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LAKEHEAD PIPE LINE COMPANY, LIMITED PARTNERSHIP
(a Delaware limited partnership)
$100,000,000 7.9% Senior Notes due 2012
UNDERWRITING AGREEMENT
November 16, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
ABN AMRO Incorporated
Banc of America Securities LLC
Chase Securities Inc.
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Lakehead Pipe Line Company, Limited Partnership, a Delaware limited
partnership (the "Operating Partnership"), confirms its agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), with respect to the
issue and sale by the Operating Partnership and the purchase by the
Underwriters, acting severally and not jointly, of the respective principal
amounts set forth in said Schedule A of $100,000,000 aggregate principal amount
of the Operating Partnership's 7.9% Senior Notes due 2012 (the "Securities").
The Securities are to be issued pursuant to an indenture dated as of September
15, 1998, between the Operating Partnership and The Chase Manhattan Bank, as
trustee (the "Trustee"), as supplemented by the Third Supplemental Indenture
dated as of November 21, 2000 (as so supplemented, the "Indenture").
Each of the Operating Partnership, Lakehead Pipe Line Partners, L.P., a
Delaware limited partnership (the "Partnership"), and Lakehead Pipe Line
Company, Inc., a Delaware corporation (both in its capacity as general partner
of the Operating Partnership and in its individual capacity, the "General
Partner"), wishes to confirm as follows its agreement with the Underwriters in
connection with the several purchases of the Securities by the Underwriters. The
Partnership, the
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Operating Partnership and the General Partner are sometimes collectively
referred to herein as the "Companies."
The Companies understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
1. Registration Statement and Prospectus. The Operating Partnership has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 (Registration
No. 333-59597) under the Act, including a prospectus subject to completion
relating to certain debt securities of the Operating Partnership, including the
Securities. Such registration statement (including all financial schedules and
exhibits), as supplemented or amended prior to the execution of this Agreement
is herein called the "Registration Statement." If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to such
registration statement will be filed and must be declared effective before the
offering of the Securities may commence, the term "Registration Statement" as
used in this Agreement means such registration statement as amended by said
post-effective amendment. If it is contemplated, at the time this Agreement is
executed, that a registration statement will be filed pursuant to Rule 462(b)
under the Act before the offering of the Securities may commence, the term
"Registration Statement" as used in this Agreement includes such registration
statement. The term "Basic Prospectus" as used in this Agreement shall mean the
prospectus contained in the Registration Statement at the time that the
Registration Statement was declared effective or in the form in which it has
been most recently filed with the Commission on or prior to the date of this
Agreement. "Preliminary Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus, together with the Basic Prospectus, which
describes the Securities and the offering thereof, that is filed pursuant to
Rule 424(b) under the Act ("Rule 424(b)") and is used prior to the filing of the
Final Prospectus. "Final Prospectus" shall mean the prospectus supplement
relating to the Securities and the offering thereof that is first filed pursuant
to Rule 424(b) under the Act ("Rule 424(b)") after the date and time this
Agreement is executed and delivered by the parties hereto, together with the
Basic Prospectus.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, the Basic Prospectus, the Preliminary Prospectus or the
Final Prospectus (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which is incorporated by reference in the Registration Statement, the Basic
Prospectus, the Preliminary Prospectus or the Final Prospectus, as the case may
be; any reference in this Agreement to the Registration Statement, the Basic
Prospectus, the Preliminary Prospectus or the Final Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Act, as of the date of the Registration
Statement, the Basic Prospectus, the Preliminary Prospectus or the Final
Prospectus, as the case may be; and any reference to any amendment or supplement
to the Registration Statement, the Basic Prospectus, the
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Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and
include any documents filed after such date under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(the "Exchange Act"), which, upon filing, are incorporated by reference therein,
as required by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Registration Statement, the Basic Prospectus, the
Preliminary Prospectus or the Final Prospectus or any amendment or supplement
thereto.
2. Agreements to Sell and Purchase. The Operating Partnership hereby
agrees, upon the terms and subject to all the conditions set forth herein, to
issue and sell to each Underwriter and, upon the basis of the representations,
warranties and agreements of the Companies herein contained and upon the terms
and subject to all the conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Operating Partnership, at the
price set forth in Schedule B hereto, the aggregate amount of Securities set
forth opposite the name of such Underwriter in Schedule A hereto, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
3. Terms of Public Offering. The Operating Partnership has been advised
by the Underwriters that the Underwriters propose to make a public offering of
their respective portions of the Securities as soon after the Registration
Statement and this Agreement have become effective as in the judgment of the
Underwriters is advisable and initially to offer the Securities upon the terms
set forth in the Final Prospectus.
4. Delivery of the Securities and Payment Therefor. The Securities to
be purchased hereunder will be represented by one or more definitive global
certificates in book-entry form which will be deposited by or on behalf of the
Operating Partnership with The Depository Trust Company ("DTC") or its
designated custodian.
Delivery to the Underwriters of the Securities, against payment of the
purchase price therefor in immediately available funds, shall be made by causing
DTC to credit the Securities to the account or accounts designated by Merrill
Lynch on behalf of the Underwriters at DTC. The time and date of such delivery
shall be 10:00 A.M., New York City time, on November 21, 2000 (such time and
date of payment and delivery being herein called the "Closing Time"). The other
documents to be delivered at the Closing Time by or on behalf of the parties
hereto shall be delivered at such time and date at the offices of Baker Botts
L.L.P., 910 Louisiana, Houston, Texas 77002. The place of closing for the
Securities and the Closing Time may be varied by agreement between the
Underwriters and the Operating Partnership. Merrill Lynch may (but shall not be
obligated to) make payment of the purchase price for the Securities to be
purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder.
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The global certificates representing the Securities to be delivered to
the Underwriters shall be made available to the Underwriters at the office of
DTC or its custodian for inspection not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Time.
5. Agreements of the Companies. Each of the Companies agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Securities may commence, the
Operating Partnership and the General Partner will endeavor to cause the
Registration Statement or such post-effective amendment to become effective as
soon as possible and will advise the Underwriters and counsel for the
Underwriters promptly and, if requested by the Underwriters, will confirm such
advice in writing, when the Registration Statement or such post-effective
amendment has become effective.
