Exhibit 3.4
EXECUTION VERSION.
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SECOND AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
ONEOK PARTNERS INTERMEDIATE LIMITED PARTNERSHIP
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TABLE OF CONTENTS
ARTICLE I RECITALS AND ORGANIZATIONAL MATTERS.............................. 1
1.1 Formation and Continuation........................................ 1
1.2 Name.............................................................. 2
1.3 Registered Office; Principal Office............................... 2
1.4 Power of Attorney................................................. 2
1.5 Term.............................................................. 4
1.6 Possible Restrictions on Transfer................................. 4
ARTICLE II DEFINITIONS..................................................... 4
"Additional Limited Partner"............................................ 4
"Adjusted Capital Account".............................................. 4
"Adjusted Property"..................................................... 5
"Affiliate"............................................................. 5
"Agreed Allocation"..................................................... 5
"Agreed Value".......................................................... 5
"Agreement"............................................................. 5
"Assignee".............................................................. 5
"Audit Committee"....................................................... 5
"Available Cash"........................................................ 5
"Board of Directors".................................................... 7
"Book-Tax Disparity".................................................... 7
"Business Day".......................................................... 7
"Capital Account"....................................................... 7
"Capital Contribution".................................................. 7
"Carrying Value"........................................................ 7
"Certificate of Limited Partnership".................................... 7
"Closing Date".......................................................... 7
"Code".................................................................. 7
"Common Unit"........................................................... 7
"Contributed Property".................................................. 8
"Contribution Agreement"................................................ 8
"Conveyance Agreement".................................................. 8
"Curative Allocation"................................................... 8
"Delaware Act".......................................................... 8
"Departing Partner"..................................................... 8
"Economic Risk of Loss"................................................. 8
"Event of Withdrawal"................................................... 8
"General Partner"....................................................... 8
"General Partner Percentage Interest"................................... 8
"Group Member".......................................................... 8
"Group Member Agreement"................................................ 8
"Indemnitee"............................................................ 9
"Indemnity Agreement"................................................... 9
"Initial General Partners".............................................. 9
"Initial Limited Partners".............................................. 9
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"Initial Substituted Limited Partner"................................... 9
"Limited Partner"....................................................... 9
"Liquidation Date"...................................................... 9
"Liquidator"............................................................ 9
"Merger Agreement"...................................................... 9
"MLP"................................................................... 9
"MLP Agreement"......................................................... 9
"NBPL Management Committee"............................................. 10
"Net Agreed Value"...................................................... 10
"Net Income"............................................................ 10
"Net Loss".............................................................. 10
"Net Termination Gain".................................................. 10
"Net Termination Loss".................................................. 11
"Nonrecourse Built-in Gain"............................................. 11
"Nonrecourse Deductions"................................................ 11
"Nonrecourse Liability"................................................. 11
"Northern Border Pipeline".............................................. 11
"Northern Border Pipeline Partnership Agreement"........................ 11
"NPNG".................................................................. 11
"NWBPC"................................................................. 11
"ONEOK"................................................................. 11
"OPGP".................................................................. 11
"Opinion of Counsel".................................................... 12
"Organizational Limited Partner"........................................ 12
"Partner Nonrecourse Debt".............................................. 12
"Partner Nonrecourse Debt Minimum Gain"................................. 12
"Partner Nonrecourse Deductions"........................................ 12
"Partners".............................................................. 12
"Partnership"........................................................... 12
"Partnership Group"..................................................... 12
"Partnership Interest".................................................. 12
"Partnership Minimum Gain".............................................. 12
"Partnership Policy Committee".......................................... 12
"PBGC".................................................................. 12
"Percentage Interest"................................................... 12
"Person"................................................................ 13
"Prior Agreement"....................................................... 13
"Recapture Income"...................................................... 13
"Registration Statement"................................................ 13
"Required Allocations".................................................. 13
"Residual Gain" or "Residual Loss"...................................... 13
"Securities Act"........................................................ 13
"Services Agreement".................................................... 13
"Special Approval"...................................................... 13
"Subsidiary"............................................................ 13
"Substituted Limited Partner"........................................... 14
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"Surviving Business Entity"............................................. 14
"Termination Capital Transactions"...................................... 14
"Unrealized Gain"....................................................... 14
"Unrealized Loss"....................................................... 14
"Withdrawal Opinion of Counsel"......................................... 14
"Working Capital Borrowings"............................................ 14
ARTICLE III PURPOSE........................................................ 14
3.1 Purpose and Business.............................................. 14
3.2 Powers............................................................ 15
ARTICLE IV CAPITAL CONTRIBUTIONS........................................... 15
4.1 Prior Contributions............................................... 15
4.2 Additional Capital Contributions.................................. 15
4.3 No Preemptive Rights.............................................. 16
4.4 Capital Accounts.................................................. 16
4.5 Interest.......................................................... 18
4.6 No Withdrawal..................................................... 18
4.7 Loans from Partners............................................... 18
ARTICLE V ALLOCATIONS AND DISTRIBUTIONS.................................... 18
5.1 Allocations for Capital Account Purposes.......................... 18
5.2 Allocations for Tax Purposes...................................... 22
5.3 Requirement and Characterization of Distributions................. 24
ARTICLE VI MANAGEMENT AND OPERATION OF BUSINESS............................ 25
6.1 Management........................................................ 25
6.2 Certificate of Limited Partnership................................ 27
6.3 Restrictions on the General Partner's Authority................... 27
6.4 Reimbursement of the General Partner.............................. 28
6.5 Outside Activities................................................ 28
6.6 Loans to and from the General Partner; Loans or Contributions from
the Partnership or Group Members.................................. 29
6.7 Indemnification................................................... 31
6.8 Liability of Indemnitees.......................................... 32
6.9 Resolution of Conflicts of Interest; Standards of Conduct and
Modification of Duties............................................ 33
6.10 Other Matters Concerning the General Partner...................... 35
6.11 Title to Partnership Assets....................................... 36
6.12 -Reliance by Third Parties........................................ 36
ARTICLE VII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS..................... 37
7.1 Limitation of Liability........................................... 37
7.2 Management of Business............................................ 37
7.3 Return of Capital................................................. 37
7.4 Rights of Limited Partners Relating to the Partnership............ 37
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ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS........................ 38
8.1 Records and Accounting............................................ 38
8.2 Fiscal Year....................................................... 38
ARTICLE IX TAX MATTERS..................................................... 38
9.1 Preparation of Tax Returns........................................ 38
9.2 Tax Elections..................................................... 38
9.3 Tax Controversies................................................. 39
9.4 Withholding....................................................... 39
9.5 Opinions of Counsel............................................... 39
ARTICLE X TRANSFER OF INTERESTS............................................ 39
10.1 Transfer.......................................................... 39
10.2 Transfer of a General Partner's Percentage Interest............... 40
10.3 Transfer of the Limited Partner's Partnership Interest............ 40
ARTICLE XI ADMISSION OF PARTNERS........................................... 40
11.1 Admission of Substituted Limited Partner.......................... 40
11.2 Admission of Successor General Partner............................ 40
11.3 Admission of Additional Limited Partners.......................... 41
11.4 Amendment of Agreement and Certificate of Limited Partnership..... 41
ARTICLE XII WITHDRAWAL OR REMOVAL OF PARTNERS.............................. 41
12.1 Withdrawal of the General Partner................................. 41
12.2 Removal of the General Partner.................................... 42
12.3 Interest of Departing Partner and Successor General Partner....... 43
12.4 Reimbursement of Departing Partner................................ 43
12.5 Withdrawal of the Limited Partner................................. 43
ARTICLE XIII DISSOLUTION AND LIQUIDATION................................... 43
13.1 Dissolution....................................................... 43
13.2 Continuation of the Business of the Partnership after
Dissolution....................................................... 44
13.3 Liquidation....................................................... 44
13.4 Distributions In Kind............................................. 45
13.5 Cancellation of Certificate of Limited Partnership................ 46
13.6 Reasonable Time for Winding Up.................................... 46
13.7 Return of Capital................................................. 46
13.8 No Capital Account Restoration.................................... 46
13.9 Waiver of Partition............................................... 46
ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT............................. 46
14.1 Amendment to be Adopted Solely by General Partner................. 46
14.2 Amendment Procedures.............................................. 47
ARTICLE XV MERGER.......................................................... 47
15.1 Authority......................................................... 47
15.2 Procedure for Merger or Consolidation............................. 48
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15.3 Approval by Limited Partners of Merger or Consolidation........... 48
15.4 Certificate of Merger............................................. 49
15.5 Effect of Merger.................................................. 49
ARTICLE XVI GENERAL PROVISIONS............................................. 49
16.1 Addresses and Notices............................................. 49
16.2 References........................................................ 50
16.3 Pronouns and Plurals.............................................. 50
16.4 Further Action.................................................... 50
16.5 Binding Effect.................................................... 50
16.6 Integration....................................................... 50
16.7 Creditors......................................................... 50
16.8 Waiver............................................................ 50
16.9 Counterparts...................................................... 50
16.10 Applicable Law.................................................... 50
16.11 Invalidity of Provisions.......................................... 50
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EXECUTION VERSION
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
ONEOK PARTNERS INTERMEDIATE LIMITED PARTNERSHIP
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ONEOK
PARTNERS INTERMEDIATE LIMITED PARTNERSHIP, dated as of May 17, 2006, is entered
into by and between ONEOK Partners GP, L.L.C., a Delaware limited liability
company formerly known as Northern Plains Natural Gas Company, LLC ("General
Partner"), and ONEOK Partners, L.P., a Delaware limited partnership (the "MLP"),
as the Limited Partner, together with any other Persons who become Partners in
the Partnership or parties hereto as provided herein. Capitalized terms used
herein have the meanings assigned to such terms in Article II. In consideration
of the covenants, conditions and agreements contained herein, the parties hereto
hereby agree as follows:
ARTICLE I
RECITALS AND ORGANIZATIONAL MATTERS
1.1 FORMATION AND CONTINUATION. (a) The Initial General Partners and the
Organizational Limited Partner previously formed the Partnership as a limited
partnership pursuant to the provisions of the Delaware Act. As set forth below,
the General Partner and the MLP, as the sole Limited Partner, are currently the
only Partners of the Partnership. Before giving effect to this Agreement, the
Partnership's agreement of limited partnership has been the Prior Agreement. The
General Partner and the Limited Partner hereby amend and restate the Prior
Agreement in its entirety and hereby continue the Partnership as a limited
partnership pursuant to the provisions of the Delaware Act. Except as expressly
provided to the contrary in this Agreement, the rights and obligations of the
Partners and the administration, dissolution and termination of the Partnership
shall be governed by the Delaware Act. All Partnership Interests shall
constitute personal property of the owner thereof for all purposes.
(b) In connection with the formation of the Partnership, NPNG, PBGC and
NWBPC had each been admitted as a general partner of the Partnership and the
Organizational Limited Partner has been admitted as a limited partner of the
Partnership. As of the Closing Date, the limited partner interest in the
Partnership of the Organizational Limited Partner was terminated and the
Organizational Limited Partner withdrew as a Limited Partner of the Partnership.
(c) The Partnership formally commenced operations in connection with the
closing of MLP's initial public offering on October 1, 1993 (the "Closing
Date").
(d) When the Partnership commenced operations, its only operating asset
consisted of its 70% ownership interest in Northern Border Pipeline.
(e) Since the Closing Date, the Partnership continued to own an interest in
Northern Border Pipeline, but also substantially expanded its operations by
acquiring and developing additional direct or indirect ownership interests in
other interstate and intrastate natural gas pipeline systems, gathering and
processing systems, storage systems and other assets.
(f) Since the Closing Date, the Amended and Restated Agreement of Limited
Partnership of Northern Border Intermediate Limited Partnership, dated as of
October 1, 1993 (the "Prior Agreement"), has continued as the limited
partnership agreement of the Partnership.
(g) ONEOK, Inc., an Oklahoma corporation ("ONEOK"), succeeded to ownership
of the member interests of NPNG and PBGC, which entities were two of the Initial
General Partners of the Partnership.
(h) Effective as of ▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇ acquired the capital stock of
NWBPC, a wholly-owned direct or indirect subsidiary of TransCanada Pipelines
Limited that was an Initial General Partner of the Partnership, and as a result
of that acquisition and subsequent transfers by NWBPC and PBGC, NPNG became the
sole owner of the General Partner Percentage Interest in the Partnership.
(i) Effective May 15, 2006, NPNG changed its name to ONEOK Partners GP,
L.L.C.
(j) The General Partner and the Limited Partner have determined that it is
appropriate to amend and restate the limited partnership agreement of the
Partnership for the purposes, among other things, of the following: (i) to
reflect the transfer of the management authority presently vested in, and the
management functions previously conducted by, the Partnership Policy Committee
to the General Partner; (ii) to address the expanded scope of Partnership
operations; and (iii) to eliminate provisions of the Prior Agreement that have
become obsolete.
1.2 NAME. The name of the Partnership shall be, and the business of the
Partnership shall continue to be conducted under the name of, "ONEOK Partners
Intermediate Limited Partnership." The Partnership's business may be conducted
under any other name or names deemed necessary or appropriate by the General
Partner. The words "Limited Partnership," "L.P.," "Ltd." or similar words or
letters shall be included in the Partnership's name where necessary for the
purposes of complying with the laws of any jurisdiction that so requires. The
General Partner in its sole discretion may change the name of the Partnership at
any time and from time to time and shall notify the Limited Partners of such
change in the next regular communication to Limited Partners.
1.3 REGISTERED OFFICE; PRINCIPAL OFFICE. Unless and until changed by the
General Partner, the registered office of the Partnership in the State of
Delaware shall be located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and the registered agent for service of
process on the Partnership in the State of Delaware at such registered office
shall be Corporation Service Company. The principal office of the Partnership
shall be located at ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
or such other place as the General Partner may from time to time designate by
notice to the Limited Partners. The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General
Partner deems necessary or appropriate.
