EXHIBIT 1
TRANSCANADA PIPELINES LIMITED
5.60% Senior Notes Due ▇▇▇▇
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
March 22, 2004
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representative of the several
Underwriters named in Schedule II hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
TransCanada PipeLines Limited, a corporation organized under the laws of
Canada (the "COMPANY"), proposes to sell to the several underwriters named in
Schedule II hereto (the "UNDERWRITERS"), for whom you (the "REPRESENTATIVE") are
acting as representative, the principal amount of its securities identified in
Schedule I hereto (the "SECURITIES"), to be issued under an unsubordinated debt
indenture (the "INDENTURE") dated as of November 30, 2000, between The Bank of
New York, as trustee (the "TRUSTEE") and the Company (the "OFFERING"). To the
extent there are no additional Underwriters listed on Schedule II other than
you, the term Representative as used herein shall mean you, as Underwriters, and
the terms Representative and Underwriters shall mean either the singular or
plural as the context requires. Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus, the Canadian
Final Prospectus or the U.S. Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 3 of
Form F-9 which were filed under the Exchange Act or Alberta Securities Law on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus, the Canadian Final
Prospectus or the U.S. Final Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus,
the Canadian Final Prospectus or the U.S. Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act or
Alberta Securities Law after the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, any Preliminary Final Prospectus, the
Canadian Final Prospectus or the U.S. Final Prospectus, as the case may be,
deemed to be incorporated therein by reference. Certain terms used herein are
defined in Section 18 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1 that:
(a) SHELF PROCEDURE ELIGIBILITY. The Company meets the eligibility
requirements to use the Shelf Procedures and to file a short form prospectus
with the Reviewing Authority; a preliminary short form shelf prospectus and a
final short form shelf prospectus have been filed with the Reviewing Authority
and the Company has informed the Reviewing Authority that it is the principal
jurisdiction regulating the offering of the Securities; a receipt has been
obtained from the Reviewing Authority in respect of such short form shelf
prospectus and any amendment thereto; no order suspending the distribution of
the Securities has been issued by the Reviewing Authority and no proceeding for
that purpose has, to the best of the Company's knowledge, been initiated or
threatened by the Reviewing Authority;
(b) REGISTRATION REQUIREMENT COMPLIANCE. The Company meets the general
eligibility requirements for use of Form F-9 under the Act, has filed a
registration statement on Form F-10 and a post-effective amendment to that Form
F-10 on Form F-9 (File No. 333-101140) in respect of the Securities and an
appointment of agent for service of process on Form F-X (the "FORM F-X") in
conjunction with the filing of such registration statement with the Commission
and has caused the Trustee to prepare and file with the Commission a Statement
of Eligibility and Qualification on Form T-1 (the "FORM T-1"); such registration
statement and any post-effective amendment thereto, in each case including the
Basic Prospectus (with such deletions therefrom and additions thereto as are
permitted or required by Form F-9 and the applicable rules and regulations of
the Commission), each in the form heretofore delivered or to be delivered to the
Representative and, including exhibits to such registration statement and any
documents incorporated by reference in the prospectus contained therein, for
delivery by them to each of the other Underwriters, became effective under the
Act in such form; no other document with respect to such registration statement
or documents incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission and no other document incorporated by
reference in the prospectus contained therein has heretofore been filed with the
Reviewing Authority, except for any documents filed with the Commission or the
Reviewing Authority subsequent to the date of such effectiveness in the form
heretofore delivered to the Representative for delivery by them to each of the
other Underwriters; no stop order suspending the effectiveness of such
registration statement has been issued and, to the Company's knowledge, no
proceeding for that purpose has been initiated or threatened by the Commission;
the various parts of such registration statement, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective but excluding the Form T-1 of the Trustee, each as amended at
the time such part of the registration statement became effective and including
any post effective amendment thereto, are hereinafter collectively called the
"REGISTRATION STATEMENT"; the prospectus relating to the Securities, in the form
in which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the Execution Time, being hereinafter called the "U.S.
BASIC PROSPECTUS"; with respect to the Securities, "U.S. FINAL PROSPECTUS" means
the U.S. Basic Prospectus as amended or supplemented prior to the Execution
Time, until such time as the first
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prospectus supplement relating to the offering of the Securities is filed with
the Commission pursuant to General Instruction II.K., at which time "U.S. FINAL
PROSPECTUS" with respect to such Securities, shall mean the U.S. Basic
Prospectus including such supplement; and "CANADIAN FINAL PROSPECTUS" means the
Basic Prospectus as amended or supplemented prior to the Execution Time, until
such time as the first prospectus supplement relating to the offering of the
Securities is filed with the Reviewing Authority, at which time "CANADIAN FINAL
PROSPECTUS" shall mean the Basic Prospectus including such supplement; any
reference herein to any U.S. Basic Prospectus, Basic Prospectus, Preliminary
Final Prospectus, Canadian Final Prospectus or U.S. Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
as of the date of such U.S. Basic Prospectus, Basic Prospectus, Preliminary
Final Prospectus, Canadian Final Prospectus or U.S. Final Prospectus, as the
case may be; any reference to any amendment or supplement to any U.S. Basic
Prospectus, Basic Prospectus, Preliminary Final Prospectus, Canadian Final
Prospectus or U.S. Final Prospectus shall be deemed to refer to and include any
documents filed as of the date of such amendment or supplement under Alberta
Securities Law, or the Exchange Act, as the case may be, and incorporated by
reference in such amendment or supplement;
(c) INCORPORATED DOCUMENTS. The Canadian Documents, when they were filed
with the Reviewing Authority and incorporated by reference into the Canadian
Final Prospectus, conformed in all material respects to the requirements of
Alberta Securities Law, the documents included or incorporated by reference in
the Registration Statement and the U.S. Final Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in
all material respects to any applicable requirements of the Exchange Act and the
rules and regulations of the Commission thereunder and any further documents so
filed and incorporated by reference in the Canadian Final Prospectus and the
U.S. Final Prospectus or any amendment or supplement thereto, when such
documents are filed with the Reviewing Authority or the Commission, will conform
in all material respects to the requirements of Alberta Securities Law, or the
Exchange Act, as applicable;
(d) DISCLOSURE CONFORMITY. On the Effective Date the Registration Statement
did, and on the date it was first filed and on the Closing Date, the U.S. Final
Prospectus did and will conform in all material respects with the Act and the
Trust Indenture Act and the rules and regulations of the Commission under both
the Act and the Trust Indenture Act; on the date each was first filed, the Basic
Prospectus did and the Canadian Final Prospectus will, and on the Closing Date
each will, conform in all material respects with the applicable requirements of
Alberta Securities Law and the rules and regulations of the Reviewing Authority
under Alberta Securities Law; the Registration Statement, as of the Effective
Date, and the Basic Prospectus as of its filing date, and in each case at the
Execution Time, did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; and the Canadian Final Prospectus and the U.S. Final
Prospectus will not, as of their filing dates and as of the Closing Date,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty
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shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through the Representative specifically for inclusion in the
Registration Statement, the Canadian Final Prospectus or the U.S. Final
Prospectus, or to the Form T-1 of the Trustee;
(e) COMPANY GOOD STANDING. The Company has been duly incorporated and is
validly existing as a corporation under the laws of Canada with full corporate
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Canadian Final
Prospectus and the U.S. Final Prospectus, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the condition
(financial or otherwise), earnings, business or properties of the Company and
its subsidiaries, taken as a whole;
(f) SUBSIDIARY GOOD STANDING. Each of the Company's Significant
Subsidiaries has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as
described in the Canadian Final Prospectus and the U.S. Final Prospectus (or as
presently conducted, if not so described therein) and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole. Other than the Significant Subsidiaries, each of
the other subsidiaries of the Company did not have (i) as of the last day of the
Company's most recent fiscal year, total assets in excess of 10% of the
consolidated assets of the Company and its subsidiaries as at that date and (ii)
for the fiscal year then ended, total revenues in excess of 10% of the
consolidated revenues of the Company and its subsidiaries for such period. In
making this determination, any subsidiary acquired after the last day of the
Company's most recent fiscal year shall be deemed to have been acquired as of
such date;
(g) EXISTING INSTRUMENTS. There is no franchise, contract or other document
of a character required to be described in the Registration Statement, the
Canadian Final Prospectus or the U.S. Final Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required; and the statements
in the Canadian Final Prospectus or the U.S. Final Prospectus under the headings
"Certain Income Tax Considerations", "Description of Debt Securities" and
