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Exhibit 2.1
EXECUTION COPY
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CONTRIBUTION AGREEMENT
by and among
ONEOK, INC.
NORTHERN BORDER PARTNERS, L.P.
and
NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP
February 14, 2006
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TABLE OF CONTENTS
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SECTION 1.
CONTRIBUTION...................................................
1
1.1
Contribution to Northern Border................................
1
1.2 Issuance of the
Units.......................................... 2
1.3 The
Closing....................................................
2
1.4 GP
Contribution and Dropdown To NBILP..........................
3
1.5 Working
Capital Adjustment.....................................
3
SECTION 2.
REPRESENTATIONS AND WARRANTIES OF ONEOK........................
5
2.1
Organization and Authority of ONEOK............................
5
2.2
Organization, Authority and Qualification of the Entities......
6
2.3 Capital of
Companies; Beneficial Ownership..................... 6
2.4
Subsidiaries...................................................
7
2.5 Financial
Statements........................................... 7
2.6
Taxes..........................................................
8
2.7 Absence of
Certain Changes..................................... 9
2.8 Ordinary
Course................................................ 10
2.9
Intellectual Property..........................................
10
2.10
Contracts......................................................
11
2.11
Compliance.....................................................
12
2.12
Litigation.....................................................
12
2.13
Insurance......................................................
12
2.14
Related Transactions...........................................
13
2.15
Employee Benefit Matters.......................................
13
2.16
Environmental Matters..........................................
14
2.17
Securities Act.................................................
14
2.18
Regulatory Matters.............................................
15
2.19
Operating Assets...............................................
15
2.20
Brokers' Fees..................................................
16
2.21
Books and Records..............................................
16
2.22
Indebtedness...................................................
16
2.23
Disclaimer.....................................................
16
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF THE NBP PARTNERSHIPS.........
17
3.1
Organization and Authority of the NBP Partnerships.............
17
3.2
Capitalization.................................................
18
3.3
Litigation.....................................................
19
3.4
Compliance.....................................................
19
3.5 Employee
Matters............................................... 19
3.6
Environmental Matters..........................................
20
3.7 Absence of
Certain Changes..................................... 21
3.8 Securities
Act................................................. 21
3.9 SEC
Filings....................................................
21
3.10
Brokers' Fees..................................................
22
3.11
Opinion of Financial Adviser...................................
22
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3.12
Registration Rights............................................
22
3.13
Disclaimer.....................................................
22
SECTION 4. COVENANTS
OF ONEOK............................................. 23
4.1 Conduct of
the Entities........................................ 23
4.2 Cash
Management................................................
25
SECTION 5. COVENANTS
OF THE NBP PARTNERSHIPS.............................. 25
5.1 Books and
Records.............................................. 25
5.2 Approval
of Issuance of Common Units Upon Conversion Units..... 26
SECTION 6. COVENANTS
OF ONEOK AND THE NBP PARTNERSHIPS.................... 26
6.1 Access to
Information.......................................... 26
6.2
Commercially Reasonable Efforts................................
27
6.3 Regulatory
and Other Authorizations; Notices and Consents...... 27
6.4 Public
Announcements...........................................
28
6.5 Notices of
Certain Events...................................... 29
6.6 Entity
Guarantees..............................................
29
6.7
Intercompany Accounts..........................................
29
6.8 Shared
Contracts and Drop-Down Contracts.......................
29
6.9 ONEOK
Marks....................................................
30
6.10
Indebtedness for Borrowed Money................................
31
6.11
Conversion Transactions........................................
31
6.12
Interim Financial Statements...................................
31
6.13
Cooperation Regarding Audits...................................
31
6.14
Insurance Matters..............................................
32
SECTION 7. CONDITIONS
TO CLOSING.......................................... 32
7.1 Conditions
to the Obligations of ONEOK......................... 32
7.2 Conditions to
the Obligations of the NBP Partnerships.......... 34
SECTION 8. TERMINATION
OF AGREEMENT; RIGHTS TO PROCEED.................... 36
8.1
Termination....................................................
36
8.2 Effect of
Termination.......................................... 37
SECTION 9.
INDEMNIFICATION................................................
37
9.1 Survival
of Representations and Warranties, Etc................ 37
9.2
Indemnification................................................
37
9.3 Threshold;
Cap................................................. 38
9.4 Exclusive
Remedy; Sole Recourse................................ 40
9.5 No
Contribution................................................
40
9.6
Setoff.........................................................
40
9.7 Third
Party Claims.............................................
40
SECTION 10. TAX
MATTERS....................................................
41
10.1
Retention of Records...........................................
41
10.2
Cooperation....................................................
41
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10.3
Transfer Taxes.................................................
42
10.4
Tax
Returns....................................................
42
10.5
Allocation of Taxes............................................
43
10.6
Tax
Indemnity..................................................
45
10.7
Contests.......................................................
46
10.8
Amended Tax Returns............................................
47
10.9
Miscellaneous..................................................
47
10.10
Allocation
of Value among the Contributed Entities; Book Ups... 47
SECTION 11.
MISCELLANEOUS..................................................
48
11.1
Fees and
Expenses.................................................
48
11.2
Governing
Law.....................................................
48
11.3
Notices...........................................................
48
11.4
Entire
Agreement..................................................
50
11.5
Assignability; Binding
Effect..................................... 50
11.6
Captions and
Gender............................................... 50
11.7
Execution in
Counterparts......................................... 50
11.8
Amendments........................................................
50
11.9
Publicity and
Disclosures......................................... 50
11.10
Severability......................................................
51
11.11 Waiver of
Jury Trial..............................................
51
11.12
Arbitration.......................................................
51
11.13 Time of
the Essence...............................................
51
11.14 Remedies
Cumulative; Specific Performance.........................
51
11.15 Further
Assurances................................................
52
11.16 Third
Party Beneficiaries.........................................
52
11.17 Audit
Committee Authority.........................................
52
11.18 Certain
Definitions...............................................
52
11.19 Other
Defined Terms...............................................
60
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Exhibit A - Companies/Company Subsidiaries
Exhibit B - Form of Amendment
Exhibit C - ONEOK Guaranty Agreement
Exhibit D - Target Working Capital
Exhibit E - Services Agreement
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CONTRIBUTION AGREEMENT
This
CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
February 14, 2006 by and among ONEOK, Inc., an Oklahoma corporation
("ONEOK"),
Northern Border Partners, L.P., a Delaware limited partnership
("Northern
Border"), and Northern Border Intermediate Limited Partnership
("NBILP", and
together with Northern Border, the "NBP Partnerships ") (each a
"Party" and
together, the "Parties"). Capitalized terms used but not defined
shall have the
meaning given in Section 11.18.
WITNESSETH
WHEREAS, ONEOK owns all of the issued and outstanding Equity
Interests (the
"Shares") of each of the Persons listed on Exhibit A hereto under
the heading
"Companies" (the "Companies", and each, individually, a
"Company");
WHEREAS, the Companies and their Subsidiaries, all of which are
listed on
Exhibit A under the heading "Company Subsidiaries", own and operate
natural gas
gathering, processing, fractionating, transportation, storage,
pipelines and
natural gas liquids assets located in Kansas, Oklahoma and Texas
(the
"Business"); and
WHEREAS, ONEOK wishes to contribute the Shares to the NBP
Partnerships and
the NBP Partnerships wish to accept the contribution of the Shares,
upon the
terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and mutual agreements
and
covenants herein contained, and intending to be legally bound
hereby, the
Parties hereto hereby agree as follows:
SECTION 1. CONTRIBUTION
1.1 CONTRIBUTION TO NORTHERN BORDER. Immediately before Closing,
ONEOK
shall deliver or cause to be delivered to Northern Plains Natural
Gas Company,
LLC ("Northern Plains") and Pan Border Gas Company, LLC ("Pan
Border", and
collectively, the "Contributing NBP General Partners"), good and
sufficient
instruments of transfer transferring the NBP GP Shares and the
NBILP GP Shares
to the Contributing NBP General Partners. At the Closing, ONEOK and
the
Contributing NBP General Partners shall deliver or cause to be
delivered to
Northern Border good and sufficient instruments of transfer
transferring the NBP
Shares and the NBP GP Shares, respectively, to Northern Border.
Such instruments
of transfer shall effectively vest in Northern Border good and
marketable title
to the NBP Shares and the NBP GP Shares free and clear of all Liens
other than
transfer restrictions imposed by applicable securities laws. The
contribution of
the NBP GP Shares by the Contributing NBP General Partners will be
made in order
to comply with the NBP General Partners' obligations to maintain
general partner
capital accounts in accordance with Section 4.2 of the Northern
Border
Partnership Agreement and NBP acknowledges that the contribution of
the NBP GP
Shares by the Contributing NBP general Partners is sufficient to
maintain the
aggregate general partner capital accounts in NBP required by
Section 4.2 of the
Northern Border Partnership Agreement.
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1.2 ISSUANCE OF THE UNITS. As consideration for the NBP Shares,
Northern Border will, at Closing, issue to ONEOK 36,494,126 units
representing
limited partnership interests in Northern Border with the rights
and preferences
contained in the form of amendment (the "Amendment") to the Amended
and Restated
Agreement of Limited Partnership of Northern Border, dated as of
October 1, 1993
(the "Northern Border Partnership Agreement"), attached hereto as
Exhibit B (the
"Units"), which Units shall be convertible, as set forth in the
Amendment, into
common units representing limited partnership interests in Northern
Border
("Common Units;" and the Common Units into which the Units are
convertible, the
"Conversion Units").
1.3 THE CLOSING.
(a) Subject to the provisions of Section 8, the closing of the
transactions contemplated by this Agreement (the "Closing") shall
take place at
the offices of Gable & Gotwals, 100 W. 5th Street, Tulsa, OK
74103, commencing
at 10:00 a.m. local time on the first business day of the calendar
month
immediately following the satisfaction or waiver of all conditions
to the
obligations of the Parties to consummate the transactions
contemplated hereby
(other than conditions with respect to actions the Parties shall
take at the
Closing itself, including without limitation, conditions in Section
7.1(h) and
7.2(h) herein) or such other date as Northern Border and ONEOK may
mutually
determine (the "Closing Date").
(b) At the Closing, ONEOK will deliver the following documents
and deliverables to Northern Border:
(i) Good and sufficient instruments of transfer transferring
all of the Shares to Northern Border free and clear of all Liens
other than
transfer restrictions imposed by applicable securities laws;
(ii) An executed copy of a Services Agreement substantially
in the form attached hereto as Exhibit E (the "Services
Agreement");
(iii) A certificate certifying that the transactions
contemplated hereby are exempt from withholding under Code Section
1445 executed
in accordance with the requirements of the Treasury regulations
promulgated
thereunder;
(iv) Resignations of the officers, directors and managers
identified prior to Closing by Northern Border;
(v) An executed copy of a Guaranty substantially in the form
attached hereto as Exhibit C (the "ONEOK Guaranty Agreement");
(vi) An executed copy of a Payment, Performance, Indemnity
and Support Agreement substantially in the form attached hereto as
Schedule
1.3(b)(vi);
(vii) A written opinion from legal counsel to ONEOK
addressed to Northern Border substantially in the form attached
hereto as
Schedule 1.3(b)(vii); and
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(viii) Such other certificates, instruments of conveyance,
and documents as may be reasonably requested by Northern Border
prior to the
Closing Date to carry out the intent and purposes of this
Agreement.
