement to be entered into between Enbridge Income Fund Holdings Inc., the successor public entity to the Fund ( EIFH ) and CIBC Mellon Trust Company. (the Shareholder Rights Plan ), be and is hereby ratified, confirmed and approved; 2. The actions of the directors of EIFH in adopting the Shareholder Rights Plan and in executing and delivering the Shareholder Rights Plan be and are hereby ratified, confirmed and approved; and 3. Any one director or officer of EIFH be and is hereby authorized and directed to perform all such acts, deeds and things and execute all such documents and other instruments as may be required to give effect to the intent of this resolution. DESCRIPTION OF EIFH SHAREHOLDER RIGHTS PLAN The following is a summary of the principal terms of the EIFH Shareholder Rights Plan (the Plan ), which is qualified in its entirety by reference to the text of the Plan. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Glossary of Terms in the Circular to which this Appendix D is attached. Term The Plan provides that to continue, it must be reconfirmed by a majority vote of Shareholders at every third annual meeting following the effective date of the Plan. Where any such approval is not obtained, the Plan will then cease to have effect. Issue of Rights On the effective date of the Plan, one right (a "Right") will be issued and attached to each EIFH Share outstanding and will attach to each EIFH Share subsequently issued. Rights Exercise Privilege The Rights will separate from the EIFH Shares and will be exercisable eight trading days (the "Separation Time") after a person has acquired, or commenced a take-over bid to acquire, 20% or more of the EIFH Shares, other than by an acquisition pursuant to a take-over bid permitted by the Plan (a "Permitted Bid") or an acquisition pursuant to a distribution by prospectus, private placement or securities exchange take-over bid of securities of EIFH that have not been previously distributed (a "Treasury Issue"). The acquisition by any person (an "Acquiring Person") of 20% of the EIFH Shares, other than by way of a Permitted Bid or Treasury Issue, is referred to as a "Flip-in Event". Other than in relation to Enbridge, there are no "grandfathering" provisions in the Plan. See "Grandfathering Provisions". Any Rights held by an Acquiring Person will become void upon the occurrence of a Flip-in Event. Eight trading days after the occurrence of the Flip-in Event, each Right (other than those held by an Acquiring Person) will permit the purchase of EIFH Shares with a market value of $100 on payment of the exercise price of $50 per Right. The issue of the Rights is not initially dilutive. Upon a Flip-in Event occurring and the Rights separating from the EIFH Shares, reported earnings per EIFH Share on a fully-diluted or non-diluted basis may be affected. Holders of Rights not exercising their Rights upon the occurrence of a Flip-in Event may suffer substantial dilution. D-1

80 Grandfathering Provisions Under the Plan, Enbridge is a "Grandfathered Person" and, accordingly, may hold any number of EIFH Shares at any time without triggering the Plan. Lock-Up Agreements A bidder may enter into lock-up agreements (a "Lock-Up Agreement") with Shareholders (a "Locked-Up Person") whereby such Shareholders agree to tender their EIFH Shares to the take-over bid (the "Subject Bid") without a Flip-in Event (as referred to above) occurring. Any such agreement must permit the Locked-Up Person to withdraw their EIFH Shares from the lock-up to tender to another take-over bid or support another transaction that will provide greater value to the Locked-Up Person than the Subject Bid where the greater value offered exceeds by as much or more than a specified amount (the "Specified Amount") the value offered under the Subject Bid, provided the Specified Amount is not greater than 7% of the value offered under the Subject Bid. For purposes of clarity, a Lock-Up Agreement may contain a right of first refusal or require a period of delay (or other similar limitation) to give an offeror an opportunity to match a higher price in another transaction as long as the Locked-Up Person can accept another bid or tender to another transaction. The Plan also provides that any Lock-Up Agreement must be made available to EIFH and to the public, and that under a Lock-Up Agreement no "break up" fees, "top up" fees, penalties, expense reimbursement or other amounts can be payable by such Locked-Up Person if the Locked-Up Person fails to deposit or tender their EIFH Shares to the Subject Bid or withdraws such units previously tendered thereto in order to deposit such EIFH Shares to another take-over bid or support another transaction that exceeds in aggregate the greater of: (i) 2½ % of the value payable under the Subject Bid; and (ii) 50% of the amount by which the value received by a Locked-Up Person under another take-over bid or transaction exceeds what such Locked-Up Person would have received under the Subject Bid. Certificates and Transferability Prior to the Separation Time, the Rights are evidenced by a legend imprinted on certificates for the EIFH Shares and are not transferable separately from the EIFH Shares. From and after the Separation Time, the Rights will be evidenced by Rights certificates that will be transferable and traded separately from the EIFH Shares. Permitted Bid Requirements The requirements for a Permitted Bid include the following: (a) (b) (c) (d) the take-over bid must be made by way of a take-over bid circular; the take-over bid must be made to all Shareholders; the take-over bid must be outstanding for a minimum period of 60 days and EIFH Shares tendered pursuant to the take-over bid may not be taken up prior to the expiry of the 60 day period and only if at such time more than 50% of the EIFH Shares held by Shareholders, other than the bidder, its affiliates and persons acting jointly or in concert and certain other persons (the "Independent Shareholders"), have been tendered to the take-over bid and not withdrawn; and if more than 50% of the EIFH Shares held by Independent Shareholders are tendered to the take-over bid within the 60-day period, the bidder must make a public announcement of that fact and the take-over bid must remain open for deposits of EIFH Shares for not less than 10 business days from the date of such public announcement. The Plan allows for a competing Permitted Bid (a "Competing Permitted Bid") to be made while a Permitted Bid is in existence. A Competing Permitted Bid must satisfy all the requirements of a Permitted Bid D-2

81 except that it may expire on the same date as the Permitted Bid, subject to the requirement that it be outstanding for a minimum period of 35 days. Waiver The EIFH Board, acting in good faith, may, prior to the occurrence of a Flip-in Event, waive the application of the Plan to a particular Flip-in Event (an "Exempt Acquisition") where the take-over bid is made by a take-over bid circular to all holders of EIFH Shares. Where the EIFH Board exercises the waiver power for one take-over bid, the waiver will also apply to any other take-over bid for EIFH made by a takeover bid circular to all holders of EIFH Shares prior to the expiry of any other bid for which the Plan has been waived. Redemption The EIFH Board with the approval of a majority of the votes cast by Shareholders (or holders of Rights if the Separation Time has occurred) voting in person or by proxy at a meeting duly called for that purpose may redeem the Rights at a price of $0.001 per Right. Rights will be deemed to have been redeemed by the EIFH Board following completion of a Permitted Bid, Competing Permitted Bid or Exempt Acquisition. Amendment The EIFH Board may amend the Plan with the approval of a majority of the votes cast by Shareholders (or the holders of Rights if the Separation Time has occurred) voting in person and by proxy at a meeting duly called for that purpose. The EIFH Board without such approval may correct clerical or typographical errors and, subject to approval as noted above at the next meeting of the Shareholders (or holders of Rights, as the case may be), may make amendments to the Plan to maintain its validity due to changes in applicable legislation. ECT Board The Plan will not detract from or lessen the duty of the EIFH Board to act honestly and in good faith with a view to the best interests of EIFH. The EIFH Board, when a Permitted Bid is made, will continue to have the duty and power to take such actions and to make such recommendations to Shareholders as are considered appropriate. Exemptions for Investment Advisors Investment advisors (for fully managed accounts), trust companies (acting in their capacities as trustees and administrators), statutory bodies whose business includes the management of funds and administrators of registered pension plans acquiring greater than 20% of the EIFH Shares are exempted from triggering a Flip-in Event, provided that they are not making, or are not part of a group making, a take-over bid. D-3

