Exhibit 10.3.2
EIGHTH SUPPLEMENT
AMENDING NORTHERN BORDER PIPELINE COMPANY
GENERAL PARTNERSHIP AGREEMENT
DATED May _____, 1999
This Agreement is dated as of May __, 1999 (the "Eighth Supplement")
by and among (i) the "Divesting Partners," consisting of TransCanada Border
PipeLine Ltd., a Nevada corporation and TransCan Northern Ltd., a Delaware
corporation; (ii) Northern Border Intermediate Limited Partnership, a
Delaware limited partnership ("NBILP"); and (iii) TC PipeLines Intermediate
Limited Partnership, a Delaware limited partnership ("TCILP").
WITNESSETH THAT:
WHEREAS, the Divesting Partners and NBILP are parties to that certain
General Partnership Agreement for Northern Border Pipeline Company, a Texas
general partnership (the "Partnership"), effective as of March 9, 1978, as
amended by (i) the "First Supplement," dated as of October 25, 1979 (as amended
by Agreement dated April 20, 1990), (ii) the Phase I Partnership Commitment
Agreement dated December 12, 1980, (iii) the "Second Supplement," dated as of
December 15, 1980 (as amended by Agreement dated April 20, 1990), (iv) the
"Third Supplement," dated October 1, 1981, (v) the "Fourth Supplement," dated
February 17, 1984, (vi) the "Fifth Supplement," dated April 20, 1990, (vii) the
"Sixth Supplement," dated April 19, 1991, and (viii) the "Seventh Supplement,"
dated September 23, 1993, such General Partnership Agreement, as amended or
supplemented, being herein referred to as the "Partnership Agreement"; and
WHEREAS, the Divesting Partners intend to transfer, pursuant to Section
10.1 of the Partnership Agreement, each of their respective partnership
interests in the Partnership to TCILP;
WHEREAS, to facilitate the admission of TCILP as a general partner in
the Partnership, the Divesting Partners, NBILP and TCILP desire to evidence
herein (i) the consent of NBILP to the transfer by the Divesting Partners of
their respective partnership interest in the Partnership to TCILP, (ii) the
admission of TCILP as a general partner in the Partnership, and (iii) certain
amendments to the Partnership Agreement; and
WHEREAS, NBILP and the members of the Management Committee of the
Partnership have unanimously consented to and approved the transfer, admission
and amendments referred to herein pursuant to an Agreement dated March 17, 1999,
by and among the general partners of NBILP, the Divesting Partners, the
Partnership, NBILP, Northern Border Partners, L.P., the members of the
Management Committee of the Partnership and the Operator.
NOW, THEREFORE, the Divesting Partners, NBILP and TCILP for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms
shall have the meanings set forth in the Partnership Agreement.
2. CONSENT OF NBILP. NBILP hereby consents to the transfer by each of
the Divesting Partners to TCILP of its interest in and to the Partnership and
agrees that each such transfer shall be permitted notwithstanding the terms of
Section 10.5 of the Partnership Agreement or any other terms thereof that might
prohibit such transfer.
3. ADMISSION OF TCILP. The Divesting Partners and NBILP hereby consent
to the admission of TCILP as a partner in the Partnership (notwithstanding the
terms of Section 11 of the Partnership Agreement or any other terms thereof that
might restrict such admission of TCILP) and TCILP shall become a Partner in the
Partnership effective as of the closing date of the transactions contemplated by
that certain Registration Statement on Form S-I (File No. 333-69947), as filed
with the Securities and Exchange Commission by TC PipeLines, L.P. and as amended
from time to time (hereinafter called the "Approval Date"). From and after the
Approval Date, TCILP agrees to be bound by all of the terms, obligations and
conditions of the Partnership Agreement. The Partnership shall pay the
distribution to its partners for the quarter ending June 30, 1999 (that would,
but for this sentence, be payable to TCILP) proportionately as between the
Divesting Partners, on the one hand, and TCILP, on the other hand, based on
the number of days these entities are actually partners of the Partnership
during the quarter ending June 30, 1999.
4. AMENDMENT OF PARTNERSHIP AGREEMENT. Effective the Approval Date, the
Divesting Partners, NBILP and TCILP hereby agree that the Partnership Agreement
shall be amended, effective as of the Approval Date, as follows:
(a) Section 1 of the Partnership Agreement is amended and is restated in
its entirety as follows:
1. PARTIES. The following are the parties to this Agreement:
1.1 Northern Border Intermediate Limited Partnership
(hereinafter referred to as "NBILP"), a limited
partnership organized under the laws of the State of
Delaware with its principal place of business located
at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000.
