Exhibit 1.1
DRAFT 5/18/99
TC PIPELINES, LP
16,445,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
_________, 1999
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TC PipeLines, LP, a Delaware limited partnership (the "Partnership"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 14,300,000 common units representing limited partner interests in the
Partnership ("Common Units") and, at the election of the Underwriters, up to
2,145,000 additional Common Units. The aggregate of 14,300,000 Common Units is
herein called the "Firm Units" and the aggregate of 2,145,000 additional Common
Units is herein called the "Optional Units." The Firm Units and the Optional
Units that the Underwriters elect to purchase pursuant to Section 2 hereof are
herein collectively called the "Units."
It is understood and agreed to by all parties that the Partnership was
formed to acquire a 30% general partner interest in Northern Border Pipeline
Company, a Texas general partnership ("Northern Border Pipeline"). At the First
Time of Delivery (as defined herein), the Partnership will own its interest in
Northern Border Pipeline through its subsidiary, TC PipeLines Intermediate
Limited Partnership, a Delaware limited partnership (the "Intermediate
Partnership"). TC PipeLines GP, Inc., a Delaware corporation, serves as the
general partner of the Partnership and the Intermediate Partnership (the
"General Partner"). The General Partner is a wholly-owned indirect subsidiary of
TransCanada PipeLines Limited, a Canadian corporation ("TransCanada"). The
Partnership, the Intermediate Partnership, the General Partner, TransCan
Northern Ltd., a Delaware corporation and wholly-owned subsidiary of TransCanada
("TransCan Northern") and TransCanada Border PipeLine Ltd., a Nevada corporation
and wholly-owned subsidiary of TransCanada ("TransCanada Border PipeLine") are
hereinafter referred to collectively as the "TC Entities." The Partnership, the
Intermediate Partnership and the General Partner are hereinafter referred to
collectively as the "Partnership Entities."
1. (a) The TC Entities, jointly and severally, represent and warrant
to, and agree with, each of the Underwriters that:
(i) A registration statement on Form S-1 (File No.
333-69947) (the "Initial Registration Statement") in respect of the Units
has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, and,
excluding exhibits thereto, to you for each of the other Underwriters,
have been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration Statement and
the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act
in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time
it was declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Prospectus;"
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, 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;
PROVIDED, HOWEVER, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Partnership by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(iii) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto, and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, 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; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Partnership by an Underwriter through Xxxxxxx, Sachs & Co.
expressly for use therein;
(iv) None of the Partnership Entities has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change
in the capitalization or long-term debt of any of the Partnership Entities
or any material adverse change, or any
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development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position, partners'
capital, stockholders' equity or results of operations of the Partnership
Entities, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
(v) None of the Partnership Entities owns in fee
simple or under lease any real property or buildings; at such Time of
Delivery (as defined in Section 4 hereof), the Partnership Entities will
have good and marketable title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made
and proposed to be made of such property by the Partnership Entities;
(vi) Each of the Partnership and the Intermediate
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware, with
power and authority (partnership and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign limited partnership for the transaction of business
and is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification except where the failure to be so qualified (A) would
not subject the Partnership or the Intermediate Partnership to material
liability or disability or (B) would not subject the limited partners of
the Partnership to any liability or disability;
(vii) 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 power and authority (corporate and other)
to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification except where the failure to
be so qualified (A) would not subject the General Partner to material
liability or disability or (B) would not subject the limited partners of
the Partnership to any liability or disability; and, other than its
partnership interests in the Partnership and the Intermediate Partnership,
the General Partner does not own, and at such Time of Delivery, will not
own, directly or indirectly, any equity or long-term debt securities of
any corporation or have an equity interest in any firm, partnership, joint
venture, association or other entity;
(viii) TransCan Northern has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification or is subject to no liability
or disability by reason of the failure to be so qualified in any such
jurisdiction;
(ix) TransCanada Border PipeLine has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Nevada, with power and authority (corporate
and other) to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification or is subject to no liability
or disability by reason of the failure to be so qualified in any such
jurisdiction;
(x) At the First Time of Delivery, after giving
effect to the issuance of the Firm Units, the Partnership will have an
authorized capitalization as set forth in the Prospectus, and the
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Units to be issued and sold by the Partnership to the Underwriters
hereunder will be duly authorized by the Amended and Restated Agreement of
Limited Partnership of TC PipeLines, LP (the "Partnership Agreement"), and
when issued against payment therefor as provided herein, will be validly
issued, fully paid and non-assessable (except as nonassessability may be
affected by certain provisions of the Delaware Revised Uniform Limited
Partnership Act, as amended (the "Delaware Act")) and conform to the
description of the Common Units contained in the Prospectus;
(xi) At such Time of Delivery, after giving effect to
the transactions contemplated in the Prospectus, the General Partner will
be the sole general partner of the Partnership with a 1% general partner
interest in the Partnership; such general partner interest will be duly
authorized by the Partnership Agreement and validly issued to the General
Partner; at such Time of Delivery, the General Partner will own all of the
issued and outstanding Subordinated Units (as defined in the Prospectus);
such Subordinated Units will be duly authorized by the Partnership
Agreement, validly issued to the General Partner, fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except
as such nonassessability may be affected by certain provisions of the
Delaware Act); at such Time of Delivery, the General Partner will own all
of the Incentive Distribution Rights (as defined in the Prospectus); such
Incentive Distribution Rights will be duly authorized by the Partnership
Agreement, validly issued to the General Partner, fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except
as such nonassessability may be affected by certain provisions of the
Delaware Act); and at such Time of Delivery, the General Partner will own
such general partner interest, Subordinated Units and Incentive
Distribution Rights free and clear of all liens, encumbrances (except
restrictions on transferability as described in the Prospectus), security
interests or adverse claims;
(xii) At such Time of Delivery, after giving effect to
the transactions contemplated in the Prospectus, the General Partner will
be the sole general partner of the Intermediate Partnership with a 1.0101%
general partner interest in the Intermediate Partnership; such general
partner interest will be duly authorized by the Amended and Restated
Agreement of Limited Partnership of TC PipeLines Intermediate Limited
Partnership (the "Intermediate Partnership Agreement") and validly issued
to the General Partner; and at such Time of Delivery, the General Partner
will own such general partner interests free and clear of all liens,
encumbrances (except restrictions on transferability as described in the
Prospectus), security interests or adverse claims;
(xiii) At such Time of Delivery, after giving effect to
the transactions contemplated in the Prospectus, the Partnership will be
the sole limited partner of the Intermediate Partnership with a 98.9899%
limited partner interest in the Intermediate Partnership; such limited
partner interest will be duly authorized by the Intermediate Partnership
Agreement, validly issued to the Partnership, fully paid (to the extent
required by the Intermediate Partnership Agreement) and nonassessable
(except as nonassessability may be affected by certain provisions of the
Delaware Act); and at such Time of Delivery, the Partnership will own such
limited partner interest free and clear of all liens, encumbrances (except
restrictions on transferability as described in the Prospectus), security
interests or adverse claims;
(xiv) As of the date of this Agreement, TransCan
Northern and TransCanada Border PipeLine collectively own a 30% general
partner interest in Northern Border Pipeline free and clear of all liens,
encumbrances (except restrictions on transferability as described in the
Prospectus), security interests or adverse claims; and at such Time of
Delivery, the Intermediate Partnership will own a 30% general partner
interest in Northern Border Pipeline free and clear of all liens,
encumbrances (except restrictions on transferability as described in the
Prospectus), security interests or adverse claims;
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(xv) Except for the Partnership's limited partner
interest in the Intermediate Partnership and the Intermediate
Partnership's general partner interest in Northern Border Pipeline,
neither the Partnership nor the Intermediate Partnership own, and at such
Time of Delivery neither will own, directly or indirectly, any equity or