1.4 POWER OF ATTORNEY. (a) Each Limited Partner hereby constitutes and
appoints the General Partner and, if a Liquidator shall have been selected
pursuant to Section 13.3, the Liquidator severally (and any successor to either
thereof by merger, transfer, assignment, election or otherwise) and each of
their authorized officers and attorneys-in-fact, with full power
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of substitution, as his true and lawful agent and attorney-in-fact, with full
power and authority in his name, place and ▇▇▇▇▇, to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and other
instruments (including, without limitation, this Agreement and the
Certificate of Limited Partnership and all amendments or restatements
thereof) that the General Partner or the Liquidator deems necessary or
appropriate to form, qualify or continue the existence or qualification of
the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) in the State of Delaware and in
all other jurisdictions in which the Partnership may conduct business or
own property; (B) all certificates, documents and other instruments that
the General Partner or the Liquidator deems necessary or appropriate to
reflect, in accordance with its terms, any amendment, change, modification
or restatement of this Agreement; (C) all certificates, documents and other
instruments (including, without limitation, conveyances and a certificate
of cancellation) that the General Partner or the Liquidator deems necessary
or appropriate to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement; (D) all certificates,
documents and other instruments relating to the admission, withdrawal,
removal or substitution of any Partner pursuant to, or other events
described in, Article X, XI, XII or XIII or the Capital Contribution of any
Partner; (E) all certificates, documents and other instruments relating to
the determination of the rights, preferences and privileges of any class or
series of Partnership Interests; and (F) all certificates, documents and
other instruments (including, without limitation, agreements and a
certificate of merger) relating to a merger or consolidation of the
Partnership pursuant to Article XV; and
(ii) execute, swear to, acknowledge, deliver, file and record all
ballots, consents, approvals, waivers, certificates, documents and other
instruments necessary or appropriate, in the sole discretion of the General
Partner or the Liquidator, to make, evidence, give, confirm or ratify any
vote, consent, approval, agreement or other action that is made or given by
the Partners hereunder or is consistent with the terms of this Agreement or
is necessary or appropriate, in the sole discretion of the General Partner
or the Liquidator, to effectuate the terms or intent of this Agreement;
provided, that when the consent or approval of the Limited Partners is
required by any provision of this Agreement, the General Partner or the
Liquidator may exercise the power of attorney made in this Section
1.4(a)(ii) only after the necessary consent or approval of the Limited
Partners is obtained.
Nothing contained in this Section 1.4(a) shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with Article XIV or
as may be otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of a Limited Partner and the transfer of all or any
portion of such Limited Partner's Partnership Interest and shall extend to such
Limited Partner's heirs, successors, assigns and personal representatives. Each
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Limited Partner hereby agrees to be bound by any representation made by the
General Partner or the Liquidator acting in good faith pursuant to such power of
attorney; and each Limited Partner hereby waives any and all defenses that may
be available to contest, negate or disaffirm the action of the General Partner
or the Liquidator taken in good faith under such power of attorney. Each Limited
Partner shall execute and deliver to the General Partner or the Liquidator,
within 15 days after receipt of the General Partner's or the Liquidator's
request therefor, such further designation, powers of attorney and other
instruments as the General Partner or the Liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
1.5 TERM. The Partnership commenced upon the filing of the Certificate of
Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the close of Partnership business on December 31, 2083, or until
the earlier termination of the Partnership in accordance with the provisions of
Article XIII.
1.6 POSSIBLE RESTRICTIONS ON TRANSFER. Notwithstanding anything to the
contrary contained in this Agreement, in the event of (a) the enactment (or
imminent enactment) of any legislation, (b) the publication of any temporary or
final regulation by the Treasury Department, (c) any ruling by the Internal
Revenue Service or (d) any judicial decision, that, in any such case, in the
Opinion of Counsel, would result in the taxation of the Partnership or Northern
Border Pipeline as an association taxable as a corporation or would otherwise
result in the Partnership or Northern Border Pipeline being taxed as an entity
for federal income tax purposes, then, the General Partner may impose such
restrictions on the transfer of Partnership Interests as may be required, in the
Opinion of Counsel, to prevent the Partnership or Northern Border Pipeline from
being taxed as an association taxable as a corporation or otherwise as an entity
for federal income tax purposes, including, without limitation, making such
amendments to this Agreement as the General Partner in its sole discretion may
determine to be necessary or appropriate to impose such restrictions.
ARTICLE II
DEFINITIONS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 11.3 and who is shown
as such on the books and records of the Partnership.
"ADJUSTED CAPITAL ACCOUNT" means the Capital Account maintained for
each Partner as of the end of each fiscal year of the Partnership, (a)
increased by any amounts that such Partner is obligated to restore under
the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or
is deemed obligated to restore under Treasury Regulation Sections
1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all
losses and deductions that, as of the end of such fiscal year, are
reasonably expected to be allocated to such Partner in subsequent years
under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation
Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that,
as of the end of such fiscal year, are reasonably expected to be made to
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such Partner in subsequent years in accordance with the terms of this
Agreement or otherwise to the extent they exceed offsetting increases to
such Partner's Capital Account that are reasonably expected to occur during
(or prior to) the year in which such distributions are reasonably expected
to be made (other than increases as a result of a minimum gain chargeback
pursuant to Section 5.1(d)(i) or 5.1(d)(ii)). The foregoing definition of
Adjusted Capital Account is intended to comply with the provisions of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
"ADJUSTED PROPERTY" means any property the Carrying Value of which has
been adjusted pursuant to Section 4.4(d)(i) or 4.4(d)(ii).
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common
control with, the Person in question. As used herein, the term "control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
"AGREED ALLOCATION" means any allocation, other than a Required
Allocation, of an item of income, gain, loss or deduction pursuant to the
provisions of Section 5.1, including, without limitation, a Curative
Allocation (if appropriate to the context in which the term "Agreed
Allocation" is used).
"AGREED VALUE" of any Contributed Property means the fair market value
of such property or other consideration at the time of contribution as
determined by the General Partner. The General Partner shall use such
method as it deems reasonable and appropriate to allocate the aggregate
Agreed Value of Contributed Properties contributed to the Partnership in a
single or integrated transaction among each separate property on a basis
proportional to the fair market value of each Contributed Property.
"AGREEMENT" means this Second Amended and Restated Agreement of
Limited Partnership of Northern Border Intermediate Limited Partnership, as
it may be amended, supplemented or restated from time to time.
"ASSIGNEE" means a Person to whom one or more Limited Partner
Partnership Interests have been transferred, but who has not been admitted
as a Substituted Limited Partner in respect of such Partnership Interests.
"AUDIT COMMITTEE" means a committee of the Board of Directors
consisting of three or more members of the Board of Directors appointed by
such board who are neither officers nor employees of the General Partner or
any of its Affiliates, and the same persons who serve as the Audit
Committee under the MLP Agreement may serve as the Audit Committee under
this Agreement.
"AVAILABLE CASH" means, with respect to any calendar quarter and
without duplication:
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(a) the sum of:
(i) all cash receipts of the Partnership Group (or the
Partnership's proportional part of cash and cash equivalents in
the care of Subsidiaries that are not wholly-owned) on hand at
the end of such calendar quarter; and
(ii) all additional cash and cash equivalents of the
Partnership Group (or the Partnership's proportional part of cash
and cash equivalents in the case of Subsidiaries that are not
wholly-owned) on hand on the date of determination of Available
Cash with respect to such calendar quarter resulting from Working
Capital Borrowings made subsequent to the end of such calendar
quarter;
(b) less the sum of:
(i) all cash disbursements of the Partnership during such
quarter, including, without limitation, disbursements for
operating expenses, taxes, if any, debt service (including,
without limitation, the payment of principal, premium and
interest), capital expenditures and contributions, if any, to
Northern Border Pipeline or any member of the Partnership Group
(but excluding all cash distributions to Partners and any cash
disbursements with respect to which, and to the extent that, a
reserve was established in a prior quarter); and
(ii) any reserves established with respect to such quarter,
and any increase in reserves established with respect to prior
quarters, in such amounts as the General Partner determines in
its reasonable discretion to be necessary or appropriate (x) to
provide for the proper conduct of the business of the Partnership
(including, without limitation, reserves for future capital
expenditures or capital contributions to Northern Border Pipeline
or any member of the Partnership Group) or (y) because the
distribution of such amounts would be prohibited by applicable
law or by any loan agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to which the
Partnership is a party or by which it is bound or its assets are
subject.
Notwithstanding the foregoing, "Available Cash" with respect to any
calendar quarter (A) shall not include any cash receipts or reductions in
reserves or take into account any disbursements made or reserves
established after the Liquidation Date and (B) shall include any
distributions of cash (to the extent such distributions are attributable to
transactions and operations during the quarter in respect of which the
determination is then being made) received by the Partnership in respect of
its interest in Northern Border Pipeline or any other Group Member after
the end of such quarter but on or before the date on which the Partnership
makes its distribution of Available Cash in respect of such quarter
pursuant to Section 5.3.
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"BOARD OF DIRECTORS" means the board of managers or directors of the
General Partner, or similar governing body, however designated.
"BOOK-TAX DISPARITY" means with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or
Adjusted Property and the adjusted basis thereof for federal income tax
purposes as of such date. A Partner's share of the Partnership's Book-Tax
Disparities in all of its Contributed Property and Adjusted Property will
be reflected by the difference between such Partner's Capital Account
balance as maintained pursuant to Section 4.4 and the hypothetical balance
of such Partner's Capital Account computed as if it had been maintained
strictly in accordance with federal income tax accounting principles.
"BUSINESS DAY" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or
the states of New York or Texas shall not be regarded as a Business Day.
"CAPITAL ACCOUNT" means the capital account maintained for a Partner
pursuant to Section 4.4.
"CAPITAL CONTRIBUTION" means any cash, cash equivalents or the Net
Agreed Value of Contributed Property that a Partner contributes to the
Partnership.
"CARRYING VALUE" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all
depreciation, amortization and cost recovery deductions charged to the
Partners' Capital Accounts in respect of such Contributed Property, and (b)
with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from
time to time in accordance with Sections 4.4(d)(i) and 4.4(d)(ii) and to
reflect changes, additions or other adjustments to the Carrying Value for
dispositions and acquisitions of Partnership properties, as deemed
appropriate by the General Partner.
"CERTIFICATE OF LIMITED PARTNERSHIP" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
referenced in Section 6.2, as such Certificate of Limited Partnership has
been amended on February 27, 2001, May 20, 2003 and December 13, 2004 and
it may be further amended, supplemented or restated from time to time.
"CLOSING DATE" means October 1, 1993.
"CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision
of future law.
"COMMON UNIT" has the meaning assigned to such term in the MLP
Agreement.
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"CONTRIBUTED PROPERTY" means each property or other asset, in such
form as may be permitted by the Delaware Act, but excluding cash,
contributed to the Partnership. Once the Carrying Value of a Contributed
Property is adjusted pursuant to Section 4.4(d), such property shall no
longer constitute a Contributed Property, but shall be deemed an Adjusted
Property.
"CONTRIBUTION AGREEMENT" means the Contribution, Conveyance and
Assumption Agreement, dated as of October 1, 1993, among the Partnership,
the MLP, NPNG, PBGC and NWBPC.
"CONVEYANCE AGREEMENT" has the meaning assigned to such term in the
MLP Agreement.
"CURATIVE ALLOCATION" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 5.1(d)(ix).
"DELAWARE ACT" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del C. Section 17-101, et seq., as amended, supplemented or restated
from time to time, and any successor to such statute.
"DEPARTING PARTNER" means a former General Partner from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 12.1 or 12.2.
"ECONOMIC RISK OF LOSS" has the meaning set forth in Treasury
Regulation Section 1.752-2(a).
"EVENT OF WITHDRAWAL" has the meaning assigned to such term in Section
12.1(a).
"GENERAL PARTNER" means ONEOK Partners GP, L.L.C. (formerly NPNG), and
any Person or Persons that are approved as successor General Partners
pursuant to Section 12.1 or 12.2 and, in either case, are admitted to the
Partnership as a general partner in accordance with the terms of Section
11.2.
"GENERAL PARTNER PERCENTAGE INTEREST" means 1.0101%.
"GROUP MEMBER" means a member of the Partnership Group.
"GROUP MEMBER AGREEMENT" means the partnership agreement of any Group
Member, other than the Partnership, that is a limited or general
partnership, the limited liability company agreement of any Group Member
that is a limited liability company, the certificate of incorporation and
bylaws or similar organizational documents of any Group Member that is a
corporation, the joint venture agreement or similar governing document of
any Group Member that is a joint venture and the governing or
organizational or similar documents of any other Group Member that is a
Person other than a limited or general partnership, limited liability
company, corporation or joint venture, as such may be amended, supplemented
or restated from time to time.
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"INDEMNITEE" means any General Partner, any member of the Board of
Directors or any committee thereof (including, without limitation, the
Audit Committee), any Departing Partner, any Person who is or was an
Affiliate of any General Partner or any Departing Partner, any Person who
is or was an officer, director, employee, partner, agent or trustee of any
General Partner, the Partnership or any Departing Partner or any such
Affiliate, any representative of the Partnership on the NBPL Management
Committee, or any Person who is or was serving at the request of any
General Partner, the General Partner or any Departing Partner or any such
Affiliate as a director, officer, employee, partner, agent or trustee of
another Person.
"INDEMNITY AGREEMENT" means the Indemnity Agreement dated as of
▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ and NWBPC.
"INITIAL GENERAL PARTNERS" means NPNG, PBGC and NWBPC, each in its
capacity as a prior general partner of the Partnership.
"INITIAL LIMITED PARTNERS" means NPNG, PBGC and NWBPC, from and after
their admission to the Partnership as Limited Partners and prior to their
withdrawal as Limited Partners of the Partnership.
"INITIAL SUBSTITUTED LIMITED PARTNER" means the MLP, following its
admission to the Partnership as a limited partner in October 1993 in
accordance with Section 11.1.
"LIMITED PARTNER" means, as applicable, the Organizational Limited
Partner, each Initial Limited Partner, the Initial Substituted Limited
Partner, each Substituted Limited Partner, each Additional Limited Partner
and any Departing Partner upon the change of its status from General
Partner to Limited Partner pursuant to Section 12.3.
"LIQUIDATION DATE" means (a) in the case of an event giving rise to
the dissolution of the Partnership of the type described in clauses (a) and
(b) of the first sentence of Section 13.2, the date on which the applicable
time period during which the Partners have the right to elect to
reconstitute the Partnership and continue its business has expired without
such an election being made, and (b) in the case of any other event giving
rise to the dissolution of the Partnership, the date on which such event
occurs.
"LIQUIDATOR" means the General Partner or other Person approved
pursuant to Section 13.3 who performs the functions described therein.
"MERGER AGREEMENT" has the meaning assigned to such term in Section
15.1.
"MLP" means ONEOK Partners, L.P., a Delaware limited partnership.
"MLP AGREEMENT" means the Second Amended and Restated Agreement of
Limited Partnership of ONEOK Partners, L.P., as it may further be amended,
supplemented or restated from time to time.
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"NBPL MANAGEMENT COMMITTEE" means the management committee responsible
for management of the business and affairs of Northern Border Pipeline
pursuant to the terms of the Northern Border Pipeline Partnership
Agreement.
"NET AGREED VALUE" means, (a) in the case of any Contributed Property,
the Agreed Value of such property reduced by any liabilities either assumed
by the Partnership upon such contribution or to which such property is
subject when contributed, and (b) in the case of any property distributed
to a Partner by the Partnership, the Partnership's Carrying Value of such
property (as adjusted pursuant to Section 4.4(d)(ii)) at the time such
property is distributed, reduced by any indebtedness either assumed by such
Partner upon such distribution or to which such property is subject at the
time of distribution, in either case, as determined under Section 752 of
the Code.
