COMMON UNIT PURCHASE AGREEMENT BY AND AMONG TC PIPELINES, LP AND TRANSCAN NORTHERN LTD.
Exhibit 10.1
BY
AND AMONG
TC
PIPELINES, LP
AND
TRANSCAN
NORTHERN LTD.
DATED
July
1, 2009
COMMON
UNIT PURCHASE AGREEMENT, dated as of July 1, 2009 (this “Agreement”),
by and among TC PIPELINES, LP, a Delaware limited partnership (the “Partnership”),
and TRANSCAN NORTHERN LTD., a Delaware corporation (the “Purchaser”).
WHEREAS,
(i) TC Pipelines GP, Inc., a Delaware corporation (the “General
Partner”), is an indirect wholly owned subsidiary of TransCanada
PipeLines Limited, a Canadian corporation (“TransCanada”);
(ii) the General Partner is the general partner of the Partnership and TC
Tuscarora Intermediate Limited Partnership, a Delaware limited partnership
(“TCT
Intermediate Partnership”), TC PipeLines Intermediate Limited
Partnership, a Delaware limited partnership (“TCP
Intermediate Partnership”), and TC GL Intermediate Partnership, a
Delaware limited partnership (“TCGL
Intermediate Partnership” and, together with TCT Intermediate Partnership
and TCP Intermediate Partnership, the “Intermediate
Partnerships”); (iii) the Partnership owns all of the limited partner
interests in each of the Intermediate Partnerships; (iv) TCT Intermediate
Partnership owns directly and indirectly a 100% general partner interest in
Tuscarora Gas Transmission Company, a Nevada general partnership (“Tuscarora”);
(v) TCP Intermediate Partnership owns a 50% general partner interest in Northern
Border Pipeline Company, a Texas general partnership (“NBPC”),
and (vi) TCGL Intermediate Partnership owns a 46.45% general partner interest in
Great Lakes Gas Transmission Limited Partnership, a Delaware limited partnership
(“Great
Lakes”). The Partnership, the General Partner and the
Intermediate Partnerships are collectively referred to herein as the “TCP
Parties;”
WHEREAS,
on May 19, 2009, TCP Intermediate Partnership entered into an agreement with Gas
Transmission Northwest Corporation, a California corporation (“GTNC”),
to purchase a 100% membership interest in North Baja Pipeline, LLC, a Delaware
limited liability company (the “Acquisition”);
WHEREAS,
coincident with the entry into the transactions contemplated by this Agreement,
the General Partner will enter into an agreement with the Partnership for the
exchange by the General Partner of the current incentive distribution rights
available to it under the Amended and Restated Agreement of Limited Partnership
of TC PipeLines, LP for 3,762,000 common units of the Partnership and revised
incentive distribution rights; and
WHEREAS,
the Partnership desires to cause TCP Intermediate Partnership to pay a portion
of the purchase price related to the Acquisition out of the proceeds of the sale
of an aggregate of $78,400,000 of Common Units representing limited partner
interests in the Partnership (“Common
Units”), and the Purchaser desires to purchase an aggregate of
$78,400,000 of Common Units from the Partnership, each in accordance with the
provisions of this Agreement.
NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:
1
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions. As
used in this Agreement, and unless the context requires a different meaning, the
following terms have the meanings indicated:
“Acquisition”
shall have the meaning specified in the recitals.
“Acquisition
Agreement” means that certain Agreement for Purchase and Sale of
Membership Interests by and between GTNC and TC Intermediate Partnership dated
as of May 19, 2009.
“Action”
against a Person means any lawsuit, action, proceeding, investigation or
complaint before any Governmental Authority, mediator or
arbitrator.
“Affiliate”
means, with respect to a specified Person, any other Person, whether now in
existence or hereafter created, directly or indirectly controlling, controlled
by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control” (including, with correlative meanings,
“controlling,” “controlled by” and “under common control with”) means the power
to direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
“Agreement”
shall have the meaning specified in the introductory paragraph.
“Basic
Documents” means, collectively, this Agreement and any and all other
agreements or instruments executed and delivered by the Parties to evidence the
execution, delivery and performance of this Agreement, and any amendments,
supplements, continuations or modifications thereto.
“Board of
Directors” means the board of directors of the General Partner or the
Purchaser, as the case may be.
“Closing”
shall have the meaning specified in Section 2.2.
“Closing
Date” shall have the meaning specified in Section 2.2.
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
“Commission”
means the United States Securities and Exchange Commission.
“Commitment
Amount” means $78,400,000.
“Common
Units” shall have the meaning specified in the recitals.
“DGCL”
shall have the meaning specified in Section 3.2.
“DRULPA”
shall have the meaning specified in Section 3.2.
2
“Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time, and the rules and regulations of the Commission promulgated
thereunder.
“GAAP”
means generally accepted accounting principles in the United States of America
in effect from time to time.
“General
Partner” shall have the meaning specified in the recitals.
“Governmental
Authority” shall include the country, state, county, city and political
subdivisions in which any Person or such Person’s property is located or that
exercises valid jurisdiction over any such Person or such Person’s property, and
any court, agency, department, commission, board, bureau or instrumentality of
any of them and any monetary authorities that exercise valid jurisdiction over
any such Person or such Person’s property. Unless otherwise specified, all
references to Governmental Authority herein shall mean a Governmental Authority
having jurisdiction over, where applicable, the Partnership, its Subsidiaries or
any of their property or the Purchaser.
“Great
Lakes” shall have the meaning set forth in the recitals.
“GTNC”
shall have the meaning set forth in the recitals.
“Incentive
Distribution Rights” shall have the meaning specified in Section
3.5(a).
“Indemnified
Party” shall have the meaning specified in Section 8.3.
“Indemnifying
Party” shall have the meaning specified in Section 8.3.
“Intermediate
Partnership Agreements” shall have the meaning specified in Section
3.4.
“Intermediate
Partnerships” shall have the meaning specified in the
recitals.
“Law”
means any federal, state, local or foreign order, writ, injunction, judgment,
settlement, award, decree, statute, law, rule or regulation.
“Lien”
means any mortgage, claim, encumbrance, pledge, lien (statutory or otherwise),
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment, preference or priority or other encumbrance upon or with respect to
any property of any kind.
“NBPC”
shall have the meaning specified in the recitals.
“Partnership”
shall have the meaning specified in the introductory paragraph.
“Partnership
Agreement” shall have the meaning specified in Section
2.1(a).
“Partnership
Material Adverse Effect” shall have the meaning specified in Section
3.2.
“Partnership
Related Parties” shall have the meaning specified in Section
8.2.
“Partnership
SEC Documents” shall have the meaning specified in Section 3.1.
3
“Party”
or “Parties”
means the Partnership and the Purchaser, individually or collectively, as the
case may be.
“Person”
means any individual, corporation, company, voluntary association, partnership,
joint venture, trust, limited liability company, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
“Purchase
Price” means the Commitment Amount.
“Purchaser”
shall have the meaning specified in the introductory paragraph.
“Purchaser
Material Adverse Effect” means any material and adverse effect on
(i) the ability of the Purchaser to meet its obligations under the Basic
Documents on a timely basis or (ii) the ability of the Purchaser to consummate
the transactions under any Basic Document.