(b) During the period of time referred to in the second sentence in
paragraph (f) below, the Operating Partnership and the General Partner will
advise the Underwriters and counsel for the Underwriters promptly and, if
requested by the Underwriters, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the Registration
Statement, the Basic Prospectus, the Preliminary Prospectus or the Final
Prospectus or for additional information; (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Securities for offering or sale in any
jurisdiction or the initiation of any proceeding for such purpose; and (iii) of
any change in the financial position, business, prospects, or results of
operations of any of the Companies, or of the happening of any event, which
makes any statement of a material fact made in the Registration Statement, the
Preliminary Prospectus or the Final Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement, the Preliminary Prospectus or the Final Prospectus (as
then amended or supplemented) in order to state a material fact required by the
Act to be stated therein or necessary in order to make the statements therein
not misleading, or of the necessity to amend or supplement, the Preliminary
Prospectus or the Final Prospectus (as then amended or supplemented) to comply
with the Act or any other law. If at any time within the period of time referred
to in the second sentence in paragraph (f) below, the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, the
Operating Partnership and the General Partner will make every reasonable effort
to obtain the withdrawal of such order at the earliest possible time.
(c) The Operating Partnership and the General Partner will furnish to
the Underwriters, at the Underwriters' request and without charge, (i) one
signed copy of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits to the Registration Statement, (ii) such number of conformed copies of
the Registration Statement as originally filed and of each amendment thereto,
but without exhibits, as the Underwriters may request, (iii) such number of
copies of the
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Incorporated Documents, without exhibits, as the Underwriters may request, and
(iv) such number of copies of the exhibits to the Incorporated Documents as the
Underwriters may request.
(d) Prior to the end of the period of time referred to in the second
sentence in paragraph (f) below, neither the Operating Partnership nor the
General Partner will file any amendment to the Registration Statement or make
any amendment or supplement to the Preliminary Prospectus the Final Prospectus
or file any document which, upon filing becomes an Incorporated Document, of
which the Underwriters and counsel for the Underwriters shall not previously
have been advised or to which, after the Underwriters and counsel for the
Underwriters shall have received a copy of the document proposed to be filed,
the Underwriters shall reasonably object; provided that the Underwriters'
consent shall not be unreasonably withheld or delayed.
(e) Prior to the execution and delivery of this Agreement, the
Operating Partnership and the General Partner have delivered to the
Underwriters, without charge, in such quantities as the Underwriters have
requested, copies of the Preliminary Prospectus. The Operating Partnership and
the General Partner consent to the use, in accordance with the provisions of the
Act and with the securities or Blue Sky laws of the jurisdictions in which the
Securities are offered by the several Underwriters and by dealers, prior to the
date of the Final Prospectus, of the Preliminary Prospectus so furnished by the
Operating Partnership and the General Partner.
(f) The Operating Partnership will cause the Final Prospectus to be
filed pursuant to, and in compliance with, Rule 424(b). As soon after the
execution and delivery of this Agreement as possible and thereafter from time to
time for such period as in the opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with sales by
any Underwriter or dealer, the Operating Partnership and the General Partner
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Final Prospectus (and of any amendment or supplement
thereto) as the Underwriters may reasonably request. The Operating Partnership
and the General Partner consent to the use of the Preliminary Prospectus and the
Final Prospectus (and of any amendment or supplement thereto) in accordance with
the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Securities are offered by the several Underwriters
and by all dealers to whom Securities may be sold, both in connection with the
offering and sale of the Securities and for such period of time thereafter as
the Final Prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or dealer. If during such period of time any event
shall occur that in the judgment of the Operating Partnership or the General
Partner or in the opinion of counsel for the Underwriters is required to be set
forth in the Final Prospectus (as then amended or supplemented) or should be set
forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Final Prospectus (or to file under the Exchange Act
any document which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Operating Partnership and the General
Partner will forthwith prepare and, subject to the provisions of paragraph (d)
above, file with the Commission an appropriate supplement or amendment thereto
(or to such document), and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof.
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In the event that the Operating Partnership or the General Partner and the
several Underwriters agree that the Final Prospectus should be amended or
supplemented, the Operating Partnership and the General Partner, if requested by
the Underwriters, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(g) The Operating Partnership and the General Partner will cooperate
with the Underwriters and with counsel for the Underwriters in connection with
the registration or qualification of the Securities for offering and sale by the
several Underwriters and by dealers under the securities or Blue Sky laws of
such jurisdictions as the Underwriters may designate and will file such consents
to service of process or other documents necessary or appropriate in order to
effect such registration or qualification; provided that in no event shall the
Operating Partnership be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which 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.
(h) The Operating Partnership and the General Partner will make
generally available to security holders of the Operating Partnership a
consolidated earnings statement, which need not be audited, covering a 12-month
period commencing after the effective date of the Registration Statement and
ending not later than 15 months thereafter, as soon as practicable after the end
of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to Section
10 hereof or pursuant to clause (ii), (iii), (iv) or (v) of Section 11 hereof)
or if this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of any of the Companies to comply with the terms
or fulfill any of the conditions of this Agreement, the Operating Partnership
and the General Partner, jointly and severally, agree to reimburse the
Underwriters for all out-of-pocket expenses (including reasonable fees and
expenses of counsel for the Underwriters) incurred by the Underwriters in
connection herewith.
(j) The Operating Partnership will apply the net proceeds from the sale
of the Securities substantially in accordance with the description set forth in
the Final Prospectus.
(k) From the date of this Agreement until the Closing Time, the
Companies will not, without the prior written consent of Merrill Lynch, directly
or indirectly, issue, sell, offer or contract to sell, grant any option for the
sale of, or otherwise transfer or dispose of, any debt securities of the
Operating Partnership or of the Partnership; provided, however, that this
limitation shall not apply to (i) bank borrowings or (ii) borrowings from the
General Partner or any of its affiliates.
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(l) The Partnership, during the period when the Final Prospectus is
required to be delivered under the Act, will file all documents required to be
filed with the Commission pursuant to the Exchange Act within the time periods
required by the Exchange Act.
