1
EXHIBIT 1.1
CONFORMED COPY
1,748,635 Class A Common Units
LAKEHEAD PIPE LINE PARTNERS, L.P.
Representing Class A Limited Partner Interests
UNDERWRITING AGREEMENT
May 16, 2001
XXXXXXX, XXXXX & CO.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Lakehead Pipe Line Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes, upon the terms and subject to the conditions set forth
herein, to issue and sell an aggregate of 1,748,635 Class A Common Units
representing limited partner interests in the Partnership (the "Firm Units") to
you (the "Underwriter"). The Partnership also proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Underwriter
up to an additional 229,507 Class A Common Units representing limited partner
interests in the Partnership (the "Additional Units"). The Firm Units and the
Additional Units are hereinafter collectively referred to as the "Offered
Units," and the Offered Units and each Class A Common Unit and Class B Common
Unit representing limited partner interest outstanding on the date hereof are
hereinafter sometimes collectively referred to as the "Units."
Each of the Partnership, Lakehead Pipe Line Company, Limited
Partnership, a Delaware limited partnership (the "Operating Partnership"), and
Lakehead Pipe Line Company, Inc., a Delaware corporation (both in its capacity
as general partner of the Partnership and in its individual capacity, the
"General Partner"), wishes to confirm as follows its agreement with the
Underwriter, in connection with the purchase of the Offered Units by the
Underwriter. The Partnership, the Operating Partnership and the General Partner
are sometimes collectively referred to herein as the "Companies."
1. Registration Statement and Prospectus. The Partnership has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (Registration No. 333-67005) under
the Act, including a prospectus subject to completion relating to the Offered
Units. Such registration statement (including all financial schedules and
exhibits), as supplemented or amended prior to the execution of this Agreement
is herein called the "Registration Statement." If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to such
registration statement will be filed and must be declared effective before the
offering of the Offered Units may commence, the term "Registration Statement" as
used in this Agreement means such registration statement as amended by said
post-effective amendment. If it is contemplated, at the time this Agreement is
executed, that a registration statement will be filed pursuant to Rule 462(b)
under the Act before the offering of
2
the Offered Units may commence, the term "Registration Statement" as used in
this Agreement includes such registration statement. The term "Basic Prospectus"
as used in this Agreement shall mean the prospectus contained in the
Registration Statement at the time that the Registration Statement was declared
effective or in the form in which it has been most recently filed with the
Commission on or prior to the date of this Agreement. "Final Prospectus" shall
mean the prospectus supplement relating to the Offered Units and the offering
thereof that is first filed pursuant to Rule 424(b) under the Act ("Rule
424(b)") after the date and time this Agreement is executed and delivered by the
parties hereto, together with the Basic Prospectus.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, the Basic Prospectus or the Final Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, the Basic Prospectus or the Final
Prospectus, as the case may be; any reference in this Agreement to the
Registration Statement, the Basic Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of the
Registration Statement, the Basic Prospectus or the Final Prospectus, as the
case may be; and any reference to any amendment or supplement to the
Registration Statement, the Basic Prospectus or the Final Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (the "Exchange Act") which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the Registration Statement,
the Basic Prospectus or the Final Prospectus or any amendment or supplement
thereto.
2. Agreements to Sell and Purchase. The Partnership hereby agrees, upon
the terms and subject to all the conditions set forth herein, to issue and sell
to the Underwriter and, upon the basis of the representations, warranties and
agreements of the Companies herein contained and upon the terms and subject to
all the conditions set forth herein, the Underwriter agrees to purchase from the
Partnership, at a purchase price of $43.806 per Unit (the "Purchase Price Per
Unit"), 1,748,635 Firm Units.
The Partnership also hereby agrees, upon the terms and subject to all
the conditions set forth herein, to sell to the Underwriter, and, upon the basis
of the representations, warranties and agreements of the Companies herein
contained and upon the terms and subject to all the conditions set forth herein,
the Underwriter shall have the right to purchase from the Partnership at the
Purchase Price per Unit, pursuant to an option (the "over-allotment option")
which may be exercised at any time and from time to time prior to 9:00 P.M., New
York City time, on the 30th day after the date of the Final Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the New York Stock Exchange is open for trading), up to
229,507 Additional Units. Additional Units may be purchased only for the purpose
of covering over-allotments made in connection with the offering of the Firm
Units.
3. Terms of Public Offering. The Partnership has been advised by you
that you propose to make a public offering of the Offered Units as soon after
the Registration Statement
2
3
and this Agreement have become effective as in your judgment is advisable and
initially to offer the Offered Units upon the terms set forth in the Final
Prospectus.
4. Delivery of the Offered Units and Payment Therefor. The Offered
Units to be purchased hereunder will be represented by one or more definitive
global certificates in book-entry form which will be deposited by or on behalf
of the Partnership with The Depository Trust Company ("DTC") or its designated
custodian.
Delivery to the Underwriter of the Firm Units, against payment of the
purchase price therefor in immediately available funds, shall be made by causing
DTC to credit the Firm Units to the account or accounts designated by the
Underwriter at DTC. The time and date of such delivery shall be 10:00 A.M., New
York City time, on May 22, 2001 (the "Closing Date"). The other documents to be
delivered at the Closing Date by or on behalf of the parties hereto shall be
delivered at such time and date at the offices of Xxxxx Xxxxx L.L.P., 000
Xxxxxxxxx, Xxxxxxx, Xxxxx 00000. The place of closing for the Firm Units and the
Closing Date may be varied by agreement between you and the Partnership.
Delivery to the Underwriter of the Additional Units to be purchased by
the Underwriter, against payment of the purchase price therefor in immediately
available funds, shall be made by causing DTC to credit the Additional Units to
the account or accounts designated by the Underwriter at DTC at such time on
such date (the "Option Closing Date"), which may be the same as the Closing Date
but shall in no event be earlier than the Closing Date nor earlier than two nor
later than ten business days after the giving of the notice hereinafter referred
to, as shall be specified in a written notice from you to the Partnership of
your determination to purchase a number, specified in such notice, of Additional
Units. The other documents to be delivered at the Option Closing Date by or on
behalf of the parties hereto shall be delivered at such time and date at the
offices of Xxxxx Xxxxx L.L.P., 000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000. The place of
closing for any Additional Units and the Option Closing Date for such Units may
be varied by agreement between you and the Partnership.