"NET INCOME" means, for any taxable period, the excess, if any, of the
Partnership's items of income and gain (other than those items attributable
to dispositions constituting Termination Capital Transactions) for such
taxable period over the Partnership's items of loss and deduction (other
than those items attributable to dispositions constituting Termination
Capital Transactions) for such taxable period. The items included in the
calculation of Net Income shall be determined in accordance with Section
4.4(b) and shall not include any items specially allocated under Section
5.1(d). Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to a
Required Allocation or a Curative Allocation, Net Income or Net Loss,
whichever the case may be, shall be recomputed without regard to such item.
"NET LOSS" means, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction (other than those items
attributable to dispositions constituting Termination Capital Transactions)
for such taxable period over the Partnership's items of income and gain
(other than those items attributable to dispositions constituting
Termination Capital Transactions) for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance
with Section 4.4(b) and shall not include any items specially allocated
under Section 5.1(d). Once an item of income, gain, loss or deduction that
has been included in the initial computation of Net Loss is subjected to a
Required Allocation or a Curative Allocation, Net Income, or Net Loss,
whichever the case may be, shall be recomputed without regard to such item.
"NET TERMINATION GAIN" means, for any taxable period, the sum, if
positive, of all items of income, gain, loss or deduction recognized by the
Partnership (including, without limitation, such amounts recognized through
Northern Border Pipeline) from Termination Capital Transactions occurring
in such taxable period. The items included in the determination of Net
Termination Gain shall be determined in accordance with Section 4.4(b) and
shall not include any items of income, gain or loss specially allocated
under Section 5.1(d). Once an item of income, gain or loss that has been
included in the initial computation of Net Termination Gain is subjected to
a Required Allocation or a Curative Allocation, Net Termination Gain or Net
Termination Loss, whichever the case may be, shall be recomputed without
regard to such item.
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"NET TERMINATION LOSS" means, for any taxable period, the sum, if
negative, of all items of income, gain, loss or deduction recognized by the
Partnership (including, without limitation, such amounts recognized through
Northern Border Pipeline) from Termination Capital Transactions occurring
in such taxable period. The items included in the determination of Net
Termination Loss shall be determined in accordance with Section 4.4(b) and
shall not include any items of income, gain or loss specially allocated
under Section 5.1(d). Once an item of gain or loss that has been included
in the initial computation of Net Termination Loss is subjected to a
Required Allocation or a Curative Allocation, Net Termination Gain or Net
Termination Loss, whichever the case may be, shall be recomputed without
regard to such item.
"NONRECOURSE BUILT-IN GAIN" means with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or pledge
securing a Nonrecourse Liability, the amount of any taxable gain that would
be allocated to the Partners pursuant to Sections 5.2(b)(i)(A),
5.2(b)(ii)(A) or 5.2(b)(iv) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no
other consideration.
"NONRECOURSE DEDUCTIONS" means any and all items of loss, deduction or
expenditures (including any expenditure described in Section 705(a)(2)(B)
of the Code) that, in accordance with the principles of Treasury Regulation
Section 1.704-2(b), are attributable to a Nonrecourse Liability.
"NONRECOURSE LIABILITY" has the meaning set forth in Treasury
Regulation Section 1.752-1(a)(2).
"NORTHERN BORDER PIPELINE" means Northern Border Pipeline Company, a
Texas general partnership, of which the Partnership and TC PipeLines
Intermediate Limited Partnership are the partners.
"NORTHERN BORDER PIPELINE PARTNERSHIP AGREEMENT" means that certain
First Amended and Restated General Partnership Agreement of Northern Border
Pipeline Company dated effective as of April 6, 2006, between the
Partnership and TC PipeLines Intermediate Limited Partnership, as amended
and supplemented.
"NPNG" means Northern Plains Natural Gas Company, a Delaware
corporation, and its successor by conversion, Northern Plains Natural Gas
Company LLC, a Delaware limited liability company (now known as ONEOK
Partners GP, L.L.C.).
"NWBPC" means Northwest Border Pipeline Company, a Delaware
corporation.
"ONEOK" has the meaning assigned to such term in Section 1.1(g) of
this Agreement.
"OPGP" means ONEOK Partners GP, L.L.C., a Delaware limited liability
company (formerly named Northern Plains Natural Gas Company).
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"OPINION OF COUNSEL" means a written opinion of counsel (who may be
regular counsel to the General Partner, its Affiliates or the Partnership)
acceptable to the General Partner.
"ORGANIZATIONAL LIMITED PARTNER" means NWBPC, in its capacity as the
organizational limited partner of the Partnership pursuant to the Prior
Agreement, its being recognized that NPNG was such organizational limited
partner at the time of the original Agreement of Limited Partnership of
this Partnership but previously had transferred its rights in such capacity
to NWBPC.
"PARTNER NONRECOURSE DEBT" has the meaning set forth in Treasury
Regulation Section 1.704-2(b)(4).
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in
Treasury Regulation Section 1.704-2(i)(2).
"PARTNER NONRECOURSE DEDUCTIONS" means any and all items of loss,
deduction or expenditure (including, without limitation, any expenditure
described in Section 705(a)(2)(B) of the Code) that, in accordance with the
principles of Treasury Regulation Section 1.704-2(i), are attributable to a
Partner Nonrecourse Debt.
"PARTNERS" means the General Partner and the Limited Partners,
together with any future Partners admitted as general partners or limited
partners.
"PARTNERSHIP" means the limited partnership heretofore formed and
continued pursuant to this Agreement.
"PARTNERSHIP GROUP" means the Partnership and its Subsidiaries treated
as a single consolidated entity.
"PARTNERSHIP INTEREST" means the interest of a Partner in the
Partnership.
"PARTNERSHIP MINIMUM GAIN" means that amount determined in accordance
with the principles of Treasury Regulation Section 1.704-2(d).
"PARTNERSHIP POLICY COMMITTEE" means the committee formerly consisting
of three (3) persons, one of whom was appointed by each of NPNG, PBGC and
NWBPC, which was established pursuant to, and had the rights, powers and
obligations specified in, Section 6.1 of the Prior Agreement.
"PBGC" means Pan Border Gas Company, a Delaware corporation, and its
successor by conversion, Pan Border Gas Company LLC, a Delaware limited
liability company.
"PERCENTAGE INTEREST" means, as of the date of determination, (a) as
to the General Partner, its General Partner Percentage Interest, (b) as to
a Limited Partner, 98.9899% multiplied by a fraction equal to the portion
of the Partnership Interests of all Limited Partners represented by the
Partnership Interests of such Limited Partner.
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"PERSON" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"PRIOR AGREEMENT" has the meaning assigned to such term in Section
1.1(f) of the Agreement.
"RECAPTURE INCOME" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Sections 734 or 743
of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to
such property or asset.
"REGISTRATION STATEMENT" means the Registration Statement on Form S-1
(Registration No. 33-66158), as it has been or as it may be amended or
supplemented from time to time, filed by the MLP with the Securities and
Exchange Commission under the Securities Act to register the offering and
sale of the Common Units in the Initial Offering.
"REQUIRED ALLOCATIONS" means any allocation (or limitation imposed on
any allocation) of an item of income, gain, deduction or loss pursuant to
(a) Section 5.1(b)(i) or (b) Sections 5.1(d)(i)-(vi) and (viii), such
allocations (or limitations thereon) being directly or indirectly required
by the Treasury regulations promulgated under Section 704(b) of the Code.
"RESIDUAL GAIN" OR "RESIDUAL LOSS" means any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax
purposes resulting from a sale, exchange or other disposition of a
Contributed Property or Adjusted Property, to the extent such item of gain
or loss is not allocated pursuant to Sections 5.2(b)(i)(A) or
5.2(b)(ii)(A), respectively, to eliminate Book-Tax Disparities.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such
statute.
"SERVICES AGREEMENT" means that certain Services Agreement, dated
April 6, 2006 among ONEOK, OPGP, NBP Services, LLC, a Delaware limited
liability company, the Partnership and MLP.
"SPECIAL APPROVAL" means approval by the Conflicts Committee of OPGP,
as further defined in the MLP Agreement.
"SUBSIDIARY" means, with respect to any Person, (a) a corporation of
which more than 50% of the voting power of shares entitled (without regard
to the occurrence of any contingency) to vote in the election of directors
or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof, (b) a partnership
(whether general or limited) in which such Person or a Subsidiary of such
Person is, at the date of determination, a general or limited partner of
such partnership, but only if more than 50% of the partnership interests of
such partnership (considering all of the
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partnership interests of the partnership as a single class) is owned,
directly or indirectly, at the date of determination, by such Person, by
one or more Subsidiaries of such Person, or a combination thereof, or (c)
any other Person (other than a corporation or a partnership) in which such
Person, one or more Subsidiaries of such Person, or a combination thereof,
directly or indirectly, at the date of determination, has (i) at least a
majority ownership interest or (ii) the power to elect or direct the
election of a majority of the directors or other governing body of such
Person.
"SUBSTITUTED LIMITED PARTNER" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.1 in place of and
with all the rights of a Limited Partner and who is shown as a Limited
Partner on the books and records of the Partnership.
"SURVIVING BUSINESS ENTITY" has the meaning assigned to such term in
Section 15.2(b).
"TERMINATION CAPITAL TRANSACTIONS" means any sale, transfer or other
disposition of property of the Partnership occurring upon or incident to
the liquidation and winding up of the Partnership Group pursuant to Article
XIII.
"UNREALIZED GAIN" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the fair
market value of such property as of such date (as determined under Section
4.4(d)) over (b) the Carrying Value of such property as of such date (prior
to any adjustment to be made pursuant to Section 4.4(d) as of such date).
"UNREALIZED LOSS" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the
Carrying Value of such property as of such date (prior to any adjustment to
be made pursuant to Section 4.4(d) as of such date) over (b) the fair
market value of such property as of such date (as determined under Section
4.4(d)).
"WITHDRAWAL OPINION OF COUNSEL" means an Opinion of Counsel to the
effect that the withdrawal of the General Partner, in connection with the
admission of a successor General Partner, would not result in the loss of
the limited liability of any Limited Partner or of the limited partners of
the MLP, or cause the Partnership, the MLP, any other Group Member or
Northern Border Pipeline to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax
purposes to the extent not already so treated or taxed.
"WORKING CAPITAL BORROWINGS" has the meaning set forth in the MLP
Agreement.
ARTICLE III
PURPOSE
3.1 PURPOSE AND BUSINESS. The purpose and nature of the business to be
conducted by the Partnership shall be (a) to engage directly in, or to enter
into or form, hold and dispose of any ownership interests in any corporation,
partnership, joint venture, limited liability company
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or other arrangement to engage indirectly in, any business activities that
relate or pertain to the business of gathering, transporting by pipeline,
railcar, marine vessel or other form of transportation, processing or storing
natural gas (either in gaseous or liquid form), crude oil, refined petroleum
products, liquefied petroleum gases, coal slurry or similar activities, that is
approved by the General Partner, and in any event to conduct, directly or
indirectly, any business activities that lawfully may be conducted by a limited
partnership organized pursuant to the Delaware Act, (b) to serve as a general
partner in Northern Border Pipeline and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership as a general partner
in Northern Border Pipeline or otherwise and (c) to do anything necessary or
appropriate to the foregoing, including, without limitation, the making of
capital contributions or loans to Northern Border Pipeline (including, without
limitation, those contributions or loans that may be required in connection with
its involvement in the activities referred to in clause (b) of this sentence)
and to Subsidiaries or joint ventures. The General Partner has no obligation or
duty to the Partnership or the Limited Partners to propose or approve, and in
its sole discretion may decline to propose or approve, the conduct by the
Partnership of any business.
3.2 POWERS. The Partnership shall be empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described in
Section 3.1 and for the protection and benefit of the Partnership.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1 PRIOR CONTRIBUTIONS. On the Closing Date, pursuant to the Conveyance
Agreement (a) the Initial General Partners contributed, transferred, assigned
and delivered to the Partnership, as a Capital Contribution, a general partner
interest in Northern Border Pipeline representing, in the aggregate, a 70%
Partner's Percentage (which term, for purposes of this Section 4.1, shall have
the meaning assigned to it in the Northern Border Pipeline Partnership
Agreement) in Northern Border Pipeline in exchange for a limited partner
interest in the Partnership representing, in the aggregate, a 98.9899%
Percentage Interest in the Partnership and the continuation of their general
partner interests in the Partnership and (b) the Initial General Partners
contributed and transferred such aggregate 98.98999% Percentage Interest in the
Partnership to the MLP in exchange for continuation of such Initial General
Partners' percentage interests as general partners of the MLP. Since the Closing
Date, the Partners' Capital Accounts have been adjusted pursuant to Section 4.4.
4.2 ADDITIONAL CAPITAL CONTRIBUTIONS. With the consent of the General
Partner, a Limited Partner, may, but shall not be obligated to, make additional
Capital Contributions to the Partnership. Contemporaneously with the making of
any such additional Capital Contributions by a Limited Partner, the General
Partner shall be obligated to make additional Capital Contributions to the
Partnership such that the General Partner shall at all times, in the aggregate,
have at least a 1.0101% General Partner Percentage Interest. Except as set forth
in the immediately preceding sentence, the General Partner shall not be
obligated to make any additional Capital Contributions to the Partnership.
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4.3 NO PREEMPTIVE RIGHTS. Except as provided in Section 4.2, no Person
shall have any preemptive, preferential or other similar right with respect to
(a) additional Capital Contributions; (b) issuance or sale of any class or
series of Partnership Interests, whether unissued, held in the treasury or
hereafter created; (c) issuance of any obligations, evidences of indebtedness or
other securities of the Partnership convertible into or exchangeable for, or
carrying or accompanied by any rights to receive, purchase or subscribe to, any
such Partnership Interests; (d) issuance of any right of subscription to or
right to receive, or any warrant or option for the purchase of, any such
Partnership Interests; or (e) issuance or sale of any other securities that may
be issued or sold by the Partnership.
4.4 CAPITAL ACCOUNTS. (a) The Partnership shall maintain for each Partner
owning a Partnership Interest a separate Capital Account with respect to such
Partnership Interest in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions made to the Partnership with respect to such
Partnership Interest and (ii) all items of Partnership income and gain
(including income and gain exempt from tax) computed in accordance with Section
4.4(b) and allocated with respect to such Partnership Interest pursuant to
Section 5.1, and decreased by (x) the amount of cash or Net Agreed Value of all
actual and deemed distributions of cash or property made with respect to such
Partnership Interest and (y) all items of Partnership deduction and loss
computed in accordance with Section 4.4(b) and allocated with respect to such
Partnership Interest pursuant to Section 5.1.
(b) For purposes of computing the amount of any item of income, gain, loss
or deduction to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes (including any method of depreciation, cost recovery or amortization
used for that purpose), provided, that:
(i) Solely for purposes of this Section 4.4, the Partnership shall be
treated as owning directly its proportionate share (as determined by the
General Partner based upon the provisions of the applicable Group Member
Agreement or the Northern Border Pipeline Partnership Agreement) of all
property owned by any other Group Member that is classified as a
partnership for federal income tax purposes or Northern Border Pipeline.
