EX-1.1
PURCHASE AGREEMENT
among
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
as Issuer
and
CHASE SECURITIES INC.
and
CREDIT SUISSE FIRST BOSTON CORPORATION
as Initial Purchasers
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
$200,000,000 8.68% Senior Notes due 2010
PURCHASE AGREEMENT
May 22, 2000
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
c/o Chase Securities Inc.
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Ladies and Gentlemen:
Iroquois Gas Transmission Systems, L.P., a Delaware limited
partnership (the "Partnership"), proposes to issue and sell $200,000,000
aggregate principal amount of its 8.68% Senior Notes due 2010 (the
"Securities"). The Securities will be issued pursuant to an Indenture to be
dated as of May 30, 2000 (the "Indenture") between the Partnership and The Chase
Manhattan Bank, as trustee (the "Trustee"). The Partnership hereby confirms its
agreement with Chase Securities Inc. ("CSI") and Credit Suisse First Boston
Corporation (together with CSI, the "Initial Purchasers") concerning the
purchase of the Securities from the Partnership by the several Initial
Purchasers.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon exemptions therefrom. The Partnership
has prepared a preliminary offering memorandum dated May 4, 2000 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum dated
the date hereof (the "Offering Memorandum") setting forth information concerning
the Partnership and the Securities. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Partnership to the Initial Purchasers pursuant to the terms of this
Agreement. Any references herein to the Preliminary Offering Memorandum and the
Offering Memorandum shall be deemed to include all amendments and supplements
thereto, unless otherwise noted. The Partnership hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers
and their direct and indirect transferees) will be entitled to the benefits of
an Exchange and Registration Rights Agreement, substantially in the form
attached hereto as Annex A (the "Registration Rights Agreement"), pursuant to
which the Partnership will agree to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement under the Securities
Act (the "Exchange Offer Registration Statement") registering an issue of senior
notes of the Partnership (the "Exchange Securities") which are identical in all
material respects to the
Securities (except that the Exchange Securities will not contain terms with
respect to transfer restrictions) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
Concurrently with the closing of the offering of the
Securities, the Partnership shall enter into a Term Facility in an amount equal
to $200 million (the "Term Facility") and a Revolving Credit Facility in the
amount of $10 million (the "Revolving Credit Facility"). The Term Facility and
the Revolving Credit Facility shall be evidenced by a loan agreement among the
Partnership and CSI and the other lenders thereto (the "Loan Agreement").
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the
Partnership. The Partnership represents and warrants to, and agrees with, the
several Initial Purchasers on and as of the date hereof and the Closing Date (as
defined in Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the
Closing Date the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided that the Partnership makes no representation
or warranty as to information contained in or omitted from the
Preliminary Offering Memorandum or the Offering Memorandum in reliance
upon and in conformity with written information relating to the Initial
Purchasers furnished to the Partnership by or on behalf of any Initial
Purchaser specifically for use therein (the "Initial Purchasers'
Information").
(b) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities
by the Initial Purchasers in the manner contemplated by this Agreement
and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
(c) The Partnership (i) has been duly formed and is validly
existing and in good standing under the laws of the jurisdiction of its
formation and (ii) is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification
except to the extent that the failure to be so qualified or in good
standing would not have a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects
of the Partnership and its subsidiaries taken as a whole (a "Material
Adverse Effect"); no further governmental consent (other than those
already obtained and routine periodic filings) is necessary in
connection with the continued existence of the Partnership as a limited
partnership under the laws of the jurisdiction of its formation. Each
of the
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Partnership's subsidiaries has been duly incorporated and is
validly existing as corporations in good standing under the laws of its
respective jurisdiction of incorporation, is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction in which its respective ownership or lease of property or
the conduct of its respective businesses requires such qualification
except to the extent that the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
(d) The Partnership and each of its subsidiaries have all
power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged and
as described in the Offering Memorandum, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a Material Adverse Effect.
(e) The Partnership has an authorized capitalization as set
forth in the Offering Memorandum under the heading "Capitalization";
all of the partnership interests in the Partnership have been duly and
validly authorized and issued and are fully paid and non-assessable;
and the partners' equity of the Partnership conforms in all material
respects to the description thereof contained in the Offering
Memorandum. All of the outstanding shares of capital stock of each
subsidiary of the Partnership have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Partnership, free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party.
(f) The Partnership has full right, power and authority to
execute and deliver this Agreement, the Indenture, the Registration
Rights Agreement, the Securities and the Loan Agreement (collectively,
the "Senior Debt Documents") and to perform its obligations hereunder
and thereunder; and all action required to be taken for the due and
proper authorization, execution and delivery of each of the Senior Debt
Documents and the consummation of the transactions contemplated thereby
have been duly and validly taken.
(g) This Agreement has been duly authorized, executed and
delivered by the Partnership and constitutes a valid and legally
binding agreement of the Partnership.
(h) The Registration Rights Agreement has been duly authorized
by the Partnership and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid
and legally binding agreement of the Partnership enforceable against
the Partnership in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or
at law).
(i) The Indenture has been duly authorized by the Partnership
and, when duly executed and delivered in accordance with its terms by
each of the parties thereto, will constitute a valid and legally
binding agreement of the Partnership enforceable against the
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Partnership in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or
at law). On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and
the rules and regulations of the Commission applicable to an indenture
which is qualified thereunder.
(j) The Securities have been duly authorized by the
Partnership and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein,
will be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Partnership entitled to
the benefits of the Indenture and enforceable against the Partnership
in accordance with their terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(k) The Loan Agreement has been duly authorized, and when
executed and delivered by the Partnership will constitute a valid and
legally binding agreement of the Partnership enforceable against the
Partnership in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or
at law).
(l) The Primary Agreements (as such term is defined in the
Indenture) have been duly authorized, executed and delivered by the
Partnership and constitute valid and legally binding agreements of the
Partnership, enforceable against the Partnership in accordance with
their terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(m) Each Senior Debt Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum.