6. Representations and Warranties of the Companies. Each of the
Companies represents and warrants to each Underwriter that:
(a) The Basic Prospectus included as part of the Registration Statement
as originally filed or as part of any amendment or supplement thereto, and the
Preliminary Prospectus filed pursuant to Rule 424(b), complied when so filed in
all material respects with the provisions of the Act and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Basic Prospectus or the Preliminary Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Operating Partnership in writing by or on behalf of any Underwriter expressly
for use therein. To the best of each of the Companies' knowledge, information
and belief, having made reasonable inquiries, the Commission has not issued any
order preventing or suspending the use of the Basic Prospectus or the
Preliminary Prospectus.
(b) The Operating Partnership and the offering of the Securities
contemplated by this Agreement meet the requirements for using Form S-3 under
the Act. The Registration Statement in the form in which it became effective and
also in such form as it may be when any post-effective amendment thereto shall
become effective and the Final Prospectus and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) and at the Closing
Time, complied or will comply in all material respects with the provisions of
the Act and, with respect to the Registration Statement, the Trust Indenture Act
of 1939, as amended, and the rules and regulations of the Commission thereunder
(the "1939 Act"), and will not at any such times contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and the statements
made or to be made in such documents that are covered by Rule 175(b) under the
Act were made or will be made with a reasonable basis and in good faith, except
that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Final Prospectus made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Operating Partnership in writing by or on behalf of any
Underwriter expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act; any further Incorporated Documents so filed will, when they
are filed, conform in all material respects with the requirements of the
Exchange Act; no such document when it was filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed) contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or
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necessary in order to make the statements therein not misleading; and no such
further document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(d) The capitalization of the Partnership as of September 30, 2000 was
as set forth in the Final Prospectus under "Capitalization." The capitalization
of the Operating Partnership as of such date was substantially the same as the
capitalization of the Partnership as of such date.
(e) Each of the Partnership, the Operating Partnership and Lakehead
Services, Limited Partnership, a Delaware limited partnership (the "LPL
Partnership"), has been duly formed and is validly existing as a limited
partnership in good standing under the Delaware Revised Uniform Limited
Partnership Act (the "Delaware Act"), with partnership power and authority to
own or lease its properties and to conduct its business as described in the
Final Prospectus. The LPL Partnership is not material to the Partnership or the
Operating Partnership.
(f) The General Partner has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with the corporate power and authority to own or lease its properties,
to conduct its businesses and to act as a general partner of the Partnership and
the Operating Partnership, in each case as described in the Final Prospectus.
(g) The accountants, PricewaterhouseCoopers LLP, who have certified or
shall certify the financial statements included or incorporated by reference in
the Registration Statement and the Final Prospectus (or any amendment or
supplement thereto), are independent public accountants as required by the Act.
(h) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Final Prospectus (and any amendment or supplement thereto), present fairly
the consolidated financial position, results of operations and changes in
financial position of the Partnership and the Operating Partnership on the basis
stated in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and data
included or incorporated by reference in the Registration Statement and the
Final Prospectus (and any amendment or supplement thereto) are accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Companies.
(i) The execution and delivery of, and the performance by each of the
Companies of its obligations under this Agreement have been duly and validly
authorized by each of such Companies, as the case may be, and this Agreement has
been duly executed and delivered by each of the Companies.
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(j) The Indenture has been duly authorized by the Operating Partnership
and duly qualified under the 1939 Act and, when duly executed and delivered by
the Operating Partnership and the Trustee, will constitute a valid and legally
binding agreement of the Operating Partnership, enforceable against the
Operating Partnership in accordance with its terms, except as enforcement
generally may be subject to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors rights and to
general equitable principles.
(k) The Securities have been duly authorized and, at the Closing Time,
will have been duly executed by the Operating Partnership and, when
authenticated, issued and delivered in the manner provided for in the Indenture
and delivered against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and binding obligations of the Operating
Partnership, enforceable against the Operating Partnership in accordance with
their terms, except as enforcement generally may be subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equitable principles, and will be
in the form contemplated by, and entitled to the benefits of, the Indenture.
(l) The Securities and the Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Preliminary Prospectus and the Final Prospectus and will be in substantially the
respective forms filed or incorporated by reference, as the case may be, as
exhibits to the Registration Statement.
(m) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement, the Indenture and the
Securities, compliance by any of the Companies with the provisions hereof or
thereof nor consummation by any of the Companies of the transactions
contemplated hereby constitutes a breach of, or a default under, the partnership
agreement, certificate or articles of incorporation or bylaws, or other
organizational documents, of any of the Companies, or any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which any of the Companies is a party or by which any
of them may be bound or to which any of their respective properties is subject,
nor will any such action result in any violation of any existing law,
regulation, ruling (assuming compliance with all applicable federal and state
securities and Blue Sky laws), judgment, injunction, order or decree to which
any of the Companies is a named party, excluding in each case any breaches,
defaults or violations which, individually or in the aggregate, would not have a
material adverse effect on the financial position, results of operations,
business or prospects of the General Partner or the Partnership and the
Operating Partnership (taken as a whole) (a "Material Adverse Effect").
(n) Except as disclosed in the Registration Statement and the Final
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Final Prospectus (or any amendment or supplement thereto),
none of the Companies has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the General Partner or the Partnership and the
Operating Partnership (taken as a whole), and there has not been any change in
the capital stock or partner's capital, or material increase in the
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short-term debt or long-term debt of, any of the Companies, or any material
adverse change, or any development that the Operating Partnership and the
General Partner have reasonable cause to believe will involve a prospective
material adverse change, in the financial position, business, prospects or
results of operations of any of the Companies.
(o) Except as disclosed in the Registration Statement and the Final
Prospectus (or any amendment of supplement thereto), no more than ten percent of
the net proceeds from the sale of the Securities is intended to be or will be
paid to members of the National Association of Securities Dealers or associated
or affiliated persons of such members, or members of the immediate family of
such members.
(p) The Commission has issued an order under the Act declaring the
Registration Statement effective and qualifying the Indenture under the 1939 Act
and no other consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the issuance of the Securities or the consummation by the Operating
Partnership of the other transactions contemplated by this Agreement and the
Indenture, except such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the issuance by the Operating Partnership of the Securities and
the purchase and distribution of the Securities by the Underwriters.