(ii) All fees and other expenses incurred by the Partnership to
promote the sale of (or to sell) a Partnership Interest that can neither be
deducted nor amortized under Section 709 of the Code, if any, shall, for
purposes of Capital Account maintenance, be treated as an item of deduction
at the time such fees and other expenses are incurred and shall be
allocated among the Partners pursuant to Section 5.1.
(iii) Except as otherwise provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any election under Section
754 of the Code which may be made by the Partnership and, as to those items
described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without
regard to the fact that such items are not includable in gross income or
are neither currently deductible nor capitalized for federal income tax
purposes.
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(iv) Any income, gain or loss attributable to the taxable disposition
of any Partnership property shall be determined as ii the adjusted basis of
such property as of such date of disposition were equal in amount to the
Partnership's Carrying Value with respect to such property as of such date.
(v) In accordance with the requirements of Section 704(b) of the Code,
any deductions for depreciation, cost recovery or amortization attributable
to any Contributed Property shall be determined as if the adjusted basis of
such property on the date it was acquired by the Partnership were equal to
the Agreed Value of such property. Upon an adjustment pursuant to Section
4.4(d) to the Carrying Value of any Partnership property subject to
depreciation, cost recovery or amortization, any further deductions for
such depreciation, cost recovery or amortization attributable to such
property shall be determined (A) as if the adjusted basis of such property
were equal to the Carrying Value of such property immediately following
such adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method and useful life (or, if
applicable, the remaining useful life) as is applied for federal income tax
purposes; provided, however, that, if the asset has a zero adjusted basis
for federal income tax purposes, depreciation, cost recovery or
amortization deductions shall be determined using any reasonable method
that the General Partner may adopt.
(vi) If the Partnership's adjusted basis in a depreciable or cost
recovery property is reduced for federal income tax purposes pursuant to
Section 48(q)(1) or 48(q)(3) of the Code, the amount of such reduction
shall, solely for purposes hereof, be deemed to be an additional
depreciation or cost recovery deduction in the year such property is placed
in service and shall be allocated among the Partners pursuant to Section
5.1. Any restoration of such basis pursuant to Section 48(q)(2) of the Code
shall, to the extent possible, be allocated in the same manner to the
Partners to whom such deemed deduction was allocated.
(c) A transferee of a Partnership Interest shall succeed to a pro rata
portion of the Capital Account of the transferor relating to the Partnership
Interest so transferred.
(d) (i) Consistent with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests
for cash or Contributed Property, the Capital Account of all Partners and
the Carrying Value of each Partnership property immediately prior to such
issuance shall be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to such Partnership property, as if
such Unrealized Gain or Unrealized Loss had been recognized on an actual
sale of each such property immediately prior to such issuance and had been
allocated to the Partners at such time pursuant to Section 5.1. In
determining such Unrealized Gain or Unrealized Loss, the aggregate cash
amount and fair market value of all Partnership assets (including, without
limitation, cash or cash equivalents) immediately prior to the issuance of
additional Partnership Interests shall be determined by the General Partner
using such reasonable method of valuation as it may adopt; provided,
however, the General Partner, in arriving at such valuation, must take
fully into account the fair market value of the Partnership Interests of
all Partners at such time. The General Partner shall allocate such
aggregate value among the assets of the Partnership
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(in such manner as it determines in its sole discretion to be reasonable)
to arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
distribution to a Partner of any Partnership property (other than a
distribution of cash that is not in redemption or retirement of a
Partnership Interest), the Capital Accounts of all Partners and the
Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to
such Partnership property, as if such Unrealized Gain or Unrealized Loss
had been recognized in a sale of such property immediately prior to such
distribution for an amount equal to its fair market value, and had been
allocated to the Partners, at such time, pursuant to Section 5.1. Any
Unrealized Gain or Unrealized Loss attributable to such property shall be
allocated in the same manner as Net Termination Gain or Net Termination
Loss pursuant to Section 5.1(c); provided, however, that, in making any
such allocation, Net Termination Gain or Net Termination Loss actually
realized shall be allocated first. In determining such Unrealized Gain or
Unrealized Loss the aggregate cash amount and fair market value of all
Partnership assets (including, without limitation, cash or cash
equivalents) immediately prior to a distribution shall in the case of a
liquidating distribution pursuant to Section 13.4, be determined and
allocated by the Liquidator using such reasonable method of valuation as it
may adopt.
4.5 INTEREST. No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
4.6 NO WITHDRAWAL. No Partner shall be entitled to withdraw any part of his
Capital Contributions or its Capital Account or to receive any distribution from
the Partnership, except as provided in Section 7.3 and Articles V and XIII.
4.7 LOANS FROM PARTNERS. Loans by a Partner to the Partnership shall not
constitute Capital Contributions. If any Partner shall advance funds to the
Partnership in excess of the amounts required hereunder to be contributed by it
to the capital of the Partnership, the making of such excess advances shall not
result in any increase in the amount of the Capital Account of such Partner. The
amount of any such excess advances shall be a debt obligation of the Partnership
to such Partner and shall be payable or collectible only out of the Partnership
assets in accordance with the terms and conditions upon which such advances are
made.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES. For purposes of maintaining
the Capital Accounts and in determining the rights of the Partners among
themselves, the Partnership's items of income, gain, loss and deduction
(computed in accordance with Section 4.4(b)) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided hereinbelow.
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(a) Net Income. After giving effect to the special allocations set forth in
Section 5.1(d), Net Income for each taxable period and all items of income,
gain, loss and deduction taken into account in computing Net Income for such
taxable period shall be allocated as follows:
(i) First, 100% to the General Partner until the aggregate Net Income
allocated to the General Partner pursuant to this Section 5.1(a)(i) for the
current taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to the General Partner pursuant to Section
5.1(b)(ii) for all previous taxable years;
(ii) Second, the balance, if any, 100% to the General Partner and the
Limited Partners in the same proportion as Net Losses were allocated
pursuant to Section 5.1(b)(i) and thereafter in accordance with their
respective Percentage Interests.
(b) Net Losses. After giving effect to the special allocations set forth in
Section 5.1(d), Net Losses for each taxable period and all items of income,
gain, loss and deduction taken into account in computing Net Losses for such
taxable period shall be allocated as follows:
(i) First, 100% to the General Partner and the Limited Partners in
proportion to, and to the extent of, the positive balances in their
respective Adjusted Capital Accounts; and
(ii) Second, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the special
allocations set forth in Section 5.1(d), all items of income gain, loss and
deduction taken into account in computing Net Termination Gain or Net
Termination Loss for such taxable period shall be allocated in the same manner
as such Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 5.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this Section
5.1 and after all distributions of Available Cash provided under Section 5.3
have been made with respect to the taxable period ending on the date of the
Partnership's liquidation pursuant to Section 13.3.
(i) If a Net Termination Gain is recognized (or deemed recognized
pursuant to Section 4.4(d)), such Net Termination Gain shall be allocated
between the Partners in the following manner (and the Adjusted Capital
Accounts of the Partners shall be increased by the amount so allocated in
each of the following subclauses, in the order listed, before an allocation
is made pursuant to the next succeeding subclause):
(A) First to each Partner having a deficit balance in its
Adjusted Capital Account, in the proportion that such deficit balance
bears to the total deficit balances in the Adjusted Capital Accounts
of all Partners, until each such Partner has been allocated Net
Termination Gain equal to any such deficit balance in its Adjusted
Capital Account; and
(B) Second, 100% to the General Partner and the Limited Partners
in accordance with their respective Percentage Interests.
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(ii) If a Net Termination Loss is recognized (or deemed recognized
pursuant to Section 4.4(d)), such Net Termination Loss shall be allocated
to the Partners in the following manner:
(A) First, 100% to the General Partner and the Limited Partners
in proportion to, and to the extent of, the positive balances in their
respective Adjusted Capital Accounts; and
(B) Second, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provision of this
Section 5.1, the following special allocations shall be made for such taxable
period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 5.1, if there is a net decrease in Partnership
Minimum Gain during any Partnership taxable period, each Partner shall be
allocated items of Partnership income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts provided in
Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and
1.704-2(j)(2)(i), or any successor provision. For purposes of this Section
5.1(d), each Partner's Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required hereunder shall
be effected, prior to the application of any other allocations pursuant to
this Section 5.1(d) with respect to such taxable period (other than an
allocation pursuant to Sections 5.1(d)(v) and 5.1(d)(vi)). This Section
5.1(d)(i) is intended to comply with the Partnership Minimum Gain
chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall
be interpreted consistently therewith.
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Section 5.1 (other than
Section 5.1(d)(i)), except as provided in Treasury Regulation Section
1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt
Minimum Gain during any Partnership taxable period, any Partner with a
share of Partner Nonrecourse Debt Minimum Gain at the beginning of such
taxable period shall be allocated items of Partnership income and gain for
such period (and, if necessary, subsequent periods) in the manner and
amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 5.1(d), each Partner's Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required hereunder shall
be effected, prior to the application of any other allocations pursuant to
this Section 5.1(d), other than Section 5.1(d)(i) and other than an
allocation pursuant to Sections 5.1(d)(v) and 5.1(d)(vi), with respect to
such taxable period. This Section 5.1(d)(ii) is intended to comply with the
chargeback of items of income and gain requirement in Treasury Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(iii) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in
Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items
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of Partnership income and gain shall be specially allocated to such Partner
in an amount and manner sufficient to eliminate, to the extent required by
the Treasury regulations promulgated under Section 704(b) of the Code, the
deficit balance, if any, in its Adjusted Capital Account created by such
adjustments, allocations or distributions as quickly as possible unless
such deficit balance is otherwise eliminated pursuant to Section 5.1(d)(i)
or (ii).
(iv) Gross Income Allocations. In the event any Partner has a deficit
balance in its Adjusted Capital Account at the end of any Partnership
taxable period, such Partner shall be specially allocated items of
Partnership gross income and gain in the amount of such excess as quickly
as possible; provided, that an allocation pursuant to this Section
5.1(d)(iv) shall be made only if and to the extent that such Partner would
have a deficit balance in its Capital Account as adjusted after all other
allocations provided for in this Section 5.1 have been tentatively made as
if this Section 5.1(d)(iv) were not in this Agreement.
(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable
period shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the General Partner determines in its
good faith discretion that the Partnership's Nonrecourse Deductions must be
allocated in a different ratio to satisfy the safe harbor requirements of
the Treasury Regulations promulgated under Section 704(b) of the Code, the
General Partner is authorized, upon notice to the Limited Partners, to
revise the prescribed ratio to the numerically closest ratio that does
satisfy such requirements.
(vi) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions
for any taxable period shall be allocated 100% to the Partner that bears
the Economic Risk of Loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable in accordance
with Treasury Regulation Section 1.704-2(i). If more than one Partner bears
the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, such
Partner Nonrecourse Deductions attributable thereto shall be allocated
between or among such Partners in accordance with the ratios in which they
share such Economic Risk of Loss.
(vii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of
the Partnership in excess of the sum of (A) the amount of Partnership
Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall be
allocated among the Partners in accordance with their respective Percentage
Interests.
(viii) Code Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Section 734(b)
or 743(b) of the Code is required, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis), and such item of
gain or loss shall be specially allocated to the Partners in a manner
consistent with the manner in
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which their Capital Accounts are required to be adjusted pursuant to such
Section of the Treasury regulations.
(ix) Curative Allocation.
(A) Notwithstanding any other provision of this Section 5.1,
other than the Required Allocations, the Required Allocations shall be
taken into account in making the Agreed Allocations so that, to the
extent possible, the net amount of items of income, gain, loss and
deduction allocated to each Partner pursuant to the Required
Allocations and the Agreed Allocations, together, shall be equal to
the net amount of such items that would have been allocated to each
such Partner under the Agreed Allocations had the Required Allocations
and the related Curative Allocation not otherwise been provided in
this Section 5.1. Notwithstanding the preceding sentence, Required
Allocations relating to (1) Nonrecourse Deductions shall not be taken
into account except to the extent that there has been a decrease in
Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall
not be taken into account except to the extent that there has been a
decrease in Partner Nonrecourse Debt Minimum Gain. Allocations
pursuant to this Section 5.1(d)(ix)(A) shall only be made with respect
to Required Allocations to the extent the General Partner reasonably
determines that such allocations will otherwise be inconsistent with
the economic agreement among the Partners. Further, allocations
pursuant to this Section 5.1(d)(ix)(A) shall be deferred with respect
to allocations pursuant to clauses (1) and (2) hereof to the extent
the General Partner reasonably determines that such allocations are
likely to be offset by subsequent Required Allocations.
(B) The General Partner shall have reasonable discretion, with
respect to each taxable period, to (1) apply the provisions of Section
5.1(d)(ix)(A) in whatever order is most likely to minimize the
economic distortions that might otherwise result from the Required
Allocations, and (2) divide all allocations pursuant to Section
5.1(d)(ix)(A) among the Partners in a manner that is likely to
minimize such economic distortions.
5.2 ALLOCATIONS FOR TAX PURPOSES. (a) Except as otherwise provided herein,
for federal income tax purposes, each item of income, gain, loss and deduction
shall be allocated among the Partners in the same manner as its correlative item
of "book" income, gain, loss or deduction is allocated pursuant to Section 5.1.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items attributable
thereto shall be allocated among the Partners in the manner provided under
Section 704(c) of the Code that takes into account the variation between
the Agreed Value of such property and its adjusted basis at the time of
contribution; and (B) except as otherwise provided in
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Section 5.2(b)(iv), any item of Residual Gain or Residual Loss attributable
to a Contributed Property shall be allocated among the Partners in the same
manner as its correlative item of "book" gain or loss is allocated pursuant
to Section 5.1.
(ii) (A) In the case of an Adjusted Property, such items shall (1)
first, be allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and the
allocations thereof pursuant to Section 4.4(d)(i) or (ii), and (2) second,
in the event such property was originally a Contributed Property, be
allocated among the Partners in a manner consistent with Section
5.2(b)(i)(A); and (B) except as otherwise provided in Section 5.2(b)(iv),
any item of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Partners in the same manner as Its
correlative item of "book" gain or loss is allocated pursuant to Section
5.1.
(iii) Except as otherwise provided in Section 5.2(b)(iv), all other
items of income, gain, loss and deduction shall be allocated among the
Partners in the same manner as their correlative item of "book" gain or
loss is allocated pursuant to Section 5.1.