(n) The execution, delivery and performance by the Partnership
of each of the Senior Debt Documents, the issuance, authentication,
sale and delivery of the Securities and compliance by the Partnership
with the terms thereof and the consummation of the transactions
contemplated by the Senior Debt Documents will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Partnership or any of its subsidiaries pursuant to, any material
indenture, mortgage, deed of trust, loan agreement or other material
contract, agreement
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or instrument to which the Partnership or any of its subsidiaries is a
party or by which the Partnership or any of its subsidiaries is bound
or to which any of the property or assets of the Partnership or any of
its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Partnership or any of its subsidiaries or any statute (other than
Section 406 of ERISA and Section 4975 of the Internal Revenue Code, of
1986, as amended) or any judgment, order, decree, rule or regulation of
any court or arbitrator or governmental agency or body having
jurisdiction over the Partnership or any of its subsidiaries or any of
their properties or assets; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator
or governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Partnership of each of the Senior Debt Documents,
the issuance, authentication, sale and delivery of the Securities and
compliance by the Partnership with the terms thereof and the
consummation of the transactions contemplated by the Senior Debt
Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (i) which shall have been
obtained or made prior to the Closing Date and (ii) as may be required
to be obtained or made under the Securities Act and applicable state
securities laws as provided in the Registration Rights Agreement.
(o) PricewaterhouseCoopers LLP are independent certified
public accountants with respect to the Partnership and its subsidiaries
within the meaning of Rule 101 of the Code of Professional Conduct of
the American Institute of Certified Public Accountants ("AICPA") and
its interpretations and rulings thereunder. The historical financial
statements (including the related notes) contained in the Offering
Memorandum comply in all material respects with the requirements
applicable to a registration statement on Form S-1 under the Securities
Act (except that certain supporting schedules are omitted); such
financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods covered thereby and fairly present the financial position of
the entities purported to be covered thereby at the respective dates
indicated and the results of their operations and their cash flows for
the respective periods indicated; and the financial information
contained in the Offering Memorandum under the headings "Summary
Financial Information", "Capitalization", "Selected Historical
Financial Information" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" are derived from the
accounting records of the Partnership and its subsidiaries and fairly
present the information purported to be shown thereby. The other
historical financial and statistical information and data included in
the Offering Memorandum are, in all material respects, fairly
presented.
(p) There are no legal or governmental proceedings pending to
which the Partnership or any of its subsidiaries is a party or of which
any property or assets of the Partnership or any of its subsidiaries is
the subject, other than proceedings accurately described in all
material respects in the Preliminary Offering Memorandum and the
Offering Memorandum, which, singularly or in the aggregate, if
determined adversely to the Partnership or any of its subsidiaries,
could reasonably be expected to have a Material
5
Adverse Effect; and to the best knowledge of the Partnership, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(q) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency
or body which prevents the issuance of the Securities or suspends the
sale of the Securities in any jurisdiction in which the Securities are
being offered; no injunction, restraining order or order of any nature
by any federal or state court of competent jurisdiction has been issued
with respect to the Partnership or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Securities or the use of
the Preliminary Offering Memorandum or the Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to
the best knowledge of the Partnership, threatened against or affecting
the Partnership or any of its subsidiaries before any court or
arbitrator or any governmental agency, body or official, domestic or
foreign, which could reasonably be expected to interfere with or
adversely affect the issuance of the Securities or in any manner draw
into question the validity or enforceability of any of the Senior Debt
Documents or any action taken or to be taken pursuant thereto; and the
Partnership has complied with any and all requests by any securities
authority in any jurisdiction for additional information to be included
in the Preliminary Offering Memorandum and the Offering Memorandum.
(r) Neither the Partnership nor any of its subsidiaries is (i)
in violation of its constituent documents, (ii) in default in any
material respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject
or (iii) in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject which violation referred to in this subsection (iii) could
reasonably be expected to have a Material Adverse Effect.
(s) The Partnership and each of its subsidiaries possess all
material licenses, certificates, authorizations and permits issued by,
and have made all declarations and filings with, the appropriate
federal, state or foreign regulatory agencies or bodies which are
necessary for the ownership of their respective properties or the
conduct of their respective businesses as described in the Offering
Memorandum, except where the failure to possess or make the same would
not, singularly or in the aggregate, have a Material Adverse Effect,
and neither the Partnership nor any of its subsidiaries has received
notification of any revocation or modification of any such license,
certificate, authorization or permit which, singly or in the aggregate,
would have a Material Adverse Effect or has any reason to believe that
any such license, certificate, authorization or permit will not be
renewed in the ordinary course.
(t) The Partnership and each of its subsidiaries have filed
all federal, state, local and foreign income and franchise tax returns
required by law to be filed through the date
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hereof and have paid all taxes due thereon, and no tax deficiency has
been determined adversely to the Partnership or any of its subsidiaries
which has had (nor does the Partnership or any of its subsidiaries have
any knowledge of any tax deficiency which, if determined adversely to
the Partnership or any of its subsidiaries, could reasonably be
expected to have) a Material Adverse Effect.
(u) Neither the Partnership nor any of its subsidiaries is (i)
an "investment company" or a Partnership "controlled by" an investment
company within the meaning of the Investment Partnership Act of 1940,
as amended (the "Investment Partnership Act"), and the rules and
regulations of the Commission thereunder or (ii) a "holding company" or
a "subsidiary company" of a holding company or an "affiliate" thereof
within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(v) The Partnership and each of its subsidiaries have
insurance covering their respective properties, operations, personnel
and businesses, which insurance is in amounts and insures against such
losses and risks as are adequate to protect the Partnership and its
subsidiaries and their respective businesses. Neither the Partnership
nor any of its subsidiaries has received notice from any insurer or
agent of such insurer that capital improvements or other expenditures
are required or necessary to be made in order to continue such
insurance.
(w) The Partnership and each of its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property which are
material to the business of the Partnership and its subsidiaries, in
each case free and clear of all liens, encumbrances, claims and defects
and imperfections of title except such as (i) do not materially
interfere with the use made and proposed to be made of such property by
the Partnership and its subsidiaries, (ii) could not reasonably be
expected to have a Material Adverse Effect or (iii) are Permitted Liens
(as such term is defined in the Indenture).
(x) No labor disturbance by or dispute with the employees of
Iroquois Pipeline Operating Company exists or, to the best knowledge of
the Partnership, is contemplated or threatened that could have a
Material Adverse Effect.
(y) Except as would not have a Material Adverse Effect, each
such employee benefit plan is in compliance in all material respects
with applicable law, including ERISA and the Code; except as would not
have a Material Adverse Effect, the Partnership and each of its
subsidiaries have not incurred and do not expect to incur liability
under Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan for which the Partnership or any of
its subsidiaries would have any liability; and except as would not have
a Material Adverse Effect, each such pension plan that is intended to
be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which could reasonably be expected to cause the loss of
such qualification.