“Purchaser
Related Parties” shall have the meaning specified in Section
8.1.
“Representatives”
of any Person means the officers, directors, employees, Affiliates, control
persons, counsel, investment banker, agents and other representatives of such
Person.
“Securities
Act” means the Securities Act of 1933, as amended from time to time, and
the rules and regulations of the Commission promulgated thereunder.
“Subsidiary”
means, as to any Person, any corporation or other entity of which a majority of
the outstanding equity interest having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation or other
entity (irrespective of whether or not at the time any equity interest of any
other class or classes of such corporation or other entity shall have or might
have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more of its
Subsidiaries.
“TCGL
Intermediate Partnership” shall have the meaning specified in the
recitals.
“TCP
Intermediate Partnership” shall have the meaning specified in the
recitals.
“TCP
Parties” shall have the meaning specified in the recitals.
“TCT
Intermediate Partnership” shall have the meaning specified in the
recitals.
“TransCanada”
shall have the meaning specified in the recitals.
“Tuscarora”
shall have the meaning specified in the recitals.
“Unit
Price” shall have the meaning specified in Section 2.1(b).
“Unitholders”
means the Unitholders of the Partnership (within the meaning of the Partnership
Agreement).
“Units”
means the Units to be issued and sold to the Purchaser pursuant to this
Agreement.
4
Section
1.2 Accounting
Procedures and Interpretation. Unless otherwise specified in this
Agreement, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters under this Agreement shall be
made, and all financial statements and certificates and reports as to financial
matters required to be furnished to the Purchaser under this Agreement shall be
prepared, in accordance with GAAP applied on a consistent basis during the
periods involved (except, in the case of unaudited statements, as permitted by
Form 10-Q promulgated by the Commission) and in compliance as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect
thereto.
ARTICLE
II
SALE
AND PURCHASE
Section
2.1 Sale and
Purchase. Subject to the terms and conditions of this Agreement, at
the Closing, the Partnership hereby agrees to issue and sell to the Purchaser,
and the Purchaser hereby agrees to purchase from the Partnership, 2,609,680
Units. The Purchaser agrees to pay the Partnership the Unit Price for
each Unit.
(a) Units.
2,609,680 Units will be issued and sold to the Purchaser. The Units
shall have those rights, preferences, privileges and restrictions governing the
Common Units as set forth in the agreement of limited partnership of the
Partnership, as amended to date (the “Partnership
Agreement”).
(b) Consideration.
The amount per Unit that the Purchaser will pay to the Partnership to purchase
the Units (the “Unit
Price”) shall be $78,400,006.56, which is the average of the closing bid
prices of the Common Units as traded on the Nasdaq Stock Market over the five
trading day period ending on May 19, 2009.
(c) Funding by the
Purchaser. On the Closing Date, upon receipt of satisfactory
evidence that the conditions set forth in Article
VI have been satisfied, the Purchaser shall pay the Commitment Amount by
wire transfer of immediately available funds to an account directed by the
Partnership.
Section
2.2 Closing. The
execution and delivery of the Basic Documents (other than this Agreement), the
delivery of certificates representing the Units, the payment by the Purchaser of
its Commitment Amount, and execution and delivery of all other instruments,
agreements and other documents required by this Agreement (the “Closing”)
shall take place concurrently with the closing of the Acquisition (the date of
such Closing being referred to herein as the “Closing
Date”) at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
PARTNERSHIP
The
Partnership represents and warrants to the Purchaser, on and as of the date of
this Agreement and on and as of the Closing Date, as follows:
5
Section
3.1 Partnership
SEC Documents. The Partnership has timely filed with the
Commission all forms, registration statements, reports, schedules and statements
required to be filed by it under the Exchange Act or the Securities Act (all
such documents as filed, collectively, the “Partnership
SEC Documents”). The Partnership SEC Documents prior to the
date hereof, when they were filed, conformed in all material respects to the
requirements of the Exchange Act and did not, as of the time each such document
was filed, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made not misleading.
Section
3.2 Formation and
Qualification of the TCP Parties. The Partnership and each of
its Subsidiaries has been duly formed and is validly existing in good standing
as a corporation or limited partnership under the Delaware General Corporation
Law (“DGCL”)
or the Delaware Revised Uniform Limited Partnership Act (“DRULPA”),
as the case may be, with full corporate or partnership power and authority to
own or lease its properties and to conduct the businesses in which it is
engaged, in each case in all material respects, and has all material
governmental licenses, authorizations, consents and approvals as described in
the Partnership SEC Documents. Each of the General Partner, the
Partnership and its Subsidiaries is or, at the Closing Date will, be duly
registered or qualified as a foreign corporation or limited partnership, as the
case may be, for the transaction of business under the laws of each jurisdiction
in which the character of the business conducted by it or the nature or location
of the properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on (A) the condition (financial or otherwise),
business, prospects, assets, liabilities, affairs or results of operations of
the Partnership and its Subsidiaries, taken as a whole, (B) the ability of the
Partnership and its Subsidiaries, taken as a whole, to carry out their business
as of the date of this Agreement or to meet their obligations under the Basic
Documents on a timely basis or (C) the ability of the Partnership to consummate
the transactions under any Basic Document (any of the foregoing a “Partnership
Material Adverse Effect”) or (ii) subject the limited partners of the
Partnership to any material liability or disability.
Section
3.3 Formation and
Qualification of NBPC, Tuscarora and Great Lakes. Each of
NBPC, Tuscarora and Great Lakes has been duly formed and is validly existing in
good standing as a general partnership under the laws of the State of Texas, the
laws of the State of Nevada and the laws of the State of Delaware, respectively,
with full partnership power and authority to own or lease its properties and to
conduct its businesses in which it is engaged, in each case in all material
respects as described in the Partnership SEC Documents. Each of NBPC,
Tuscarora and Great Lakes is or, at the Closing Date will be duly registered or
qualified as a foreign general partnership for the transaction of business under
the laws of each jurisdiction in which the character of the business conducted
by it or the nature or location of the properties owned or leased by it makes
such registration or qualification necessary, except where the failure so to
register or qualify would not (i) have a Partnership Material Adverse Effect or
(ii) subject the limited partners of the Partnership to any material liability
or disability.
Section
3.4 Ownership of
the General Partner Interests. The General Partner is the sole
general partner of the Partnership and each of the Intermediate Partnerships
with a 1.0% general partner interest in the Partnership and a 1.0101% general
partner interest in each of the Intermediate Partnerships; such general partner
interests have been duly authorized and validly issued in accordance with the
Partnership Agreement, or the partnership agreements of each of the Intermediate
Partnerships, each as amended to date (collectively, the “Intermediate
Partnership Agreements”); and the General Partner owns such general
partner interests free and clear of all Liens (except restrictions on
transferability as described in the Partnership SEC
Documents).
6
Section
3.5 Capitalization.
(a) As of
the date hereof and prior to the issuance and sale of the Units, the issued and
outstanding limited partner interests of the Partnership consist of 34,856,086
Common Units and the Incentive Distribution Rights (as defined in the
Partnership Agreement, the “Incentive
Distribution Rights”). All outstanding Common Units and
Incentive Distribution Rights and the limited partner interests represented
thereby have been duly authorized and validly issued in accordance with the
Partnership Agreement and are fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by Section 17-607 of the DRULPA and as otherwise disclosed in the
Partnership SEC Documents).