(iv) Any items of income, gain, loss or deduction otherwise allocable
under Section 5.2(b)(i)(B), 5.2(b)(ii)(B) or 5.2(b)(iii) shall be subject
to allocation by the General Partner in a manner designed to eliminate, to
the maximum extent possible, Book Tax Disparities in a Contributed Property
or Adjusted Property otherwise resulting from the application of the
"ceiling" limitation (under Section 704(c) of the Code or Section 704(c)
principles) to the allocations provided under Section 5.2(b)(i)(A) or
5.2(b)(ii)(A). The General Partner shall apply the principles of Treasury
Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) For the proper administration of the Partnership and for the
preservation of uniformity of any class or classes of Partnership Interests, the
General Partner shall have sole discretion to (i) adopt such conventions as it
deems appropriate in determining the amount of depreciation, amortization and
cost recovery deductions; (ii) make special allocations for federal income tax
purposes of income (including, without limitation, gross income) or deductions;
and (iii) amend the provisions of this Agreement as appropriate (x) to reflect
the proposal or promulgation of Treasury regulations under Section 704(b) or
Section 704(c) of the Code or (y) otherwise to preserve or achieve uniformity of
any class or classes of Partnership Interests. The General Partner may adopt
such conventions, make such allocations and make such amendments to this
Agreement as provided in this Section 5.2(c) only if such conventions,
allocations or amendments would not have a material adverse effect on the
Partners, the holders of any class or classes of Partnership Interests or the
Partnership, and if such allocations are consistent with the principles of
Section 704 of the Code.
(d) The General Partner in its sole discretion may determine to depreciate
or amortize the portion of an adjustment under Section 743(b) of the Code
attributable to unrealized appreciation in any Adjusted Property (to the extent
of the unamortized Book-Tax Disparity) using a predetermined rate derived from
the depreciation or amortization method and useful life applied to the
Partnership's common basis of such property, despite any inconsistency of such
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approach with Treasury Regulation Section 1.167(c)-1(a)(6) or any successor
regulations thereto. If the General Partner determines that such reporting
position cannot reasonably be taken, the General Partner may adopt depreciation
and amortization conventions under which all purchasers acquiring Partnership
Interests in the same month would receive depreciation and amortization
deductions, based upon the same applicable rate as it they had purchased a
direct interest in the Partnership's property. If the General Partner chooses
not to utilize such aggregate method, the General Partner may use any other
reasonable depreciation and amortization conventions to preserve the uniformity
of the intrinsic tax characteristics of any class or classes of Partnership
Interests that would not have a material adverse effect on the Limited Partners
or the holders of any class or classes of Partnership Interests.
(e) Any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall, to the extent possible, after taking
into account other required allocations of gain pursuant to this Section 5.2, be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners (or their predecessors in interest) have been allocated any
deductions directly or indirectly giving rise to the treatment of such gains as
Recapture Income.
(f) All items of income, gain, loss, deduction and credit recognized by the
Partnership for federal income tax purposes and allocated to the Partners in
accordance with the provisions hereof shall be determined without regard to any
election under Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations, once made, shall be adjusted as
necessary or appropriate to take into account those adjustments permitted or
required by Sections 734 and 743 of the Code.
(g) The General Partner may adopt such methods of allocation of income,
gain, loss or deduction between a transferor and a transferee of a Partnership
Interest as it determines necessary, to the extent permitted or required by
Section 706 of the Code and the regulations or rulings promulgated thereunder.
5.3 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS. (a) Within 45 days
following the end of each calendar quarter an amount equal to 100% of Available
Cash with respect to such quarter (or period) shall be distributed in accordance
with this Article V by the Partnership to the Partners in accordance with their
respective Percentage Interests. The immediately preceding sentence shall not
require any distribution of cash if and to the extent such distribution would be
prohibited by applicable law or by any loan agreement, security agreement,
mortgage, debt instrument or other agreement or obligation to which the
Partnership is a party or by which it is bound or its assets are subject.
(b) Notwithstanding the definition of Available Cash contained herein,
disbursements (including, without limitation, contributions to Northern Border
Pipeline or disbursements on behalf of Northern Border Pipeline) made or
reserves established after the end of any quarter shall be deemed to have been
made or established, for purposes of determining Available Cash, within such
quarter if the General Partner so determines. Notwithstanding the foregoing, in
the event of the dissolution and liquidation of the Partnership, all proceeds of
such liquidation shall be applied and distributed in accordance with, and
subject to the terms and conditions of, Section 13.4.
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ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
6.1 MANAGEMENT.
(a) Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership shall be
exclusively vested in the General Partner, and no Limited Partner or Assignee
shall have any management power over the business and affairs of the
Partnership. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or that are granted to the
General Partner under any other provision of this Agreement, the General
Partner, subject to Section 6.3, shall have full power and authority to do all
things and on such terms as it determines to be necessary or appropriate to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 and to effectuate the purposes set forth in Section 3.1, including
the following:
(i) the making of any expenditures, the lending or borrowing of money,
the assumption or guarantee of, or other contracting for, indebtedness and
other liabilities, the issuance of evidences of indebtedness, including
indebtedness that is convertible into, equity securities of the
Partnership, and the incurring of any other obligations;
(ii) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the Partnership or
the merger or other combination of the Partnership with or into another
Person (the matters described in this clause (iii) being, subject, however,
to any prior approval that may be required by Section 6.3 and Article XV);
(iv) the use of the assets of the Partnership (including cash on hand)
for any purpose consistent with the terms of this Agreement, including the
financing of the conduct of the operations of the Partnership Group;
subject to Section 6.6(a), the lending of funds to other Persons (including
other Group Members); the repayment or guarantee of obligations of any
Group Member; and the making of capital contributions to any Group Member;
(v) the negotiation, execution and performance of any contracts,
conveyances or other instruments (including instruments that limit the
liability of the Partnership under contractual arrangements to all or
particular assets of the Partnership, with the other party to the contract
to have no recourse against the General Partner or its assets other than
their interest in the Partnership, even if same results in the terms of the
transaction being less favorable to the Partnership than would otherwise be
the case);
(vi) the distribution of Partnership cash;
(vii) the selection and dismissal of employees (including employees
having titles such as "president," "chief executive officer," "vice
president," "chief financial
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officer," "chief accounting officer," "secretary" and "treasurer") and
agents, outside attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of employment or
hiring;
(viii) the maintenance of insurance for the benefit of the Partnership
Group, the Partners and Indemnitees;
(ix) the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any further limited or
general partnerships, joint ventures, corporations, limited liability
companies or other relationships (including the acquisition of interests
in, and the contributions of property to, any Group Member from time to
time) subject to the restrictions set forth in Section 3.1;
(x) the control of any matters affecting the rights and obligations of
the Partnership, including the bringing and defending of actions at law or
in equity and otherwise engaging in the conduct of litigation, arbitration
or mediation and the incurring of legal expense and the settlement of
claims and litigation;
(xi) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;
(xii) the purchase, sale or other acquisition or disposition of
Partnership securities, or the issuance of options, rights, warrants and
appreciation rights relating to Partnership securities;
(xiii) the undertaking of any action in connection with the
Partnership's participation in any Group Member; and
(xiv) the entering into of agreements with any of its Affiliates to
render services to the MLP, a Group Member or to itself in the discharge of
its duties as General Partner of the Partnership.
(b) Notwithstanding any other provision of this Agreement, any Group Member
Agreement, the Delaware Act or any applicable law, rule or regulation, each of
the Partners and the Assignees and each other Person who may acquire an interest
in Partnership securities hereby (i) approves, ratifies and confirms the
execution, delivery and performance by the parties thereto of this Agreement and
the Group Member Agreement of each other Group Member, and the engaging by any
Affiliate of the General Partner in the transportation, gathering, marketing,
storage, treatment or processing of natural gas or other hydrocarbons and
related activities, including, without limitation, the expansion of existing
facilities owned or operated by such Affiliate, the acquisition of additional
facilities or the construction of new facilities, even if such activities are in
direct competition with the business and activities of the Partnership, any
other Group Member or Northern Border Pipeline; (ii) agrees that the General
Partner (on its own or through any authorized officer of the Partnership) is
authorized to execute, deliver and perform the agreements referred to in clause
(i) of this sentence and the other agreements, acts, transactions and matters
described in or contemplated therein on behalf of the Partnership without any
further act, approval or vote of the Partners or the Assignees or the other
Persons who may acquire an interest in Partnership securities; (iii) agrees that
the execution, delivery or
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performance by the General Partner, any Group Member or any Affiliate of any of
them of this Agreement or any agreement authorized or permitted under this
Agreement, or the engaging by any Affiliate of the General Partner in any of the
activities specified in clause (i) above, even if such activities are in direct
competition with the business and activities of the Partnership or any other
Group Member, shall not constitute a breach by the General Partner, any officers
of the General Partner or any such Affiliate of any duty that any such Person
may owe the Partnership or the Limited Partners or any other Persons under this
Agreement (or any other agreements) or of any duty stated or implied by law or
equity; and (iv) agrees that the Partnership and its designated representative
on the NBPL Management Committee shall not be in breach of any standard of care
or duty imposed by this Agreement or under the Delaware Act or any applicable
law, rule or regulation with respect to the voting of the interest of the
Partnership on the NBPL Management Committee if such designated representative
acted in good faith and in a manner reasonably believed by such person to be in,
or not inconsistent with, the best interests of the Partnership.
6.2 CERTIFICATE OF LIMITED PARTNERSHIP. The Certificate of Limited
Partnership has been filed with the Secretary of State of the State of Delaware
as required by the Delaware Act. The General Partner shall use all reasonable
efforts to cause to be filed such other certificates or documents as may be
determined by the General Partner in its sole discretion to be reasonable and
necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware or any other state in
which the Partnership may elect to do business or own property. To the extent
that such action is determined by the General Partner in its sole discretion to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate of Limited Partnership and do
all things to maintain the Partnership as a limited partnership (or a
partnership or other entity in which the limited partners have limited
liability) under the laws of the State of Delaware or of any other state in
which the Partnership may elect to do business or own property. Subject to the
terms of Section 7.4(a), the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate of Limited
Partnership, any qualification document or any amendment thereto to any Limited
Partner or Assignee.
6.3 RESTRICTIONS ON THE GENERAL PARTNER'S AUTHORITY.
(a) Except as provided in Articles XIII and XV, the General Partner may
not, without the prior approval of the Limited Partner, sell, exchange or
otherwise dispose of all or substantially all of the Partnership's assets in a
single transaction or a series of related transactions; provided, however, that
this provision shall not preclude or limit the General Partner's ability to
mortgage, pledge, hypothecate or grant a security interest in all or
substantially all of the Partnership's assets and shall not apply to any forced
sale of any or all of the Partnership's assets pursuant to the foreclosure of,
or other realization upon, any such encumbrance.
(b) Unless approved by the Limited Partners, the General Partner shall not
take any action or refuse to take any reasonable action the effect of which, if
taken or not taken, as the case may be, would be to cause the Partnership or
Northern Border Pipeline to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax
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purposes; provided that this Section 6.3(b) shall not be construed to apply to
amendments to this Agreement (which are governed by Article XIV) or mergers or
consolidations of the Partnership with any Person (which are governed by Article
XV) or of Northern Border Pipeline with any Person (which are governed by the
provisions of the Northern Border Pipeline Company Partnership Agreement).
6.4 REIMBURSEMENT OF THE GENERAL PARTNER.
(a) Except as provided in this Section 6.4 and elsewhere in this Agreement
or any Group Member Agreement, the General Partner shall not be compensated for
its services as general partner of the Partnership or of any Group Member.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine, for (i) all direct and
indirect expenses it incurs or payments it makes on behalf of the Partnership
Group (including salary, bonus, incentive compensation and other amounts paid to
any Person, including Affiliates of the General Partner to perform services for
the Partnership Group or for the General Partner in the discharge of its duties
to the Partnership Group and including overhead allocated to the Partnership by
any Affiliate of the General Partner), and (ii) all other necessary or
appropriate expenses allocable to the Partnership Group or otherwise reasonably
incurred by such Person in connection with operating the Partnership Group's
business (including expenses allocated to such Person by its Affiliates);
provided, however, that ONEOK and its Affiliates, including OPGP, shall not be
reimbursed hereunder for any amounts that are duplicative of amounts paid by any
member of the Partnership Group (A) to ONEOK pursuant to the Services Agreement
and (B) to OPGP (i) by Northern Border Pipeline under its Operating Agreement
with Northern Border Pipeline dated February 28, 1990, as amended; (ii) by
Midwestern Gas Transmission Company under its Operating Agreement dated May 1,
2001; (iii) by Viking Gas Transmission Company under its Operating Agreement
dated January 17, 2003; and (iv) by Guardian Pipeline, LLC under its Amended and
Restated Operating Agreement dated May 1, 2006. The General Partner shall
determine the fees and expenses that are allocable to the Partnership Group.
Reimbursements pursuant to this Section 6.4 shall be in addition to any
reimbursement to such Person as a result of indemnification pursuant to Section
6.7.
6.5 OUTSIDE ACTIVITIES.
(a) The General Partner, for so long as it is a general partner of the
Partnership (i) agrees that its sole business will be to act as a general
partner or managing member, as the case may be, of the Partnership and any other
partnership or limited liability company of which the Partnership is, directly
or indirectly, a partner or member and to undertake activities that are
ancillary or related thereto (including being a limited partner in the
Partnership) and (ii) shall not engage in any business or activity or incur any
debts or liabilities except in connection with or incidental to (A) its
performance as general partner, managing member or operator, if any, of one or
more Group Members or Northern Border Pipeline or as described in or
contemplated by the Registration Statement, (B) the acquiring, owning or
disposing of debt or equity securities in any Group Member (except that,
notwithstanding the foregoing, employees of each General Partner may perform
services for Affiliates of the General Partner) and (C) any business, debts or
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liabilities permitted of a general partner of Northern Border Pipeline pursuant
to the terms of the Northern Border Pipeline Partnership Agreement.
(b) Except as described in the Registration Statement or Section 6.5(a), no
Indemnitee shall be expressly or implicitly restricted or proscribed pursuant to
this Agreement, any Group Member Agreement, the Northern Border Pipeline
Partnership Agreement or the partnership relationship established hereby or
thereby from engaging in other activities for profit, whether in the businesses
engaged in by any Group Member or Northern Border Pipeline or anticipated to be
engaged in by any Group Member, Northern Border Pipeline or otherwise,
including, without limitation, in the case of any Affiliate of the General
Partner, those businesses and activities described in or contemplated by Section
6.1(b)(i) and by the Registration Statement. Without limitation of and subject
to the foregoing, each Indemnitee (other than the General Partner) shall have
the right to engage in businesses of every type and description and to engage in
and possess an interest in other business ventures of any and every type or
description, independently or with others, including, without limitation, in the
case of any Affiliate of the General Partner, business interests and activities
of the type described in Section 6.1(b)(i), and none of the same shall
constitute a breach of this Agreement, any Group Member Agreement or any duty to
any Group Member or any Partners. Neither any Group Member, any Limited Partner
nor any other Person shall have any rights by virtue of this Agreement, any
Group Member Agreement, the Northern Border Pipeline Partnership Agreement or
the partnership relationship established hereby or thereby in any business
ventures of any Indemnitee (subject, in the case of the General Partner, to
compliance with Section 6.5(a)), and such Indemnitees shall have no obligation
to offer any interest in any such business ventures to any Group Member,
Northern Border Pipeline, any Limited Partner or any other Person.