82 APPENDIX E ARRANGEMENT AGREEMENT E-1

83 ARRANGEMENT AGREEMENT THIS ARRANGEMENT AGREEMENT made as of the 29 th day of March, 2010, as amended on the 31 st day of March, 2010, AMONG: ENBRIDGE INCOME FUND, a trust established pursuant to a trust indenture made as of May 22, 2003 as amended and restated as of June 30, 2003, August 18, 2003 and May 1, 2006 (the Fund ) - and ENBRIDGE COMMERCIAL TRUST, a trust established pursuant to a trust indenture made as of December 20, 2002 as amended and restated as of June 30, 2003, August 18, 2003, May 4, 2004 and July 1, 2005 and May 1, 2006, and as further amended on November 5, 2007 ( ECT ) - and ENBRIDGE MANAGEMENT SERVICES INC., a corporation incorporated under the laws of Canada ( EMSI ) - and ENBRIDGE INC., a corporation continued under the laws of Canada ( Enbridge ) - and ENBRIDGE INCOME FUND HOLDINGS INC., a corporation incorporated under the laws of Alberta ( EIFH ) WHEREAS the Parties hereto intend to carry out the transactions contemplated herein by way of an arrangement under the provisions of the ABCA; AND WHEREAS the Parties hereto have entered into this Agreement to provide for the matters referred to in the foregoing recitals and for other matters relating to such arrangement; NOW THEREFORE, in consideration of the covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties hereto do hereby covenant and agree as follows: 1.1 Definitions ARTICLE 1 INTERPRETATION In this Agreement, unless there is something in the context or subject matter inconsistent therewith, the following defined terms have the meanings hereinafter set forth: (a) ABCA means the Business Corporations Act (Alberta), R.S.A. 2000, c. B-9;

84 - 2 - (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) Administrator means EMSI; affiliate has the meaning ascribed thereto in the ABCA; Agreement, herein, hereof, hereto, hereunder and similar expressions mean and refer to this arrangement agreement (including the schedules hereto) as supplemented, modified or amended, and not to any particular article, section, schedule or other portion hereof; Arrangement means the arrangement pursuant to section 193 of the ABCA set forth in the Plan of Arrangement subject to any amendments or variations thereto made in accordance therewith or made at the direction of the Court; Arrangement Fairness Opinion means the opinion of the Financial Advisor dated March 29, 2010; Arrangement Resolution means the resolution in respect of the Arrangement and other related matters to be considered at the Meeting; Articles of Arrangement means one or more articles of arrangement in respect of the Arrangement required under subsection 193(10) of the ABCA to be filed with the Registrar after the Final Order has been granted, giving effect to the Arrangement; Business has the meaning ascribed thereto in the Management Agreement between ECT and EMSI dated June 27, 2003 and amended as of May 1, 2006; Business Day means a day other than a Saturday, Sunday or a day when banks in the City of Calgary, Alberta are not generally open for business; Court means the Court of Queen s Bench of Alberta; ECT Preferred Units means the class of trust units of ECT designated as Preferred Units in the ECT Trust Indenture and having the rights, privileges, restrictions and conditions described therein; ECT Trustees means the trustees of ECT and, for greater certainty, is comprised of the Independent ECT Trustees and the Manager Trustees; ECT Trust Indenture means the trust indenture pursuant to which ECT was established, made as of December 20, 2002, as amended and restated as of June 30, 2003, August 18, 2003, May 4, 2004, July 1, 2005 and May 1, 2006, and as further amended on November 5, 2007; Effective Date means the date the Arrangement becomes effective under the ABCA, which is expected to be on or about December 15, 2010; Effective Time means the first moment on the Effective Date; EIFH Administration Agreement means an agreement to be entered into between EMSI and EIFH pursuant to which EMSI will provide certain administrative services to EIFH; EIFH Shares means the common shares in the share capital of EIFH;

85 - 3 - (s) (t) (u) (v) (w) (x) (y) (z) EIFH Special Voting Share means the special voting share in the capital of EIFH, the rights, restrictions, privileges and conditions attached to which will entitle Enbridge to appoint one director of EIFH for so long as Enbridge and its affiliates holds or controls, directly or indirectly, at least 15% of the issued and outstanding EIFH Shares; Exchange Right means the right of holders of ECT Preferred Units to exchange, at their option, such ECT Preferred Units for Units; Exchange Right Support Agreement means the agreement to be entered into among EIFH, the Fund, Enbridge and EMSI with respect to the Exchange Right; Final Order means the final order of the Court approving the Arrangement pursuant to section 193(9) of the ABCA, as such order may be affirmed, amended or modified at any time prior to the Effective Time or, if appealed, then unless such appeal is withdrawn or denied, as affirmed or as amended on appeal; Financial Advisor means CIBC World Markets Inc.; Fund Trust Indenture means the trust indenture pursuant to which the Fund was established, made as of May 22, 2003, as amended and restated as of June 30, 2003, August 18, 2003 and May 1, 2006; Independent ECT Trustee means an ECT Trustee who is independent (as such term is defined in National Instrument of the Canadian Securities Administrators) of the Administrator and any of its affiliates; Independent ECT Trustees Approval Requirement means the requirement that the approval of a majority of the Independent ECT Trustees will be required in the following circumstances: (i) (ii) (iii) the disposition of any material assets or equipment which are used in operating the Business, other than in the ordinary course of business; for so long as EIFH owns 20% or more of the Units, a Significant Transaction; and the approval of, amendment to or any material deviation from the current distribution policy of the Fund; (aa) (bb) (cc) Information Circular means the information circular to be prepared by EMSI on behalf of the Fund and forwarded as part of the proxy solicitation materials to Unitholders in respect of the Meeting; Interim Order means the interim order of the Court concerning the Arrangement under section 193(4) of the ABCA containing declarations and directions with respect to the Arrangement and the holding of the Meeting, as such order may be affirmed, amended or modified by the Court; Manager Trustees means the three ECT Trustees appointed by the Administrator;