(q) The General Partner has (excluding its interests in the Partnership
and the Operating Partnership) a net worth of at least $35 million.
(r) Based upon the advice of counsel, none of the Companies is, or as
of the Closing Time will be, an "Investment Company" as that term is defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
or required to register as an "Investment Company" under the Investment Company
Act.
(s) Based upon the advice of counsel, none of the Companies or the LPL
Partnership is (i) a "public utility company," (ii) a "holding company," (iii) a
"subsidiary company" of a "registered holding company" or of a "holding company"
required to be registered under the Public Utility Holding Company Act of 1935,
as amended (the "1935 Act"), or (iv) an "affiliate" of (A) a "registered holding
company," (B) a "holding company" required to be registered under the 1935 Act,
(C) a "subsidiary company" of a "registered holding company" or (D) a
"subsidiary company" of a "holding company" required to be registered under the
1935 Act, as such terms are defined in the 1935 Act. The issuance and sale of
the Securities as contemplated by the Final Prospectus is not subject to
regulation under the 1935 Act.
(t) There are no legal or governmental proceedings pending or, to the
knowledge of any of the Companies, threatened, against any of the Companies, or
to which any of the Companies, or to which any of their respective properties,
is subject, that are required to be described in the Registration Statement or
the Final Prospectus and are not described as required.
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(u) The States of Illinois, Indiana, Michigan, Minnesota, New York,
North Dakota and Wisconsin are the only jurisdictions within the United States
in which each of the General Partner and Operating Partnership, as applicable,
owns or leases property, or conducts business as a foreign limited partnership
or corporation, as applicable, so as to require the Operating Partnership or
General Partner, as applicable, to qualify to conduct business as a foreign
limited partnership or corporation, as applicable, and in which the failure to
so qualify would be likely to have a Material Adverse Effect.
7. Indemnification and Contribution. (a) Each of the Companies, jointly
and severally, agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in, the Preliminary Prospectus or
the Final Prospectus or in the Registration Statement or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such Underwriter furnished in writing to the
Operating Partnership by or on behalf of the Underwriters expressly for use in
connection therewith; provided, however, that the only information furnished in
writing to the Operating Partnership by or on behalf of the Underwriters are the
statements noted in Section 12 hereof; and provided, further, that the
indemnification contained in this paragraph (a) with respect to the Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Securities by such
Underwriter to any person if a copy of the Final Prospectus shall not have been
delivered or sent to such person within the time required by the Act, and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in the Preliminary Prospectus was corrected in the
Final Prospectus; provided that the Operating Partnership has delivered the
Final Prospectus to the several Underwriters in requisite quantities on a timely
basis to permit such delivery or sending. The foregoing indemnity agreement
shall be in addition to any liability which any of the Companies may otherwise
have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act in respect of which
indemnity may be sought against any of the Companies, such Underwriter or such
controlling person shall promptly notify the General Partner on behalf of the
Companies, and the Companies shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Underwriters and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses
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<PAGE> 12
of such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Companies have agreed in writing to pay such fees and
expenses, (ii) the Companies have failed to assume the defense and employ
counsel reasonably satisfactory to the Underwriters or (iii) the named parties
to any such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person, and any of the Companies and
such Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and one or more of the
Companies by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the Companies shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the Companies shall, in
connection with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with the Underwriters, which firm shall be designated in writing by
Merrill Lynch, and that all such fees and expenses shall be reimbursed as they
are incurred. None of the Companies shall be liable for any settlement of any
such action, suit or proceeding effected without its written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, each of the Companies, jointly
and severally, agrees to indemnify and hold harmless any Underwriter, to the
extent provided in the preceding paragraph, and any such controlling person from
and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless each of the Companies, the directors of the General Partner,
the officers of the General Partner who sign the Registration Statement, and any
person who controls any of the Companies within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Companies to each Underwriter, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf of
such Underwriter expressly for use in the Registration Statement, the
Preliminary Prospectus, the Final Prospectus, or any amendment or supplement
thereto; provided, however, that the only information furnished in writing to
the Operating Partnership by or on behalf of the Underwriters are the statements
noted in Section 12 hereof. If any action, suit or proceeding shall be brought
against any of the Companies, any of the directors of the General Partner, any
such officer of the General Partner, or any such controlling person based on the
Registration Statement, the Preliminary Prospectus or the Final Prospectus, or
any amendment or supplement thereto, and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph (c), such Underwriter
shall have the rights and duties given to the Companies by paragraph (b) above,
and the Companies, the directors of the General Partner, any such officer of the
General Partner, and any such controlling person, shall have the rights and
duties given to the Underwriters by paragraph (b) above. The foregoing indemnity
agreement shall be in addition to any liability which the Underwriters may
otherwise have.
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<PAGE> 13
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Companies on the one hand and the Underwriters on the other hand from the
offering of the Securities, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Companies on the one hand and the Underwriters on
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Companies on the one hand and the Underwriters on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Operating Partnership bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Final Prospectus. The
relative fault of the Companies on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Companies on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, including, with respect to any
Underwriter, the extent to which any such loss, claim, damage or liability
arises from the sale of Securities by such Underwriter to any person if a copy
of the Final Prospectus shall not have been delivered or sent to such person
within the time required by the Act, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in the
Preliminary Prospectus was corrected in the Final Prospectus, provided that the
Operating Partnership has delivered the Final Prospectus to the several
Underwriters in requisite quantities on a timely basis to permit such delivery
or sending.
(e) The Companies and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by a
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the Securities
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent
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<PAGE> 14
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective numbers of Securities set
forth opposite their names in Schedule A hereto (or such numbers of Securities
increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Companies set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, any of the Companies, the directors of the General Partner or
officers of the General Partner, or any person controlling any of the Companies,
(ii) acceptance of any Securities and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to any of the Companies or the directors or
officers of the General Partner, or any person controlling any of the Companies,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7. The term "successor," as
used in this Agreement, shall not include a purchaser from any Underwriter of
any Securities in his status as a purchaser.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Securities hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Securities may commence, such
post-effective amendment shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by the Underwriters, and all filings, if any,
required by Rules 424 and 430A under the Act shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been instituted or, to
the knowledge of any of the Companies or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the Registration Statement or the Final Prospectus or otherwise)
shall have been complied with to the Underwriters' satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred any change, or any development involving a prospective change, in
or affecting the
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<PAGE> 15
financial position, business, prospects or results of operations of the
Companies not contemplated by the Final Prospectus, which in the opinion of the
Underwriters, would materially adversely affect the market for the Securities.
