Exhibit 3.1
Execution Version
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FIRST AMENDED AND RESTATED
GENERAL PARTNERSHIP AGREEMENT
OF
NORTHERN BORDER PIPELINE COMPANY
APRIL 6, 2006
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INDEX
1. Parties...................................................... 2
2. Definitions.................................................. 2
3. Formation and Purpose of General Partnership................. 6
4. Capital Contributions........................................ 8
5. Allocation of Profits and Losses............................. 12
6. Distributions................................................ 12
7. Accounting and Taxation...................................... 12
8. Management of the Partnership................................ 14
9. Limitation of Liabilities.................................... 21
10. Transfer or Pledge of Partnership Interests.................. 22
11. Admission of New Partners.................................... 24
12. Additional Capital........................................... 25
13. Expansion of the Line........................................ 26
14. Termination and Right of Withdrawal.......................... 26
15. General...................................................... 30
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FIRST AMENDED AND RESTATED GENERAL
PARTNERSHIP AGREEMENT OF NORTHERN BORDER PIPELINE COMPANY
THIS FIRST AMENDED AND RESTATED GENERAL PARTNERSHIP AGREEMENT OF NORTHERN
BORDER PIPELINE COMPANY, dated as of April 6, 2006 (this "Amendment and
Restatement"), is entered into by and between NORTHERN BORDER INTERMEDIATE
LIMITED PARTNERSHIP, a Delaware limited partnership ("NBILP") and TC PIPELINES
INTERMEDIATE LIMITED PARTNERSHIP, a Delaware limited partnership ("TCILP"), each
in its capacity as a Partner. Defined terms used herein shall have the meaning
assigned to such terms in Section 2.
R E C I T A L S:
WHEREAS, the Partnership was formed by the original partners of the
Partnership pursuant to the Original Partnership Agreement and the Partnership
formally commenced operations on March 9, 1978 (the "Formation Date"), and in
connection therewith such original partners executed and delivered that General
Partnership Agreement for Northern Border Pipeline Company, a Texas general
partnership, effective as of March 9, 1978 (the "Prior Partnership Agreement");
and
WHEREAS, the Prior Partnership Agreement has been 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, (viii) the "Seventh Supplement," dated September 23, 1993,
(ix) the "Eighth Supplement," dated May 21, 1999, (x) the "Ninth Supplement,"
dated July 16, 2001, and (xi) the "Tenth Supplement," dated March 2, 2005 (the
Original Partnership Agreement as so amended being herein called the "Amended
Partnership Agreement"); and
WHEREAS, on September 20, 1982, the Partnership completed and placed into
service an interstate Gas pipeline system and related facilities to transport
Gas produced in the Province of Alberta prior to the introduction of Gas from
the Prudhoe Bay area of the North Slope of Alaska, from a point of
interconnection on the Canadian/United States border near Monchy, Saskatchewan
to a point of interconnection near Ventura, Iowa (the "Prebuild"); and
WHEREAS, the Prebuild has, from time to time, undergone extensions,
expansions, additions, betterments and renewals with the result that the
interstate Gas pipeline system owned by the Partnership extends, as of the date
of this Amendment and Restatement, from the Canadian/United States border near
Monchy, Saskatchewan to a terminus near North Hayden, Indiana; and
WHEREAS the Partnership was formed to pursue the construction and
ownership of the Prebuild and the Project which, in respect of the Project would
require the construction of the
Incremental Facilities which facilities have not, as of the date of this
Amendment and Restatement, been constructed; and
WHEREAS, the Partners are the successors, directly or indirectly, of the
original partners in the Partnership and constitute all of the partners in the
Partnership on the date hereof; and
WHEREAS, pursuant to that Partnership Interest Purchase and Sale
Agreement, dated as of December 31, 2005 (the "PSA"), concurrently with the
execution of this Amendment and Restatement, TCILP has purchased a portion of
NBILP's partnership interest in the Partnership that is equal to 20% of the
total partnership interest in the Partnership, including 20% of the total
Capital Accounts and 20% of the total Partners' Percentages in the Partnership
(the "Assigned Interest"); and
WHEREAS, as a result of the sale of the Assigned Interest, NBILP and TCILP
each own a 50% partnership interest in the Partnership (and each of NBILP's and
TCILP's Partner's Percentage is 50% and each of NBILP and TCILP have the same
Capital Account balance, which, as to each Partner, equals 50% of the total
Capital Accounts of the Partnership); and
WHEREAS, the Partners have determined that it is appropriate to amend and
restate the Amended Partnership Agreement (i) to reflect the change in the
ownership interests of the Partners pursuant to the PSA hereinabove described,
(ii) to change the designation of the Operator, (iii) to eliminate outdated
provisions (iv) to revise the governance provisions, and (v) to incorporate all
prior amendments and changes in one document;
NOW, THEREFORE, for and in consideration of the covenants, conditions and
agreements contained herein, the parties hereto hereby agree that the Amended
Partnership Agreement is hereby amended and restated to read as follows:
1. Parties. The following are the parties to this Amendment and Restatement:
1.1 Northern Border Intermediate Limited Partnership, a limited
partnership organized under the laws of the State of Delaware, with
its principal place of business located at 00000 XXX Xxxxxxx, Xxxxx,
XX 00000-0000, Facsimile (000) 000-0000.
1.2 TC PipeLines Intermediate Limited Partnership, a limited partnership
organized under the laws of the State of Delaware, with its
principal place of business located at 000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxx, XX, Facsimile (000) 000-0000. For the purpose of
Section 15.2, a copy of all notices shall also be sent to its
general partner: TC PipeLines GP, Inc., 000-0xx Xxxxxx XX Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0; Attention: Secretary. Facsimile (403)
920-2460.
2. Definitions.
Unless otherwise required by the context, the terms defined in this
Section 2 shall, for all purposes of this Amendment and Restatement, have
the respective meanings set forth below:
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2.1 Additional Partners: A Partner under this Amendment and Restatement
admitted in accordance with the provisions of Section 11.
2.2 Affiliate: Any Person which, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common
control with another Person.
2.3 Alaska Natural Gas Transportation System: The Gas pipeline and
related facilities to be constructed and operated to transport Gas
from Alaska and Canada to the contiguous States, as described in the
Presidential Report.
2.4 Amended Partnership Agreement: Has the meaning assigned to such term
in the recitals.
2.5 Amendment and Restatement: This First Amended and Restated General
Partnership Agreement of Northern Border Pipeline Company.
2.6 XXXXX: The Alaska Natural Gas Transportation Act of 1976.
2.7 Assigned Interest: Has the meaning assigned to such term in the
recitals.
2.8 Bankruptcy Code: The United States Bankruptcy Code, 11 U.S.C. Sections.
1.01 et seq.
2.9 Capital Account: The capital account maintained by the Partnership
for each Partner. Each Partner's Capital Account shall be increased
by the Partner's capital contributions to the Partnership and by the
share of net profits of the Partnership allocated to such Partner.
Each Partner's Capital Account shall be reduced by the share of net
losses of the Partnership allocated to such Partner and by
distributions made to the Partner by the Partnership. The Capital
Accounts of the Partners shall be adjusted to reflect the fair
market value of the Company's assets and liabilities upon an
issuance of additional interests in the Partnership for cash or
property, with any upward or downward adjustment be treated as
profits or losses deemed realized by the Partnership. The Capital
Accounts of the Partners established pursuant to this Amendment and
Restatement shall not be deemed to be, or have the same meaning as,
the capital account of the Partnership under Section 12 of the
Natural Gas Act.
2.10 Code: The Internal Revenue Code of 1986, as amended.
2.11 Cost of an Expansion Project: Expenditures, including filing fees
and any allowance for funds used during construction, incurred,
assumed or paid by the Partnership for the acquisition, planning,
design, engineering and construction of an Expansion Project, and
securing necessary governmental authorizations and approvals
therefor.
2.12 Cost of the Incremental Facilities: Expenditures, including filing
fees and any allowance for funds used during construction, incurred,
assumed or paid by the Partnership for the acquisition, planning,
design, engineering and construction of
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the Incremental Facilities, and securing necessary governmental
authorizations and approvals therefor.
2.13 Defaulted Contribution: Has the meaning assigned to such term in
Section 4.4.5(ii).
2.14 Effective Date: Has the meaning assigned to such term in Section
9.3.
2.15 Elected Percentage: Has the meaning assigned to such term in Section
4.4.5(ii).
2.16 Estimated Cost of an Expansion Project: The Cost of an Expansion
Project as estimated by the Operator and approved by the Management
Committee.
2.17 Estimated Cost of the Incremental Facilities: The Cost of the
Incremental Facilities as estimated by the Operator and approved by
the Management Committee.
