1
EXHIBIT 1
Northern Border Partners, L.P.
4,455,218
Common Units(1)
Representing Limited Partner Interests
Underwriting Agreement
New York, New York
May 16, 2001
Salomon Smith Barney Inc.
Banc of America Securities LLC
UBS Warburg LLC
A.G. Edwards & Sons, Inc.
Dain Rauscher Incorporated
First Union Securities, Inc.
as Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Northern Border Partners, L.P., a limited partnership organized under
the laws of Delaware (the "Partnership"), proposes to sell to the several
underwriters named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, 4,000,000 Common Units
("Common Units") of the Partnership, and the person named in Schedule II hereto
(the "Selling Unitholder") proposes to sell to the several Underwriters 455,218
Common Units (said units to be issued and sold by the Partnership and units to
be sold by the Selling Unitholder collectively being hereinafter called the
"Underwritten Securities"). The Selling Unitholder named in Schedule II hereto
also proposes to grant to the Underwriters an option to purchase up to 668,282
additional Common Units to cover over-allotments (the "Option Securities"; the
Option Securities, together with the Underwritten Securities, being hereinafter
called the "Securities"). To the extent there are no additional Underwriters
listed on Schedule I other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. The use of the
neuter in this Agreement shall include the feminine and masculine wherever
appropriate. Any reference herein to the Registration Statements, a
- ----------
(1) Plus an option to purchase from the Selling Unitholder up to 668,282
additional Securities to cover over-allotments.
2
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the respective Effective
Dates of each of the Registration Statements or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to any of
the Registration Statements, any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the respective Effective Dates of each of the Registration Statements,
or the issue date of any Preliminary Prospectus or the Prospectus, as the case
may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Partnership and Northern Border Intermediate Limited
Partnership, a Delaware limited partnership (the "Intermediate Partnership"),
jointly and severally represent and warrant to, and agree with, each Underwriter
as set forth below in this Section 1.
(a) The Partnership has prepared and filed with the Commission three
registration statements on Form S-3 (file numbers 333-40601, 333-72323 and
333-72351), in each case including a related base prospectus subject to
completion, for registration under the Act of certain securities of the
Partnership, including the offering and sale of the Securities, each of
such Registration Statements has been declared effective by the Commission,
and no stop order suspending the effectiveness of any of the Registration
Statements has been issued by the Commission. At the time of the filing of
each such Registration Statement, the Partnership met the requirements for
use of Form S-3 under the Act. The Partnership may have filed one or more
amendments or supplements thereto, including a preliminary prospectus
supplement which relates to each such base prospectus, each of which has
previously been furnished to you. The Partnership will next file with the
Commission a final prospectus supplement which relates to each such base
prospectus, together with each such base prospectus, in accordance with
Rules 430A and 424(b). The Partnership has included in each such
Registration Statement, as amended and supplemented at its respective
Effective Date or the issue date of the Prospectus, as applicable, all
information (other than Rule 430A Information) required by the Act to be
included in each such Registration Statement and the Prospectus. As filed,
such final prospectus supplement together with each such base prospectus,
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes as the Partnership has advised
you, prior to the Execution Time, will be included or made therein.
(b) Each Registration Statement, on its respective Effective Date, did,
and when the Prospectus is first filed in accordance with Rule 424(b) and
on the Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
"settlement date"), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the Act
and the
2
3
Exchange Act; each Registration Statement, on its respective Effective
Date, and each Registration Statement, as supplemented or amended, at the
Execution Time, did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and on the date of filing pursuant to Rule 424(b) and on the
Closing Date and any settlement date, the Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Partnership makes no
representations or warranties as to the information contained in or omitted
from any of the Registration Statements or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Partnership by or on behalf of any Underwriter
through the Representatives specifically for inclusion in any of the
Registration Statements or the Prospectus (or any supplement thereto).
(c) The only significant subsidiaries (as defined in Regulation S-X
under the Act) of the Partnership are the Intermediate Partnership,
Northern Border Pipeline Company, a Texas general partnership ("Northern
Border Pipeline"), Crestone Energy Ventures, L.L.C., a Delaware limited
liability company ("Crestone"), Bear Paw Investments, LLC, a Delaware
limited liability company ("Bear Paw Investments"), Bear Paw Energy, LLC, a
Delaware limited liability company ("Bear Paw Energy"), Border Midwestern
Company, a Delaware corporation ("Border Midwestern"), and Midwestern Gas
Transmission Company, a Delaware corporation ("Midwestern Gas"). Each
Subsidiary was duly formed and is validly existing and in good standing
under the laws of its jurisdiction of formation. Each of the Subsidiaries
has, and at the Closing Date will have, full power and authority to conduct
the activities conducted by it, to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statements and the Prospectus. Each of the Subsidiaries is, and at the
Closing Date will be, duly licensed or qualified to do business and in good
standing as a foreign entity in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or
leased by it makes such licensing or qualification necessary, except for
such jurisdictions in which the failure so to qualify or register would not
have a material adverse effect upon such Subsidiary or subject such
Subsidiary or the Partnership to any material liability or disability. All
of the outstanding interests of Crestone have been duly authorized and
validly issued and are fully paid and non-assessable and are owned by the
Intermediate Partnership free and clear of all liens, encumbrances and
claims whatsoever. Crestone, directly or indirectly, owns (i) all of the
membership interests in Crestone Gathering Services, L.L.C., Crestone Wind
River, L.L.C. and Crestone Powder River, L.L.C. and (ii) a 49% common
membership interest in and preferred shares of Bighorn Gas Gathering,
L.L.C. ("Bighorn"), (iii) a 33.33% membership interest in Fort Union Gas
Gathering, L.L.C., a Delaware limited liability company ("Fort Union"), and
(iv) a 35% membership interest in Lost Creek Gathering, L.L.C., a Delaware
limited liability company ("Lost Creek"), in each case free and clear of
any liens, claims or encumbrances (except that Crestone's member interests
in Fort Union and Lost Creek are or will be pledged to the lenders with
respect to those projects and except for such other liens, encumbrances,
security interests, equities, charges or claims as are not, individually or
in the aggregate, material or except as described in the Prospectus). All
of the outstanding
3
4
shares of capital stock of Border Midstream Services, Ltd., an Alberta
corporation ("Border Midstream"), have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the
Intermediate Partnership free and clear of any liens, claims or
encumbrances (except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material or except as described in the Prospectus). All of the outstanding
interests of Bear Paw Investments have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the
Intermediate Partnership free and clear of any liens, claims or
encumbrances (except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material or except as described in the Prospectus). All of the outstanding
interests of Bear Paw Energy have been duly authorized and validly issued
and are fully paid and non-assessable and are owned by Bear Paw Investments
free and clear of any liens, claims or encumbrances (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or except as described in the
Prospectus). All of the outstanding shares of capital stock of Border
Midwestern have been duly authorized and validly issued and are fully paid
and non-assessable and are owned by the Intermediate Partnership free and
clear of any liens, claims or encumbrances (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or except as described in the
Prospectus). All of the outstanding shares of capital stock of Midwestern
Gas have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by Border Midwestern free and clear of any
liens, claims or encumbrances (except for such liens, encumbrances,
security interests, equities, charges or claims as are not, individually or
in the aggregate, material or except as described in the Prospectus). The
Intermediate Partnership owns a 70% general partner interest in Northern
Border Pipeline free and clear of any liens, claims or encumbrances (except
for such liens, encumbrances, security interests, equities, charges or
claims as are not, individually or in the aggregate, material or except as
described in the Prospectus).
(d) The Partnership has been duly formed and is validly existing as a
limited partnership under the Delaware Revised Uniform Limited Partnership
Act (the "Delaware Act"), with all necessary partnership power and
authority to own or lease the properties it owns or leases and to conduct
the business it conducts in each case in all material respects as described
in each of the Registration Statements and the Prospectus, and is duly
qualified or registered as a foreign limited partnership for the
transaction of business under the laws of each jurisdiction in which the
failure so to qualify or register would have a material adverse effect upon
the Partnership or subject the Partnership or the limited partners of the
Partnership to any material liability or disability.
(e) Northern Plains Natural Gas Company, a Delaware corporation
("Northern Plains") and wholly owned subsidiary of Enron Corp., an Oregon
corporation ("Enron"), Pan Border Gas Company, a Delaware corporation ("Pan
Border") and wholly owned subsidiary of Northern Plains, and Northwest
Border Pipeline Company, a Delaware corporation ("Northwest Border") and
wholly owned subsidiary of The Williams Companies, Inc., a Delaware
corporation ("Williams") (collectively, the "General Partners"), are the
only general partners of the Partnership with general partner interests
4
5
in the Partnership of 1.0% in the aggregate; such general partner interests
are duly authorized by the Agreement of Limited Partnership of the
Partnership (as it may be amended or restated at the Execution Date, the
"Partnership Agreement"), and were validly issued to the General Partners
and are fully paid (to the extent required under the Partnership
Agreement).