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(z) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of
any kind of toxic or other wastes or other hazardous substances, in
each case which are regulated under existing environmental laws, by the
Partnership or any of its subsidiaries (or, to the best knowledge of
the Partnership, by any other entity (including any predecessor) for
whose acts or omissions the Partnership or any of its subsidiaries is
liable) upon any of the property now or previously owned or leased by
the Partnership or any of its subsidiaries, or upon any other property,
in violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit, or which would, under any statute or any
ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any
violation or liability that could not reasonably be expected to have,
singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; and there has been no disposal,
discharge, emission or other release by the Partnership or any of its
subsidiaries onto such property or into the environment surrounding
such property of any such toxic or other wastes or other hazardous
substances with respect to which the Partnership has knowledge, except
for any such disposal, discharge, emission or other release which could
not reasonably be expected to have, singularly or in the aggregate with
all such discharges and other releases, a Material Adverse Effect.
(aa) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(bb) None of the Partnership, any of its affiliates or any
person acting on its or their behalf has engaged or will engage in any
directed selling efforts (as such term is defined in Regulation S under
the Securities Act ("Regulation S")), and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S to the extent applicable.
(cc) Neither the Partnership nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as such
term is defined in the Securities Act), which is or will be integrated
with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(dd) None of the Partnership or any of its affiliates or any
other person acting on its or their behalf has engaged, in connection
with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act.
(ee) There are no securities of the Partnership registered
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or listed on a national securities exchange or quoted in a U.S.
automated inter-dealer quotation system.
(ff) The statements of projections with respect to revenues,
operating and maintenance expenses and capital expenditures contained
in the Preliminary Offering
8
Memorandum and the Offering Memorandum have been made in good faith and
are based on reasonable assumptions.
(gg) Since the date as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (i) there has
been no material adverse change or any development involving a
prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or business
prospects of the Partnership or any of its subsidiaries, whether or not
arising in the ordinary course of business, (ii) neither the
Partnership nor any of its subsidiaries has incurred any material
liability or obligation, direct or contingent, other than in the
ordinary course of business, (iii) neither the Partnership nor any of
its subsidiaries has entered into any material transaction other than
in the ordinary course of business and (iv) there has not been any
change in the partners' equity of the Partnership or long-term debt of
the Partnership or any of its subsidiaries, or any dividend or
distribution of any kind declared, paid or made by the Partnership on
its partners' equity.
(hh) The use of proceeds from the sale of the Securities by
the Partnership will not violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U, and X of the Board of
Governors of the Federal Reserve System.
(ii) The Year 2000 Problem has not and will not have a
material adverse effect on the general affairs, management, the current
or future consolidated financial position, business prospects, or
results of operations of the Partnership and its subsidiaries or
resulted or will result in any material loss or interference with the
Partnership's 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
operations of mechanical or electrical systems of any kind does 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
(jj) The Partnership is not an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act
of 1940, as amended, and is not, and is not owned by, a closed-end
investment company required to be registered, but not registered, under
the Investment Company Act.
(kk) The list of contracts, agreements and instruments
attached as Schedule A to the written opinion of Shearman & Sterling
furnished pursuant to Section 5(d) hereof constitutes a complete and
accurate list of all material indentures, mortgages, deeds of trust,
loan agreements or other material contracts, agreements or instruments
to which the Partnership or Iroquois Pipeline Operating Company ("the
Operator") is a party or by which the Partnership or the Operator is
bound or to which any of the property or assets of the Partnership or
the Operator is subject.
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2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Partnership agrees to issue and sell
to each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Partnership, the principal amount of Securities set forth opposite the name of
such Initial Purchaser on Schedule 1 hereto at a purchase price equal to 99.125%
of the principal amount thereof. The Partnership shall not be obligated to
deliver any of the Securities except upon payment for all of the Securities to
be purchased as provided herein.
(b) The Initial Purchasers have advised the Partnership that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that (i)
it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (iii) it has solicited and will
solicit offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of their initial offering, only
(A) within the United States to persons whom it reasonably believes to be (i)
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each case,
in transactions in accordance with Rule 144A or (ii) "institutional accredited
investors" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Securities Act and (B) outside the United States to persons other
than U.S. persons in reliance on Regulation S under the Securities Act
("Regulation S").
(c) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) The Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act.
(ii) Such Initial Purchaser has offered and sold the Securities,
and will offer and sell the Securities, (A) as part of their
distribution at any time and (B) otherwise until 40 days after the
later of the commencement of the offering of the Securities and the
Closing Date, only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act.
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(iii) None of such Initial Purchaser or any of its affiliates or
any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities, and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S.
(iv) at or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, it will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other
remuneration that purchase Securities from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them by Regulation S."
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its affiliates or with the prior written
consent of the Partnership.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and prior to the date
six months after the Closing Date will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ and the Public Offers
of Securities Regulations 1995 with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom; and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
(e) Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Partnership pursuant hereto, such Initial
11
Purchaser shall furnish to that purchaser a copy of the Offering Memorandum (and
any amendment or supplement thereto that the Partnership shall have furnished to
such Initial Purchaser prior to the date of such confirmation of sale). In
addition to the foregoing, each Initial Purchaser acknowledges and agrees that
the Partnership and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(d) and (e), counsel for the Partnership and
for the Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers and their compliance
with their agreements contained in this Section 2, and each Initial Purchaser
hereby consents to such reliance.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
New York, New York, or at such other place as shall be agreed upon by the
Initial Purchasers and the Partnership, at 10:00 A.M., New York City time, on
May 30, 2000, or at such other time or date, not later than seven full business
days thereafter, as shall be agreed upon by the Initial Purchasers and the
Partnership (such date and time of payment and delivery being referred to herein
as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Partnership by wire or book-entry transfer of
same-day funds to such account or accounts as the Partnership shall specify
prior to the Closing Date or by such other means as the parties hereto shall
agree prior to the Closing Date against delivery to the Initial Purchasers of
the certificates evidencing the Securities. Upon delivery, the Securities shall
be in global form, registered in such names and in such denominations as CSI on
behalf of the Initial Purchasers shall have requested in writing not less than
two full business days prior to the Closing Date. The Partnership agrees to make
one or more global certificates evidencing the Securities available for
inspection by CSI on behalf of the Initial Purchasers in New York, New York at
least 24 hours prior to the Closing Date.