(b) Except
for the Share Unit Plan for Non-Employee Directors (2007) filed as Exhibit 10.25
to the Partnership’s Form 10-K for the fiscal year ended December 31, 2008, the
Partnership has no equity compensation plans that contemplate the issuance of
Common Units (or securities convertible into or exchangeable for Common
Units). The Partnership has no outstanding indebtedness having the
right to vote (or convertible into or exchangeable for securities having the
right to vote) on any matters on which the Unitholders may
vote. Except as contemplated by this Agreement or as are contained in
the Partnership Agreement, there are no outstanding or authorized (i) options,
warrants, preemptive rights, subscriptions, calls or other rights, convertible
securities, agreements, claims or commitments of any character obligating the
Partnership or any of its Subsidiaries to issue, transfer or sell any equity
interests in the Partnership or any of its Subsidiaries or securities
convertible into or exchangeable for such equity interests, (ii) obligations of
the Partnership or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any equity interests in the Partnership or any of its Subsidiaries or
any such securities or agreements listed in clause (i) of this sentence or (iii)
voting trusts or similar agreements to which the Partnership or any of its
Subsidiaries is a party with respect to the voting of the equity interests of
the Partnership or any of its Subsidiaries.
Section
3.6 Authorization
and Rights of Units. The offer and sale of the Units and the
limited partnership interests represented thereby will be duly authorized by the
Partnership pursuant to the Partnership Agreement prior to the Closing and, when
issued and delivered to the Purchaser against payment therefor in accordance
with the terms of this Agreement, will be validly issued, fully paid (to the
extent required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by Section 17-607 of the DRULPA and as
otherwise disclosed in the Partnership SEC Documents) and will be free of any
and all Liens and restrictions on transfer, other than restrictions on transfer
under the Partnership Agreement and applicable state and federal securities Laws
and other than such Liens as are created by the Purchaser. The Units
shall have those rights, preferences, privileges and restrictions governing the
Units as set forth in the Partnership Agreement. A true and correct
copy of the Partnership Agreement, as amended through the date hereof, was filed
by the Partnership with the Commission as Exhibit 3.1 to the Partnership’s
Annual Report on Form 10-K for the year ended December 31, 1999, as amended by
the Amendment to the Partnership Agreement filed with the Commission as Exhibit
3.1.1 to the Partnership’s Annual Report on Form 10-K for the year ended
December 31, 2007 (it being understood that the Partnership Agreement will be
amended concurrent with the Closing as set forth the Acquisition
Agreement).
7
Section
3.7 Ownership of
the Limited Partner Interests in the Intermediate
Partnerships. The Partnership owns a 98.9899% limited partner
interest in each of the Intermediate Partnerships; such limited partner
interests have been duly authorized and validly issued in accordance with the
applicable Intermediate Partnership Agreement and are fully paid (to the extent
required under the applicable Intermediate Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Section 17-607
of the DRULPA); and the Partnership owns such limited partner interests free and
clear of all Liens or claims.
Section
3.8 Ownership of
Interest in NBPC. TCP Intermediate Partnership owns a 50%
general partner interest in NBPC; such general partner interest has been duly
authorized and validly issued in accordance with the partnership agreement of
NBPC, as amended to date; and TCP Intermediate Partnership owns such general
partner interest free and clear of all Liens or claims.
Section
3.9 Ownership of
Interest in Tuscarora. TCT Intermediate Partnership owns a 99%
general partner interest in Tuscarora and 100% of the membership interest in TC
Pipelines Tuscarora LLC which owns a 1% general partner interest in Tuscarora;
such general partner interests have been duly authorized and validly issued in
accordance with the partnership agreement of Tuscarora, as amended to date; and
TCT Intermediate Partnership and TC Pipelines Tuscarora LLC own such general
partner interests free and clear of all Liens or claims.
Section
3.10 Ownership of
Interest in Great Lakes. TCGL Intermediate Partnership owns a
46.45% general partner interest in Great Lakes; such general partner interest
has been duly authorized and validly issued in accordance with the partnership
agreement of Great Lakes, as amended to date; and TCGL Intermediate Partnership
owns such general partner interest free and clear of all Liens or
claims.
Section
3.11 No Other
Subsidiaries. Other than (i) the Partnership’s ownership
interest in the Intermediate Partnerships and (ii) the Intermediate
Partnerships’ ownership interests in each of NBPC, Tuscarora, Great Lakes and TC
Pipelines Tuscarora LLC, as applicable, neither the Partnership nor the
Intermediate Partnerships own, directly or indirectly, any equity or long-term
debt securities of any corporation, partnership, limited liability company,
joint venture, association or other entity. Other than its ownership
of its partnership interests in the Partnership and each of the Intermediate
Partnerships, the General Partner does not own, directly or indirectly, any
equity or long-term debt or other securities of any corporation, partnership,
limited liability company, joint venture, association or other
entity.
Section
3.12 No Preemptive
Rights, Registration Rights or Options. Except as described in
the Partnership SEC Documents, there are no preemptive rights or other rights to
subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any partnership or equity interests of the Partnership. None of
the execution of this Agreement nor the issuance or sale of the Units as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any Common Units or other securities of the
Partnership other than as provided in the Partnership SEC
Documents. There are no outstanding options or warrants to purchase
any Common Units.
8
Section
3.13 MLP
Status. The Partnership met for the taxable years ended
December 31, 2007 and 2008, and the Partnership expects to meet for the taxable
year ending December 31, 2009, the gross income requirements of Section
7704(c)(2) of the Code, and accordingly the Partnership is not, and does not
reasonably expect to be, taxed as a corporation for U.S. federal income tax
purposes or for applicable state tax purposes.
Section
3.14 Offering. Assuming
the accuracy of the representations and warranties of the Purchaser contained in
this Agreement, the sale and issuance of the Units pursuant to this Agreement
are exempt from the registration requirements of the Securities Act, and neither
the Partnership nor, to the Partnership’s knowledge, any authorized
Representative acting on its behalf has taken or will take any action that would
cause the loss of such exemption.
Section 3.15 Certain
Fees. No fees or commissions will be payable by the
Partnership to brokers, finders or investment bankers with respect to the sale
of any of the Units or the consummation of the transactions contemplated by this
Agreement.
Section
3.16 Authorization
and Enforceability of Basic Documents and Other
Agreements. The Partnership has all necessary limited
partnership power and authority to execute, deliver and perform its obligations
under the Basic Documents and the Acquisition Agreement to which it is a party
and to consummate the transactions contemplated thereby. The Basic
Documents and the Acquisition Agreement have been duly authorized, validly
executed and delivered and are valid and legally binding agreements, enforceable
against the Partnership in accordance with their terms; provided that,
with respect to each such agreement, the enforceability thereof may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and, provided
further, that the indemnity, contribution and exoneration provisions
contained in any of such agreements may be limited by applicable laws and public
policy. No approval of the Unitholders is required as a result of the
Partnership’s issuance and sale of the Units pursuant to this
Agreement.