86 - 4 - (dd) (ee) (ff) (gg) (hh) (ii) (jj) (kk) (ll) (mm) (nn) Material Agreements means, collectively, the ECT Trust Indenture, the Fund Trust Indenture, the EIFH Administration Agreement, the Unitholders Agreement and the Exchange Right Support Agreement; Meeting means the annual and special meeting of Unitholders to be held to consider, among other things, the Arrangement and related matters, and any adjournments thereof; Parties means, collectively, the Fund, ECT, EMSI, Enbridge and EIFH and Party means any one of them; Person includes an individual, limited or general partnership, limited liability company, limited liability partnership, trust, joint venture, association, body corporate, trustee, executor, administrator, legal representative, government (including any governmental entity, governmental authority, regulatory body or agency) or any other entity, whether or not having legal status; Plan of Arrangement means the plan of arrangement substantially in the form set out in Schedule A to this Agreement as amended, modified and/or supplemented from time to time in accordance with the terms thereof; Pre-emptive Right means, in the event of a determination by the ECT Trustees to issue additional Units, the right that will be granted to each of Enbridge and EIFH to acquire that number of Units that is proportional to their respective pre-issuance economic interest in the Fund, inclusive of any ECT Preferred Units in the case of Enbridge; Public Unitholders means Unitholders other than Enbridge; Registrar means the Registrar of Corporations duly appointed under the ABCA; ROFR means the right to be granted to each of Enbridge and EIFH to acquire from the other Units proposed to be sold pursuant to a bona fide offer to purchase, except such right shall not apply in the event of a transfer by Enbridge or EIFH of some or all of its Units to an affiliate; Significant Transaction means (i) an amendment to the Fund Trust Indenture other than as otherwise permitted in section 9.2 of the Fund Trust Indenture; (ii) the sale, lease or exchange of all or substantially all of the property of the Fund, other than (a) in the ordinary course of business, (b) in specie redemptions permitted under the Fund Trust Indenture, or (c) in order to acquire ECT Units (as defined in the Fund Trust Indenture) and ECT Notes (as defined in the Fund Trust Indenture) in connection with pursuing the purposes of the Fund; (iii) the termination, liquidation or winding up of the Fund, other than as permitted in the Fund Trust Indenture; or (iv) the combination, merger or similar transaction involving the Fund and any other person that is not an affiliate (as defined in the Fund Trust Indenture) or associate (as defined in the Fund Trust Indenture) of the Fund if, following such transaction, the holders (or affiliates thereof) of equity interests in such other person (such holders being determined immediately prior to the entering into of such transaction) hold, directly or indirectly, more than 50% of the outstanding voting rights attributable to securities of the entity which results from such combination, merger or other transaction; subsidiary has the meaning ascribed to such term in the ABCA, with such modifications as necessary so that the definition applies in the event the person is not a corporation and, for

87 - 5 - greater certainty, includes any limited partnership, joint venture, trust, limited liability company, unlimited liability company or other entity, whether or not having legal status, that would constitute a subsidiary if such entity were a corporation; (oo) (pp) (qq) (rr) (ss) Tag-Along Rights means the rights that will be set forth in the Unitholders Agreement; TSX means the Toronto Stock Exchange; Unitholders means holders from time to time of Units; Unitholders Agreement means the agreement to be entered into among EIFH, the Fund, Enbridge and EMSI to provide for the Tag-Along Rights and the ROFR; and Units means units designated by the Fund Trust Indenture as an ordinary unit of the Fund. 1.2 Interpretation Not Affected by Headings, etc. The division of this Agreement into articles, sections and subsections is for convenience of reference only and does not affect the construction or interpretation of this Agreement. 1.3 Number, etc. Words importing the singular number include the plural and vice versa, words importing the use of any gender include all genders, and words importing persons include firms and corporations and vice versa. 1.4 Entire Agreement This Agreement together with the agreements and documents herein and therein referred to, constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, among the Parties with respect to the subject matter hereof. 1.5 Currency All sums of money which are referred to in this Agreement are expressed in lawful money of Canada. 1.6 Accounting Matters Unless otherwise stated, all accounting terms used in this Agreement shall have the meanings attributable thereto under Canadian generally accepted accounting principles and all determinations of an accounting nature that are required to be made shall be made in a manner consistent with Canadian generally accepted accounting principles. 1.7 References to Legislation References in this Agreement to any statute or sections thereof shall include such statute as amended or substituted and any regulations promulgated thereunder from time to time in effect. 1.8 Enforceability All representations, warranties, covenants and opinions in or contemplated by this Agreement as to the enforceability of any covenant, agreement or document are subject to enforceability being limited by

88 - 6 - applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws relating to or affecting creditors rights generally, and the discretionary nature of certain remedies (including specific performance and injunctive relief and general principles of equity). 1.9 Schedules The following schedule attached hereto is incorporated into and forms an integral part of this Agreement: Schedule A Plan of Arrangement 2.1 Arrangement ARTICLE 2 THE ARRANGEMENT EIFH shall apply to the Court pursuant to Section 193 of the ABCA for an order approving the Arrangement and in connection with such application shall: (a) (b) (c) forthwith file, proceed with and diligently prosecute an application for an Interim Order providing for, among other things, the calling and holding of the Meeting for the purpose of, among other things, considering and, if deemed advisable, approving the Arrangement Resolution; subject to obtaining all necessary approvals of the Unitholders as contemplated in the Interim Order and as may be directed by the Court in the Interim Order, take steps necessary to submit the Arrangement to the Court and apply for the Final Order; and subject to fulfillment of the conditions set forth herein, shall deliver to the Registrar Articles of Arrangement and such other documents as may be required to give effect to the Arrangement, whereupon the transactions comprising the Arrangement shall occur and shall be deemed to have occurred in the order and in the manner set out in the Plan of Arrangement. To the extent that such transactions involve Enbridge, EIFH or any securities thereof or are governed by Section 193 of the ABCA, such transactions shall occur without any further act or formality pursuant to Section 193 of the ABCA. All other transactions shall occur by means of the appropriate action being taken on the part of the appropriate Parties to effect such transactions at the Effective Time. 2.2 Effective Date The Arrangement shall become effective at the Effective Time on the Effective Date. ARTICLE 3 COVENANTS 3.1 Covenants of the Fund, ECT, Enbridge and EMSI Each of the Fund, ECT, Enbridge and EMSI covenants and agrees that it will: (a) take, and cause to be taken all actions necessary to give effect to the transactions contemplated by this Agreement and the Arrangement;