long-term debt securities of any corporation or have an equity interest in
any firm, partnership, joint venture, association or other entity;
(xvi) The issue and sale of the Units by the
Partnership and the compliance by the TC Entities with all of the
provisions of this Agreement and the consummation of the transactions
contemplated herein and in the Prospectus (including, without limitation,
the transfer of the 30% general partner interest in Northern Border
Pipeline to the Intermediate Partnership) (A) will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the TC Entities
or Northern Border Pipeline is a party or by which any of the TC Entities
or Northern Border Pipeline is bound or to which any of the property or
assets of any of the TC Entities or Northern Border Pipeline is subject,
(B) will not result in any violation of or conflict with the provisions of
the articles or certificate of incorporation, bylaws, certificate of
limited partnership, agreement of limited partnership, general partnership
agreement or other governing documents of any of the TC Entities or
Northern Border Pipeline or violate or conflict with any statute, (C) will
not violate or conflict with any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the TC Entities or
Northern Border Pipeline or any of their properties and (D) will not
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of any of the Partnership Entities, except, in
the case of clauses (A), (C) or (D) which, individually or in the
aggregate, would not be reasonably expected to have a material adverse
effect on the condition (financial or otherwise) or on the business,
properties or results of operations of the Partnership Entities, taken as
a whole (a "Material Adverse Effect"); and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Units or the consummation by the TC Entities of the transactions
contemplated by this Agreement, except the registration under the Act of
the Units and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Units by the
Underwriters;
(xvii) None of the TC Entities or Northern Border
Pipeline is in violation of its articles or certificate of incorporation,
bylaws, certificate of limited partnership, agreement of limited
partnership or other governing documents;
(xviii) None of the TC Entities or Northern Border
Pipeline is in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be bound
which default, individually or in the aggregate, would be reasonably
expected to result in a Material Adverse Effect on the ability of any of
the TC Entities to enter into or perform its obligations set forth in this
Agreement;
(xix) The statements set forth in the Prospectus under
the caption "Description of Common Units," insofar as they purport to
constitute a summary of the terms of the Units and under the caption "Tax
Considerations," insofar as they purport to describe the provisions of the
laws and documents referred to therein, are fair summaries in all material
respects;
(xx) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which any of the TC
Entities or Northern Border Pipeline is a party or of which any property
of any of the TC Entities or Northern Border Pipeline is the subject
which, if determined adversely to any of the TC Entities or Northern
Border Pipeline could reasonably be expected to,
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individually or in the aggregate, result in a Material Adverse Effect;
and, to the best of each of the TC Entities' knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(xxi) None of the TC Entities are, nor, after giving
effect to the offering and sale of the Units and the application of the
proceeds thereof, will be an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(xxii) None of the Partnership Entities or TransCanada
Border PipeLine is nor, after giving effect to the offering and sale of
the Units, will be a "holding company" or "affiliate" of a holding company
or public utility, as defined in the Public Utility Holding Company Act of
1935;
(xxiii) KPMG LLP, who have certified certain financial
statements of the Partnership and the General Partner, and Xxxxxx Xxxxxxxx
LLP, who have certified certain financial statements of Northern Border
Pipeline, are each independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(xxiv) Each of the TC Entities has reviewed its
operations and that of any third parties with which the TC Entities have a
material relationship to evaluate the extent to which the business or
operations of the TC Entities will be affected by the Year 2000 Problem.
As a result of such review, the TC Entities have no reason to believe, and
do not believe, that (other than as described in the Prospectus) the Year
2000 Problem will have a material adverse effect on the general affairs,
management, the current or future consolidated financial position,
partners' capital or results of operations of the TC Entities or result in
any material loss or interference with any of the TC Entities' business or
operations. The "Year 2000 Problem" as used herein means any significant
risk that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in
the case of dates or time periods occurring prior to January 1, 2000;
(xxv) Each of the Partnership Entities carries, or is
covered by, insurance in such amounts and covering such risks as is
customarily obtained by businesses similarly situated, taking into account
self-insurance;
(xxvi) Except as described in the Prospectus, the TC
Entities possess, and are operating in compliance in all material respects
with, all certificates, authorities or permits issued by the appropriate
local, state, federal or foreign regulatory agencies or bodies necessary
to conduct the business currently (or, as described or contemplated in the
Prospectus, to be) operated by them, except for such certificates,
authorizations or permits which, if not obtained, would not reasonably be
expected to have, individually or in the aggregate, a material adverse
effect upon the ability of the TC Entities to conduct their businesses in
all material respects as currently conducted and as contemplated by the
Prospectus to be conducted; and, except as described in the Prospectus,
none of the TC Entities has received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or
permit which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would be expected to have a
material adverse effect upon the ability of the TC Entities to conduct
their businesses in all material respects as currently conducted and as
contemplated by the Prospectus to be conducted;
(xxvii) The Partnership Entities maintain a system of
internal accounting control sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with
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management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles in the United
States ("U.S. GAAP") and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(xxviii) The TC Entities (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
imposing liability or standards of conduct concerning any Hazardous
Material (as hereinafter defined) ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, individually or in the aggregate, result in a
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, partners' capital, stockholders' equity or results of
operations of the TC Entities taken as a whole. The term "Hazardous
Material" means (A) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (B) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or petroleum
product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous, or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental
Law;
(xxix) In the ordinary course of business, the TC
Entities conduct a periodic review of the effect of Environmental Laws on
the business, operations and properties of the TC Entities, in the course
of which they identify and evaluate associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). Except as set forth in the Registration Statement and the
Prospectus there are no costs and liabilities associated with or arising
in connection with Environmental Laws as currently in effect (including,
without limitation, costs of compliance therewith) which would,
individually or in the aggregate, result in a Material Adverse Effect;
(xxx) The TC Entities are in compliance with all
federal, state and local employment and labor laws, including, but not
limited to, laws relating to non-discrimination in hiring, promotion and
pay of employees; no labor dispute with the employees of the TC Entities
exists or, to the knowledge of the TC Entities, is imminent or threatened;
and none of the TC Entities is aware of any existing, imminent or
threatened labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors; in any case that would result in
a Material Adverse Effect;
(xxxi) There are no preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the transfer of,
any limited partner interests in the Partnership or the Intermediate
Partnership pursuant to either the Partnership Agreement or the
Intermediate Partnership Agreement (except as described in the Prospectus)
or other governing documents or any agreement or other instrument to which
the Partnership or the Intermediate Partnership is a party or by which
either of them may be bound; there are no outstanding options or warrants
to purchase any Common Units or Subordinated Units (except pursuant to
this Agreement);
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(xxxii) The offering and sale of Units as contemplated by
this Agreement does not give rise to any rights for or relating to the
registration of any partnership interests or other securities of the
Partnership;
(xxxiii) This Agreement has been duly authorized, executed
and delivered by each of the TC Entities, constitutes a valid and binding
agreement with respect to each of such entities and is enforceable against
each of them in accordance with the terms hereof;
(xxxiv) On or before the First Date of Delivery, each of
the Contribution, Conveyance and Assumption Agreement (the "Contribution
Agreement"), the $40 million unsecured revolving credit facility between
the Partnership and TransCanada PipeLine USA Ltd. ("TransCanada PipeLine
USA") (the "Revolving Credit Facility"), and the Eighth Supplement to the
General Partnership Agreement of Northern Border Pipeline Company
(collectively, the "Operative Documents") to which any of the TC Entities
is a party, has been duly authorized, executed and delivered by the
respective TC Entities and constitutes a valid and binding agreement of
the respective TC Entities and is enforceable against the respective TC
Entities in accordance with its respective terms;
(xxxv) On or before the First Time of Delivery, the