(c) Subject to the terms of Section 6.5(a) and Section 6.5(b), but
otherwise notwithstanding anything to the contrary in this Agreement, (i) the
engaging in competitive activities by any Indemnitees (other than the General
Partner) in accordance with the provisions of this Section 6.5 is hereby
approved by the Partnership and all Partners, (ii) it shall be deemed not to be
a breach of any fiduciary duty or any other obligation of any type whatsoever of
the General Partner or of any Indemnitee for any such Persons to permit an
Indemnitee (other than the General Partner) to engage in such business interests
and activities in preference to or to the exclusion of the Partnership and (iii)
the Indemnitees shall have no obligation hereunder or as a result of any duty
expressed or implied by law to present business opportunities to the
Partnership.
6.6 LOANS TO AND FROM THE GENERAL PARTNER; LOANS OR CONTRIBUTIONS FROM THE
PARTNERSHIP OR GROUP MEMBERS.
(a) The General Partner or any of its Affiliates may lend to any Group
Member, and any Group Member may borrow from the General Partner or any of its
Affiliates, funds needed or desired by the Group Member, in each case for such
periods of time and in such amounts as the General Partner may determine;
provided, however, that in either such case the lending party may not charge the
borrowing party interest at a rate greater than the rate that would be charged
the borrowing party or impose terms less favorable to the borrowing party than
would be charged or imposed on the borrowing party by unrelated lenders on
comparable loans made on an arm's-length basis (without reference to the lending
party's financial abilities or guarantees), all as
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determined by the General Partner. The borrowing party shall reimburse the
lending party for any costs (other than any additional interest costs) incurred
by the lending party in connection with the borrowing of such funds. For
purposes of this Section 6.6(a) and Section 6.6(b), the term "Group Member"
shall include any Affiliate of a Group Member that is controlled by the Group
Member.
(b) The Partnership may lend or contribute to any Group Member, and any
Group Member may borrow from the Partnership, funds on terms and conditions
determined by the General Partner; provided, however, that the MLP may not
charge the Partnership interest at a rate greater than the rate that would be
charged to the Partnership (without reference to the financial abilities or
guarantees of the General Partner), by unrelated lenders on comparable loans. No
Group Member may lend funds to the General Partner or any of its Affiliates
(other than another Group Member).
(c) The General Partner may permit the Partnership to enter into one or
more agreements, in addition to the Services Agreement, with the General Partner
and its Affiliates to render services to the Partnership or to the General
Partner in the discharge of its duties to the Partnership. Any services rendered
to the Partnership by the General Partner or any of its Affiliates shall be on
terms that are fair and reasonable to the Partnership; provided, however, that
the requirements of this Section 6.6(c) shall be deemed satisfied as to (i) any
transaction approved by Special Approval, (ii) any transaction, the terms of
which are no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties or (iii) any transaction
that, taking into account the totality of the relationships between the parties
involved (including other transactions that may be particularly favorable or
advantageous to the Partnership), is equitable to the Partnership. The
provisions of Section 6.4 shall apply to the rendering of services described in
this Section 6.6(c).
(d) The General Partner may cause the Partnership to transfer assets to
joint ventures, other partnerships, corporations, limited liability companies,
or other business entities in which it is or thereby becomes a participant upon
such terms and subject to such conditions as are consistent with this Agreement
and applicable law.
(e) None of the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership; provided, however, that the requirements
of this Section 6.6(e) shall be deemed to be satisfied as to (i) the
transactions effected pursuant to the Conveyance Agreement and any other
transactions described in or contemplated by the Registration Statement, (ii)
any transaction approved by Special Approval, (iii) any transaction, the terms
of which are no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties, or (iv) any transaction
that, taking into account the totality of the relationships between the parties
involved (including other transactions that may be particularly favorable or
advantageous to the Partnership), is equitable to the Partnership.
(f) The General Partner and its Affiliates will have no obligation to
permit the Partnership, any other Group Member or Northern Border Pipeline to
use any facilities or assets of the General Partner and its Affiliates, except
as may be provided in contracts entered into
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from time to time specifically dealing with such use, nor shall there be any
obligation on the part of the General Partner or its Affiliates to enter into
such contracts.
(g) Without limitation of Sections 6.6(a) through 6.6(f), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statement are hereby
approved by all Partners.
6.7 INDEMNIFICATION.
(a) To the fullest extent permitted by law but subject to the limitations
expressly provided in this Agreement, all Indemnitees shall be indemnified and
held harmless by the Partnership from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including legal fees and
expenses), judgments, fines, penalties, interest, settlements and other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
its status as an Indemnitee; provided, that in each case the Indemnitee acted in
good faith and in a manner which such Indemnitee believed to be in, or not
opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful; provided, further, that no indemnification pursuant to this Section
6.7 shall be available to the General Partner with respect to its obligations
incurred pursuant to the Indemnity Agreement, any underwriting agreement or the
Contribution Agreement (other than obligations incurred by the General Partner
on behalf of any Group Member). The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 6.7 shall be made only out of the
assets of the Partnership, it being agreed that the General Partner shall not be
personally liable for such indemnification and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to
effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses (including legal fees
and expenses) incurred by an Indemnitee who is indemnified pursuant to Section
6.7(a) in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by the Partnership prior to a determination that the
Indemnitee is not entitled to be indemnified upon receipt by the Partnership of
any undertaking by or on behalf of the Indemnitee to repay such amount if it
shall be determined that the Indemnitee is not entitled to be indemnified as
authorized in this Section 6.7.
(c) The indemnification provided by this Section 6.7 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
pursuant to any vote of the holders of outstanding Limited Partner Interests, as
a matter of law or otherwise, both as to actions in the Indemnitee's capacity as
an Indemnitee and as to actions in any other capacity (including any capacity
under any underwriting agreement), and shall continue as to an Indemnitee who
has ceased to serve in such capacity and shall inure to the benefit of the
heirs, successors, assigns and administrators of the Indemnitee.
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(d) The Partnership may purchase and maintain (or reimburse the General
Partner or its Affiliates for the cost of) insurance, on behalf of the General
Partner and such other Persons as the General Partner shall determine, against
any liability that may be asserted against, or expense that may be incurred by,
such Person in connection with the Partnership's activities or such Person's
activities on behalf of the Partnership, regardless of whether the Partnership
would have the power to indemnify such Person against such liability under the
provisions of this Agreement.
(e) For purposes of this Section 6.7, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute "fines"
within the meaning of Section 6.7(a); and action taken or omitted by it with
respect to any employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose that is in the
best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 6.7 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 6.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligations of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
6.8 LIABILITY OF INDEMNITEES.
(a) Notwithstanding anything to the contrary set forth in this Agreement,
no Indemnitee shall be liable for monetary damages to the Partnership, the
Limited Partners, the Assignees or any other Persons who have acquired interests
in Partnership securities, for losses sustained or liabilities incurred as a
result of any act or omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties as set forth in Section 6.1, the
General Partner may exercise any of the powers granted to it by this Agreement
and perform any of the duties
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imposed upon it hereunder either directly or by or through its agents, and the
General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by the General Partner in good faith.
(c) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership
or to the Partners, the General Partner and any other Indemnitee acting in
connection with the Partnership's business or affairs shall not be liable to the
Partnership or to any Partner for its good faith reliance on the provisions of
this Agreement.
(d) Any amendment, modification or repeal of this Section 6.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability of the Indemnitees under this Section 6.8 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.
6.9 RESOLUTION OF CONFLICTS OF INTEREST; STANDARDS OF CONDUCT AND
MODIFICATION OF DUTIES.
(a) Unless otherwise expressly provided in this Agreement or any Group
Member Agreement, whenever a potential conflict of interest exists or arises
between the General Partner or any of its Affiliates, on the one hand, and the
Partnership, any Group Member, any Partner or any Assignee, on the other, any
resolution or course of action by the General Partner or its Affiliates in
respect of such conflict of interest shall be permitted and deemed approved by
all Partners, and shall not constitute a breach of this Agreement, of any Group
Member Agreement, of any agreement contemplated herein or therein, or of any
duty stated or implied by law or equity, if the resolution or course of action
in respect of such conflict of interest is (i) approved by Special Approval,
(ii) on terms no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties or (iii) fair and
reasonable to the Partnership, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership). The General
Partner shall be authorized but not required in connection with its resolution
of such conflict of interest to seek Special Approval of such resolution, and
the General Partner may also adopt a resolution or course of action that has not
received Special Approval. The General Partner and each representative of the
Partnership on the NBPL Management Committee (and the Conflicts Committee of the
MLP in connection with the Special Approval) shall be authorized in connection
with its determination of what is "fair and reasonable" to the Partnership and
in connection with its resolution of any conflict of interest to consider (A)
the relative interests of any party to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interest; (B) any
customary or accepted industry practices and any customary or historical
dealings with a particular Person; (C) any applicable generally accepted
accounting or engineering practices or principles; and (D) such additional
factors as the General Partner or representative of the Partnership on the NBPL
Management Committee (and, if applicable, the Conflicts Committee) determines in
its sole discretion to be relevant, reasonable or appropriate under the
circumstances. Nothing contained in this Agreement, however, is intended to nor
shall it be construed to require the General Partner or representative of the
Partnership on the NBPL
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Management Committee (or the Conflicts Committee) to consider the interests of
any Person other than the Partnership. In the absence of bad faith by the
General Partner or representative of the Partnership on the NBPL Management
Committee, the resolution, action or terms so made, taken or provided by the
General Partner or representative of the Partnership on the NBPL Management
Committee with respect to such matter shall not constitute a breach of this
Agreement or any other agreement contemplated herein or a breach of any standard
of care or duty imposed herein or therein or under the Delaware Act or any other
law, rule or regulation. If Special Approval is not sought and the General
Partner determines that the resolution or course of action taken with respect to
a conflict of interest satisfies either of the standards set forth in clauses
(i) or (ii) above, then it shall be presumed that, in making its decision, the
General Partner acted in good faith, and in any proceeding brought by any
Limited Partner or Assignee or by or on behalf of such Limited Partner or
Assignee or any other Limited Partner or Assignee or the Partnership challenging
such approval, the Person bringing or prosecuting such proceeding shall have the
burden of overcoming such presumption.
(b) Whenever the General Partner, in its capacity as the general partner of
the Partnership as opposed to in its individual capacity, makes a determination
or takes or declines to take any other action, or any of its Affiliates causes
it to do so whether under this Agreement, any Group Member Agreement or any
other agreement contemplated hereby provides that the General Partner or any of
its Affiliates, is permitted or required to make a decision (i) in its "sole
discretion" or "discretion," that it deems "necessary or appropriate" or under a
grant of similar authority or latitude, the General Partner or such Affiliate
shall be entitled to consider only such interests and factors as it desires and
shall have no duty or obligation to give any consideration to any interest of,
or factors affecting, the Partnership, the MLP or any Limited Partner, (ii) it
may make such decision in its sole discretion (regardless of whether there is a
reference to "sole discretion" or "discretion"), or (iii) in "good faith" or
under another express standard, the General Partner or such Affiliate shall act
under such express standard and shall not be subject to any other or different
standards imposed by this Agreement, the MLP Agreement, any other Group Member
Agreement, any other agreement contemplated hereby or under the Delaware Act or
any other law, rule or regulation or at equity. In addition, any actions taken
by the General Partner or such Affiliate consistent with the standards of
"reasonable discretion" set forth in the definition of Available Cash shall not
constitute a breach of any duty of General Partner to the Partnership or the
Limited Partners. The General Partner shall have no duty, express or implied, to
sell or otherwise dispose of any asset of the Partnership, other than in the
ordinary course of business. No borrowing by the Partnership or the MLP or the
approval thereof by the general partner shall be deemed to constitute a breach
of any duty of the General Partner to the Partnership or the Limited Partners by
reason of the fact that the purpose or effect of such borrowing is directly or
indirectly to enable the General Partner of the MLP to receive or increase the
amount of Incentive Distributions (as such term is defined in the MLP
Agreement). In order for a determination or other action to be in "good faith"
for purposes of this Agreement, the Person or Persons making such determination
or taking or declining to take such other action must believe that the
determination or other action is in, or not inconsistent with, the best
interests of the Partnership.
(c) Whenever the General Partner, in its individual capacity as opposed to
in its capacity as the general partner of the Partnership, makes a determination
or takes or declines to take any other action, or any of its Affiliates causes
it to do so whether under this Agreement,
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any Group Member Agreement or any other agreement contemplated hereby or
otherwise, then the General Partner, or such Affiliate(s) causing it to do so,
is entitled to make such determination or to take or decline to take such other
action free of any fiduciary duty or obligation whatsoever to the Partnership,
any Limited Partner or Assignee, and the General Partner, or such Affiliates
causing it to do so, shall not be required to act in good faith or pursuant to
any other standard imposed by this Agreement, any Group Member Agreement, any
other agreement contemplated hereby or under the Delaware Act or any other law,
rule or regulation or at equity. By way of illustration and not of limitation,
whenever the phrase, "at the option of the General Partner," or some variation
of that phrase, is used in this Agreement, it indicates that the General Partner
is acting in its individual capacity. The General Partner's organizational
documents may provide that determinations to take or decline to take any action
in its individual, rather than representative, capacity may or shall be
determined by its members, if such General Partner is a limited liability
company, stockholders, if such General Partner is a corporation, or the members
or stockholders of such General Partner's general partner, if such General
Partner is a partnership.
(d) Whenever a particular transaction, arrangement or resolution of a
conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of similar or
related transactions.
6.10 OTHER MATTERS CONCERNING THE GENERAL PARTNER.
(a) The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the advice or opinion (including an Opinion of Counsel) of such Persons as
to matters that the General Partner reasonably believes to be within such
Person's professional or expert competence shall be conclusively presumed to
have been done or omitted in good faith and in accordance with such advice or
opinion.
(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of the duly authorized
officers of the Partnership or the General Partner and their duly appointed
attorney or attorneys-in-fact.
(d) Any standard of care and duty imposed by this Agreement or under the
Delaware Act or any applicable law, rule or regulation shall be modified, waived
or limited as required to permit the General Partner to act under this Agreement
or any other agreement contemplated by this Agreement and to make any decision
pursuant to the authority prescribed in this Agreement so long as such action is
reasonably believed by the General Partner to be in, or not inconsistent with,
the best interests of the Partnership.
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6.11 TITLE TO PARTNERSHIP ASSETS.