89 - 7 - (b) (c) (d) (e) use all reasonable efforts to obtain all necessary consents, assignments, waivers and amendments to or terminations of any instruments and take such measures as may be appropriate to fulfill its obligations hereunder and to carry out the transactions contemplated hereby; in the case of EMSI, convene the Meeting as ordered by the Interim Order and conduct the Meeting in accordance with the Interim Order and as otherwise required by law and the Fund Trust Indenture; in the case of EMSI, solicit proxies to be voted at the Meeting in favour of the Arrangement Resolution and prepare the Information Circular and proxy solicitation materials and any amendments or supplements thereto as required by and in compliance with, the Interim Order and applicable corporate and securities laws, and file and distribute same to the Unitholders in a timely and expeditious manner in all jurisdictions where same are required to be filed and distributed; in case of each of the Fund and ECT until the Effective Date, conduct its operations and those of its subsidiaries in the ordinary and normal course of business and in accordance with applicable laws, generally accepted industry practice and any operating and other agreements applicable to its properties and assets and those of its subsidiaries; (f) use all reasonable efforts to cause each of the conditions precedent set forth in Article 4 which are within its control to be satisfied on or before the Effective Date; (g) (h) (i) (j) (k) (l) forthwith carry out the terms of the Final Order to the extent applicable to it; in the case of EMSI, upon issuance of the Final Order and subject to the fulfillment of the conditions precedent set forth in Article 4, proceed to file the Articles of Arrangement, the Final Order and all related documents with the Registrar pursuant to subsection 193(10) of the ABCA on or about December 15, 2010; in the case of EMSI, cause the Fund Trust Indenture to be amended or amended and restated at the Effective Time to the extent necessary to provide for the Pre-Emptive Right, the Exchange Right and the Independent ECT Trustees Approval Requirements and in any and all other respects as may be necessary or desirable in connection with or to facilitate the Arrangement as described in the Plan of Arrangement; in the case of each of the Fund and EMSI, cause the ECT Trust Indenture to be amended or amended and restated at the Effective Time to the extent necessary to provide for the Exchange Right, the composition of the board of ECT Trustees and the Independent ECT Trustees Approval Requirements and in any and all other respects as may be necessary or desirable in connection with or to facilitate the Arrangement as described in the Plan of Arrangement; in the case of each of EMSI, the Fund and Enbridge, enter into the Unitholders Agreement and the Exchange Right Support Agreement on or before the Effective Date; in the case of EMSI, enter into the EIFH Administration Agreement on or before the Effective Date;

90 - 8 - (m) (n) not, except in the ordinary course of business or as contemplated in connection with the Plan of Arrangement, merge into or with, or consolidate with, any other Person or perform any act or enter into any transaction or negotiation which might interfere or be inconsistent with the consummation of the transactions contemplated by this Agreement; and until the Effective Date, except as specifically provided for hereunder (which shall include, without limitation, the making of any amendments that are necessary to permit the Fund to accommodate certain changes in accounting treatment arising from the implementation of international financial reporting standards), and any and all other amendments as may be necessary or desirable in connection with or to facilitate, the Arrangement, not alter or amend its constating or governing documents, articles or by-laws or those of its subsidiaries as the same exist at the date of this Agreement. 3.2 Covenants of EIFH EIFH covenants and agrees that it will: (a) (b) (c) (d) take all action necessary to give effect to the transactions contemplated by this Agreement and the Arrangement; use all reasonable efforts to obtain all necessary consents, assignments, waivers and amendments to or terminations of any instruments and take such measures as may be appropriate to fulfill its obligations hereunder and to carry out the transactions contemplated hereby; until the Effective Date, other than as contemplated herein, in the Plan of Arrangement or in the Information Circular, not carry on any business, enter into any transaction or effect any corporate act whatsoever other than as contemplated herein or in the Information Circular without the prior written consent of the Fund; until the Effective Date, not issue any securities or enter into any agreements to issue or grant options, warrants or rights to purchase any of its securities; (e) use all reasonable efforts to cause each of the conditions precedent set forth in Article 4 which are within its control to be satisfied on or before the Effective Date; (f) (g) (h) (i) subject to the requisite approval of the Arrangement Resolution by the Unitholders, as required by the Interim Order, submit the Arrangement to the Court and apply for the Final Order: forthwith carry out the terms of the Final Order to the extent applicable to it; enter into each of the Unitholders Agreement, the Exchange Right Support Agreement and the EIFH Administration Agreement on or before the Effective Date; upon issuance of the Final Order and subject to the fulfillment of the conditions precedent set forth in Article 4, proceed to file the Articles of Arrangement, the Final Order and all related documents with the Registrar pursuant to subsection 193(10) of the ABCA on or about December 15, 2010;

91 - 9 - (j) (k) reserve and authorize for issuance the EIFH Shares and the EIFH Special Voting Share issuable pursuant to the Arrangement; and prior to the Effective Date, apply to list the EIFH Shares on the TSX. 4.1 Mutual Conditions Precedent ARTICLE 4 CONDITIONS PRECEDENT The respective obligations of the Parties to complete the transactions contemplated by this Agreement and the Arrangement shall be subject to the fulfilment or satisfaction, on or before the Effective Date, of each of the following conditions, any of which may be waived collectively by them without prejudice to their right to rely on any other condition: (a) (b) (c) (d) (e) the Interim Order shall have been granted in form and substance satisfactory to the Parties, acting reasonably, not later than April 30, 2010 or such later date as the Parties hereto may agree and shall not have been set aside or modified in a manner unacceptable to such parties on appeal or otherwise; the Arrangement Resolution shall have been approved by the requisite number of votes cast by the Unitholders at the Meeting in accordance with the provisions of the Interim Order and any applicable regulatory requirements; the Final Order shall have been granted in form and substance satisfactory to the Parties, acting reasonably, not later than December 15, 2010 or such later date as the Parties may agree, provided that such date shall be no later than December 31, 2010; the Articles of Arrangement and all necessary related documents, in form and substance satisfactory to the Parties, acting reasonably, shall have been accepted for filing by the Registrar together with the Final Order in accordance with subsection 193(9) of the ABCA; no material action or proceeding shall be pending or threatened by any Person and there shall be no action taken under any existing applicable law or regulation, nor any statute, rule, regulation or order which is enacted, enforced, promulgated or issued by any court, department, commission, board, regulatory body, government or governmental authority or similar agency, domestic or foreign, that: (i) (ii) makes illegal or otherwise directly or indirectly restrains, enjoins or prohibits the Arrangement or any other transactions contemplated herein; or results in a judgment or assessment of material damages directly or indirectly relating to the transactions contemplated herein; (f) all necessary material third party and regulatory consents and approvals with respect to the transactions contemplated under the Arrangement shall have been completed or obtained including, without limitation, the necessary consents and approvals from the Fund s principal lenders;