The global certificates representing the Offered Units to be delivered
to the Underwriter shall be made available to you at the office of DTC or its
custodian for inspection not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be.
5. Agreements of the Companies. Each of the Companies agrees with the
Underwriter as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Offered Units may commence,
the Partnership and the General Partner will endeavor to cause the Registration
Statement or such post-effective amendment to become effective as soon as
possible and will advise you and counsel for the Underwriter promptly and, if
requested by you, will confirm such advice in writing, when the Registration
Statement or such post-effective amendment has become effective.
3
4
(b) Following the execution and delivery of this Agreement and
thereafter from time to time during for such period as in the opinion of counsel
for the Underwriter a prospectus is required by the Act to be delivered in
connection with sales by the Underwriter or any dealer (the "Prospectus Delivery
Period"), the Partnership and the General Partner will advise you and counsel
for the Underwriter promptly and, if requested by you, will confirm such advice
in writing: (i) of any request by the Commission for amendment of or a
supplement to the Registration Statement, the Basic Prospectus or the Final
Prospectus or for additional information; (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Offered Units for offering or sale in
any jurisdiction or the initiation of any proceeding for such purpose; and (iii)
of any change in the financial position, business, prospects, or results of
operations of any of the Companies, or of the happening of any event, which
makes any statement of a material fact made in the Registration Statement or the
Final Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the Final
Prospectus (as then amended or supplemented) in order to state a material fact
required by the Act to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Final Prospectus (as then amended or supplemented) to comply with the Act or
any other law. If at any time within the Prospectus Delivery Period, the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Partnership and the General Partner will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Partnership and the General Partner will furnish to you, at
your request and without charge, (i) one conformed copy of the Registration
Statement as originally filed with the Commission and of each amendment thereto,
including financial statements and all exhibits to the Registration Statement,
(ii) such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto, but without exhibits, as you may request,
(iii) such number of copies of the Incorporated Documents, without exhibits, as
you may request, and (iv) such number of copies of the exhibits to the
Incorporated Documents as you may request.
(d) During the Prospectus Delivery Period, neither the Partnership
nor the General Partner will file any amendment to the Registration Statement or
make any amendment or supplement to the Final Prospectus or, file any document
which, upon filing becomes an Incorporated Document, of which you and counsel
for the Underwriter shall not previously have been advised or to which, after
you and counsel for the Underwriter shall have received a copy of the document
proposed to be filed, you shall reasonably object; provided that your consent
shall not be unreasonably withheld or delayed.
(e) [Reserved]
(f) The Partnership will cause the Final Prospectus to be filed
pursuant to, and in compliance with, Rule 424(b). As soon as practical following
the execution and delivery of this Agreement and until the end of the Prospectus
Delivery Period, the Partnership and the General Partner will expeditiously
deliver to the Underwriter and each dealer, without charge, as many copies of
the Final Prospectus (and of any amendment or supplement thereto) as you may
4
5
reasonably request. The Partnership and the General Partner consent to the use
of the Final Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Offered Units are offered by the
Underwriter and by all dealers to whom Offered Units may be sold, both in
connection with the offering and sale of the Offered Units and for such period
of time thereafter as the Final Prospectus is required by the Act to be
delivered in connection with sales by the Underwriter or any dealer. If during
such period of time any event shall occur that in the judgment of the
Partnership or the General Partner or in the opinion of counsel for the
Underwriter is required to be set forth in the Final Prospectus (as then amended
or supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Final Prospectus
(or to file under the Exchange Act any document which, upon filing, becomes an
Incorporated Document) in order to comply with the Act or any other law, the
Partnership and the General Partner will forthwith prepare and, subject to the
provisions of paragraph (d) above, file with the Commission an appropriate
supplement or amendment thereto (or to such document), and will expeditiously
furnish to the Underwriter and dealers a reasonable number of copies thereof. In
the event that the Partnership or the General Partner and the Underwriter agree
that the Final Prospectus should be amended or supplemented, the Partnership and
the General Partner, if requested by you, will promptly issue a press release
announcing or disclosing the matters to be covered by the proposed amendment or
supplement.
(g) The Partnership and the General Partner will cooperate with you
and with counsel for the Underwriter in connection with the registration or
qualification of the Offered Units for offering and sale by the Underwriter and
by dealers under the securities or Blue Sky laws of such jurisdictions as you
may designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Partnership be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Offered Units, in any
jurisdiction where it is not now so subject.
(h) The Partnership and the General Partner will make generally
available to security holders of the Partnership a consolidated earnings
statement, which need not be audited, covering a 12-month period commencing
after the effective date of the Registration Statement and ending not later than
15 months thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a) of
the Act.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to Section
10 hereof or pursuant to clause (ii), (iii), (iv) or (v) of Section 11 hereof)
or if this Agreement shall be terminated by the Underwriter because of any
failure or refusal on the part of any of the Companies to comply with the terms
or fulfill any of the conditions of this Agreement, the Partnership and the
General Partner, jointly and severally, agree to reimburse the Underwriter for
all out-of-pocket expenses (including reasonable fees and expenses of counsel
for the Underwriter) incurred by the Underwriter in connection herewith.
5
6
(j) The Partnership will apply the net proceeds from the sale of the
Offered Units substantially in accordance with the description set forth in the
Final Prospectus.
(k) Except as provided in this Agreement, neither the Partnership
nor the General Partner will offer, sell, contract to sell or otherwise dispose
of or hedge any Units or any securities substantially similar to, convertible
into or exercisable or exchangeable for Units, or grant any options or warrants
to purchase any Units or any such securities, for a period of 90 days after the
date of the Final Prospectus, without the prior written consent of the
Underwriter.
(l) Except as stated in this Agreement and in the Final Prospectus,
none of the Companies has taken, nor will take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Units to facilitate the sale
or resale of the Offered Units.
(m) The Partnership and the General Partner will use their best
efforts to have the Offered Units listed, subject to official notice of
issuance, on the New York Stock Exchange on or before the Closing Date.
(n) Upon the issuance of the Offered Units by the Partnership, the
General Partner shall make the additional capital contributions to the
Partnership as required by Section 4.4(c)(ii) of the Amended and Restated
Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement").