(c) At the Closing, Northern Border will deliver the following
documents and deliverables to ONEOK:
(i) Certificates (or appropriate evidence of a book entry
transfer to the account designated by ONEOK) representing the
Units;
(ii) An executed copy of the Services Agreement;
(iii) An Agreement and Guaranty with respect to each of the
equipment leases relating to ONEOK Bushton Processing, Inc., in a
form
reasonably acceptable to ONEOK and Northern Border, and such other
agreements,
certificates and assurances necessary in connection with the
transfer of ONEOK
Bushton Processing, Inc. to Northern Border;
(iv) An executed copy of a Payment, Performance, Indemnity
and Support Agreement substantially in the form attached hereto as
Schedule
1.3(b)(vi);
(v) A written opinion from legal counsel to Northern Border
addressed to ONEOK substantially in the form attached hereto as
Schedule
1.3(c)(v); and
(vi) Such other certificates, instruments, and documents as
may be reasonably requested by ONEOK prior to the Closing Date to
carry out the
intent and purposes of this Agreement.
1.4 GP CONTRIBUTION AND DROPDOWN TO NBILP. At the Closing and
immediately following the contribution set forth in Section 1.1,
(i) Northern
Border shall deliver to NBILP good and sufficient instruments of
transfer
transferring the NBP Shares and the NBP GP Shares to NBILP, and
(ii) ONEOK shall
cause the Contributing NBP General Partners to deliver to NBILP
good and
sufficient instruments of transfer transferring the NBILP GP Shares
to NBILP.
Such instruments of transfer shall effectively vest in NBILP good
and marketable
title to the Shares free and clear of all Liens other than transfer
restrictions
imposed by applicable securities laws. The contribution of the
NBILP GP Shares
by the Contributing NBP General Partners will be made in order to
comply with
the NBP General Partners' obligations to maintain general partner
capital
accounts in accordance with Section 4.2 of the Amended and Restated
Agreement of
Limited Partnership of NBILP, dated as of October 1, 1993 (the
"NBILP
Partnership Agreement") and NBILP acknowledges that the
contribution of the
NBILP GP Shares by the Contributing NBP General Partners is
sufficient to
maintain the aggregate general partner capital accounts in NBILP
required by
Section 4.2 of the NBILP Partnership Agreement.
1.5 WORKING CAPITAL ADJUSTMENT.
(a) As soon as practicable, but in no event later than 60 days
following the Closing, ONEOK shall prepare and deliver to Northern
Border a
calculation (the "Closing Working Capital Statement") of the Net
Working Capital
of the Entities, on a consolidated basis,
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as of the close of business on the last day of the month
immediately preceding
the Closing Date (the "Closing Working Capital"). The Closing
Working Capital
Statement shall be prepared in accordance with the principles set
forth in the
definition of Net Working Capital.
(b) ONEOK shall deliver a copy of the Closing Working Capital
Statement to Northern Border promptly after it has been prepared.
After receipt
of the Closing Working Capital Statement, Northern Border shall
have 30 days to
review the Closing Working Capital Statement, together with the
work papers used
in the preparation thereof. ONEOK shall (i) provide Northern Border
and its
Representatives reasonable access during normal business hours to
all relevant
personnel, work papers, trial balances and other financial
information to the
extent necessary or useful to complete their review of the Closing
Working
Capital Statement, and (ii) cooperate with Northern Border's and
its
Representatives' reasonable requests with respect to the review of
the Closing
Working Capital Statement, including by providing on a timely basis
all
information necessary or useful in reviewing the Closing Working
Capital
Statement. Unless Northern Border delivers written notice to ONEOK
on or prior
to the 30th day after Northern Border's receipt of the Closing
Working Capital
Statement specifying in reasonable detail the amount, nature and
basis of all
disputed items, Northern Border shall be deemed to have accepted
and agreed to
the calculation of the Closing Working Capital. If Northern Border
(or one of
its Representatives) notifies ONEOK of an objection to the
calculation of the
Closing Working Capital, ONEOK and Northern Border shall, within 20
days (or
such longer period as the Parties may agree in writing) following
such notice
(the "Resolution Period"), attempt to resolve their differences and
any
resolution by them as to any disputed amounts shall be final,
binding and
conclusive (other than as a result of manifest error or fraud).
(c) If, at the conclusion of the Resolution Period, there are
any
amounts remaining in dispute, then such amounts remaining in
dispute shall be
submitted to a nationally recognized public accounting firm agreed
by Northern
Border and ONEOK (the "Neutral Auditors"). Northern Border and
ONEOK shall
execute, if requested by the Neutral Auditors, a reasonable
engagement letter,
including customary indemnities. The Neutral Auditors shall act as
an arbitrator
to determine, based solely on the provisions of this Section 1.5(c)
and the
presentations by ONEOK and Northern Border, and not by independent
review, only
those issues still in dispute. The Neutral Auditors' determination
shall be made
within 30 days of the dispute being submitted for their
determination, shall be
set forth in a written statement delivered to ONEOK and Northern
Border and
shall be final, non-appealable and binding on the Parties hereto,
absent
manifest error or fraud. A judgment of a court of competent
jurisdiction may be
entered upon the Neutral Auditors' determination. The Neutral
Auditors shall
have exclusive jurisdiction over, and resort to the Neutral
Auditors as provided
in this Section 1.5(c) shall be the only recourse and remedy of the
Parties
against one another with respect to, any disputes arising out of or
relating to
the adjustments pursuant to this Section 1.5(c). The fees, costs
and expenses of
the Neutral Auditors shall be borne by Northern Border, on the one
hand, and by
ONEOK, on the other, based upon the percentage which the portion of
the
contested amount not awarded to each Party bears to the amount
actually
contested by such Party. For example, if Northern Border claims
that the Closing
Working Capital is $1,000 less than the amount determined by ONEOK,
and ONEOK
contests only $500 of the amount claimed by Northern Border, and if
the Neutral
Auditors ultimately resolve the dispute by awarding Northern Border
$300 of the
$500 contested, then the costs and expenses of the Neutral Auditors
will be
allocated 60% (i.e., 300 / 500) to ONEOK and 40% (i.e., 200 / 500)
to Northern
Border. The term "Final Closing
4
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Working Capital" shall mean the definitive Closing Working Capital
agreed to (or
deemed to be agreed to) by Northern Border and ONEOK in accordance
with Section
1.5(b) hereof or resulting from the determinations made by the
Neutral Auditors
in accordance with this Section 1.5(c) (in addition to those items
theretofore
agreed to by ONEOK and Northern Border).
(d) In the event the Final Closing Working Capital
(i) exceeds the Target Working Capital, Northern Border
shall pay the excess in cash to ONEOK; or
(ii) is less than the Target Working Capital, ONEOK shall
pay the difference in cash to Northern Border (the payments
contemplated by this
Section 1.5(d) are referred to as the "Net Working Capital
Adjustment").
All
payments made pursuant to this Section 1.5 shall be made by
wire
transfer of immediately available funds within five (5) days of
the
determination of the Final Closing Working Capital to an account
designated in
writing by the applicable Party.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF ONEOK
Except as set forth in the disclosure schedules delivered by ONEOK
(the
"ONEOK Disclosure Schedules") to Northern Border on the date hereof
(it being
agreed that any matter disclosed in a particular Schedule of the
Disclosure
Schedules delivered by ONEOK shall be deemed to have been disclosed
with respect
to any other Sections of this Agreement to the extent that the
relevance of such
matter to such other Section is readily apparent from the
information
disclosed), ONEOK represents and warrants to Northern Border that
the statements
contained in this Section 2 are true, correct and complete as of
the date of
this Agreement and will be true, correct and complete as of the
Closing, except
in each case to the extent that such statements are expressly made
only as of a
specified date, in which case ONEOK represents and warrants that
such statements
are true, correct and complete as of such specified date.
2.1 ORGANIZATION AND AUTHORITY OF ONEOK.
(a) ONEOK is a corporation duly incorporated, validly existing
and in good standing under the laws of Oklahoma.
(b) ONEOK has all requisite right, authority and power to enter
into this Agreement and each Related Agreement to be executed and
delivered by
ONEOK and to carry out the transactions contemplated hereby and
thereby.
(c) The execution, delivery and performance by ONEOK of this
Agreement and each Related Agreement have been duly authorized by
all necessary
action of ONEOK and no other action on the part of ONEOK is
required in
connection therewith.
(d) This Agreement and each Related Agreement to be executed
and
delivered by ONEOK constitutes, or when executed and delivered will
constitute,
valid and binding obligations of ONEOK enforceable in accordance
with their
respective terms, except as such
5
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enforceability may be limited by bankruptcy, insolvency or other
similar laws
from time to time in effect which affect the enforcement of
creditors' rights
generally.
(e) The execution, delivery and performance by ONEOK of this
Agreement and each Related Agreement to be executed and delivered
by ONEOK, with
or without the giving of notice or the passage of time, or
both:
(i) do not and will not conflict with or violate any
provision of the organizational documents of ONEOK or any
Entity;
(ii) do not and will not conflict with or violate any Legal
Requirements applicable to ONEOK or any of the Entities, or, except
as set forth
in Schedule 2.1(e)(ii) and any filings required to be made under
the HSR Act,
require ONEOK or any Entity to obtain any approval, consent or
waiver of, or
make any filing with, any Governmental Authority that has not been
obtained or
made;
(iii) do not and will not require the consent, approval or
waiver of any Person (other than any Governmental Authority),
except as set
forth in Schedule 2.1(e)(iii), or except for any such consents,
approvals or
waivers as have been obtained or the failure of which to be
obtained would not,
individually or in the aggregate, have a Material Adverse Effect;
and
(iv) does not and will not breach any Material Contract or
result in or permit the termination of any such Material
Contract.
2.2 ORGANIZATION, AUTHORITY AND QUALIFICATION OF THE ENTITIES.
Each
Company and each Subsidiary thereof (each, a "Company Subsidiary"
and, together
with the Companies, each an "Entity" and, collectively, the
"Entities") is duly
organized, validly existing and in good standing under the laws of
the
jurisdiction of its organization, as set forth on Exhibit A, and
has all
necessary power and authority to own, operate or lease the
properties and assets
now owned, operated or leased by it and to carry on its business as
it is
currently conducted. Each Entity is duly licensed or qualified to
do business
and is in good standing (to the extent applicable) in each
jurisdiction in which
the properties owned or leased by it or the operation of its
business makes such
licensing or qualification necessary, except where the failure to
be so
qualified or licensed would not, individually or in the aggregate,
have a
Material Adverse Effect. All material actions taken by the Entities
have been
duly authorized, and no Entity has taken any action that in any
material respect
conflicts with, constitutes a material default under or results in
a material
violation of the organizational documents of such Entities. True
and correct
copies of the organizational documents of each Entity, each as in
effect on the
date hereof, have previously been made available to Northern
Border.
2.3 CAPITAL OF COMPANIES; BENEFICIAL OWNERSHIP.
(a) All of the issued and outstanding shares of capital stock
of
each of the Companies that is a corporation are validly issued,
fully paid and
nonassessable and are owned beneficially and of record, directly or
indirectly,
by ONEOK, and all of the limited liability company interests in
each of the
Companies that is a limited liability company are validly issued,
fully paid and
nonassessable and are owned beneficially and of record, directly or
indirectly,
by ONEOK, in each case free and clear of all Liens.
6
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(b) There are no outstanding options, warrants, rights,
commitments, preemptive rights or agreements of any kind for the
issuance or
sale of, or outstanding securities convertible into, any additional
shares of
capital stock of any class or limited liability company interests,
as the case
may be, of any Company which would entitle the holders thereof to
an interest in
or rights in respect of that Company, and there are no agreements
of any kind
that may obligate ONEOK or any of its Affiliates (including the
Companies) to
sell, issue, purchase, redeem or otherwise transfer any Shares to
any Person.
There are no voting agreements, proxies or other similar agreements
or
understandings with respect to the Shares.
2.4
SUBSIDIARIES.