1.2 TC PipeLines Intermediate Limited Partnership
(hereinafter called "TCILP") a limited partnership
organized under the laws of the State of Delaware
with its principal place of business located at Four
Greenspoint Plaza, 00000 Xxxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxx 00000.
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(b) Section 2.45 of the Partnership Agreement is amended to delete the
reference to Sections 1.1 through 1.3 and replace it with ". . . Sections 1.1
and 1.2."
(c) Section 2 of the Partnership Agreement is amended to add the
following:
2.61 EIGHTH SUPPLEMENT. The Agreement dated as of
May __, 1999 among the Partners.
(d) Section 3.6.1 of the Partnership Agreement is amended and restated
to read as follows (and TCILP and NBILP shall each be deemed, as of the
Approval Date, to have made the representations set forth in Section 3.6.1).
3.6.1 REPRESENTATIONS AND WARRANTIES CONCERNING 1999 CHANGE
IN COMPOSITION OF PARTNERSHIP. Each Partner
represents and warrants that the execution and
delivery by such Partner of the Seventh Supplement,
the change in the composition of the Partnership to
admit NBILP in lieu of the Divesting Partners, and
the performance by such Partner of its obligation
under the Partnership Agreement, as amended, will not
contravene any provision of, or constitute a default
under, an indenture, mortgage or other agreement of
such Partner or any order of any court, commission or
government agency having jurisdiction. Each Partner
represents and warrants that the execution and
delivery by such partner of the Eighth Supplement,
the change in the composition of the Partnership to
admit TCILP in lieu of the Divesting Partners, and
the performance by such Partner of its obligation
under the Partnership Agreement, as amended, will not
contravene any provision of, or constitute a default
under, an indenture, mortgage or other agreement of
such Partner or any order of any court, commission or
government agency having jurisdiction. Each Partner
further (i) represents and warrants that it is a
limited partnership duly organized and existing under
the laws of its state of incorporation or
organization, and (ii) covenants that it will do or
cause to be done all things necessary to preserve and
keep in full force and effect its limited partnership
existence for so long as it shall remain a Partner.
(e) Section 7.6 of the Partnership Agreement is amended by amending
the last paragraph to read in its entirety as follows:
The Parties intend that all tax items arising from or
attributable to any change in the tax basis of Partnership
properties occasioned by the admission of NBILP in 1993, or
TCILP in 1999, as a Partner and related transaction shall be
allocated solely to NBILP or TCILP, respectively. Accordingly,
to the extent deemed necessary by the Management Committee,
income, gain, loss and deduction shall be allocated for
federal (and any applicable state) income tax purposes among
the Partners in such manner (using any reasonable method,
including curative allocations, consistent with Section 704(c)
of the Internal Revenue Code of 1986 and the regulations
promulgated or proposed thereunder) as will achieve such
intent.
(f) Sections 8.2.1 and 8.2.5(ii) of the Partnership Agreement are
amended and
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restated in their entirety to read as follows:
8.2.1 The Management Committee shall consist of four members
(the "Representatives"), one of whom shall be designated
by TCILP and three of whom shall be designated by NBILP
with one Representative being selected by each general
partner of NBILP. Each Partner shall designate, by
notice to each other Partner and the Partnership, its
Representative(s) to serve on the Management Committee.
By like notice, each Partner may designate an alternate
Representative for each Representative appointed by it,
who shall have authority to act on behalf of such
appointed Representative in the event of such appointed
Representative's absence or inability to serve. Any
Partner may at any time, by written notice to all other
Partners and to the Partnership, remove its appointed
Representative(s) on the Management Committee and
designate a new Representative(s).
8.2.5 (ii) the Partner's Percentages on all matters determined
on or after the Commitment Date. For this purpose, the
Representative(s) designated by NBILP shall have, in the
aggregate, a number of votes equal to the Partner's
Percentage of NBILP. Until NBILP provides written
notification to the other Partner(s) of a change in
allocation of its number of votes, the Representative of
NBILP selected by Northern Plains shall have a number of
votes equal to 35%; the Representative of NBILP selected
by Pan Border Gas Company shall have a number of votes
equal to 22.75%; and the Representative of NBILP
selected by Northwest Border Pipeline Company shall have
a number of votes equal to 12.25%. The representative
appointed by TCILP shall have a number of votes equal to
30%. The majority of such votes cast by the
Representatives of the Partners shall constitute a
majority of the Partner's Percentages. Each
Representative agrees not to enter into a voting
agreement with another Representative pursuant to which
such Representatives would vote as a block, but this
sentence shall not be construed to prohibit two or more
Representatives from agreeing with each other concerning
particular projects, issues or subjects.