(o) The Partnership, during the Prospectus Delivery Period, will
file all documents required to be filed with the Commission pursuant to the
Exchange Act within the time periods required by the Exchange Act.
6. Representations and Warranties of the Companies. Each of the
Companies represents and warrants to the Underwriter that:
(a) The Basic Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto
complied when so filed in all material respects with the provisions of the Act
and did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the Basic Prospectus made in reliance upon and
in conformity with information relating to the Underwriter furnished to the
Partnership in writing by or on behalf of the Underwriter expressly for use
therein. To the best of each of the Companies' knowledge, information and
belief, having made reasonable inquiries, the Commission has not issued any
order preventing or suspending the use of the Basic Prospectus.
(b) The Partnership and the offering of the Offered Units
contemplated by this Agreement meet the requirements for using Form S-3 under
the Act. The Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective and the Final Prospectus and any supplement or
amendment thereto when filed with the Commission under Rule 424(b) and at the
Closing Date and if applicable, at the Option Closing Date, complied or will
comply in all
6
7
material respects with the provisions of the Act, and will not at any such times
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the statements made or to be made in such documents that are
covered by Rule 175(b) under the Act were made or will be made with a reasonable
basis and in good faith, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the Final
Prospectus made in reliance upon and in conformity with information relating to
the Underwriter furnished to the Partnership in writing by or on behalf of the
Underwriter expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act; any further Incorporated Documents so filed
will, when they are filed, conform in all material respects with the
requirements of the Exchange Act; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further document, when it is
filed, will contain an untrue statement of a material fact or will omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(d) The capitalization of the Partnership as of March 31, 2001 was
as set forth in the Final Prospectus under "Capitalization."
(e) The Offered Units and the limited partner interests represented
thereby are authorized by the Partnership Agreement and, when issued, delivered
and paid for in accordance with Section 4 hereof, will be validly issued, fully
paid and non-assessable (except as such non-assessability may be affected by the
matters described under the caption "Summary Description of the Partnership
Agreement -- Limited Liability" in Amendment No. 3 to the Partnership's
Registration Statement on Form S-1 (Registration No. 33-43425) which is
incorporated by reference into the Partnership's Registration Statement on Form
8-A, dated November 14, 1991, as amended by Amendment No. 1 to Form 8-A on Form
8, dated December 9, 1991, and Amendment No. 2 on Form 8-A/A, dated May 2, 1997
(the "Form 8-A")) and free of any preemptive or similar rights (except for the
required Capital Contributions (as defined in the Partnership Agreement) to the
Partnership to be made by the General Partner pursuant to Section 4.4(c)(ii) of
the Partnership Agreement), and the Underwriter will acquire such Units free and
clear of any liens, encumbrances, security interests, charges or claims.
(f) Each of the Partnership and the Operating Partnership has been
duly formed and is validly existing as a limited partnership in good standing
under the Delaware Revised Uniform Limited Partnership Act (the "Delaware Act"),
with partnership power and authority to own or lease its properties and to
conduct its business as described in the Final Prospectus.
(g) The General Partner has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with the corporate power and authority to own or lease its properties,
to conduct its businesses and to act as a general
7
8
partner of the Partnership and the Operating Partnership, in each case as
described in the Final Prospectus.
(h) The accountants, PricewaterhouseCoopers LLP, who have certified
or shall certify the financial statements included or incorporated by reference
in the Registration Statement and the Final Prospectus (or any amendment or
supplement thereto), are independent public accountants as required by the Act.
(i) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Final Prospectus (and any amendment or supplement thereto), present fairly
the consolidated financial position, results of operations and changes in
financial position of the Partnership and the Operating Partnership on the basis
stated in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
included or incorporated by reference in the Registration Statement and the
Final Prospectus (and any amendment or supplement thereto) are accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Companies.
(j) The execution and delivery of, and the performance by each of
the Companies of its obligations under this Agreement have been duly and validly
authorized by each of such Companies, as the case may be, and this Agreement has
been duly executed and delivered by each of the Companies.
(k) Neither the offer, sale or delivery of the Offered Units, the
execution, delivery or performance of this Agreement, compliance by any of the
Companies with the provisions hereof nor consummation by any of the Companies of
the transactions contemplated hereby constitutes a breach of, or a default
under, the partnership agreement, certificate or articles of incorporation or
bylaws, or other organizational documents, of any of the Companies or any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which any of the Companies is a party
or by which any of them may be bound or to which any of their respective
properties is subject, nor will any such action result in any violation of any
existing law, regulation, ruling (assuming compliance with all applicable
federal and state securities and Blue Sky laws), judgment, injunction, order or
decree to which any of the Companies is a named party, excluding in each case
any breaches, defaults or violations which, individually or in the aggregate,
would not have a material adverse effect on the financial position, results of
operations, business or prospects of the General Partner or the Partnership and
the Operating Partnership (taken as a whole) (a "Material Adverse Effect").
(l) Except as disclosed in the Registration Statement and the Final
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Final Prospectus (or any amendment or supplement thereto),
none of the Companies has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the limited partners of the Partnership, the
General Partner or the Partnership and the
8
9
Operating Partnership (taken as a whole), and there has not been any change in
the capital stock or partner's capital, or material increase in the short-term
debt or long-term debt of, any of the Companies, or any material adverse change,
or any development that the Partnership and the General Partner have reasonable
cause to believe will involve a prospective material adverse change, in the
financial position, business, prospects or results of operations of any of the
Companies.
(m) None of the Companies has distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Offered Units, will distribute any offering material in connection with the
offering and sale of the Offered Units other than the Final Prospectus or other
materials, if any, permitted by the Act.
(n) Except as disclosed in the Registration Statement and the Final
Prospectus (or any amendment of supplement thereto), no more than ten percent of
the net proceeds from the sale of the Offered Units are intended to be or will
be paid to members of the National Association of Securities Dealers or
associated or affiliated persons of such members, or members of the immediate
family of such members.
(o) Except for the General Partner, who has waived such rights, no
holder of any security of the Partnership or any other person has any right to
require registration of Units or any other interest or other security of the
Partnership because of the filing of the registration statement or consummation
of the transactions contemplated by this Agreement.