(a) Exhibit A lists, for each Company Subsidiary, its name,
type
of entity, jurisdiction of its incorporation, formation or
organization and the
percentage Equity Interest owned by a Company. Except as set forth
in Schedule
2.4(a), the Companies own, directly or indirectly, all of the
issued and
outstanding Equity Interests of each Company Subsidiary, free and
clear of all
Liens other than transfer restrictions imposed by applicable
securities laws,
and the owner beneficially and of record of each Company Subsidiary
is either a
Company or a Company Subsidiary, as applicable, and all Equity
Interests of each
Company Subsidiary are validly issued, fully paid and
nonassessable. There are
no options, warrants, convertible securities or other rights,
agreements,
arrangements or commitments of any character relating to the Equity
Interests of
the Company Subsidiaries or that may obligate the Company
Subsidiaries to issue
or sell any Equity Interests of any Company Subsidiary, and there
are no
agreements of any kind that may obligate any Company to sell,
issue, purchase,
redeem or otherwise transfer any Equity Interests in any Company
Subsidiary to
any Person. There are no voting agreements, proxies or other
similar agreements
or understandings with respect to the Equity Interests of the
Company
Subsidiaries.
(b) Other than the Company Subsidiaries, no Entity owns any
Equity Interest in any Person except as set forth in Schedule
2.4(b). The
Entities own, directly or indirectly, 50% of the outstanding Equity
Interests in
Fox Plant, L.L.C. and 10.1765% of the Equity Interests in Venice
Energy Services
Company, L.L.C., in each case free and clear of all Liens, other
than transfer
restrictions imposed by applicable securities laws.
2.5 FINANCIAL STATEMENTS.
(a) ONEOK has delivered to Northern Border true, correct and
complete copies of a consolidated unaudited balance sheet of the
Entities (the
"Balance Sheet") as of December 31, 2005 (the "Balance Sheet Date")
and an
unaudited statement of income of the Acquired Entities for the 12
months then
ended (together, the "Financial Statements") copies of which are
attached hereto
as Schedule 2.5(a). The long-term Indebtedness listed in the
Financial
Statements under the caption "Long-term Debt, excluding current
maturities" is
all owed to ONEOK or its Affiliates.
(b) Except (i) to the extent set forth in or reserved against
in
the Balance Sheet or as identified in Schedule 2.5(b) hereto, (ii)
for current
liabilities (determined in accordance with GAAP) incurred in the
ordinary course
of business consistent with past practices since the Balance Sheet
Date, and
(iii) for immaterial Liabilities, none of the Entities has any
Liabilities of
7
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the type that would be required to be disclosed on a balance sheet
of that
Entity (or the notes thereto) prepared in accordance with GAAP.
(c) The Financial Statements have been prepared in accordance
with GAAP (except as disclosed herein) during the periods covered
thereby, are
complete and correct in all material respects, and present fairly
in all
material respects the financial condition of the applicable
Entities at the
dates of said statements and the results of their operations for
the periods
covered thereby, except for normal year or period end adjustments
and the
absence of footnotes.
2.6 TAXES.
(a) The Entities have (giving effect to extensions) (x) duly
and
timely filed (or there has been filed on their behalf) with the
appropriate
Governmental Authority all income and other material Tax Returns
required to be
filed by them, and all such Tax Returns are true, correct and
complete in all
material respects and (y) timely paid or accrued on the their
books, or there
has been paid on their behalf, all material Taxes due and
payable.
(b) The Entities have complied in all material respects with
all
applicable Tax Laws relating to the payment and withholding of
Taxes.
(c) There are no Liens that arose in connection with Taxes upon
the assets or properties of the Entities except for Liens described
in clause
(a) of the definition of "Permitted Liens".
(d) The Entities have not requested (nor has any request been
made by any Person on behalf of any of the Entities) in writing any
extension of
time within which to file any Tax Return in respect of any taxable
year which
has not since been filed, and no outstanding written waivers or
comparable
written consents regarding the application of the statute of
limitations with
respect to any Taxes or Tax Returns has been given by or on behalf
of the
Entities.
(e) To the Knowledge of ONEOK, no U.S. federal, state, local or
foreign audits, reviews or other administrative proceedings or
court proceedings
("Audits") are ongoing or have been initiated with regard to any
Taxes or Tax
Returns of the Entities, and the Entities have not received any
written notice
of any such Audits.
(f) None of the Entities has agreed or is required to make any
adjustment by reason of a change in accounting method that would
affect any
taxable year ending after the Closing Date, and no Tax Authority
has proposed
any such adjustment or change in accounting method that would
affect any taxable
year ending after the Closing Date. None of the Entities have an
application
pending with any Tax Authority requesting permission for any change
in
accounting method that relates to their business or operations and
that would
affect any taxable year ending after the Closing Date.
(g) Each of the Entities is classified as a partnership or a
disregarded entity for U.S. federal income tax purposes, except for
those
Entities listed in Schedule 2.6.
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(h) No written claim has been made, and to the Knowledge of
ONEOK
there has been no oral or threatened claim, by any Tax Authority in
a
jurisdiction where an Entity does not file a Tax Return that it is
or may be
subject to Tax in that jurisdiction.
(i) None of the Entities is a party to any Tax allocation or
sharing agreement or has any liability for the Taxes of another
Person under
Treasury Regulations Section 1.1502-6 or similar law, as a
transferee,
successor, by contract or otherwise.
(j) ONEOK is a United States person within the meaning of the
Code.
(k) The unpaid Taxes of the Companies (A) did not, as of the
Balance Sheet Date, exceed the reserves established on the
Financial Statements,
and (B) do not exceed the reserve as adjusted for the passage of
time through
the Closing Date in accordance with past custom and practice of the
Entities in
filing their Tax Returns.
(l) None of the assets or properties of the Entities (A)
secures
any debt the interest on which is tax-exempt under Code Section
103(a), (B) is
"tax-exempt use property" within the meaning of Code Section
168(h), (C) is "tax
exempt bond financed property" within the meaning of Code Section
168(g)(5), (D)
is "limited use property" within the meaning of Revenue Procedure
76-30 or (E)
will be treated as owned by another Person pursuant to the
provisions of Code
Section 168(f)(8).
(m)
The transactions contemplated herein are not subject to tax
withholding pursuant to the provisions of Section 3406 or
Subchapter A of
Chapter 3 of the Code or any other Legal Requirement.
2.7 ABSENCE OF CERTAIN CHANGES. As of the date hereof, except
as
identified on Schedule 2.7, since the Balance Sheet Date there has
not been:
(a) any change in the financial condition, properties, assets,
Liabilities, business or operations of the Entities that has had or
would
reasonably be expected to have, individually or in the aggregate, a
Material
Adverse Effect;
(b) any contingent Liability incurred by any of the Entities as
guarantor or otherwise with respect to the obligations of others
(other than any
other Entity) in excess of $500,000, or any cancellation of any
material debt or
claim owing to any Entity, or waiver of any right that has had or
would
reasonably be expected to have, individually or in the aggregate, a
Material
Adverse Effect;
(c) other than Permitted Liens, any Lien placed on any of the
material properties of the Entities, that remain in existence on
the date hereof
and that will remain in existence on the Closing Date;
(d) any material obligation or Liability of any nature incurred
by any of the Entities, whether accrued, absolute, contingent or
otherwise,
asserted or unasserted, known or unknown, other than obligations
and Liabilities
incurred in the ordinary course of business consistent with past
practice and in
accordance with the terms of this Agreement;
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(e) any purchase, sale or other disposition, or any agreement
or
other arrangement for the purchase, sale or other disposition, of
any of the
material properties or assets of any Entity other than in the
ordinary course of
business consistent with past practice and in accordance with the
terms of this
Agreement;
(f) any material change in accounting principles, methods or
practices used by any Entity;
(g) any loss, damage, destruction or other casualty to any
Entity's property, plants, equipment or inventories (whether or not
covered by
insurance) that has had or would reasonably be expected to have,
individually or
in the aggregate, a Material Adverse Effect;
(h) any material change in the compensation levels of any
Entity's senior executives, any material changes in the manner in
which other
employees are generally compensated or any provision of additional
or
supplemental benefits for its employees generally, except, in each
case, normal
periodic increases or promotions effected in the ordinary course of
business
consistent with past practice;
(i) any material commitment, guarantee, contractual obligation,
capital expenditure or transaction entered into by any Entity,
other than in the
ordinary course of business consistent with past practice, or any
borrowing or
other incurrence, assumption or guarantee of Indebtedness by any
Entity other
than short term Indebtedness owed to ONEOK or its Affiliates;
or
(j) any agreement or understanding whether in writing or
otherwise, for any Entity to take any of the actions specified in
paragraphs (a)
through (i) above.
For
purposes of this Section 2.7, materiality, as to any matter, shall
be
determined with respect to all the Entities, taken as a whole.
2.8 ORDINARY COURSE. Since the Balance Sheet Date, the Entities
have
conducted their respective businesses in the ordinary course of
business
consistent with past practices.
2.9 INTELLECTUAL PROPERTY. Each Entity owns or has the right to
use
all Intellectual Property Assets necessary for or used in the
conduct of its
business as currently conducted ("Entity Intellectual Property
Assets"), and all
such Entity Intellectual Property Assets owned by any Entity are
free and clear
of all Liens (other than Permitted Liens). Neither the execution or
delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby
will, with or without notice or lapse of time, result in, or give
any other
Person the right or option to cause or declare, a breach or
termination of, or
cancellation or reduction in rights of any Entity under any
Contract providing
for the license of any Entity Intellectual Property Assets to such
Entity,
except for any such terminations, cancellations or reductions that,
individually
or in the aggregate, would not have a Material Adverse Effect. No
Entity is
infringing or otherwise violating in any material respect the
Intellectual
Property Assets of any other Person.
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2.10 CONTRACTS.
(a) As of the date hereof, Schedule 2.10(a) contains a true and
complete listing of the following Contracts to which any Entity is
a party
(collectively, the "Material Contracts"):
(i) except for any intercompany Indebtedness that will be
cancelled prior to Closing, each Contract for Indebtedness or the
borrowing of
money, or securing Indebtedness or the borrowing of money, by any
Entity
involving an obligation in excess of $500,000;
(ii) each natural gas transportation, storage, gathering or
processing Contract that individually involves revenues of the
Entities in
excess of $500,000 for the year to date period ended on the Balance
Sheet Date;
(iii) each executory Contract for the purchase of any fixed
asset or service for a price in excess of $500,000, whether or not
such purchase
is in the ordinary course of business;
(iv) each Contract involving a remaining commitment by the
Entities to pay capital expenditures in excess of $500,000;
(v) each Contract for lease of personal property or real
property involving aggregate payments in excess of $500,000 in any
calendar
year;
(vi) each employment Contract and each Contract providing
retention, severance or project bonus payments, in each case that
have not been
paid in full as of the date of this Agreement;
(vii) each Contract with any union, trade organization or
bargaining unit representative;
(viii) each material acquisition, divestiture or merger
agreement;
(ix) each joint venture or partnership agreement;
(x) except for Contracts otherwise described in this Section
2.10, each Contract between ONEOK or any of its Affiliates (other
than the
Entities) or any officer, director or manager of any Entity, on the
one hand,
and any Entity on the other hand, involving payments by or to
Entities in excess
of $500,000 in any calendar year;
(xi) each Contract that provides for a limit on the ability
of an Entity or its Affiliates to compete in any line of business
or with any
Person or in any geographic area during any period of time after
the Closing;
(xii) each Shared Contract involving payments by or to
Entities in excess of $500,000 in any calendar year;
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(xiii) each Drop-Down Contract involving payments by or to
Entities in excess of $500,000 in any calendar year; and
(xiv) each Contract not otherwise listed above involving
aggregate payments (contingent or otherwise), by or to the Entities
in excess of
$500,000 in any future calendar year that cannot be terminated by
the Entities
upon 60 days or less notice without penalty.