4. Further Agreements of the Partnership. The Partnership agrees with
each of the several Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum (as amended or supplemented from
time to time) in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; to advise
the Initial Purchasers promptly of any order preventing or suspending
the use of the Preliminary Offering Memorandum or the Offering
Memorandum, of any suspension of the qualification of the Securities
for offering or sale in any jurisdiction and of the initiation or
threatening of any proceeding for any such purpose; and to use its best
efforts to prevent the issuance of any such order preventing or
suspending the use of the Preliminary Offering Memorandum or the
Offering Memorandum or suspending any such qualification and, if any
such suspension is issued, to obtain the lifting thereof at the
earliest possible time;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of
the Preliminary Offering
12
Memorandum and the Offering Memorandum (and any amendments or
supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Initial
Purchasers and counsel for the Initial Purchasers and not to effect any
such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Partnership after a reasonable
period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Partnership, to
amend or supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the
Offering Memorandum, as so amended or supplemented, will comply with
applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Partnership is then subject to and in
compliance with Section 13 or 15(d) of the Exchange Act (the foregoing
agreement being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
(f) for so long as the Securities are outstanding, to furnish
upon request to the Initial Purchasers copies of any annual reports,
quarterly reports and current reports filed by the Partnership with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Partnership to the Trustee
or to the holders of the Securities pursuant to the Indenture or the
Exchange Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchasers may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may designate and to continue
such qualifications in effect for so long as required for the resale of
the Securities; provided that the Partnership and its subsidiaries
shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction;
13
(h) to assist the Initial Purchasers in arranging for the
Securities to be eligible for clearance and settlement through The
Depository Trust Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act to cease to be applicable to the offering
and sale of the Securities as contemplated by this Agreement and the
Offering Memorandum;
(k) for a period of 90 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement
for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the
Partnership or any of its subsidiaries (other than the Securities)
without the prior written consent of the Initial Purchasers; provided,
however, that the foregoing shall not prevent registration of the
Securities pursuant to the Registration Rights Agreement or entry into
any Interest Rate Agreement.
(l) during the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the
Initial Purchasers, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities
purchased by the Partnership or any of its affiliates and resold in a
transaction registered under the Securities Act;
(m) in connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchasers;
(n) to furnish to each of the Initial Purchasers on the date
hereof a copy of the independent accountants' report included in the
Offering Memorandum signed by the accountants rendering such report;
(o) to do and perform in all material respects all things
required to be done and performed by it under this Agreement that are
within its control prior to or after the
14
Closing Date, and to use its best efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(p) to not take any action from the date hereof which, if
taken after the execution and delivery of the Indenture and giving
effect to the transactions contemplated thereby, would have violated
any of the covenants contained in the Indenture;
(q) prior to the Closing Date, not to issue any press release
or other communication directly or indirectly or hold any press
conference with respect to the Partnership, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Partnership and
of which the Initial Purchasers are notified), without the prior
written consent of the Initial Purchasers, unless in the judgment of
the Partnership and its counsel, and after notification to the Initial
Purchasers, such press release or communication is consistent with Rule
135(c) and Rule 202(c) under the Securities Act or is required by law;
and
(r) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
5. Conditions of Initial Purchasers' Obligations. The
respective obligations of the several Initial Purchasers hereunder are subject
to the accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Partnership contained herein, to the
accuracy of the statements of the Partnership made in any certificates delivered
pursuant hereto, to the performance by the Partnership of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchasers may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Partnership on or prior to the Closing Date that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which is material or omits to state any fact
which is material and is required to be stated therein or is necessary
to make the statements therein not misleading unless an amendment or
supplement to the Offering Memorandum shall have been issued with the
consent of the Initial Purchasers rendering such statement not untrue
or misleading or correcting such omission of fact.
(c) All corporate proceedings and other legal matters with
respect to the authorization, form and validity of each of the Senior
Debt Documents and the Offering Memorandum, and all other legal matters
relating to the Senior Debt Documents and the
15
transactions contemplated thereby, shall be satisfactory in all
material respects to the Initial Purchasers, and the Partnership shall
have furnished to the Initial Purchasers all documents and information
that they or their counsel may reasonably request to enable them to
pass upon such matters.
(d) Shearman & Sterling shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Partnership, and
the general counsel to the Partnership shall have furnished to the
Initial Purchasers its written opinion, each addressed to the Initial
Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set
forth in Annexes B-1 and B-2 hereto.
(e) The Initial Purchasers shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchasers may reasonably require, and the Partnership shall
have furnished to such counsel such documents and information as they
request for the purpose of enabling them to pass upon such matters.
(f) The Initial Purchasers shall have received a letter (the
"Initial Letter") of PricewaterhouseCoopers LLP addressed to the
Initial Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers, substantially to the effect set
forth in Annex C hereto.
(g) The Initial Purchasers shall have received a letter (the
"Bring-Down Letter") of PricewaterhouseCoopers LLP, addressed to the
Initial Purchasers and dated the Closing Date (i) confirming that they
are independent public accountants with respect to the Partnership and
its subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings
thereunder, (ii) stating, as of the date of the Bring-Down Letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Offering Memorandum, as of a date not more than three business
days prior to the date of the Bring-Down Letter), that the conclusions
and findings of such accountants with respect to the financial
information and other matters covered by the Initial Letter are
accurate and (iii) confirming in all material respects the conclusions
and findings set forth in the Initial Letter.
(h) The Partnership shall have furnished to the Initial
Purchasers a certificate, dated the Closing Date, signed by its chief
executive officer and chief financial officer, stating that (A) such
officers have carefully examined the Offering Memorandum, (B) in their
opinion, the Offering Memorandum, as of its date, did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and since the date of the
Offering Memorandum, no event has occurred which should have been set
forth in a supplement or amendment to the Offering Memorandum which was
not set forth in a
16
supplement or amendment so that the Offering Memorandum (as so amended
or supplemented) would not include any untrue statement of a material
fact and would not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
and (C) as of the Closing Date, the representations and warranties of
the Partnership in this Agreement are true and correct in all material
respects, the Partnership has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder on or prior to the Closing Date, and subsequent to the date
of the most recent financial statements contained in the Offering
Memorandum, there has been no material adverse change in the financial
position or results of operation of the Partnership or any of its
subsidiaries, or any change, or any development including a prospective
change, in or affecting the condition (financial or otherwise), results
of operations, business or prospects of the Partnership and its
subsidiaries taken as a whole, except as set forth in the Offering
Memorandum.