(p) The General Partner has (excluding its interests in the
Partnership and the Operating Partnership) a net worth of at least $35 million.
(q) Based upon the advice of counsel, none of the Companies is, or
as of the Closing Date will be, an "Investment Company" as that term is defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act"), or required to register as an "Investment Company" under the Investment
Company Act.
(r) Based upon the advice of counsel, none of the Companies is (i) a
"public utility company," (ii) a "holding company," (iii) a "subsidiary company"
of a "registered holding company" or of a "holding company" required to be
registered under the Public Utility Holding Company Act of 1935, as amended (the
"1935 Act"), or (iv) an "affiliate" of (A) a "registered holding company," (B) a
"holding company" required to be registered under the 1935 Act, (C) a
"subsidiary company" of a "registered holding company" or (D) a "subsidiary
company" of a "holding company" required to be registered under the 1935 Act, as
such terms are defined in the 1935 Act. The issuance and sale of the Offered
Units as contemplated by the Final Prospectus is not subject to regulation under
the 1935 Act.
(s) There are no legal or governmental proceedings pending or, to
the knowledge of any of the Companies, threatened, against any of the Companies,
or to which any of the Companies, or to which any of their respective
properties, is subject, that are required to be described in the Registration
Statement or the Final Prospectus and are not described as required.
9
10
(t) The States of Illinois, Indiana, Michigan, Minnesota, New York,
North Dakota and Wisconsin are the only jurisdictions within the United States
in which each of the Operating Partnership and General Partner, as applicable,
owns or leases property, or conducts business as a foreign limited partnership
or corporation, as applicable, so as to require the Operating Partnership or
General Partner, as applicable, to qualify to conduct business as a foreign
limited partnership or corporation, as applicable, and in which the failure to
so qualify would be likely to have a Material Adverse Effect. The States of
Minnesota and Wisconsin are the only jurisdictions within the United States in
which the Partnership owns or leases property, or conducts business as a foreign
limited partnership so as to require the Partnership to qualify to conduct
business as a foreign limited partnership and in which the failure to so qualify
would be likely to have a Material Adverse Effect.
7. Indemnification and Contribution.
(a) Each of the Companies, jointly and severally, agrees to
indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Final Prospectus or in the Registration Statement
or in any amendment or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to the Underwriter
furnished in writing to the Partnership by or on behalf of the Underwriter
expressly for use in connection therewith; provided, however, that the only
information furnished in writing to the Partnership by or on behalf of the
Underwriter are the statements noted in Section 12 hereof. The foregoing
indemnity agreement shall be in addition to any liability which any of the
Companies may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Underwriter or any person controlling the Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act in respect of which
indemnity may be sought against any of the Companies, the Underwriter or such
controlling person shall promptly notify the General Partner on behalf of the
Companies, and the Companies shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Underwriter and payment of
all fees and expenses. The Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action, suit or proceeding and
to participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Underwriter or such controlling person unless (i)
the Companies have agreed in writing to pay such fees and expenses, (ii) the
Companies have failed to assume the defense and employ counsel reasonably
satisfactory to the Underwriter or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include both the
Underwriter or such controlling person and any of the Companies and the
Underwriter or such controlling person shall have been advised by its counsel
that representation of such indemnified party and one or more of the Companies
by the same counsel would be inappropriate under applicable standards of
professional conduct
10
11
(whether or not such representation by the same counsel has been proposed) due
to actual or potential differing interests between them (in which case the
Companies shall not have the right to assume the defense of such action, suit or
proceeding on behalf of the Underwriter or such controlling person). It is
understood, however, that the Companies shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for the Underwriter and controlling persons not having
actual or potential differing interests with you, which firm shall be designated
in writing by the Underwriter, and that all such fees and expenses shall be
reimbursed as they are incurred. None of the Companies shall be liable for any
settlement of any such action, suit or proceeding effected without its written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, each of the
Companies, jointly and severally, agrees to indemnify and hold harmless the
Underwriter, to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) The Underwriter agrees to indemnify and hold harmless each of
the Companies, the directors of the General Partner, the officers of the General
Partner who sign the Registration Statement, and any person who controls any of
the Companies within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Companies
to the Underwriter, but only with respect to information relating to the
Underwriter furnished in writing by or on behalf of the Underwriter expressly
for use in the Registration Statement, the Final Prospectus, or any amendment or
supplement thereto; provided, however, that the only information furnished in
writing to the Partnership by or on behalf of the Underwriter are the statements
noted in Section 12 hereof. If any action, suit or proceeding shall be brought
against any of the Companies, any of the directors of the General Partner, any
such officer of the General Partner, or any such controlling person based on the
Registration Statement or the Final Prospectus, or any amendment or supplement
thereto, and in respect of which indemnity may be sought against the Underwriter
pursuant to this paragraph (c), the Underwriter shall have the rights and duties
given to the Companies by paragraph (b) above, and the Companies, the directors
of the General Partner, any such officer of the General Partner, and any such
controlling person, shall have the rights and duties given to the Underwriter by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which the Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Companies on the one hand and the Underwriter on the other hand from the
offering of the Offered Units, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Companies on the one hand and the Underwriter on
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages,
11
12
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Companies on the one hand and the
Underwriter on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Partnership bear to the total underwriting discounts and commissions
received by the Underwriter, in each case as set forth in the table on the cover
page of the Final Prospectus; provided that, in the event that the Underwriter
shall have purchased any Additional Units, hereunder, any determination of the
relative benefits received by the Companies or the Underwriter from the offering
of the Offered Units shall include the net proceeds (before deducting expenses)
received by the Partnership and the underwriting discounts and commissions
received by the Underwriter, from the sale of such Additional Units. The
relative fault of the Companies on the one hand and the Underwriter on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Companies on the one hand or by the Underwriter on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, including, with respect to the
Underwriter, the extent to which any such loss, claim, damage or liability
arises from the sale of Offered Units by the Underwriter to any person if a copy
of the Final Prospectus shall not have been delivered or sent to such person
within the time required by the Act, provided that the Partnership has delivered
the Final Prospectus to the Underwriter in requisite quantities on a timely
basis to permit such delivery or sending.