Section
3.17 No
Conflicts. None of the sale by the Partnership of the Units,
the execution, delivery and performance of the Basic Documents or the
Acquisition Agreement by the Partnership and all other agreements and
instruments in connection with the transactions contemplated by
the Basic Documents or the Acquisition Agreement, or the consummation of the
transactions contemplated hereby or thereby by the Partnership (i) conflicts or
will conflict with or constitutes or will constitute a violation of the
Partnership Agreement, (ii) conflicts or will conflict with or constitutes or
will constitute a breach or violation of, or a default under (or an event that,
with notice or lapse of time or both, would constitute such a default), any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Partnership or any of its Subsidiaries is a party or by
which any of them or any of their respective properties may be bound, (iii)
violates or will violate any statute, law or regulation, including exchange
regulation, or any order, judgment, decree or injunction of any court or
governmental agency or body directed to any of the Partnership or its
Subsidiaries or any of their properties in a proceeding to which any of them or
their property is a party, or (iv) results or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Partnership or any of its Subsidiaries, which conflicts, breaches,
violations, defaults or liens, in the case of clauses (ii), (iii) or (iv),
would, individually or in the aggregate, have a Partnership Material Adverse
Effect or would materially impair the ability of the Partnership to perform its
obligations under the Basic Documents or the Acquisition
Agreement.
9
Section
3.18 No
Consents. No permit, consent, approval, authorization, waiver,
license, declaration, order, registration, filing or qualification (“consent”)
of or with any court, governmental agency or body having jurisdiction over the
Partnership or any of its properties is required in connection with the offering
and sale by the Partnership of the Units, the execution, delivery and
performance of the Basic Documents and the Acquisition Agreement by the
Partnership, or the consummation by the Partnership of the transactions
contemplated by the Basic Documents and the Acquisition Agreement, except for
such consents required under the Securities Act or state securities or “Blue
Sky” laws.
Section
3.19 Independent
Registered Public Accounting Firm. The independent registered
public accounting firm, KPMG LLP, who has audited the financial statements of
the Partnership, NBPC and Great Lakes included in the Partnership SEC Documents
is a registered independent public accounting firm with respect to the
Partnership, NBPC and Great Lakes, as required by the Exchange Act or the
Securities Act, as applicable, and has not resigned or been dismissed as
independent registered public accountants of the Partnership as a result of or
in connection with any disagreement with the Partnership on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedures.
Section
3.20 Financial
Statements. At March 31, 2009, the Partnership had a
capitalization as indicated in the Partnership’s Quarterly Report on Form 10-Q
for the three months ended March 31, 2009. The historical financial
statements (including the related notes and supporting schedules) of the
Partnership, NBPC and Great Lakes included in the Partnership SEC Documents
comply as to form in all material respects with the requirements of Regulation
S-X under the Exchange Act or the Securities Act, as applicable, and present
fairly in all material respects the financial position, results of operations
and cash flows of the Partnership, NBPC and Great Lakes on the basis stated
therein at the respective dates or for the respective periods which have been
prepared in accordance with GAAP consistently applied through the periods
involved, except to the extent disclosed therein.
Section
3.21 No Material
Adverse Change. None of the Partnership or any of its
Subsidiaries or NBPC, Great Lakes or Tuscarora has sustained, since the date of
the latest financial statements included in the Partnership’s Quarterly Report
on Form 10-Q for the three months ended March 31, 2009, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, investigation, order or decree, otherwise than as set forth
or contemplated in the Partnership SEC Documents. Except as disclosed
in the Partnership SEC Documents, subsequent to the respective dates as of which
such information is given in the Partnership SEC Documents, (i) none of the
Partnership or any of its Subsidiaries or NBPC, Great Lakes or Tuscarora has
incurred any liability or obligation, indirect, direct or contingent, or entered
into any transactions, not in the ordinary course of business, that,
individually or in the aggregate, is material to the Partnership and its
Subsidiaries, taken as a whole, (ii) there has not been any material change in
the capitalization or material increase in the short-term debt or long-term debt
of the Partnership and its Subsidiaries, NBPC, Great Lakes and Tuscarora taken
as a whole, except for debt incurred to finance the Acquisition, (iii) there has
been no acquisition or disposition of any material asset by the Partnership or
any of its Subsidiaries or NBPC, Great Lakes or Tuscarora or any contract or
arrangement therefor, otherwise than for fair value in the ordinary course of
business, (iv) there has been no material change in the Partnership’s accounting
principles, practices or methods and (v) there has not been any material adverse
change, or any development, individually or in the aggregate, that has had or
would be reasonably expected to have a Partnership Material Adverse
Effect.
10
Section
3.22 Investment
Company. The Partnership is not now, and after issuance and
sale of the Units to be issued and sold by the Partnership hereunder and
application of the net proceeds from such sale as described in Section
5.2 hereof will not be, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
Section
3.23 Litigation. Except
as described in the Partnership SEC Documents or the forms, reports, schedules
and statements filed with the Commission by the Partnership under the Exchange
Act or the Securities Act, there is (i) no action, suit or proceeding before or
by any court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the best of the Partnership’s knowledge, threatened,
to which the Partnership or any of its Subsidiaries or NBPC, Great Lakes or
Tuscarora is or may be a party or to which the business or property of any of
the Partnership or its Subsidiaries or NBPC, Great Lakes or Tuscarora is or may
be subject, (ii) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency or that has been formally proposed
by any governmental agency, and (iii) no injunction, restraining order or
order of any nature issued by a federal or state court or foreign court of
competent jurisdiction to which any of the Partnership or its Subsidiaries or
NBPC, Great Lakes or Tuscarora is or may be subject, that, in the case of
clauses (i), (ii) and (iii) above, is reasonably expected to (A) individually or
in the aggregate have a Partnership Material Adverse Effect, (B) prevent or
result in the suspension of the offering and sale of the Units, or (C) in any
manner draw into question the validity of this Agreement.
Section
3.24 Listing. The
Common Units are listed on the Nasdaq Global Select Market. The Units
will be issued in compliance with all applicable rules of The Nasdaq
Market. Prior to the Closing, the Partnership will have submitted to
The Nasdaq Market a “Notification Form: Listing of Additional Shares” with
respect to the Units. The Partnership has not received a notice of
delisting with respect to the Common Units.
Section
3.25 Acknowledgment
Regarding Certificates. Any certificate signed by any officer
of any of the General Partner on behalf of the Partnership and delivered to the
Purchaser or counsel for the Purchaser in connection with the offering of the
Units shall be deemed a representation and warranty by the Partnership as to
matters covered thereby to the Purchaser.
11
Section
3.26 Insurance. The
Partnership and its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as the
Partnership believes are prudent for its businesses. The Partnership
does not have any reason to believe that it or any Subsidiary will not be able
to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business.
Section
3.27 Form S-3
Eligibility. The Partnership is eligible to register the Units
for resale by the Purchaser on a registration statement on Form S-3 under the
Securities Act.
Section
3.28 No
Integration. Neither the Partnership, nor any of its Affiliates, nor any
Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Units to be integrated
with prior offerings by the Partnership for purposes of the Securities Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of the exchange on which the Units are currently
listed or quoted.
Section
3.29 Taxes. Each
of the Partnership and its Subsidiaries has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon except for taxes being contested in good faith by the
Partnership for which adequate reserves have been established, and neither the
Partnership nor any of its subsidiaries has knowledge of a tax deficiency which
has been asserted in writing against it which would reasonably be expected to
have a Material Adverse Effect.