(b) True and complete copies of all Material Contracts have
been
made available to Northern Border.
(c) Except as would not, individually or in the aggregate, have
a
Material Adverse Effect, (i) each Material Contract is in full
force and effect
and represents the legal, valid and binding obligation of the
Entity that is a
party thereto and, to the Knowledge of ONEOK, represents the legal,
valid and
binding obligation of the other parties thereto, and (ii) the
Entities are not
and, to the Knowledge of ONEOK, no other party is in material
breach of any
Material Contract, and neither ONEOK nor any Entity has received
any written or,
to the Knowledge of ONEOK, oral notice of termination or breach of
any Material
Contract. For purposes of this Section 2.10(c) only, "Material
Contracts" shall
also include all Contracts of the types described in Section
2.10(a) above
entered into by any Entity between the date hereof through and
including the
Closing Date.
2.11 COMPLIANCE. Each Entity is, and at all times since January
1,
2001 has been, in material compliance with all applicable Legal
Requirements,
except for such instances of non-compliance that, individually or
in the
aggregate would not have a Material Adverse Effect. Since January
1, 2001, none
of ONEOK or any Entity has received any written notice from any
Governmental
Authority regarding any actual or possible material violation of or
material
failure by any Entity to comply with any Legal Requirement that has
resulted, or
would reasonably be expected to result, in any material fine,
penalty or
Liability. Each Entity holds all Permits necessary for it to own
and operate its
assets and for the conduct of the Business as now being conducted,
other than
any Permits, the failure of which to hold would not, individually
or in the
aggregate, have a Material Adverse Effect and there is no
suspension or
cancellation of any such Permits pending or, to the Knowledge of
ONEOK,
threatened.
2.12 LITIGATION. Except as disclosed in Schedule 2.12, there are
no
Legal Proceedings pending or, to the Knowledge of ONEOK, threatened
(a) that (i)
seeks more than $1,000,000 in damages for which any Entity could be
liable, (ii)
seeks injunctive relief against any Entity, its assets or its
activities or
(iii) is, or seeks to be certified as, a class or similar
representative action
and involves any Entity or the material assets of any Entity, or
(b) that
challenges or otherwise seeks to prevent, enjoin, alter or delay
the
consummation of the transactions contemplated hereby. No Entity
(nor any of the
material assets of any Entity) is subject to any outstanding
Governmental Order.
2.13 INSURANCE. Schedule 2.13 identifies all insurance policies
maintained by, at the expense of or for the benefit of any Entity
and identifies
any material unresolved claims made thereunder. ONEOK has
previously made
available to Northern Border accurate and complete copies of the
insurance
policies identified on Schedule 2.13. Each of such insurance
12
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policies is in full force and effect, and the Entities have paid
all premiums
due thereunder. Since January 1, 2005, no Entity has received any
written notice
or other communication regarding any actual or possible (a)
cancellation or
invalidation of any insurance policy, (b) refusal of any coverage
or rejection
of any material claim under any insurance policy, or (c) material
adjustment in
the amount of the premiums payable with respect to any insurance
policy.
2.14 RELATED TRANSACTIONS. Except as set forth on Schedule 2.14,
and
other than through ownership of the Shares, no Related Party (a)
has any direct
or indirect ownership interest in any material asset used in or
otherwise
relating to the Business; (b) is indebted to any Entity in an
amount exceeding
$500,000; (c) has any direct or indirect financial interest in any
Material
Contract; and (d) has any claim against any Entity in excess of
$500,000 (other
than rights to receive compensation for services performed as an
employee of the
Entity or its Subsidiaries). Each of the following shall be deemed
to be a
"Related Party": (i) ONEOK and its Affiliates (other than the
Entities); (ii)
each individual who is an officer or director of ONEOK, its
Affiliates or any
Entity; (iii) each member of the immediate family of each of the
individuals
referred to in clause "(ii)" above; and (iv) any trust or other
entity (other
than ONEOK or any Entity, Northern Border and any Subsidiary of
Northern Border)
in which any one of the individuals referred to in clauses "(ii)"
and "(iii)"
above holds (or in which more than one of such individuals
collectively hold),
beneficially or otherwise, a controlling voting, proprietary or
equity interest.
2.15 EMPLOYEE BENEFIT MATTERS. Except as set forth on Schedule
2.15:
(a) All of the employees engaged in running and operating the
Business are employees of ONEOK or its Affiliates (other than the
Entities).
None of the Entities have any employees or any Liabilities under
any current or
former Employee Benefit Plan.
(b) No Entity has any Liabilities in respect of Employee
Benefit
Plans or employment matters relating to current or former employees
of such
Entity or any current or former ERISA Affiliate of such Entity.
(c) Neither ONEOK or any of its Affiliates (including the
Entities) is a party to, or bound by, any collective bargaining
agreement,
Contract or other understanding with a labor union with respect to
any employees
who perform services in connection with the businesses of the
Entities, and, to
the Knowledge of ONEOK, there are not any union organizing efforts
underway with
respect to any such employees. There are no unfair labor practice
or labor
arbitration proceedings pending or, to the Knowledge of ONEOK,
threatened
against any Entity.
(d) Each Entity is in compliance, in all material respects,
with
all applicable Legal Requirements respecting employment, employment
practices,
labor, terms and conditions of employment and wages and hours, and
no Entity has
or would reasonably be expected to have any Liability arising out
of any failure
of ONEOK or its Affiliates (other than the Entities) to comply with
any such
Legal Requirements.
(e) None of the Entities is obligated to make any payments, or
is
party to any agreement that could obligate it to make any payments,
that would
not be deductible under Code
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section 162(m) or 280G of the Code, or would be considered a
payment under a
nonqualified deferred compensation plan, as contemplated in Code
section 409A.
2.16 ENVIRONMENTAL MATTERS. Notwithstanding any other provision
in
this Agreement, this Section 2.16 contains the exclusive
representations of
ONEOK concerning Environmental Matters. Except as set forth on
Schedule 2.16:
(a) Each Entity is, and at all times since January 1, 2001 has
been, in material compliance with all applicable Environmental
Laws;
(b) There have been no releases of Hazardous Materials from,
at,
on or under any property now owned or leased (or formerly owned or
leased) by
any Entity which are required by applicable Environmental Laws to
be remediated
(or would, upon discovery, be required to be remediated) by any
Entity, except
for any releases that have been fully remediated or that would not,
individually
or in the aggregate, have a Material Adverse Effect;
(c) Neither ONEOK nor any Entity has received any written
request
for information or written notification that it is a potentially
responsible
party under CERCLA or any similar state Legal Requirement with
respect to any
on-site or off-site location for which liability is currently being
asserted
against them with respect to the activities or operations of the
Entities and no
Entity has sent or contributed waste to any facility that is
subject to a
potential claim under CERCLA or any similar state Legal
Requirement;
(d) There are no material writs, injunctions, decrees, notices
of
violation, Governmental Orders or judgments outstanding, or any
Legal
Proceedings pending or, to ONEOK's Knowledge, threatened, involving
any Entity
relating to (i) its compliance with any Environmental Law or (ii)
the release,
discharge, spill, treatment, storage or disposal of Hazardous
Materials into the
environment at any location that could reasonably be expected to
result in any
Entity incurring any material Liability under Environmental
Law;
(e) Each Entity has obtained, currently maintains and is in
material compliance with all Environmental Permits, and all such
Environmental
Permits are in effect and no Legal Proceeding is pending with
respect to any
such Environmental Permit;
(f) Except as otherwise disclosed in the Balance Sheet, no
material expenditures, capital improvements or changes in operation
are, or, to
the Knowledge of ONEOK, will be, necessary to achieve or maintain
compliance
with any Environmental Permit or Environmental Law, or will be
necessary as a
condition or result of the renewal, amendment or necessary
modification of any
Environmental Permit; and
(g) ONEOK has provided or made available to Northern Border all
information relevant to the environmental compliance and condition
of the
Entities and all of their respective Business Facilities, and the
estimated or
reasonably anticipated remediation costs related thereto.
2.17 SECURITIES ACT. ONEOK is acquiring the Units solely for
the
purpose of investment and not with a view to, or for offer or sale
in connection
with, any distribution thereof in violation of the Securities Act
or state
securities laws. ONEOK acknowledges that the Units
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are not registered under the Securities Act or any applicable state
securities
law, and that such Units may not be transferred or sold except
pursuant to the
registration provisions of the Securities Act or pursuant to an
applicable
exemption therefrom and pursuant to state securities laws and
regulations as
applicable. ONEOK acknowledges that each certificate representing
the Units
shall bear a legend in substantially the following form:
THE
UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS
("ACTS"). THE UNITS HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD
OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT
FOR
THE UNITS UNDER THE ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO
THE
PARTNERSHIP THAT SUCH REGISTRATION IS NOT REQUIRED.
2.18 REGULATORY MATTERS. No Entity is a "public utility
company,"
"holding company" or "subsidiary" or "affiliate" of a holding
company as such
terms are defined in the Public Utility Holding Company Act of 1935
(the "1935
Act"). Each Entity that is a "Natural Gas Company" as that term is
defined in
Section 2 of the Natural Gas Act ("NGA") is in compliance, in all
material
respects, with all provisions of the NGA and all rules and
regulations
promulgated by FERC pursuant thereto. Each such Natural Gas Company
is in
compliance, in all material respects, with all orders issued by
FERC that
pertain to material terms and conditions and material rates charged
for
services. No approval of (a) the SEC under the 1935 Act or (b) FERC
under the
NGA or the Federal Power Act is required in connection with the
execution of
this Agreement by ONEOK or the transactions contemplated hereby
with respect to
ONEOK or the Entities. The Form No. 2 Annual Reports filed by each
Natural Gas
Company with FERC for the years ended December 31, 2004 and
December 31, 2003
were true, correct and complete, in all material respects, as of
the dates
thereof and since December 31, 2004 no Natural Gas Company has
become subject to
any proceeding under Section 5 of the NGA or any general rate case
proceeding
commenced under Section 4 of the NGA by reason of a filing made
with the FERC
after December 31, 2004. Except as set forth on Schedule 2.18, no
approvals of
state Governmental Authorities are required in connection with the
execution of
this Agreement by ONEOK or the transactions contemplated hereby
with respect to
ONEOK or the Entities.
2.19 OPERATING ASSETS.
(a) Except
as identified to the contrary in Schedule 2.19(a), (i)
except for the Drop-Down Contracts and the Shared Contracts and
except as would
not reasonably be expected to have a Material Adverse Effect, the
Entities own
or have the right to use the pipelines, storage facilities, gas
processing
facilities, fractionators, plants, equipment and related facilities
and assets
("Operating Assets") necessary to enable them to conduct their
business in the
manner currently being conducted and the Entities own or have the
right to use
the Operating Assets that are reflected as being owned or leased by
such
Entities on the Financial Statements; (ii) the Operating Assets are
free and
clear of Liens other than Permitted Liens; (iii) each Entity has
good and
indefeasible title to the real property it owns in fee, free and
clear of all
Liens other than Permitted Liens; and (iv) each Entity has title to
its
rights-of-way and easements (A) free and clear of all Liens and
claims of those
claiming by, through or under ONEOK or its Affiliates
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(other than the Entities), other than Permitted Liens; and (B)
sufficient to
allow such Entity to conduct its business in substantially the same
manner as
such business is currently being conducted.
(b) Except as identified to the contrary in Schedule 2.19(b),
the
Operating Assets are in good operating condition and repair,
ordinary wear and
tear excepted, are free of material defects and are suitable for
the use for
which such assets are currently used.