2.18 Expansion Project: Has the meaning assigned to such term in Section
13.
2.19 FERC: The Federal Energy Regulatory Commission or any commission,
agency or other governmental body succeeding to the powers of such
commission.
2.20 Formation Date: March 9, 1978.
2.21 Fully Contributing Partner: Has the meaning assigned to such term in
Section 12.1.
2.22 Gas: Gas having the physical and chemical qualities required for
acceptance by the Partnership for transportation under the
Partnership's tariff which is in effect from time to time.
2.23 Incremental Facilities: Any pipeline facilities (together with all
related facilities and properties) contemplated pursuant to Section
7(a)(4)(B) of XXXXX and the Presidential Report in furtherance of
the Project, as determined by the Management Committee, and the
planning, design and construction of such additional facilities and
properties.
2.24 Incremental Facilities Commitment Agreement: Any agreement executed
by all Partners (other than those Partners which have withdrawn from
the Partnership prior to the execution of such agreement) in which
such Partners agree pursuant to Section 4.2 to make capital
contributions to the Partnership sufficient, together with the
proceeds of securities to be issued pursuant to the Incremental
Facilities Financing Commitment Agreements, to finance the Estimated
Cost of the Incremental Facilities as of the Incremental Facilities
Commitment Date.
2.25 Incremental Facilities Commitment Date: The date as of which the
Incremental Facilities Commitment Agreement becomes effective.
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2.26 Incremental Facilities Financing Commitment Agreements: Arrangements
for the issuance of debt securities by the Partnership, the proceeds
of which are sufficient, together with the capital contributions, if
any, to be made by the Partners pursuant to the Incremental
Facilities Commitment Agreement, in the opinion of the Management
COMMITTEE, to complete construction of the Incremental Facilities
based upon the then Estimated Cost of the Incremental Facilities.
2.27 Independent Public Accountants: A firm of independent public
accountants selected from time to time by the Management Committee.
2.28 Line: The Interstate Gas pipeline and related facilities owned and
operated by the Partnership, which extends from the United
States-Canada border near Monchy, Saskatchewan area to its terminus
in the contiguous States near North Hayden, Indiana, and any
extensions, expansions, additions, betterments or renewals thereof
which are approved by the Management Committee and constructed from
time to time, whether as Incremental Facilities, Expansion Projects
or otherwise.
2.29 Management Committee: The Management Committee provided for in
Section 8.
2.30 Operator: The Operator provided for in Section 8.
2.31 Original Partnership Agreement: The Northern Border Pipeline Company
General Partnership Agreement dated as of April 15, 1974.
2.32 Partner: Each of the Partners executing this Amendment and
Restatement, any Partner substituted for a Partner pursuant to
Section 10, and any Additional Partner which is admitted to the
Partnership pursuant to Section 11; provided, however, that the term
Partner shall not any Person which has been deemed to have withdrawn
from the Partnership pursuant to Section 4.4.5 or 14.3.
2.33 Partner's Percentage: That percentage which is determined by
dividing a Partner's Capital Account by the total of all Partners'
Capital Accounts, rounded to the nearest ten-thousandth of one
percent.
2.34 Partnership: The general Partnership originally created by the
Original Partnership Agreement, continued pursuant to the Prior
Partnership Agreement and as continued pursuant to this Amendment
and Restatement.
2.35 Person: An individual, a corporation, voluntary association, joint
stock company, limited liability company, business trust or
partnership.
2.36 Presidential Report: The "Decision and Report to Congress on the
Alaska Natural Gas Transportation System" issued by the President on
September 22, 1977.
2.37 Prior Partnership Agreement: Has the meaning assigned to such term
in the recitals.
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2.38 Project: The Gas transmission pipeline system (together with all
related properties and facilities) contemplated pursuant to Section
7(a)(4)(B) of XXXXX and the Presidential Report extending from the
United States-Canada border near Monchy, Saskatchewan to its
terminus in the contiguous States near Xxxxxx, Illinois or such
other point as determined by the Management Committee and approved
by the FERC for the transportation of Gas from the Prudhoe Bay area
of Alaska, to a delivery point in the lower 48 states which, as of
the date of this Amendment and Restatement, would require the
construction of Incremental Facilities and the planning, design and
construction of such pipeline and facilities.
2.39 Required Accounting Practice: The accounting rules and regulations,
if any, at the time prescribed by the regulatory body or bodies
under the jurisdiction of which the Partnership is at the time
operating and, to the extent of matters not covered by such rules
and regulations, generally accepted principles of accounting at the
time prevailing for companies engaged in a business similar to that
of the Partnership.
2.40 SEC: The Securities and Exchange Commission or any commission,
agency or other governmental body succeeding to the powers of such
commission.
2.41 Shipper: Each Person that enters into a contract with the
Partnership for the purpose of transporting Gas through all or any
portion of the Line.
2.42 Study Group: The Persons which are from time to time parties to the
Study Group Agreement.
2.43 Study Group Agreement: The Northern Border Pipeline Joint Research
and Feasibility Study Agreement dated as of January 26, 1973, as
amended and supplemented by Amendment and Agreement dated August 1,
1978 and as amended and supplemented from time to time.
2.44 Study Group Assets: All property rights and assets owned by the
Study Group pursuant to the Study Group Agreement.
2.45 Successor Partnership. Has the meaning assigned to such term in
Section 14.6.1.
2.46 Withdrawing Partner: Has the meaning assigned in Section 14.7.1.
3. Formation and Purpose of General Partnership.
3.1 Formation: The Partnership was formed by the original partners
pursuant to the Uniform Partnership Act of the State of Texas as of
12:00 P.M. on the Formation Date. The Partnership is being continued
as a general partnership pursuant to the Texas Revised Partnership
Act as of the date hereof.
3.2 Name: The name of the Partnership shall be: NORTHERN BORDER PIPELINE
COMPANY.
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3.3 Purpose: The Partnership is the successor to the rights, titles and
interest of Northern Border Pipeline Company as the Person
designated by the Presidential Report and related Federal Power
Commission and FERC proceedings and orders to construct and operate
a Gas Pipeline system in the contiguous States pursuant to Section
7(a)(4)(B) of XXXXX. The Partnership owns and operates the Line and,
if approved by the Management Committee pursuant to the terms of
this Amendment and Restatement, shall plan, design and obtain
financing for and construct Expansion Projects and, to the extent
not previously completed, the Project pursuant to XXXXX and the
Presidential Report. The Partnership transports Gas owned by
Shippers from the United States-Canada border near Monchy,
Saskatchewan, where the Line interconnects with a Canadian line, and
from such other points of interconnection with Shippers at which the
Partnership is authorized by the FERC to receive Gas, to various
points of interconnection with facilities at which the Partnership
is authorized by the FERC to redeliver Gas to Shippers. The Partners
agree, if approved by the Management Committee pursuant to the terms
of this Amendment and Restatement, to cooperate, and to cause their
Affiliates to cooperate, in obtaining all necessary authorizations
from governmental authorities having jurisdiction as may be required
to construct the Project and operate the Line.
3.4 Use of the Line: It is the intention and policy of the Partnership
that the Line shall be a contract carrier of Gas and shall be
available to Shippers (whether or not a Partner or its Affiliate) on
a fair and non-discriminatory basis. Nothing in this Amendment and
Restatement shall (i) commit or entitle any Partner or any of its
Affiliates to transport Gas owned or manufactured by, or committed
to be sold to, such Partner or Affiliate through the Line or other
facilities of the Partnership regardless of the location of such
Partner's or Affiliate's owned or controlled Gas reserves or the
markets to which such Gas is to be delivered or (ii) limit the
availability of Gas transportation service only to those Shippers
which are Partners or Affiliates of Partners.
3.5 Regulatory Status: The Partners acknowledge that (a) the Partnership
is a "natural gas company" under the Natural Gas Act subject to the
jurisdiction of the FERC, and (b) one or more Additional Partners
may be subject to the jurisdiction of the FERC under the Public
Utility Holding Company Act of 2005.
3.6 Representations and Warranties Concerning Composition of
Partnership: Each Partner represents and warrants that the execution
and delivery by such Partner of this Amendment and Restatement and
the performance by such Partner of its obligations under the
Amendment and Restatement, will not contravene any provision of, or
constitute a default under, any indenture, mortgage or other
agreement of such Partner or any order of any court, commission or
government agency having jurisdiction. Each Partner further (1)
represents and warrants that it is a limited partnership duly
organized and existing under the laws of its state of organization
and (2) 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.
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3.7 Offices: The principal offices of the Partnership shall be at such
place as the Management Committee may determine.