Partnership Agreement will have been duly authorized, executed and
delivered by the General Partner and the Organizational Limited Partner
and will be a valid and legally binding agreement of the General Partner
and the Organizational Limited Partner, enforceable against the General
Partner and the Organizational Limited Partner in accordance with its
terms; on or before the First Time of Delivery, the Intermediate
Partnership Agreement will have been duly authorized, executed and
delivered by each of the General Partner and the Partnership and will be a
valid and legally binding agreement of the General Partner and the
Partnership, enforceable against each of them in accordance with its
terms;
(xxxvi) The historical financial statements (including
the related notes and supporting schedules) included in the Registration
Statement and the Prospectus present fairly in all material respects the
financial position, results of operations and cash flow of the entities
purported to be shown thereby on the basis stated therein at the
respective dates or for the respective periods which have been prepared in
accordance with U.S. GAAP consistently applied through the periods
involved, except to the extent disclosed therein. The selected pro forma
information set forth in the Registration Statement and the Prospectus
under the caption "Selected Pro Forma Financial Data of the Partnership"
is accurately presented in all material respects and prepared on a basis
consistent with the audited and unaudited historical consolidated
financial statements and pro forma financial statements from which it has
been derived. The pro forma financial statements of the Partnership
included in the Registration Statement and the Prospectus have been
prepared in all material respects in accordance with the applicable
accounting requirements of Article 11 of Regulation S-X of the Commission;
the assumptions used in the preparation of such pro forma financial
statements are, in the opinion of the management of the TC Entities,
reasonable; and the pro forma adjustments reflected in such pro forma
financial statements have been properly applied to the historical amounts
in compilation of such pro forma financial statements;
(xxxvii) On or before the First Time of Delivery, the
Units will be approved for quotation, subject to official notice of
issuance, on the National Association of Securities Dealers Automated
Quotations National Market System ("NASDAQ");
(xxxviii) None of the TC Entities has or, to their
knowledge, has any employee or agent thereof made any payment of funds to
any of the TC Entities or received or retained any funds therefrom in
violation of any law, rule or regulation of a character required to be
disclosed in the Prospectus;
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(xxxix) Each of the TC Entities has filed all material
federal, state and foreign income and franchise tax returns and has paid
all taxes shown as due thereon, other than taxes which are being contested
in good faith and for which adequate reserves have been established in
accordance with U.S. GAAP or Canadian GAAP, as the case may be, there are
no tax returns of any of the TC Entities that are currently being audited
by state, local or federal taxing authorities or agencies (and with
respect to which any of the TC Entities has received notice), where the
findings of such audit, if adversely determined, would result in a
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, partners' capital, stockholders' equity or results of
operations of the TC Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material
liability or disability;
(xl) With respect to each employee benefit plan,
program and arrangement (governed by the laws of Canada or the United
States, including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) maintained or contributed to by the TC
Entities, or with respect to which the Partnership could incur any
liability under ERISA (collectively, the "Benefit Plans"), no event has
occurred, in connection with which the Partnership could be subject to any
liability under the terms of such Benefit Plan, applicable law (including,
without limitation, ERISA and the Internal Revenue Code of 1986, as
amended) or any applicable agreement that could materially adversely
affect the financial condition, results of operations or business of the
TC Entities, taken as a whole, or subject the Partnership or the limited
partners of the Partnership to any material liability or disability;
(xli) Northern Border Pipeline has not sustained since
the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change
in the capitalization or long-term debt of Northern Border Pipeline or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, partners' capital or results of Northern Border
Pipeline otherwise than as set forth or contemplated in the Prospectus;
(xlii) Northern Border Pipeline has good and
indefeasible title to all real and personal property necessary to own and
operate the Northern Border pipeline system (as such term is used in the
Prospectus) as described in the Prospectus, free and clear of all liens,
claims, encumbrances and defects except (1) as described in the Prospectus
and (2) such as do not materially interfere with the ownership, operation
or benefits of ownership of the Northern Border pipeline system or
materially increase the cost of operation or ownership of the Northern
Border pipeline system, provided that, (a) with respect to the gas
transmission pipelines and right-of-way interests related thereto (the
"Pipeline Properties") the foregoing shall only constitute a
representation that, except as described in the Prospectus, (i) Northern
Border Pipeline has sufficient title to enable it to use such Pipeline
Properties in its business as they have been used in the past and as are
proposed to be used in the future as described in the Prospectus and (ii)
any lack of title has not had and will not have any material adverse
effect on the ability of Northern Border Pipeline to use such Pipeline
Properties as they have been used in the past and are proposed to be used
in the future as described in the Prospectus and will not materially
increase the cost of such use, and (b) with respect to any real property,
buildings and equipment held under lease by Northern Border Pipeline, such
real property, buildings and equipment are held by Northern Border
Pipeline under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such real property, buildings and equipment by such
person;
9
(xliii) Northern Border Pipeline has been duly formed and
is validly existing as a Texas general partnership, with all necessary
power and authority (partnership and other) to own or lease its properties
and conduct its business as described in the Prospectus, and has been duly
qualified for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification or is subject
to no material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(xliv) Northern Border Pipeline carries, or is covered
by, insurance in such amounts and covering such risks as is customarily
obtained by businesses similarly situated, taking into account
self-insurance;
(xlv) Except as described in the Prospectus, Northern
Border Pipeline possesses, and is operating in compliance in all material
respects with, all certificates, authorities or permits issued by the
appropriate local, state, federal or foreign regulatory agencies or bodies
necessary to conduct the business currently (or, as described or
contemplated in the Prospectus, to be) operated by it, except for such
certificates, authorizations or permits which, if not obtained, would not
reasonably be expected to have, individually or in the aggregate, a
material adverse effect upon the ability of Northern Border Pipeline to
conduct its businesses in all material respects as currently conducted;
and, except as described in the Prospectus, Northern Border Pipeline has
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would be expected to have a material adverse
effect upon the ability of Northern Border Pipeline to conduct its
businesses in all material respects as currently conducted;
(xlvi) Northern Border Pipeline maintains a system of
internal accounting control sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with U.S. GAAP
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences;
(xlvii) Except as described in the Prospectus, Northern
Border Pipeline (A) is in compliance with any and all applicable
Environmental Laws, (B) has received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (C) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not,
individually or in the aggregate result in a material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position, partners'
capital, stockholders' equity or results of operations of Northern Border
Pipeline;
(xlviii) In the ordinary course of its business, Northern
Border Pipeline conducts a periodic review of the effect of Environmental
Laws on the business, operations and properties of Northern Border
Pipeline, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties). Except as set forth in the Registration Statement and
the Prospectus there are no costs and liabilities associated with or
arising in connection with Environmental Laws as currently in effect
(including, without
10
limitation, costs of compliance therewith) which would, individually or in
the aggregate have a material adverse effect on the condition (financial
or otherwise) or on the business, properties or results of operations of
Northern Border Pipeline;
(xlix) The selected historical information set forth in
the Registration Statement and the Prospectus under the caption "Selected
Historical Financial and Operating Data of Northern Border Pipeline" is
accurately presented in all material respects and prepared on a basis
consistent with the audited historical consolidated financial statements
from which it has been derived; and
(l) Northern Border Pipeline has filed all material
federal, state and foreign income and franchise tax returns and has paid
all taxes shown as due thereon, other than taxes which are being contested
in good faith and for which adequate reserves have been established in
accordance with U.S. GAAP, there are no tax returns of Northern Border
Pipeline that are currently being audited by state, local or federal
taxing authorities or agencies (with respect to which Northern Border
Pipeline has received notice), where the findings of such audit, if
adversely determined, would result in a material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position, partners'
capital, stockholders' equity or results of operations of Northern Border
Pipeline.