2.20 BROKERS' FEES. Except for UBS Investment Bank (the fees of
which
shall be paid solely by ONEOK), no broker, finder, investment
banker or other
Person is entitled to any brokerage fee, finders' fee or other
commission in
connection with the transactions contemplated by this Agreement
based upon
arrangements made by ONEOK or any of its Affiliates.
2.21 BOOKS AND RECORDS. The respective books of account, minute
books,
stock or other equity record books and other records of each
Entity, all of
which have been made available to Northern Border, are complete and
correct.
2.22 INDEBTEDNESS. No Entity has any Indebtedness to any Person
other
than Indebtedness owed to the other Entities or to ONEOK or its
other
Affiliates.
2.23 DISCLAIMER.
(a) Except as and to the extent expressly set forth in Section
2,
(i) ONEOK makes no representations or warranties, express or
implied, and (ii)
ONEOK expressly disclaims all Liability and responsibility for
any
representation, warranty, statement or information made or
communicated (orally
or in writing) to Northern Border or any of its Subsidiaries,
employees, agents,
consultants or representatives (including, without limitation, any
opinion,
information, projection or advice that may have been provided to
Northern Border
by any officer, director, employee, agent, consultant,
representative or advisor
of ONEOK or any of its Affiliates).
(b) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS
EXPRESSLY REPRESENTED OTHERWISE IN SECTION 2, ONEOK EXPRESSLY
DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, ORAL OR WRITTEN, AS
TO (I) TITLE
TO ANY OF THE PROPERTIES OR OTHER ASSETS OF ANY OF THE ENTITIES,
(II) THE
CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM OR
REPORT RELATING
TO THE PROPERTIES OR OTHER ASSETS OF ANY OF THE ENTITIES, (III) ANY
ESTIMATES OF
THE VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE
PROPERTIES OR OTHER
ASSETS OF ANY OF THE ENTITIES, (IV) THE MAINTENANCE, REPAIR,
CONDITION, QUALITY,
SUITABILITY, DESIGN OR MARKETABILITY OF THE PROPERTIES OR OTHER
ASSETS OF ANY OF
THE ENTITIES, OR (V) ANY OTHER MATERIALS OR INFORMATION THAT MAY
HAVE BEEN MADE
AVAILABLE OR COMMUNICATED TO NORTHERN BORDER OR ITS AFFILIATES, OR
ITS OR THEIR
EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN
CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION
OR
PRESENTATION RELATING THERETO, AND FURTHER DISCLAIMS ANY
REPRESENTATION OR
16
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WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR
PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY
EQUIPMENT, IT
BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT,
EXCEPT AS
EXPRESSLY REPRESENTED OTHERWISE IN SECTION 2, NORTHERN BORDER SHALL
BE DEEMED TO
BE OBTAINING PIPELINES, STORAGE FACILITIES, PLANTS, EQUIPMENT AND
RELATED
FACILITIES AND OTHER ASSETS IN ITS PRESENT STATUS, CONDITION AND
STATE OF
REPAIR, "AS IS" AND "WHERE IS" WITH ALL FAULTS AND THAT NORTHERN
BORDER HAS MADE
OR CAUSED TO BE MADE SUCH INSPECTIONS AS IT DEEMS APPROPRIATE.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE NBP
PARTNERSHIPS
Except as set forth in the disclosure schedules (the "NBP
Partnerships
Disclosure Schedules") delivered by the NBP Partnerships to ONEOK
on the date
hereof (it being agreed that any matter disclosed in a particular
Schedule of
the NBP Partnerships Disclosure Schedules shall be deemed to have
been disclosed
with respect to any other Sections of this Agreement to the extent
that the
relevance of such matter to such other Section is readily apparent
from the
information disclosed), the NBP Partnerships represent and warrant
to ONEOK that
the statements contained in this Section 3 are true, correct and
complete as of
the date of this Agreement and will be true, correct and complete
as of the
Closing, except in each case to the extent that such statements are
expressly
made only as of a specified date, in which case the NBP
Partnerships represent
and warrant that such statements are true, correct and complete as
of such
specified date.
3.1 ORGANIZATION AND AUTHORITY OF THE NBP PARTNERSHIPS.
(a) The NBP Partnerships are limited partnerships duly
organized,
validly existing and in good standing under the laws of
Delaware.
(b) The NBP Partnerships have all requisite right, authority
and
power to enter into this Agreement and each Related Agreement to be
executed and
delivered by Northern Border and to carry out the transactions
contemplated
hereby.
(c) The Partnership Policy Committee and the Audit Committee of
Northern Border have each approved the execution, delivery and
performance of
this Agreement and each of the other Northern Border Transaction
Agreements, and
the Audit Committee has determined that the Northern Border
Transaction is fair
and reasonable to Northern Border. Except as contemplated by this
Agreement, the
execution, delivery and performance by the NBP Partnerships of this
Agreement
and each of the other Northern Border Transaction Agreements have
been duly
authorized by all necessary action of the NBP Partnerships and no
other action
on the part of the NBP Partnerships is required in connection
therewith.
(d) This Agreement and each Related Agreement (including,
without
limitation, the Amendment) executed and delivered by the NBP
Partnerships
constitutes, or when executed and delivered will constitute, valid
and binding
obligations of the NBP Partnerships
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enforceable in accordance with their respective terms, except as
such
enforceability may be limited by bankruptcy, insolvency or other
similar laws
from time to time in effect which affect the enforcement of
creditors' rights
generally.
(e) The execution, delivery and performance by the NBP
Partnerships of this Agreement and each Related Agreement
(including, without
limitation, the Amendment) executed and delivered by the NBP
Partnerships, with
or without the giving of notice or the passage of time, or both,
and the
issuance of the Units or the Conversion Units, as applicable:
(i) do not and will not conflict with or violate any
provision of the organizational documents of the NBP
Partnerships;
(ii) do not and will not conflict with or violate any Legal
Requirements applicable to the NBP Partnerships or, except as set
forth in
Schedule 3.1(e)(ii) and any filings required to be made under the
HSR Act,
require the NBP Partnerships to obtain any approval, consent or
waiver of, or
make any filing with, any Governmental Authority that has not been
obtained or
made, except for such violations or failures to obtain such
approval, consent or
waiver would not, individually or in the aggregate, have a material
adverse
effect on the ability of the NBP Partnerships to perform its
obligations
hereunder and consummate the transactions contemplated hereby on
the Closing
Date;
(iii) except as set forth on Schedule 3.1(e)(iii), do not
and will not require the consent, approval or waiver of any Person
(other than
any Governmental Authority), except for the approval of the
issuance of the
Conversion Units by the holders of the Common Units and except for
any such
consents, approvals or waivers as have been obtained or the failure
of which to
be obtained would not, individually or in the aggregate, have a
material adverse
effect on the ability of the NBP Partnerships to perform their
obligations
hereunder and consummate the transactions contemplated hereby on
the Closing
Date;
(iv) does not and will not breach any contract material to
the business or operations of the NBP Partnerships or result in or
permit the
termination of any such contract; and
(v) except for issuance of the Conversion Units, do not
require the consent or approval of the holders of Common Units.
(f) The Northern Border Partnership Agreement and the NBILP
Partnership Agreement are in full force and effect and are binding
on all the
partners thereto. After the Closing, the Amendment will be
effective to amend
the Northern Border Partnership Agreement in accordance with the
provisions and
terms of the Amendment.
3.2 CAPITALIZATION.
(a) As of the date hereof, Northern Border has 46,397,214
Common
Units issued and outstanding and the partnership interests in
Northern Border
are as described in the Northern Border Partnership Agreement.
Except as set
forth on Schedule 3.2(a), there are no options, warrants,
convertible securities
or other rights, agreements, arrangements or commitments of any
character
relating to the partnership interests of Northern Border or
obliging
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Northern Border to issue or sell any partnership interests of
Northern Border.
NBILP has a 1.0101% general partner interest issued and
outstanding. All of the
limited partner interests in NBILP are held by Northern Border.
Except as set
forth on Schedule 3.2(a), there are no options, warrants,
convertible securities
or other rights, agreements, arrangements or commitments of any
character
relating to the partnership interests in NBILP or obligating NBILP
to issue or
sell any partnership interests of NBILP.
(b) All of the Units and Conversion Units issuable to ONEOK
pursuant to this Agreement, when issued, will at time of such
issuance or
conversion, as applicable, be duly authorized, validly issued,
fully paid, and
nonassessable and free of preemptive rights, with no personal
liability
attaching to ownership thereof, except as such non-assessability
and absence of
personal liability may be affected by section 18-607 of the
Delaware Revised
Limited Partnership Act. At the Closing, Northern Border will
deliver to ONEOK
good and valid title to the Units, and, upon conversion, to the
Conversion
Units, in each case, free and clear of any Liens, other than those
imposed by
section 18-607 of the Delaware Revised Limited Partnership Act,
applicable
securities laws or the Northern Border Partnership Agreement.
3.3 LITIGATION. Except as disclosed in Schedule 3.3, there are
no
Legal Proceedings pending or, to the Knowledge of the NBP
Partnerships,
threatened (a) that (i) seeks more than $1,000,000 in damages for
which the NBP
Partnerships or any of their Subsidiaries could be liable, (ii)
seeks injunctive
relief against the NBP Partnerships or any of their Subsidiaries or
any of their
respective assets or activities or (iii) is, or seeks to be
certified as, a
class or similar representative action involving the NBP
Partnerships or any of
their Subsidiaries or any of their respective assets, or (b) that
challenges or
otherwise seeks to prevent, enjoin, alter or delay the consummation
of the
transactions contemplated hereby. Neither of the NBP Partnerships
nor any of
their Subsidiaries (nor any of their material assets) is subject to
any
outstanding Governmental Order.
3.4 COMPLIANCE. Except as set forth on Schedule 3.4, the NBP
Partnerships and their Subsidiaries are, and at all times since
January 1, 2001
have been, in material compliance with all applicable Legal
Requirements, except
for such instances of non-compliance that, individually or in the
aggregate
would not have a Northern Border Material Adverse Effect. Except as
set forth on
Schedule 3.4, since January 1, 2001, neither of the NBP
Partnerships nor any of
their Subsidiaries have received any written notice from any
Governmental
Authority regarding any actual or possible material violation of or
material
failure to comply with any Legal Requirement that has resulted, or
would
reasonably be expected to result, in any material fine, penalty or
Liability.
Except as set forth on Schedule 3.4, the NBP Partnerships and their
Subsidiaries
hold all Permits necessary for the conduct of their business as now
being
conducted, other than any Permits the failure of which to hold
would not,
individually or in the aggregate, have a Northern Border Material
Adverse
Effect, and there is no suspension or cancellation of any such
Permits pending
or, to the Knowledge of the NBP Partnerships, threatened.
3.5 EMPLOYEE MATTERS. Except for the Black Mesa Companies:
(a) Neither of the NBP Partnerships nor any of their
Subsidiaries
has at any time maintained, sponsored or been obligated to
contribute to any
Employee Benefit Plan.
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(b) There are no liabilities owed by the NBP Partnerships or
any
of their Subsidiaries in respect of current or former employees or
employment
related matters, other than to employees or former employees of
ONEOK or its
Affiliates who provide services primarily to one or more of the
Entities.
(c) Neither of the NBP Partnerships nor any of their
Subsidiaries
is a party to, or bound by, any collective bargaining agreement,
Contract or
other understanding with a labor union. There are no unfair labor
practice or
labor arbitration proceedings pending or, to the Knowledge of the
NBP
Partnerships, threatened in writing against the NBP Partnerships or
any of their
Subsidiaries.