"Description of the Notes" insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings;
(h) AGREEMENT, SECURITIES AND INDENTURE AUTHORIZATION. The Company has full
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and this Agreement has been duly authorized, executed and
delivered by the Company; the Securities have been duly authorized and, when the
Securities are issued and delivered pursuant to this Agreement, such Securities
will have
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been duly executed, authenticated, issued and delivered and, upon payment for
the Securities by the Representative to the Company, will constitute valid and
legally binding obligations of the Company entitled to the benefits of the
Indenture; the Indenture, which was incorporated by reference as an exhibit to
the Registration Statement, has been duly authorized and duly qualified under
the Trust Indenture Act and constitutes a valid and legally binding instrument,
and enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyances or transfer, moratorium or similar laws affecting
creditors' rights generally and subject to general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and to the provisions of the Currency Act (Canada) or to the usury
provisions of the Criminal Code (Canada); no registration, filing or recording
of the Indenture under the laws of Canada or any province thereof is necessary
in order to preserve or protect the validity or enforceability of the Indenture
or the Securities issued thereunder; and the Indenture conforms, and the
Securities will conform in all material respects to the descriptions thereof
contained in the Canadian Final Prospectus and the U.S. Final Prospectus with
respect to such Securities;
(i) INVESTMENT COMPANY ACT. The Company is not and, after giving effect to
the offering and sale of the Securities and the application of the proceeds as
described in the Canadian Final Prospectus and the U.S. Final Prospectus under
the heading "Use of Proceeds," will not be an "investment company" as defined in
the Investment Company Act of 1940, as amended, and the rules and regulations of
the Commission promulgated thereunder;
(j) GOVERNMENTAL AUTHORIZATION AND ABSENCE OF FURTHER REQUIREMENTS. No
Governmental Authorization is required in connection with the transactions
contemplated herein, except such as have been obtained under the Act, Alberta
Securities Law, and the Trust Indenture Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner contemplated
herein and in the Canadian Final Prospectus and the U.S. Final Prospectus;
except as set forth in or contemplated in the Canadian Final Prospectus and the
U.S. Final Prospectus, the Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
foreign, federal, provincial, state, municipal or local regulatory authorities
necessary to conduct their respective businesses except where the failure to
possess such license, certificate, permit or other authorization would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authorization or
permit which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business;
(k) MATERIAL CHANGES. Since the representative dates as of which
information is given in the Registration Statement, the Canadian Final
Prospectus and the
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U.S. Final Prospectus, except as may otherwise be stated therein or contemplated
thereby, there has been no material adverse change, actual or to the knowledge
of the Company, pending, in the condition (financial or otherwise), earnings,
business or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business;
(l) NO DEFAULT AND CONFLICT ABSENCE. Neither the issue and sale of the
Securities nor the consummation of any other of the transactions herein
contemplated will conflict with or result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its Significant Subsidiaries pursuant to, (i) the charter or
by-laws of the Company or any of its Significant Subsidiaries, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its Significant Subsidiaries is a party or bound or
to which its or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of its
Significant Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its Significant Subsidiaries or any of its or their
properties, except, in the case of (ii) or (iii), such breaches, violations,
liens, charges or encumbrances as would not, individually or in the aggregate,
constitute a material adverse effect on the condition (financial or otherwise),
earnings, business or properties of the Company and its subsidiaries, taken as a
whole; except as set forth in or contemplated in the Canadian Final Prospectus
and the U.S. Final Prospectus, neither the Company nor any Significant
Subsidiary is in violation or default of (i) any provision of its charter or
bylaws or other constating documents, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a party
or bound or to which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such Significant Subsidiary or any of its
properties, as applicable, except, in the case of (ii) or (iii) such violation
or default as would not, individually or in the aggregate, constitute a material
adverse effect on the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole;
(m) FINANCIAL STATEMENTS. The consolidated historical financial statements
of the Company included or incorporated by reference in the Canadian Final
Prospectus, the U.S. Final Prospectus and the Registration Statement present
fairly in all material respects the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements of the Act and
Alberta Securities Law and have been prepared in conformity with Canadian
generally accepted accounting principles and have been reconciled to U.S.
generally accepted accounting principles in accordance with Item 17 of Form 20-F
under the Exchange Act, in each case applied on a consistent basis throughout
the periods involved (except as otherwise noted therein). Any selected financial
data set forth in the Canadian Final Prospectus, the U.S. Final Prospectus and
the Registration Statement fairly present, on the basis stated under such
caption in the Canadian Final Prospectus, the U.S. Final Prospectus and the
Registration Statement, the information included therein;
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(n) PROCEEDINGS ABSENCE. Except as set forth in or contemplated in the
Canadian Final Prospectus and the U.S. Final Prospectus, no action, suit or
proceeding by or before any court or Governmental Authority involving the
Company or any of its subsidiaries or its or their property is pending or, to
the best knowledge of the Company, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance of this Agreement
or the consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business;
(o) OWNERSHIP OF PROPERTY. Each of the Company and each of its subsidiaries
owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted, except such as would not, individually or in
the aggregate, constitute a material adverse effect on the condition (financial
or otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole;
(p) INDEPENDENT ACCOUNTANTS. KPMG LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements included or
incorporated by reference in the Canadian Final Prospectus and the U.S. Final
Prospectus, are independent chartered accountants with respect to the Company
within the meaning of Alberta Securities Law and independent public accountants
within the meaning of the Act and the applicable published rules and regulations
thereunder;
(q) MARKET STABILIZATION. The Company has not taken, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under Alberta Securities Law, or
the Exchange Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities;
(r) ENVIRONMENTAL LAW COMPLIANCE. Except as set forth in or contemplated in
the Canadian Final Prospectus and the U.S. Final Prospectus, the Company and its
subsidiaries are (i) in substantial compliance with Environmental Laws, (ii)
have received and are in substantial compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except where such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business. Except as set forth in the
Canadian Final Prospectus and the U.S. Final Prospectus, neither the Company nor
any of the subsidiaries has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, or under any similar Canadian legislation; and
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(s) OFFICERS' CERTIFICATES. Any certificate signed by any officer of the
Company and delivered to the Representative or counsel for the Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities shall
be made on the date and at the time specified in Schedule I hereto or at such
time on such later date not more than three Business Days after the foregoing
date as the Representative shall designate, which date and time may be postponed
by agreement between the Representative and the Company or as provided in
Section 8 hereof (such date and time of delivery and payment for the Securities
being herein called the "CLOSING DATE"). Delivery of the Securities shall be
made to the Representative for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representative of the purchase price thereof to or upon the order of the Company
by wire transfer payable in same-day funds to an account specified by the
Company. Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representative shall otherwise instruct and
agree to with the Company.
(b) As compensation for the services rendered by the Underwriters to the
Company in respect of the issuance and sale of the Securities, the Company on
the Closing Date will pay to the Representative for the respective accounts of
the several Underwriters a commission of 0.875% of the principal amount of the
Securities sold to the Underwriters under this Agreement. Payment to the
Representative shall be made by wire transfer payable in same-day funds to an
account specified by the Representative. All payments to be made by the Company
to the Representative as compensation for the services rendered by the
Underwriters to the Company in respect of the issuance and sale of the
Securities hereunder shall be made without withholding or deduction for or on
account of any present or future taxes, duties or governmental charges
whatsoever provided that each Underwriter deals at arm's length with the Company
(as such term is understood for purposes of the INCOME TAX ACT (Canada)), any
such commission or fee is payable in respect of services rendered by an
Underwriter wholly outside of Canada that are performed in the ordinary course
of business carried on by the Underwriter that includes the performance of such
services for a fee and any such amount is reasonable in the circumstances.