92 (g) (h) (i) (j) the TSX shall have conditionally approved the substitutional listing of the EIFH Shares to be issued pursuant to the Arrangement, subject only to the filing of required documents which cannot be filed prior to the Effective Date; the ECT Trustees shall not have determined in their sole and absolute discretion that to proceed with the Arrangement would not be in the best interests of the Fund, ECT, the Unitholders and the unitholders of ECT, other than Enbridge and any affiliate of Enbridge; the Arrangement Fairness Opinion shall have been received and accepted by the ECT Trustees prior to the date of mailing of, and shall have been included in, the Information Circular; and the Material Agreements shall have been amended or entered into, as required, and such agreements shall have been executed by the Parties as applicable. 4.2 Additional Conditions to Obligations of the Fund, ECT, Enbridge and EMSI In addition to the conditions contained in Section 4.1, the obligation of the Fund, ECT, Enbridge and EMSI to complete the transactions contemplated by this Agreement and the Arrangement is subject to the fulfillment or satisfaction, (provided that the same may be waived by them) on or before the Effective Date, of each of the covenants, acts and undertakings of EIFH to be performed or complied with on or before the Effective Date pursuant to the terms of this Agreement and the Arrangement. 4.3 Additional Conditions to Obligations of EIFH In addition to the conditions contained in Section 4.1, the obligations of EIFH to complete the transactions contemplated by this Agreement and the Arrangement is subject to the fulfillment or satisfaction, on or before the Effective Date, of the following conditions, any of which may be waived by EIFH without prejudice to its right to rely on any other condition: (a) (b) each of the covenants, acts and undertakings of the Fund, ECT, Enbridge and EMSI to be performed or complied with on or before the Effective Date pursuant to the terms of this Agreement and the Arrangement shall have been duly performed or complied with; and prior to the Effective Date, there shall have been no material adverse change in the affairs, operations, financial condition or business of the Fund and ECT or any of their respective subsidiaries from that reflected in the Information Circular. 4.4 Notice and Effect of Failure to Comply with Conditions If any of the conditions precedent set forth in Sections 4.1, 4.2 or 4.3 hereof shall not be complied with or waived by the Party or Parties for whose benefit such conditions are provided on or before the date required for the performance thereof, then a Party for whose benefit the condition precedent is provided may, in addition to any other remedies they may have at law or equity, rescind and terminate this Agreement, provided that prior to the filing of the Articles of Arrangement for the purpose of giving effect to the Arrangement, the Party intending to rely thereon has delivered a written notice to the other Party, specifying in reasonable detail all breaches of covenants which the Party delivering such notice is asserting as the basis for the non fulfillment of the applicable conditions precedent and the Party in breach shall have failed to cure such breach within three Business Days of receipt of such written notice thereof (except that no cure period shall be provided for a breach which by its nature cannot be cured). More than one such notice may be delivered by a Party.

93 Satisfaction of Conditions The conditions set out in this Article 4 are conclusively deemed to have been satisfied, waived or released when, with the agreement of the Parties, Articles of Arrangement are filed under the ABCA to give effect to the Arrangement. 5.1 Amendments ARTICLE 5 AMENDMENT AND TERMINATION This Agreement may, at any time and from time to time before or after the Meeting, be amended in any respect whatsoever by written agreement of the Parties without further notice to or authorization on the part of their respective securityholders, and any such amendment may, without limitation: (a) (b) (c) change the time for performance of any of the obligations or acts of the Parties; waive any inaccuracies or modify any representation contained herein or in any document delivered pursuant hereto; and waive compliance with or modify any of the covenants or conditions herein contained and waive or modify performance of any obligations of the parties hereto. 5.2 Termination This Agreement shall be terminated in each of the following circumstances: (a) (b) (c) the mutual agreement of the Parties; the Arrangement shall not have become effective on or before December 31, 2010; and termination of this Agreement under Article 4 hereof. ARTICLE 6 GENERAL 6.1 Binding Effect This Agreement shall be binding upon and enure to the benefit of the Parties and their respective successors and permitted assigns. 6.2 No Assignment No Party may assign its rights or obligations under this Agreement. 6.3 Exclusivity None of the covenants contained herein shall prevent the ECT Trustees from responding as required by law to any unsolicited submission or proposal regarding any acquisition or disposition of assets or any unsolicited proposal to amalgamate, merge or effect an arrangement or any unsolicited acquisition proposal generally or make any disclosure to its securityholders with respect thereto which in the judgment of the ECT Trustees, acting upon the advice of outside counsel, is required under applicable law.

94 Equitable Remedies All covenants herein or to be given hereunder as to enforceability in accordance with the terms of any covenant, agreement or document shall be qualified as to applicable bankruptcy and other laws affecting the enforcement of creditors rights generally and to the effect that specific performance, being an equitable remedy, may only be ordered at the discretion of the court. 6.5 Severability If any one or more of the provisions or parts thereof contained in this Agreement should be or become invalid, illegal or unenforceable in any respect in any jurisdiction, the remaining provisions or parts thereof contained herein shall be and shall be conclusively deemed to be, as to such jurisdiction, severable therefrom and: (a) (b) the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed; and the invalidity, illegality or unenforceability of any provision or part thereof contained in this Agreement in any jurisdiction shall not affect or impair such provision or part thereof or any other provisions of this Agreement in any other jurisdiction. 6.6 Further Assurances Each Party hereto shall, from time to time and at all times hereafter, at the request of another Party hereto, but without further consideration, do all such further acts, and execute and deliver all such further documents and instruments as may be reasonably required in order to fully perform and carry out the terms and intent hereof. 6.7 Time of Essence Time shall be of the essence. 6.8 Liability of the Fund The obligations of the Fund hereunder shall not be personally binding upon the trustee of the Fund, EMSI or any of the Unitholders or any annuitant, subscriber or beneficiary under a plan of which a Unitholder is a trustee or carrier (an annuitant ) and that any recourse against the Fund, the trustee of the Fund, EMSI or any Unitholder or annuitant in any manner in respect of any indebtedness, obligation or liability of the Fund arising hereunder or arising in connection herewith or from the matters to which this Agreement relates, if any, including without limitation claims based on negligence or otherwise tortious behaviour, shall be limited to, and satisfied only out of, the Fund Property as defined in the Fund Trust Indenture, as the same may be further amended; 6.9 Liability of ECT The obligations of ECT hereunder shall not be personally binding upon any of the ECT Trustees, EMSI, any of the unitholders of ECT or any annuitant, subscriber or beneficiary under a plan of which a unitholder of ECT is an annuitant and that any recourse against the ECT Trustees, EMSI, any unitholder of ECT or annuitant in any manner in respect of any indebtedness, obligation or liability of ECT arising hereunder or arising in connection herewith or from the matters to which this Agreement relates, if any,

95 including without limitation claims based on negligence or otherwise tortious behaviour, shall be limited to, and satisfied only out of, the Trust Property as defined in the ECT Trust Indenture Counterparts This Agreement may be executed by facsimile or other electronic signature and in counterparts, each of which shall be deemed an original, and all of which together constitute one and the same instrument. [Signature page follows]