Section
3.30 Registration
Rights. The Purchaser is an “Affiliate” of the General Partner
within the meaning of the Partnership Agreement, as such Partnership Agreement
will be amended in connection with the Acquisition, and is therefore entitled to
rely upon the registration rights set forth in Section 7.12(a) of the
Partnership Agreement .
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
The
Purchaser represents and warrants to the Partnership, on and as of the date of
this Agreement and on and of the Closing Date, as follows:
Section 4.1 Valid
Existence. The Purchaser (i) is duly organized, validly existing and
in good standing under the Laws of its jurisdiction of organization and
(ii) has all requisite power, and has all material governmental licenses,
authorizations, consents and approvals, necessary to own its properties and
carry on its business as its business is now being conducted, except where the
failure to obtain such licenses, authorizations, consents and approvals would
not have and would not reasonably be expected to have a Purchaser Material
Adverse Effect.
12
Section
4.2 No
Breach. The execution, delivery and performance by the Purchaser of the
Basic Documents to which it is a party and all other agreements and instruments
in connection with the transactions contemplated by the Basic Documents to which
it is a party, and compliance by the Purchaser with the terms and provisions
hereof and thereof and the purchase of the Units by the Purchaser do not and
will not (a) violate any provision of any Law, governmental permit,
determination or award having applicability to the Purchaser or any of its
properties, (b) conflict with or result in a violation of any provision of
the organizational documents of the Purchaser or (c) require any consent
(other than standard internal consents), approval or notice under or result in a
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under (i) any note, bond, mortgage, license, loan or
credit agreement to which the Purchaser is a party or by which the Purchaser or
any of its properties may be bound or (ii) any other such agreement,
instrument or obligation, except in the case of clauses (a) and
(c) where such violation, default, breach, termination, cancellation,
failure to receive consent or approval, or acceleration with respect to the
foregoing provisions of this Section 4.2
would not, individually or in the aggregate, reasonably be expected to have a
Purchaser Material Adverse Effect.
Section
4.3 Investment.
The Units are being acquired for the Purchaser’s own account, not as a nominee
or agent, and with no present intention of distributing the Units or any part
thereof, and the Purchaser has no present intention of selling or granting any
participation in or otherwise distributing the same in any transaction in
violation of the securities Laws of the United States of America or any state,
without prejudice, however, to the Purchaser’s right at all times to sell or
otherwise dispose of all or any part of the Units under a registration statement
under the Securities Act and applicable state securities Laws or under an
exemption from such registration available thereunder (including, if available,
Rule 144 promulgated thereunder). If the Purchaser should in the future
decide to dispose of any of the Units, the Purchaser understands and agrees
(a) that it may do so only (i) in compliance with the Securities Act
and applicable state securities Law, as then in effect, or pursuant to an
exemption therefrom or (ii) in the manner contemplated by any registration
statement pursuant to which such securities are being offered, and (b) that
stop-transfer instructions to that effect will be in effect with respect to such
securities. Notwithstanding the foregoing, the Purchaser may at any time enter
into one or more total return swaps with respect to the Purchaser’s Units with a
third party provided that such transactions are exempt from registration under
the Securities Act.
Section
4.4 Nature of the
Purchaser. The Purchaser represents and warrants to, and covenants and
agrees with, the Partnership that (a) it is an “accredited investor” within
the meaning of Rule 501 of Regulation D promulgated by the Commission
pursuant to the Securities Act and (b) by reason of its business and
financial experience it has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Units, is able to bear the economic
risk of such investment and, at the present time, would be able to afford a
complete loss of such investment.
Section
4.5 Receipt of
Information; Authorization. The Purchaser acknowledges that it has
(a) had access to the Partnership SEC Documents, (b) had access to
information publicly disclosed regarding the Acquisition and its potential
effect on the Partnership’s operations and financial results and (c) been
provided a reasonable opportunity to ask questions of and receive answers from
Representatives of the Partnership regarding such matters.
Section
4.6 Restricted
Securities. The Purchaser understands that the Units it is purchasing are
characterized as “restricted securities” under the federal securities Laws
inasmuch as they are being acquired from the Partnership in a transaction not
involving a public offering and that under such Laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. In this connection, the Purchaser represents
that it is knowledgeable with respect to Rule 144 of the Commission
promulgated under the Securities Act.
13
Section
4.7 Certain
Fees. No fees or commissions will be payable by the Purchaser to brokers,
finders or investment bankers with respect to the sale of any of the Units or
the consummation of the transactions contemplated by this
Agreement.
Section
4.8 Legend.
It is understood that the certificates evidencing the Units initially will bear
the following legend: “These securities have not been registered under the
Securities Act of 1933. These securities may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or pursuant to an exemption from
registration thereunder and, in the case of a transaction exempt from
registration, unless sold pursuant to Rule 144 under such Act or the issuer
has received documentation reasonably satisfactory to it that such transaction
does not require registration under such Act.”
ARTICLE
V
COVENANTS
Section
5.1 Taking of
Necessary Action. Each of the Parties hereto shall use its commercially
reasonable efforts promptly to take or cause to be taken all action and promptly
to do or cause to be done all things necessary, proper or advisable under
applicable Law and regulations to consummate and make effective the transactions
contemplated by this Agreement. Without limiting the foregoing, the Partnership
and the Purchaser will, and the Partnership shall cause each of its Subsidiaries
to, use its commercially reasonable efforts to make all filings and obtain all
consents of Governmental Authorities that may be necessary or, in the reasonable
opinion of the Purchaser or the Partnership, as the case may be, advisable for
the consummation of the transactions contemplated by this Agreement or the other
Basic Documents.
Section
5.2 Use of
Proceeds. The Partnership shall use the collective proceeds from the sale
of the Units to provide funds to TCP Intermediate Partnership to partially fund
the purchase price set forth in the Acquisition Agreement.
Section
5.3 Tax
Information. The Partnership shall provide the Purchaser with any
reasonably requested tax information related to its ownership of the
Units.
Section
5.4 Certain
Special Allocations of Book and Taxable Income. To the extent
that the Unit Price is more or less than the trading price of the Common Units
of the Partnership on the Nasdaq Global Select Market as of the Closing Date,
the General Partner intends to specially allocate items of book and taxable loss
or income to the Purchaser so that its capital account in its Units is
consistent, on a per-Unit basis, with the capital accounts of the other holders
of Common Units (and thus to assure fungibility of all Common
Units). The Purchaser acknowledges and agrees to such special
allocations.