4. AGREEMENTS. The Company agrees with the Representative and the several
Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company
will not file any amendment or supplement to the Registration Statement or the
Basic Prospectus or U.S. Basic Prospectus (including the Canadian Final
Prospectus, the U.S. Final Prospectus or any Preliminary Final Prospectus)
unless the Company has
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furnished a copy to the Representative for their review prior to filing and will
not file any such proposed amendment or supplement to which the Representative
reasonably object unless filing is immediately required by law without right of
appeal. Subject to the foregoing sentence, the Company will prepare the Canadian
Final Prospectus and the U.S. Final Prospectus setting forth the principal
amount of Securities covered thereby, the terms not otherwise specified in the
Basic Prospectus and U.S. Basic Prospectus pursuant to which the Securities are
being issued, the names of the Underwriters participating in the offering and
the principal amount of Securities which each severally has agreed to purchase,
the names of the Underwriters acting as co-managers in connection with the
offering, the price at which the Securities are to be purchased by the
Underwriters from the Company, the initial public offering price, the selling
concession and reallowance, if any, in a form approved by the Representative and
shall file (i) such Canadian Final Prospectus with the Reviewing Authority in
accordance with the Shelf Procedures and (ii) such U.S. Final Prospectus with
the Commission pursuant to General Instruction II.K. of Form F-9 not later than
the Commission's close of business on the business day following the date of the
filing thereof with the Reviewing Authority. The Company will promptly file all
reports required to be filed by it with the Reviewing Authority pursuant to
Alberta Securities Law, and the Commission pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities, and during
such same period will advise the Representative, promptly after it receives
notice thereof, of the time when any amendment to the Canadian Final Prospectus
has been filed or receipted, when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Basic Prospectus or
U.S. Basic Prospectus or any amended Canadian Final Prospectus or U.S. Final
Prospectus has been filed with the Reviewing Authority or the Commission, of the
issuance by the Reviewing Authority or the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of such Securities for
offering or sale in any jurisdiction, of the initiation or threatening, to the
knowledge of the Company, of any proceeding for any such purpose, or of any
request by the Reviewing Authority or the Commission for the amending or
supplementing of the Registration Statement, the Canadian Final Prospectus or
the U.S. Final Prospectus or for additional information relating to the
Securities; and the Company will use its commercially reasonable best efforts to
prevent the issuance of any such stop order or any such order preventing or
suspending the use of any prospectus relating to the Securities or the
suspension of any such qualification and, in the event of the issuance of any
such stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such qualification, to
use its commercially reasonable best efforts to obtain the withdrawal of such
order as soon as possible;
(b) Notwithstanding the provisions of paragraph (a) above, if, at any time
when a prospectus relating to the Securities is required to be delivered under
the Act, any event occurs as a result of which the Canadian Final Prospectus or
the U.S. Final Prospectus, each as then supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Canadian Final Prospectus or the U.S. Final
Prospectus to comply with Alberta Securities Law, the Act or the Exchange Act,
or the respective rules thereunder, the Company will promptly
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(i) notify the Representative of such event, (ii) prepare and file with the
Reviewing Authority and the Commission, an amendment or supplement which will
correct such statement or omission or effect such compliance and (iii) supply
any supplemented Canadian Final Prospectus and U.S. Final Prospectus to the
Representative in such quantities as they may reasonably request;
(c) As soon as practicable, the Company will make generally available to
its security holders an earnings statement or statements of the Company and its
subsidiaries which will satisfy the provisions of Section 11(a) of the Act and
Rule 158 under the Act;
(d) The Company will furnish to the Representative and counsel for the
Underwriters, without charge, copies of the Registration Statement (including
exhibits thereto) and to the Representative for delivery to each other
Underwriter a copy of the Registration Statement (without exhibits thereto) and,
so long as delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of each Preliminary Final Prospectus and U.S. Final
Prospectus and any supplement thereto as the Representative may reasonably
request. The Company will pay the expenses of printing or other production of
all documents relating to the offering;
(e) The Company will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the Representative
may designate upon consultation with the Company and will maintain such
qualifications in effect so long as required for the distribution of the
Securities and will pay any fee of the National Association of Securities
Dealers, Inc., in connection with its review of the offering; provided that in
no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction where it is not now so
subject;
(f) The Company will not, without the prior written consent of the
Representative, offer, sell, contract to sell, pledge, or otherwise dispose of,
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company) directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act, any debt securities with a term in excess of nine months
issued or guaranteed by the Company (other than the Securities) or publicly
announce an intention to effect any such transaction within the U.S. marketplace
until the Business Day set forth in Schedule I hereto;
(g) The Company will furnish to the Trustee reports and other information
in accordance with the requirements specified in Section 4.3 of the Indenture;
10
(h) The Company will use the net proceeds received by it from the sale of
any Securities in the manner specified in the U.S. Final Prospectus and the
Canadian Final Prospectus under the caption "Use of Proceeds;"
(i) In connection with each offering of Securities, the Company will take
such steps as it deems necessary to ascertain promptly whether (i) the Canadian
Final Prospectus prepared in connection with such offering was received for
filing by the Reviewing Authority and (ii) whether the U.S. Final Prospectus
prepared in connection with such offering and transmitted for filing pursuant to
General Instruction II.K. of Form F-9 was received for filing by the Commission,
and, in the event that any such prospectuses were not received for filing, it
will promptly file any such prospectus not then received for filing;
(j) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing with
the Commission of the Registration Statement (including financial statements and
exhibits thereto) and with the Review Authority of each Preliminary Final
Prospectus, the Canadian Final Prospectus and U.S. Final Prospectus, and each
amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Preliminary Final
Prospectus, the Canadian Final Prospectus and U.S. Final Prospectus, and all
amendments or supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the Securities;
(iii) the preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (iv) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) if applicable,
any registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to such
registration and qualification) provided that the Company shall not be
responsible for the fees and disbursements of more than one law firm (other than
local counsel) for all the Underwriters in connection with the transactions
contemplated hereby, including preparation of the Blue Sky memorandum; (vi) any
filings required to be made with the National Association of Securities Dealers,
Inc. (including filing fees and the reasonable fees and expenses of counsel for
the Underwriters relating to such filings); (vii) the transportation and other
expenses in connection with presentations to prospective purchasers of the
Securities; (viii) the fees and expenses of the Company's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Company; (ix) any fees and expenses of the Trustee and any agent of the Trustee
and the fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; (x) any fees charged by securities rating services
for rating the Securities; and (xi) all other costs and expenses of the Company
and its representatives incident to the performance by the Company of its
obligations hereunder; and
(k) The Company will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act, Alberta Securities Law, or otherwise,
stabilization or
11
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
5. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
as of the Execution Time and the Closing Date (including, for the avoidance of
doubt, compliance with covenants and conditions in the indentures of the Company
relating to the creation, assumption or incurrence of funded indebtedness), to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions of this Section, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) (i) The Canadian Final Prospectus shall have been filed with the
Reviewing Authority under the Shelf Procedures and (ii) the U.S. Final
Prospectus shall have been filed with the Commission pursuant to General
Instruction II.K. of Form F-9 under the Act, in each case, within the applicable
time period prescribed for such filing and in accordance with Section 4(a)
hereof; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no order preventing or suspending
the use of any prospectus relating to the Securities shall have been issued and
no proceeding for any such purpose shall have been initiated or threatened by
the Commission or the Reviewing Authority;
(b) The Company shall have requested and caused Mayer, Brown, ▇▇▇▇ & Maw
LLP, U.S. counsel for the Company, to have furnished to the Representative their
opinion, dated the Closing Date and addressed to the Representative, to the
effect set forth in Annex I hereto;
(c) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Canadian counsel for the Company, shall have
furnished to the Representative their opinion, dated the Closing Date and
addressed to the Representative, with respect to the laws of the Province of
Alberta and the federal laws of Canada applicable therein, to the effect set
forth in Annex II;
(d) The Representative shall have received from Shearman & Sterling LLP,
U.S. counsel for the Underwriters, such opinion or opinions, dated the Closing
Date and addressed to the Representative, with respect to the issuance and sale
of the Securities, the Indenture (if applicable), the Registration Statement,
the U.S. Final Prospectus (together with any supplement thereto) and other
related matters as the Representative may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably require
and request for the purpose of enabling them to pass upon such matters;
(e) The Representative shall have received from United States in-house
counsel to the Company, an opinion to the effect set forth in Annex III;
(f) The Company shall have furnished to the Representative a certificate of
the Company, signed by the President and Chief Executive Officer and the
Executive Vice-President Corporate Development and Chief Financial Officer of
the Company, dated the Closing Date, to the effect that:
12
(i) the signers of such certificate have carefully examined the
Registration Statement, the Canadian Final Prospectus and the U.S. Final
Prospectus, any supplements to the Canadian Final Prospectus and the U.S.