4. Capital Contributions.
4.1 Capital Contributions: The original partners and their successors
have previously made contributions to the Partnership as reflected
in the Partnership's books and records. The Capital Accounts of the
Partners are equal on the date of this Amendment and Restatement.
The Partner's Percentage of the Partners as of the date of this
Amendment and Restatement are set forth on Exhibit A opposite each
Partner's name.
4.2 Further Capital Contributions for Incremental Facilities:
4.2.1 If the Management Committee determines that the Incremental
Facilities are to be constructed, the Management Committee
shall determine, by a vote of representatives of Partners
owning not less than two-thirds of the Partner's Percentages
of the Partners, the amount of the then Estimated Cost of the
Incremental Facilities and which portion of such Estimated
Cost of the Incremental Facilities should be financed with
equity funds, including (i) equity funds generated by the
operations of the Partnership and (ii) equity funds raised
through contributions of additional capital by the Partners
(such amount of new equity funds to be raised by contributions
being hereinafter called the "Additional Equity
Requirements").
4.2.2 When the Additional Equity Requirements, if any, of the
Partnership have been determined pursuant to Section 4.2.1,
each Person who has been admitted to the Partnership pursuant
to Section 11.1.1 (i) (hereinafter called a "New Partner")
shall have the privilege of subscribing for up to seven and
one-half percent (7.5%) of the Additional Equity Requirements;
provided, however, that in no event shall the new capital
subscribed to and contributed by all New Partners exceed
thirty percent (30%) of the Additional Equity Requirements.
The portion of the Additional Equity Requirements remaining
after the New Partners have made their election (hereinafter
called the "Remaining Requirements") shall be taken up and
satisfied by the Partners, other than the New Partners, in
proportion to their respective Partner's Percentages.
For the purposes of this Section 4.2.2, the Partner's
Percentages as of the end of the most recent month next
preceding the date the Additional Equity Requirements, if any,
of the Partnership have been determined pursuant to Section
4.2.1 shall be used.
4.3 Study Group Assets:
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4.3.1 Pursuant to the terms and conditions of the Study Group
Agreement, at such time as a member of the Study Group (other
than an Affiliate of Northern Plains or Pan Border) elects to
sell its interest in the property rights and assets referred
to in Sections 2 and 3 of Article 2 of the Amendment and
Agreement dated August 1, 1978 to the Study Group Agreement,
such interest shall be purchased by the Partnership at a
purchase price equal to expenditures theretofore incurred by
the selling member in acquiring its interest in the Study
Group Assets. Payment of the purchase price, including
interest thereon calculated at the prime rate plus one percent
based on Citibank of New York for the period from May 14, l974
to date of payment will be made by the Partnership on the
effective date of the Incremental Facilities Commitment
Agreement, if such selling member elects to sell pursuant to
Section 2(b) of Article 2 of the Amendment and Agreement dated
August 1, 1978 to the Study Group Agreement. Each Partner
shall contribute its share of the purchase price in accordance
with its respective Partner's Percentage and each Partner
shall be entitled to receive a credit to such Partner's
Capital Account equal to such Partner's pro rata share of the
purchase price contributed.
4.3.2 Notwithstanding anything to the contrary in this Amendment and
Restatement, it is not intended that this Amendment and
Restatement shall either limit or expand any rights or
obligations of the parties to the Study Group Agreement with
respect to the subject matter thereof, and no provision of
this Amendment and Restatement shall be applied or interpreted
in a manner that would so limit or expand such rights or
obligations.
4.4 Payment of Capital Contributions for Incremental Facilities:
4.4.1 Within the budgetary limitations established by the Management
Committee, the Management Committee shall issue a written
request for payment of each capital contribution to be made in
accordance with Sections 4.2 and 4.3, at such times and in
such amounts as the Management Committee shall deem
appropriate in light of the cash requirements of the
Partnership. All amounts received by the Partnership pursuant
to this Section 4.4 on or before the date specified in Section
4.4.2 (iv) shall be credited to the respective Partner's
Capital Account as of such specified date, and all amounts
received from a Partner after the date specified in Section
4.4.2 (iv) by the Partnership pursuant to this Section 4.4
shall be credited to such Partner's Capital Account as of the
date of receipt thereof.
4.4.2 Each written request issued pursuant to Section 4.4.1 shall
contain the following information:
(i) The total amount of capital contributions requested from
all Partners;
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(ii) The amount of capital contribution requested from the
Partner to whom the request is addressed;
(iii) The purpose for which the funds are to be applied in
such reasonable detail as the Management Committee shall
direct; and
(iv) The date on which payments of the capital contribution
shall be made (which date shall not be less than fifteen
days following the date the request is given if given
under Section 4.3 and not less than thirty days
following the date the request is given if given under
Section 4.2) and the method of payment, provided that
such date and method shall be the same for each of the
Partners.
4.4.3 Each Partner agrees that it shall make payments of its
respective capital contributions in accordance with requests
issued pursuant to Section 4.4.1.
4.4.4 Partners shall not be entitled to any return of their
contributions to the capital of the Partnership except that:
(i) A Partner may receive funds from the Partnership only in
accordance with the provisions of Section 6 or Section
14.4.
(ii) Upon the withdrawal of a Partner from the Partnership,
such Withdrawing Partner shall be entitled to receive,
at a time when the Management Committee determines
payment may be made without undue hardship to the
Partnership, an amount equal to its Capital Account on
the date of Withdrawal. To the extent that the
Management Committee determines not to make payment
pursuant to the foregoing sentence of an aggregate
amount equal to the Capital Account of the Withdrawing
Partner, the Withdrawing Partner shall be entitled only
to such amounts as may be distributed pursuant to
Section 14.4. The Capital Account balance of a
Withdrawing Partner shall be recorded as a contingent
liability of the Partnership, and not as a Partner's
Capital Account, from and after the date of withdrawal.
This right of reimbursement shall (a) be subordinate to
the rights of any creditor of the Partnership, (b) not
impair in any way the rights of continuing Partners to
receive distributions pursuant to Section 6, and (c)
rank pari passu with the rights of Partners in the event
of dissolution as provided for in Section 14.4.
(iii) Except as herein provided in this Section 4.4.4, no
return shall be paid in respect of the Capital Account
of any Withdrawing Partner; provided, that the foregoing
shall not prohibit the inclusion of a Withdrawing
Partner's share of the Partnership's assets in
computations for ratemaking purposes, including an
allowance for funds used during construction.
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4.4.5 (i) In the event a Partner shall default in the performance
of any of its obligations to make a contribution to the
Partnership in accordance with the terms of any request
under this Section 4 for such contribution and such
default shall continue unremedied for a period of ten
days after the giving of notice of such default by the
Management Committee, such default shall be deemed a
withdrawal from the Partnership by such defaulting
Partner. Such a withdrawal shall not (a) affect a
dissolution of the Partnership or (b) affect obligations
previously assumed by such defaulting Partner.
(ii) If the Management Committee determines that an
amount equal to the whole or any portion of the amount
of the capital contribution which such Withdrawing
Partner failed to pay (which amount shall be herein
called the "Defaulted Contribution") should be
contributed to the Partnership by the nondefaulting
Partners in order to meet the cash needs of the
Partnership, it shall promptly provide written notice of
such determination to each nondefaulting Partner, which
notice shall state the amount of the Defaulted
Contribution. Each nondefaulting Partner shall have the
right to elect (by written notice to the other Partners
within 10 days of the date of the notice from the
Management Committee of the Defaulted Contribution) to
contribute any percentage of the Defaulted Contribution
not in excess of the percentage determined by dividing
the Partner's Percentage of such nondefaulting Partner
at that time by the sum of the Partners' Percentages of
all nondefaulting Partners who so elect to contribute a
portion of the Defaulted Contribution (any percentage so
elected being hereafter called an "Elected Percentage");
provided, however, that (a) those Partners who so elect
to satisfy a portion of the Defaulted Contribution may
unanimously agree to allocate the amounts of their
contributions among such Partners in a manner other than
that provided for in this Section 4.4.5(ii), and (b) the
sum of the Elected Percentages of the Partners who so
elect to satisfy the Defaulted Contribution must be
100%. In the event that the Partners do not elect to
contribute an amount equal to 100% of the Defaulted
Contribution in accordance with the first sentence of
this subsection (ii) and the Management Committee does
not alter its determination that the cash needs of the
Partnership should be met by equity contributions, then
within 10 days of the date of a written request therefor
from the Management Committee, each Partner shall
contribute to the Partnership an amount equal to its pro
rata share (based on the ratio of such Partner's
Percentage to the sum of the Partners' Percentages of
the nondefaulting Partners) of the Defaulted
Contribution.