96 above. IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first written ENBRIDGE INCOME FUND, by its administrator ENBRIDGE MANAGEMENT SERVICES INC. Per: signed John R. Whelen Per: signed James E. R. Lord ENBRIDGE COMMERCIAL TRUST by its manager ENBRIDGE MANAGEMENT SERVICES INC. Per: signed John R. Whelen Per: signed James E. R. Lord ENBRIDGE MANAGEMENT SERVICES INC. Per: signed John R. Whelen Per: signed James E. R. Lord ENBRIDGE INC. Per: Per: signed Alison T. Love signed Wanda M. Opheim ENBRIDGE INCOME FUND HOLDINGS INC. Per: signed Wanda M. Opheim

97 SCHEDULE A PLAN OF ARRANGEMENT UNDER SECTION 193 OF THE BUSINESS CORPORATIONS ACT (ALBERTA)

98 EXHIBIT A PLAN OF ARRANGEMENT UNDER SECTION 193 OF THE BUSINESS CORPORATIONS ACT (ALBERTA) ARTICLE 1 INTERPRETATION 1.1 In this Plan of Arrangement, the following terms have the following meanings: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) ABCA means the Business Corporations Act (Alberta), R.S.A. 2000, c. B-9; Administrator means EMSI; affiliate has the meaning ascribed thereto in the ABCA; Amended DRIP means the amended and restated dividend reinvestment and share purchase plan of EIFH, pursuant to a dividend reinvestment plan agency agreement to be entered into between EIFH and CIBC Mellon Trust Company; Arrangement means the arrangement pursuant to Section 193 of the ABCA set forth in this Plan of Arrangement subject to any amendments or variations hereto made in accordance with Article 5 hereof or made at the direction of the Court; Arrangement Resolution means the resolution in respect of the Arrangement and other related matters to be considered at the Meeting; Articles of Arrangement means one or more articles of arrangement in respect of the Arrangement required under subsection 193(10) of the ABCA to be filed with the Registrar after the Final Order has been granted, giving effect to the Arrangement; Business has the meaning ascribed thereto in the Management Agreement between ECT and EMSI dated June 27, 2003 and amended as of May 1, 2006; Certificate means the confirmation of filing to be issued by the Registrar pursuant to subsection 193(11) of the ABCA giving effect to the Arrangement; Court means the Court of Queen s Bench of Alberta; DRIP means the distribution reinvestment and unit purchase plan of the Fund, pursuant to the distribution reinvestment plan agency agreement, dated June 17, 2004, among the Fund, EMSI and CIBC Mellon Trust Company; ECT means Enbridge Commercial Trust, a trust established pursuant to the ECT Trust Indenture;

99 - 2 - (m) (n) (o) (p) (q) (r) (s) (t) (u) (v) (w) (x) (y) (z) (aa) ECT Preferred Units means the class of trust units of ECT designated as Preferred Units in the ECT Trust Indenture and having the rights, privileges, restrictions and conditions described therein; ECT Trust Indenture means the trust indenture pursuant to which ECT was established, made as of December 20, 2002, as amended and restated as of June 30, 2003, August 18, 2003, May 4, 2004, July 1, 2005 and May 1, 2006, and as further amended on November 5, 2007; ECT Trustees means the trustees of ECT and, for greater certainty, is comprised of the Independent ECT Trustees and the Manager Trustees; Effective Date means the date the Arrangement becomes effective under the ABCA, which is expected to be on or about December 15, 2010; Effective Time means the first moment on the Effective Date; EIFH means Enbridge Income Fund Holdings Inc., a corporation incorporated pursuant to the laws of Alberta; EIFH Administration Agreement means an agreement to be entered into between EMSI and EIFH pursuant to which EMSI will provide certain administrative services to EIFH; EIFH Shares means the common shares in the share capital of EIFH; EIFH Special Voting Share means the special voting share in the capital of EIFH, the rights, restrictions, privileges and conditions attached to which will entitle Enbridge to appoint one director of EIFH for so long as Enbridge and its affiliates holds or controls, directly or indirectly, at least 15% of the issued and outstanding EIFH Shares; Eligible Unitholder means a beneficial holder of Units that is not a Non-Resident Unitholder or a Tax-Exempt Unitholder immediately before the Effective Time; EMSI means Enbridge Management Services Inc., a corporation incorporated under the laws of Canada; Enbridge means Enbridge Inc., a corporation continued under the laws of Canada; Exchange Right means the right of holders of ECT Preferred Units to exchange, at their option, such ECT Preferred Units for Units; Exchange Right Support Agreement means the agreement to be entered into among EIFH, the Fund, Enbridge and EMSI with respect to the Exchange Right; Final Order means the final order of the Court approving the Arrangement pursuant to section 193(9) of the ABCA, as such order may be affirmed, amended or modified at any time prior to the Effective Time or, if appealed, then unless such appeal is withdrawn or denied, as affirmed or as amended on appeal;

100 - 3 - (bb) (cc) (dd) (ee) Fund means Enbridge Income Fund, a trust established pursuant to the Fund Trust Indenture; Fund Trust Indenture means the trust indenture pursuant to which the Fund was established, made as of May 22, 2003, as amended and restated as of June 30, 2003, August 18, 2003 and May 1, 2006; Independent ECT Trustee means an ECT Trustee who is independent (as such term is defined in National Instrument of the Canadian Securities Administrators) of the Administrator and any of its affiliates; Independent ECT Trustees Approval Requirement means the requirement that the approval of a majority of the Independent ECT Trustees will be required in the following circumstances: (i) (ii) (iii) the disposition of any material assets or equipment which are used in operating the Business, other than in the ordinary course of business; for so long as EIFH owns 20% or more of the Units, a Significant Transaction; and the approval of, amendment to or any material deviation from the current distribution policy of the Fund; (ff) (gg) (hh) (ii) (jj) (kk) (ll) Information Circular means the information circular to be prepared by EMSI on behalf of the Fund and forwarded as part of the proxy solicitation materials to Unitholders in respect of the Meeting; Interim Order means an interim order of the Court concerning the Arrangement under section 193(4) of the ABCA containing declarations and directions with respect to the Arrangement and the holding of the Meeting, as such order may be affirmed, amended or modified by the Court; Manager Trustees means the three ECT Trustees appointed by the Administrator; Meeting means the annual and special meeting of Unitholders to be held to consider the Arrangement and related matters, and any adjournments thereof; Non-Resident Unitholder means a beneficial holder of Units that is: (i) a person who is not a resident of Canada, and not deemed to be resident in Canada for the purposes of the Tax Act; or (ii) a partnership that is not a Canadian partnership for the purposes of the Tax Act; Parties means, collectively, the Fund, ECT, EMSI, Enbridge and EIFH and Party means any one of them; Person includes an individual, limited or general partnership, limited liability company, limited liability partnership, trust, joint venture, association, body corporate, trustee, executor, administrator, legal representative, government (including any governmental entity, governmental authority, regulatory body or agency) or any other entity, whether or not having legal status;