Final Prospectus and this Agreement;
(ii) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(iii) no stop order suspending the effectiveness of the Registration
Statement or stop order preventing or suspending the use of any prospectus
relating to the Securities has been issued and no proceedings for that
purpose have been, to the Company's knowledge, instituted or threatened by
the Reviewing Authority or the Commission;
(iv) since the date of the most recent financial statements included
or incorporated by reference in the Canadian Final Prospectus, as amended
or supplemented prior to the Execution Time, and the U.S. Final Prospectus,
as amended or supplemented prior to the Execution Time, there has been no
material adverse effect on the condition (financial or otherwise),
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Canadian Final
Prospectus, as amended or supplemented prior to the Execution Time, and the
U.S. Final Prospectus, as amended or supplemented prior to the Execution
Time; and
(v) the Company is in compliance with the covenants and conditions in
the indentures of the Company relating to the creation, assumption or
incurrence of funded indebtedness;
(g) At the Execution Time and the Closing Date, the Representative shall
have received from KPMG LLP a letter or letters dated such date or dates, in
form and substance satisfactory to the Representative, together with signed or
reproduced copies of such letter or letters for each of the other Underwriters
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement, the U.S. Final Prospectus and the Canadian Final Prospectus;
(h) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement as amended or supplemented
prior to the Execution Time, and the Canadian Final Prospectus as amended or
supplemented prior to the Execution Time and the U.S. Final Prospectus as
amended or supplemented prior to the Execution Time, there shall not have been
(i) any change or decrease specified in the letter or letters referred to in
paragraph (g) of this Section 5 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary
13
course of business, except as set forth in or contemplated in the Canadian Final
Prospectus, as amended or supplemented prior to the Execution Time and the U.S.
Final Prospectus, as amended or supplemented prior to the Execution Time, the
effect of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Representative, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement and the Canadian Final
Prospectus and the U.S. Final Prospectus;
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change;
(j) If the Registration Statement or an offering of Securities has been
filed with the NASD for review, the NASD shall not have raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements;
(k) Prior to the Closing Date, the Company shall have furnished to the
Representative such further information, certificates and documents as the
Representative may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 5 shall be delivered
at the office of the Company, Attention: Corporate Finance Law Department, ▇▇▇ -
▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ on the Closing Date or such other
place as the Representative shall so instruct.
6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 5 hereof is not satisfied, or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through the Representative on demand for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
14
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls any Underwriter within the meaning of the Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement as
originally filed, the Basic Prospectus, any Preliminary Final Prospectus, the
Canadian Final Prospectus and the U.S. Final Prospectus, or in all cases any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representative
specifically for inclusion therein; provided, however, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus, the Canadian Final Prospectus or the U.S. Final Prospectus, the
indemnity provisions contained in this subsection (a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased the Securities concerned to the extent that a
prospectus relating to the Securities was required to be delivered by such
underwriter under the Act in connection with such purchase and any such loss,
claim, damage or liability of such Underwriter results from the fact that there
was not sent or given to such person, at or prior to the written confirmation of
the sale of such debt securities to such person, a copy of the Basic Prospectus,
any Preliminary Final Prospectus, the Canadian Final Prospectus or the U.S.
Final Prospectus if the Company had previously furnished copies thereof which
corrected such untrue statement, alleged untrue statement, omission or alleged
omission to such Underwriter. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, each of its directors, its officers, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Company by or on behalf of such Underwriter through
the Representative specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth, in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Underwriting", (i) the names
listed in the table included in the second paragraph of the text, (ii) the
fourth paragraph of text concerning concessions, (iii) the sixth, seventh and
eighth paragraphs of
15
text concerning price stabilization, short positions and penalty bids, (iv) the
third sentence in the ninth paragraph of text concerning market making by the
Underwriters and (v) the twelfth paragraph of text concerning electronic
prospectuses, in any Preliminary Final Prospectus, Canadian Final Prospectus and
U.S. Final Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in any Preliminary Final
Prospectus, the U.S. Final Prospectus or Canadian Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); PROVIDED, HOWEVER, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 7 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses
16
reasonably incurred in connection with investigating or defending same)
(collectively "LOSSES") to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriters on the
other from the offering of the Securities; PROVIDED, HOWEVER, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the total price at which the Securities underwritten and
distributed to the public by such Underwriter was offered to the public. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received by
the Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the Canadian
Final Prospectus and the U.S. Final Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls an Underwriter within the meaning of
the Act and each director, officer, employee and agent of an Underwriter shall
have the same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of the Act, each officer of the Company
and each director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
8. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail to
purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, then the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all
of the unsold Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then the remaining Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the principal amount of Securities set forth opposite their
names in Schedule II hereto bears to the aggregate principal amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting
17
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Securities set forth in Schedule
II hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 8, the Closing Date shall be postponed for such period, not exceeding
seven Business Days, as the Representative shall determine in order that the
required changes in the Registration Statement, the Canadian Final Prospectus
and the U.S. Final Prospectus or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
9. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representative, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such
time, (i) trading in securities generally on the New York Stock Exchange or the
Toronto Stock Exchange or the Nasdaq National Market shall have been suspended
or limited or minimum prices shall have been established on any of such
Exchanges, (ii) a banking moratorium shall have been declared either by
authorities in the United States, Canada or New York state, (iii) a change or
development involving a prospective change in Canadian taxation affecting the
Securities or the transfer thereof or the imposition of exchange controls by the
United States or Canada, or (iv) there shall have occurred any outbreak or
escalation of hostilities, except as existing with similar severity on the date
hereof involving Canada or the United States, declaration by the United States
or Canada of a national emergency or war, or other calamity or crisis, except as
existing with similar severity on the date hereof the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representative, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Canadian Final Prospectus and
the U.S. Final Prospectus.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of the officers,
directors, employees, agents or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
11. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representative, will be mailed, delivered
or telefaxed to ▇.▇. ▇▇▇▇▇▇ Securities Inc., office of the Transaction Execution
Group (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to General Counsel, ▇.▇. ▇▇▇▇▇▇
Securities Inc. at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇; or, if sent to
the Company, will be mailed, delivered or telefaxed to TransCanada PipeLines
Limited and confirmed to it at ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇,
Attention: Corporate Secretary.
18
12. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder.
13. SUBMISSION TO JURISDICTION; AGENT FOR SERVICE; WAIVER OF IMMUNITIES.
The Company irrevocably (i) agrees that any legal suit, action or proceeding
against the Company brought by any Underwriter or by any person who controls any
Underwriter arising out of or based upon this Agreement or the transactions
contemplated thereby may be instituted in any New York Court, (ii) waives, to
the fullest extent it may effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such proceeding and (iii) submits
to the non-exclusive jurisdiction of such courts in any such suit, action or
proceeding. The Company has appointed TransCanada Power Marketing Ltd. as its
authorized agent (the "AUTHORIZED AGENT") upon whom process may be served in any
such action arising out of or based on this Agreement or the transactions
contemplated thereby which may be instituted in any New York Court by any
Underwriter or by any person who controls any Underwriter, expressly consents to
the jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. The Company represents and
warrants that the Authorized Agent has agreed to act as such agent for service
of process and agrees to take any and all action, including the filing of any
and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company shall be
deemed, in every respect, effective service of process upon the Company.
To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, it hereby
irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
The provisions of this Section 13 shall survive any termination of this
Agreement, in whole or in part.