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5. Allocation of Profits and Losses.
5.1 Except as otherwise provided herein, all net profits and net losses
of the Partnership shall be allocated to the respective Capital
Accounts of the Partners in accordance with their respective
Partner's Percentages. Such allocations shall be made for each
calendar month based upon the weighted average of each Partner's
Percentage during such month (prior to the allocation of such net
profits or net losses). These allocations are subject to retroactive
adjustments resulting from any changes in Capital Accounts pursuant
to FERC or other governmental order.
6. Distributions.
Distributions to the Partners (other than distributions pursuant to the
first sentence of Section 4.4.4(ii)) shall be made only to all Partners
simultaneously in such aggregate amounts and from time to time as
determined by the Management Committee. Each distribution shall be made to
each Partner:
(i) Until distributions have been made under this clause (i)
in an amount equal to the cumulative net profits of the
Partnership not previously distributed, in the ratio in
which, as of the date of such distribution, the amount
of cumulative net profits previously allocated to the
partnership interest held by such Partner but not
previously distributed bears to the amount of such
undistributed cumulative net profits allocated to all
Partners (it being agreed by the Partners that any
previously undistributed cumulative net profits as of
the date of this Amendment and Restatement are allocable
equally to each of them); and thereafter
(ii) in the ratio of the Partner's Percentage, after giving
effect to the distributions under (i) above, to the
extent the distribution exceeds the amount of
undistributed cumulative net profits referred to under
(i) above.
7. Accounting and Taxation.
7.1 Fiscal Year: The fiscal year of the Partnership shall be the
calendar year.
7.2 Location of Records: The books of account for the Partnership shall
be kept and maintained at the principal office of the Partnership or
at such other place as the Management Committee shall determine.
7.3 Books of Account: The books of account for the Partnership shall be:
7.3.1 maintained on an accrual basis in accordance with Required
Accounting Practice; and
7.3.2 audited by the Independent Public Accountants at the end of
each fiscal year.
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7.4 Annual Financial Statements: As soon as practicable following the
end of each fiscal year of the Partnership, the Management Committee
shall cause to be prepared and delivered to each Partner:
7.4.1 a profit and loss statement and a statement of changes in
financial position for such fiscal year, a balance sheet and a
statement of each Partner's Capital Account as of the end of
such fiscal year, together with a report thereon of the
Independent Public Accountants; and
7.4.2 such federal, state and local income tax returns and such
other accounting, tax information and schedules as shall be
necessary for the preparation by each Partner of its income
tax return for such fiscal year.
7.5 Interim Financial Statements: As soon as practicable after the end
of each fiscal quarter, the Management Committee shall cause to be
prepared and delivered to each Partner, with an appropriate
certificate of the person authorized to prepare the same:
7.5.1 a profit and loss statement and a statement of changes in
financial position for such fiscal quarter (including
sufficient information to permit the Partners to calculate
their tax accruals), for the portion of the fiscal year then
ended;
7.5.2 a balance sheet and a statement of each Partner's Capital
Account as of the end of such fiscal quarter; and
7.5.3 a statement comparing the actual financial status and results
of the Partnership as of the end of or for fiscal quarter and
the portion of the fiscal year then ended with the budgeted or
forecasted status and results as of the end of or for such
respective periods.
7.6 Taxation:
7.6.1 The Parties intend that the Partnership shall be taxed as a
"partnership" for federal and state income tax purposes, and
the Partners agree to take all action, including the amendment
of this Amendment and Restatement and the execution of such
other documents as may be required, to qualify for and receive
such tax treatment. All Partnership elections for state and
federal income tax purposes shall be determined by the
Management Committee, except those specifically reserved by
the Code to be made by the individual Partners.
7.6.2 All income, gains, losses and deductions shall be allocated
among the Partners in a manner consistent with the allocation
of book profits and losses of the Partnership, subject to the
special rules for tax purposes provided under the Code
(including, without limitation, under Section 704 and 743 of
the Code) and the regulations thereunder. All tax credits
shall be allocated among the Partners in a manner consistent
with the Partners'
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respective contributions for such expenditures or otherwise as
permissible under the Code as determined by the Management
Committee.
7.7 Governmental Reports: Subject to the provisions of Section 8.2.6,
the Operator, on behalf of the Partnership, shall prepare and file
all reports prescribed by the FERC and any other commission or
governmental agency having jurisdiction.
7.8 Inspection of Facilities and Records: Each Partner (other than a
Withdrawing Partner) shall have the right at all reasonable times
during usual business hours to inspect the facilities of the
Partnership and to examine and make copies of the books of account
and other records of the Partnership. Such right may be exercised
through any agent or employee of such Partner designated in writing
by it or by an independent public accountant, petroleum engineer,
attorney or other consultant so designated. That Partner shall bear
all costs and expenses incurred in any examination for such
Partner's account.
7.9 Deposit of Funds: Funds of the Partnership shall be deposited in
such banks or other depositories as shall be designated by the
Management Committee.
8. Management of the Partnership.
8.1 General Management Structure:
8.1.1 The major policies of the Partnership shall be established by
the Management Committee which, except as otherwise provided
in this Amendment and Restatement, shall have exclusive
authority with respect to such affairs of the Partnership as
would (if the Partnership were a corporation) be subject to
control by a corporate board of directors.
8.1.2 The day to day management of the affairs of the Partnership,
including supervision of the construction of the Project
(including the Incremental Facilities) and any Expansion
Project and operation of the Line, and activities reasonably
related thereto, shall be the responsibility of the Operator.
8.2 Management Committee:
8.2.1 The Management Committee shall consist of four members (the
"Representatives"), two of whom shall be designated by NBILP
and two of whom shall be designated by TCILP. Each Partner
shall designate, by notice to each other Partner and the
Partnership, its Representatives 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
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Representative(s) on the Management Committee and designate a
new Representative(s).
8.2.2 TCILP shall select one of its Representatives to serve as the
Chairman of the Management Committee so long as TCILP holds,
directly or indirectly, an undivided fifty percent interest in
the Partnership or, if an Additional Partner is admitted to
the Partnership in accordance with Section 11.1.1(i) and the
ownership interests of the then existing Partners are reduced
in accordance with Section 11.1.1(ii), at least as great a
Partner's Percentage as the Partner with the largest Partner's
Percentage, but if the Chairman is removed, as below provided,
the Chairman shall be elected by the Management Committee. The
Chairman may not be removed from office except upon the
affirmative finding by unanimous vote of the Representatives
other than the Chairman that the Chairman has, through
misfeasance, nonfeasance or gross negligence, acted in a
manner contrary to the best interests of the Partnership. A
vote on removal of the Chairman may be held only after the
Chairman has been given reasonable notice of, and an
opportunity to be heard on, a call for removal by one or more
of the Representatives.
8.2.3 The Chairman shall preside at all meetings of the Management
Committee, which shall meet at least quarterly. Special
meetings of the Management Committee may be called at such
times and places, and in such manner, as the Chairman deems
necessary, and at such times as requested by written notice
concurred in by a majority of the Management Committee.
Written minutes of all meetings shall be maintained.
Any action required or permitted to be taken at any meeting of
the Management Committee may be taken without a meeting, and
without prior notice, if a consent or consents in writing,
setting forth the action so taken, shall be signed by all
Representatives of the Management Committee. Any such consent
shall be filed with the minutes of proceedings of the
Management Committee and shall have the same force and effect
as a unanimous vote at a meeting. Subject to the requirement
for notice of such meetings, Representatives of the Management
Committee may participate in a meeting of the Management
Committee by means of a conference telephone or similar
communications equipment, by means of which all persons
participating in the meeting can hear each other, and
participation in such meetings shall constitute presence in
person at the meeting, except where a person participates in
the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is
not properly called or convened.
8.2.4 The Management Committee shall designate, subject to Section
8.3.1, members of the Audit Committee and may create such
other committees as may be required. Each of TCILP and NBILP
shall have equal
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representation and shall designate personnel to serve on these
committees with the Chairman of each committee being appointed
by the Management Committee.
8.2.5 Except as otherwise provided by this Amendment and
Restatement, the Management Committee shall act upon the
affirmative vote of a majority of the Partner's Percentages.
For this purpose, each Partner may, by notice to the other
Partner, allocate to each of its Representatives all or any
portion of its Partner's Percentage, and the Representatives
designated by each of NBILP and TCILP shall have, in the
aggregate, votes equal to their respective Partner's
Percentage.