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner or Assignee, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner, one or more of their Affiliates or one or more nominees, as
the General Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which record title is held in the name
of the General Partner or one or more of its Affiliates or one or more nominees
shall be held by the General Partner or such Affiliate or nominee for the use
and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its reasonable
efforts to cause record title to such assets (other than those assets in respect
of which the General Partner determines that the expense and difficulty of
conveyancing makes transfer of record title to the Partnership impracticable) to
be vested in the Partnership as soon as reasonably practicable; provided that,
prior to the withdrawal or removal of the General Partner or as soon thereafter
as practicable, the General Partner shall use reasonable efforts to effect the
transfer of record title to the Partnership and, prior to any such transfer,
will provide for the use of such assets in a manner satisfactory to the
Partnership. All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which record
title to such Partnership assets is held.
6.12 -RELIANCE BY THIRD PARTIES. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner and any officer of the Partnership authorized by
the General Partner to act on behalf of and in the name of the Partnership has
full power and authority to encumber, sell or otherwise use in any manner any
and all assets of the Partnership and to enter into any authorized contracts on
behalf of the Partnership, and such Person shall be entitled to deal with the
General Partner or any such officer as if it were the Partnership's sole party
in interest, both legally and beneficially. Each Limited Partner hereby waives
any and all defenses or other remedies that may be available against such Person
to contest, negate or disaffirm any action of the General Partner or any such
officer in connection with any such dealing. In no event shall any Person
dealing with the General Partner or any such officer or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or any such officer or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (a) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (b) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and (c)
such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.
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ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
7.1 LIMITATION OF LIABILITY. The Limited Partners shall have no liability
under this Agreement except as expressly provided in this Agreement or the
Delaware Act.
7.2 MANAGEMENT OF BUSINESS. No Limited Partner (other than the General
Partner, any of its Affiliates or any officer, director, employee, partner,
agent or trustee of the Partnership, General Partner or any of its Affiliates,
in its capacity as such, if such Person shall also be a Limited Partner) shall
participate in the operation, management or control (within the meaning of the
Delaware Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. The transaction of any such business by the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent or trustee of
the Partnership, the General Partner or any of its Affiliates, in its capacity
as such, shall not affect, impair or eliminate the limitations on the liability
of the Limited Partners under this Agreement.
7.3 RETURN OF CAPITAL. No Limited Partner shall be entitled to the
withdrawal or return of his Capital Contribution, except to the extent, if any,
that distributions made pursuant to this Agreement or upon termination of the
Partnership may be considered as such by law and then only to the extent
provided for in this Agreement. No Limited Partner shall have priority over any
other Limited Partner either as to the return of Capital Contributions or as to
profits, losses or distributions.
7.4 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP. (a) In addition
to other rights provided by this Agreement or by applicable law, and except as
limited by Section 7.4(b), each Limited Partner shall have the right, for a
purpose reasonably related to such Limited Partner's interest as a limited
partner in the Partnership, upon reasonable demand and at such Limited Partner's
own expense:
(i) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to him, upon notification to the Partnership,
a current list of the name and last known business, residence or mailing
address of each Partner;
(iv) to have furnished to him, upon notification to the Partnership, a
copy of this Agreement, the Services Agreement and the Certificate of
Limited Partnership and all amendments thereto, together with a copy of the
executed copies of all powers of attorney pursuant to which this Agreement,
the Certificate of Limited Partnership and all amendments thereto have been
executed;
(v) to obtain true and full information regarding the amount of cash
and description and statement of the Agreed Value of any other Capital
Contribution by each
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Partner and which each Partner has agreed to contribute in the future, and
the date on which each became a Partner; and
(vi) to obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b) Notwithstanding any other provision of this Agreement, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner deems reasonable, any information that the General
Partner reasonably believes to be in the nature of trade secrets or other
information the disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or Northern Border Pipeline or
could damage the Partnership or Northern Border Pipeline or that the Partnership
or Northern Border Pipeline is required by law or by agreements with third
parties to keep confidential (other than agreements with Affiliates of the
General Partner the primary purpose of which is to circumvent the obligations
set forth in this Section 7.4).
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 RECORDS AND ACCOUNTING. The General Partner shall keep or cause to be
kept at the principal office of the Partnership appropriate books and records
with respect to the Partnership's business, including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section
7.4(a). Any books and records maintained by or on behalf of the Partnership in
the regular course of its business, including, without limitation, books of
account and records of Partnership proceedings, may be kept on, or be in the
form of, computer disks, hard disks, punch cards, magnetic tape, photographs,
micrographics or any other information storage device, provided, that the books
and records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial reporting purposes, on an accrual basis in accordance
with generally accepted accounting principles.
8.2 FISCAL YEAR. The fiscal year of the Partnership shall be the calendar
year.
ARTICLE IX
TAX MATTERS
9.1 PREPARATION OF TAX RETURNS. The General Partner shall arrange for the
preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each taxable year of the Partnership, the tax
information reasonably required by the Partners for federal and state income tax
reporting purposes. The classification, realization and recognition of income,
gain, losses and deductions and other items shall be on the accrual method of
accounting for federal income tax purposes. The taxable year of the Partnership
shall be the calendar year.
9.2 TAX ELECTIONS. (a) The General Partner shall cause the Partnership to
make the election under Section 754 of the Code in accordance with applicable
regulations thereunder,
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subject to the reservation of the right to seek to revoke any such election upon
the General Partner's determination in its sole discretion that such revocation
is in the best interests of the Limited Partners.
(b) Except as otherwise provided herein, the General Partner shall
determine whether the Partnership should make any other elections permitted by
the Code.
9.3 TAX CONTROVERSIES. Subject to the provisions hereof, the General
Partner is designated the Tax Matters Partner (as defined in Section 6231 of the
Code), and is authorized and required to represent the Partnership (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Partner agrees to cooperate with the General Partner
and to do or refrain from doing any or all things reasonably required by the
General Partner to conduct such proceedings.
9.4 WITHHOLDING. Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines in its sole
discretion to be necessary or appropriate to cause the Partnership to comply
with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner (including, without
limitation, by reason of Section 1446 of the Code), the amount withheld shall be
treated as a distribution of cash pursuant to Section 5.3 in the amount of such
withholding from such Partner.
9.5 OPINIONS OF COUNSEL. Notwithstanding any other provision of this
Agreement, if the Partnership or Northern Border Pipeline is treated as an
association taxable as a corporation at any time or is otherwise taxable for
federal income tax purposes as an entity at any time and, pursuant to the
provisions of this Agreement, an Opinion of Counsel would otherwise be required
to the effect that an action will not cause the Partnership or Northern Border
Pipeline to become so treated as an association taxable as a corporation or
otherwise taxable as an entity for federal income tax purposes, such requirement
for an Opinion of Counsel shall be deemed automatically waived.
ARTICLE X
TRANSFER OF INTERESTS
10.1 TRANSFER. (a) The term "TRANSFER," when used in this Article X with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which a Partner disposes of its Partnership Interest to another Person and
includes a sale, assignment, gift, bequest, pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article X.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article X shall be null and void.
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(c) Nothing contained in this Article X shall be construed to prevent a
disposition by the parent entity of the General Partner of all of the issued and
outstanding capital stock of such General Partner.
10.2 TRANSFER OF A GENERAL PARTNER'S PERCENTAGE INTEREST. If the general
partner of the MLP transfers its Percentage Interest as a general partner
therein to any Person in accordance with the provisions of the MLP Agreement,
the General Partner of the Partnership shall contemporaneously therewith
transfer its General Partner Percentage Interest to such Person, and the Limited
Partners hereby expressly consent to such transfer. Except as set forth in the
immediately preceding sentence, a General Partner may not transfer all or any
part of its Partnership Interest as a general partner in the Partnership.
10.3 TRANSFER OF THE LIMITED PARTNER'S PARTNERSHIP INTEREST. If a Limited
Partner merges, consolidates or otherwise combines into any other Person or
transfers all or substantially all of its assets to another Person, such Person
may become a Substituted Limited Partner pursuant to Article XI. Except for the
transfers by the Initial Limited Partners of their Partnership Interests as
limited partners in the Partnership to the Initial Substituted Limited Partner
(as provided in the Conveyance Agreement) and except as set forth in the
immediately preceding sentence, a Limited Partner may not transfer all or any
part of its Partnership Interest as a limited partner or withdraw from the
Partnership.
ARTICLE XI
ADMISSION OF PARTNERS
11.1 ADMISSION OF SUBSTITUTED LIMITED PARTNER. Any Person that is the
successor in interest to a Limited Partner as described in Section 10.2 shall be
admitted to the Partnership as a limited partner upon (a) furnishing to the
General Partner (i) acceptance in form satisfactory to the General Partner of
all of the terms and conditions of this Agreement and (ii) such other documents
or instruments as may be required to effect its admission as a limited partner
in the Partnership and (b) obtaining the consent of the General Partner, which
consent may be withheld or granted in the sole discretion of the General
Partner. Such Person shall be admitted to the Partnership as a limited partner
immediately prior to the transfer of the Partnership Interest, and the business
of the Partnership shall continue without dissolution.
11.2 ADMISSION OF SUCCESSOR GENERAL PARTNER. A successor General Partner
approved pursuant to Section 12.1 or 12.2 or the transferee of or successor to
all of a General Partner's Partnership Interest as a general partner in the
Partnership pursuant to Section 10.2 who is proposed to be admitted as a
successor General Partner shall, subject to compliance with the terms of Section
12.3, be admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of such General Partner pursuant
to Section 12.1 or 12.2 or the transfer of a General Partner's Percentage
Interest pursuant to Section 10.2. Any such successor shall, subject to the
terms hereof, carry on the business of the Partnership without dissolution. In
each case, the admission of such successor General Partner to the Partnership
shall be subject to the execution by such successor General Partner of an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect such admission.
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11.3 ADMISSION OF ADDITIONAL LIMITED PARTNERS. (a) A Person (other than the
General Partner or a Limited Partner) who makes a Capital Contribution to the
Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 1.4, and (ii) such other
documents or instruments as may be required in the discretion of the General
Partner to effect such Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 11.3, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded as such in the books and records of the Partnership, following the
consent of the General Partner to such admission.
11.4 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP. To
effect the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Delaware Act to amend
the records of the Partnership to reflect such admission and, if necessary, to
prepare as soon as practical an amendment of this Agreement and, if required by
law, to prepare and file an amendment to the Certificate of Limited Partnership
and may for this purpose, among others, exercise the power of attorney granted
pursuant to Section 1.4.
ARTICLE XII
WITHDRAWAL OR REMOVAL OF PARTNERS
12.1 WITHDRAWAL OF THE GENERAL PARTNER. (a) The General Partner shall be
deemed to have withdrawn from the Partnership upon the occurrence of any one of
the following events (each such event herein referred to as an "EVENT OF
WITHDRAWAL");
(i) the General Partner voluntarily withdraws from the Partnership by
giving written notice to the other Partners;
(ii) the General Partner transfers all of its rights as General
Partner pursuant to Section 10.2;
(iii) the General Partner is removed pursuant to Section 12.2;
(iv) the General Partner, in its capacity as a general partner of the
MLP, withdraws from or is removed as a general partner of the MLP;
(v) the General Partner (A) makes a general assignment for the benefit
of creditors; (B) files a voluntary bankruptcy petition; (C) files a
petition or answer seeking for itself a reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any law; (D) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the General
Partner in a proceeding of the type described in clauses (A)-(C) of this
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Section 12.1(a)(v); or (E) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the General Partner or
of all or any substantial part of its properties;
(vi) a final and non-appealable judgment is entered by a court with
appropriate jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a
court with appropriate jurisdiction against the General Partner, in each
case under any federal or state bankruptcy or insolvency laws as now or
hereafter in effect; or
(vii) a certificate of dissolution or its equivalent is filed for the
General Partner, or 90 days expire after the date of notice to the General
Partner of revocation of its charter without a reinstatement of its
charter, under the laws of its state of organization.
If an Event of Withdrawal specified in Section 12.1(a)(v), (vi) or (vii) occurs,
the General Partner shall give notice to the Limited Partners within 30 days
after such occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 12.1 shall result in the withdrawal of the
General Partner from the Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances:
(i) the General Partner voluntarily withdraws by giving at least 90
days' advance notice to the Limited Partners, such withdrawal to take
effect on the date specified in such notice; or
(ii) at any time that the General Partner ceases to be a General
Partner pursuant to Section 12.1(a)(ii).
If the General Partner gives a notice of withdrawal pursuant to Section 12.1
(a)(i) or an Event of Withdrawal of the type described in Sections
12.1(a)(v)-(vii) occurs, the Limited Partners may, prior to the effective date
of such withdrawal, elect a successor General Partner; provided, however, that
such successor shall be the same person, if any, that is elected pursuant to
Section 13.1 of the MLP Agreement as the successor to the General Partner in its
capacity as a general partner of the MLP. If, prior to the effective date of the
General Partner's withdrawal, a successor is not selected by the Limited
Partners as provided herein, or the Partnership does not receive a Withdrawal
Opinion of Counsel, the Partnership shall be dissolved in accordance with
Section 13.1. Any successor General Partner elected in accordance with the terms
of this Section 12.1 shall be subject to the provisions of Section 11.2.
12.2 REMOVAL OF THE GENERAL PARTNER. The General Partner shall be removed
if it is removed as a general partner of the MLP pursuant to Section 13.2 of the
MLP Agreement. Such removal shall be effective concurrently with the
effectiveness of the removal of the General Partner as a general partner of the
MLP pursuant to the terms of the MLP Agreement. If a successor General Partner
is elected in connection with the removal of the General Partner as a general
partner of the MLP, such successor General Partner shall, upon admission
pursuant to Article XI, automatically become a successor General Partner of the
Partnership. The admission
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of any such successor General Partner to the Partnership shall be subject to the
provisions of Section 11.2.
12.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER. The
Partnership Interest of a Departing Partner departing as a result of withdrawal
or removal pursuant to Section 12.1 or 12.2 shall (unless it is otherwise
required to be converted into Common Units pursuant to Section 13.3(b) of the
MLP Agreement) be purchased by the successor to the Departing Partner for cash
in the manner specified in the MLP Agreement. Such purchase (or conversion into
Common Units, as applicable) shall be a condition to the admission to the
Partnership of the successor as the General Partner.
12.4 REIMBURSEMENT OF DEPARTING PARTNER. A Departing Partner shall be
entitled to receive all reimbursements due such Departing Partner pursuant to
Section 6.4, including, without limitation, any employee-related liabilities
(including, without limitation, severance liabilities), incurred in connection
with the termination of any employees employed by such Departing Partner for the
benefit of the Partnership.
12.5 WITHDRAWAL OF THE LIMITED PARTNER. Without the prior consent of the
General Partner, which may be granted or withheld in its sole discretion, the
Limited Partner shall not have the right to withdraw from the Partnership.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
13.1 DISSOLUTION. The Partnership shall not be dissolved by the admission
of the Initial Limited Partners, the Initial Substituted Limited Partner,
Substituted Limited Partners or Additional Limited Partners or by the admission
of a successor General Partner in accordance with the terms of this Agreement.