(i) The Initial Purchasers shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer serving on the management
committee of the of the Partnership.
(j) The Indenture shall have been duly executed and delivered
by the Partnership and the Trustee, and the Securities shall have been
duly executed and delivered by the Partnership and duly authenticated
by the Trustee.
(k) If any event shall have occurred that requires the
Partnership under Section 4(d) to prepare an amendment or supplement to
the Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchasers shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchasers reasonably in advance of the
Closing Date.
(l) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Offering Memorandum (exclusive of any amendment or supplement thereto),
there shall not have been any change in the partners' equity or
long-term debt or any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the
Partnership and its subsidiaries taken as a whole, the effect of which,
in any such case described above, is, in the reasonable judgment of the
Initial Purchasers, so material and adverse as to make it impracticable
or inadvisable to proceed with the sale or delivery of the Securities
on the terms and in the manner contemplated by this Agreement and the
Offering Memorandum (exclusive of any amendment or supplement thereto).
(m) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent
17
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Securities.
(n) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities by any "nationally recognized statistical rating
organization", as such term is defined by the Commission for purposes
of Rule 436(g)(2) of the rules and regulations of the Commission under
the Securities Act and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), its
rating of the Securities or any of the Partnership's other debt
securities.
(o) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
limited, or minimum prices shall have been established on any such
exchange or market by the Commission, by any such exchange or by any
other regulatory body or governmental authority having jurisdiction, or
trading in any securities of the Partnership on any exchange or in the
over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or (iii) an outbreak or
escalation of hostilities or a declaration by the United States of a
national emergency or war or (iv) a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of this clause (iv),
is, in the judgment of the Initial Purchasers, so material and adverse
as to make it impracticable or inadvisable to proceed with the sale or
the delivery of the Securities on the terms and in the manner
contemplated by this Agreement and in the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(p) The Initial Purchasers shall have received from ▇.▇. ▇▇▇▇,
Inc. (the "Independent Engineer") a certificate of a senior officer
dated the Closing Date, consenting to the references to the Independent
Engineer's Report in the Offering Memorandum and the use of the
Independent Engineer's Report appended to the Offering Memorandum and
certifying that since the date of the Independent Engineer's Report, no
event affecting the Independent Engineer's Report or the matters
referred to therein shall have occurred (A) which shall make untrue or
incorrect, as of the Closing Date, any information or statement
contained in the Independent Engineer's Report, or (B) which shall not
be reflected in the Independent Engineer's Report or the Offering
Memorandum but should be reflected therein in order to make the
statements and information contained in the Independent Engineer's
Report, or in the Offering Memorandum relating to matters referred to
in the Independent Engineer's Report, in light of the circumstances
under which they were made, not misleading.
(q) The Initial Purchasers shall have received from ICF
Resources Incorporated (the "Independent Market Consultant") a letter
in the form attached hereto as Annex D,
18
signed by a senior officer of ICF and dated as of the Closing Date,
consenting to the references to the Independent Market Consultant's
Report in the Offering Memorandum and the use of the Independent Market
Consultant's Report appended to the Offering Memorandum and certifying,
subject to the term of the letter, that since the date of the
Independent Market Consultant's Report, that the Independent Market
Consultant does not know of any events that would cause it to alter the
opinions expressed in its Independent Market Consultant's Report.
(r) The Loan Agreement shall have been duly authorized,
executed and delivered by the Partnership and the other parties
thereto, shall be in full force and effect with all conditions thereto
satisfied or waived and the security collateralizing the Original Loan
Agreement shall have been released.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers by notice given to and
received by the Partnership prior to delivery of and payment for the Securities
if, prior to that time, any of the events described in Section 5(l), (m), (n) or
(o) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing
Date, any Initial Purchaser defaults in the performance of its obligations under
this Agreement, the non-defaulting Initial Purchasers may make arrangements for
the purchase of the Securities which such defaulting Initial Purchaser agreed
but failed to purchase by other persons satisfactory to the Partnership and the
non-defaulting Initial Purchasers, but if no such arrangements are made within
36 hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers or the Partnership, except
that the Partnership will continue to be liable for the payment of expenses to
the extent set forth in Sections 8 and 12 and except that the provisions of
Sections 9 and 10 shall not terminate and shall remain in effect. As used in
this Agreement, the term "Initial Purchasers" includes, for all purposes of this
Agreement unless the context otherwise requires, any party not listed in
Schedule 1 hereto that, pursuant to this Section 7, purchases Securities which a
defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Partnership or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, either the non-defaulting Initial Purchasers or the
Partnership may postpone the Closing Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Partnership
or counsel for the Initial Purchasers may be necessary in the Offering
Memorandum or in any other document or arrangement, and the Partnership agrees
to promptly prepare any amendment or supplement to the Offering Memorandum that
effects any such changes.
19
8. Reimbursement of Initial Purchasers' Expenses. The
Partnership shall reimburse the Initial Purchasers for such reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been incurred by the Initial Purchasers in connection with this
Agreement and the proposed purchase and resale of the Securities.