(f) The General Partners are the sole general partners of the
Intermediate Partnership with general partner interests in the Intermediate
Partnership of 1.0101% in the aggregate subject to the provisions of the
Agreement of Limited Partnership of the Intermediate Partnership (the
"Intermediate Partnership Agreement"); such general partner interests are
duly authorized by the Intermediate Partnership Agreement and were validly
issued to the General Partners and are fully paid (to the extent required
under the Intermediate Partnership Agreement) (the Intermediate Partnership
Agreement and the Partnership Agreement are herein collectively referred to
as the "Partnership Agreements"). Complete and correct copies of the
certificate of limited partnership for each of the Partnership and the
Intermediate Partnership and of the Partnership Agreements, and all
amendments thereto have been delivered to the Underwriters, and no changes
therein will be made subsequent to the date hereof and prior to the Closing
Date.
(g) The limited partners of the Partnership hold limited partner
interests in the Partnership aggregating 99.0%, such limited partner
interests being represented by 37,623,014 Common Units, excluding
Underwritten Securities sold by the Partnership hereunder; such limited
partner interests are the only limited partner interests of the Partnership
that are issued and outstanding; the limited partner interests represented
thereby are authorized by the Partnership Agreement, were validly issued
and are fully paid (to the extent required under the Partnership Agreement)
and non-assessable (except as described in the Partnership Agreement and
except as set forth in Section 17-607 of the Delaware Act).
(h) The Partnership is the sole limited partner of the Intermediate
Partnership, with a limited partner interest of 98.9899% (subject to the
provisions of the Intermediate Partnership Agreement); such limited partner
interest is authorized by the Intermediate Partnership Agreement, was
validly issued in accordance with the Intermediate Partnership Agreement
and is fully paid and non-assessable (except as described in the
Intermediate Partnership Agreement and except as set forth in Section
17-607 of the Delaware Act); the Partnership owns, directly or indirectly,
such limited partner interest in the Intermediate Partnership free and
clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
except as described in any of the Registration Statements or Prospectus).
(i) Except as described in the Prospectus or contained in the
Partnership Agreement and except for (i) rights granted pursuant to that
certain Exchange Agreement dated May 31, 1997 among the Intermediate
Partnership, the Partnership and the stockholders of Williams Technologies,
Inc. and (ii) rights granted pursuant to that certain Exchange Agreement
dated December 29, 1997 between the Partnership and Central Pacific
Resources Partnership, there are no preemptive rights or other rights to
5
6
subscribe for or to purchase, nor any restriction upon the voting or
transfer of (except in the case of restrictions on transfer for securities
issued by the Partnership in reliance on Section 4(2) of the Act), any
limited partner interests in the Partnership or the Intermediate
Partnership pursuant to either of the Partnership Agreements or other
governing documents or any agreement or other instrument to which the
Partnership or the Intermediate Partnership is a party or by which either
of them may be bound. The Common Units conform in all material respects to
the description of the Common Units contained in the Prospectus. Except as
described above, there are no outstanding options or warrants to purchase
any Common Units.
(j) None of the Partnership or the Subsidiaries has sustained since the
date of the latest audited financial statements incorporated by reference
in each of the Registration Statements any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the date as of which information
is given in the Prospectus, there has not been any material adverse change
in the capitalization or long-term debt of any of the Subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, or results of operations of any of the Subsidiaries,
otherwise than as set forth or contemplated in the Prospectus.
(k) The Partnership and the Subsidiaries have good and indefeasible
title to all real and personal property necessary to own and operate their
businesses in all material respects as described in the Prospectus, free
and clear of all liens, claims, encumbrances and defects except (1) as
described in the Prospectus and (2) such as do not materially interfere
with the ownership, operation or benefits of ownership of such businesses
or materially increase the cost of operation or ownership of such
businesses, provided that, (a) with respect to the gas transmission and
gathering pipelines of Northern Border Pipeline, Crestone, Bear Paw Energy
and Midwestern Gas and right-of-way interests related thereto (the
"Pipeline Properties") the foregoing shall only constitute a representation
that, except as described in the Prospectus, (i) Northern Border Pipeline,
Crestone, Bear Paw Energy and Midwestern Gas have sufficient title to
enable them to use such Pipeline Properties in their businesses as they
have been used in the past and as are proposed to be used in the future as
described in the Prospectus and (ii) any lack of title has not had and will
not have any material adverse effect on the ability of Northern Border
Pipeline, Crestone, Bear Paw Energy and Midwestern Gas to use such Pipeline
Properties as they have been used in the past and are proposed to be used
in the future as described in the Prospectus and will not materially
increase the cost of such use, and (b) with respect to any real property,
buildings and equipment held under lease by Northern Border Pipeline,
Crestone, Bear Paw Energy or Midwestern Gas, such real property, buildings
and equipment are held by Northern Border Pipeline, Crestone, Bear Paw
Energy or Midwestern Gas under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such real property, buildings and equipment
by such person.
6
7
(l) The sale of the Securities by the Partnership and the compliance by
the Partnership and the Intermediate Partnership with all of the provisions
of this Agreement and the consummation of the transactions contemplated
herein and in the Prospectus to be consummated at the Closing Date will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Partnership or any of the Subsidiaries is a party or by which any of them
is bound or to which any of the property or assets of any of them is
subject, nor will such action result in any violation of the provisions of
the agreement of limited partnership, charter or other governing documents
of the Partnership or any of the Subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over any of them or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the sale of
the Securities or the consummation by the Partnership of the transactions
contemplated herein and in the Prospectus to be consummated at the Closing
Date, except for (i) such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters, and (ii) such consents, approvals,
authorizations, orders, registrations or qualifications (A) as have been
obtained or will be obtained prior to the Closing Date or (B) that, if not
obtained, would not, individually or in the aggregate, have a material
adverse effect upon the holders of Common Units or the consolidated
financial position or results of operations or prospects of the
Partnership, the Intermediate Partnership or Northern Border Pipeline. The
offering and sale of the Securities as contemplated by this Agreement does
not give rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any Common Units or other
securities of the Partnership or which would require the inclusion of any
Common Units or other securities of the Partnership in such offering and
sale of the Securities pursuant to "tag along" or other such rights.
(m) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Partnership or any of the
Subsidiaries is a party or of which any of their respective properties is
the subject which, if determined adversely to such person, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position or results of operations or prospects of
the Partnership; and, to the best of the Partnership's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(n) Arthur Andersen L.L.P., who have certified certain financial
statements of Northern Border Pipeline, are independent public accountants
with respect to Northern Border Pipeline, the Intermediate Partnership and
the Partnership as required by the Act and the rules and regulations of the
Commission thereunder;
(o) (i) This Agreement has been duly authorized, executed and delivered
by each of the Partnership and the Intermediate Partnership and constitutes
the valid and binding agreement of each such person, (ii) the Partnership
Agreement has been duly authorized, executed and delivered by the General
Partners and is a valid and legally binding agreement of the General
Partners, enforceable against the General Partners in
7
8
accordance with its terms, and (iii) the Intermediate Partnership Agreement
has been duly authorized, executed and delivered by the parties thereto and
is a valid and legally binding agreement of such parties, enforceable
against the General Partners in accordance with its terms, except as the
enforceability of the Partnership Agreements may be affected by (A) the
matters described in the Prospectus and (B) bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and general equitable principles.
(p) Each of the Partnership and the Subsidiaries carries, or is covered
by, insurance in such amounts and covering such risks as is customarily
obtained by businesses similarly situated, taking into account
self-insurance.
(q) None of the Partnership or the Subsidiaries is in, nor will
consummation of the transactions contemplated herein or in the Prospectus
to be consummated at the Closing Date result in: (i) violation of its
charter, bylaws, agreement of limited or general partnership or other
governing document (except for the failure to mail the reports identified
in Section 8.3(b) of the Partnership Agreement); or (ii) default (and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default) in the due performance or observance of any
term, covenant or condition contained in any material contract, agreement,
indenture or instrument to which it or its property may be subject, or
violation of any law, ordinance, governmental rule, regulation or court
decree to which it or its property may be subject, which default or
violation, individually or in the aggregate, could have a material adverse
effect on the holders of Common Units or the consolidated financial
position or results of operations or prospects of any of the Partnership,
the Intermediate Partnership or Northern Border Pipeline; and, except as
described in the Prospectus, none of the Partnership or the Subsidiaries
has failed to obtain any material license, permit, certificate, franchise
or other governmental authorization or permit necessary to the ownership of
its property or to the conduct of its business.