(b) TransCanada represents and warrants to, and agrees with, each
of the Underwriters that:
(i) The Registration Statement, the Prospectus and
each Preliminary Prospectus do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto,
and as of the applicable filing date as to the Prospectus and each
Preliminary Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein with respect to TransCanada or necessary to
make the statements therein with respect to TransCanada not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Partnership by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(ii) TransCanada has been duly organized, and is
validly existing as a corporation in good standing under the laws of
Canada, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction, except where the failure to so qualify would not reasonably
be expected to have a material adverse effect on the ability of
TransCanada or any of the TC Entities to enter into or perform its
obligations set forth in this Agreement or to consummate any of the
transactions contemplated herein or in the Prospectus (a "TC Material
Adverse Effect");
(iii) TransCanada owns, directly or indirectly, all of
the issued and outstanding shares of capital stock of each of TransCan
Northern, the General Partner and TransCanada Border PipeLine, free and
clear of all liens, encumbrances, security interests or adverse claims;
such shares of capital stock are duly authorized, validly issued, fully
paid and nonassessable;
(iv) The compliance by TransCanada with all of the
provisions of this Agreement and the consummation of the transactions
contemplated herein and in the Prospectus (A) will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or
11
instrument to which TransCanada is a party or by which TransCanada is
bound or to which any of the property or assets of TransCanada is subject,
(B) will not result in any violation of or conflict with the provisions of
the articles or certificate of incorporation, or other governing documents
of TransCanada or violate or conflict with any statute, (C) will not
violate or conflict with any order, rule or regulation of any court or
governmental agency or body having jurisdiction over TransCanada or any of
their properties and (D) will not result in the creation or imposition of
any lien, charge or encumbrance upon any assets of the Partnership
Entities, except, in the case of clauses (A), (C) or (D) which,
individually or in the aggregate, would not reasonably be expected to have
a TC Material Adverse Effect; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Units or the consummation by TransCanada of the transactions contemplated
by this Agreement, except the registration under the Act of the Units and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Units by the Underwriters;
(v) TransCanada is not in violation of its articles
or certificate of incorporation, bylaws, or other governing documents;
(vi) TransCanada is not in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound which, individually or in the
aggregate, would reasonably be expected to result in a TC Material Adverse
Effect;
(vii) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which TransCanada is a
party or of which any property of TransCanada is the subject which, if
determined adversely to TransCanada would reasonably be expected to,
individually or in the aggregate, result in a TC Material Adverse Effect;
and, to the best of TransCanada's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(viii) TransCanada is not and, after giving effect to
the offering and sale of the Units, will not be an "investment company",
as such term is defined in the Investment Company Act;
(ix) TransCanada is not and, after giving effect to
the offering and sale of the Units, will not be subject to regulation as a
"holding company" or "affiliate" of a holding company or a public utility,
as defined in the Public Utility Holding Company Act of 1935;
(x) KPMG LLP, who have certified certain financial
statements of the Partnership and the General Partner are independent
public accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(xi) This Agreement has been duly authorized, executed
and delivered by TransCanada and constitutes a valid and binding agreement
and is enforceable against TransCanada in accordance with the terms
hereof;
(xii) On or before the First Date of Delivery, each of
the Operative Documents to which TransCanada is a party, has been duly
authorized, executed and delivered by TransCanada and constitutes a valid
and binding agreement and is enforceable against TransCanada in accordance
with its respective terms;
12
(c) TransCanada shall have the same responsibility and liability
for any misrepresentation in or breach of Section 1(a) to the same extent as if
TransCanada had made such representations and warranties jointly and severally
with the TC Entities.
2. Subject to the terms and conditions herein set forth, (a) the
Partnership agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Partnership, at a purchase price per unit of $.............., the number of Firm
Units set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Units as provided below, the Partnership agrees to
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Partnership, at the purchase price per
unit set forth in clause (a) of this Section 2, that portion of the number of
Optional Units as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Units by a fraction the numerator of which is the
maximum number of Optional Units which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum number of Optional Units that all of the
Underwriters are entitled to purchase hereunder.
The Partnership hereby grants to the Underwriters the right to purchase at
their election up to 2,145,000 Optional Units, at the purchase price per unit
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Units. Any such election to purchase
Optional Units may be exercised only by written notice from you to the
Partnership, given within a period of 30 calendar days after the date of this
Agreement and setting forth the aggregate number of Optional Units to be
purchased and the date on which such Optional Units are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Partnership otherwise agree
in writing, earlier than two or later than ten business days after the date of
such notice.
3. Upon the authorization by you of the release of the Firm Units, the
several Underwriters propose to offer the Firm Units for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Units to be purchased by each Underwriter hereunder, in book
entry form, and in such authorized denominations and registered in such names as
Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior notice
to the Partnership shall be delivered by or on behalf of the Partnership to
Xxxxxxx, Xxxxx & Co., through the facilities of the Depository Trust Company
("DTC") for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Partnership to Xxxxxxx, Sachs &
Co. at least forty-eight hours in advance. The Partnership will cause the
certificates representing the Units to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) with respect thereto at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Units, 9:30 a.m., New York time, on .............,
1999 or such other time and date as Xxxxxxx, Xxxxx & Co. and the Partnership may
agree upon in writing, and, with respect to the Optional Units, 9:30 a.m., New
York time, on the date specified by Xxxxxxx, Sachs & Co. in the written notice
given by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase such
Optional Units, or such other time and date as Xxxxxxx, Sachs & Co. and the
Partnership may agree upon in writing. Such time and date for delivery of the
Firm Units is herein called the "First Time of Delivery", such time and date for
delivery of the Optional Units, if not the First Time of Delivery, is herein
called the "Second Time of Delivery", and each such time and date for delivery
is herein called a "Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Units and any additional documents requested by the
Underwriters pursuant to Section 7(l) hereof, will be delivered at the offices
of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Closing Location"), and the Units will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be held at the
13
Closing Location at 2:00 p.m., New York City time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. Each of the Partnership Entities agrees (and solely with respect to
(e) and (l) of this Section 5, each of the TC Entities and TransCanada agrees)
with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the last Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to advise you,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the qualification of
the Units for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Units for offering and sale under the
securities laws of such jurisdictions in the United States as you may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Units, provided that in connection therewith
the Partnership shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction, provided
further that the Units will only be offered in the United States and to
residents thereof. The Units have not been and will not be registered under
Canadian provincial securities laws and may not be offered, sold or delivered
within Canada or to Canadian persons;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Prospectus in connection with the offering or sale of
the Units and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you and
upon your request to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Units at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such
14
Underwriter as many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Partnership and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Partnership, Rule
158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the Prospectus,
not to offer, sell, hedge, contract to sell or otherwise dispose of, except as
provided hereunder any Common Units or Subordinated Units, including but not
limited to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Common Units or Subordinated Units or any
securities that are senior or on a parity with the Common Units (other than the
redemption of Subordinated Units in the event the Underwriters elect to purchase
any or all of the Optional Units), without your prior written consent;
(f) During a period of five years from the effective date of the
Registration Statement, to furnish to its Unitholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, partners' capital and cash flows of the Partnership
and its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the effective
date of the Registration Statement), to make available to its Unitholders
consolidated summary financial information of the Partnership for such quarter
in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to Unitholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Partnership is listed; and (ii)
such additional information concerning the business and financial condition of
the Partnership as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Partnership and its subsidiaries are consolidated in reports furnished to its
unitholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the
Units pursuant to this Agreement in the manner specified in the Prospectus under
the caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Units on
NASDAQ;
(j) To file with the Commission such information on Form 10-Q or
Form 10-K as may be required by Rule 463 under the Act;
(k) If the Partnership elects to rely upon Rule 462(b), the
Partnership shall file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement, and the Partnership shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act; and
(l) TransCanada shall beneficially own, directly or indirectly,
all of the issued and outstanding shares of the capital stock of the General
Partner until the later of (i) the date that TransCanada or any of its
affiliates is no longer providing the Revolving Credit Facility and (ii) six
months after such time
15
that none of the officers of the General Partner are directors, officers or
employees of TransCanada or any of its affiliates.