(e) The Companies and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total price of the Offered Units underwritten by it and distributed to the
public exceeds the amount of any damages which the Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or
12
13
expenses are incurred. The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Companies set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the Underwriter or
any person controlling the Underwriter, any of the Companies, the directors of
the General Partner or officers of the General Partner, or any person
controlling any of the Companies, (ii) acceptance of any Offered Units and
payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to the Underwriter or any person controlling the Underwriter, or to
any of the Companies or the directors or officers of the General Partner, or any
person controlling any of the Companies, shall be entitled to the benefits of
the indemnity, contribution and reimbursement agreements contained in this
Section 7. The term "successor," as used in this Agreement, shall not include a
purchaser from the Underwriter of any Units in his status as a purchaser.
8. Conditions of Underwriter's Obligations. The obligation of the
Underwriter to purchase the Firm Units hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Offered Units may commence,
the Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you and all
filings, if any, required by Rule 424 under the Act shall have been timely made;
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceeding for that purpose shall have been instituted
or, to the knowledge of any of the Companies or the Underwriter, threatened by
the Commission, and any request of the Commission for additional information (to
be included in the Registration Statement or the Final Prospectus or otherwise)
shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred any change, or any development involving a prospective change,
in or affecting the financial position, business, prospects, or results of
operations of the Companies not contemplated by the Final Prospectus, which in
the opinion of the Underwriter, would materially, adversely affect the market
for the Offered Units.
(c) You shall have received on the Closing Date an opinion of S.
Xxxx Xxxxxx, Corporate Secretary of the General Partner, dated the Closing Date
and addressed to you to the effect that:
(i) There is no action, proceeding or investigation pending or,
to the best of such counsel's knowledge after due inquiry, threatened against
any of the Companies which in such counsel's judgment could reasonably be
expected to have a Material Adverse Effect.
(ii) None of the Companies is in violation of any term of (A)
its partnership agreement or certificate of incorporation or by-laws, as the
case may be, (B) any other material agreement or instrument to which it is a
party or by which it or any of its properties is bound, or (C) to the best of
such counsel's knowledge after due inquiry, any
13
14
applicable order, judgment or decree of any court, arbitrator or governmental
authority to which any of the Companies is a named party, which violations, in
the judgment of such counsel, could reasonably be expected to have a Material
Adverse Effect.
(d) You shall have received on the Closing Date an opinion of
Fulbright & Xxxxxxxx L.L.P., counsel for the Companies, dated the Closing Date
and addressed to you to the effect that:
(i) Each of the Partnership and the Operating Partnership has
been duly formed and is validly existing as a limited partnership in good
standing under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act"), with partnership power and authority to own or lease its
properties and to conduct its business as described in the Final Prospectus.
(ii) The General Partner has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with the corporate power and authority to own or lease its
properties, to conduct its businesses, to act as a general partner of the
Partnership and the Operating Partnership, in each case as described in the
Final Prospectus.
(iii) Enbridge Pipelines Inc. ("Enbridge") is the record owner
of all of the issued and outstanding shares of capital stock of the General
Partner.
(iv) The authorized and outstanding partnership interests of the
Partnership are as set forth under the caption "Business--Overview" in the Final
Prospectus.
(v) The General Partner is the sole general partner of each of
the Partnership and the Operating Partnership. The General Partner owns of
record a general partner interest in the Partnership of 1.0%, and prior to the
consummation of the issuance and sale of the Firm Units hereunder, owns of
record a limited partner interest in the Partnership (represented by 3,912,750
Class B Common Units) of approximately 13.4%, and a general partner interest in
the Operating Partnership of 1.0101%. The Partnership is the sole limited
partner of the Operating Partnership and owns of record a limited partner
interest in the Operating Partnership of 98.9899%. The general partner interest
and the Units in the Partnership are authorized by the Partnership Agreement.
The general partner interest and the limited partner interest in the Operating
Partnership (the "Operating Partnership Interests") are authorized by the
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership (the "Operating Partnership Agreement"). Each of the Operating
Partnership Interests and each Unit outstanding on the date of the Final
Prospectus is validly issued and fully paid (with respect to such general
partner interests, only to the extent required at such time) and, with respect
to such limited partner interest and Units, non-assessable (except as such
non-assessibility may be affected by matters described in the Form 8-A). The
Operating Partnership Interests are owned of record by the parties indicated in
the Final Prospectus, in each case free and clear of any liens, encumbrances,
security interests, charges or claims of record known (based solely upon its
participation as counsel in matters relating to the offering of the Offered
Units and without having conducted an independent investigation) to such
counsel, other than those created by or arising under the Operating Partnership
Agreement or the Delaware Act.
14
15
(vi) The Offered Units to be issued and sold to the Underwriter
by the Partnership hereunder have been duly authorized by the Partnership and,
when issued and delivered to the Underwriter against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
non-assessable (except as such non-assessibility may be affected by the matters
described in the Form 8-A), and free of any preemptive or similar rights (except
for the required Capital Contributions to the Partnership to be made by the
General Partner pursuant to Section 4.4(c)(ii) of the Partnership Agreement)
that entitle or will entitle any person to acquire any partnership interest in
the Partnership, upon the issuance thereof by the Partnership, arising under the
Partnership Agreement or, to the knowledge of such counsel without any
independent investigation, any other agreement to which the Partnership is a
party or by which it is bound, and the Underwriter will acquire the Offered
Units free and clear of any liens, encumbrances, security interests, charges or
claims of record known (based solely upon its participation as counsel in
matters relating to the offering of the Offered Units and without having
conducted an independent investigation) to such counsel, except as created by
this Agreement or by the Underwriter or any person who acquires an interest in
the Offered Units through the Underwriter or as provided by the Delaware Act.
(vii) The Registration Statement and all post-effective
amendments thereto, if any, have become effective under the Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or threatened by the Commission; and any required filing of the
Final Prospectus pursuant to Rule 424(b) has been made in accordance with Rule
424(b).
(viii) Each of the Companies has the partnership or corporate
power and authority, as the case may be, to enter into this Agreement and, in
the case of the Partnership, to issue, sell and deliver the Offered Units to the
Underwriter as provided herein.
(ix) This Agreement has been duly authorized, executed and
delivered by each of the Companies.