(r) Neither the Partnership nor the Intermediate Partnership is, or at
the Closing Date will be, (a) a "holding company" or "affiliate" of a
holding company (other than an exempt holding company) or public utility,
as defined in the Public Utility Holding Company Act of 1935 or (b) an
"investment company" as that term is defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and the rules and
regulations thereunder;
(s) Except as described in the Prospectus, the Partnership and the
Subsidiaries possess, and are operating in compliance in all material
respects with, all certificates, authorities or permits issued by the
appropriate local, state, federal or foreign regulatory agencies or bodies
necessary to conduct the business currently (or, as described or
contemplated in the Prospectus, to be) operated by them, except for such
certificates, authorizations or permits which, if not obtained, would not
reasonably be expected to have, individually or in the aggregate, a
material adverse effect upon the ability of the Partnership and the
Subsidiaries to conduct their businesses in all material respects as
currently conducted and as contemplated by the Prospectus to be conducted;
and, except as described in the Prospectus, none of the Partnership or the
Subsidiaries has received
8
9
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would be expected to have a material adverse effect upon the ability of the
Partnership or the Subsidiaries to conduct their businesses in all material
respects as currently conducted and as contemplated by the Prospectus to be
conducted.
(t) Neither the Partnership nor the Intermediate Partnership has taken,
directly or indirectly, any action designed to cause or result in, or which
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Units to
facilitate the sale or resale of the Common Units in violation of any law,
rule or regulation.
(u) The financial statements of the Partnership (including the related
notes and supporting schedules) filed as part of each of the Registration
Statements or included in the Prospectus present fairly in all material
respects the consolidated financial condition, results of operations and
cash flows of the Partnership and its subsidiaries at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles (except as otherwise described therein)
applied on a consistent basis throughout the periods involved.
(v) The Partnership maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) The Partnership and the Subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
imposing liability or standards of conduct concerning any Hazardous
Material (as hereinafter defined) ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, individually or in the aggregate, result in a
material adverse effect on the condition (financial or otherwise) or on the
earnings, business, properties, business prospects or operations of the
Partnership and the Subsidiaries, taken as a whole. The term "Hazardous
Material" means (A) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (B) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or petroleum
product,
9
10
(D) any polychlorinated biphenyl and (E) any pollutant or contaminant or
hazardous, dangerous, or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
(x) In the ordinary course of their businesses, the Partnership and the
Subsidiaries conduct a periodic review of the effect of Environmental Laws
on the business, operations and properties of the Partnership and the
Subsidiaries, in the course of which they identify and evaluate associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties). Except as set forth in the Registration Statements and
the Prospectus there are no costs and liabilities associated with or
arising in connection with Environmental Laws as currently in effect
(including, without limitation, costs of compliance therewith) which would,
singly or in the aggregate have a material adverse effect on the condition
(financial or otherwise) or on the earnings, business, properties, business
prospects or operations of the Partnership and the Subsidiaries, taken as a
whole.
(y) The Partnership and the Subsidiaries are in compliance with all
federal, state and local employment and labor laws, including, but not
limited to, laws relating to non-discrimination in hiring, promotion and
pay of employees; no labor dispute exists involving the employees of
Northern Plains or NBP Services Corporation, a Delaware corporation, or, to
the knowledge of the Partnership or the Intermediate Partnership, is
imminent or threatened; and neither the Partnership nor the Intermediate
Partnership is aware of any existing, imminent or threatened labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could result in a material adverse effect
on the condition (financial or otherwise) or on the earnings, business,
properties, business prospects or operations of the Partnership and the
Subsidiaries, taken as a whole.
(z) The outstanding Common Units are listed for trading on the New York
Stock Exchange, and the Underwritten Securities to be sold by the
Partnership pursuant to this Agreement have been approved for listing on
the New York Stock Exchange upon official notice of issuance.
(ii) The Selling Unitholder represents and warrants to, and agrees
with, each Underwriter that:
(a) The Selling Unitholder is the record and beneficial owner of the
Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and has duly endorsed such Securities in
blank, and, assuming that each Underwriter acquires its interest in the
Securities it has purchased from the Selling Unitholder without notice of
any adverse claim (within the meaning of Section 8-105 of the New York
Uniform Commercial Code ("UCC")), each Underwriter that has purchased such
Securities delivered on the Closing Date to The Depository Trust Company or
other securities intermediary by making payment therefor as provided
herein, and that has had such Securities credited to the securities account
or accounts of such Underwriters
10
11
maintained with The Depository Trust Company or such other securities
intermediary will have acquired a security entitlement (within the meaning
of Section 8-102(a)(17) of the UCC) to such Securities purchased by such
Underwriter, and no action based on an adverse claim (within the meaning of
Section 8-105 of the UCC) may be asserted against such Underwriter with
respect to such Securities.
(b) The Selling Unitholder 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 the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Securities.
(c) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Selling
Unitholder of the transactions contemplated herein, except such as may have
been obtained under the 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 and such other approvals as have been
obtained.
(d) Neither the sale of the Securities being sold by the Selling
Unitholder nor the consummation of any other of the transactions herein
contemplated by the Selling Unitholder or the fulfillment of the terms
hereof by the Selling Unitholder will conflict with, result in a breach or
violation of, or constitute a default under (i) the charter or by-laws of
the Selling Unitholder or (ii) any law or the terms of any indenture or
other agreement or instrument to which the Selling Unitholder or any of its
affiliates is a party or bound, or any judgment, order or decree applicable
to the Selling Unitholder or any of its affiliates of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Selling Unitholder or any of its affiliates, except
in the case of clause (ii) as would not have a material adverse effect on
the Selling Unitholder's performance of its obligations hereunder.
(e) The sale of Securities by the Selling Unitholder pursuant hereto is
not prompted by any information concerning the Partnership or any of the
Subsidiaries which is not set forth in the Prospectus or any supplement
thereto.
(f) The information in the Prospectus under the caption "Principal and
Selling Unitholders" which specifically relates to the Selling Unitholder
does not, and will not on the Closing Date, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.
Any certificate signed by any officer of the Selling Unitholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Selling Unitholder, as to matters covered thereby, to each
Underwriter.
11
12
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Partnership and the Selling Unitholder agree, severally and not jointly, to sell
to each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Partnership and the Selling Unitholder, at a purchase price of
$39.56 per Common Unit, the amount of the Underwritten Securities set forth
opposite such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Unitholder
named in Schedule II hereto hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to 668,282 Option
Securities at the same purchase price per share as the Underwriters shall
pay for the Underwritten Securities. Said option may be exercised only to
cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of the
Prospectus upon written or telegraphic notice by the Representatives to the
Partnership and the Selling Unitholder setting forth the number of units of
the Option Securities as to which the several Underwriters are exercising
the option and the settlement date. The number of Option Securities to be
purchased by each Underwriter shall be the same percentage of the total
number of units of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as you in your absolute discretion
shall make to eliminate any fractional units.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on May 22,
2001, or at such time on such later date not more than three Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement among the Representatives, the Partnership and the
Selling Unitholder or as provided in Section 9 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 Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by the Partnership and the Selling
Unitholder to or upon the order of the Partnership and the Selling Unitholder by
wire transfer payable in same-day funds to the accounts specified by the
Partnership and the Selling Unitholder. Delivery of the Underwritten Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
The Selling Unitholder will pay all applicable state transfer taxes, if
any, involved in the transfer to the several Underwriters of the Securities to
be purchased by them from such Selling Unitholder and the respective
Underwriters will pay any additional transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Selling Unitholder named
in Schedule II hereto will
12
13
deliver the Option Securities (at the expense of the Partnership) to the
Representatives, at 388 Greenwich Street, New York, New York, on the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Selling Unitholder named in Schedule II by wire transfer payable in same-day
funds to the account(s) specified by the Selling Unitholder named in Schedule II
hereto. If settlement for the Option Securities occurs after the Closing Date,
the Partnership and the Selling Unitholder will deliver to the Representatives
on the settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Partnership and the Intermediate Partnership agree with the
several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the
Partnership will not file any amendment of any of the Registration
Statements, any supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Partnership has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if any of the Registration Statements have become or become
effective pursuant to Rule 430A, or filing of the Prospectus is otherwise
required under Rule 424(b), the Partnership will cause the Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Partnership will promptly advise
the Representatives (1) when each of the Registration Statements, if not
effective at the Execution Time, shall have become effective, (2) when the
Prospectus, and any supplement thereto, shall have been filed (if required)
with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (3) when,
prior to termination of the offering of the Securities, any amendment of
any of the Registration Statements shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of any of the Registration Statements, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of any of the Registration Statements or
the institution or threatening of any proceeding for that purpose and (6)
of the receipt by the Partnership of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Partnership and the Intermediate Partnership will use their
best efforts to
13
14
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) 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 Prospectus 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
any of the Registration Statements or supplement the Prospectus to comply
with the Act or the Exchange Act, the Partnership promptly will (1) notify
the Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or effect such compliance and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Partnership will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Partnership and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Partnership will furnish to the Representatives and counsel for
the Underwriters, without charge, one signed copy of each of the
Registration Statements (including exhibits thereto) and to each other
Underwriter copies of each of the Registration Statements (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
Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Partnership will pay the
expenses of printing or other production of all documents relating to the
offering.