14. JUDGMENT CURRENCY. The obligation of the Company in respect of any sum
due to any Underwriter shall, notwithstanding any judgment in a currency other
than United States dollars, not be discharged until the first Business Day
following receipt by such Underwriter of any sum adjudged to be so due in such
other currency, on which (and only to the extent that) such Underwriter may in
accordance with normal banking procedures purchase United States dollars with
such other currency; if the United States dollars so purchased are less than the
sum originally due (as converted into U.S. dollars at the rate of exchange
announced by the Bank of Canada on the day on which the final judgment is
entered) to such Underwriter hereunder, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Underwriter
against such loss. If the United States dollars so purchased are greater than
the sum originally due to such Underwriter hereunder, such Underwriter agrees to
pay to
19
the Company an amount equal to the excess of the dollars so purchased over the
sum originally due to such Underwriter hereunder.
15. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
16. COUNTERPARTS. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
17. HEADINGS. The section headings used herein are for convenience only and
shall not affect the construction hereof.
18. DEFINITIONS. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"ACT" shall mean the Securities Act of 1933, as amended and the rules
and regulations of the Commission promulgated thereunder.
"ALBERTA SECURITIES LAW" shall mean the securities laws, rules,
regulations and published policy statements applicable in the Province of
Alberta.
"BASIC PROSPECTUS" shall mean the Canadian final short form shelf
prospectus as most recently amended, if applicable, filed with the
Reviewing Authority for which a receipt has been obtained for such short
form shelf prospectus, including any Preliminary Final Prospectus, in
accordance with Alberta Securities Law and the Shelf Procedures.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions are authorized or obligated by law or
regulation to close in New York City, Toronto or Calgary.
"CANADIAN DOCUMENTS" shall mean any documents incorporated by
reference in the Canadian Final Prospectus when they were filed with the
Reviewing Authority.
"COMMISSION" shall mean the Securities and Exchange Commission.
"EFFECTIVE DATE" shall mean each date and time that any part of the
Registration Statement, any post-effective amendment or amendments thereto
became or becomes effective.
"ENVIRONMENTAL LAWS" shall mean any Canadian, United States and other
applicable foreign, federal, provincial, state, local or municipal laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants.
20
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"GOVERNMENTAL AUTHORITY" shall mean any court or governmental agency
or body or any arbitrator of any kind having jurisdiction over the Company
or any of its subsidiaries or any of their properties.
"GOVERNMENTAL AUTHORIZATION" shall mean any consent, approval,
authorization, order, permit, license, filing, registration, clearance or
qualification of, or with any statute, order, rule or regulation of any
Governmental Agency.
"PRELIMINARY FINAL PROSPECTUS" shall mean any preliminary prospectus
supplement to the U.S. Basic Prospectus or the Basic Prospectus which
describes the Securities and the offering thereof and is used by the
Underwriters prior to filing of the U.S. Final Prospectus or the Canadian
Final Prospectus, together with the U.S. Basic Prospectus or the Basic
Prospectus, as applicable.
"REGULATIONS" shall mean the rules and regulations of the Commission
under the Act.
"REVIEWING AUTHORITY" shall mean the Alberta Securities Commission.
"SHELF PROCEDURES" shall mean the rules and procedures established
under National Instrument 44-101 Short Form Prospectus Distributions and
Companion Policy 44-101CP and National Instrument No. 44-102 Shelf
Distributions and Companion Policy 44-102CP for the distribution of
securities on a continuous or delayed basis.
"SIGNIFICANT SUBSIDIARY" shall mean the "significant subsidiaries" (as
such term is defined in Rule 1-02 of Regulation S-X under the Act) of the
Company all of which are listed in Annex A hereto.
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
21
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
TRANSCANADA PIPELINES LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice-President, Finance
and Treasurer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice-President,
Corporate Development and
Chief Financial Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Vice President
For itself and the other several
Underwriters named in Schedule II
to the foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated March 22, 2004
Registration Statement No. 333-101140
Representative: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
Title, Purchase Price, Underwritten Commission and Description of Securities:
Title: 5.60% Senior Notes due March 31, 2034
Principal amount: US$350,000,000
Purchase price (include accrued interest or amortization, if any): 99.653%
Underwriting commission: 0.875%
Sinking fund provisions: None
Redemption provisions: Make-Whole Call + 20 basis points
Other provisions: None
Closing Date, Time and Location: March 25, 2004 at 7:00 a.m. (Calgary Time)
at TransCanada PipeLines Limited
TransCanada Tower
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Type of Offering: Non-delayed
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s) shall be the earlier of:
(A) 5 days from the date of this Agreement, provided that (i) the
Representative receives written notification in advance of any new offering
of debt securities issued or guaranteed by the Company and (ii) the
Underwriters' selling efforts with respect to the debt securities offered
pursuant to this Agreement have concluded and trading in such debt
securities is continuing; or (B) 30 days from the date of this Agreement.
Modification of items to be covered by the letter from KPMG LLP delivered
pursuant to Section 5(g) at the Execution Time: None
SCHEDULE II
Principal Amount
of Securities to be
Underwriters Purchased
------------ -------------------
▇.▇. ▇▇▇▇▇▇ Securities Inc............................. US$147,000,000
Citigroup Global Markets Inc........................... 87,500,000
Deutsche Bank Securities Inc........................... 49,000,000
HSBC Securities (USA) Inc.............................. 28,000,000
Banc One Capital Markets, Inc.......................... 17,500,000
▇▇ ▇▇▇▇▇ Securities Corporation........................ 14,000,000
Lazard Freres & Co. LLC................................ 7,000,000
--------------------
Total......................................... US$350,000,000
--------------------
--------------------
ANNEX A
SIGNIFICANT SUBSIDIARIES
Percentage Ownership
Organized Under by TransCanada of
Subsidiary the Laws of Voting Share
---------- --------------- --------------------
NOVA Gas Transmission Ltd. Alberta 100
TransCanada PipeLine USA Ltd. Nevada 100
TransCanada Energy USA Inc. Delaware 100
701671 Alberta Ltd. Alberta 100
TransCanada Energy Ltd. Canada 100
ANNEX I
OPINION OF ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ & MAW LLP,
UNITED STATES COUNSEL TO THE COMPANY
(i) TransCanada PipeLine USA Ltd. and TransCanada Energy USA Inc. are
corporations in good standing under the laws of the jurisdiction in which they
are chartered or organized.
(ii) Assuming the compliance of the Canadian Final Prospectus, including
the documents incorporated by reference therein, with the requirements of the
securities laws and regulations of the Province of Alberta and other
requirements of Canadian law, the Registration Statement and the U.S. Final
Prospectus (other than the financial statements, including schedules, and other
financial and statistical information contained therein or omitted therefrom,
and the Form T-1, as to which such counsel need express no opinion) appear on
their face to be appropriately responsive as to form in all material respects
with the applicable requirements of the Act and the rules and regulations
thereunder; the Form F-X, as of its date, appears on its face to be
appropriately responsive in all material respects to the requirements of the
Securities Act.
(iii) No consent, approval, authorization or order of, or filing,
registration or qualification with, any Governmental Authority, which has not
been obtained, taken or made (other than as required by any state securities
laws, as to which such counsel expresses no opinion) is required on the part of
the Company under any Applicable Law for the issuance or sale of the Securities
or the performance by the Company of its obligations under this Agreement and
the Indenture. For purposes of this opinion, the term "Governmental Authority"
means any executive, legislative, judicial, administrative or regulatory body of
the State of
New York or the United States of America. For purposes of this
opinion, the term "Applicable Law" means those laws, rules and regulations of
the United States of America and the State of
New York, in each case which in
our experience are normally applicable to the transactions of the type
contemplated by this Agreement.
(iv) Assuming that the Indenture has been duly authorized by the Company,
the Indenture (to the extent execution and delivery are governed by the laws of
New York) has been duly executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that the enforceability of the
Indenture may be subject to bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors' rights
generally and subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law), and the
Indenture conforms in all material respects to the description thereof contained
in the U.S. Final Prospectus under the caption "Description of Debt Securities"
and under the caption "Description of the Notes." The Indenture has been duly
qualified under the Trust Indenture Act.