(c) The Underwriters shall have received at the Closing Time an opinion
of S. Mark Curwin, Corporate Secretary of the General Partner, dated the Closing
Time and addressed to the Underwriters to the effect that:
(i) There is no action, proceeding or investigation pending or, to
the best of such counsel's knowledge after due inquiry, threatened
against any of the Companies which in such counsel's judgment could
reasonably be expected to have a Material Adverse Effect.
(ii) None of the Companies is in violation of any term of (A) its
partnership agreement or certificate of incorporation or by-laws, as
the case may be, (B) any other material agreement or instrument to
which it is a party or by which it or any of its properties is bound,
or (C) to the best of such counsel's knowledge after due inquiry, any
applicable order, judgment or decree of any court, arbitrator or
governmental authority to which any of the Companies is a named party,
which violations, in the judgment of such counsel, could reasonably be
expected to have a Material Adverse Effect.
(d) The Underwriters shall have received at the Closing Time an opinion
of Fulbright & Jaworski L.L.P., counsel for the Companies, dated the Closing
Time and addressed to the Underwriters to the effect that:
(i) Each of the Partnership and the Operating Partnership has been
duly formed and is validly existing as a limited partnership in good
standing under the Delaware Revised Uniform Limited Partnership Act
(the "Delaware Act"), with partnership power and authority to own or
lease its properties and to conduct its business as described in the
Final Prospectus.
(ii) The General Partner has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the corporate power and authority to own or lease its
properties, to conduct its businesses and to act as a general partner
of the Partnership and the Operating Partnership, in each case as
described in the Final Prospectus.
(iii) Enbridge Pipelines Inc. ("Enbridge") is the record owner of
all of the issued and outstanding shares of capital stock of the
General Partner.
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<PAGE> 16
(iv) The authorized and outstanding partnership interests of the
Partnership are as set forth under the caption "Business--Overview" in
the Final Prospectus.
(v) The General Partner is the sole general partner of each of the
Partnership and the Operating Partnership. The General Partner owns of
record a general partner interest in the Partnership of 1.0%, and owns
of record a limited partner interest in the Partnership (represented by
3,912,750 Class B Common Units) of approximately 13.3% and a general
partner interest in the Operating Partnership of 1.0101%. The
Partnership is the sole limited partner of the Operating Partnership
and owns of record a limited partner interest in the Operating
Partnership of 98.9899%.
(vi) The Registration Statement and all post-effective amendments
thereto, if any, have become effective under the Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or threatened by the Commission; and
any required filing of the Final Prospectus pursuant to Rule 424(b) has
been made in accordance with Rule 424(b).
(vii) The Indenture has been duly qualified under the 1939 Act.
(viii) Each of the Companies has the partnership or corporate power
and authority, as the case may be, to enter into this Agreement and, in
the case of the Operating Partnership, to issue, sell and deliver the
Securities to the Underwriters as provided herein.
(ix) This Agreement has been duly authorized, executed and
delivered by each of the Companies.
(x) The Indenture has been duly authorized, executed and delivered
by the Operating Partnership and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitutes a valid and
binding agreement of the Operating Partnership, enforceable against the
Operating Partnership in accordance with its terms, except as the
enforcement thereof may be limited or affected by (A) bankruptcy,
insolvency, reorganization, moratorium, liquidation, rearrangement,
fraudulent transfer, fraudulent conveyance and other similar laws
(including court decisions) now or hereafter in effect and affecting
the rights and remedies of creditors generally or providing for the
relief of debtors, (B) the refusal of a particular court to grant
equitable remedies, including without limitation specific performance
and injunctive relief, and (C) general principles of equity (regardless
of whether such remedies are sought in a proceeding in equity or at
law).
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<PAGE> 17
(xi) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Operating Partnership and, assuming
that the Securities have been duly authenticated by the Trustee in the
manner described in its certificate delivered to the Underwriters at
the Closing Time (which fact such counsel need not determine by an
inspection of the Securities) and delivered against payment of the
purchase price therefor in accordance with the terms of this Agreement,
the Securities have been duly executed and delivered by the Operating
Partnership and, under the law of the State of New York, constitute
valid and binding obligations of the Operating Partnership, enforceable
against the Operating Partnership in accordance with their terms,
except as the enforcement thereof may be limited or affected by (A)
bankruptcy, insolvency, reorganization, moratorium, liquidation,
rearrangement, fraudulent transfer, fraudulent conveyance and other
similar laws (including court decisions) now or hereafter in effect and
affecting the rights and remedies of creditors generally or providing
for the relief of debtors, (B) the refusal of a particular court to
grant equitable remedies, including without limitation specific
performance and injunctive relief, and (C) general principles of equity
(regardless of whether such remedies are sought in a proceeding in
equity or at law).
(xii) The Securities and the Indenture conform as to legal matters
in all material respects to the descriptions thereof contained in the
Final Prospectus.
(xiii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement, the Indenture and
the Securities, compliance by any of the Companies with the provisions
hereof or thereof nor consummation by any of the Companies of the
transactions contemplated hereby violate the partnership agreement,
certificate or articles of incorporation or bylaws or other
organizational documents, of any of the Companies (the "Organizational
Documents") or constitutes a breach of, or a default under, any
agreement, indenture, lease or other instrument to which any of the
Companies is a party or by which any of them may be bound or to which
any of their respective properties is subject that is an exhibit to the
Registration Statement or to any Incorporated Document, nor will any
such action result in any violation of any existing law, regulation,
ruling (assuming compliance with all applicable federal and state
securities and Blue Sky laws) applicable to any of them, or any
judgment, injunction, order or decree to which any of the Companies is
a named party and which has been specifically identified to such
counsel in a certificate signed by an authorized officer of the
Operating Partnership, excluding in each case (other than with respect
to the Organizational Documents) any breaches, defaults or violations
which, individually or in the aggregate, would not have a Material
Adverse Effect.