(e) The Partnership will arrange, if necessary, for the qualification
of the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, 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
Partnership 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 Partnership will not, without the prior written consent of
Salomon Smith Barney Inc., 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 Partnership or any affiliate of the Partnership or any
person in privity with the Partnership or any affiliate of the Partnership)
directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of
(except for the filing of a shelf registration statement
14
15
(the "Bear Paw Shelf Registration Statement") filed with the Commission
pursuant to Section 11.7 of the Acquisition Agreement, dated March 14, 2001
(the "Acquisition Agreement"), among the Partnership, the Intermediate
Partnership, Bear Paw Investments, Bear Paw Energy and the other parties
named therein), 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 other Common Units or any securities
convertible into, or exercisable, or exchangeable for, Common Units; or
publicly announce an intention to effect any such transaction (other than
by filing the Bear Paw Shelf Registration Statement as described above),
for a period of ninety (90) days after the date of this Agreement,
provided, however, that the Partnership may issue and sell Common Units
pursuant to any employee unit option plan, unit ownership plan or dividend
reinvestment plan of the Partnership in effect at the Execution Time and
the Partnership may issue Common Units issuable upon the conversion of
securities or the exercise of warrants outstanding at the Execution Time.
(g) The Partnership 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 or otherwise, stabilization
or manipulation of the price of any security of the Partnership to
facilitate the sale or resale of the Securities.
(ii) The Selling Unitholder agrees with the several Underwriters that:
(a) Except pursuant to this Agreement, the Selling Unitholder will not,
without the prior written consent of Salomon Smith Barney Inc., 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 Selling
Unitholder or any affiliate of the Selling Unitholder or any person in
privity with the Selling Unitholder or any affiliate of the Selling
Unitholder) directly or indirectly, or file (or participate 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 with respect to, any Common Units of the Partnership or any securities
convertible into or exercisable or exchangeable for such Common Units, or
publicly announce an intention to effect any such transaction, for a period
of ninety (90) days after the date of this Agreement, other than Common
Units disposed of as bona fide gifts approved by Salomon Smith Barney Inc.
(b) The Selling Unitholder 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 or otherwise,
stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Securities.
(c) The Selling Unitholder will advise you promptly, and if requested
by you, will confirm such advice in writing, so long as delivery of a
prospectus relating to the Securities by an underwriter or dealer may be
required under the Act, of (i) any material change in the Partnership's
condition (financial or otherwise), prospects, earnings,
15
16
business or properties which comes to the attention of the Selling
Unitholder, (ii) any change in information in any of the Registration
Statements or the Prospectus relating to the Selling Unitholder or (iii)
any new material information relating to the Partnership or relating to any
matter stated in the Prospectus which comes to the attention of the Selling
Unitholder.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Partnership and the Selling
Unitholder contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Partnership and the Selling Unitholder made in any certificates pursuant
to the provisions hereof, to the performance by the Partnership and the Selling
Unitholder of their respective obligations hereunder and to the following
additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, will be
filed in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of any of the Registration
Statements shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Partnership shall have requested and caused Vinson & Elkins
L.L.P., counsel for the Partnership, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) Each of the Partnership and the Intermediate Partnership has
been duly formed and is validly existing as a limited partnership under
the Delaware Act, with full partnership power and authority under the
Delaware Act and the Partnership Agreement and the Intermediate
Partnership Agreement, respectively, necessary to own, lease and
operate its properties and conduct its business as described in the
Prospectus;
(ii) The Partnership has been registered as a foreign limited
partnership for the transaction of business under the laws of the State
of Texas, and to our knowledge based upon a certificate (a copy of
which has been furnished to you and your counsel) from an authorized
officer of the Partnership as to the states in which the Partnership
owns or leases property or conducts business, the State of Texas is the
only jurisdiction in which the Partnership owns or leases property or
conducts business so as to require qualification or registration to
conduct business as a foreign limited partnership, except where the
failure to so qualify or register would not (i) have a material adverse
effect upon the Partnership, the Intermediate Partnership or the
General Partners or (ii) subject the limited partners of the
Partnership to any material liability or disability;
(iii) The Intermediate Partnership has been qualified or
registered as a foreign limited partnership for the transaction of
business under the laws of the States of Illinois, Iowa, Minnesota,
Montana, Nebraska, North Dakota, South
16
17
Dakota and Texas, and to our knowledge based upon a certificate (a copy
of which has been furnished to you and your counsel) from an authorized
officer of the Partnership as to the states in which the Partnership
owns or leases property or conducts business, such jurisdictions are
the only jurisdictions in which the Intermediate Partnership owns or
leases property or conducts business so as to require qualification or
registration to conduct business as a foreign limited partnership,
except where the failure to so qualify or register would not (i) have a
material adverse effect upon the Partnership, the Intermediate
Partnership or the General Partners or (ii) subject the limited
partners of the Partnership to any material liability or disability;
(iv) The General Partners are the sole general partners of each
of the Partnership and the Intermediate Partnership with a combined
general partner interest in the Partnership of 1.0% and a combined
general partner interest in the Intermediate Partnership of 1.0101%
(subject to the provisions of the Partnership Agreement and the
Intermediate Partnership Agreement, respectively); such general partner
interests are duly authorized by the Partnership Agreement and the
Intermediate Partnership Agreement, respectively, are validly issued
and fully paid (to the extent required by the Partnership Agreement and
Intermediate Partnership Agreement) and are owned of record by the
General Partners free and clear of all liens, encumbrances, security
interests, equities, charges or claims of record (except as provided in
the Partnership Agreement, the Intermediate Partnership Agreement or
the Northern Border Pipeline Partnership Agreement or pursuant to the
Delaware Act, as amended) (A) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware naming a
General Partner as debtor is on file in the offices of the Secretary of
State of the State of Delaware or (B) otherwise known to us;
(v) The Partnership is the sole limited partner of the
Intermediate Partnership, with a limited partner interest in the
Intermediate Partnership of 98.9899% (subject to the provisions of the
Intermediate Partnership Agreement); such limited partner interest is
duly authorized by the Intermediate Partnership Agreement and is
validly issued, fully paid and non-assessable, except as provided in
Section 17-607 of the Delaware Act; and the Partnership owns such
limited partner interest in the Intermediate Partnership free and clear
of all liens, encumbrances, security interests, equities, charges or
claims of record (except as provided in the Intermediate Partnership
Agreement or pursuant to the Delaware Revised Uniform Limited
Partnership Act, as amended) (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming the Partnership as debtor is on file in the offices of the
Secretary of State of the State of Delaware or (B) otherwise known to
us;
(vi) Immediately prior to the closing under this Agreement, the
limited partners of the Partnership held limited partner interests in
the Partnership aggregating 99.0% (subject to the provisions of the
Partnership Agreement); such limited partner interests are represented
by 37,623,014 Common Units; such limited partner interests and the
Underwritten Securities sold by the Partnership
17
18
will be the only limited partner interests of the Partnership that are
issued and outstanding immediately following the closing under this
Agreement; the Underwritten Securities sold by the Partnership are
authorized by the Partnership Agreement and are validly issued, fully
paid and non-assessable, except as provided in Section 17-607 of the
Delaware Act;
(vii) Insofar as such descriptions relate to legal matters or
descriptions of provisions of the governing instruments, the Common
Units conform in all material respects to the descriptions thereof
contained in the Prospectus;
(viii) Except as described in the Prospectus and contained in the
Partnership Agreement and except for (i) rights granted pursuant to
that certain Exchange Agreement dated May 31, 1997 among the
Intermediate Partnership, the Partnership and the stockholders of
Williams Technologies, Inc. and (ii) rights granted pursuant to that
certain Exchange Agreement dated December 29, 1997 between the
Partnership and Central Pacific Resources Partnership, there are no
preemptive or other rights to subscribe for or to purchase any limited
partner interests of the Partnership or the Intermediate Partnership
pursuant to the Partnership Agreements or, to our knowledge, pursuant
to any other agreement or instrument to which the Partnership or the
Intermediate Partnership is a party; and except as described in the
Prospectus and except for restrictions on transfer of securities issued
by the Partnership in reliance on Section 4(2) of the Act, there are no
restrictions upon the voting or transfer of any limited partner
interests of the Partnership or the Intermediate Partnership pursuant
to the Partnership Agreements or, to our knowledge, pursuant to any
other agreement or instrument to which the Partnership or the
Intermediate Partnership is a party.