8.2.6 Without modification of its general authority under Section
8.1.1, and as may be qualified under Section 8.2.7, the
approval of the Management Committee shall be necessary before
any of the following actions can be taken on behalf of the
Partnership:
(i) Establishment of the operating budgets for the Line, the
construction and operating budgets for the Incremental
Facilities and each Expansion Project;
(ii) Execution of interim and permanent financing agreements
and commitments;
(iii) Establishment of Partnership tax policies;
(iv) Selection of depositories for Partnership funds;
(v) Selection and retention of the Independent Public
Accountants;
(vi) Expansion Projects and Incremental Facilities which are
not within the description of Section 8.2.7(i) of this
Amendment and Restatement;
(vii) Admission of Additional Partners;
(viii) Transfer of a Partner's interest in the Partnership;
(ix) Filing of the Partnership's tariffs, or any amendment
thereof, with the FERC;
(x) Any change in the authority and responsibility delegated
in this Amendment and Restatement to any committee or to
the Operator;
(xi) Selection of a successor Operator, if such becomes
necessary;
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(xii) Approval of the Estimated Cost of the Incremental
Facilities or the Estimated Cost of the Expansion
Project;
(xiii) Request for additional capital contributions pursuant
to Section 12;
(xiv) Timing and amounts of distributions to Partners pursuant
to Section 6;
(xv) Adopting transportation capacity marketing strategies
and policies;
(xvi) Negotiation and execution of the contract provided for
in Section 8.4.10; and
(xvii) Monitoring and review of the performance of the
Operator and all contractors.
8.2.7 Subject to the remaining provisions of this Section 8.2.7,
without modification of its general authority under Section
8.1.1, the unanimous approval of the Management Committee
shall be necessary before any of the following actions can be
taken on behalf of the Partnership:
(i) Decisions to undertake any Expansion Project or the
Incremental Facilities, including the filing of the
application for regulatory authority to construct and
operate such facilities and the acceptance of such
regulatory authority, excluding, however, decisions on
any Expansion Project or Incremental Facilities
requiring capital expenditures of less than $22,000,000
or such greater amount as may be determined by reference
to 18 CFR Section.157.208(d) or a succeeding
regulation;
(ii) The settlement of cases brought pursuant to Sections
Four (4) or Five (5) of the Natural Gas Act and
acceptance of regulatory orders approving such
settlements; and
(iii) A change to, or suspension of, the cash distribution
policy of the Partnership as in effect on the date of
this Amendment and Restatement.
8.3 Audit Committee:
8.3.1 The Audit Committee shall consist of three members, two
of whom shall be selected by each Partner's
Representatives on the Management Committee provided
that the Representatives of any Partner as to whom (or
as to whose general partner) the Operator is then an
affiliate, shall only have the right to appoint one
member of the Audit Committee. No member of the Audit
Committee shall be an employee, officer or director of
the Operator. The Management Committee shall designate
one member of the Audit Committee to serve as Chairman
of the Audit Committee.
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Decisions of the Audit Committee shall be by majority
vote of the members. The members shall serve on the
Audit Committee at the will of the Representatives that
appointed them.
8.3.2 The Audit Committee shall meet quarterly and at such other
times as called by its Chairman. The Chairman shall designate
the time and place, and the manner, of all Audit Committee.
8.3.3 The Audit Committee shall, on behalf of the Partnership:
(i) Consult with internal and external auditors;
(ii) Review and monitor the internal audit coverage and plans
for coverage;
(iii) Analyze and approve internal audit operating
philosophies and strategies;
(iv) Review the results of all financial audits;
(v) Review the results of all recommendations for corrective
action; and
(vi) Perform any other duties as required by the Securities
Exchange Act of 1934 and the rules and regulations of
the SEC promulgated thereunder, as well as any other
policies that the Management Committee determines to be
appropriate or necessary from time to time.
8.3.4 The Audit Committee shall report fully to the Management
Committee at least quarterly and at such times and places as
the Management Committee deems advisable.
8.4 Operator:
8.4.1 The Operator shall be Northern Plains Natural Gas Company, LLC
until April 1, 2007, subject to the provisions of Section
8.4.2 and Section 8.4.10. Effective April 1, 2007, the
Operator shall be TransCan Northwest Border Ltd. subject to
the provisions of Section 8.4.2.
8.4.2 The Operator may not be removed unless one or more
Representatives call for removal of the Operator due to the
Operator's willful misconduct or gross negligence. A vote on
removal of the Operator may be held only after the Operator
has been given reasonable notice of, and an opportunity to be
heard on, a call for removal by one or more Representatives.
The notice to the Operator shall set forth in reasonable
detail the particulars of the alleged grounds for removal. If
a Representative disputes the proposed removal, then the
Representatives will refer the dispute to senior management of
each of the Partners. The senior
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management of the Partners will meet and negotiate in good
faith with a view to reaching a satisfactory resolution of the
dispute as soon as possible, but not more than seven (7) days
following delivery of written notice of the dispute on removal
unless specifically agreed to otherwise. Should senior
management of the Partners be unable to resolve the dispute on
removal within twenty-one (21) days following delivery of
written notice of the dispute on removal, any Representative
may, by delivery of written notice to the other
Representatives, submit the dispute on removal of the Operator
to binding arbitration for a determination of the existence of
such willful misconduct or gross negligence. Promptly
following receipt of such notice, but not later than five (5)
business days thereafter, the Chairman of the Management
Committee shall provide written notice to the Representatives
that a question has been submitted to binding arbitration as
provided for herein. Each Partner will select an independent
gas pipeline industry expert and the two experts shall jointly
select a third such expert and the three experts shall form
the arbitration panel that shall determine, with consideration
to accepted industry standards and terms of the operating
agreement, whether the Operator should be removed due to a
finding of willful misconduct or gross negligence. It is
required that the arbitration panel be selected and a decision
rendered within 60 days of the date that the Chairman of the
Management Committee provides written notice to the
Representatives that a question has been submitted to binding
arbitration. To the extent not inconsistent with the terms
hereof, any such arbitration shall be conducted under the
rules of the American Arbitration Association and at a
location agreed to by the arbitration panel. The cost of any
such arbitration shall be borne by the Partnership. Any
determination by such arbitration panel shall be conclusive
and binding on all Partners and shall be enforceable against
any Partner in court of competent jurisdiction.
8.4.3 The Operator will represent that it has and will at all times
maintain the necessary personnel, experience, competence and
legal right to discharge its responsibilities as Operator
under this Amendment and Restatement. The governing body of
the Operator shall direct its personnel to pursue the
interests of the Partnership in accordance with the policies
of the Partnership as determined by the Management Committee.
Any other activity which the Operator may undertake will be
undertaken subject to these standards.
8.4.4 The Operator shall be authorized to utilize, as it deems
necessary, the services of its Parent and corporate
Affiliates, provided that such services are utilized on terms
materially no less favorable to the Partnership than those
prevailing at the time for comparable services of unaffiliated
independent parties. The Operator shall also be authorized to
utilize, as it deems necessary, the services of independent
contractors, including the services of any other Partner's
Parent and corporate Affiliates, provided
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that the services of any such Parent or corporate Affiliate
are utilized on terms materially no less favorable to the
Partnership than those prevailing at the time for comparable
services of unaffiliated independent parties, and the Operator
shall negotiate contracts for such services and execute the
same. Any services which are not assigned to a contractor
shall be performed by the Operator or its Parent or corporate
Affiliates.
8.4.5 The Operator shall, on behalf of the Partnership, have the
general responsibility for the day-to-day management of the
operation of the Line and shall manage the design and
construction of the Incremental Facilities and any Expansion
Project and shall have all powers and authorities reasonably
necessary to the discharge of these responsibilities with
respect to those matters enumerated in Section 8.4, subject,
however, to the prior approval of the Management Committee
with respect to those matters enumerated in Section 8.2.6, and
the provisions of Section 8.1.1. The Operator shall prepare
and submit to the Management Committee the Operator's
recommendations with respect to those matters requiring
Management Committee approval pursuant to this Section 8.4.
8.4.6 The Operator shall, on behalf of the Partnership, establish
and maintain liaison with all governmental agencies and
authorities, in the United States and Canada, having
jurisdiction over permits, authorizations or certificates
issued or to be issued to the Partnership and necessary for
operation of the Line and for construction of the Project
(including the Incremental Facilities) and any Expansion
Project, and shall be responsible for the preparation and
presentation to the appropriate agency or office of all
applications and requests for such permits, authorizations and
certificates, and for the preparation and filing of all
required reports, subject, however, to the prior approval of
the Management Committee with respect to those matters
enumerated in Section 8.2.6, and the provisions of Section
8.1.1.