3.6 ENVIRONMENTAL MATTERS. Notwithstanding any other provision in
this
Agreement, this Section 3.6 contains the exclusive representations
of the NBP
Partnerships concerning Environmental Matters. Except as set forth
on Schedule
3.6:
(a) The NBP Partnerships and their Subsidiaries are, and at all
times since January 1, 2005 have been, in material compliance, with
all
applicable Environmental Laws;
(b) There have been no releases of Hazardous Materials at, on
or
under any property now owned or leased (or formerly owned or
leased) by the NBP
Partnerships or any of their Subsidiaries which are required by
applicable
Environmental Laws to be remediated by the NBP Partnerships or any
of their
Subsidiaries, except for any releases that have been fully
remediated or that
would not, individually or in the aggregate, have a Northern Border
Material
Adverse Effect;
(c) Neither of the NBP Partnerships nor any of their
Subsidiaries
has received any written request for information or written
notification that it
is a potentially responsible party under CERCLA or any similar
state Legal
Requirement with respect to any on-site or off-site location for
which liability
is currently being asserted against them with respect to the
activities or
operations of the NBP Partnerships and their Subsidiaries and
neither of the NBP
Partnerships nor any of their Subsidiaries has sent or contributed
waste to any
facility that is subject to a potential claim under CERCLA or any
similar state
Legal Requirement;
(d) There are no material writs, injunctions, decrees, notices
of
violation, Governmental Orders or judgments outstanding, or any
Legal
Proceedings pending or, to the Knowledge of the NBP Partnerships,
threatened,
involving the NBP Partnerships or any of their Subsidiaries
relating to (i) its
compliance with any Environmental Law or (ii) the release,
discharge, spill,
treatment, storage or disposal of Hazardous Materials into the
environment at
any location that could reasonably be expected to result in the NBP
Partnerships
or any of their Subsidiaries incurring any material Liability
under
Environmental Law;
(e) The NBP Partnerships and each of their Subsidiaries has
obtained, currently maintains and is in material compliance with
all
Environmental Permits, and all such Environmental Permits are in
effect and no
Legal Proceeding is pending with respect to any such Environmental
Permit; and
(f) Except to the extent set forth in or reserved against in
the
consolidated financial statements of Northern Border contained in
the Northern
Border SEC Documents, no
20
<PAGE>
material expenditures, capital improvements or changes in operation
are, or, to
the Knowledge of the NBP Partnerships, will be, necessary to
achieve or maintain
compliance with any Environmental Permit or Environmental Law, or
will be
necessary as a condition or result of the renewal, amendment or
necessary
modification of any Environmental Permit.
3.7 ABSENCE OF CERTAIN CHANGES. As of the date hereof, since
September
30, 2005 (a) there has not been any Northern Border Material
Adverse Effect and
(b) the business of Northern Border and its consolidated
Subsidiaries has been
conducted in all material respects only in the ordinary course
consistent with
past practice.
3.8 SECURITIES ACT. The NBP Partnerships are acquiring the
Shares
solely for the purpose of investment and not with a view to, or for
offer or
sale in connection with, any distribution thereof in violation of
the Securities
Act or state securities laws. The NBP Partnerships acknowledge that
the Shares
are not registered under the Securities Act or any applicable state
securities
law, and that such Shares may not be transferred or sold except
pursuant to the
registration provisions of the Securities Act or pursuant to an
applicable
exemption therefrom and pursuant to state securities laws and
regulations as
applicable.
3.9 SEC FILINGS.
(a) The NBP Partnerships have made available to ONEOK true and
complete copies of all SEC Documents filed by Northern Border with
the SEC since
January 1, 2004 (the "Northern Border SEC Documents"), which are
all of the
documents (other than preliminary material) that Northern Border
was required to
file with the SEC since such date. As of their respective dates,
the Northern
Border SEC Documents complied in all material respects with the
applicable
requirements of the Securities Act or the Exchange Act, as the case
may be, and
the rules and regulations promulgated thereunder. None of the
Northern Border
SEC Documents, including, without limitation, any exhibits,
financial statements
or schedules included therein, at the time filed contained any
untrue statement
of material fact or omitted to state a material fact required to be
stated
therein or necessary to make the statements therein, in light of
the
circumstances under which they were made, not misleading. The
financial
statements (including the related notes and schedules) of Northern
Border
included in the Northern Border SEC Documents comply as to form in
all material
respects with the published rules and regulations of the SEC with
respect
thereto, were prepared in accordance with GAAP applied on a
consistent basis
during the periods involved (except as may be indicated in the
notes thereto or,
in the case of the unaudited statements, as permitted by the rules
of the SEC)
and fairly present in accordance with the applicable requirements
of GAAP
(subject, in the case of the unaudited statements, to normal,
recurring
adjustments, none of which will be material), the consolidated
financial
position of Northern Border and its consolidated Subsidiaries as of
their
respective dates and the consolidated results of operations and the
consolidated
cash flows of Northern Border and its consolidated Subsidiaries for
the periods
presented therein.
(b) Except (i) to the extent set forth in or reserved against
in
the consolidated financial statements of Northern Border contained
in the
Northern Border SEC Documents, (ii) for current liabilities
(determined in
accordance with GAAP) incurred in the ordinary course of business
consistent
with past practices since the date of the most recent consolidated
financial
statements of Northern Border contained in the Northern Border SEC
Documents and
(iii) except
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<PAGE>
for immaterial Liabilities, Northern Border has no Liabilities of
the type that
would be required to be disclosed on a balance sheet of Northern
Border (or the
notes thereto) prepared in accordance with GAAP.
3.10 BROKERS' FEES. Except for the fees payable to the
financial
advisor referenced in Section 3.11 herein (the fees of which shall
be paid
solely by Northern Border), no broker, finder, investment banker or
other Person
is entitled to any brokerage fee, finders' fee or other commission
in connection
with the transactions contemplated by this Agreement based upon
arrangements
made by Northern Border or any of its Affiliates.
3.11 OPINION OF FINANCIAL ADVISER. Lehman Brothers Inc. has
provided
the Audit Committee of Northern Border (with a copy to the
Partnership Policy
Committee of Northern Border) with its opinion that, as of the date
hereof and
based upon and subject to the matters set forth therein, the net
consideration
involved in the Northern Border Transaction is fair to Northern
Border from a
financial point of view.
3.12 REGISTRATION RIGHTS. The Units and the Conversion Units,
when
issued, will be Partnership Securities (as such term is used in the
Northern
Border Partnership Agreement) and ONEOK will be entitled to
exercise all of the
registration rights provided for in Section 6.14 of the Northern
Border
Partnership Agreement with respect to the Units and the Conversion
Units.
3.13 DISCLAIMER.
(a) Except as and to the extent expressly set forth in Section
3,
(i) the NBP Partnerships make no representations or warranties,
express or
implied, and (ii) the NBP Partnerships expressly disclaim all
Liability and
responsibility for any representation, warranty, statement or
information made
or communicated (orally or in writing) to ONEOK or any of its
Affiliates,
employees, agents, consultants or representatives (including,
without
limitation, any opinion, information, projection or advice that may
have been
provided to ONEOK by any officer, director, employee, agent,
consultant,
representative or advisor of the NBP Partnerships or any of their
Subsidiaries).
(b) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS
EXPRESSLY REPRESENTED OTHERWISE IN SECTION 3, THE NBP PARTNERSHIPS
EXPRESSLY
DISCLAIM ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, ORAL
OR WRITTEN, AS
TO (I) TITLE TO ANY OF THE PROPERTIES OR OTHER ASSETS OF THE NBP
PARTNERSHIPS OR
ANY OF THEIR SUBSIDIARIES, (II) THE CONTENTS, CHARACTER OR NATURE
OF ANY
DESCRIPTIVE MEMORANDUM OR REPORT RELATING TO THE PROPERTIES OR
OTHER ASSETS OF
THE NBP PARTNERSHIPS OR ANY OF THEIR SUBSIDIARIES, (III) ANY
ESTIMATES OF THE
VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE PROPERTIES
OR OTHER
ASSETS OF THE NBP PARTNERSHIPS OR ANY OF THEIR SUBSIDIARIES, (IV)
THE
MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR
MARKETABILITY OF
THE PROPERTIES OR OTHER ASSETS OF THE NBP PARTNERSHIPS OR ANY OF
THEIR
SUBSIDIARIES, OR (V) ANY OTHER MATERIALS OR INFORMATION THAT MAY
HAVE BEEN MADE
22
<PAGE>
AVAILABLE OR COMMUNICATED TO ONEOK OR ITS AFFILIATES, OR ITS OR
THEIR EMPLOYEES,
AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH
THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR
PRESENTATION
RELATING THERETO, AND FURTHER DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS
OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
CONFORMITY
TO MODELS OR SAMPLES OF MATERIALS OF ANY EQUIPMENT.
SECTION 4. COVENANTS OF ONEOK
4.1 CONDUCT OF THE ENTITIES. Except as set forth on Schedule
4.1,
during the period from the date of this Agreement until the Closing
(the
"Pre-Closing Period"), ONEOK agrees that, except as otherwise
contemplated by
this Agreement, the ONEOK Disclosure Schedules, or as Northern
Border shall
otherwise consent in writing (such consent not to be unreasonably
withheld,
delayed or conditioned):
(a) Ordinary Course. ONEOK shall cause the Entities to, (i)
conduct their Business in the ordinary course consistent with past
practice and
(ii) use commercially reasonable efforts to (A) preserve intact
their current
business organization, (B) preserve the relationships of the
Entities with
customers, suppliers, landlords, creditors, employees and other
Persons having
business dealings with the Entities, (C) preserve and maintain in
force all of
the insurance policies of the Entities and each of the Permits of
the Entities,
(D) maintain and repair all property material to the operation of
the Business
in a manner consistent with past practice, (E) make the capital
expenditures
identified in the budget previously provided to Northern Border and
(F) make
payments to all employees, vendors and other trade creditors in a
timely manner
consistent with past practice.
(b) Governing Documents. ONEOK shall cause each Entity not to
amend or waive any rights under the organizational documents of
such Entity,
other than amendments or waivers necessary to execute, deliver and
perform the
transactions contemplated by this Agreement including, without
limitation,
pursuant to Section 6.12.
(c) Issuance of Securities. ONEOK shall cause each Entity not
to
issue, transfer, sell or dispose of, or authorize or agree to the
issuance,
transfer, sale or disposition of (whether through the issuance or
granting of
options, rights, warrants, or otherwise), any Equity Interests of
any Entity or
any options, rights, warrants or other securities convertible into
or
exchangeable or exercisable for any Equity Interests of any Entity
or amend any
of the terms of any securities or agreements relating to such
Equity Interests
outstanding on the date hereof.
(d) Reclassifications. ONEOK shall cause each Entity not to
split, combine or reclassify any Equity Interests of any Entity, or
redeem,
purchase or otherwise acquire or offer to acquire any such Equity
Interests of
any Entity.
(e) No Acquisitions. ONEOK shall cause each Entity not to form
any Subsidiary or acquire or agree to acquire, by merging or
consolidating with,
or by purchasing an equity interest in or any of the assets of, any
Person;
provided, however, that, subject to Section
23
<PAGE>
4.1(h), the foregoing shall not restrict ONEOK or any Entity from
purchasing
assets in the ordinary course of operating the Entities.
(f) No Dispositions. ONEOK shall cause each Entity not to
transfer, sell, lease, license, encumber or otherwise dispose of or
agree to
transfer, sell, lease, license, encumber or otherwise dispose of,
any of their
respective assets other than (i) in the ordinary course of business
consistent
with past practice, (ii) pursuant to existing contractual
obligations, (iii) the
imposition of Permitted Liens and (iv) the transfer of assets among
the
Entities.