6. Each of the TC Entities and TransCanada covenants and agrees with
one another and with the several Underwriters that the Partnership will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Partnership's counsel and accountants in connection with the registration of the
Units under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the Blue
Sky Memorandum, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Units; (iii) all reasonable expenses in connection with the qualification of
the Units for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters (of not more than $5,000) in connection with such qualification and
in connection with the Blue Sky survey; (iv) all fees and expenses in connection
with listing the Units on NASDAQ; and the filing fees incident to, and the fees
and disbursements of counsel for the Underwriters (of not more than $5,000) in
connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Units; (v) the cost of
preparing certificates for the Units; (vi) the cost and charges of any transfer
agent or registrar; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that the Partnership
shall bear the cost of any other matters not directly relating to the sale and
purchase of the Units pursuant to this Agreement, and that except as provided in
this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Units by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Units to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the TC Entities and TransCanada herein are, at and as of such Time of Delivery,
true and correct, the condition that the TC Entities and TransCanada shall have
performed all of their obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Partnership has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, shall
have furnished to you such written opinion or opinions, dated such Time of
Delivery, with respect to the matters covered in paragraphs (i), (ii), (iv),
(xiv), (xxv) and certain matters contained in (xix) of subsection (c) below as
well as such other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the
Partnership, shall have furnished to you their written opinion, dated such Time
of Delivery, in form and substance satisfactory to you, to the effect that:
16
(i) Each of the Partnership and the Intermediate
Partnership has been duly formed and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware, with
partnership power and authority to own its properties and conduct its
business as described in the 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 corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(iii) TransCan Northern is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(iv) The Units to be issued and sold to the
Underwriters by the Partnership pursuant to the Underwriting Agreement on
the First Time of Delivery and the limited partner interests represented
thereby have been duly authorized by the Partnership Agreement and, when
issued and delivered against payment therefor as provided in the
Underwriting Agreement, will be validly issued, fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by the Delaware Act); other than the
3,200,000 Subordinated Units and the Incentive Distribution Rights that
will be owned by the General Partner, the Units will be the only limited
partner interests of the Partnership issued and outstanding at such Time
of Delivery;
(v) Each of the Partnership and the Intermediate
Partnership has been duly qualified as a foreign limited partnership for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification except where the failure to
be so qualified (A) would not subject the Partnership or the Intermediate
Partnership to material liability or disability or (B) would not subject
the limited partners of the Partnership to any liability or disability;
(vi) The General Partner has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified (A) would not
subject the General Partner to material liability or disability or (B)
would not subject the limited partners of the Partnership to any liability
or disability;
(vii) At such Time of Delivery, after giving effect to
the transactions contemplated in the Prospectus, the General Partner will
be the sole general partner of each of the Partnership and the
Intermediate Partnership with a general partner interest in the
Partnership of 1.0% and a general partner interest in the Intermediate
Partnership of 1.0101%; such general partner interests are duly authorized
by the Partnership Agreement and the Intermediate Partnership Agreement,
respectively, validly issued and are owned of record by the General
Partner free and clear of all liens, security interests, or "adverse
claims" (as defined in Section 8-102(a)(1) of the Uniform Commercial Code
of the State of New York (A) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware naming the
General Partner as debtor is on file in the offices of the Secretary of
State of the State of Delaware as of ___________, 1999 or (B) otherwise
known to such counsel;
(viii) At such Time of Delivery, after giving effect to
the transactions contemplated in the Prospectus, the General Partner will
own of record all of the Incentive Distribution Rights; such Incentive
Distribution Rights are duly authorized by the Partnership Agreement,
validly issued, fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such
17
nonassessability may be affected by the Delaware Act); and such Incentive
Distribution Rights are owned of record by the General Partner free and
clear of all liens, security interests, adverse claims (as defined above)
(A) in respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the General Partner as debtor is on
file in the offices of the Secretary of State of the State of Delaware as
of ___________, 1999 or (B) otherwise known to such counsel;
(ix) At such Time of Delivery, after giving effect to
the transactions contemplated in the Prospectus, the General Partner will
own of record 3,200,000 Subordinated Units and such Subordinated Units and
the limited partner interests represented thereby are duly authorized by
the Partnership Agreement, validly issued, fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by the Delaware Act); such
Subordinated Units are owned of record by the General Partner free and
clear of all liens, security interests, adverse claims (as defined above)
(A) in respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware, naming the General Partner as debtor is on
file in the offices of the Secretary of State of Delaware as of
__________, 1999 or (B) otherwise known to such counsel;
(x) The offer, sale and issuance of 14,285,714 Common
Units to (and the redemption by the Partnership of such Common Units from)
TransCan Northern pursuant to the Partnership Agreement and the
Contribution Agreement is exempt from the registration requirements of the
Act and the securities laws of the State of New York;
(xi) The offer, sale and issuance of 14,286 Common
Units, 3,200,000 Subordinated Units, and the Incentive Distribution Rights
to TransCanada Border PipeLine, the redemption by the Partnership of
14,286 Common Units from TransCanada Border PipeLine and the transfer by
TransCanada Border PipeLine of 3,200,000 Subordinated Units and the
Incentive Distribution Rights to the General Partner, in each case
pursuant to the Partnership Agreement and the Contribution Agreement, are
exempt from the registration requirements of the Act and the securities
laws of the State of New York;
(xii) The Partnership is the sole limited partner of
the Intermediate Partnership, with a limited partner interest in the
Intermediate Partnership of 98.9899%; such limited partner interest is
duly authorized by the Intermediate Partnership Agreement and is validly
issued, fully paid (to the extent required under the Intermediate
Partnership Agreement) and nonassessable (except as such nonassessability
may be affected by the Delaware Act); and such limited partner interest in
the Intermediate Partnership is owned of record by the Partnership free
and clear of all liens, security interests, or adverse claims (as defined
above) (A) in respect of which a financing statement under the Uniform
Commercial Code of the State of Delaware naming the Partnership as debtor
is on file in the offices of the Secretary of State of the State of
Delaware as of _________, 1999 or (B) otherwise known to such counsel;
(xiii) All of the issued and outstanding shares of
capital stock of the General Partner are duly authorized, validly issued,
fully paid and nonassessable; and TransCanada Border PipeLine owns such
shares of record, free and clear of all liens, security interests or
adverse claims (as defined above) (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming TransCanada Border PipeLine as debtor is on file in the offices of
the Secretary of State of the State of Delaware as of _________, 1999 or
(B) otherwise known to such counsel;
(xiv) This Agreement has been duly authorized, executed
and delivered by the Partnership, the Intermediate Partnership, the
General Partner and TransCan Northern, and has been duly executed and
delivered by TransCanada Border PipeLine;
18
(xv) Each of the Partnership Agreement, the
Intermediate Partnership Agreement and the Revolving Credit Agreement to
which the Partnership, the Intermediate Partnership, the General Partner,
TransCan Northern or TransCanada Border PipeLine is a party has been duly
authorized and validly executed and delivered by the respective party
(except that we assume and express no opinion regarding and assume the due
authorization of any agreement by TransCanada Border PipeLine). Each of
the Partnership Agreement, the Intermediate Partnership Agreement and the
Revolving Credit Agreement constitutes a valid and binding obligation of
the Partnership, the Intermediate Partnership, the General Partner,
TransCanada, TransCan Northern or TransCanada Border PipeLine, as the case