8.4.7 The Operator shall, on behalf of the Partnership, supervise
and audit the performance of all contractors to achieve, to
the greatest extent practicable, contract compliance, timely
completion of each Expansion Project or other Partnership
construction project and of the Project (including the
Incremental Facilities) and acceptable quality and cost
control.
8.4.8 The Operator shall report fully to the Management Committee at
each meeting of such group and shall report specially as
necessary.
8.4.9 The Partnership shall reimburse the Operator for all
reasonable costs, including overhead and administrative
expense incurred by the Operator and overhead and
administrative expense incurred by the Operator's Parent and
corporate Affiliates in rendering their services, incurred in
providing the services to the Partnership as set forth in the
Operating Agreement entered into pursuant to Section 8.4.10.
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8.4.10 The Partnership shall contract with the Operator for the
rendition of services set forth in this Section 8.4, upon the
terms and conditions set forth in this Section 8.4, such
contract to be binding upon the Partnership.
8.5 Limitation of Authority: The Management Committee, the committees
appointed as provided in Section 8.2.4 and the Operator shall not
have authority to take any action inconsistent with the terms of
this Amendment and Restatement. To the extent that there is any
inconsistency or conflict between the terms of this Amendment and
Restatement and the operating agreement provided for in 8.4.10, the
terms of this Amendment and Restatement shall govern.
8.6 Indemnification: The Partnership shall indemnify and save harmless
the members of the Management Committee, the members of any
committee appointed as provided in Section 8.2.4 and the Operator
(in its capacity as such) against all actions, claims, demands,
costs and liabilities arising out of the acts (or failure to act) of
such Persons in good faith within the scope of their authority in
the course of the Partnership's business, and such Persons shall not
be liable for any obligations, liabilities or commitments incurred
by or on behalf of the Partnership as a result of any acts (or
failure to act). The Operator shall not be indemnified for its gross
negligence or willful misconduct.
8.7 Other Positions or Representations: Except as provided in Section
8.3.1, any member of the Management Committee and the committees
provided for in Section 8.2.4 may also be an officer, director or
employee of a Partner or one or more Affiliates of a Partner.
9. Limitation of Liabilities.
9.1 Limitation on Liability of Partners: No Partner shall be liable to
third persons for Partnership losses, deficits, liabilities or
obligations, except as otherwise expressly agreed to in writing by
such Partner, unless the assets of the Partnership shall first be
exhausted.
9.2 Contracts to Limit Partner's Liability: Without the prior written
consent of all Partners, no contract, lease, sublease, note, deed of
trust or other obligation on behalf of the Partnership shall be
entered into unless there is contained therein an appropriate
provision limiting the claims of all parties to such instruments and
other beneficiaries thereunder to the assets of the Partnership and
expressly waiving any rights of such parties and other beneficiaries
to proceed against the Partners individually.
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),
provided that none of the Partners or their Affiliates may pursue
any business opportunity that consists of an expansion, addition,
betterment, improvement, renewal or replacement of the Line as it
existed on
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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 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-1.03 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.
10. Transfer or Pledge of Partnership Interests.
10.1 Limitation on Right to Transfer Partner's Interest: Except with the
unanimous consent of the Management Committee or as permitted by
Section 10.3, a Partner may not sell, assign, pledge, hypothecate or
otherwise transfer in any manner all or any part of its right, title
or interest in, or any evidence of indebtedness of, the Partnership
or in this Amendment and Restatement.
10.2 Legend on Evidence of Indebtedness Held by Partners: As long as this
Amendment and Restatement shall remain in effect, all evidences of
indebtedness of the Partnership to any of the Partners or their
Affiliates shall bear an appropriate legend to indicate that it is
held subject to, and may be assigned or transferred only in
accordance with, the terms and conditions of this Amendment and
Restatement.
10.3 Permitted Transfers by Partners: Nothing herein shall prevent:
10.3.1 The transfer by any Partner of all of its right, title and
interest in the Partnership (including indebtedness thereof)
and in this Amendment and Restatement if all of such right,
title and interest is transferred to another corporation which
is an Affiliate of the transferor pursuant to (i) a statutory
merger or consolidation or (ii) a sale of all, or
substantially all, of the assets of the transferor, provided
that such Affiliate assumes by operation of law or express
agreement with the Partnership (in form and substance
satisfactory to the Management Committee) all of the
obligations of the transferor under this Amendment and
Restatement and that no such transfer (other than pursuant to
a statutory merger or consolidation wherein all obligations
and liabilities of the Partner are assumed by the successor
corporation by operation of law) shall relieve the transferor
of its obligations under this Amendment and Restatement
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without the approval of the Management Committee, and
provided, further, that upon any transfer permitted by this
Section 10.3.1, the transferee Affiliate shall be admitted as
a Partner in substitution of the Partner which was the
transferor; or
10.3.2 An assignment, pledge or other transfer creating a security
interest (and any transfer made in foreclosure or other
enforcement of such security interest) in all or any portion
of a Partner's right, title or interest in the profits and
surplus of the Partnership, or in any indebtedness of the
Partnership, under any mortgage, indenture or deed of trust
created by any Partner, provided that the assignee, pledgee,
mortgagee, trustee or secured party shall hold the same
subject to all of the terms of this Amendment and Restatement,
and provided, further, that such assignee, pledgee, mortgagee,
trustee or secured party shall not have any voice in the
management of the Partnership as a result of any such
transfer.
10.4 Effect of Permitted Transfers: No assignment, pledge or other
transfer pursuant to Section 10 shall give rise to a right in any
Partner or Partners to dissolve the Partnership. Except as provided
in Section 10.3.1, no assignment, pledge or other transfer shall
give rise to a right in any transferee to become a Partner in the
Partnership, unless admitted pursuant to Section 11 or agreed to by
all the Partners.
10.5 Partnership Termination: Notwithstanding any other provision of this
Section 10, no interest in Partnership capital or profit and losses
may be transferred if, in the opinion of counsel for the
Partnership, such transfer would result in a termination of the
Partnership under Section 708 of the Code.
10.6 Right to Make Offer:
10.6.1 If a general partner of NBILP desires to transfer its
general partnership interest in NBILP to a party other than
an Affiliate of such general partner, such selling general
partner of NBILP must first provide TCILP and the general
partner of TCILP with notice of such intent to transfer and
for a period of 30 days following the receipt of such
notice, TCILP and/or its general partner shall have the
right to submit an offer for the general partner interest of
such selling general partner of NBILP (and any other
interests in NBILP proposed to be sold by such selling
general partner of NBILP). Such selling general partner of
NBILP shall have no obligation to consider or accept any
offers received from TCILP and/or the general partner of
TCILP, and from and after such 30 day period, such selling
general partner of NBILP shall be free to consummate the
proposed transaction referred to in its notice to TCILP and
the general partner of TCILP.
10.6.2 If a general partner of TCILP desires to transfer its
general partnership interest in TCILP to a party other than
an Affiliate of such general partner,
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such selling general partner of TCILP must first provide
NBILP and the general partner of NBILP with notice of such
intent to transfer and for a period of 30 days following the
receipt of such notice, NBILP and/or its general partners
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 the general
partners 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
notice to NBILP and the general partner of NBILP.
11. Admission of New Partners.
11.1 Execution of Agreement: Additional Persons may become parties to
this Amendment and Restatement and Partners of this Partnership upon
execution of a counterpart of this Amendment and Restatement and the
satisfaction of the following conditions:
11.1.1(i) Any Person which is a party to the Study Group Agreement
and which elects to become a Partner shall be admitted
pursuant to the terms and conditions of the Study Group
Agreement, including without limitation the provisions
of Sections II(4) and II(5) of the Amendment and
Agreement dated August 1, 1978 to the Study Group
Agreement; provided that none of the events set forth in
Section 14.3.1 has happened to such Person.
(ii) If the Partnership admits any Additional Partner to the
Partnership and any reduction in the ownership interest
of any Partner will be required by such admission, the
reduction shall be allocated pro rata to all the
Partners according to their respective Partner's
Percentage.
11.1.2 Compliance with any agreements with security holders of the
Partnership or others that may require the approval of such
security holders or other parties to the admission of
Additional Partners.
11.1.3 Compliance with all applicable requirements of law, including
the Natural Gas Act and the Public Utility Holding Company
Act of 2005, if applicable, and the applicable rules and
regulations of the FERC and SEC, respectively, thereunder.