(g) Material Contracts. ONEOK shall cause each Entity not to
enter into, or permit any of the material assets owned or used by
Entity to
become bound by or modify, amend or prematurely terminate, or waive
any material
right or remedy under:
(i) any Contract containing covenants limiting the freedom
of any of the Entities, Northern Border or any of its Subsidiaries
or their
assignees or successors to compete in any line of business or with
any Person or
in any geographic area during any period of time following the
Closing;
(ii) any Contract for
the borrowing of money or related to
Indebtedness of any Entity in excess of $500,000;
(iii) any Contract with any officer, employee, director of
any Entity or ONEOK or any of their respective Affiliates;
(iv) any Contract with any union, trade organization or
bargaining unit representative; or
(v) any acquisition, divestiture, merger, joint venture or
partnership agreement that is material to the Business.
(h) Capital
Expenditures. ONEOK shall cause each Entity not to
make, authorize or enter into commitments to make capital
expenditures in an
amount that, when added to all other capital expenditures made
during the
Pre-Closing Period on behalf of any Entity, exceeds $500,000, other
than any
capital expenditures contemplated by the budget previously provided
to Northern
Border.
(i) Indebtedness. ONEOK shall cause each Entity not to (i) lend
money to any Person (except that any Entity may make routine
advances to
employees in the ordinary course of business) or (ii) incur,
assume, guarantee
or otherwise become liable in respect of any Indebtedness.
(j) Accounting. ONEOK shall cause each Entity not to change any
of its methods of accounting or accounting practices in any
material respect
except as may be required by any Legal Requirement or GAAP.
(k) Tax Elections. ONEOK shall cause each Entity not to make
any
Tax election, other than (A) any Tax election made consistent with
prior
practice of the Entity, (B) a Tax election that would not adversely
affect
Northern Border or any Entity for any taxable
24
<PAGE>
period or portion thereof beginning after the Closing Date or (C) a
Tax election
to effect a Conversion Transaction as contemplated by Section
6.11.
(l) Proceedings. ONEOK shall cause each Entity not to settle
any
material Legal Proceeding if, as a result of the settlement, the
Entity would be
liable after the Closing for settlement payments in excess of
$5,000,000 or
subject to any injunctive or similar equitable relief or otherwise
be subject to
any ongoing obligations following the payment of any settlement
amounts.
(m) Regulatory Actions. ONEOK shall cause each Entity not to,
other than routine compliance filings, make any filings or submit
any documents
or information to FERC or any other Governmental Authority, other
than routine
compliance filings, without prior consultation with Northern
Border.
(n) Agreements to Take Action. ONEOK shall cause each Entity
not
to agree or commit to take any of the actions described in clauses
"(b)" through
"(m)" above.
4.2 CASH MANAGEMENT. Nothing contained in this Agreement shall
prevent
or limit the ability of any Entity to distribute, dividend or
otherwise transfer
any cash to ONEOK, any other Entity or any other Affiliate of ONEOK
during the
Pre-Closing Period.
SECTION 5. COVENANTS OF THE NBP PARTNERSHIPS
5.1 BOOKS AND RECORDS.
(a) No later than ten (10) days after Closing, ONEOK will make
available to the NBP Partnerships or their designee, at ONEOK's
sole cost and
expense, originals of all files, records, information and data (in
all formats)
owned by or primarily relating to the Entities that are in the
possession or
control of ONEOK or its Affiliates (together with all ONEOK's and
its
Affiliate's contractual rights to request other such files,
records, information
and data from any third party).
(b) For a period of five (5) years from the Closing Date:
(i) The NBP Partnerships shall not dispose of or destroy any
of the material books and records relating to the Business for
periods prior to
the Closing (the "Books and Records") without first offering to
turn over
possession thereof to ONEOK by written notice from the NBP
Partnerships to ONEOK
at least 60 days prior to the proposed date of such disposition or
destruction.
Within 30 days after receipt of such notice from the NBP
Partnerships, ONEOK may
notify the NBP Partnerships that it wishes to receive such Books
and Records,
and the NBP Partnerships shall deliver such Books and Records (to
the extent
such Books and Records are not subject to an attorney-client or
similar
privilege or other confidentiality obligation) to a designated
Representative of
ONEOK upon receipt by the NBP Partnerships of a written agreement
in form and
substance reasonably satisfactory to the NBP Partnerships in which
ONEOK agrees
to maintain the confidentiality of such Books and Records. If ONEOK
does not
notify the NBP Partnerships within 30 days of receipt of such
notice, the NBP
Partnerships may dispose of or destroy the Books and Records.
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<PAGE>
(ii) The NBP Partnerships shall, on reasonable notice and at
reasonable times at Northern Border's principal place of business
or at any
location where any Books and Records are stored, allow ONEOK and
its agents
reasonable access to all Books and Records that are not subject
to
attorney-client or similar privilege or other confidentiality
obligation, to the
extent such access is requested for any legitimate purpose related
to ONEOK's
prior ownership of the Entities and provided that the NBP
Partnerships have
received a written agreement in form and substance reasonably
satisfactory to
the NBP Partnerships in which ONEOK agrees to maintain the
confidentiality of
such Books and Records. ONEOK shall have the right, at its own
expense, to make
copies of any such Books and Records; provided, however, that any
such access or
copying shall be had or done in such a manner so as not to unduly
interfere with
the normal conduct of the Business.
(iii) The NBP Partnerships shall make available to ONEOK
upon reasonable notice to ONEOK and at reasonable times and upon
written request
the personnel of the NBP Partnerships to assist ONEOK in locating
and obtaining
any Books and Records.
5.2 APPROVAL OF ISSUANCE OF COMMON UNITS UPON CONVERSION UNITS.
Northern Border shall, as soon as reasonably practicable following
the Closing
(but in any event prior to the one year anniversary of the Closing
Date), (i)
take action to call and hold a meeting of holders of the Common
Units for the
purposes of approving the issuance of the Conversion Units to ONEOK
upon the
conversion of the Units by ONEOK and approving the amendment to the
Northern
Border Partnership Agreement in the manner contemplated by the
Parties in the
Amendment, (ii) actively solicit proxies in favor of the proposals
described in
subsection 5.2(i) above, and (iii) take such other actions as may
be reasonably
necessary and appropriate in order to obtain all requisite
approvals for the
resolutions described above in this Section 5.2.
SECTION 6. COVENANTS OF ONEOK AND THE NBP PARTNERSHIPS
The
parties hereto agree that:
6.1 ACCESS TO INFORMATION. During the Pre-Closing Period
(a) ONEOK will, and will cause each Entity to, (i) give the NBP
Partnerships and their Representatives reasonable access during
normal business
hours and on reasonable notice to the officers, personnel,
properties, Tax
Returns, books, records and work papers of and relating to any
Entity, (ii)
furnish to the NBP Partnerships and their Representatives such
financial and
operating data and copies of such Tax Returns, books, records, work
papers and
other documents and information with respect to any Entity, as such
Persons may
reasonably request, and (iii) instruct their respective
Representatives to
cooperate with the NBP Partnerships in their investigation of the
Entities. The
Parties agree that any information provided, or caused to be
provided, by the
Entities pursuant to this Section 6.1(a) shall be kept confidential
and not
disclosed to any third party, except to the extent required by any
Legal
Requirement. ONEOK shall cooperate to ensure that the provision of
access
hereunder to the NBP Partnerships and their authorized
Representatives shall
comply in all respects with the Federal Energy Regulatory
Commission's ("FERC")
Standards of Conduct for Transmission Providers set forth in 18
C.F.R. Part 37,
et al.
26
<PAGE>
(b) The NBP Partnerships will (i) give ONEOK and its
Representatives reasonable access during normal business hours and
on reasonable
notice to the officers, personnel, properties, Tax Returns, books,
records and
work papers of and relating to the NBP Partnerships and their
Subsidiaries, (ii)
furnish to ONEOK and its Representatives such financial and
operating data and
copies of such Tax Returns, books, records, work papers and other
documents and
information with respect to Northern Border and its Subsidiaries,
as such
Persons may reasonably request, and (iii) instruct its
Representatives to
cooperate with ONEOK in its investigation of the NBP Partnerships
and their
Subsidiaries. The Parties agree that any information provided, or
caused to be
provided, by the NBP Partnerships and their Subsidiaries pursuant
to this
Section 6.1(b) shall be kept confidential and not disclosed to any
third party,
except to the extent required by any Legal Requirement. The NBP
Partnerships
shall cooperate to ensure that the provision of access hereunder to
ONEOK and
its authorized Representatives shall comply in all respects with
the FERC
Standards of Conduct for Transmission Providers set forth in 18
C.F.R. Part 37,
et al.
6.2 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement and applicable Legal Requirements,
each of the
Parties hereto shall act in good faith and use its commercially
reasonable
efforts to take, or cause to be taken, all actions, and to do, or
cause to be
done, all things necessary, proper or advisable to consummate and
make effective
the transactions contemplated hereby as soon as practicable,
including such
actions or things as the other Parties may reasonably request in
order to cause
any of the conditions to such other Party's or Parties' obligation
to consummate
the transactions contemplated by this Agreement to be fully
satisfied.
6.3 REGULATORY AND OTHER AUTHORIZATIONS; NOTICES AND CONSENTS.
(a) Each of the Parties shall use commercially reasonable
efforts
to obtain promptly all authorizations, consents, orders and
approvals of all
Governmental Authorities (including by making, or causing to be
made, all
appropriate filings of notifications or reports) necessary for its
execution and
delivery of, and the performance of its obligations pursuant to,
and the
consummation of the transactions contemplated by, this Agreement
(such
authorizations, consents, orders and approvals, "Governmental
Approvals"). ONEOK
and the NBP Partnerships shall, and ONEOK shall cause the Entities
to, cooperate
in promptly seeking to obtain the Governmental Approvals.
(b) Neither ONEOK nor the NBP Partnerships shall intentionally
take any action that would be reasonably expected to delay, impair
or impede the
receipt of any Governmental Approvals. ONEOK and the NBP
Partnerships agree to
make, or to cause to be made, all appropriate filings of
notifications and
reports required to obtain the Governmental Approvals promptly
after the date of
this Agreement and to supply promptly any additional information
and documentary
material that may be requested by Governmental Authorities
responsible therefor.
As defined further below, the parties shall cooperate in making any
such
filings. ONEOK and the NBP Partnerships agree to use their
commercially
reasonable efforts to avoid or eliminate each and every impediment
under any
Legal Requirement that may be asserted by any Governmental
Authority in
connection with the Governmental Approvals so as to enable the
Parties to
expeditiously close the transactions contemplated by this
Agreement. ONEOK and
the NBP Partnerships agree to use commercially reasonable efforts
to vacate or
lift
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any order relating to the Governmental Approvals that would have
the effect of
making any of the transactions contemplated by this Agreement
illegal or
otherwise prohibiting their consummation. Notwithstanding any other
terms or
provisions of this Agreement, in no event shall the NBP
Partnerships or their
Subsidiaries be deemed to have any obligation to dispose of any
assets or
properties (including any assets or properties of the Entities) or
to enter into
any agreement with any Person in order to obtain early termination
or expiration
of the waiting period under the HSR Act or to obtain any other
Governmental
Approvals.
(c) Each Party shall promptly notify the other parties of any
communication it or any of its Affiliates receives from any
Governmental
Authority relating to the matters that are the subject of this
Agreement,
including any filing, investigation or inquiry, and, subject to
applicable Law,
permit the other Parties to review in advance any proposed
communication by such
Party to, or filing by such party with, any Governmental Authority.