(xiv) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on
the part of any of the
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<PAGE> 18
Companies (except as have been obtained under the Act or such as may be
required under state securities or Blue Sky laws governing the purchase
and distribution of the Securities) for the valid issuance and sale of
the Securities to the Underwriters as contemplated by this Agreement.
(xv) The Registration Statement and the Final Prospectus and any
supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial data
included therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the
requirements of the Act; and each of the Incorporated Documents (except
for the financial statements and the notes thereto and the schedules
and other financial data included therein, as to which counsel need not
express any opinion) complies as to form in all material respects with
the Exchange Act.
(xvi) To the knowledge of such counsel, (A) other than as described
or contemplated in the Final Prospectus (or any supplement thereto) or
any Incorporated Document, there are no legal or governmental
proceedings pending or threatened against any of the Companies, or to
which any of the Companies, or any of their property, is subject, which
are required to be described in the Registration Statement or the Final
Prospectus (or any amendment or supplement thereto) and (B) there are
no agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the Final
Prospectus (or any amendment or supplement thereto) or to be filed as
an exhibit to the Registration Statement or any Incorporated Document
that are not described or filed as required, as the case may be.
(xvii) The Amended and Restated Agreement of Limited Partnership of
the Partnership has been duly authorized, executed and delivered by the
General Partner and is a valid and legally binding agreement of the
General Partner, enforceable against the General Partner in accordance
with its terms, subject to the qualifications that (A) the
enforceability of such document may be limited by bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights generally, (B) the
enforceability of such document 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 such
document is subject to equitable defenses and judicial discretion, and
the enforceability of such document may be limited by general equitable
principles and (D) the enforceability of the indemnity and contribution
provisions of such document may be limited by federal and state
securities laws; and the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership has been duly authorized,
executed and delivered by the General Partner and the Partnership and
is a valid and legally binding agreement of the General Partner and the
Partnership, enforceable against the
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<PAGE> 19
General Partner and the Partnership in accordance with its terms,
subject to the qualifications that (A) the enforceability of such
document may be limited by bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights generally, (B) the enforceability of such document 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 such document is subject to equitable defenses and
judicial discretion, and the enforceability of such document may be
limited by general equitable principles and (D) the enforceability of
the indemnity and contribution provisions of such document may be
limited by federal and state securities laws.
(xviii) None of the Companies or the LPL Partnership is an
"Investment Company" as that term is defined in the Investment Company
Act or is required to register as an "Investment Company" under the
Investment Company Act.
(xix) None of the Companies or the LPL Partnership is a "public
utility company" or a "holding company" as such terms are defined in
the 1935 Act.
Such counsel shall also state that although such counsel has not undertaken,
except as otherwise indicated in their opinion, to determine independently, and
does not assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Final Prospectus, including
review and discussion of the contents thereof (including review and discussion
of the contents of all Incorporated Documents), and nothing has come to the
attention of such counsel that has caused them to believe that the Registration
Statement (including the Incorporated Documents) at the time the Registration
Statement became effective, or the Final Prospectus, as of its date and as of
the Closing Time, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that any amendment
or supplement to the Final Prospectus, as of its respective date, and as of the
Closing Time, as the case may be, contained any untrue statement of a material
fact or omitted 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 (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto and the
schedules and other financial data included in the Registration Statement or the
Final Prospectus or any Incorporated Document). In addition, such counsel shall
state that for purposes of determining whether the fair market value of the
assets of the General Partner (excluding the General Partner's interest in the
Partnership and in the Operating Partnership) exceeds the liabilities of the
General Partner by at least $35 million, such counsel has advised the General
Partner that any assets or liabilities reflected on a balance sheet prepared in
accordance with generally accepted accounting principles that merely represent
timing differences between generally accepted accounting principles and federal
income tax accounting principles should be excluded in the making of such
determination.
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In rendering such opinions, such counsel may (1) rely in respect of
factual matters upon representations and warranties of the Companies set forth
herein and certificates of officers of the General Partner and upon information
obtained from public officials, upon opinions of other counsel issued in
connection with the offering of the Securities pursuant to the Final Prospectus
and other sources believed by such counsel to be responsible, (2) state that
their opinion is limited to federal laws, the Delaware Act, the Delaware General
Corporation Law and New York law (exclusive of pipeline and pipeline-related
regulatory law), in each case exclusive of the law addressed in the legal
opinions rendered by counsel referred to in the following clauses (e), (f) and
(g), (3) state that they express no opinion with respect to state or local taxes
or tax statutes to which any of the Partnership, the limited partners of the
Partnership, the Operating Partnership or the General Partner may be subject and
(4) state that their opinion is furnished as counsel for the Companies to the
Underwriters and is solely for the benefit of the several Underwriters.
(e) The Underwriters shall have received at the Closing Time an opinion
of Sullivan & Cromwell, counsel for the Companies, dated the Closing Time and
addressed to the Underwriters to the effect that (i) none of the Companies or
the LPL Partnership is (A) a "subsidiary company" of a "registered holding
company," or of a "holding company" required to be registered under the 1935 Act
or (B) an "affiliate" of a "registered holding company," or of a "holding
company" required to be registered under the 1935 Act, or of a "subsidiary
company" of a "registered holding company," or of a "holding company" required
to be registered under the 1935 Act, as such terms are defined in the 1935 Act,
and (ii) no consent, authorization, approval or filing is required to be
obtained or made under the 1935 Act in connection with the issuance and sale of
the Securities by the Operating Partnership as contemplated by the Final
Prospectus.
(f) Each of (i) Sidley & Austin, with respect to the State of Illinois,
(ii) Barnes & Thornburg, with respect to the State of Indiana, (iii) Fraser
Trebilcock Davis & Foster, P.C., with respect to the State of Michigan, (iv)
Fryberger, Buchanan, Smith & Frederick, P.A., with respect to the State of
Minnesota, (v) Phillips, Lytle, Hitchcock, Blaine & Huber, with respect to the
State of New York, (vi) Pearce & Durick, with respect to the State of North
Dakota and (vii) Melli, Walker, Pease & Ruhly, S.C., with respect to the State
of Wisconsin, each of which is acting as special local counsel for the
Companies, shall have furnished to the Underwriters its written opinion or
opinions, dated as of the Closing Time in form and substance satisfactory to the
Underwriters to the effect that:
(i) The Operating Partnership has been duly qualified or registered
as a foreign limited partnership for the transaction of business under
the laws of such state. The General Partner is duly qualified to do
business and is in good standing under the laws of such state.