11.1.4 If the Partnership admits any Additional Partners, the
Management Committee shall, in establishing the terms of such
admission, (i) maintain the financial and operating integrity
and the condition (financial, regulatory and otherwise) of
the Partnership, (ii) treat the existing Partners
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as equitably as possible in view of, among other factors
which the Management Committee may deem relevant, their
previous capital contributions and their participation in (a)
the technical, engineering, environmental, feasibility, legal
and financial studies and planning necessary to operate the
Line and to design, construct and finance the Project
(including the Incremental Facilities) and any Expansion
Project and to obtain regulatory approval therefor and (b) as
applicable, the actual design, construction and financing of
the Project (including the Incremental Facilities) and any
Expansion Project and operation of the Line and (iii) take
such other action as the Management Committee deems necessary
or appropriate to further the interests of the Partnership
and its Partners.
11.1.5 Notwithstanding anything to the contrary contained in this
Section 11, a Partner may be admitted to the Partnership only
under circumstances which, in the opinion of counsel to the
Partnership, will avoid a termination of the Partnership
under Section 708 of the Code.
12. Additional Capital.
12.1 The Management Committee may request additional capital
contributions to the Partnership other than those required to be
made pursuant to Sections 4.2, 4.3. and 11.1.1 (or in excess of
those obtained pursuant to such sections if one or more Partners
should default in making contributions required by such sections).
Any such request shall be made by offering each of the Partners the
opportunity to make such contributions; provided, that each Partner
shall have the right, but not the obligation, to contribute an
amount which is the same percentage of the total amount of the
additional capital contributions as the Partner's Percentage of such
Partner at that time (each Partner which elects to make the maximum
contribution permitted to be made by it pursuant to this sentence
being hereinafter called a "Fully Contributing Partner"). In the
event all Partners shall not be Fully Contributing Partners with
respect to any additional capital contributions requested pursuant
to this Section 12, each Fully Contributing Partner shall have the
privilege of subscribing by written notice to the other Partners for
any percentage of the amount by which the additional capital
contributions requested exceed the aggregate amount of contributions
elected to be made by the Partners pursuant to the next preceding
sentence, subject, in the case such amount is oversubscribed
pursuant to this sentence, to allotment among the Fully Contributing
Partners exercising such privilege, such allotment to be in
proportion to the Partner's Percentages of such Fully Contributing
Partners.
12.2 Additional capital contributions made under this Section 12 shall be
added to the Capital Account of the Partner contributing the same.
Any failure to respond to an additional capital request made
pursuant to this Section 12 shall not be deemed an act of withdrawal
from the Partnership.
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12.3 The Management Committee shall issue a written request for payment
of each capital contribution to be made in accordance with Section
12, at such times and in such amounts as the Management Committee
shall deem appropriate in light of the additional cash requirements
of the Partnership, subject, however, to the provisions of Section
12.1.
12.4 Each written request issued pursuant to Section 12.3 shall contain
the following information:
(i) The total amount of additional capital contributions
requested from all Partners;
(ii) The amount of additional capital contribution requested
from the Partner to whom the request is addressed;
(iii) The purpose for which the funds are to be applied in
such reasonable detail as the Management Committee shall
direct; and
(iv) The date on which payments of the additional capital
contribution shall be made (which date shall not be less
than five days following the date the request is issued)
and the method of payment, provided that such date and
method shall be the same for each of the Partners.
13. Expansion of the Line.
Subject to the terms of Sections 8.2.6(vi) and 8.2.7(i), as applicable,
the Management Committee may, from time to time, authorize the
construction of facilities, other than Incremental Facilities, to expand
the Line's capacity, to extend the Line or to construct lateral facilities
from the Line and increase the Partnership's authority to transport Gas
(such a project to expand or extend the Line or construct lateral
facilities or increase the authority to transport Gas, an "Expansion
Project") and may authorize the filing of all necessary applications to
the FERC for a certificate of public convenience and necessity relating to
such an Expansion Project and to such other regulatory and governmental
agencies as may have jurisdiction with respect thereto; provided that, if
such an Expansion Project requires additional capital contributions to the
Partnership, such capital shall be obtained only in accordance with the
provisions of Section 12.1. Decisions to expand the Line's capacity shall
be made in light of the policy of the Partnership expressed in Section
3.4. Construction of the Incremental Facilities will not be subject to the
provisions of this Section 13.
14. Termination and Right of Withdrawal.
14.1 Term of Partnership: The Partnership shall continue from the
Formation Date until dissolved pursuant to the terms of this
Amendment and Restatement.
14.2 Automatic Dissolution: The Partnership shall be automatically and
without notice dissolved upon the happening of any of the following
events:
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14.2.1 The sale or abandonment of all or substantially all of the
Partnership's business and assets; provided, however, that
any such sale or abandonment may be made only pursuant to
unanimous written consent of all Partners; or
14.2.2 Any event which shall make it unlawful for the business of
the Partnership to be carried on.
14.3 Automatic Withdrawal: In addition to those instances where
withdrawal is deemed to occur under Section 4.4.5, a Partner shall
be deemed to have withdrawn from the Partnership and be entitled to
receive payment as specified in Section 4.4.4 upon the happening of
any of the following events:
14.3.1 Any of the following:
(i) the entry of a court of competent jurisdiction of a
decree or order, unstayed on appeal or otherwise and in
effect for 90 days, adjudicating the Partner a bankrupt
or insolvent;
(ii) the entry by a court of competent jurisdiction of a
decree or order appointing a receiver, assignee,
trustee, liquidator, sequestrator or other similar
official of the Partner or of any substantial part of
the property of the Partner, or ordering the winding up
or liquidation of its affairs, or approving as properly
filed a petition seeking reorganization, arrangement,
adjustment or composition of the Partner under the
Bankruptcy Code or any similar statute; but only if and
when such decree or order shall have continued unstayed
on appeal or otherwise and in effect for 90 days; or
(iii) the filing by the Partner of a petition in voluntary
bankruptcy under any of the provisions of any bankruptcy
law; or the consenting by the Partner to the filing of
any bankruptcy or reorganization petition against it
under any such law; or (without limitation or the
generality of the foregoing) the filing by the Partner
of a petition or answer or consent to reorganize the
Partner pursuant to or seek relief under the Bankruptcy
Code or any other similar statute; or the making by the
Partner of an assignment for the benefit of creditors;
or the admitting in writing by the Partner of its
inability to pay its debts generally as they become due;
or the consenting by the Partner to the appointment of a
receiver, assignee, trustee, liquidator, sequestrator or
other similar official of it or of any substantial part
of its property, or the taking of corporate action by
the Partner in furtherance of any such action.
14.3.2 The filing of a certificate of dissolution of that Partner
under the laws of the state of its incorporation or the
entering of a final order dissolving that Partner by any
court of competent jurisdiction; or
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14.3.3 Any event which shall make it unlawful for that Partner to
carry on such business in partnership.
14.4 Winding Up and Liquidation: After the Partnership shall be dissolved
pursuant to the provisions of Section 14.3, the Management Committee
and each of the Partnership Committees and the Operator shall
continue to exercise the powers vested in each of them by this
Amendment and Restatement and continue to operate in the normal
course to the extent appropriate for the purpose of winding up any
business of the Partnership and liquidating any assets thereof in an
orderly manner and, subject to Section 6, distributing any net
assets of the Partnership not so transferred pari passu (i) to the
Partners in accordance with Section 6 as of the date of dissolution,
and (ii) to each Withdrawing Partner in an amount equal to its
Capital Account balance on the date of withdrawal or such amount, if
any, as remains if distribution has earlier occurred pursuant to
Section 4.4.4 (iii). The Partnership shall engage in no new business
during the period of such winding up; provided, that no dissolution
of the Partnership, pursuant to this Section 14 or otherwise, shall
relieve any Partner from any obligation accruing or accrued to the
date of such dissolution or deprive any Partner not in default
hereunder of any remedy otherwise available to it.
14.5 Termination Subject to Natural Gas Act: The right and power to
dissolve the Partnership shall at all times be subject to the
obligations and duties of the Partnership as a "natural gas company"
under the Natural Gas Act and the jurisdiction of the FERC under
that Act, and no dissolution shall be effected unless all provisions
of that Act shall have been complied with and any transfer of the
Partnership's business and assets, including any certificate of
public convenience and necessity issued under that Act, shall have
been validly consummated under the provisions of that Act and other
applicable law.