9. Indemnification. (a) The Partnership shall indemnify and
hold harmless each Initial Purchaser, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 9(a) and
Section 10 as an Initial Purchaser), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which that Initial Purchaser may
become subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum or
the Offering Memorandum or in any amendment or supplement thereto or in any
information provided by the Partnership pursuant to Section 4(e) or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and shall
reimburse each Initial Purchaser promptly upon demand for any legal or other
expenses reasonably incurred by that Initial Purchaser in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Partnership
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Initial Purchasers'
Information; and provided, further, that with respect to any such untrue
statement in or omission from the Preliminary Offering Memorandum, the indemnity
agreement contained in this Section 9(a) shall not inure to the benefit of any
such Initial Purchaser to the extent that the sale to the person asserting any
such loss, claim, damage, liability or action was an initial resale by such
Initial Purchaser and any such loss, claim, damage, liability or action of or
with respect to such Initial Purchaser results from the fact that both (A) to
the extent required by applicable law, a copy of the Offering Memorandum was not
sent or given to such person at or prior to the written confirmation of the sale
of such Securities to such person and (B) the untrue statement in or omission
from the Preliminary Offering Memorandum was corrected in the Offering
Memorandum unless, in either case, such failure to deliver the Offering
Memorandum was a result of non-compliance by the Partnership with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Partnership, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Partnership within the meaning of the Securities Act or
the Exchange Act (collectively referred to for purposes of this
20
Section 9(b) and Section 10 as the Partnership), from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Partnership may become subject, whether commenced or threatened,
under the Securities Act, the Exchange Act, any other federal or state statutory
law or regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Initial Purchasers' Information, and
shall reimburse the Partnership for any legal or other expenses reasonably
incurred by the Partnership in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action,
21
in each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm of attorneys (in addition to any local counsel) at any one time for all
such indemnified party or parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 9(a) and 9(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
The obligations of the Partnership and the Initial Purchasers
in this Section 9 and in Section 10 are in addition to any other liability that
the Partnership or the Initial Purchasers, as the case may be, may otherwise
have, including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
10. Contribution. If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Partnership on the one hand and
the Initial Purchasers on the other from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Partnership on the one hand and the Initial Purchasers on the other with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Partnership on the one
hand and the Initial Purchasers on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before deducting
expenses) received by or on behalf of the Partnership, on the one hand, and the
total discounts and commissions received by the Initial Purchasers with respect
to the Securities purchased under this Agreement, on the other, bear to the
total gross proceeds from the sale of the Securities under this Agreement, in
each case as set forth in the table on the cover page of the Offering
Memorandum. 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 the Partnership
or information
22
supplied by the Partnership on the one hand or to any Initial Purchasers'
Information on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Partnership and the Initial Purchasers agree
that it would not be just and equitable if contributions pursuant to this
Section 10 were to be determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10 shall be deemed to include, for purposes of
this Section 10, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
10, no Initial Purchaser shall be required to contribute any amount in excess of
the amount by which the total discounts and commissions received by such Initial
Purchaser with respect to the Securities purchased by it under this Agreement
exceeds the amount of any damages which such Initial Purchaser has otherwise
paid or become liable to pay by reason of any 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
as provided in this Section 10 are several in proportion to their respective
purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Partnership and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Partnership
and the Initial Purchasers and in Section 4(e) with respect to holders and
prospective purchasers of the Securities. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 11, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
12. Expenses. The Partnership agrees with the Initial
Purchasers to pay (a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Securities and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and any
amendments or supplements thereto; (c) the costs of reproducing and distributing
each of the Senior Debt Documents; (d) the costs incident to the preparation,
printing and delivery of the certificates evidencing the Securities, including
stamp duties and transfer taxes, if any, payable upon issuance of the
Securities; (e) the fees and expenses of the Partnership's counsel and
independent accountants; (f) the fees and expenses of qualifying the Securities
under the securities laws of the several jurisdictions as provided in Section
4(h) and of preparing, printing and distributing Blue Sky Memoranda (including
related fees and expenses of counsel for the Initial Purchasers); (g) any fees
charged by rating agencies for rating the Securities; (h) the fees and expenses
of the Trustee and any paying agent (including related fees and expenses of any
counsel to such parties); (i) all reasonable expenses and application fees
incurred in connection
23
with the approval of the Securities for book-entry transfer by DTC; (j) all
reasonable fees and expenses of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Initial
Purchasers; and (k) all other reasonable costs and expenses incident to the
performance of the obligations of the Partnership and Initial Purchasers under
this Agreement which are not otherwise specifically provided for in this Section
12.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Partnership and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Partnership or the Initial Purchasers pursuant to this Agreement or any
certificate delivered pursuant hereto shall survive the delivery of and payment
for the Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail or telecopy transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department
(telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇); or
(b) if to the Partnership, shall be delivered or sent by mail
or telecopy transmission to the address of the Partnership set forth in
the Offering Memorandum, Attention: Chief Financial Officer (telecopier
no.: 203-925-7225);
provided that any notice pursuant to Section 9(c) shall also be delivered or
sent by mail to such notified party at its address set forth on the signature
page hereof. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof. The Partnership shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Initial Purchasers' Information. The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the Initial
Purchasers' Information consists solely of the following information in the
Preliminary Offering Memorandum and the Offering Memorandum: (i) the last two
bullet point paragraphs on the front cover page (concerning the terms of the
offering by the Initial Purchasers); and (ii) the statements concerning the
Initial Purchasers contained in the second paragraph (concerning obligations
under this Agreement), third paragraph (concerning the offering price), and
ninth paragraph (concerning overallotment,
24
stabilizing transactions and syndicate covering transactions) under the heading
"Plan of Distribution".
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
18. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
25
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Partnership and the
several Initial Purchasers in accordance with its terms.
Very truly yours,
IROQUOIS GAS TRANSMISSION SYSTEM, L.P.
By: Iroquois Pipeline Operating Company,
its Agent
By: /s/
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Chief Financial Officer
By: /s/
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
26
Accepted:
CHASE SECURITIES INC.