(g) Section 8.2.6 is hereby amended to replace the word
"Section 8.5.10" with "Section 8.4.10."
(h) Section 8.4.1 is hereby amended to replace the words
"Section 8.5.2 and Section 8.5.10," with "Section 8.4.2
and Section 8.4.10."
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(i) Section 8.4.5 is hereby amended to replace the words
"Section 8.5" with "Section 8.4."
(j) Section 8.4.9 is hereby amended to replace the word
"Section 8.5" with "Section 8.4."
(k) Section 8.4.10 is hereby amended to replace the words
"Section 8.5" with "Section 8.4."
(1) Section 10.6 of the Partnership Agreement is amended to
add the following as a second paragraph:
"If the general partner of TCILP desires to transfer its
general partnership interest in TCILP to a party other
than an Affiliate of such general partner, such selling
general partner of TCILP must first provide NBILP and
the general partners of NBILP with notice of such intent
to transfer and for a period of 30 days following the
receipt by NBILP and the general partners of NBILP,
NBILP and/or any general partner of NBILP shall have the
right to submit an offer for the general partner
interest of such selling general partner of TCILP (and
any other interests in TCILP proposed to be sold by such
selling general partner of TCILP). Such selling general
partner of TCILP shall have no obligation to consider or
accept any offers received from NBILP and/or any general
partner of NBILP, and from and after such 30 day period,
such selling general partner of TCILP shall be free to
consummate the proposed transaction referred to in its
notices to NBILP and the general partners of NBILP."
5. AMENDMENT OF THE PARTNERSHIP AGREEMENT EFFECTIVE MARCH 17, 1999. The
parties affirm that effective March 17, 1999, Section 9 of the Partnership
Agreement was amended to add the following:
9.3 BUSINESS OPPORTUNITIES. The Partners and their
Affiliates are free to pursue any business opportunity
without first offering such business opportunity to the
Partnership (and such pursuit shall not be a breach of
any duty to the Partnership or to any other Partner),
except that no Partner and no Affiliate of a Partner may
pursue the project known as Project 2000 filed with the
Federal Energy Regulatory in Docket No. CP99-21 or any
business opportunity that consists of an expansion,
addition, betterment, improvement, renewal or
replacement of the Line as it existed on January 15,
1999 (the "Effective Date") unless the party desiring to
pursue such opportunity first offers to the Partnership
the opportunity to pursue such business opportunity and
the Partnership declines to do so. The
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terms "expansion, addition, betterment, improvement,
renewal or replacement" shall not include any extension
of the Line beyond its terminus as it existed on the
Effective Date or the construction or acquisition of any
pipeline (including any lateral or any other extension)
that connects with the Line as it existed on the
Effective Date. The parties hereto agree that the
waivers and agreements in this Section 9.3 constitute an
agreement among the partners of the Partnership that
governs the management of the business and affairs of
the Partnership and the relationship among the Partners
and the Partnership, as contemplated by Article
6132b-l.03 of the Texas Revised Partnership Act. The
parties hereto further agree that the waivers and
agreements in this Section 9.3 identify certain types
and categories of activities which do not violate the
duty of loyalty to the Partnership, and that such types
and categories and the waivers and agreements in this
Section 9.3 are not manifestly unreasonable.
6. MISCELLANEOUS.
(a) Except as amended hereby, the terms and provisions of the
Partnership Agreement shall remain in full force and effect.
(b) The Eighth Supplement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
(c) Each party hereto represents and warrants to every other party
hereto that (i) it has the full corporate or partnership power and authority to
execute and deliver this Eighth Supplement and to consummate the transactions
contemplated hereunder, (ii) the execution, delivery and performance by such
party of this Eighth Supplement has been duly authorized by all necessary
corporate or partnership action on the part of such party, and (iii) this Eighth
Supplement has been duly executed and delivered by such party and constitutes
the legal, valid and binding obligation of such party, enforceable against such
party in accordance with its terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Eighth
Supplement to be executed by their respective duly authorized officers.
TRANSCANADA BORDER PIPELINE LTD.
(Divesting Partner)
By:
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Name:
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Title:
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TRANSCAN NORTHERN LTD.
(Divesting Partner)
By:
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Name:
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Title:
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NORTHERN BORDER INTERMEDIATE LIMITED
PARTNERSHIP
(NBILP)
By:
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Name:
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Title:
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TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP
(TCILP)
By: TC PipeLines GP, Inc., its General Partner
By:
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Name:
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Title:
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