may be, enforceable against each such party in accordance with its
respective terms, subject to (A) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws from time
to time in effect affecting creditors' rights and remedies generally, (B)
general principles of equity (regardless of whether such principles are
considered in a proceeding at law or in equity) and (C) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(xvi) The Partnership has all requisite partnership
power and authority to issue, sell and deliver (A) the Units, in
accordance with and upon the terms and conditions set forth in the
Underwriting Agreement and the Partnership Agreement and (B) the
Subordinated Units and Incentive Distribution Rights, in accordance with
and upon the terms and conditions set forth in the Partnership Agreement
and the Contribution Agreement;
(xvii) The issue and sale of the Units being delivered
at such Time of Delivery by the Partnership and the performance by the TC
Entities and TransCanada with their respective obligations under this
Agreement and their consummation of the transactions contemplated herein
(A) will not breach or violate any of the terms or provisions of, or
constitute a default under, any agreement or instrument to which any of
the Partnership Entities is a party or by which any of the Partnership
Entities is bound (the opinion in this clause (A) being limited (x) to our
review of only the agreements, or instruments that are listed on Annex
____ hereto and (y) in that we express no opinion with respect to any
violation or default not readily ascertainable from the face of any such
agreement or instrument or arising under or based upon any cross-default
provision insofar as it relates to a default under an agreement or
instrument not so listed, or arising under or based upon any covenant of a
financial or numerical nature or requiring computation), (B) will not
violate any of the provisions of the Certificate of Limited Partnership or
Agreement of Limited Partnership of the Partnership or Intermediate
Partnership, the Certificate of Incorporation or Bylaws of the General
Partner, (C) will not violate any present law, or present regulation of
any governmental agency or authority, of the State of New York or the
State of Delaware pursuant to the Delaware General Corporation Law or the
Delaware Act or the United States of America [exclude FERC and state
analogues] known by us to be applicable to any of the Partnership
Entities, order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Partnership
Entities or any of their respective properties and (D) will not result in
the creation or imposition of any lien, security interest or other
encumbrance upon any property or assets of any of the Partnership Entities
under any agreement or instrument to which any of the Partnership Entities
is a party or by which any of the Partnership Entities is bound (the
opinion in this clause (D) being limited to our review of only those
agreements or instruments that are listed in Annex ____ hereto), except,
in the case of clauses (A), (C) or (D) which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect;
(xviii) The issue and sale of the Units by the
Partnership and the consummation by the TC Entities of the transactions
contemplated by this Agreement do not require under present law any filing
or registration by any TC Entity with, or approval or consent to any TC
Entity of, any governmental agency or authority of the State of New York
or the State of Delaware pursuant to the Delaware General Corporation Law
or the Delaware Act or of the United States of America that has
19
not been made or obtained, except the registration under the Act and the
Securities Exchange Act of 1934, as amended, of the Units, and such
filings, consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Units by the
Underwriters;
(xix) The statements in the Registration Statement and
Prospectus under the captions "The Transactions," "Cash Distribution
Policy," "Conflicts of Interest and Fiduciary Responsibilities,"
"Description of the Common Units", "Description of the Subordinated
Units", "The Partnership Agreement", "Northern Border Pipeline Partnership
Agreement" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Description of Indebtedness of
Northern Border Pipeline" insofar as they purport to describe the
provisions of the (A) the Partnership Agreement, (B) the Intermediate
Partnership Agreement, (C) the Contribution Agreement, (D) the [Revolving
Credit Agreement ], (E) the partnership agreement of Northern Border
Pipeline, as amended to ______________, (F) the [Note Agreement] of
Northern Border Pipeline and (G) the [Credit Agreement] of Northern Border
Pipeline, or of the Delaware Act, as referred to therein, are fair
summaries of the matters covered thereby in all material respects, and the
Units, the Common Units, the Subordinated Units and the Incentive
Distribution Rights conform as to legal matters in all material respects
to the descriptions thereof contained in the Registration Statement and
Prospectus under the captions "Prospectus Summary--The Offering," "Cash
Distribution Policy," "Description of the Common Units," "Description of
the Subordinated Units" and "The Partnership Agreement;"
(xx) The opinion of such counsel that is filed as
Exhibit 8.1 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to them;
(xxi) The Registration Statement was declared effective
under the Act on _________, 1999; to our knowledge, 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 Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period required by
such Rule;
(xxii) None of the Partnership, the Intermediate
Partnership, the General Partner, TransCan Northern, TransCanada Border
PipeLine and TransCanada is, and after giving effect to the offering and
sale of the Units and the application of the proceeds thereof as described
in the Prospectus, none of the Partnership, the Intermediate Partnership,
the General Partner, TransCanada Border PipeLine and TransCanada will be
an "investment company" as such term is defined in the Investment Company
Act of 1940;
(xxiii) Assuming that the Underwriters do not have notice
of any adverse claim (as defined in 8-102(a) and 8-105 of the New York
Uniform Commercial Code) to the Units, upon the delivery to the
Underwriters of certificates evidencing the Units registered in the name
of the Underwriters (or their nominee) and payment by the Underwriters of
the purchase price for the Units, the Underwriters (or such nominee) will
be "protected purchasers" (as such term is used in Section 8-303 of the
New York Uniform Commercial Code).
(xxiv) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any limited partner interests of the Partnership or the
Intermediate Partnership pursuant to the Partnership Agreement or the
Intermediate Partnership Agreement (except as described or referred to in
the Prospectus), or to our knowledge, pursuant to any other agreement or
instrument to which the Partnership, the Intermediate Partnership or the
General Partner are a party; neither the filing of the Registration
Statement nor the offering or sale of the Units as contemplated by this
Agreement gives rise to any rights for or relating to the
20
registration of any Units or other securities of the Partnership pursuant
to the Partnership Agreement or the Intermediate Partnership Agreement, or
to our knowledge, pursuant to any other agreement or instrument to which
the Partnership, the Intermediate Partnership or the General Partner are a
party; to our knowledge there are no outstanding options or warrants to
purchase any Common Units or Subordinated Units or other partnership
interests in the Partnership or Intermediate Partnership issued or granted
by the Partnership or the Intermediate Partnership pursuant to any
agreement or other instrument to which the Partnership or the Intermediate
Partnership is a party;
(xxv) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the Partnership
prior to such Time of Delivery as of their respective effective or issue
dates (other than the financial statements, notes or schedules included or
omitted from the Registration Statement or Prospectus or other financial
data included in or omitted from the Registration Statement or Prospectus,
as to which such counsel need express no opinion) appeared on their face
to be responsive as to form in all material respects with the requirements
of the Act and the rules and regulations thereunder;
Such counsel shall also state that In the course of its
engagement to represent or advise the TC Entities and TransCanada
professionally, they have not become aware of any pending legal proceeding
before, or pending investigation by, any court or administrative agency or
authority of the United States of America or the State of New York, or any
arbitration tribunal, against any of the TC Entities, TransCanada or
Northern Border Pipeline Company in each case that is required to be
described in the Prospectus or the Registration Statement which has not
been so described. In making the foregoing statement, such counsel shall
have endeavored, to the extent they believe necessary, to determine from
lawyers currently in their firm who have performed substantive legal
services for any of the TC Entities or TransCanada, whether such services
involved substantive attention in the form of legal representation
concerning pending legal proceedings or pending investigations or overtly
threatened litigation of the nature referred to above, and such counsel
may rely upon certificates of officers of the TC Entities and TransCanada.
Beyond that, such counsel shall not make made any review, search or
investigation of public files or records or files or records of any of the
TC Entities, TransCanada or Northern Border Pipeline Company, or of their
respective transactions, or any other investigation or inquiry with
respect to the foregoing statement.