(v) Assuming that the Securities have been duly authorized by the Company,
when duly executed and authenticated in accordance with the provisions of the
Indenture and delivered by the Company against payment as provided in this
Agreement, the Securities will constitute valid and legally binding obligations
of the Company entitled to the benefits of the Indenture and will be enforceable
against the Company in accordance with their terms, except that the
enforceability of the Securities may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting creditors' rights generally and subject to general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law). The Securities, when issued and delivered, will conform in
all material respects to the description contained in the U.S. Final Prospectus,
under the caption "Description of the Notes" and "Description of Debt
Securities" and are in a form contemplated in the Indenture.
(vi) Assuming that this Agreement has been duly authorized by the Company,
this Agreement (to the extent execution and delivery are governed by the laws of
New York) has been duly executed and delivered by the Company.
(vii) The Company is not and, after giving effect to the offering and the
sale of the Securities and the application of their proceeds as described in the
U.S. Final Prospectus under the heading "Use of Proceeds," will not be required
to be registered as an investment company under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
(viii) The statements in the U.S. Final Prospectus under the caption
"Certain Income Tax Considerations -- Certain United States Income Tax
Considerations," to the extent that they constitute summaries of United States
federal statutes, rules and regulations, or portions thereof, are accurate in
all material respects.
(ix) Neither the execution and delivery of this Agreement and the
Indenture, nor the issue and sale of the Securities, nor the consummation of any
other of the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
its subsidiaries pursuant to (i) the terms of such material agreements as are
set out in Schedule A hereto or (ii) any United States federal or New York State
statute, law, rule, regulation known to such counsel to be applicable to the
Offering, excluding the Company's and any subsidiary's specially regulated
activities (as to which such counsel need express no opinion) or, to the
knowledge of such counsel, any judgment, order or decree applicable to the
Company or its subsidiaries of any United States federal or New York State
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or its subsidiaries or any
of its or their properties in the United States, except, in the case of (i) or
(ii), such conflicts, breaches, violations, liens, charges and encumbrances
that, individually or in the aggregate, would not reasonably be expected to have
a material
I-2
adverse effect on the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole.
Such counsel will state that they have been advised by the Commission that
the Registration Statement has become effective under the Act. Such counsel will
further state that, to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened.
Such counsel will state that they have participated in the preparation of
the Registration Statement and the U.S. Final Prospectus and in conferences with
officers and other representatives of the Company, representatives of the
independent chartered accountants for the Company, the Underwriters and
representatives of the Underwriters at which the contents of the Registration
Statement, the U.S. Final Prospectus and related matters were discussed. Given
the limitations inherent in the independent verification of factual matters and
the character of determinations involved in the registration process, such
counsel may state that they have not verified, and are not passing upon and do
not assume responsibility for, the accuracy, completeness or fairness of the
statements contained in either of them (other than as explicitly stated in
paragraph (viii) above), and have made no independent check or verification
thereof. Subject to the foregoing and based upon such participation (and relying
as to materiality as to factual matters to the extent such counsel deems
reasonable on officers, employees and other representatives of the Company), no
facts have come to our attention to lead us to believe that (a) the Registration
Statement, at its effective date and on the date of this Agreement, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or (b) the U.S. Final Prospectus, as of the date the U.S. Final Prospectus was
issued and as of the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. In each case, counsel need not express any belief as
to (i) financial statements, financial statement schedules and other financial
and statistical information or data included or incorporated by reference in or
omitted from the Registration Statement and the U.S. Final Prospectus, (ii) the
Form T-1 or (iii) discussions of the regulation of the Company's business under
the federal and provincial laws of Canada in documents filed with the Reviewing
Authority or filed with the Commission and incorporated by reference in the
Registration Statement and the U.S. Final Prospectus. In connection with the
foregoing, such counsel may state that it is the understanding of the addresses
of such opinion that such counsel does not act as United States regulatory
counsel of the Company and does not hold itself out as an expert on the
regulation of the generation, transportation, distribution or delivery of
natural gas, oil, electricity or other specially regulated commodities or
services, including pipelines, transmission lines, storage facilities and
related facilities and equipment, or the import or export of such commodities or
services.
In rendering such opinion, such counsel may (A) exclude from such opinions
the effect or applicability of any United States or Canadian federal, state and
local laws, rules or regulations relating to the regulation of the generation,
transportation, distribution or delivery of natural gas,
I-3
oil, electricity or other specially regulated commodities or services, including
pipelines, transmission lines, storage facilities and related facilities and
equipment, or the import or export of such commodities or services, (B) rely as
to matters involving the application of laws of any jurisdiction other than the
State of New York or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters and (C) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and public
officials.
I-4
SCHEDULE A
TO ANNEX I
1. Debt Indenture, dated as of November 30, 2000, between TransCanada
PipeLines Limited and The Bank of New York, as trustee, as amended or
supplemented.
2. Subordinated Debt Indenture, dated as of November 30, 2000, between
TransCanada PipeLines Limited and The Bank of Nova Scotia Trust Company of
New York, as trustee, as amended or supplemented.
3. Indenture, dated as of September 15, 1992, between NOVA Corporation (now
NOVA Gas Transmission Ltd.) of Alberta and BankAmerica Trust Company (now
U.S. Bank Trust National Association) as amended or supplemented.
4. Indenture, dated as of July 15, 1996, between TransCanada PipeLines
Limited, as Issuer, and The Bank of New York, as Trustee, relating to the
8.75% Junior Subordinated Debentures Due July 24, 2045, as amended or
supplemented.
5. Indenture, dated as of October 15, 1996, between TransCanada PipeLines
Limited, as Issuer, and The Bank of New York, as Trustee, relating to the
8.50% Junior Subordinated Debentures Due September 30, 2045, as amended or
supplemented.
6. Indenture, dated as of October 1, 1998 between TransCanada PipeLines, as
Issuer and The Bank of New York, as Trustee, relating to the 8.25%
Preferred Securities due October 1, 2047, as amended or supplemented.