Section
5.5 Non-Disclosure;
Interim Public Filings. Promptly following the execution of
this Agreement and in any event within the time period proscribed by applicable
Law, the Partnership shall issue a press release reasonably acceptable to the
Purchaser or otherwise disclose the transactions contemplated hereby as required
by applicable Law. In addition and without limitation of the
foregoing, the Partnership shall timely file a Current Report on Form 8-K with
the Commission in the form required by the Exchange Act (the “8-K
Filing”) describing the terms of the transactions contemplated by this
Agreement and containing all other information required to be disclosed by the
Exchange Act in connection with the transactions contemplated hereby (and, if
necessary, attaching this Agreement as an exhibit thereto). Thereafter,
the Partnership shall timely file any filings and notices required by the
Commission or applicable Law with respect to the transactions contemplated
hereby. Except with respect to the 8-K Filing (a copy of which will be
provided to the Purchaser for its review as early as practicable prior to its
filing), the Partnership shall, at least two Business Days prior to the filing
or dissemination of any disclosure required by this Section 5.5,
provide a copy thereof to the Purchaser for their review. The Partnership
and the Purchaser shall consult with each other in issuing any press releases or
otherwise making public statements or filings and other communications with the
Commission or any regulatory agency or The Nasdaq Stock Market (or other
exchange on which securities of the Partnership are listed or traded) with
respect to the transactions contemplated hereby, and neither Party shall issue
any such press release or otherwise make any such public statement, filing or
other communication without the prior consent of the other, except if such
disclosure is required by Law, in which case the disclosing Party shall promptly
provide the other Party with prior notice of such public statement, filing or
other communication.
14
ARTICLE
VI
CONDITIONS
TO CLOSING
Section
6.1 Mutual
Conditions. The respective obligation of each Party to
consummate the purchase and issuance and sale of the Units shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions (any or all of which may be waived by a particular Party on behalf of
itself in writing, in whole or in part, to the extent permitted by applicable
Law):
(a) no
Law shall have been enacted or promulgated, and no action shall have been taken,
by any Governmental Authority of competent jurisdiction which temporarily,
preliminarily or permanently restrains, precludes, enjoins or otherwise
prohibits the consummation of the transactions contemplated by this Agreement or
makes the transactions contemplated by this Agreement illegal;
and
(b) there
shall not be pending any Action by any Governmental Authority seeking to
restrain, preclude, enjoin or prohibit the transactions contemplated by this
Agreement.
Section
6.2 The
Purchaser’s Conditions. The obligation of the Purchaser to
consummate the purchase of its Units shall be subject to the satisfaction on or
prior to the Closing Date of each of the following conditions (any or all of
which may be waived by the Purchaser on behalf of itself in writing, in whole or
in part, to the extent permitted by applicable Law):
15
(a) the
Partnership shall have performed and complied in all material respects with the
covenants and agreements contained in this Agreement that are required to be
performed and complied with by it on or prior to the Closing
Date;
(b) the
representations and warranties of the Partnership contained in this Agreement
that are qualified by materiality or Partnership Material Adverse Effect shall
be true and correct when made and as of the Closing Date and all other
representations and warranties shall be true and correct in all material
respects when made and as of the Closing Date, in each case as though made at
and as of the Closing Date (except that representations made as of a specific
date shall be required to be true and correct as of such date
only);
(c) since
the date of this Agreement, no Partnership Material Adverse Effect shall have
occurred and be continuing;
(d) the
Partnership shall have delivered, or caused to be delivered, to the Purchaser at
the Closing, its closing deliveries described in Section
7.1; and
(e) the
Partnership shall have submitted to The Nasdaq Market a “Notification Form:
Listing of Additional Shares” with respect to the Units and no notice of
delisting from The Nasdaq Market shall have been received by the Partnership
with respect to the Common Units.
Section
6.3 The Partnership’s
Conditions. The obligation of the Partnership to
consummate the sale of the Units to the Purchaser shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
with respect to the Purchaser (any or all of which may be waived by the
Partnership in writing, in whole or in part, to the extent permitted by
applicable Law):
(a) the
Purchaser shall have performed and complied in all material respects with the
covenants and agreements contained in this Agreement that are required to be
performed and complied with by the Purchaser on or prior to the Closing
Date;
(b) the
representations and warranties of the Purchaser contained in this Agreement that
are qualified by materiality or Purchaser Material Adverse Effect shall be true
and correct when made and as of the Closing Date and all other representations
and warranties of the Purchaser shall be true and correct in all material
respects when made and as of the Closing Date, in each case as though made at
and as of the Closing Date (except that representations or warranties made as of
a specific date shall be required to be true and correct as of such date only);
and
(c) the
Purchaser shall have delivered, or caused to be delivered, its closing
deliveries described in Section 7.2
(including payment of its Commitment Amount as provided in Section 7.2(b) and
Section
2.1(c)).
16
ARTICLE
VII
CLOSING
DELIVERIES
Section
7.1 The Partnership
Deliveries. At the Closing, subject to the terms and conditions of this
Agreement, the Partnership shall have delivered, or caused to be delivered, to
the Purchaser:
(a) the Units
by delivering certificates (bearing the legend set forth in Section 4.8)
evidencing such Units, all free and clear of any Liens, encumbrances or
interests of any other party;
(b) a
certificate signed on behalf of the Partnership by the Chairman of the Board of
Directors or the President and the principal financial or accounting officer of
the General Partner, dated the Closing Date, to the effect
that:
(i) the
representations and warranties of the Partnership in this Agreement are true and
correct on and as of the Closing Date with the same effect as if made on the
Closing Date and the Partnership has performed and 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;
(ii) since the
date of the most recent financial statements included or incorporated by
reference in the Partnership SEC Documents, there has been no Partnership
Material Adverse Effect, except as set forth in or contemplated in the
Partnership SEC Documents;
(iii) the
conditions to the closing of the Acquisition set forth in the Acquisition
Agreement (other than the payment of the purchase price by the Partnership) have
been satisfied or waived;
(c) a
certificate dated as of a recent date of the Secretary of State of the State of
Delaware with respect to the due organization and good standing in the State of
Delaware of the Partnership; and
(d) a
receipt, dated the Closing Date, executed by the Partnership and delivered to
the Purchaser certifying that the Partnership has received the Purchase Price
with respect to the Units issued and sold to the Purchaser.
Section
7.2 The Purchaser
Deliveries. Subject to the terms and conditions of this
Agreement, the Purchaser will deliver, or cause to be delivered, at the
Closing:
(a) a
certificate signed on behalf of the Purchaser by the Chairman of the Board of
Directors or the President and the principal financial or accounting officer,
dated the Closing Date, to the effect that the representations and warranties of
the Purchaser in this Agreement are true and correct on and as of the Closing
Date with the same effect as if made on the Closing Date and the Purchaser has
performed and 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;
and
17
(b) payment
to the Partnership of Purchaser’s Commitment Amount by wire transfer(s) of
immediately available funds to an account designated by the
Partnership.
ARTICLE
VIII
INDEMNIFICATION,
COSTS AND EXPENSES
Section
8.1 Indemnification by the
Partnership. The Partnership agrees to indemnify the Purchaser and its
Representatives (collectively, the “Purchaser Related
Parties”) from, and hold each of them harmless against, any and all
actions, suits, proceedings (including any investigations, litigation or
inquiries), demands and causes of action, and, in connection therewith, and
promptly upon demand, pay and reimburse each of them for all costs, losses,
liabilities, damages or expenses of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel and all other reasonable expenses
incurred in connection with investigating, defending or preparing to defend any
such matter that may be incurred by them or asserted against or involve any of
them as a result of, arising out of or in any way related to (i) any actual
or proposed use by the Partnership of the proceeds of the sale of the Units or
(ii) the breach of any of the representations, warranties or covenants of
the Partnership contained herein; provided that such claim for
indemnification relating to a breach of a representation or warranty is made
prior to the expiration of such representation or warranty; provided further, that no
Purchaser Related Party shall be entitled to recover special, consequential
(including lost profits or diminution in value) or punitive
damages.