In addition, such counsel shall state that, in the course of
the preparation of the Registration Statement and the Prospectus they
participated in conferences with certain of the officers and
representatives of, and the independent public accountants for, the TC
Entities, TransCanada and Northern Border Pipeline at which the contents
of the Registration Statement and Prospectus were discussed. Such counsel
shall also state that, between the date of the Registration Statement and
the time of delivery of this opinion, they participated in additional
conferences with certain officers and representatives of the TC Entities,
TransCanada and Northern Border Pipeline at which the contents of the
Registration Statement and the Prospectus were discussed to a limited
extent. Given the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process, such counsel shall state that they are not passing
upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Prospectus, except as stated in paragraph 19 above. Such counsel shall
then state that, subject to the foregoing and on the basis of the
information they gained in the course of the performance of the services
referred to above, including information obtained from officers and
representatives of the TC Entities, TransCanada and Northern Border
PipeLine (i) no facts have come to their attention that cause them to
believe that the Registration Statement, at the time it became effective,
contained any 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 the Prospectus, as of its date,
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the
21
statements therein, in the light of the circumstances under which they
were made, not misleading, and (ii) they do not know of any contract or
other document of a character required to be filed as an exhibit to the
Registration Statement which are not filed as required. Also, subject to
the foregoing, such counsel shall state that no facts have come to their
attention in the course of the proceedings described in the second
sentence of this paragraph that cause them to believe that the Prospectus,
as of the date and time of delivery hereof, contains any untrue statement
of a material fact or omits 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. In each case, however, such counsel may
state that they do not express any view or belief with respect to (i)
financial statements, notes or schedules included or omitted in the
Registration Statement or the Prospectus, (ii) other financial data
included in or omitted from the Registration Statement or Prospectus, or
(iii) discussions of the regulation of TransCanada's, Northern Border
Pipeline's or the TC Entities' businesses by the Federal Energy Regulatory
Commission or similar federal or state laws. In connection with the
foregoing, such counsel may state, that it is the understanding of the
Underwriters that such counsel does not act as United States regulatory
counsel to TransCanada, Northern Border Pipeline or the TC Entities and
that they do not hold themselves out as expert in the regulation of the
generation, transportation, distribution or delivery of natural gas, oil,
electricity or other specially regulated commodities or services,
including pipelines, transmission lines, storage facilities and related
facilities and equipment, or the import or export of such commodities or
services;
(d) Xxxxxxxx Xxxxxx, counsel for the Partnership, shall have
furnished to you her written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) the statements in the Registration Statement and
the Prospectus under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Settlement of 1995 FERC
Rate Case and Project Cost Containment Mechanism" and "Business of
Northern Border Pipeline--FERC Regulation," insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate and fair in all material respects;
(ii) The issue and sale of the Units by the
Partnership and the consummation of the transactions contemplated by this
Agreement, the Contribution Agreement, the Partnership Agreement and the
Intermediate Partnership Agreement do not require under present law any
filing or registration by TransCanada or any of the TC Entities with, or
approval or consent to any TC Entity or TransCanada of, the Federal Energy
Regulatory Commission that has not been made or obtained, except
_________;
(iii) None of the TC Entities or TransCanada is nor,
after giving effect to the offering and sale of the Units and the
application of the proceeds thereof as described in the Prospectus, will
be subject to regulation as a "holding company" or "affiliate" of a
holding company or public utility, as defined in the Public Utility
Holding Company Act of 1935;
(iv) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which TransCanada, TransCan Northern, TransCanada
Border PipeLine or Northern Border PipeLine Company is a party or of which
any property of such entities is the subject which, if determined
adversely to any such party would, individually or in the aggregate,
result in a Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
(v) The Revolving Credit Agreement has been validly
executed and delivered by TransCanada PipeLine USA, constitutes a valid
and binding obligation of and is enforceable against TransCanada PipeLine
USA in accordance with its terms, subject to (A) applicable
22
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws from time to time in effect affecting creditors' rights and
remedies generally and general principles of equity (regardless of whether
such principles are considered in a proceeding at law or in equity) and
(B) public policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair dealing.
(e) Xxxxxx Xxxx, Canadian counsel for TransCanada, shall have
furnished to you his written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) TransCanada is validly existing as a corporation
in good standing under the laws of Canada, with corporate power and
authority to own its properties and conduct its business as described in
the Prospectus;
(ii) TransCanada has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification or is subject
to no material liability or disability by reason of failure to be so
qualified in any such jurisdiction which would reasonably be expected to
have a TC Material Adverse Effect;
(iii) Each of this Agreement and the Contribution
Agreement has been duly authorized, executed and delivered by TransCanada;
(iv) All of the issued and outstanding shares of
capital stock of each of TransCan Northern and TransCanada Border PipeLine
are owned of record by TransCanada (or a wholly-owned subsidiary of
TransCanada) free and clear of all liens, security interests or adverse
claims (as defined above);
(v) The issue and sale of the Units being delivered
at such Time of Delivery by the Partnership and the performance by
TransCanada, TransCan Northern and TransCanada Border PipeLine of their
respective obligations under this Agreement and the consummation of the
transactions herein contemplated (A) will not result in a breach or
violate any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which any of such entities is a
party or by which any of such entities is bound or to which any of the
property or assets of any of such entities is subject, (B) will not result
in any violation of or conflict with the provisions of the articles of
incorporation, by-laws or other organizational documents of TransCanada or
violate or conflict with any Canadian (federal or provincial) statute
applicable to TransCanada, (C) will not violate or conflict with any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over TransCanada or any of
its properties and (D) will not result in the creation or imposition of
any lien, security interest or other encumbrance upon any property or
assets of any of the Partnership Entities pursuant to any agreement or
other instrument to which any of the TC Entities or TransCanada is a
party, except, in the case of clauses (A), (C) or (D) which, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect; and
(vi) No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by TransCanada of the
transactions contemplated by this Agreement or as described in the
Prospectus.
(f) Xxxxx & Xxxxxxxxx LLP, Texas counsel to the Partnership, shall
have furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
23
(i) Northern Border Pipeline is validly existing as a
general partnership under the laws of the State of Texas, with full
partnership power and authority to own, lease and operate its properties
and conduct its business in all material respects as described in the
Prospectus;
(ii) The issue and sale of the Units being delivered
at such Time of Delivery by the Partnership and the compliance by the TC
Entities and TransCanada with all of the provisions of this Agreement and
the consummation of the transactions contemplated herein and in the
Prospectus (including, without limitation, the transfer by TransCan
Northern and TransCanada Border PipeLine of the 30% general partner
interest in Northern Border Pipeline to the Intermediate Partnership) will
not violate or conflict with the provisions of the General Partnership
Agreement or other governing documents of Northern Border Pipeline;
(iii) At such Time of Delivery, the Intermediate
Partnership owns a 30% general partnership interest in Northern Border
Pipeline; such general partner interest is owned of record by the
Intermediate Partnership free and clear of all liens, security interests
and other adverse claims (as defined herein);
(iv) The General Partnership Agreement (including the
Eighth Supplement thereto) governing Northern Border Pipeline, as amended
and in effect on such Time of Delivery, constitutes a valid and legally
binding agreement of the Intermediate Partnership and is enforceable
against the Intermediate Partnership in accordance with its terms, subject
to (A) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws from time to time in effect
affecting creditors' rights and remedies generally and general principles
of equity (regardless of whether such principles are considered in a
proceeding at law or in equity) and (B) public policy, applicable law
relating to fiduciary duties and indemnification and an implied covenant
of good faith and fair dealing;
(v) The Contribution Agreement constitutes a valid
and legally binding agreement of TransCanada Border PipeLine, TransCan
Northern, TransCanada, the Partnership, the Intermediate Partnership and
the General Partner and is enforceable against such parties in accordance
with its terms, subject to (A) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws from time
to time in effect affecting creditors' rights and remedies generally and
general principles of equity (regardless of whether such principles are
considered in a proceeding at law or in equity) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing;
(g) _________, Nevada counsel to the TC Entities, shall have
furnished to you their written opinion, dated such time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) TransCanada Border PipeLine in validly existing
as a corporation in good standing under the laws of the State of Nevada
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and
(ii) Each of the Underwriting Agreement, the
Contribution Agreement and the Eighth Supplement to the General
Partnership Agreement of Northern Border Pipeline has been duly authorized
by TransCanada Border PipeLine.
(h) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery, KPMG LLP and
Xxxxxx Xxxxxxxx LLP shall each have furnished to you a letter, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
to the effect set forth in Annex I hereto (the executed copy of the
24
letter delivered prior to the execution of this Agreement is attached as Annex
I(a) hereto and a draft of the form of letter to be delivered on the effective
date of any post-effective amendment to the Registration Statement and as of
each Time of Delivery is attached as Annex I(b) hereto);
(i) (i) None of the TC Entities or Northern Border Pipeline shall
have sustained since the latest audited financial statements included in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capitalization or long-term debt of any of the TC Entities or
Northern Border Pipeline or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, partners' capital or results of operations of any of the TC Entities,
taken as a whole, or Northern Border Pipeline, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in Clause (i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Units being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(j) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded Northern Border Pipeline's debt securities by
any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of Northern Border Pipeline's debt securities;
(k) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or NASDAQ; (ii) a suspension
or material limitation in trading in the Partnership's securities; (iii) a
suspension or material limitation in the trading of the securities of
_________________________; (iv) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (v) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Units being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(l) The Units at such Time of Delivery shall have been duly listed
for quotation on NASDAQ;
(m) The Partnership shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement;
(n) At the First Time of Delivery, (i) each of the Operative
Documents shall have been executed and delivered and become effective and (ii)
the transactions contemplated by the Operative Documents to occur at the First
Time of Delivery shall have been consummated;
(o) The Partnership has obtained and delivered to the Underwriters
executed copies of an agreement from each officer and director of the General
Partner substantially to the effect set forth in Section 5(e) hereof in form and
substance satisfactory to you; and
(p) The Partnership shall have furnished or caused to be furnished
to you at such Time of Delivery certificates of officers of the Partnership
satisfactory to you as to the accuracy of the
25
representations and warranties of the Partnership herein at and as of such Time
of Delivery, as to the performance by the Partnership of all of their respective
obligations hereunder to be performed at or prior to such Time of Delivery, and
as to such other matters as you may reasonably request, and the Partnership
shall have furnished or caused to be furnished certificates as to the matters
set forth in subsections (a) and (i) of this Section.