(x) Neither the offer, sale or delivery of the Offered Units,
the execution, delivery or performance of this Agreement, compliance by any of
the Companies with the provisions hereof nor consummation by any of the
Companies of the transactions contemplated hereby violate the partnership
agreement, certificate or articles of incorporation or bylaws, or other
organizational documents, of any of the Companies (the "Organizational
Documents") or constitute a breach of, or default under, any agreement,
indenture, lease or other instrument to which any of the Companies is a party or
by which any of them may be bound or to which any of their respective properties
is subject that is an exhibit to the Registration Statement or to any
Incorporated Document, nor will any such action result in any violation of any
existing law, regulation, ruling (assuming compliance with all applicable
federal and state securities and Blue Sky laws) applicable to any of them, or
any judgment, injunction, order or decree to which any of the Companies is a
named party and which has been specifically identified to such counsel in a
certificate signed by an authorized officer of the Partnership, excluding in
each case (other than with respect to the Organizational Documents) any
breaches, defaults or violations which, individually or in the aggregate, would
not have a Material Adverse Effect; except for the rights of the General Partner
and its Affiliates (as such term is defined in
15
16
the Partnership Agreement and used in Section 6.14 of the Partnership
Agreement), to such counsel's knowledge, neither the filing of the Registration
Statement nor the offering or sale of the Offered Units as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any
interests in or securities of the Partnership or the Operating Partnership.
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of any
of the Companies (except as have been obtained under the Act or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Offered Units) for the valid issuance and sale of the
Offered Units to the Underwriter as contemplated by this Agreement.
(xii) The Registration Statement and the Final Prospectus and
any supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial data included therein,
as to which such counsel need not express any opinion) comply as to form in all
material respects with the requirements of the Act; and each of the Incorporated
Documents (except for the financial statements and the notes thereto and the
schedules and other financial data included therein, as to which counsel need
not express any opinion) complies as to form in all material respects with the
Exchange Act.
(xiii) To the knowledge of such counsel, (A) other than as
described or contemplated in the Final Prospectus (or any supplement thereto) or
any Incorporated Document, there are no legal or governmental proceedings
pending or threatened against any of the Companies, or to which any of the
Companies, or any of their property, is subject, which are required to be
described in the Registration Statement or the Final Prospectus (or any
amendment or supplement thereto) and (B) there are no agreements, contracts,
indentures, leases or other instruments, that are required to be described in
the Registration Statement or the Final Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the Registration Statement
or any Incorporated Document that are not described or filed as required, as the
case may be.
(xiv) The Amended and Restated Agreement of Limited Partnership
of the Partnership has been duly authorized, executed and delivered by the
General Partner and is a valid and legally binding agreement of the General
Partner, enforceable against the General Partner in accordance with its terms,
subject to the qualifications that (A) the enforceability of such document may
be limited by bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights generally, (B) the
enforceability of such document may be limited by public policy, applicable law
relating to fiduciary duties and the judicial imposition of an implied covenant
of good faith and fair dealing, (C) the enforceability of equitable rights and
remedies provided for in such document is subject to equitable defenses and
judicial discretion, and the enforceability of such document may be limited by
general equitable principles and (D) the enforceability of the indemnity and
contribution provisions of such document may be limited by federal and state
securities laws; and the Amended and Restated Agreement of Limited Partnership
of the Operating Partnership has been duly authorized, executed and delivered by
the General Partner and the Partnership and is a valid and legally binding
agreement of the General Partner and the Partnership, enforceable against the
General Partner and the Partnership in accordance with its terms, subject to the
16
17
qualifications that (A) the enforceability of such document may be limited by
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights generally, (B) the enforceability of
such document may be limited by public policy, applicable law relating to
fiduciary duties and the judicial imposition of an implied covenant of good
faith and fair dealing, (C) the enforceability of equitable rights and remedies
provided for in such document is subject to equitable defenses and judicial
discretion, and the enforceability of such document may be limited by general
equitable principles and (D) the enforceability of the indemnity and
contribution provisions of such document may be limited by federal and state
securities laws.
(xv) None of the Companies is an "Investment Company" as that
term is defined in the Investment Company Act or is required to register as an
"Investment Company" under the Investment Company Act.
(xvi) None of the Companies is a "public utility company" or a
"holding company" as such terms are defined in the 0000 Xxx.
(xvii) The opinion of Fulbright & Xxxxxxxx L.L.P. that was filed
as Exhibit 8.1 to the Registration Statement is confirmed and the Underwriter
may rely upon such opinion as if it were addressed to them.
Such counsel shall also state that although such counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement, such counsel has
participated in the preparation of the Registration Statement and the Final
Prospectus, including review and discussion of the contents thereof (including
review and discussion of the contents of all Incorporated Documents), and
nothing has come to the attention of such counsel that has caused them to
believe that the Registration Statement (including the Incorporated Documents)
at the time the Registration Statement became effective, or the Final
Prospectus, as of its date and as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that any amendment or supplement
to the Final Prospectus, as of its respective date, and as of the Closing Date
or the Option Closing Date, as the case may be, contained any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto and the
schedules and other financial data included in the Registration Statement or the
Final Prospectus or any Incorporated Document). In addition, such counsel shall
state that for purposes of determining whether the fair market value of the
assets of the General Partner (excluding the General Partner's interest in the
Partnership and in the Operating Partnership) exceeds the liabilities of the
General Partner by at least $35 million, such counsel has advised the General
Partner that any assets or liabilities reflected on a balance sheet prepared in
accordance with generally accepted accounting principles that merely represent
timing differences between generally accepted accounting principles and federal
income tax accounting principles should be excluded in the making of such
determination.