Section
8.2 Indemnification by the
Purchaser. The Purchaser agrees to indemnify the Partnership and its
Representatives (collectively, the “Partnership Related
Parties”) from, and hold each of them harmless against, any and all
actions, suits, proceedings (including any investigations, litigation or
inquiries), demands and causes of action, and, in connection therewith, and
promptly upon demand, pay and reimburse each of them for all costs, losses,
liabilities, damages or expenses of any kind or nature whatsoever, including the
reasonable fees and disbursements of counsel and all other reasonable expenses
incurred in connection with investigating, defending or preparing to defend any
such matter that may be incurred by them or asserted against or involve any of
them as a result of, arising out of or in any way related to the breach of any
of the covenants of the Purchaser contained herein; provided further, that no Partnership Related
Party shall be entitled to recover special, consequential (including lost
profits or diminution in value) or punitive damages.
Section
8.3 Indemnification
Procedure. Promptly after any the Partnership Related Party or Purchaser
Related Party (hereinafter, the “Indemnified Party”)
has received notice of any indemnifiable claim hereunder, or the commencement of
any action or proceeding by a third party, which the Indemnified Party believes
in good faith is an indemnifiable claim under this Agreement, the Indemnified
Party shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such claim or the commencement of such action or proceeding,
but failure to so notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability it may have to such Indemnified Party
hereunder except to the extent that the Indemnifying Party is materially
prejudiced by such failure. Such notice shall state the nature and the basis of
such claim to the extent then known. The Indemnifying Party shall
have the right to defend and settle, at its own expense and by its own counsel
who shall be reasonably acceptable to the Indemnified Party, any such matter as
long as the Indemnifying Party pursues the same diligently and in good faith. If
the Indemnifying Party undertakes to defend or settle, it shall promptly notify
the Indemnified Party of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in all commercially
reasonable respects in the defense thereof and the settlement thereof. Such
cooperation shall include furnishing the Indemnifying Party with any books,
records and other information reasonably requested by the Indemnifying Party and
in the Indemnified Party’s possession or control. Such cooperation of the
Indemnified Party shall be at the cost of the Indemnifying Party. After the
Indemnifying Party has notified the Indemnified Party of its intention to
undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability; provided,
however, that the
Indemnified Party shall be entitled (i) at its expense, to participate in
the defense of such asserted liability and the negotiations of the settlement
thereof and (ii) if (A) the Indemnifying Party has failed to assume
the defense or employ counsel reasonably acceptable to the Indemnified Party or
(B) if the defendants in any such action include both the Indemnified Party
and the Indemnifying Party and counsel to the Indemnified Party shall have
concluded that there may be reasonable defenses available to the Indemnified
Party that are different from or in addition to those available to the
Indemnifying Party or if the interests of the Indemnified Party reasonably may
be deemed to conflict with the interests of the Indemnifying Party, then the
Indemnified Party shall have the right to select a separate counsel and to
assume such legal defense and otherwise to participate in the defense of such
action, with the expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the Indemnifying Party as
incurred. Notwithstanding any other provision of this Agreement, the
Indemnifying Party shall not settle any indemnified claim without the consent of
the Indemnified Party, unless the settlement thereof imposes no liability or
obligation on, involves no admission of wrongdoing or malfeasance by, and
includes a complete release from liability of, the Indemnified
Party.
18
ARTICLE
IX
MISCELLANEOUS
Section
9.1 Interpretation.
Article, Section, Schedule and Exhibit references are to this Agreement, unless
otherwise specified. All references to instruments, documents,
contracts and agreements are references to such instruments, documents,
contracts and agreements as the same may be amended, supplemented and otherwise
modified from time to time, unless otherwise specified. The word “including”
shall mean “including but not limited to”. Whenever the Partnership has an
obligation under the Basic Documents, the expense of complying with such
obligation shall be an expense of the Partnership unless otherwise specified.
Whenever any determination, consent or approval is to be made or given by the
Purchaser under this Agreement, such action shall be in the Purchaser’s sole
discretion unless otherwise specified. If any provision in the Basic Documents
is held to be illegal, invalid, not binding or unenforceable, such provision
shall be fully severable and the Basic Documents shall be construed and enforced
as if such illegal, invalid, not binding or unenforceable provision had never
comprised a part of the Basic Documents, and the remaining provisions shall
remain in full force and effect. The Basic Documents have been reviewed and
negotiated by sophisticated parties with access to legal counsel and shall not
be construed against the drafter.
19
Section
9.2 Survival of
Provisions. The representations and warranties set forth in Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.12, 3.13, 3.15, 3.16, 3.22, 3.23, 4.1, 4.3, 4.4, 4.6, 4.7 and 4.8 of this Agreement
shall survive the execution and delivery of this Agreement indefinitely, and the
other representations and warranties set forth in this Agreement shall survive
for a period of twelve (12) months following the Closing Date regardless of any
investigation made by or on behalf of the Partnership or the
Purchaser. The covenants made in this Agreement or any other Basic
Document shall survive the closing of the transactions described herein and
remain operative and in full force and effect regardless of acceptance of any of
the Units and payment therefor and conversion, exercise or repurchase
thereof. All indemnification obligations of the Partnership and the
Purchaser pursuant to Article VIII of
this Agreement shall remain operative and in full force and effect unless such
obligations are expressly terminated in a writing by the Parties referencing the
particular Article or Section, regardless of any purported general termination
of this Agreement.
Section
9.3 No Waiver; Modifications in
Writing.
(a) Delay. No
failure or delay on the part of any Party in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any right, power or
remedy. The remedies provided for herein are cumulative and are not
exclusive of any remedies that may be available to a Party at law or in equity
or otherwise.
(b) Specific Waiver.
Except as otherwise provided in this Agreement, no amendment, waiver, consent,
modification or termination of any provision of this Agreement or any other
Basic Document shall be effective unless signed by each of the Parties or each
of the original signatories thereto affected by such amendment, waiver, consent,
modification or termination. Any amendment, supplement or
modification of or to any provision of this Agreement or any other Basic
Document, any waiver of any provision of this Agreement or any other Basic
Document and any consent to any departure by the Partnership from the terms of
any provision of this Agreement or any other Basic Document shall be effective
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this
Agreement, no notice to or demand on any Party in any case shall entitle any
Party to any other or further notice or demand in similar or other
circumstances.
Section
9.4 Binding Effect;
Assignment.
(a) Binding Effect. This
Agreement shall be binding upon the Partnership, the Purchaser, and their
respective successors and permitted assigns. Except as expressly
provided in this Agreement, this Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the Parties to this
Agreement and as provided in Article VII, and
their respective successors and permitted assigns.
(b) Assignment of Units.
All or any portion of the Purchaser’s Units purchased pursuant to this Agreement
may be sold, assigned or pledged by the Purchaser, subject to compliance with
applicable securities Laws.
20
(c) Assignment of Rights.