(ii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement and the Indenture,
compliance by the Companies with the provisions hereof or thereof nor
consummation by the Companies of the transactions contemplated hereby
or thereby will result in any
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violation of any existing law, regulation, ruling (assuming compliance
with all applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel after reasonable
inquiry, applicable to any of the Companies or any of their respective
properties.
(iii) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or instrumentality of
such state governing (A) oil pipelines generally or (B) the issuance of
securities by entities owning oil pipelines, or, to such counsel's
knowledge, based solely upon its participation as special counsel in
matters relating to the offering of the Securities pursuant to the
Final Prospectus and without in any manner having conducted an
independent investigation, any other governmental agency or
instrumentality of such state having jurisdiction over any of the
Companies, as the case may be, or any of their respective properties,
is required for the sale or issuance of the Securities by the Operating
Partnership, except such consents, approvals, authorizations, orders,
registrations or qualifications (1) as have been obtained, (2) as may
be required under state securities or Blue Sky laws, (3) which, if not
obtained, would not, individually or in the aggregate, have a material
adverse effect upon the ability of the Operating Partnership to conduct
its business substantially in accordance with its past practice or (4)
as set forth or contemplated in the Final Prospectus.
(g) The Underwriters shall have received at the Closing Time an opinion
of Steptoe & Johnson, special FERC counsel for the Companies, dated the Closing
Time and addressed to the Underwriters to the effect that:
(i) No consent, approval, authorization, order, registration or
qualification of or with the FERC is required for the issuance of the
Securities, the offer and sale of the Securities by the Operating
Partnership or the execution, delivery and performance of this
Agreement, the Indenture and the Securities.
(ii) To the knowledge of such counsel and without in any manner
having conducted an investigation, there are no material legal or
governmental proceedings pending or threatened against any of the
Companies by or before the FERC or on appeal from the FERC, except as
set forth in or contemplated by the Final Prospectus.
(h) The Underwriters shall have received at the Closing Time an opinion
of McCarthy Tetrault, Canadian counsel to Enbridge, dated the Closing Time and
addressed to the Underwriters to the effect that:
(i) No consent, approval, authorization, order, registration or
qualification of or with, any governmental agency or other governmental
instrumentality of Canada or any province thereof having jurisdiction
over any of the
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Companies or Enbridge is required for the issuance and sale of the
Securities as contemplated by the Final Prospectus.
(ii) To the best of such counsel's knowledge, there is no
litigation or governmental proceeding to which Enbridge is a party or
to which its properties are subject that is pending or threatened
against it that, if adversely determined, would have a Material Adverse
Effect.
(i) The Underwriters shall have received at the Closing Time an opinion
of Baker Botts L.L.P., counsel for the Underwriters, dated the Closing Time,
with respect to the matters referred to in clauses (i), (vi), (vii), (viii),
(ix), (x), (xi), (xii) and (xv) (but only with respect to the Registration
Statement and the Final Prospectus and any supplements or amendments thereto) of
the foregoing paragraph (d) and such other related matters as the Underwriters
may request.
(j) The Underwriters shall have received letters addressed to the
Underwriters and dated the date hereof and the Closing Time from
PricewaterhouseCoopers LLP, independent accountants, substantially in the forms
heretofore approved by the Underwriters.
(k) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of any of the Companies shall be threatened by
the Commission at or prior to the Closing Time; (ii) there shall not have been
any change in the capitalization of the Operating Partnership nor any material
increase in the short-term or long-term debt of the Operating Partnership (other
than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Final Prospectus (or any amendment or
supplement thereto); (iii) none of the Companies shall have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the General Partner or the Partnership and the
Operating Partnership (taken as a whole), other than those reflected in the
Registration Statement or the Final Prospectus (or any amendment or supplement
thereto); and (iv) all the representations and warranties of the Companies
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Time as if made on and
as of the Closing Time, and the Underwriters shall have received a certificate,
dated the Closing Time and signed by the chief executive officer and the chief
financial officer of the General Partner (or such other officers as are
acceptable to the Underwriters), to the effect set forth in this Section 8(k)
and in Section 8(l) hereof.
(l) None of the Companies shall have failed at or prior to the Closing
Time to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Time.
(m) At the Closing Time, the Securities shall be rated at least "A3" by
Moody's Investors Services Inc. and "A-" by Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc., and the Operating Partnership
shall have delivered to the Underwriters a letter dated the Closing Time, from
each such rating agency, or other evidence satisfactory to the
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<PAGE> 23
Underwriters, confirming that the Securities have such ratings; and since the
date of this Agreement, there shall not have occurred a downgrading in the
rating assigned to the Securities or any of the Operating Partnership's other
debt securities by any "nationally recognized statistical rating agency," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and no such organization shall have publicly announced that it has under
surveillance or review its rating of the Securities or any of the Operating
Partnership's other debt securities.
(n) Each of the Operating Partnership and the General Partner shall
have furnished or caused to be furnished to the Underwriters such further
certificates and documents as the Underwriters shall have reasonably requested
that are customary in closing transactions of the nature contemplated by this
Agreement.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
Any certificate or document signed by any officer of the General
Partner, whether on behalf of itself or the Partnership or the Operating
Partnership, and delivered to the Underwriters or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Companies to
each Underwriter as to the statements made therein.