(ix) The Registration Statements were declared effective under
the Act on December 5, 1997, March 3, 1999 and March 3, 1999,
respectively; the Prospectus was filed with the Commission pursuant to
subparagraph (5) of Rule 424(b) on May 17, 2001; and no stop order
suspending the effectiveness of any of the Registration Statements has
been issued and, to our knowledge, no proceeding for that purpose is
pending or threatened by the Commission;
(x) Each of the Registration Statements and the Prospectus and
any further amendments or supplements thereto made by the Partnership
prior to the Closing Date (other than the financial statements and
related schedules or other financial or statistical data and the
projected data included therein, as to which we express no opinion)
comply as to form in all material respects with the requirements of the
Act;
(xi) To our knowledge, there are no contracts or other documents
that are required to be summarized or described in the Prospectus or
filed as exhibits to any of the Registration Statements by the Act that
have not been summarized, described or incorporated by reference in the
Prospectus or filed as exhibits to such Registration Statement(s);
18
19
(xii) The statements contained in the Prospectus under the
captions "Tax Considerations" and "Recent Tax Developments," insofar as
they describe federal statutes, rules and regulations, constitute a
fair summary thereof that is accurate in all material respects; our
opinions filed as Exhibit 8 to each of the Registration Statements and
as Exhibit 8 to the Partnership's Form 8-K filed on May 17, 2001, are
confirmed, and you may rely upon such opinions as if each of them were
addressed to you;
(xiii) This Agreement has been duly authorized, executed and
delivered by each of the Partnership and the Intermediate Partnership;
assuming due authorization, execution and delivery by, and the
validity, legally binding effect and enforceability with respect to,
the other parties thereto, the General Partnership Agreement governing
Northern Border Pipeline, as amended and in effect on the date hereof,
and each of the Partnership Agreements constitute valid and legally
binding agreements of each of the Partnership, the Intermediate
Partnership and the General Partners (in each case, to the extent a
party thereto) and are enforceable against each such party in
accordance with their respective terms, subject to the qualifications
that (A) the enforceability of each such agreement may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws of general applicability relating to or
affecting the rights of creditors generally, (B) the enforceability of
each such agreement may be limited by public policy, applicable law
relating to fiduciary duties and the judicial imposition of an implied
covenant of good faith and fair dealing, (C) the enforceability of
equitable rights and remedies provided for in each such agreement is
subject to equitable defenses and judicial discretion, and (D) the
enforceability of certain other provisions of each such agreement may
be limited by applicable laws and court decisions, none of which should
materially and adversely interfere with the practical realization of
the material benefits intended to be provided by such agreements;
(xiv) The compliance by each of the Partnership and the
Intermediate Partnership with all of the provisions of this Agreement
will not, with the passage of time or upon stated contingency or
otherwise, (A) conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any of
the agreements filed or incorporated by reference as exhibits to the
Partnership's Annual Report on Form 10-K for the year ended December
31, 2000 (the "2000 10-K") or any report filed by the Partnership with
the Commission subsequent to the filing of the 2000 10-K, or (B) result
in any breach or violation of the provisions of the certificate of
limited partnership of the Partnership or the Intermediate Partnership
or of any statute or any rule or regulation of any governmental agency
or body having jurisdiction over either of such entities or its
properties, excluding in each case any breaches or violations which,
individually or in the aggregate, would not have a material adverse
effect on the limited partners of the Partnership or the financial
condition, results of operation, business or prospects (as described in
the Prospectus) of the Partnership and the Intermediate Partnership
considered as a whole;
19
20
(xv) Except as described in the Prospectus, or as provided in the
Partnership Agreement and the Acquisition Agreement, to our knowledge
there are no contracts, agreements or understandings between the
Partnership, the Intermediate Partnership or the General Partners and
any person granting such person the right to require the Partnership to
file a registration statement under the Act with respect to any
securities of the Partnership owned or to be owned by such person or to
require the Partnership to include such securities in the securities
registered pursuant to any of the Registration Statements or in any
securities being registered pursuant to any other registration
statement filed by the Partnership under the Act; and none of such
rights described in this paragraph would require any such securities to
be included in the offering and sale of the Securities;
(xvi) Neither the Partnership nor the Intermediate Partnership is
an "investment company" as that term is defined in the Investment
Company Act and the rules and regulations thereunder and each General
Partner is either (A) not an "investment company" as that term is
defined in the Investment Company Act and the rules and regulations
thereunder or (B) exempt from the Investment Company Act;
(xvii) None of the Partnership, the Intermediate Partnership or
any General Partner is a "public utility company," a "holding company"
or an "affiliate" of a holding company (other than an exempt holding
company) or a public utility company within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(xviii) No consent, approval, authorization, order, registration
or qualification of or with any federal governmental agency or body or
any governmental agency or body of the State of Texas is required for
the sale of the Common Units or the consummation by any of the
Partnership, the Intermediate Partnership, the General Partners of the
transactions contemplated by this Agreement and the Prospectus, except
(i) such consents, approvals, authorizations, orders, registrations or
qualifications (a) as have been obtained, (b) as may be required under
state securities or Blue Sky laws, or (c) which, if not obtained, would
not, individually or in the aggregate, have a material adverse effect
upon the ability of the Partnership and the Intermediate Partnership to
conduct their business as described in the Prospectus;
(xix) The Common Units outstanding immediately prior to the
closing under this Agreement are listed on the New York Stock Exchange,
and the Underwritten Securities issued by the Partnership pursuant to
this Agreement have been approved for listing on the New York Stock
Exchange, subject to notice of issuance; and
(xx) Northern Border Pipeline is validly existing as a general
partnership under the laws of the State of Texas, with full partnership
power and authority to
20
21
own, lease and operate its properties and conduct its business in all
material respects as described in the Prospectus.
(xxi) Assuming that each Underwriter acquires its interest in the
Securities it has purchased from the Selling Unitholder without notice
of any adverse claim (within the meaning of Section 8-105 of the UCC),
each Underwriter that has purchased such Securities delivered on the
Closing Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that
has had such Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust Company or
such other securities intermediary will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to
such Securities purchased by such Underwriter, and no action based on
an adverse claim (within the meaning of Section 8-105 of the UCC) may
be asserted against such Underwriter with respect to such Securities.