101 - 4 - (mm) (nn) (oo) (pp) (qq) (rr) (ss) (tt) (uu) (vv) (ww) Plan of Arrangement means this Plan of Arrangement as amended, modified and/or supplemented from time to time in accordance with the terms hereof; Pre-emptive Right means, in the event of a determination by the ECT Trustees to issue additional Units, the right that will be granted to each of Enbridge and EIFH to acquire that number of Units that is proportional to their respective pre-issuance economic interest in the Fund, inclusive of any ECT Preferred Units in the case of Enbridge; Public Unitholders means Unitholders other than Enbridge; Registrar means the Registrar of Corporations duly appointed under the ABCA; ROFR means the right to be granted to each of Enbridge and EIFH to acquire from the other Units proposed to be sold pursuant to a bona fide offer to purchase, except such right shall not apply in the event of a transfer by Enbridge or EIFH of some or all of its Units to an affiliate; Significant Transaction means (i) an amendment to the Fund Trust Indenture other than as otherwise permitted in section 9.2 of the Fund Trust Indenture; (ii) the sale, lease or exchange of all or substantially all of the property of the Fund, other than (a) in the ordinary course of business, (b) in specie redemptions permitted under the Fund Trust Indenture, or (c) in order to acquire ECT Units (as defined in the Fund Trust Indenture) and ECT Notes (as defined in the Fund Trust Indenture) in connection with pursuing the purposes of the Fund; (iii) the termination, liquidation or winding up of the Fund, other than as permitted in the Fund Trust Indenture; or (iv) the combination, merger or similar transaction involving the Fund and any other person that is not an affiliate (as defined in the Fund Trust Indenture) or associate (as defined in the Fund Trust Indenture) of the Fund, if following such transaction, the holders (or affiliates thereof) of equity interests in such other person (such holders being determined immediately prior to the entering into of such transaction) hold, directly or indirectly, more than 50% of the outstanding voting rights attributable to securities of the entity which results from such combination, merger or other transaction; Subsequent Mailing means the materials to be sent to Unitholders on or about the Effective Date which sets out instructions in respect of the filing of tax elections described in section 3.3 hereof and as described in the Information Circular; Tag-Along Rights means the rights that will be set forth in the Unitholders Agreement; Tax Act means the Income Tax Act (Canada), R.S.C c. 1 (5th Supp.), as amended, including the regulations promulgated thereunder, as amended from time to time; Tax-Exempt Unitholder means a beneficial holder of Units that is exempt from tax under Part I of the Tax Act; Unitholders means holders from time to time of Units;

102 - 5 - (xx) (yy) Unitholders Agreement means the agreement to be entered into among EIFH, the Fund, Enbridge and EMSI to provide for the Tag-Along Rights and the ROFR; and Units means units designated by the Fund Trust Indenture as ordinary units of the Fund. 1.2 The division of this Plan of Arrangement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Plan of Arrangement. 1.3 Unless reference is specifically made to some other document or instrument, all references herein to articles and sections are to articles and sections of this Plan of Arrangement. 1.4 Unless the context otherwise requires, words importing the singular number shall include the plural and vice versa; words importing any gender shall include all genders; and words importing Persons shall include individuals, partnerships, associations, corporations, funds, unincorporated organizations, governments, regulatory authorities, and other entities. 1.5 References in this Plan of Arrangement to any statute or sections thereof shall include such statute as amended or substituted and any regulations promulgated thereunder from time to time in effect. ARTICLE 2 ARRANGEMENT AGREEMENT 2.1 This Plan of Arrangement is made pursuant to, and is subject to the provisions of, and forms part of, the Arrangement Agreement. 2.2 This Plan of Arrangement, upon the filing of the Articles of Arrangement and the issuance of the Certificate shall become effective on, and be binding on and after, the Effective Time on: (i) the Unitholders; (ii) the Fund; (iii) ECT; (iv) Enbridge; (v) EMSI; and (vi) EIFH. 2.3 The Articles of Arrangement and Certificate shall be filed and issued, respectively, with respect to this Arrangement in its entirety. The Certificate shall be conclusive evidence that the Arrangement has become effective and that each of the provisions of Article 3 have become effective in the sequence and at the times set out therein. 2.4 Other than as expressly provided for herein, no portion of this Plan of Arrangement shall take effect with respect to any Party or other Person until the Effective Time. Furthermore, each of the events listed in Article 3 shall be, without affecting the timing set out in Article 3, mutually conditional, such that no event described in said Article 3 may occur without all steps occurring, and those events shall effect the integrated transaction which constitutes the Arrangement. ARTICLE 3 ARRANGEMENT 3.1 At the Effective Time, the following transactions shall occur and shall be deemed to occur sequentially in the order set out below, except as otherwise expressly provided. To the extent that such transactions involve Enbridge, EIFH or any securities thereof or are governed by

103 - 6 - Section 193 of the ABCA, such transactions shall occur without any further act or formality pursuant to Section 193 of the ABCA. All other transactions shall occur by means of the appropriate action being taken on the part of the appropriate Parties to effect such transactions at the Effective Time. Amendment to the Fund Trust Indenture (a) the Fund Trust Indenture shall be amended or amended and restated to the extent necessary to provide for the Pre-emptive Right, the Exchange Right and the Independent ECT Trustees Approval Requirement and in any and all other respects as may be necessary or desirable in connection with or to facilitate the Arrangement described herein; Amendment to the ECT Trust Indenture (b) the ECT Trust Indenture shall be amended or amended and restated to the extent necessary to provide for the Exchange Right, the composition of the board of ECT Trustees, the Independent ECT Trustees Approval Requirement and in any and all other respects as may be necessary or desirable in connection with or to facilitate the Arrangement as described herein; Execution of the Unitholders Agreement and Exchange Right Support Agreement (c) EIFH, the Fund, Enbridge and EMSI shall enter into the Unitholders Agreement and the Exchange Right Support Agreement; Execution of the EIFH Administration Agreement (d) EMSI and EIFH shall enter into the EIFH Administration Agreement; Amendment to EIFH Articles of Incorporation (e) EIFH s Articles of Incorporation shall be amended to establish the minimum and maximum number of directors at six and 15, respectively; Exchange of Public Unitholders Units for EIFH Shares (f) all of the Units held by Public Unitholders shall be transferred to EIFH and in exchange, EIFH shall issue to Public Unitholders EIFH Shares on the basis of one EIFH Share for each Unit so transferred; Exchange of Enbridge s 5,000,000 Units for 5,000,000 EIFH Shares (g) 5,000,000 Units held by Enbridge shall be transferred to EIFH and in exchange, EIFH shall issue to Enbridge EIFH Shares on the basis of one EIFH Share for each Unit so transferred; Issuance of EIFH Special Voting Share (h) one (1) EIFH Special Voting Share will be issued to Enbridge;