Upon the removal or withdrawal of the General Partner, or if a Person becomes a
successor General Partner pursuant to Section 12.1 or 12.2, the Partnership
shall not be dissolved and any remaining General Partner and/or such successor
General Partner shall continue the business of the Partnership. The Partnership
shall dissolve, and (subject to Section 13.2) its affairs should be wound up,
upon:
(a) the expiration of its term as provided in Section 1.5;
(b) an Event of Withdrawal of the General Partner as provided in Section
12.1(a) (other than Section 12.1(a)(ii)), unless a Person becomes a successor
General Partner and an Opinion of Counsel is received as provided in Section
12.1(b) or 12.2 and such successor is admitted to the Partnership pursuant to
Section 11.2;
(c) an election by the General Partner to dissolve the Partnership that is
approved by the Limited Partners;
(d) entry of a decree of judicial dissolution of the Partnership pursuant
to the provisions of the Delaware Act;
(e) the sale of all or substantially all of the assets and properties of
the Partnership; or
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(f) the dissolution of the MLP.
13.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER DISSOLUTION.
Upon (a) dissolution of the Partnership following an Event of Withdrawal caused
by the withdrawal or removal of the General Partner as provided in Section
12.1(a)(i) or (ii) and the failure to select a successor to such Departing
Partner pursuant to Section 12.1 or 12.2, then within 90 days thereafter or (b)
dissolution of the Partnership upon an event constituting an Event of Withdrawal
as defined in Section 12.1(a)(v), (vi) or (vii) and the failure to select a
successor to such Departing Partner pursuant to Section 12.1 or 12.2, then
within 180 days thereafter, the Limited Partners may elect to continue the
Partnership and continue its business on the same terms and conditions set forth
in this Agreement by forming a new limited partnership on terms identical to
those set forth in this Agreement and having as the successor general partner
any remaining General Partner (if it desires to continue in such capacity)
and/or a Person approved by the Limited Partners. In addition, upon dissolution
of the Partnership pursuant to Section 13.1(f), if the business of the MLP is
continued pursuant to Section 14.2 of the MLP Agreement, the Limited Partners
may, within 180 days after such event of dissolution, elect to continue the
Partnership in accordance with the immediately preceding sentence. Upon any such
election by the Limited Partners, all Partners shall be bound thereby and shall
be deemed to have approved same. Unless such an election is made within the
applicable time period as set forth above, the Partnership shall conduct only
activities necessary to wind up its affairs. If such an election is so made,
then:
(i) the business of the Partnership shall continue until the end of
the term set forth in Section 1.5 unless earlier dissolved in accordance
with this Article XIII;
(ii) if the successor General Partner is not a former General Partner,
or if the remaining General Partner does not desire to continue as the
General Partner, then the interest of such former General Partner and/or
such remaining General Partner shall be purchased by the successor General
Partner or converted into Common Units as provided in Section 13.3(b) of
the MLP Agreement; and
(iii) the successor General Partner shall be admitted to the
Partnership as the General Partner, effective as of the Event of
Withdrawal, by agreeing in writing to be bound by this Agreement; provided,
that the right to approve a successor General Partner and to reconstitute
and to continue the business of the Partnership shall not exist and may not
be exercised unless the Partnership has received an Opinion of Counsel that
(x) the exercise of the right would not result in the loss of limited
liability of any Limited Partner and (y) neither the Partnership, the
reconstituted limited partnership nor Northern Border Pipeline would be
treated as an association taxable as a corporation or otherwise be taxable
as an entity for federal income tax purposes upon the exercise of such
right to continue.
13.3 LIQUIDATION. Upon dissolution of the Partnership, unless the
Partnership is continued under an election to continue the Partnership pursuant
to Section 13.2, the General Partner or its designee, or if it fails to act, a
liquidator or liquidating committee approved by the Limited Partners, shall be
the Liquidator. The Liquidator (if other than the General Partner or its
designee) shall be entitled to receive such compensation for its services as may
be approved by
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the Limited Partners. The Liquidator shall agree not to resign at any time
without 15 days' prior notice and (if other than the General Partner or its
designee) may be removed at any time, with or without cause, by notice of
removal approved by the Limited Partners. Upon dissolution, removal or
resignation of the Liquidator, a successor and substitute Liquidator (who shall
have and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by the Limited Partners. The right
to approve a successor or substitute Liquidator in the manner provided herein
shall be deemed to refer also to any such successor or substitute Liquidator
approved in the manner herein provided. Except as expressly provided in this
Article XIII, the Liquidator approved in the manner provided herein shall have
and may exercise, without further authorization or consent of any of the parties
hereto, all of the powers conferred upon the General Partner and the General
Partner under the terms of this Agreement (but subject to all of the applicable
limitations, contractual and otherwise, upon the exercise of such powers, other
than the limitation on sale set forth in Section 6.3(a)) to the extent necessary
or desirable in the good faith judgment of the Liquidator to carry out the
duties and functions of the Liquidator hereunder for and during such period of
time as shall be reasonably required in the good faith judgment of the
Liquidator to complete the winding-up and liquidation of the Partnership as
provided for herein. The Liquidator shall liquidate the assets of the
Partnership, and apply and distribute the proceeds of such liquidation in the
following order of priority, unless otherwise required by mandatory provisions
of applicable law:
(a) the payment to creditors of the Partnership, including,
without limitation, Partners who are creditors, in the order of
priority provided by law; and the creation of a reserve of cash or
other assets of the Partnership for contingent liabilities in an
amount, if any, determined by the Liquidator to be appropriate for
such purposes; and
(b) to all Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined
after taking into account all Capital Account adjustments (other than
those made by reason of this clause) for the taxable year of the
Partnership during which the liquidation of the Partnership occurs
(with the date of such occurrence being determined pursuant to
Treasury Regulation Section 1.704-1(b) (2)(ii)(g)); and such
distribution shall be made by the end of such taxable year (or, if
later, within 90 days after said date of such occurrence).
13.4 DISTRIBUTIONS IN KIND. Notwithstanding the provisions of Section 13.3,
which require the liquidation of the assets of the Partnership, but subject to
the order of priorities set forth therein, if prior to or upon dissolution of
the Partnership the Liquidator determines that an immediate sale of part or all
of the Partnership's assets would be impractical or would cause undue loss to
the Partners, the Liquidator may, in its absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including, without limitation, those to Partners
as creditors) and/or distribute to the Partners or to specific classes of
Partners, in lieu of cash, as tenants in common and in accordance with the
provisions of Section 13.3, undivided interests in such Partnership assets as
the Liquidator deems not suitable for liquidation. Any such distributions in
kind shall be made only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interest of the Limited Partners, and
shall be subject to such conditions relating to the disposition and management
of
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such properties as the Liquidator deems reasonable and equitable and to any
agreements governing the operation of such properties at such time. The
Liquidator shall determine the fair market value of any property distributed in
kind using such reasonable method of valuation as it may adopt.
13.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon the
completion of the distribution of Partnership cash and property as provided in
Sections 13.3 and 13.4 in connection with the liquidation of the Partnership,
the Partnership shall be terminated and the Certificate of Limited Partnership
and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware shall be cancelled and such other
actions as may be necessary to terminate the Partnership shall be taken by the
Liquidator.
13.6 REASONABLE TIME FOR WINDING UP. A reasonable time shall be allowed for
the orderly winding up of business and affairs of the Partnership and the
liquidation of its assets pursuant to Section 13.3 in order to minimize any
losses otherwise attendant upon such winding up, and the provisions of this
Agreement shall remain in effect between the Partners during the period of
liquidation.
13.7 RETURN OF CAPITAL. The General Partner shall not be personally liable
for, and shall have no obligation to contribute or loan any monies or property
to the Partnership to enable it to effectuate, the return of the Capital
Contributions of the Limited Partners, or any portion thereof, it being
expressly understood that any such return shall be made solely from Partnership
assets.
13.8 NO CAPITAL ACCOUNT RESTORATION. No Partner shall have any obligation
to restore any negative balance in its Capital Account upon liquidation of the
Partnership.
13.9 WAIVER OF PARTITION. Each Partner hereby waives any right to partition
of the Partnership property.
ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT
14.1 AMENDMENT TO BE ADOPTED SOLELY BY GENERAL PARTNER. Each Limited
Partner agrees' that the General Partner (pursuant to its powers of attorney
from the Limited Partners), without the approval of any Limited Partner, may
amend any provision of this Agreement, and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect:
(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that, in the sole discretion of the General Partner, is
reasonable and necessary or appropriate to qualify or continue the
qualification of the Partnership as
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a limited partnership or a partnership in which the limited partners have
limited liability under the laws of any state or that is necessary or
advisable in the opinion of the General Partner to ensure that neither the
Partnership nor Northern Border Pipeline will be treated as an association
taxable as a corporation or otherwise taxed as an entity for federal income
tax purposes;
(d) a change (i) that, in the sole discretion of the General Partner,
does not adversely affect the Limited Partners in any material respect,
(ii) that is necessary or desirable to satisfy any requirements, conditions
or guidelines contained in any opinion, directive, order, ruling or
regulation of any federal or state agency or judicial authority or
contained in any federal or state statute (including, without limitation,
the Delaware Act), compliance with any of which the General Partner
determines in is sole discretion to be in the best interests of the
Partnership and the Limited Partners or (iii) that is required to effect
the intent of the provisions of this Agreement or is otherwise contemplated
by this Agreement;
(e) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership or the General Partner or their directors or
officers from in any manner being subjected to the provisions of the
Investment Company Act of 1940, as amended, the Investment Advisers Act of
1940, as amended, or "plan asset" regulations adopted under the Employee
Retirement Income Security Act of 1974, as amended, whether or not
substantially similar to plan asset regulations currently applied or
proposed by the United States Department of Labor;
(f) any amendment expressly permitted in this Agreement to be made by
the General Partner acting alone;
(g) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 15.3; or
(h) any other amendments substantially similar to the foregoing.
14.2 AMENDMENT PROCEDURES. Except with respect to amendments of the type
described in Section 14.1, all amendments to this Agreement shall be made in
accordance with the following requirements. Amendments to this Agreement may be
proposed only by or with the consent of the General Partner. Each such proposal
shall contain the text of the proposed amendment. A proposed amendment shall be
effective upon its approval by the Limited Partners.
ARTICLE XV
MERGER
15.1 AUTHORITY. The Partnership may merge or consolidate with one or more
corporations, business trusts or associations, real estate investment trusts,
common law trusts or unincorporated businesses, including, without limitation, a
limited liability company, general partnership or limited partnership, formed
under the laws of the State of Delaware or any other state of the United States
of America, pursuant to a written agreement of merger or consolidation ("MERGER
AGREEMENT") in accordance with this Article.
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15.2 PROCEDURE FOR MERGER OR CONSOLIDATION. Merger or consolidation of the
Partnership pursuant to this Article requires the prior approval of the General
Partner. If the General Partner shall determine, in the exercise of its sole
discretion, to consent to the merger or consolidation, the General Partner shall
approve the Merger Agreement, which shall set forth:
(a) The names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;
(b) The name and jurisdictions of formation or organization of the
business entity that is to survive the proposed merger or consolidation
(the "SURVIVING BUSINESS ENTITY");
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property
or general or limited partnership interests, rights, securities or
obligations of the Surviving Business Entity; and (i) if any general or
limited partnership interests, securities or rights of any constituent
business entity are not to be exchanged or converted solely for, or into,
cash, property or general or limited partnership interests, rights,
securities or obligations of the Surviving Business Entity, the cash,
property or general or limited partnership interests, rights, securities or
obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such
general or limited partnership interest are to receive in exchange for, or
upon conversion of, their securities or rights, and (ii) in the case of
securities represented by certificates, upon the surrender of such
certificates, which cash, property or general or limited partnership
interests, rights, securities or obligations of the Surviving Business
Entity or any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;
(e) A statement of any changes in the constituent documents or the
adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or
agreement of limited partnership or other similar charter or governing
document) of the Surviving Business Entity to be effected by such merger or
consolidation;
(f) The effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 15.4 or a later
date specified in or determinable in accordance with the Merger Agreement
(provided, that if the effective time of the merger is to be later than the
date of the filing of the certificate of merger, the effective time shall
be stated in the certificate of merger); and
(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the General
Partner.
15.3 APPROVAL BY LIMITED PARTNERS OF MERGER OR CONSOLIDATION. (a) The
General Partner of the Partnership, upon its approval of the Merger Agreement,
shall direct that the Merger Agreement be submitted to the Limited Partners for
their approval.
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(a) The Merger Agreement shall be approved upon receiving the
affirmative vote of holders of a majority of the Limited Partner
Partnership Interests.
(b) After such approval by vote or consent of the Limited Partners,
and at any time prior to the filing of the certificate of merger pursuant
to Section 15.4, the merger or consolidation may be abandoned pursuant to
provisions therefor, if any, set forth in the Merger Agreement.
15.4 CERTIFICATE OF MERGER. Upon the required approval by the General
Partner and the Limited Partners of a Merger Agreement, a certificate of merger
shall be executed and filed with the Secretary of State of the State of Delaware
in conformity with the requirements of the Delaware Act.
15.5 EFFECT OF MERGER. (a) At the effective time of the certificate of
merger:
(i) all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real, personal
and mixed, and all debts due to any of those business entities and all
other things and causes of action belonging to each of those business
entities shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business
Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any
of those constituent business entities shall not revert and is not in any
way, impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests
in property of any of those constituent business entities shall be
preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business
entities shall attach to the Surviving Business Entity, and may be enforced
against it to the same extent as if the debts, liabilities and duties had
been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article shall not
be deemed to result in a transfer or assignment of assets or liabilities from
one entity to another having occurred.
ARTICLE XVI
GENERAL PROVISIONS
16.1 ADDRESSES AND NOTICES. Any notice, demand, request, report or proxy
materials required or permitted to be given or made to a Partner under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first-class United States mail or by other means of
written communication to such Partner at the address of such Partner as shown on
the records of the Partnership. Any notice to the Partnership or the General
Partner shall be deemed given if received by the Chairman of the General Partner
at the principal office of the Partnership designated pursuant to Section 1.3.
The General Partner may rely and
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shall be protected in relying on any notice or other document from a Partner or
other Person if believed by it to be genuine.
16.2 REFERENCES. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
16.3 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
16.4 FURTHER ACTION. The parties shall execute and deliver all documents,
provide all information and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement.
16.5 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.
16.6 INTEGRATION. This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
16.7 CREDITORS. None of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Partnership.
16.8 WAIVER. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
16.9 COUNTERPARTS. This Agreement may be executed in counterparts, all of
which together shall constitute an agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto, independently of the signature of any other
party.
16.10 APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
16.11 INVALIDITY OF PROVISIONS. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER:
ONEOK PARTNERS GP, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇
Chairman and Chief Executive Officer
LIMITED PARTNER:
ONEOK PARTNERS, L.P.
By: ONEOK Partners, GP, L.L.C.,
as its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇
Chairman and Chief Executive Officer
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