In addition, such counsel shall state that in the course of preparation
by the Partnership of the Registration Statements, the Preliminary
Prospectus and the Prospectus, such counsel participated in conferences
with officers and other representatives of the Partnership and certain of
the Subsidiaries, representatives of the independent public accountants of
the Partnership and, in the case of the Preliminary Prospectus and the
Prospectus, your representatives, at which the contents of the Registration
Statements, the Preliminary Prospectus and Prospectus and related matters
were discussed. Such counsel shall also state that although they have not
conducted any independent investigation with regard to the information set
forth in the Registration Statements or the Prospectus (except with respect
to the foregoing opinions) and are not (except as aforesaid) passing upon
and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained therein, on the basis of the
foregoing, no facts have come to such counsel's attention that cause such
counsel to believe that any of the Registration Statements or any amendment
thereto on its respective Effective Date, or as supplemented or amended at
the Closing Date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that, as of its date or
the Closing Date, the Prospectus or any further amendment or supplement
thereto contained an untrue statement of a material fact or omitted 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. In making such statement, such counsel may state that
they do not express any comment with respect to the financial statements
and related schedules and other financial data included or incorporated by
reference in the Registration Statements or in the Prospectus or any
further amendment or supplement thereto (including, without limitation,
statements relating to projected cash distributions to the limited partners
of the Partnership) or any statement contained therein or omitted therefrom
in reliance upon and in conformity with written information furnished to
the Partnership by any Underwriter through you expressly for use therein.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of the Delaware Act, the Delaware Limited
Liability Company Act, the
21
22
Delaware General Corporation Law and the laws of the States of New York and
Texas, 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 (B)
as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Partnership and public officials. References to
the Prospectus in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) The Partnership shall have requested and caused Janet K. Place,
Esq., General Counsel of Northern Plains, to have furnished to the
Representatives her opinion with respect to the Common Units, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) Other than as set forth in the Prospectus, to her knowledge
there are no legal or governmental proceedings pending to which the
Partnership or any of the Subsidiaries is a party or of which any
property of any of them is the subject which, if determined adversely
to such person, would individually or in the aggregate have a material
adverse effect on the Partnership and its Subsidiaries taken as a whole
(a "Material Adverse Effect"); and, to her knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(ii) Except as described in the Prospectus, to her knowledge each
of the Partnership and the Subsidiaries possesses, and is operating in
compliance in all material respects with, all certificates, authorities
or permits issued by the appropriate local, state or federal regulatory
agencies or bodies necessary to conduct its business as it is currently
conducted as described in the Prospectus, except for such certificates,
authorizations or permits which, if not obtained, would not reasonably
be expected to have, individually or in the aggregate, a material
adverse effect upon the ability of the Partnership and each of the
Subsidiaries to conduct its businesses in all material respects as
currently conducted as described in the Prospectus; to her knowledge,
the Partnership and each of the Subsidiaries possesses all
certificates, authorities or permits issued by the appropriate local,
state or federal regulatory agencies or bodies necessary to conduct its
business as proposed to be conducted as described in the Prospectus,
except for (a) certificates, authorizations or permits that, if not
obtained, would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect; and (b) certificates,
authorizations or permits that are reasonably expected to be obtained
in the ordinary course of business; and, except as described in the
Prospectus, none of the Partnership or any of the Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would be expected to have a Material
Adverse Effect. All government regulations, authorizations and
procedures which affect the Partnership or any of the Subsidiaries and
the operation of their respective businesses and that are required to
be described in the Prospectus are as described therein.
22
23
(iii) The Partnership and each of the Subsidiaries (1) is in
compliance with any and all applicable Environmental Laws, (2) has
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct its business and (3) is
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, individually or in the aggregate,
result in a Material Adverse Effect; provided, such counsel may qualify
such opinions to her knowledge with respect to Bear Paw Investments,
Bear Paw Energy, Border Midwestern and Midwestern Gas.
(iv) None of the Partnership or any of the Subsidiaries is: (i)
in violation of its charter, bylaws, agreement of limited or general
partnership or other governing document (except for the failure to mail
the reports identified in Section 8.3(b) of the Partnership Agreement),
(ii) in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is
subject, or (iii) other than as set forth in the Prospectus, in
violation in any material respect of any law, ordinance, government
rule, regulation or court decree to which it or its properties or
assets may be subject, except for such violations and defaults that
would not, individually or in the aggregate, result in an Material
Adverse Effect; provided, such counsel may qualify the opinion in this
clause (iii) to her knowledge with respect to Bear Paw Investments,
Bear Paw Energy, Border Midwestern and Midwestern Gas.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Partnership has not (i) issued or
granted any partner interests, (ii) incurred any material liability or
obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business,
(iii) entered into any material transaction not in the ordinary course
of business or (iv) distributed any of the cash or other assets of the
Partnership to any partner.
(vi) The Partnership and the Subsidiaries have good and
indefeasible title to all real and personal property necessary to own
and operate their businesses in all material respects as described in
the Prospectus, free and clear of all liens, claims, encumbrances and
defects except (1) as described in the Prospectus and (2) such as do
not materially interfere with the ownership, operation or benefits of
ownership of such businesses or materially increase the cost of
operation or ownership of such businesses, provided that, (a) with
respect to the Pipeline Properties, the foregoing shall only constitute
a statement that, to her knowledge, except as described in the
Prospectus (i) Northern Border Pipeline, Crestone, Bear Paw Energy and
Midwestern Gas have sufficient title to enable them to use such
23
24
Pipeline Properties in their businesses as they have been used in the
past and are proposed to be used in the future as described in the
Prospectus and (ii) any lack of title has not had and will not have a
Material Adverse Effect, and (b) with respect to any real property,
buildings and equipment held under lease by Northern Border Pipeline,
Crestone, Bear Paw Energy or Midwestern Gas, such real property,
buildings and equipment are held by Northern Border Pipeline, and to
her knowledge, by Crestone, Bear Paw Energy and Midwestern Gas under
valid, subsisting and enforceable leases with such exceptions as will
not have a Material Adverse Effect.
(vii) Each of Northern Border Pipeline, Crestone, Bear Paw
Investments, Bear Paw Energy, Border Midwestern and Midwestern Gas was
duly formed (to her knowledge in the case of the latter four entities)
and is validly existing and in good standing under the laws of its
jurisdiction of formation and has full corporate, partnership or
limited liability company power and authority, as the case may be, to
conduct the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Prospectus. Each of Northern Border Pipeline, Crestone, Bear Paw Energy
and Midwestern Gas is duly licensed or qualified to do business and in
good standing as a foreign entity in all jurisdictions in which the
nature of the activities conducted by it or the character of the assets
owned or leased by it makes such licensing or qualification necessary,
except for such jurisdictions in which the failure so to qualify or
register would not have a material adverse effect upon it or subject it
or the Partnership to any material liability or disability. All of the
outstanding interests of Northern Border Pipeline have been duly
authorized and validly issued and are fully paid and non-assessable
(except as provided in the partnership agreement of Northern Border
Pipeline). The Intermediate Partnership owns a 70% general partner
interest in Northern Border Pipeline, and such interest is free and
clear of any liens, claims or encumbrances (except for such liens,
encumbrances, security interests, equities, charges or claims as are
not, individually or in the aggregate, material or except as described
in the Prospectus). All of the outstanding shares of Crestone have been
duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Intermediate Partnership free and
clear of all liens, claims or encumbrances (except for such liens,
encumbrances, security interests, equities, charges or claims as are
not, individually or in the aggregate, material or except as described
in the Prospectus). All of the outstanding interests of Bear Paw
Investments have been duly authorized and validly issued and are fully
paid and non-assessable and are owned by the Intermediate Partnership
free and clear of any liens, claims or encumbrances (except for such
liens, encumbrances, security interests, equities, charges or claims as
are not, individually or in the aggregate, material or except as
described in the Prospectus). All of the outstanding interests of Bear
Paw Energy have been duly authorized and validly issued and are fully
paid and non-assessable and are owned by Bear Paw Investments free and
clear of any liens, claims or encumbrances (except for such liens,
encumbrances, security interests, equities, charges or claims as are
not, individually or in the aggregate, material or except as described
in the Prospectus). All of the outstanding shares of capital stock of
Border Midwestern have been duly authorized and validly issued and are
fully paid and non-assessable and are owned by the Intermediate
Partnership free and clear of any liens, claims or encumbrances (except
for such liens, encumbrances, security interests, equities, charges or
claims as are not, individually or in the aggregate, material or except
as described in the Prospectus). All of the outstanding shares of
capital
24
25
stock of Midwestern Gas have been duly authorized and validly issued
and are fully paid and non-assessable and are owned by Border
Midwestern free and clear of any liens, claims or encumbrances (except
for such liens, encumbrances, security interests, equities, charges or
claims as are not, individually or in the aggregate, material or except
as described in the Prospectus); provided such counsel may qualify to
her knowledge the opinions (i) as to due authorization, valid issuance,
full payment and non-assessability with respect to Bear Paw
Investments, Bear Paw Energy and Midwestern Gas and (ii) as to liens,
encumbrances and claims enforceable under the UCC with respect to Bear
Paw Investments and Bear Paw Energy.
In addition, such counsel shall state that in the course of preparation
by the Partnership of the Registration Statements, the Preliminary
Prospectus and the Prospectus, such counsel participated in conferences
with officers and other representatives of the Partnership and certain of
the Subsidiaries, representatives of the independent public accountants of
the Partnership and, in the case of the Preliminary Prospectus and the
Prospectus, your representatives, at which the contents of the Registration
Statements, the Preliminary Prospectus and Prospectus and related matters
were discussed. Such counsel shall also state that although she has not
conducted any independent investigation with regard to the information set
forth in the Registration Statements or the Prospectus (except with respect
to the foregoing opinions) and is not (except as aforesaid) passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained therein, on the basis of the foregoing
and during the course of her representation of Northern Plains, no facts
have come to such counsel's attention that cause such counsel to believe
that any of the Registration Statements or any amendment thereto on its
respective Effective Date, or as amended or supplemented at the Closing
Date, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that, as of its date or the Closing
Date, the Prospectus or any further amendment or supplement thereto
contained an untrue statement of a material fact or omitted 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.