104 - 7 - Cancellation of a Certain EIFH Share (i) the one (1) EIFH Share issued to Enbridge in connection with the organization of EIFH shall be purchased for cancellation by EIFH for a consideration of one dollar ($1.00) per such EIFH Share, and shall be cancelled; Assignment, Amendment and Restatement of DRIP (j) the Fund shall assign the DRIP to EIFH and EIFH shall amend and restate the DRIP so that, among other things, all existing participants in the DRIP will be deemed to be participants in the Amended DRIP without any further action on their part and holders of EIFH Shares may participate in the Amended DRIP with respect to any cash dividends declared and paid by EIFH on EIFH Shares; and Organization of EIFH (k) EIFH shall be organized as follows: (i) (ii) (iii) the registered office of EIFH shall be located at Suite 3000, st Street S.W., Calgary, Alberta, T2P 3L8; the first directors of EIFH shall be the directors identified in the Information Circular. Such directors shall hold office until the first annual shareholder meeting of EIFH or until their successor is duly elected or appointed; and the first auditors of EIFH shall be PricewaterhouseCoopers LLP. The first auditors of EIFH shall hold office until the first annual shareholder meeting of EIFH or until their successors are duly elected or appointed. 3.2 Upon the exchange at the Effective Time of Units for EIFH Shares pursuant to Section 3.1: (i) (ii) (iii) (iv) (v) each Public Unitholder shall cease to be the holder of the Units so exchanged and the name of each such holder shall be removed from the register of holders of Units; each such former Public Unitholder shall become the holder of the EIFH Shares exchanged for the Units by such holder and shall be added to the register of holders of EIFH Shares in respect thereof; EIFH shall become the holder of the Units so exchanged by Public Unitholders and shall be added to the register of holders of Units in respect thereof; Enbridge shall cease to be the holder of 5,000,000 Units so exchanged and the name of Enbridge shall be removed from the register of holders in respect of such Units; Enbridge shall become the holder of 5,000,000 EIFH Shares exchanged for 5,000,000 Units by Enbridge and shall be added to the register of holders of EIFH Shares in respect thereof; and

105 - 8 - (vi) EIFH shall become the holder of the 5,000,000 Units so transferred and shall be added to the register of holders of Units in respect thereof. 3.3 A former beneficial holder of Units who is an Eligible Unitholder shall be entitled to make an income tax election, pursuant to subsection 85(1) or 85(2) of the Tax Act, as applicable (and the analogous provisions of provincial or territorial income tax law) with respect to the transfer by the Eligible Unitholder of Units to EIFH if such Eligible Unitholder delivers to EIFH on or before February 28, 2011, in accordance with the instructions to be set out in the Subsequent Mailing, duly completed election forms required by the Eligible Unitholder to make the joint election pursuant to subsection 85(1) or 85(2) of the Tax Act, as applicable (and the analogous provisions of provincial or territorial income tax law) complete with the details of the number of Units transferred and the applicable agreed amount or amounts for the purposes of such election or elections. EIFH will not execute or file any election that is received by EIFH after February 28, EIFH will forward to the Canada Revenue Agency and any applicable provincial or territorial taxation authority the properly completed election received by February 28, 2011 on or before March 31, The Fund, EIFH or any nominee thereof will not be responsible for the proper completion of any election, except for the obligation of EIFH to sign and forward to the Canada Revenue Agency (and any applicable provincial or territorial taxation authority) such duly completed election that is received by EIFH by February 28, The Fund, EIFH or any nominee thereof will not be responsible or liable for taxes, interest, penalties, damages or expenses resulting from the failure by anyone to properly complete any election. ARTICLE 4 OUTSTANDING CERTIFICATES 4.1 Registration of interests in and transfers of the EIFH Shares will be made through a book-based system (the Book-Based System ) administered by Clearing and Depository Services Inc. ( CDS ). On or about the Effective Date, EIFH will deliver to CDS one or more certificates evidencing the aggregate number of EIFH Shares issued in connection with the Arrangement. 4.2 EIFH Shares may be purchased, transferred or surrendered for redemption through a participant in the CDS depository service (a CDS Participant ). All rights of holders of EIFH Shares may be exercised through, and all payments or other property to which such holder is entitled, may be made or delivered by, CDS or the CDS Participant through which the holder holds such EIFH Shares. Upon purchase of such EIFH Shares, the holders will receive only a customer confirmation from the registered dealer which is a CDS Participant and from or through which such EIFH Shares are purchased. 4.3 EIFH may issue certificates representing EIFH Shares to one or more shareholders, where such issuances are warranted in the opinion of EIFH, in its sole discretion. EIFH also has the option to terminate registration of the EIFH Shares through the Book-Based System, in which case certificates for the EIFH Shares in fully registered form would be issued to beneficial owners of such EIFH Shares or their nominees. 4.4 Unitholders shall not be entitled to any interest, distribution, premium or other payment on or with respect to the former Units other than the EIFH Shares which they are entitled to receive pursuant to this Arrangement and any distributions that have been made payable by the Fund to Unitholders prior to the Effective Date with respect to such Units but that are unpaid at the Effective Date.

106 - 9 - ARTICLE 5 AMENDMENTS 5.1 The Parties reserve the right to amend, modify and/or supplement this Plan of Arrangement from time to time at any time prior to the Effective Time, provided that each such amendment, modification or supplement must be contained in a written document that is: (i) filed with the Court and, if made following the Meeting, approved by the Court; and (ii) communicated to Unitholders in the manner required by the Court (if so required). 5.2 Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Parties at any time prior to or at the Meeting with or without any other prior notice or communication to Unitholders, and if so proposed and accepted by the Persons voting at the Meeting (other than as may be required under the Interim Order), shall become part of this Plan of Arrangement for all purposes. 5.3 Any amendment, modification or supplement to this Plan of Arrangement may be made at any time and from time to time prior to or after the Effective Time without the approval of the Court or the Unitholders, provided that it concerns a matter which, in the reasonable opinion of the Parties (or, if following the Effective Time, EMSI alone), is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement or is not adverse to the financial or economic interests of any former Unitholders. ARTICLE 6 GENERAL 6.1 Notwithstanding that the transactions and events set out herein shall occur and be deemed to occur in the order and the manner set out in this Plan of Arrangement, each of the Parties to the Arrangement Agreement shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order to further document or evidence any of the transactions or events set out herein. The Parties may agree not to implement this Plan of Arrangement, notwithstanding the passing of the Arrangement Resolution and the receipt of the Final Order. 6.2 If, prior to the Effective Date, any term or provision of this Plan of Arrangement is held by the Court to be invalid, void or unenforceable, the Court, at the request of any Parties, shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of this Plan of Arrangement shall remain in full force and effect and shall in no way be affected, impaired or invalidated by such holding, alteration or interpretation.

107 APPENDIX F FAIRNESS OPINION F-1

108

109

110