By:
---------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
---------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department, ▇▇▇▇▇▇ ▇▇▇▇▇▇
27
SCHEDULE 1
Principal Amount
Initial Purchasers of Notes
------------------ --------
Chase Securities Inc. $140,000,000
Credit Suisse First Boston Corporation $ 60,000,000
------------
Total $200,000,000
ANNEX A
Form of Exchange and Registration Rights Agreement
(Filed as Exhibit 4.4)
ANNEX B-1
Form of Opinion of Counsel for the Partnership
Shearman & Sterling shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Partnership, addressed to
the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, substantially to the effect
set forth below:
(i) The descriptions in the Offering Memorandum of statutes,
legal and governmental proceedings and contracts and other documents
are accurate in all material respects; the statements in the Offering
Memorandum under the heading "Certain U.S. Federal Tax Considerations
for Non-U.S. Holders" and "Certain U.S. Federal Tax Information
Reporting and Backup Withholding", to the extent that they constitute
summaries of matters of federal law of the United States, have been
reviewed by such counsel and fairly summarize the matters described
therein in all material respects; and such counsel does not have actual
knowledge of any current or pending legal or governmental actions,
suits or proceedings which are required to be described in the Offering
Memorandum so that the statements made therein, in the light of the
circumstances under which they were made, are not misleading;
(ii) The Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder;
(iii) Assuming that each of the Purchase Agreement and the
Registration Rights Agreement has been duly authorized, executed and
delivered by the Partnership, the Purchase Agreement and the
Registration Rights Agreement each constitutes a valid and legally
binding agreement of the Partnership enforceable against the
Partnership in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or
at law) and except to the extent that the indemnification provisions
thereof may be unenforceable;
(iv) Assuming that the Indenture has been duly authorized,
executed and delivered by the Partnership and, assuming due
authorization, execution and delivery thereof by the Trustee, the
Indenture constitutes a valid and legally binding agreement of the
Partnership enforceable against the Partnership in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(v) Assuming that the Securities have been duly authorized and
issued by the Partnership and, assuming due authentication thereof by
the Trustee and upon
payment and delivery in accordance with the Purchase Agreement, the
Securities will constitute valid and legally binding obligations of the
Partnership entitled to the benefits of the Indenture and enforceable
against the Partnership in accordance with their terms, except to the
extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding
in equity or at law);
(vi) Assuming that the Loan Agreement has been duly
authorized, executed and delivered by the Partnership, the Loan
Agreement constitutes a valid and legally binding agreement of the
Partnership enforceable against the Partnership in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(vii) Each Senior Debt Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum;
(viii) The execution, delivery and performance by the
Partnership of each of the Senior Debt Documents, the issuance,
authentication, sale and delivery of the Securities and compliance by
the Partnership with the terms thereof and the consummation of the
transactions contemplated by the Senior Debt Documents will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default in any material respect under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Partnership or the
Operator pursuant to any material contract listed on Schedule A hereto,
nor will such actions result in any violation of the provisions of the
constituent documents of the Partnership or the Operator or any statute
or any judgment, order, decree, rule or regulation known to us of any
court or arbitrator or governmental agency or body having jurisdiction
over the Partnership or the Operator or any of their properties or
assets; and no consent, approval, authorization or order of, or filing
or registration with, any such court or arbitrator or governmental
agency or body under any such statute, judgment, order, decree, rule or
regulation is required for the execution, delivery and performance by
the Partnership of each of the Senior Debt Documents, the issuance,
authentication, sale and delivery of the Securities and compliance by
the Partnership with the terms thereof and the consummation of the
transactions contemplated by the Senior Debt Documents, except for such
consents, approvals, authorizations, filings, registrations or
qualifications (i) which have been obtained or made prior to the
Closing Date and (ii) as may be required to be obtained or made under
the Securities Act and applicable state securities laws as provided in
the Registration Rights Agreement;
(ix) Except as disclosed in the Offering Memorandum, to the
knowledge of such counsel, there are no pending actions or suits or
judicial, arbitral, rule-making, administrative or other proceedings to
which the Partnership or the Operator is a party or
B-2
of which any property or assets of the Partnership or the Operator is
the subject which (A) singularly or in the aggregate, if determined
adversely to the Partnership or the Operator, would reasonably be
expected to have a Material Adverse Effect or (B) questions the
validity or enforceability of any of the Senior Debt Documents or any
action taken or to be taken pursuant thereto; and to the best knowledge
of such counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(x) Neither the Partnership nor the Operator is (A) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder, without
taking account of any exemption under the Investment Company Act
arising out of the number of holders of the Partnership's securities or
(B) a "holding company " or a "subsidiary company " of a holding
company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(xi) Assuming the accuracy of the representations, warranties
and agreements of the Partnership and of the Initial Purchasers
contained in the Purchase Agreement, no registration of the Securities
under the Securities Act or qualification of the Indenture under the
Trust Indenture Act of 1939, as amended, is required in connection with
the issuance and sale of the Securities by the Partnership and the
offer, initial resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by the Purchase Agreement and the
Offering, it being understood that no opinion is expressed as to any
subsequent resale of any Securities.
Such counsel shall also state that they have participated in
conferences with representatives of the Partnership, representatives of its
independent accountants and counsel and representatives of the Initial
Purchasers and their counsel at which conferences the contents of the
Preliminary Offering Memorandum and the Offering Memorandum and any amendment
and supplement thereto and related matters were discussed and, although such
counsel assumes no responsibility for the accuracy, completeness or fairness of
the Offering Memorandum or any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Offering Memorandum or any amendment or
supplement thereto (other than the financial statements and other financial and
statistical information and the Independent Engineer's Report and the
Independent Market Consultant's Report, in each case contained therein, as to
which such counsel need express no belief), as of the date thereof and as of the
Closing Date, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Partnership and public officials which are furnished to the
Initial Purchasers.
B-3
ANNEX B-2
Form of Opinion of General Counsel for the Partnership
General Counsel to the Partnership shall have furnished to the
Initial Purchasers their written opinion addressed to the Initial Purchasers and
dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, substantially to the effect set forth below:
(i) The Partnership (i) has been duly formed and is validly
existing as a limited partnership in good standing under the laws of
its jurisdiction of formation, and (ii) is duly qualified to do
business and is in good standing in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires
such qualification except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Partnership and its subsidiaries taken as a whole.
(ii) Iroquois Pipeline Operating Company (the "Operator") has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct
of its businesses requires such qualification.
(iii) Each of the Partnership and the Operator has all power
and authority necessary to own or hold its respective properties and to
conduct the respective businesses in which they are engaged (except
where the failure to so qualify or have such power or authority would
not, singularly or in the aggregate, have a Material Adverse Effect),
(iv) The Partnership has an authorized capitalization as set
forth in the Offering Memorandum, and all of the partnership interests
in the Partnership have been duly and validly authorized and issued and
are fully paid and non-assessable; and the partners' equity of the
Partnership conforms in all material respects to the description
thereof contained in the Offering Memorandum;
(v) The Partnership has full right, power and authority to
execute and deliver each of the Senior Debt Documents and to perform
its obligations thereunder; and all action required to be taken for the
due and proper authorization, execution and delivery of each of the
Senior Debt Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken;
(vi) Each of the Purchase Agreement, the Indenture and the
Registration Rights Agreement has been duly authorized, executed and
delivered by the Partnership;
(vii) The Securities have been duly authorized and issued by
the Partnership; and
(viii) The Loan Agreement has been duly authorized, executed
and delivered by the Partnership.