17
18
In rendering such opinions, such counsel may (1) rely in respect of
factual matters upon representations and warranties of the Companies set forth
herein and certificates of officers of the General Partner and upon information
obtained from public officials, upon opinions of other counsel issued in
connection with the offering of the Offered Units pursuant to the Final
Prospectus and other sources believed by such counsel to be responsible, (2)
assume that the certificates for the Offered Units conform to the specimens
thereof examined by them and have been duly countersigned by a transfer agent
and duly registered by a registrar of the Units and that the signatures on all
documents examined by such counsel are genuine, which assumptions they may state
they have not independently verified, (3) state that their opinion is limited to
federal laws, the Delaware Act, the Delaware General Corporation Law and New
York law (exclusive of pipeline and pipeline-related regulatory law), in each
case exclusive of the law addressed in the legal opinions rendered by counsel
referred to in the following clauses (e), (f) and (g), (4) state that they
express no opinion with respect to state or local taxes or tax statutes to which
any of the Partnership, the limited partners of the Partnership or the Operating
Partnership, the General Partner may be subject and (5) state that their opinion
is furnished as counsel for the Companies to you and is solely for the benefit
of the Underwriter.
(e) You shall have received on the Closing Date an opinion of
Xxxxxxxx & Xxxxxxxx, counsel for the Companies, dated the Closing Date and
addressed to you to the effect that (i) none of the Companies is (A) a
"subsidiary company" of a "registered holding company," or of a "holding
company" required to be registered under the 1935 Act or (B) is an "affiliate"
of a "registered holding company," or of a "holding company" required to be
registered under the 1935 Act, or of a "subsidiary company" of a "registered
holding company," or of a "holding company" required to be registered under the
1935 Act, as such terms are defined in the 1935 Act, and (ii) no consent,
authorization, approval or filing is required to be obtained or made under the
1935 Act in connection with the issuance and sale of the Offered Units by the
Partnership as contemplated by the Final Prospectus.
(f) Each of (i) Sidley & Austin, with respect to the State of
Illinois, (ii) Xxxxxx & Xxxxxxxxx, with respect to the State of Indiana, (iii)
Fraser, Xxxxxxxxxx Xxxxx and Xxxxxx, P.C., with respect to the State of
Michigan, (iv) Fryberger, Buchanan, Xxxxx & Xxxxxxxxx, P.A., with respect to the
State of Minnesota, (v) Phillips, Lytle, Xxxxxxxxx, Xxxxxx & Xxxxx, with respect
to the State of New York, (vi) Xxxxxx & Xxxxxx, with respect to the State of
North Dakota and (vii) Melli, Walker, Xxxxx & Ruhly, S.C., with respect to the
State of Wisconsin, each of which is acting as special local counsel for the
Companies, shall have furnished to you its written opinion or opinions, dated as
of the Closing Date in form and substance satisfactory to you, to the effect
that:
(i) The Partnership need not be qualified or registered as a
foreign limited partnership for the transaction of business under the laws of
such state. [As to Wisconsin and Minnesota only -- The Partnership has been duly
qualified or registered as a foreign limited partnership to conduct business in
such state.]
(ii) Neither the offer, sale or delivery of the Offered Units,
the execution, delivery or performance of this Agreement, compliance by the
Companies with the provisions hereof nor consummation by the Companies of the
transactions contemplated hereby will result in any violation of any existing
law, regulation, ruling (assuming compliance with all
18
19
applicable state securities and Blue Sky laws), judgment, injunction, order or
decree known to such counsel after reasonable inquiry, applicable to any of the
Companies or any of their respective properties.
(iii) No consent, approval, authorization, order, registration
or qualification of or with any governmental agency or instrumentality of such
state governing (A) oil pipelines generally or (B) the issuance of securities by
entities owning oil pipelines, or, to such counsel's knowledge, based solely
upon its participation as special counsel in matters relating to the offering of
the Offered Units pursuant to the Final Prospectus and without in any manner
having conducted an independent investigation, any other governmental agency or
instrumentality of such state having jurisdiction over any of the Companies, as
the case may be, or any of their respective properties, is required for the sale
or issuance of the Offered Units by the Partnership, except such consents,
approvals, authorizations, orders, registrations or qualifications (1) as have
been obtained, (2) as may be required under state securities or Blue Sky laws,
(3) which, if not obtained, would not, individually or in the aggregate, have a
material adverse effect upon the ability of the Partnership and the Operating
Partnership (taken as a whole) to conduct their business substantially in
accordance with the past practice of each, or (4) as set forth or contemplated
in the Final Prospectus.
(g) You shall have received on the Closing Date an opinion of
Steptoe & Xxxxxxx, special FERC counsel for the Companies, dated the Closing
Date and addressed to you to the effect that:
(i) No consent, approval, authorization, order, registration or
qualification of or with the FERC is required for the issuance of the Offered
Units, the offer and sale of the Offered Units by the Partnership or the
execution, delivery and performance of this Agreement.
(ii) To the knowledge of such counsel and without in any manner
having conducted an investigation, there are no material legal or governmental
proceedings pending or threatened against any of the Companies by or before the
FERC or on appeal from the FERC, except as set forth in or contemplated by the
Final Prospectus.
(h) You shall have received on the Closing Date an opinion of
XxXxxxxx Xxxxxxxx, Canadian counsel to Enbridge, dated the Closing Date and
addressed to you to the effect that:
(i) No consent, approval, authorization, order, registration or
qualification of or with, any governmental agency or other governmental
instrumentality of Canada or any province thereof having jurisdiction over any
of the Companies or Enbridge is required for the issuance and sale of the
Offered Units as contemplated by the Final Prospectus.
(ii) To the best of such counsel's knowledge, there is no
litigation or governmental proceeding to which Enbridge is a party or to which
its properties are subject that is pending or threatened against it that, if
adversely determined, would have a Material Adverse Effect.
19
20
(i) You shall have received on the Closing Date an opinion of Xxxxx
Xxxxx L.L.P., counsel for the Underwriter, dated the Closing Date, with respect
to the matters referred to in clauses (i), (vi), (vii), (viii), (ix) and (xii)
(but only with respect to the Registration Statement and the Final Prospectus
and any supplements or amendments thereto) of the foregoing paragraph (d) and
such other related matters as the Underwriter may request.
(j) You shall have received letters addressed to you and dated the
date hereof and the Closing Date from PricewaterhouseCoopers LLP, independent
accountants, substantially in the forms heretofore approved by you.