9. Expenses. The Companies agree to pay the following costs and
expenses and all other costs and expenses incident to the performance by them of
their obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Preliminary Prospectus, the Final
Prospectus, each amendment or supplement to any of them and this Agreement; (ii)
the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, the Basic Prospectus, the Preliminary Prospectus, the
Final Prospectus, the Incorporated Documents, and all amendments or supplements
to any of them, as may be reasonably requested for use in connection with the
offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of the Securities; (iv) the printing (or
reproduction) and delivery of this Agreement, any Agreement among Underwriters,
the Indenture, the preliminary and supplemental Blue Sky Memoranda and all other
agreements or documents printed (or reproduced) and delivered in connection with
the offering of the Securities; (v) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee;
(vi) the registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); (vii) the filing fees and
the fees and expenses of counsel for the Underwriters in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc.; (viii) the transportation and lodging expenses incurred by or on behalf of
representatives of the Companies in connection with
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<PAGE> 24
presentations to prospective purchasers of the Securities; (ix) the fees and
expenses of the accountants for the Companies; (x) the fees and expenses of
counsel (including local and special counsel) for the Companies; (xi) any fees
payable in connection with the rating of the Securities; and (xii) any fees
payable to DTC in connection with the Securities being book-entry only
securities.
10. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective
before the offering of the Securities may commence, when notification of the
effectiveness of such post-effective amendment has been given by the Commission.
Until such time as this Agreement shall have become effective, it may be
terminated by the General Partner, on behalf of the Companies, by notifying the
Underwriters, or by the Underwriters, by notifying the General Partner, on
behalf of the Companies.
If one or more of the Underwriters shall fail at Closing Time to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Underwriters shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Underwriters shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the aggregate principal amount of the Securities to be purchased
hereunder, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Underwriters or the Operating Partnership shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Final Prospectus or in any other documents or arrangements. As used herein,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 10.
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<PAGE> 25
Any notice under this Section 10 may be made by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in the Underwriters' absolute discretion, without liability on the
part of any Underwriter to the Companies by notice to the General Partner, on
behalf of the Companies, if prior to the Closing Time: (i) there has been, since
the time of execution of this Agreement or since the respective dates as of
which information is given in the Final Prospectus, any material adverse change
in the financial position, results of operations, business or prospects of the
General Partner or the Partnership and the Operating Partnership (taken as a
whole), whether or not arising in the ordinary course of business; (ii) trading
in the Class A Common Units of the Partnership shall be suspended or subject to
any restriction or limitation not in effect on the date of this Agreement; (iii)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited; (iv) a general moratorium on commercial banking activities
in New York shall have been declared by either federal or state authorities; or
(v) there shall have occurred any material adverse change in the financial
markets in the United States or Canada, any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the
Underwriters' judgment, impracticable or inadvisable to commence or continue the
offering of the Securities on the terms set forth on the cover page of the Final
Prospectus or to enforce contracts for the resale of the Securities by the
Underwriters. Notice of such termination shall be promptly given to the General
Partner, on behalf of the Companies, by telegram, telecopy or telephone and
shall be subsequently confirmed by letter.
12. Information Furnished by the Underwriters. The statements set forth
in the last paragraph on the cover page and the statements in the fourth and
fifth paragraphs, and the third sentence of the seventh paragraph under the
caption "Underwriting" in the Preliminary Prospectus and in the Final
Prospectus, constitute the only information furnished by or on behalf of the
Underwriters as such information is referred to in Sections 6(a), 6(b) and 7
hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to any of the Companies, at the office of
the General Partner, Lake Superior Place, 21 West Superior Street, Suite 200,
Duluth, Minnesota 55802, Attention: S. Mark Curwin, Corporate Secretary; or
(ii) if to the Underwriters, care of Merrill Lynch, Canada Inc., Bow Valley
Square IV, Suite 1650, 250 - 6th Avenue S.W., Calgary, Alberta T2P 3H7,
Attention: Rory J. Tyler.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Companies, the directors and officers of the General
Partner, and the other controlling persons referred to in Section 7 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns" as
used in this Agreement shall include a purchaser from any Underwriter of any of
the Securities in its status as such purchaser.
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<PAGE> 26
14. Applicable Law; Counterparts. This Agreement shall 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.
This Agreement may be signed in various counterparts, which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
15. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement, or in
certificates of officers of the Companies submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or controlling person, or by or on
behalf of the Companies, and shall survive delivery of the Securities to the
Underwriters.
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<PAGE> 27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Operating Partnership a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriters and the Companies in accordance with
its terms.
Very truly yours,
LAKEHEAD PIPE LINE COMPANY,
LIMITED PARTNERSHIP
By: Lakehead Pipe Line Company, Inc.
General Partner
By: /s/ L.H. DE BRIYN
--------------------------------------
Name: L. H. De Briyn
------------------------------------
Title: Vice President
-----------------------------------
LAKEHEAD PIPE LINE PARTNERS, L.P.
By: Lakehead Pipe Line Company, Inc.
General Partner
By: /s/ L.H. DE BRIYN
--------------------------------------
Name: L. H. De Briyn
-------------------------------------
Title: Vice President
-----------------------------------
LAKEHEAD PIPE LINE COMPANY, INC.
By: /s/ L.H. DE BRIYN
--------------------------------------
Name: L. H. De Briyn
------------------------------------
Title: Vice President
-----------------------------------
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CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
ABN AMRO INCORPORATED
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Rory J. Tyler
--------------------------------------
Authorized Signatory
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SCHEDULE A
<TABLE>
<CAPTION>
Principal
Amount of
Name of Underwriter Securities
------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporate-------............................. $ 52,000,000
ABN AMRO Incorporated...................................... 16,000,000
Banc of America Securities LLC............................. 16,000,000
Chase Securities Inc....................................... 16,000,000
============
Total...................................................... $100,000,000
============
</TABLE>
Sch A-1
<PAGE> 30
SCHEDULE B
LAKEHEAD PIPE LINE COMPANY, LIMITED PARTNERSHIP
$100,000,000 7.9% Senior Notes due 2012
1. The initial public offering price of the Securities shall be 99.824%
of the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be 99.149% of the principal amount thereof.
3. The interest rate on the Securities shall be 7.9% per annum.
4. The Securities will be redeemable as a whole or in part, at the
option of the Operating Partnership at any time, at a redemption price equal to
the greater of (i) 100% of the principal amount of such Securities and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to the date of redemption)
discounted to the redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate (as defined in the
Final Prospectus plus 37.5 basis points, plus in each case accrued interest
thereon to the date of redemption.
Sch B-1