B-2
ANNEX C
Form of Initial Comfort Letter
The Partnership shall have furnished to the Initial Purchasers
a letter of PricewaterhouseCoopers LLP, addressed to the Initial Purchasers and
dated the date of the Purchase Agreement, in form and substance satisfactory to
the Initial Purchasers, substantially to the effect set forth below:
(i) they are independent certified public accountants with
respect to the Partnership within the meaning of Rule 101 of the Code
of Professional Conduct of the AICPA and its interpretations and
rulings;
(ii) in their opinion, the audited financial statements
included in the Offering Memorandum and reported on by them comply in
form in all material respects with the accounting requirements of the
Exchange Act and the related published rules and regulations of the
Commission thereunder that would apply to the Offering Memorandum if
the Offering Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act (except that certain
supporting schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by the Partnership, the procedures of the
AICPA for a review of interim financial information as described in
Statement of Auditing Standards No. 71, reading of minutes and
inquiries of certain officials of the Partnership who have
responsibility for financial and accounting matters and certain other
limited procedures requested by the Initial Purchasers and described in
detail in such letter, nothing has come to their attention that causes
them to believe that (A) any unaudited financial statements included in
the Offering Memorandum do not comply as to form in all material
respects with applicable accounting requirements, (B) any material
modifications should be made to the unaudited financial statements
included in the Offering Memorandum for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Offering Memorandum or (C) the information included
under the headings "Offering Memorandum Summary--Summary Financial and
Operating Data", "Capitalization", "Selected Consolidated Financial and
Operating Data", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Management--Compensation of
Representatives/Executive Compensation" is not in conformity with the
disclosure requirements of Regulation S-K that would apply to the
Offering Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-1 under the Securities
Act;
(iv) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the last available
balance sheet, including reading of minutes and inquiries of certain
officials of the Partnership who have responsibility for financial and
accounting matters, nothing has come to their attention that causes
them to believe that (A) at a specified date not more than three
business days prior to the date of such letter, there was any change in
partners' equity, increase in long-term debt or decrease in
net current assets as compared with the amounts shown in the June 30,
1999 unaudited balance sheet included in the Offering Memorandum or (B)
for the period from June 30, 1999 to a specified date not more than
three business days prior to the date of such letter, there were any
decreases, as compared with the corresponding period in the preceding
year, in net sales, income from operations, EBITDA or net income,
except in all instances for changes, increases or decreases that the
Offering Memorandum discloses have occurred or which are set forth in
such letter, in which case the letter shall be accompanied by an
explanation by the Partnership as to the significance thereof unless
said explanation is not deemed necessary by the Initial Purchasers; and
(v) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Partnership) set forth in the
Offering Memorandum agrees with the accounting records of the
Partnership, excluding any questions of legal interpretation.
C-2
ANNEX D
Form of Independent Market Consultant's Letter
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Subject: Iroquois Gas Transmission System, L.P
$200,000,000 8.68% Senior Notes Due 2010
To the Addressees:
This letter is furnished under the direction of Iroquois Gas Transmission
System, L.P., with respect to Section 5q of the Purchase Agreement to be dated
as of April 27, 2000 among Iroquois Gas Transmission System, L.P. (the "Issuer")
Chase Securities Inc and Credit Suisse First Boston Corporation relating to the
sale by the Issuer of $200,000,000 of 8.68% Senior Notes Due 2010 (the "Notes"),
as more fully described in the Offering Memorandum of the Issuer dated [______],
2000 (the "Offering Memorandum") and prepared in connection with the sale of the
Notes. Capitalized terms used and not defined herein shall have the meaning
attributed thereto in the Offering Memorandum.
ICF Resources Incorporated ("ICF") has been retained by the Issuer to
act as the Independent Marketing Consultant and has prepared an Independent
Marketing Consultant's Report dated [______], 2000 (the "Report") included as
Appendix A to the Offering Memorandum. ICF hereby consents to the inclusion of
the Report, in its entirety, in the Offering Memorandum. ICF is an independent
consulting and marketing firm not directly or indirectly owned or controlled by
the Issuer, Chase Securities Inc and Credit Suisse First Boston Corporation.
In connection with the preparation of the Report, personnel of ICF have
participated in meetings or telephone discussions with representatives of the
Issuer and Chase Securities Inc. in regard to the gas transmission system
described in the Report. Subject to the qualifications and limitations set forth
in the following paragraph, nothing has come to the attention of ICF in
connection with the preparation of the report which would cause ICF to believe
that the Report, as of its date, or any of the statements in the Offering
Memorandum specifically attributed to ICF, as of the date of the Offering
Memorandum, were misleading in any material respect.
For purposes of this letter, ICF has, at the request of Chase
Securities, Inc. and Credit Suisse First Boston Corporation (the Underwriters),
carried out certain limited procedures for the period commencing [_____], 2000
and ending on the date of this letter, consisting solely of the making of
inquiries of the Issuer (the responses to which have been relied upon by ICF in
making the statements in this letter), rechecking publicly available information
from EIA, and confirming published natural gas pipeline tariff rates as to
whether there has been any material
change in the information provided by them, and upon which ICF relied, for
purposes of the Report. These procedures would not be sufficient under normal
practice to enable ICF to express an opinion as to the matters covered by the
Report and would not necessarily reveal matters of significance with respect to
the statement in the last sentence of this paragraph. ICF, therefore, expresses
no opinion as to the matters covered by the Report as of any date subsequent to
the date of the Report and makes no representation as to the sufficiency of the
foregoing procedures for the Underwriters' purposes. Nothing has come to the
attention of ICF as a result of the foregoing procedures, however, that has
caused ICF to believe that, as of the date to which the procedures were carried
out, it should alter its opinions set forth in the Report.
This letter is solely for the information of, and assistance to, the
Underwriters in conducting and documenting their investigation of the matters
covered by the Report in connection with the offering pursuant to the Offering
Memorandum for the Notes and is not to be used, circulated, quoted or otherwise
referred to within or without the Underwriters for any purpose other than the
Offering Memorandum, including but not limited to the purchase or sale of the
Notes, nor is it to be referred to in whole or in part in the Offering
Memorandum or any other document, except that reference may be made to it in the
above-mentioned Purchase Agreement or in any list of closing documents
pertaining to such offering.
The Underwriters recognize and acknowledge that the Report was prepared
pursuant to ICF's Consulting Agreement with the Issuer. Consequently, ICF makes
no representation that ICF's procedures undertaken in preparation of the Report
have been adequate for the Underwriters' purposes.
ICF disclaims any obligation to update this letter. This letter is not
intended to, and may not, be relied upon by any party other than the Addressees.
Very truly yours,
D-2