(k) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of any of the Companies shall
be threatened by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capitalization of the Partnership nor any
material increase in the short-term or long-term debt of the Partnership (other
than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Final Prospectus (or any amendment or
supplement thereto); (iii) none of the Companies shall have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the General Partner or the Partnership and the
Operating Partnership (taken as a whole), other than those reflected in the
Registration Statement or the Final Prospectus (or any amendment or supplement
thereto); and (iv) all the representations and warranties of the Companies
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date, and you shall have received a certificate, dated the
Closing Date and signed by the chief executive officer and the chief financial
officer of the General Partner (or such other officers as are acceptable to
you), to the effect set forth in this Section 8(k) and in Section 8(l) hereof.
(l) None of the Companies shall have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(m) Prior to commencement of the offering of the Offered Units, such
Units shall have been listed, subject to official notice of issuance, on the New
York Stock Exchange.
(n) Each of the Partnership and the General Partner shall have
furnished or caused to be furnished to you such further certificates and
documents as you shall have reasonably requested that are customary in closing
transactions of the nature contemplated by this Agreement.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and counsel for the Underwriter.
Any certificate or document signed by any officer of the General
Partner, whether on behalf of itself or the Partnership or the Operating
Partnership, and delivered to you or to counsel
20
21
for the Underwriter, shall be deemed a representation and warranty by the
Companies to the Underwriter as to the statements made therein.
The obligation of the Underwriter to purchase Additional Units
hereunder is subject to the satisfaction on and as of any Option Closing Date of
the conditions set forth in this Section 8, except that, if any Option Closing
Date is other than the Closing Date, the certificates, opinions and letters
referred to in paragraphs (c) through (k) and (n) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d),
(e), (f), (g), (h) and (i) shall be revised to reflect the sale of Additional
Units.
9. Expenses. The Companies agree to pay the following costs and
expenses and all other costs and expenses incident to the performance by them of
their obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Final Prospectus, each amendment or
supplement to any of them and this Agreement; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Basic Prospectus, the Final Prospectus, the Incorporated Documents, and all
amendments or supplements to any of them, as may be reasonably requested for use
in connection with the offering and sale of the Offered Units; (iii) the
preparation, printing, authentication, issuance and delivery of the Offered
Units; (iv) the printing (or reproduction) and delivery of this Agreement, any
Agreement among Underwriter, any preliminary or supplemental Blue Sky Memoranda
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Offered Units; (v) the listing of the
Offered Units on the New York Stock Exchange; (vi) the registration or
qualification of the Offered Units for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 5(g) hereof, if
required (including the reasonable fees, expenses and disbursements of counsel
for the Underwriter relating to the preparation, printing or reproduction, and
delivery of any preliminary or supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees and the fees and expenses
of counsel for the Underwriter in connection with any filings required to be
made with the National Association of Securities Dealers, Inc.; (viii) the
transportation and lodging expenses incurred by or on behalf of representatives
of the Companies in connection with any presentations to prospective purchasers
of the Offered Units; (ix) the fees and expenses of the accountants for the
Companies; (x) the fees and expenses of counsel (including local and special
counsel) for the Companies; and (xi) any fees payable to DTC in connection with
the Offered Units being book-entry only securities.
10. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Offered Units may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been given by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the General
Partner, on behalf of the Companies, by notifying you, or by you by notifying
the General Partner, on behalf of the Companies.
21
22
Any notice under this Section 10 may be made by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriter to the Companies by notice to the General Partner, on behalf of the
Companies, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Units), as the case may
be; (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Final
Prospectus, any material adverse change in the financial position, results of
operations, business or prospects of the General Partner or the Partnership and
the Operating Partnership (taken as a whole), whether or not arising in the
ordinary course of business; (ii) trading in the Units shall be suspended or
subject to any restriction or limitation not in effect on the date of this
Agreement; (iii) trading in securities generally on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market shall have been
suspended or materially limited; (iv) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or state
authorities; or (v) there shall have occurred any material adverse change in the
financial markets in the United States or Canada, any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Offered
Units on the terms set forth on the cover page of the Final Prospectus or to
enforce contracts for the resale of the Offered Units by the Underwriter. Notice
of such termination shall be promptly given to the General Partner, on behalf of
the Companies, by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
12. Information Furnished by the Underwriter. The statements set forth
in the last paragraph on the cover page and the statements in the fourth, sixth,
seventh and tenth paragraphs under the caption "Underwriting" in the Final
Prospectus, constitute the only information furnished by or on behalf of the
Underwriter as such information is referred to in Sections 6(a), 6(b) and 7
hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to any of the Companies, at the office of
the General Partner, at 00 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxx
00000, Attention: S. Xxxx Xxxxxx, Corporate Secretary; or (ii) if to you at
Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriter, the Companies, the directors and officers of the General Partner,
and the other controlling persons referred to in Section 7 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from the Underwriter of any of the
Offered Units in his status as such purchaser.
22
23
14. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
15. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Companies submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Underwriter or controlling person, or by or on
behalf of the Companies, and shall survive delivery of the Offered Units to the
Underwriter.
16. NASD Rules of Fair Practice. As the National Association of
Securities Dealers, Inc. ("NASD") views the Offered Units as interests in a
direct participation program, the Underwriter agrees that it will offer the
Offered Units in compliance with Rule 2810 of the NASD's Conduct Rules.
23
24
Please confirm that the foregoing correctly sets forth the agreement
among the Partnership, the Operating Partnership, the General Partner and the
Underwriter.
Very truly yours,
LAKEHEAD PIPE LINE PARTNERS, L.P.
By: Lakehead Pipe Line Company, Inc.
General Partner
By: /s/ X.X Xxxxx
----------------------------------
Name: X.X. Xxxxx
--------------------------------
Title: Chief Accountant
-------------------------------
LAKEHEAD PIPE LINE COMPANY,
LIMITED PARTNERSHIP
By: Lakehead Pipe Line Company, Inc.
General Partner
By: /s/ X.X Xxxxx
----------------------------------
Name: X.X. Xxxxx
--------------------------------
Title: Chief Accountant
-------------------------------
LAKEHEAD PIPE LINE COMPANY, INC.
By: /s/ X.X Xxxxx
----------------------------------
Name: X.X. Xxxxx
--------------------------------
Title: Chief Accountant
-------------------------------
24
25
Confirmed as of the date first above mentioned .
XXXXXXX, SACHS & CO.
/S/ XXXXXXX, XXXXX & CO.
------------------------------------------
25