8. (a) Each of the TC Entities and TransCanada, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; PROVIDED, HOWEVER, that each of
the TC Entities and TransCanada shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Partnership by any
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the TC
Entities and TransCanada against any losses, claims, damages or liabilities to
which any of the TC Entities or TransCanada may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Partnership by such
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and will
reimburse the TC Entities and TransCanada for any legal or other expenses
reasonably incurred by the TC Entities and TransCanada in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party (which consent shall
not be unreasonably withheld or delayed), be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the
26
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the TC Entities and TransCanada on the one hand
and the Underwriters on the other from the offering of the Units. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the TC Entities and TransCanada on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the TC Entities and TransCanada on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Partnership bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, 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 TC Entities or TransCanada on the one hand or the Underwriters
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. Each of the TC
Entities, TransCanada and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
PRO RATA allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Units underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the TC Entities and TransCanada under this
Section 8 shall be in addition to any liability which they may otherwise have
and shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the General Partner
(including any person who, with his or her consent, is named in the Registration
Statement as about to become a director of the General Partner) and to each
person, if any, who controls the General Partner within the meaning of the Act.
27
9. (a) If any Underwriter shall default in its obligation to purchase
the Units which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Units on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Units, then the Partnership shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Units on such terms. In the event that,
within the respective prescribed periods, you notify the Partnership that you
have so arranged for the purchase of such Units, or the Partnership notifies you
that they have so arranged for the purchase of such Units, you or the
Partnership shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Partnership agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Units.
(b) If, after giving effect to any arrangements for the purchase
of the Units of a defaulting Underwriter or Underwriters by you and the
Partnership as provided in subsection (a) above, the aggregate number of such
Units which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Units to be purchased at such Time of Delivery, then the
Partnership shall have the right to require each non-defaulting Underwriter to
purchase the number of Units which such Underwriter agreed to purchase hereunder
at such Time of Delivery and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Units which
such Underwriter agreed to purchase hereunder) of the Units of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase
of the Units of a defaulting Underwriter or Underwriters by you and the
Partnership as provided in subsection (a) above, the aggregate number of such
Units which remains unpurchased exceeds one-eleventh of the aggregate number of
all of the Units to be purchased at such Time of Delivery, or if the Partnership
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Units of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and to sell the
Optional Units) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Partnership, except for the expenses to be
borne by the Partnership and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Partnership and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the
Partnership, or any officer or director or controlling person of the General
Partner, and shall survive delivery of and payment for the Units.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Partnership shall not be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason any Units are
not delivered by or on behalf of the Partnership as provided herein, the
Partnership will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Units not so delivered, but the Partnership
shall then be under no further liability to any Underwriter in respect of the
Units not so delivered except as provided in Sections 6 and 8 hereof.
28
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives of the several Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives of the several Underwriters
in care of Xxxxxxx, Sachs & Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, (facsimile number 212-357-1557) Attention: Registration Department; and
if to the Partnership shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Partnership set forth in the Registration
Statement, Attention: Secretary with a copy to the Agent for Service of Process
as set forth in the Registration Statement; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Partnership by you on
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the TC Entities and TransCanada, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the General
Partner and each person who controls the General Partner or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Units from any Underwriter shall be deemed
a successor or assign by reason merely of such purchase.
14. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any court within the
Borough of Manhattan of New York City, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the exclusive
jurisdiction of such courts in any such suit, action or proceeding. TransCanada
has appointed the General Partner, Four Greenspoint Plaza, 00000 Xxxxxxxxxx
Xxxxx, Xxxxxxx, Xxxxx 00000 as its authorized agent (the "Authorized Agent")
upon whom process may be served in any such action arising out of or based on
this Agreement or the transactions contemplated hereby which may be instituted
in any such court by any Underwriter or by any person who controls any
Underwriter, expressly consents to the jurisdiction of any such court in respect
of any such action, and waives any other requirements of or objections to
personal jurisdiction with respect thereto. Such appointment shall be
irrevocable. TransCanada represents and warrants that the Authorized Agent has
agreed to act as such agent for service at process and agrees to take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to TransCanada shall be deemed, in every respect, effective service
of process upon such party.
15. In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, TransCanada will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of the judgment currency actually received by
such Underwriter. The foregoing indemnity shall constitute a separate and
independent obligation of TransCanada and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term "rate
of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
29
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Partnership and each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, each of the TC
Entities and TransCanada. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Partnership for examination, upon request, but without warranty on your part
as to the authority of the signers thereof.
Very truly yours,
TC PIPELINES, LP
By: TC PipeLines GP, Inc.,
its General Partner
By:
----------------------------
Name:
----------------------
Title:
---------------------
TC PIPELINES INTERMEDIATE LIMITED
PARTNERSHIP
By: TC PipeLines GP, Inc.,
its General Partner
By:
----------------------------
Name:
----------------------
Title:
---------------------
TC PIPELINES GP, INC.
By:
----------------------------
Name:
----------------------
Title:
---------------------
TRANSCAN NORTHERN LTD.
30
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
TRANSCANADA BORDER PIPELINE LTD.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
TRANSCANADA PIPELINES LIMITED
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
BY:
-----------------------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
31
SCHEDULE I
NUMBER OF OPTIONAL UNITS
TOTAL NUMBER OF TO BE PURCHASED IF
FIRM UNITS TO BE MAXIMUM-OPTION
UNDERWRITER PURCHASED EXERCISED
----------- ---------------- ------------------------
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
---------------- ------------------------
Total.......................................
================ ========================
32
ANNEX I
DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Partnership and ____________ within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and
any supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Partnership for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
[SEPARATELY] furnished to the representatives of the Underwriters (the
"Representatives")[AND ARE ATTACHED HERETO];
(iii) They have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus as indicated in their reports thereon copies of
which [HAVE BEEN SEPARATELY FURNISHED TO THE REPRESENTATIVES] [AND ARE
ATTACHED HERETO] and on the basis of specified procedures including
inquiries of officials of the Partnership who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial position
of the Partnership for the five most recent fiscal years included in the
Prospectus agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such five
fiscal years which were included or incorporated by reference in the
Partnership's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the
Prospectus under selected captions with the disclosure requirements of
Regulation S-K and on the basis of limited procedures specified in such
letter nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of Items
301, 302, 402 and 503(d), respectively, of Regulation S-K;
33
(vi) On the basis of limited procedures, not
constituting an examination in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial statements
and other information referred to below, a reading of the latest available
interim financial statements of _____________, inspection of the minute
books of _____________ since the date of the latest audited financial
statements included in the Prospectus, inquiries of officials of
_____________ responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements
of income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data
and balance sheet items included in the Prospectus do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in
the Prospectus;
(C) the unaudited financial statements which
were not included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in Clause (A)
and any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for
the audited consolidated financial statements included in the
Prospectus;
(D) any unaudited pro forma consolidated
condensed financial statements included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five
days prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest financial statements included in the Prospectus) or any
increase in the consolidated long-term debt of the Partnership and
_____________, or any decreases in consolidated net current assets
or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the specified
date referred to in Clause (E) there were any
34
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in
each case for decreases or increases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(vii) In addition to the examination referred to in
their report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages
and financial information specified by the Representatives, which are
derived from the general accounting records of the Partnership and
_____________, which appear in the Prospectus, or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Partnership
and _____________ and have found them to be in agreement.
35