14.6 Continuance of a Partnership: Except as provided in Section 14.3, it
is understood and agreed by each of the Partners that the
relationship of partnership among them is intended to continue
without interruption until such relationship is either specifically
dissolved by unanimous consent of all the Partners or by the
occurrence of one of the events specified in Section 14.3 as an
event of dissolution, and each Partner waives and releases its right
to dissolve or obtain dissolution of the Partnership in any other
manner or for any other reason. In this connection, the Partners
agree and intend that the Partnership shall not be dissolved by the
admission of a new Partner pursuant to Section 11.1.1 or by the
withdrawal of a Partner from the Partnership. If, notwithstanding
the foregoing understanding, agreements and intentions of the
Partners, the Partnership may at any time or from time to time be
deemed by operation of law and otherwise than pursuant to Section
14.3 to be dissolved and subject to winding up, each of the Partners
hereby covenants and agrees with the other Partners as follows:
14.6.1 The business and affairs of the Partnership shall continue
without interruption and be carried out by a new partnership
or, if there is only one remaining
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Partner, by (i) a new partnership of which such sole
remaining Partner and one of its wholly owned subsidiaries
are the partners of such new partnership or (ii) a limited
liability company of which such remaining Partner is the
sole member (the "Successor Partnership");
14.6.2 The Partners or members, as the case may be, of the
Successor Partnership shall be the Persons who were Partners
hereunder at the time of such dissolution, and the Successor
Partnership and the Partners or members thereof shall be
governed by the terms of this Amendment and Restatement as
if the Successor Partnership were the Partnership;
14.6.3 Each of the Partners covenants and agrees to execute such
further agreements, including (without limitation) notes,
novations and accommodations, as may be necessary to
continue the business of the Partnership by the Successor
Partnership and to protect and perfect any lien or security
interest granted by the Partnership;
14.6.4 Each of the Partners waives and releases, to the full extent
it may lawfully do so, all rights to a winding up or
liquidation of the business of the Partnership,
notwithstanding that the dissolution of the Partnership may
be caused wrongfully or otherwise in contravention of this
Amendment and Restatement by such Partner or any other
Partner and further notwithstanding that, at the time of
such dissolution, such Partner shall be, or be deemed to be
or thereby become, a Withdrawing Partner pursuant to this
Amendment and Restatement; and
14.6.5 As used in this Section 14.6, the term "Partnership", at any
point in time, shall mean the Partnership originally formed
pursuant to this Amendment and Restatement or the Successor
Partnership which at such time is continuing the business
and affairs of the Partnership originally so formed.
14.7 Effect of Withdrawal:
14.7.1 Any Partner which (i) shall be deemed to have withdrawn from
the Partnership by operation of Section 4.4.5 or 14.3, or
(ii) shall have caused a dissolution of the Partnership
under applicable law in contravention of this Amendment and
Restatement (any such Partner that withdraws from the
Partnership as described in the foregoing clauses (i) or
(ii), to be herein called a "Withdrawing Partner") shall
have those rights stated in Section 4.4.4 and no others.
Withdrawal by one or more Partners as described in clause
(i) of the preceding sentence shall not effect a dissolution
of the Partnership, and withdrawal by one or more Partners
as described in either clauses (i) or (ii) of the preceding
sentence shall not affect obligations previously incurred by
the Withdrawing Partner. Withdrawal as described in the
first sentence of this Section 14.7 shall, ipso facto,
terminate the Withdrawing Partner's status as a Partner,
forfeit all voting rights in Partnership affairs and
terminate all representation on Partnership Committees and
the Management Committee. No Withdrawing Partner
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shall as a consequence of the termination of its status as a
Partner be entitled to any priority over any Partner with
respect to the receipt of any funds from the Partnership.
14.7.2 A Withdrawing Partner shall be liable in damages to the
Partnership and to each nonwithdrawing Partner for losses
suffered by the Partnership and such Partner by the
withdrawal (regardless of the cause thereof), and the
Partnership and each nonwithdrawing Partner shall have a
first and preferred lien upon and security interest in the
right of such Withdrawing Partner to receive funds from the
Partnership in accordance with Section 4.4.4 (ii). The
Management Committee is authorized, at its election, to the
extent that the Partnership or any nonwithdrawing Partner is
entitled to damages from a Withdrawing Partner pursuant to
this Section 14.7, and in the case of a nonwithdrawing
Partner entitled to such damages, at the election of such
nonwithdrawing Partner, to withhold from any sum which a
Withdrawing Partner otherwise may be entitled to receive
from the Partnership pursuant to Section 4.4.4 (ii) an
amount equal to such damages and to apply the same to the
discharge of such damage liability (on a pro rata basis
among those nonwithdrawing Partners which elect to have such
amount so applied by the Management Committee). No capital
contribution made by a Partner pursuant to Section 4.4.5
(ii) (whether made pursuant to such Partner's election or
otherwise) shall in any way prejudice the right of such
Partner or of the Partnership to pursue any right
(including, without limitation, the right to damages
pursuant to this Section 14.7.2) or remedy against a
Withdrawing Partner.
15. General.
15.1 Effect of Agreement: This Amendment and Restatement reflects the
whole and entire agreement among the Partners, and this Amendment
and Restatement can be amended, restated or supplemented only by the
written agreement of all Partners.
15.2 Notices: Any written notice or other communication shall be
sufficiently given or shall be deemed given if delivered personally
or sent by overnight courier or sent by facsimile (with evidence of
confirmation of receipt) and addressed:
15.2.1 to each of the Partners at the address set forth in Section
1 of this Amendment and Restatement or at such other address
as may be designated from time to time by any Partner by
written notice to each other Partner and the Partnership;
and
15.2.2 to the Partnership at its principal office specified by the
Management Committee in accordance with Section 3.7 or such
other address as may be designated from time to time by
written notice to each of the Partners. Any Partner may
request that copies of notices be given to any Affiliate at
such address designated by such Partner by written notice to
each other
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Partner and to the Partnership, provided that any failure to
give such notice shall not affect the validity of any notice
given to any Partner or the Partnership in accordance with
this Section 15.2. Each of the Partners agrees to give such
notice to any such Affiliate.
15.3 Further Assurances: Each of the Partners agrees to execute and
deliver all such other and additional instruments and documents and
to do such other acts and things as may be reasonably necessary more
fully to effectuate this Partnership and carry on the Partnership
business in accordance with this Amendment and Restatement.
15.4 Applicable Law: This Amendment and Restatement shall be governed by
and interpreted in accordance with the laws of Texas.
15.5 Counterparts: This Amendment and Restatement may be executed in
counterparts (including counterparts providing for the execution by
an Additional Partner), each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
15.6 Headings: The headings contained in this Amendment and Restatement
are for reference purposes only and shall not affect the meaning or
interpretation of this Amendment and Restatement.
15.7 Waiver: No waiver by any Partner of any default by any other Partner
or Partners in the performance of any provision, condition or
requirement herein shall be deemed to be a waiver of, or in any
manner release the other Partner or Partners from performance of any
other provision, condition or requirement herein; nor deemed to be a
waiver of, or in any manner a release of the other Partner or
Partners from future performance of the same provision, condition or
requirement. Any delay or omission of any Partner to exercise any
right hereunder shall not impair the exercise of any such right, or
any like right, accruing to it thereafter. No waiver of a right
created by this Amendment and Restatement by one or more Partners
shall constitute a waiver of such right by the other Partners except
as may otherwise be required by law with respect to persons not
parties hereto. The failure of one or more Partners to perform its
or their obligations hereunder shall not release the other Partners
from the performance of such obligations.
15.8 Partition: The Partners expressly waive and release any right to
have their interest, individually or collectively, in the Project
(including the Incremental Facilities), Expansion Projects and the
Line partitioned or sold for the purpose of dividing the proceeds of
such sale for the period during which the Partnership or any
Successor Partnership shall remain in existence.
15.9 Applicable Laws: This Amendment and Restatement and the obligations
of the Partners hereunder are subject to all applicable laws, rules,
orders and regulations of governmental authorities having
jurisdiction and, in the event of conflict, such
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laws, rules, orders and regulations of governmental authorities
having jurisdiction shall control.
15.10 Voluntary Contributions: No Partner shall make any capital
contributions to the Partnership except pursuant to Sections 4, 11,
and/or 12 of this Amendment and Restatement.
15.11 Section Numbers: Unless otherwise indicated, references to section
numbers are to sections of this Amendment and Restatement.
[Signature page follows.]
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IN WITNESS WHEREOF, the Parties have caused this Amendment and Restatement
to be executed by their respective duly authorized officers.
PARTNERS:
NORTHERN BORDER INTERMEDIATE
LIMITED PARTNERSHIP
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial and Accounting Officer
TC PIPELINES INTERMEDIATE LIMITED PARTNERSHIP
BY: TC PIPELINES GP, INC., ITS GENERAL PARTNER
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief
Executive officer
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and
Treasurer
Signature Page
First Amended and Restated General Partnership Agreement
of Northern Border Pipeline Company
EXHIBIT A
PARTNERS
NAME OF PARTNER PARTNER'S PERCENTAGE
Northern Border Intermediate Limited Partnership 50%
TC Pipelines Intermediate Limited Partnership 50%
Exhibit A
