Exhibit 1.1
TC PIPELINES, LP
________ 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 ........ common units representing limited partner interests in the
Partnership ("Common Units") and, at the election of the Underwriters, up to . .
. . . . additional Common Units. The aggregate of . . . . Common Units is herein
called the "Firm Units" and the aggregate of . . . . . 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 direct subsidiary of
TransCanada ("TransCan Northern") and TransCanada Border PipeLine, Ltd., a
Nevada corporation and wholly-owned indirect 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, 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 (as defined herein),
after giving effect to the issuance of the Firm Units, the
Partnership will have an authorized capitalization as set
forth in the
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Prospectus, and the 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, security interests,
equities, charges or claims;
xii. At such Time of Delivery, 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, security
interests or adverse claims;
xiii. At such Time of Delivery, 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, 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, security interests,
equities, charges or 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, security interests or adverse claims;
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;
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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 Norther 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 Norther 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 Norther Border Pipeline is a party or of
which any property of any of the TC Entities or Norther Border
Pipeline is the subject which, if determined adversely to any
of the TC Entities or Norther Border Pipeline could reasonably
be expected to, 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;
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xxi. None of the Partnership Entities or TransCanada
Border PipeLine is nor, after giving effect to the offering
and sale of the Units, 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, business prospects, 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 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") or
generally accepted accounting principles in Canada ("Canadian
GAAP"), as the case may be, 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
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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);
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;
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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. (the "Revolving Credit Facility"), and
________________ (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 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 or Canadian GAAP, as the case may
be, 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 listing, subject to official notice
of issuance, on the Nasdaq National Market (the "Exchange");
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;
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
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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;
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
9
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. 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, security interests,
equities, charges or 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, security interests, equities, charges or
claims;
xlv. 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;
xlvi. 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;
xlvii. 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;
xlviii. 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;
xlix. 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
10
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 have a material adverse effect on the condition
(financial or otherwise) or on the business, properties or
results of operations of Northern Border Pipeline;
l. 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;
li. 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.
lii. The TC Entities have reviewed Northern Border
Pipeline's operations and that of any third parties with which
Northern Border Pipeline has a material relationship to
evaluate the extent to which the business or operations
Northern Border Pipeline 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 the Year 2000
Problem will have a material adverse effect on the general
affairs, management, the current or future consolidated
financial position, business prospects, partners' capital or
results of operations of Northern Border Pipeline or result in
any material loss or interference with Northern Border
Pipeline's business or operations;
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");
11
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, equities
or 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 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 up on 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;
12
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, constitutes a
valid and binding agreement and is enforceable against
TransCanada in accordance with its respective terms;
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 ................... 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.
13
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, Xxxxx & 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, Sachs & 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, Xxxxx & 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, Sachs & 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, Xxxxx & Co. in the written notice given by Xxxxxxx,
Sachs & Co. of the Underwriters' election to purchase such Optional Units, or
such other time and date as Xxxxxxx, Xxxxx & 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
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;
14
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 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, contract to sell or otherwise dispose of, except as provided
hereunder any Common Units, Subordinated Units or any securities of the
Partnership that are substantially similar to the 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,
Subordinated Units or any such substantially similar securities (other than
pursuant to employee stock option plans existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of, the date
of this Agreement), 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);
15
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, subject to notice of
issuance, the Units on the Exchange;
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 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 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 the Exchange; 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:
16
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;
x. 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:
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 ______ 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;
17
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 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 _______ 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 _________ 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 _________ Common
Units, _________ Subordinated Units, and the Incentive
Distribution Rights to TransCanada Border PipeLine, the
redemption by the Partnership of _________ Common Units from
TransCanada Border PipeLine and the transfer by TransCanada
Border PipeLine of _________ 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;
18
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;
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
19
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 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;
20
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 are acting
without notice of any adverse claim (as defined in 8-102(a) of
the Uniform Commercial Code of the State of New York), upon
the delivery to the Underwriters of certificates evidencing
the Units issued in the name of the Underwriters and payment
by the Underwriters of the purchase price for the Units, the
Underwriters will be "protected purchasers" (as such term is
used in Section 8-303 of the Uniform Commercial Code of the
State of New York).
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
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. Given the limitations inherent
in the independent vertification of factual matters and the
character of determinations involved in the registration
process, which counsel shall state 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.
21
(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 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 such counsel's 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 caption "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 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 _________; and
22
iii. None of the TC Entities or TransCanada is nor,
after giving effect to the offering and sale of the Units,
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.
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 (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of officers of such entities or certificates
of public officials of various jurisdictions, provided that
such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and
certificates);
iii. 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;
iv. This Agreement has been duly authorized, executed
and delivered by TransCanada;
v. 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 free and
clear of all liens, security interests or adverse claims (as
defined above);
vi. [Each of the Operative Agreements to which
TransCanada is a party has been duly authorized and validly
executed and delivered by TransCanada, constitutes a valid and
binding obligation of and is enforceable against TransCanada
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
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; (THIS OPINION IS REQUESTED ONLY IF ANY
OF THE OPERATIVE AGREEMENTS WILL BE GOVERNED BY THE LAWS OF
CANADA)]
vii. 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 with all 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 statute, (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, 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
23
viii. 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.
x. 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:
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, claims as defined herein)
[(A) in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware naming the
Intermediate Partnership or TransCan Northern as debtor is on
file in the offices of the Secretary of State of the State of
Delaware, (B) in respect of which a financing statement under
the Uniform Commercial Code of the State of Nevada naming
TransCanada Border PipeLine as debtor is on file in the
offices of the Secretary of State of the State of Nevada or
(C) otherwise known to such counsel;]
iv. The General Partnership Agreement 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;
24
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. The Underwriting Agreement and each of the
Operative Agreements to which TransCanada Border PipeLine is a
party 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 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 Exchange; (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 (vi) 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;
25
l. The Units at such Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange;
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, TransCan Northern and TransCanada Border Pipeline and each
executive officer and director of TransCanada, 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 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 (h) 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.
26
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 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 (d) 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 (e) 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 (e). 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 (e) 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 (e), 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.
27
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.
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.
28
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.
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, Sachs & Co. on behalf of you as the
representatives.
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 in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (facsimile number 212-
_________) 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.
29
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 ___________________, New York, New York, 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.
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:
30
TC PIPELINES GP, INC.
By:
Name:
Title:
TRANSCAN NORTHERN LTD.
By:
Name:
Title:
TRANSCANADA BORDER PIPELINE LTD.
By:
Name:
Title:
TRANSCANADA PIPELINES LIMITED
By:
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Sachs & 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
TOTAL NUMBER OF NUMBER OF OPTIONAL UNITS TO
FIRM UNITS TO BE BE PURCHASED IF MAXIMUM
UNDERWRITER PURCHASED OPTION EXERCISED
----------- --------- ----------------
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
PaineWebber Incorporated
Total.......................................................
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;
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
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.