ANNEX II
OPINION OF ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
CANADIAN COUNSEL TO THE COMPANY
(i) The Company has been duly incorporated, is validly existing as a
corporation under the laws of Canada and has the corporate power and authority
to own or lease, as the case may be, and to operate its property and conduct its
business as described in the Canadian Final Prospectus;
(ii) each of NOVA Gas Transmission Ltd., 701671 Alberta Ltd. and
TransCanada Energy Ltd. (individually a "Canadian Subsidiary" and collectively
the "Canadian Subsidiaries") has been duly incorporated, is validly existing as
a corporation under the jurisdiction of its incorporation and has the corporate
power and authority to own or lease, as the case may be, and to operate its
property and to conduct its business as described in the Canadian Final
Prospectus;
(iii) the Indenture has been duly authorized, executed and, to the extent
delivery is a matter governed by the laws of the Province of Alberta or the
federal laws of Canada, delivered by the Company; and no registration, filing or
recording of the Indenture under the laws of the Province of Alberta and the
federal laws of Canada applicable therein (the "Applicable Law") is necessary in
order to preserve or protect the validity or enforceability of the Indenture or
the debt securities issued thereunder, including the Securities;
(iv) the Securities have been duly authorized by the Company and, assuming
that the Securities have been duly authenticated by the Trustee in the manner
described in the Indenture and under New York law, the Securities have been, to
the extent issuance, execution and delivery are matters governed by Applicable
Law, issued, executed and delivered by the Company; the Securities conform in
all material respects to the description thereof in the Canadian Final
Prospectus;
(v) the Agreement has been duly authorized, executed and, to the extent
delivery is governed by Applicable Law, delivered by the Company;
(vi) the execution and delivery by the Company of, and the performance by
the Company of its obligations under the Agreement, the Indenture and the
Securities will not contravene any provisions of (i) the articles of
incorporation or by-laws of the Company, (ii) Applicable Law applicable to the
Offering, excluding the Company's and any subsidiary's specially regulated
activities (as to which such counsel need express no opinion), (iii) any
indenture, mortgage, deed of trust, loan, credit agreement, note or any other
agreement listed in Schedule A hereto on the part of the Company or the Canadian
Subsidiaries, or, (iv) to the best of such counsel's knowledge, any judgment,
order or decree of any governmental body, agency or court in Canada having
jurisdiction over the Company or the Canadian Subsidiaries except in the case of
(ii), (iii) or (iv), such conflicts, breaches, violations, liens, charges and
encumbrances that, individually, or in the aggregate, would not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole;
(vii) no consent, approval or authorization or order of or registration,
qualification, recording or filing with any governmental body or agency in
Canada is required on the part of the Company pursuant to Applicable Law or the
related rules, regulations and policy statements thereunder for the performance
by the Company of its obligations under the Agreement, the Indenture or the
Securities except such as may be required under the securities laws, rules and
regulations applicable in the Province of Alberta as interpreted and applied by
the Reviewing Authority or such as has been obtained under the Canada Business
Corporations Act;
(viii) the statements in the Canadian Final Prospectus under the captions
"Certain Income Tax Considerations -- Certain Canadian Income Tax
Considerations", "Description of Debt Securities" and "Description of the Notes"
insofar as such statements constitute summaries of the Canadian legal matters,
agreements, documents or proceedings referred to therein, fairly summarize the
matters referred to therein, subject to specific limitations and qualifications
stated or referred to therein and applicable thereto;
(ix) each document incorporated by reference in the Canadian Final
Prospectus (other than the financial statements, including schedules, and other
financial or statistical data included therein or omitted therefrom, as to which
such counsel need express no opinion), when such document was filed with the
Reviewing Authority, appeared on their face to be appropriately responsive as to
form in all material respects with the requirements of the securities laws,
rules and regulations of the Province of Alberta as interpreted and applied by
the Reviewing Authority;
(x) a receipt has been obtained in respect of the Basic Prospectus from the
Reviewing Authority, the Canadian Final Prospectus has been filed with the
Reviewing Authority in the manner and within the time period required by the
Shelf Procedures and all necessary documents have been filed, all necessary
proceedings have been taken and all necessary authorizations, approvals,
permits, consents and orders have been obtained under the securities laws of the
Province of Alberta, and no other authorization, approval, permit, consent,
licence or order of any government, government instrumentality or court under
Applicable Law is required, for the valid authorization, issuance, sale and
delivery of the Securities through the Underwriters in connection with a public
offering thereof in the United States, and, to the best knowledge of such
counsel, no order having the effect of ceasing or suspending the distribution of
the Securities has been issued by the Reviewing Authority and no proceedings for
that purpose have been instituted or are pending or contemplated;
(xi) the Basic Prospectus, at the time a final receipt was issued therefor,
and the Canadian Final Prospectus, as of the date of its filing with the
Reviewing Authority (other than the financial statements, financial schedules
and other financial or statistical data included in the foregoing documents, as
to which such counsel need express no opinion) complied or comply as to form in
all material respects with the requirements, including the Shelf Procedures, of
the securities laws, rules and regulations of the Province of Alberta as
interpreted and applied by the Reviewing Authority;
(xii) such counsel does not know of any contracts or documents of a
character required to be described, referred to or filed in or with the Canadian
Prospectus that are not described,
II-2
referred to or filed as required; there are no reports or other information that
in accordance with the requirements of the Reviewing Authority must be made
publicly available in connection with the offering of the Securities that have
not been made publicly available as required;
(xiii) no withholding tax imposed under the federal laws of Canada or the
laws of the Province of Alberta will be payable in respect of any commission or
fee to be paid by the Company pursuant to this Agreement to an Underwriter that
is not resident in Canada for purposes of the INCOME TAX ACT (Canada), provided
that such Underwriter deals at arm's length with the Company (as such term is
understood for purposes of the INCOME TAX ACT (Canada)), any such commission or
fee is payable in respect of services rendered by such Underwriter wholly
outside of Canada that are performed in the ordinary course of business carried
on by the Underwriter that includes the performance of such services for a fee
and any such amount is reasonable in the circumstances;
(xiv) any final and conclusive judgment IN PERSONAM against the Company in
respect of the Agreement, the Indenture or the Securities or any agreement or
instrument entered into in connection therewith by a court of the State of New
York or of the United States located in the State of New York (a "New York
Court"), which is not impeachable as void or voidable under the internal laws of
the State of New York, for a fixed sum would be recognized and enforced by a
court of competent jurisdiction in the Province of Alberta, if (i) the court
rendering judgment had jurisdiction over the Company, as recognized by the
courts of the Province of Alberta; (ii) such judgment was not obtained by fraud
or in a manner contrary to natural justice and the enforcement thereof would not
be inconsistent with public policy, as such term is understood under the laws of
the Province of Alberta; (iii) the enforcement of such judgment does not
constitute, directly or indirectly, the enforcement of foreign revenue or penal
laws; and (iv) there has been compliance with the LIMITATIONS ACT (Alberta);
provided, however, that interest payable on a judgment debt may be limited by
the INTEREST ACT (Canada) and the JUDGMENT INTEREST ACT (Alberta), that a
monetary judgment of a court of the Province of ▇▇▇▇▇▇▇ ▇▇▇ only be awarded in
Canadian currency and that the enforceability thereof may be limited by
applicable bankruptcy, insolvency or other laws of general application limiting
the enforcement of creditors' rights generally. We have no reason to believe
that the enforcement of any such judgment in respect of the Agreement, the
Indenture or the Securities would be inconsistent with public policy as such
term is understood under Applicable Law;
(xv) in the event that any of the Agreement, the Indenture or the
Securities is sought to be enforced in any action or proceedings in the Province
of Alberta in accordance with the laws applicable thereto as chosen by the
parties, namely the laws of the State of New York, the courts of the Province of
Alberta would recognize such choice of laws, provided that such choice of laws
was not made with a view to avoiding the consequences of the laws of any other
jurisdiction and provided that such choice is not contrary to public policy as
such term is understood under Applicable Law. We have no reason to believe that
such choice of laws was made for the purpose of avoiding the consequences of the
laws of any other jurisdiction or that such choice of laws would be inconsistent
with public policy as such term is understood under Applicable Law;
II-3
(xvi) in the event that any of the Agreement, the Indenture or the
Securities is sought to be enforced in any action or proceeding in the Province
of Alberta in accordance with the laws applicable thereto as chosen by the
parties, namely the laws of the State of New York, the courts of the Province of
Alberta would, subject to paragraph (xv) above, apply the laws of the State of
New York, upon appropriate evidence as to such laws being adduced, to all issues
that, under the conflict of laws rules of Applicable Law, are to be determined
in accordance with the proper or governing law of the respective contract or
obligation, provided that none of the provisions of the applicable document or
the laws of the State of New York are contrary to public policy as such term is
understood under Applicable Law; and further provided, however, that interest
payable on a judgment debt may be limited by the INTEREST ACT (Canada) and the
JUDGMENT INTEREST ACT (Alberta) and that a monetary judgment of a court of the
Province of ▇▇▇▇▇▇▇ ▇▇▇ only be awarded in Canadian currency. A court in the
Province of Alberta has, however, an inherent power to decline to hear such an
action or proceeding if it is contrary to public policy, as such term is
understood under Applicable Law for it to do so, or if it is not the proper
forum to hear such action, or if concurrent proceedings are being brought
elsewhere. We have no reason to believe that any of the provisions of the
Agreement, the Indenture or the Securities are contrary to public policy as such
term is understood under Applicable Law or that it would be inconsistent with
public policy as such term is understood under Applicable Law for a court of the
Province of Alberta to hear an action or proceeding to enforce the Agreement,
the Indenture or the Securities;
(xvii) the submission by the Company to the non-exclusive jurisdiction of
the courts of the State of New York or the courts of the United States of
America located in The City of New York, contained in the Agreement, the
Indenture and the Securities, would be recognized and given effect by the courts
of the Province of Alberta as a valid submission to the jurisdiction of such
courts, provided that the applicable provisions, if any, of the Agreement, the
Indenture and the Securities, respectively, respecting service of process on the
Company are duly complied with; and
(xviii) the courts in the Province of Alberta would recognize the
appointment by the Company of TransCanada Power Marketing Ltd. as its agent for
service of process in the United States of America under the Agreement, the
Indenture and the Securities.