The Purchaser may assign all or any portion of its rights and obligations under
this Agreement without the consent of the Partnership (i) to any Affiliate
of the Purchaser or (ii) in connection with a total return swap or similar
transaction with respect to the Units purchased by the Purchaser, and in each
case the assignee shall be deemed to be the Purchaser hereunder with respect to
such assigned rights or obligations and shall agree to be bound by the
provisions of this Agreement. Except as expressly permitted by this
Section 9.4(c),
such rights and obligations may not otherwise be transferred except with the
prior written consent of the Partnership (which consent shall not be
unreasonably withheld), in which case the assignee shall be deemed to be the
Purchaser hereunder with respect to such assigned rights or obligations and
shall agree to be bound by the provisions of this Agreement.
Section
9.5 Aggregation of Units.
All Units held or acquired by Persons who are Affiliates of one another shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
Section
9.6 Communications. All
notices and demands provided for hereunder shall be in
writing and shall be given by regular mail, registered or certified mail, return
receipt requested, facsimile, air courier guaranteeing overnight delivery,
electronic mail or personal delivery to the following
addresses:
(a) If to the
Purchaser:
TransCan
Northern Ltd.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
(XXX) XXX-XXX
with a
copy to:
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the
Partnership:
TC
Pipelines, LP
450
– 1st Street S.W.
Calgary,
Alberta, Canada T2P 5H1
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with a
copy to:
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
21
with a
copy to:
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
The
▇▇▇▇▇▇ Building
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇;
or to
such other address as the Partnership or the Purchaser may designate in writing.
All notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; upon actual receipt if sent by
registered or certified mail, return receipt requested, or regular mail, if
mailed; when receipt acknowledged, if sent via facsimile; and upon actual
receipt when delivered by an air courier guaranteeing overnight delivery or via
electronic mail.
Section
9.7 Removal of Legend.
The Partnership shall remove the legend described in Section 4.8 from the
certificates evidencing the Units at the request of the Purchaser submitting to
the Partnership such certificates, together with such other documentation as may
be reasonably requested by the Partnership or required by its transfer agent,
unless the Partnership, with the advice of counsel, reasonably determines that
such removal is inappropriate; provided that no opinion of
counsel shall be required in the event the Purchaser is effecting a sale of such
Units pursuant to Rule 144 or an effective registration statement (unless
required by the Partnership’s transfer agent). The Partnership shall
cooperate with the Purchaser to effect removal of such legend. The
legend described in Section 4.8
shall be removed and the Partnership shall issue a certificate without such
legend to the holder of Units upon which it is stamped, if, unless otherwise
required by state securities Laws, (i) such Units are sold pursuant to an
effective Registration Statement, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Partnership with an
opinion of a law firm reasonably acceptable to the Partnership, in a generally
acceptable form, to the effect that such sale, assignment or transfer of such
Units may be made without registration under the applicable requirements of the
Securities Act, or (iii) such holder provides the Partnership with
reasonable assurance that such Units can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A under the Securities
Act.
Section
9.8 Expenses. Each Party
shall bear its own fees and expenses incurred in connection with the preparation
of and performance under this Agreement.
Section
9.9 Entire Agreement.
This Agreement and the other Basic Documents are intended by the Parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the Parties hereto and thereto
in respect of the subject matter contained herein and therein. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein or therein with respect to the rights granted by the
Partnership or the Purchaser set forth herein or therein. This
Agreement and the other Basic Documents supersede all prior agreements and
understandings between the Parties with respect to such subject
matter.
22
Section
9.10 Governing Law. This
Agreement will be construed in accordance with and governed by the Laws of the
State of New York without regard to principles of conflicts of
Laws.
Section
9.11 Execution in
Counterparts. This Agreement may be executed in any number of
counterparts and by different Parties hereto in separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.
Section
9.12 Expenses. If any
action at law or equity is necessary to enforce or interpret the terms of the
Basic Documents, the prevailing Party shall be entitled to reasonable attorney’s
fees, costs and necessary disbursements in addition to any other relief to which
such Party may be entitled.
Section
9.13 Termination.
(a) Notwithstanding
anything herein to the contrary, this Agreement may be terminated at any time at
or prior to the Closing by the mutual written consent of the Purchaser and the
Partnership.
(b) Notwithstanding
anything herein to the contrary, this Agreement shall automatically terminate at
any time at or prior to the Closing:
(i) if a Law
shall have been enacted or promulgated, or if any action shall have been taken
by any Governmental Authority of competent jurisdiction which permanently
restrains, precludes, enjoins or otherwise prohibits the consummation of the
transactions contemplated by this Agreement or makes the transactions
contemplated by this Agreement illegal;
(ii) if the
Closing shall not have occurred on or before December 31, 2009;
or
(iii) if the
Acquisition Agreement shall have been terminated in accordance with its
terms.
(c) In the
event of the termination of this Agreement as provided in Section
9.13(a) or Section
9.13(b), this Agreement shall
forthwith become null and void. In the event of such termination,
there shall be no liability on the part of any Party hereto; provided that nothing herein
shall relieve any Party from any liability or obligation with respect to any
willful breach of this Agreement.
Section
9.14 Recapitalization, Exchanges,
Etc. Affecting the Units. The provisions of this Agreement shall apply to
the full extent set forth herein with respect to any and all units or other
equity interests of the Partnership or any successor or assign of the
Partnership (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in exchange for or in substitution of, the
Units, and shall be appropriately adjusted for combinations, unit splits,
recapitalizations and the like occurring after the date of this
Agreement.
23
Section
9.15 Obligations Limited to
Parties to Agreement. Each of the parties hereto covenants, agrees and
acknowledges that no Person other than the Purchaser (and their permitted
assignees) and the Partnership shall have any obligation hereunder and that,
notwithstanding that the Purchaser may be a corporation, partnership or limited
liability company, no recourse under this Agreement or the other Basic Documents
or under any documents or instruments delivered in connection herewith or
therewith shall be had against any former, current or future director, officer,
employee, agent, general or limited partner, manager, member, stockholder or
Affiliate of the Purchaser or the Partnership or any former, current or future
director, officer, employee, agent, general or limited partner, manager, member,
stockholder or Affiliate of any of the foregoing, whether by the enforcement of
any assessment or by any legal or equitable proceeding, or by virtue of any
applicable Law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any former, current or future director, officer, employee, agent, general or
limited partner, manager, member, stockholder or Affiliate of the Purchaser or
the Partnership or any former, current or future director, officer, employee,
agent, general or limited partner, manager, member, stockholder or
Affiliate of any of the foregoing, as such, for any obligations of the
Purchaser and the Partnership under this Agreement or the other Basic Documents
or any documents or instruments delivered in connection herewith or therewith or
for any claim based on, in respect of or by reason of such obligation or its
creation.
[The
remainder of this page is intentionally left blank.]
24
IN
WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the
date first above written.
PARTNERSHIP
TC
PipeLines, LP
By: TC
PipeLines GP, Inc., its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇
▇▇▇▇▇▇▇▇▇
Title:
President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Title:
Secretary
PURCHASER
TransCan
Northern Ltd.
By: /s/ ▇▇▇ ▇▇▇▇
Name: ▇▇▇
▇▇▇▇
Title:
Vice-President, Taxation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Title:
Vice-President, Finance
| [Signature page to Common Unit Purchase Agreement] |