In making such statement, such counsel may state that she does not express
any comment with respect to the financial statements and related schedules
and other financial data included or incorporated by reference in the
Registration Statements or in the Prospectus or any further amendment or
supplement thereto (including, without limitation, statements relating to
projected cash distributions to the limited partners of the Partnership) or
any statement contained therein or omitted therefrom in reliance upon and
in conformity with written information furnished to the Partnership by any
Underwriter through you expressly for use therein.
25
26
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Nebraska, to the extent she deems proper and specified in such opinion,
upon the opinion of other counsel of good standing whom she believes to be
reliable and who are satisfactory to counsel for the Underwriters and (B)
as to matters of fact, to the extent she deems proper, on certificates of
responsible officers of the Partnership and public officials.
(d) The Selling Unitholder shall have requested and caused William G.
von Glahn, General Counsel of the Selling Unitholder, to have furnished to
the Representatives his opinion dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by the Selling Unitholder and the Selling Unitholder has full
legal right and authority to sell, transfer and deliver in the manner
provided in this Agreement the Securities being sold by such Selling
Unitholder hereunder;
(ii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Selling Unitholder of the transactions contemplated herein, except such
as may have been obtained under the 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 and
such other approvals (specified in such opinion) as have been obtained;
and
(iii) neither the sale of the Securities being sold by the
Selling Unitholder nor the consummation of any other of the
transactions herein contemplated by the Selling Unitholder or the
fulfillment of the terms hereof by the Selling Unitholder will conflict
with, result in a breach or violation of, or constitute a default under
(i) the charter or By-laws of the Selling Unitholder or (ii) any law or
the terms of any indenture or other agreement or instrument known to
such counsel and to which any Selling Unitholder or any of its
affiliates is a party or bound, or any judgment, order or decree known
to such counsel to be applicable to the Selling Unitholder or any of
its affiliates of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Selling
Unitholder or any of its affiliates, except in the case of clause (ii)
as would not have a material adverse effect on the Selling Unitholder's
performance of its obligations hereunder.
In rendering such opinion, such counsel may state that he is admitted
to practice law in the States of Oklahoma and New York, and, accordingly,
the opinions expressed by such counsel, except where expressly further
limited, will be based upon and limited exclusively to the laws of the
States of Oklahoma and New York, the General Corporation Law of the State
of Delaware, and the laws of the United States of America insofar as any of
such laws are applicable. Such counsel will not be required to render any
opinion with respect to any other laws.
26
27
(e) The Representatives shall have received from Andrews & Kurth
L.L.P., counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statements, the
Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Partnership and the
Selling Unitholder shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such
matters.
(f) The Partnership shall have furnished to the Representatives a
certificate of the Partnership, signed by the Chief Executive Officer and
the Chief Financial and Accounting Officer of the Partnership, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined each of the Registration Statements, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Partnership and the
Intermediate Partnership in this Agreement are true and correct in all
material respects (except that all those representations and warranties
that are qualified as to their materiality are true and correct in all
respects) on and as of the Closing Date with the same effect as if made
on the Closing Date and the Partnership 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;
(ii) no stop order suspending the effectiveness of any of the
Registration Statements has been issued and no proceedings for that
purpose have been instituted or, to the Partnership's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus (exclusive of
any supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Partnership 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 Prospectus
(exclusive of any supplement thereto).
(g) The Selling Unitholder shall have furnished to the Representatives
a certificate, signed by an officer of the Selling Unitholder, dated the
Closing Date, to the effect that the signer of such certificate has
carefully examined the information relating to the Selling Unitholder in
the Prospectus, any supplement to the Prospectus and this Agreement and
that the representations and warranties of the Selling Unitholder in this
Agreement are true and correct in all material respects on and as of the
Closing Date to the same effect as if made on the Closing Date.
(h) The Partnership shall have requested and caused Arthur Andersen LLP
to have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and that they have
27
28
performed a review of the unaudited interim financial information of the
Partnership for the three-month period ended March 31, 2001 and as of March
31, 2001 in accordance with Statement on Auditing Standards No. 71, and
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statements and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Partnership and its subsidiaries;
their limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for the three-month period ended March 31, 2001,
and as of March 31, 2001, incorporated by reference in the Registration
Statements and the Prospectus; carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such letter;
a reading of the minutes of the meetings of the Partnership Policy
Committee and Audit Committee of the Partnership; and inquiries of
certain officials of the Partnership who have responsibility for
financial and accounting matters of the Partnership and its
subsidiaries as to transactions and events subsequent to December 31,
2000, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated by reference in any of the Registration Statements
and the Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act and
with the related rules and regulations adopted by the Commission
with respect to financial statements included or incorporated by
reference in the Partnership's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2001 under the Exchange Act; and said
unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included or incorporated by reference in the
Registration Statements and the Prospectus;
(2) with respect to the period subsequent to March 31, 2001,
there were any changes, at a specified date not more than five
days prior to the date of the letter, in the long-term debt
including current maturities of the Partnership or decreases in
the partners' capital as compared with the amounts shown on the
March 31, 2001 consolidated balance sheet included or
incorporated by reference in any of the Registration Statements
and the Prospectus, or for the period from April 1, 2001 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding quarter in operating
revenue or net
28
29
income to partners, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Partnership as to
the significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(3) the information included or incorporated by reference in
any of the Registration Statements and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed
Charges) is not in conformity with the applicable disclosure
requirements of Regulation S-K;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Partnership and its subsidiaries) set
forth in the Registration Statements and the Prospectus and in Exhibit
12 to each of the Registration Statements, including the information
set forth under the captions "Selected Historical Consolidated
Financial Data" in the Prospectus, the information included or
incorporated by reference in Items 1, 6, 7 and 11 of the Partnership's
2000 10-K, incorporated by reference in the Registration Statements and
the Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated by reference in the Partnership's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001,
incorporated by reference in the Registration Statements and the
Prospectus, agrees with the accounting records of the Partnership and
its subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statements (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (h) of this Section 6 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 Partnership 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 Prospectus
(exclusive of any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, 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 Statements (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
29
30
(j) Prior to the Closing Date, the Partnership and the Selling
Unitholder shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(k) The Underwritten Securities issued by the Partnership shall have
been duly authorized for listing by the New York Stock Exchange, subject to
official notice of issuance, and satisfactory evidence of such actions
shall have been provided to the Representatives.
(l) At the Execution Time, the Partnership shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto
addressed to the Representatives from Northern Plains, Pan Border, PEC
Midwest L.L.C. and each officer of the Partnership and member of the
Partnership Policy Committee who owns Common Units and each of the former
owners of Bear Paw Investments listed on Schedule III hereto.
(m) On or prior to the Closing Date, the Partnership shall have
furnished to the Representatives waivers by each of the General Partners of
their pre-emptive rights pursuant to Section 4.3 of the Partnership
Agreement.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
or waived by the Representatives in writing, 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
Representatives 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 Representatives. Notice of such cancellation
shall be given to the Partnership and the Selling Unitholder in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Andrews & Kurth L.L.P., counsel for the Underwriters,
at 600 Travis Street, Suite 4200, Houston, Texas, 77002, on the Closing Date.
7. 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 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Partnership or the Selling
Unitholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Partnership
will reimburse the Underwriters severally through Salomon Smith Barney Inc. on
demand for all 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. If the Partnership is
required to make any payments to the Underwriters under this Section 7 because
of the Selling Unitholder's refusal, inability or failure to satisfy any
condition to the obligations of the Underwriters set forth in Section 6, the
Selling Unitholder shall reimburse the Partnership on demand for all amounts so
paid.
30
31
8. Indemnification and Contribution. (a) The Partnership agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act and the Selling
Unitholder, its directors, officers, employees and agents and each person who
controls the Selling Unitholder within the meaning of either the Act or the
Exchange 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
Statements as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in 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
Partnership 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 Partnership by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein; provided, further, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(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 any such loss, claim, damage or liability of such Underwriter occurs
under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the
Partnership had previously furnished copies of the Prospectus to the
Representatives, (x) delivery of the Prospectus was required by the Act to be
made to such person, (y) the untrue statement or omission of a material fact
contained in the Preliminary Prospectus was corrected in the Prospectus and (z)
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the
Prospectus.