Such counsel may state that in connection with the preparation by the Company of
the Canadian Final Prospectus, such counsel attended conferences with certain of
the officers of, and the independent public accountants for, the Company, at
which the Canadian Final Prospectus was discussed. Such counsel may state
further that they participated in the preparation of the Company's most recently
filed Annual Information Form, required under Canadian securities law and had
discussions with certain officers of the Company at which the contents of the
Canadian Final Prospectus was discussed to a limited extent. Given the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the qualification process, such counsel
may state that, except for the statements contained in paragraph (viii) above,
they have not verified and are not passing upon and do not assume any
responsibility for the accuracy, completeness or genuineness or fairness of the
statements
II-4
contained in or omitted from the Canadian Final Prospectus and have made no
independent verification thereof.
Subject to the foregoing and on the basis of the information such counsel gained
in the performance of the services referred to above and a review of the
Canadian Final Prospectus and the documents incorporated by reference therein,
including information obtained from officers and other representatives of the
Company, such counsel shall state that no facts have come to such counsel's
attention that cause such counsel to believe that the Basic Prospectus at the
time a final receipt was issued therefor on the date of this Agreement, and on
the date of filing of any amendment or supplement to the Basic Prospectus with
the Reviewing Authority prior to the date of such opinion, contained or contains
any untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Also, subject to the foregoing, such counsel shall state that no
facts have come to such counsel's attention in the course of the proceedings
described above that cause them to believe that the Canadian Final Prospectus as
of the date of its filing with the Reviewing Authority and the date and time of
delivery of such opinion contained or contains, as the case may be, any untrue
statement of a material fact or omitted or omits, as the case may be, to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. In each case, counsel
need not express any belief as to (i) financial statements, financial statement
schedules and other financial and statistical information or data included or
incorporated by reference in or omitted from the Basic Prospectus and the
Canadian Final Prospectus or (ii) discussions of the regulation of the Company's
business under the federal and provincial laws of Canada or the United States in
documents filed with the Reviewing Authority or filed with the Commission and
incorporated by reference in the Basic Prospectus or Canadian Final Prospectus.
In connection with the foregoing, such counsel may state that it is the
understanding of the addressees of such opinion that such counsel does not act
as Canadian or United States regulatory counsel to the Company on the regulation
of the generation, transportation, distribution or delivery of natural gas, oil,
electricity or other specially regulated commodities or services, including
pipelines, transmission lines, storage facilities and related facilities and
equipment, or the import or export of such commodities of services.
In giving the opinions described above, such counsel may (A) exclude from such
opinions the effect or applicability of any United States or Canadian federal,
provincial, territorial, state and local laws, rules or regulations relating to
the regulation of the generation, transportation, distribution or delivery of
natural gas, oil, electricity or other specially regulated commodities or
services, including pipelines, transmission lines, storage facilities and
related facilities and equipment, or the import or export of such commodities or
services, (B) state that the opinions above are limited to the laws of the
Province of Alberta and the federal laws of Canada therein (C) rely solely upon
the opinion of ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ & Maw LLP to be delivered pursuant to Section
5(b) of this Agreement with respect to all matters relating to the laws of the
United States and the State of New York and (D) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials. In addition, in connection with the belief expressed
above, such counsel may assume that the terms "material fact" and "misleading"
have the same interpretation under United States law as the same have under the
Alberta Securities Act.
II-5
SCHEDULE A
TO ANNEX II
A. TRUST INDENTURES GOVERNING NOVA GAS TRANSMISSION LTD. PUBLIC DEBT AND
CREDIT FACILITIES OVER CDN.$100 MILLION
1. 1970 Trust Indenture with The Royal Trust Company, as amended or
supplemented.
2. 1988 Trust Indenture with The Royal Trust Company, as amended or
supplemented.
3. 1993 Trust Indenture with R-M Trust Company (now CIBC Mellon Trust
Company), as amended or supplemented.
4. U.S.$182.5 Million Syndicated Facility dated May 8, 1991 as amended on
October 28, 1994 and June 27, 1997, as amended or supplemented.
B. TRUST INDENTURES GOVERNING TRANSCANADA PIPELINES LIMITED PUBLIC DEBT AND
CREDIT FACILITIES OVER CDN.$100 MILLION
1. Deed of Trust and Mortgage dated as of the 1st day of January, 1957 made by
and between TransCanada PipeLines Limited and National Trust Company
Limited, as amended or supplemented.
2. Trust Indenture made as of the 15th day of June, 1970 between TransCanada
PipeLines Limited and Crown Trust Company, as amended or supplemented.
3. Trust Indenture made as of the 3rd of May, 1993 between TransCanada
PipeLines Limited and the R-M Trust Company, as amended or supplemented.
4. Credit Agreement between TransCanada PipeLines Limited and the financial
institutions signatory thereto dated December 12, 2002, as amended.
ANNEX III
OPINION OF IN-HOUSE COUNSEL TO THE COMPANY
(i) no consent, approval or authorization or order or registration,
qualification, recording or filing with the Federal Energy Regulatory
Commission, the National Energy Board, or any other federal, state, provincial
or local governmental body or agency in the United States or Canada responsible
for the regulation of the generation, transportation or delivery of natural gas,
oil, electricity or other specially regulated commodities or services, including
pipelines, transmission lines, storage facilities and related facilities and
equipment, or the import or export of such commodities or services (excluding
any federal, state, provincial or local governmental body or agency in the
United States or Canada having jurisdiction over offers and sales of the Notes
under the securities laws of the United States or the applicable provinces and
territories of Canada or the securities or Blue Sky laws of the various states,
as to which such counsel need not express any opinion) is required for the
performance by the Company of its obligations under this Agreement, the
Indenture or the Securities;
(ii) the statements in any relevant document filed with the Reviewing
Authority or filed with the Commission and specifically incorporated by
reference into the U.S. Final Prospectus and the Canadian Final Prospectus and,
in each case, insofar as such statements constitute summaries of legal matters,
documents, proceedings, applications or approvals relating to the regulation in
the United States or Canada of the generation, transportation, distribution or
delivery of natural gas, oil, electricity or other specially regulated
commodities or services, including pipelines, transmission lines, storage
facilities and related facilities and equipment, or the import or export of such
commodities or services, referred to therein, fairly summarize in all material
respects the matters referred to therein, as of the date of the above-listed
documents; and
(iii) on the basis of the information gained in the performance of such
counsel's duties to the Company and on review of the Registration Statement, the
U.S. Final Prospectus, the Canadian Final Prospectus and the documents
incorporated by reference therein, including information obtained from officers
and other representatives of the Company, no facts have come to such counsel's
attention that cause such counsel to believe that the Registration Statement
(except for financial statements and schedules and other financial data included
therein or omitted therefrom, as to which such counsel need not make any
statement), at the time the Registration Statement became effective, on the date
of this Agreement, and on the effective date of any post-effective amendment to
the Registration Statement which became effective prior to the date of such
opinion, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading
or that the U.S. Final Prospectus and Canadian Final Prospectus (except for
financial statements and schedules and other financial data included therein or
omitted therefrom, as to which such counsel need not make any statement), as of
their respective issue dates and the date and time of delivery of such opinion,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Such counsel shall confirm that its requisite state and provincial legal
qualifications are in good standing in the United States and Canada. Such
counsel may state that for the purposes of the foregoing opinions, it has
reviewed the Agreement, the U.S. Final Prospectus, the Canadian Final
Prospectus, the Registration Statement and such other documents of the Company
as such counsel deemed necessary or relevant. Such counsel may state that, in
reviewing these documents, such counsel has assumed the genuineness of all
signatures and the authenticity of all documents submitted to it as originals
and the conformity to authentic or original documents of all documents submitted
to such counsel as reproduction or conformed copies. In addition, such counsel
may state that given the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process, such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness, fairness or genuineness of the statements
contained in the Registration Statement, the U.S. Final Prospectus, the Canadian
Final Prospectus and the documents incorporated by reference therein.
III-2