(b) The Selling Unitholder agrees to indemnify and hold harmless the
Partnership, each member of the Partnership Policy Committee, each officer of
the Partnership who signed the Registration Statements, each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls the Partnership or any Underwriter within the meaning of either the
Act or the Exchange Act to the same extent as the foregoing indemnity from the
Partnership to each Underwriter, but only with reference to written information
furnished to the Partnership by or on behalf of the Selling Unitholder
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
the Selling Unitholder may otherwise have.
31
32
(c) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Partnership, each member of the Partnership Policy
Committee, each officer of the Partnership who signed the Registration
Statements, and each person who controls the Partnership within the meaning
of either the Act or the Exchange Act and the Selling Unitholder, its
directors, officers, employees and agents and each person who controls the
Selling Unitholder within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity to each Underwriter, but
only insofar as losses, claims, damages, liabilities or actions arise out
of or are based upon any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with written
information relating to such Underwriter furnished to the Partnership by or
on behalf of such Underwriter through the Representatives 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 Partnership and the Selling Unitholder
acknowledge 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 table setting forth the names of the underwriters
and the number of common units sold to each of them, (ii) the sentences
related to concessions and reallowances and (iii) the paragraph(s) related
to stabilization, syndicate covering transactions and penalty bids and the
effect of such practices in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(d) Promptly after receipt by an indemnified party under this Section 8
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 8, 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), (b) or (c)
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), (b) or (c)
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 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
32
33
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 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
or that may arise out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Partnership, the Selling Unitholder
and the Underwriters agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Partnership, the Selling Unitholder and one or more
of the Underwriters may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Partnership, by the Selling
Unitholder and by the Underwriters 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 underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Partnership, the
Selling Unitholder and the Underwriters shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Partnership, of the Selling Unitholder and of the
Underwriters in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations.
Benefits received by the Partnership and by the Selling Unitholder shall be
deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by each of them, 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 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 Partnership or the Selling
Unitholder, 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
Partnership, the Selling Unitholder 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 (e), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to
33
34
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls
an Underwriter within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, each person who controls
the Partnership within the meaning of either the Act or the Exchange Act,
each officer of the Partnership who signed the Registration Statements and
each member of the Partnership Policy Committee shall have the same rights
to contribution as the Partnership, and each person who controls the
Selling Unitholder within the meaning of either the Act or the Exchange Act
and each officer, director, employee and agent of the Selling Unitholder
shall have the same rights to contribution as the Selling Unitholder,
subject in each case to the applicable terms and conditions of this
paragraph (e).
9. 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, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I 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, the
Selling Unitholder or the Partnership. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statements and
the 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 Partnership, the Selling Unitholder and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Partnership
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Partnership's Common Units shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
34
35
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Partnership or its officers, of the Selling Unitholder 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,
the Selling Unitholder or the Partnership or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to the General Counsel, Salomon Smith Barney
Inc., at 388 Greenwich Street, New York, New York, 10013, Attention: General
Counsel; or, if sent to the Partnership, will be mailed, delivered or telefaxed
to Janet K. Place at (402) 398-7780 and confirmed to her at (402) 398-7886; or
if sent to the Selling Unitholder, will be mailed, delivered or telefaxed and
confirmed to it at the address set forth in Schedule II hereto.
13. 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 8 hereof, and no other person will have any right or obligation
hereunder.
14. 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.
15. 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.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. 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.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean, with respect to each of the Registration
Statements, each date and time that such Registration Statement, any
post-effective amendment or
35
36
amendments thereto and any Rule 462(b) Registration Statement became or
become effective.
"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.
"Preliminary Prospectus" shall mean any preliminary prospectus
supplement to the base prospectuses included in each of the Registration
Statements at their respective Effective Dates, together with such base
prospectuses, that describes the Securities and the offering thereof, that
is filed pursuant to Rule 424(b) and that is used prior to the filing of
the Prospectus.
"Prospectus" shall mean the final prospectus supplement to the base
prospectuses included in each of the Registration Statements at their
respective Effective Dates, together with such base prospectuses, that
describes the Securities and the offering thereof, and that is first filed
pursuant to Rule 424(b) after the Execution Time.
"Registration Statements" shall mean each of the three registration
statements referred to in paragraph 1(i)(a) above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statements referred to in
Section 1(a) hereof.
"Subsidiary" shall mean the Intermediate Partnership, Northern Border
Pipeline, Crestone, Bear Paw Investments, Bear Paw Energy, Border
Midwestern and Midwestern Gas.
36
37
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
Partnership, the Intermediate Partnership, the Selling Unitholder and the
several Underwriters.
Very truly yours,
Northern Border Partners, L.P.
By: /s/ JERRY L. PETERS
-------------------------------------------
Name: Jerry L. Peters
-----------------------------------------
Title: Chief Financial and Accounting Officer
----------------------------------------
Northern Border Intermediate Limited Partnership
By: /s/ WILLIAM R. CORDES
-------------------------------------------
Name: William R. Cordes
-----------------------------------------
Title: Chief Executive Officer
----------------------------------------
Northwest Border Pipeline Company
By: /s/ JAMES C. MOORE
-------------------------------------------
Name: James C. Moore
-----------------------------------------
Title: Vice President
----------------------------------------
37
38
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Smith Barney Inc.
Banc of America Securities LLC
UBS Warburg LLC
A.G. Edwards & Sons, Inc.
Dain Rauscher Incorporated
First Union Securities, Inc.
By: Salomon Smith Barney Inc.
By: /s/ JOHN A. CIOLEK
--------------------------
Name: John A. Ciolek
------------------------
Title: Director
-----------------------
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
38
39
SCHEDULE I
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
- ------------ --------------------------
Salomon Smith Barney Inc....................................... 1,225,209
UBS Warburg LLC............................................... 1,225,209
Banc of America Securities LLC................................ 556,900
A. G. Edwards & Sons, Inc..................................... 556,900
Dain Rauscher Incorporated.................................... 445,500
First Union Securities, Inc................................... 445,500
---------
Total 4,455,218
=========
Schedule I-1
40
SCHEDULE II
MAXIMUM NUMBER OF
NUMBER OF UNDERWRITTEN OPTION SECURITIES
SELLING UNITHOLDER: SECURITIES TO BE SOLD TO BE SOLD
- ------------------ ---------------------- -----------------
Northwest Border Pipeline Company
295 Chipeta Way
Salt Lake City, Utah 84108........................ 455,218 668, 282
with copies to:
The Williams Companies, Inc.
One Williams Center, Suite 4900
Tulsa, Oklahoma 74172
Attention: Cuba Wadlington
Facsimile: 918.573.7427
The Williams Companies, Inc.
P.O. Box 1396
Houston, Texas 77251
Attention: James Moore
Facsimile: 713.215.4269
----------- -----------
Total........................................ 455,218 668,282
=========== ===========
Schedule II-1
41
SCHEDULE III
1. Cub Investment, LLC
2. Haddington / Chase Energy Partners (Bear Paw) LP
3. Cleveptnrs
4. Thomas Edelman
5. Robert Clark
6. Michael Henderson
7. Pierce Norton
8. Carl Holmgren
9. Richard VandeBossche
10. Bruce Duval
11. Jonathon Nixon
12. Thom. Edelman Irrevocable Trust fbo Eliz. Edelman
13. Thom. Edelman Irrevicable Trust fbo Eleanor Edelman
14. R&K Ventures, LLP
15. Bear Cub Investments, LLC
2
42
EXHIBIT A
[LETTERHEAD OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER OF CORPORATION]
Northern Border Partners, L.P.
Public Offering of Common Units
May ___, 2001
Salomon Smith Barney Inc.
Banc of America Securities LLC
UBS Warburg LLC
A.G. Edwards & Sons, Inc.
Dain Rauscher Incorporated
First Union Securities, Inc.
As Representatives of the several Underwriters,
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Northern Border
Partners, L.P., a Delaware limited partnership (the "Partnership"), Northwest
Border Pipeline Company, a Delaware corporation, and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Units (the "Common Units"), of the
Partnership.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Salomon Smith Barney Inc., 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 undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange 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 Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
Common Units of the Partnership or any securities convertible into, or
exercisable or exchangeable for such Common Units, or publicly announce an
intention to effect any such transaction, for a period of ninety (90) days after
the date of this Agreement, other than Common Units disposed of as bona fide
gifts approved by Salomon Smith Barney Inc.
43
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
[SIGNATURE OF OFFICER, DIRECTOR OR
MAJOR STOCKHOLDER]
[NAME AND ADDRESS OF OFFICER, DIRECTOR
OR MAJOR STOCKHOLDER]