No Party
shall agree to participate in any meeting with any Governmental
Authority in
respect of any filings, investigation or other inquiry unless it
consults with
the other Parties in advance and, to the extent permitted by such
Governmental
Authority, affords the other Parties the reasonable opportunity to
attend and
participate. Each Party will coordinate and cooperate fully with
the other
Parties in exchanging such information and providing such
assistance as such
other Parties may reasonably request in connection with the
foregoing and in
seeking early termination of any applicable waiting periods under
the HSR Act or
in connection with any other Governmental Approvals. Each Party
will provide the
other Parties with copies of all correspondence, filings or
communications
between such Party or any of its Representatives, on the one hand,
and any
Governmental Authority, on the other hand, with respect to this
Agreement and
the transactions contemplated by this Agreement, including with
respect to the
Party hereto making a filing, providing copies of all such
documents to the
non-filing Parties and their Representatives prior to filing
(except that no
Party hereto shall be under an obligation of any kind to provide
the other
Parties with documents, material or other information relating to
such Party's
valuation of the Business).
(d) The NBP Partnerships and ONEOK shall (and shall each cause
their respective Affiliates to) use commercially reasonable efforts
to obtain
all consents, authorizations, waivers and approvals of third
parties that any of
the Parties or their respective Affiliates (including the Entities)
are required
to obtain in order to consummate the transactions contemplated
hereby.
(e) Northern Border shall use commercially reasonable efforts
to
list the Common Units to be issued to ONEOK pursuant to this
Agreement on the
New York Stock Exchange, prior to the Closing Date or immediately
upon
conversion of the Units into Conversion Units, subject to official
notice of
issuance.
(f) The Parties agree to cooperate and assist in the filing of
proxy solicitation materials relating to matters contemplated
hereby requiring a
vote of the holders of the outstanding Common Units of Northern
Border, as
promptly as practicable after the date hereof.
6.4 PUBLIC ANNOUNCEMENTS. During the Pre-Closing Period, the
Parties
shall consult with each other before issuing any press release or
making any
public statement with respect to the transactions contemplated
hereby and,
except as may be required by applicable
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Legal Requirements or stock exchange rules and regulations, shall
not issue any
such press release or make any such public statement unless the
text of such
statement shall first have been agreed to by the parties.
6.5 NOTICES OF CERTAIN EVENTS. Each Party hereto shall promptly
notify
the other Parties hereto (i) following the receipt of any notice of
any Legal
Proceeding commenced or, to the Knowledge of ONEOK, or the
Knowledge of the NBP
Partnerships, as applicable, threatened against it that relates to
or seeks to
prohibit the consummation of the transactions contemplated hereby,
(ii) upon its
discovery that any of its representations or warranties in this
Agreement
contain any inaccuracies or that such Party has breached or
otherwise failed to
perform its obligations, covenants and agreements contained herein
or (iii) upon
its discovery of any development that is reasonably likely to
result in a
failure of a condition to the Closing.
6.6 ENTITY GUARANTEES.
(a) The NBP Partnerships and ONEOK shall use commercially
reasonable efforts to obtain from the respective beneficiary, in
form and
substance reasonably satisfactory to ONEOK, on or before the
Closing, valid and
binding written releases of ONEOK and its Affiliates (other than
the Entities),
as applicable, from any liability or obligation, whether arising
before, on or
after the Closing Date, under any Entity Guarantees in effect as of
the Closing.
If any Entity Guarantee has not been released as of the Closing
Date, then the
NBP Partnerships shall continue to use commercially reasonable
efforts after the
Closing to cause each such unreleased Entity Guarantee to be
released promptly.
Schedule 6.6 to the ONEOK Disclosure Schedules contains a true,
correct and
complete list of all of the Entity Guarantees.
(b) Notwithstanding anything to the contrary herein, the
Parties
acknowledge and agree that at any time on or after the Closing
Date, any of
ONEOK and its Affiliates may, in its sole discretion, take any
action to
terminate, obtain release of or otherwise limit its liability under
any and all
outstanding Entity Guarantees.
(c) The NBP Partnerships shall indemnify and hold harmless
ONEOK
and its Affiliates from and after the Closing Date for any and all
Damages
arising out of or relating to any Entity Guarantees.
6.7 INTERCOMPANY ACCOUNTS. Except for amounts related to normal
operational sales and cost of sales and fuel, prior to Closing
ONEOK will settle
all Intercompany Accounts and intercompany arrangements between any
Entity, on
the one hand, and ONEOK and its Affiliates (other than an Entity),
on the other
hand, and the Entities will not have any Liability whatsoever with
respect to
such settled intercompany arrangements and Intercompany Accounts.
ONEOK shall be
solely liable for any contractual or other Liabilities, express or
implied,
arising out of the termination, cancellation and elimination of any
of the
foregoing.
6.8 SHARED CONTRACTS AND DROP-DOWN CONTRACTS.
(a) Schedule 6.8(a) contains a true and complete listing of all
Shared Contracts and Drop-Down Contracts. Commencing on the date
hereof, (i)
Northern Border and ONEOK shall use commercially reasonable efforts
to cause the
Shared Contracts to be replaced with separate Contracts that
provide that each
Entity receive only such rights and obligations
29
<PAGE>
under a replacement Contract substantially and materially similar
to those
contract rights and obligations utilized by it in the conduct of
its business
immediately prior to the date hereof and (ii) Northern Border and
ONEOK shall
use commercially reasonable efforts to cause the Drop-Down
Contracts to be
assigned to one or more Entities, as applicable, or, if any such
Drop-Down
Contracts are not assignable or if ONEOK is not able to obtain any
consent
required to so assign such Drop-Down Contracts, use commercially
reasonable
efforts to cause such Drop-Down Contracts to be replaced with
separate Contracts
that provide that the Entity receives the rights and obligations
under a
replacement Contract as are substantially and materially similar to
those
contract rights and obligations of ONEOK under such Drop-Down
Contracts
immediately prior to the date hereof. The administrative costs and
expenses
arising from the separation, replacement or assignment of a Shared
Contract or
Drop-Down Contract (excluding any costs incurred under the payment
terms under
any such Contract or any replacement Contract) shall be borne by
ONEOK.
(b) If the Parties are not able to effect the separation and
replacement of a Shared Contract or to effect the assignment or
replacement of a
Drop-Down Contract prior to the Closing, then, from the Closing
until such
Contract is separated and replaced (in the case of a Shared
Contract), assigned
or replaced (in the case of a Drop-Down Contract) or expires by its
terms, to
the extent permissible under any Legal Requirement and under the
terms of such
Contract, ONEOK shall, and Northern Border shall cause each Entity
to, (i)
assume and perform the liabilities and obligations under such
Contract relating
to its respective business (and shall promptly reimburse the other
Party for any
expenses relating thereto incurred by the other Party or its
Affiliates), (ii)
hold in trust for the benefit of the other Party, and shall
promptly forward to
the other Party, any monies or other benefits received pursuant to
such Shared
Contract relating to the business of the other Party (or its
Affiliates) and
(iii) endeavor to institute alternative arrangements intended to
put the Parties
in substantially the same economic position as if such Contract
were separated
and replaced (in the case of a Shared Contract) or assigned or
replaced (in the
case of a Drop-Down Contract).
6.9 ONEOK MARKS. Northern Border shall obtain no right, title,
interest, license or any other right whatsoever to use the word
"ONEOK" or any
Trademarks containing or comprising the foregoing, or any Trademark
confusingly
similar thereto or dilutive thereof (collectively, the "ONEOK
Marks").
Notwithstanding the preceding sentence, effective upon the Closing
Date, ONEOK,
on behalf of itself and its Affiliates hereby grants to the
Entities and
Northern Border a nonexclusive, nontransferable, royalty-free
license, without
right to sublicense, to use, solely in the Entities' businesses as
they are
presently conducted, any and all of the ONEOK Marks solely to the
extent
appearing on existing advertising materials and property of the
Companies (such
as signage, vehicles, and equipment) for a period of 6 months from
the Closing
Date ("License Period"); provided, however, that with respect to
pipeline and
gas storage signage the License Period shall be deemed to be a
period of 12
months from the Closing Date. Northern Border and the Entities may
use such
existing inventory, advertising materials and property during the
License
Period, but shall not create new inventory, advertising materials
or property
using the ONEOK Marks. Northern Border and the Entities shall
promptly replace
or remove all ONEOK Marks on inventory, advertising materials and
other assets,
provided that all such use shall cease no later than the end of the
License
Period. As promptly as practicable and no later than 60 days after
the Closing
Date, Northern Border shall change the name of any Entity that
contains a
reference to "ONEOK", to a name that does not contain such
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reference. The Parties agree, because damages would be an
inadequate remedy,
that a Party seeking to enforce this Section 6.9 shall be entitled
to seek
specific performance and injunctive relief as remedies for any
breach thereof in
addition to other remedies available at law or in equity.
6.10 INDEBTEDNESS FOR BORROWED MONEY. Immediately prior to the
Closing, (i) ONEOK shall repay or otherwise settle any Indebtedness
due to the
Entities from ONEOK or its Affiliates (other than the Entities) and
(ii) ONEOK
shall cause the repayment or settlement of any Indebtedness due
from the
Entities to ONEOK or its Affiliates (other than the Entities), in
each case,
including interest and other amounts accrued thereon or due in
respect thereof,
other than any Indebtedness fully reflected in the Closing Working
Capital.
6.11 CONVERSION TRANSACTIONS. ONEOK shall, prior to the Closing
Date,
subject to having obtained any and all necessary approvals and
consents from
Governmental Authorities, (a) cause each of the Converting
Companies to convert
from corporations into an Eligible Person under the laws of the
jurisdiction in
which each is organized on the date of this Agreement (the
"Conversion
Transactions") (and use its best efforts, after consulting with
Northern Border,
to form such Eligible Person as instructed by Northern Border) and
(b) cause
each of the Companies and Company Subsidiaries that is not on the
date hereof
treated as a partnership or an entity disregarded from its owner
for United
States federal income tax purposes to be so treated on or before
the Closing
Date and (c) cause each such Company and Company Subsidiary
described in
subsections 6.11(a) or (b) above to be continuously treated as a
partnership or
a disregarded entity from its owner for United States federal
income tax
purposes from the date it becomes so treated through the Closing
Date.
6.12 INTERIM FINANCIAL STATEMENTS. From time to time after the
date
hereof, ONEOK will deliver to Northern Border copies of the monthly
and
quarterly financial statements (which shall include a balance sheet
and a
statement of income) for the Entities for all periods after the
Balance Sheet
Date through and including the Closing Date (collectively, the
"Interim
Financial Statements"). The Interim Financial Statements will be
prepared on the
same basis as the Financial Statements and will present fairly in
all material
respects the financial position, results of operations and cash
flows of the
Entities as of such dates and for the periods then ended (subject
to normal
year-end audit adjustments consistent with prior periods).
6.13 COOPERATION REGARDING AUDITS. ONEOK acknowledges and
understands
that Northern Border may be required to obtain certain information
relating to
the Entities including, but not limited to, audited or unaudited
financial
statements of the Entities, and disclose such information in
registration
statements and other documents filed with the Securities and
Exchange Commission
under the federal securities laws or in disclosure documents given
to investors
in certain securities offerings, including in connection with the
third-party
financing required to satisfy Northern Border's obligations under
Section 1.2 of
the Northern Border Purchase Agreement. At Northern Border's cost,
ONEOK agrees
to use commercially reasonable efforts to cooperate, and shall
cause its
Affiliates, accountants, counsel and other agents and
representatives to
cooperate, with Northern Border in connection therewith with
respect to the
Entities for periods prior to the Closing, including the execution
and delivery
of any customary audit representation letters, consents or comfort
letters and
representation letters
31
<PAGE>
for such periods presented to ONEOK by Northern Border and its
auditors for
execution in connection therewith.
6.14 INSURANCE MATTERS. The Parties acknowledge that the
facilities
owned by Venice Energy Services Co., L.L.C. ("VESCO") were damaged
by Hurricane
Katrina in 2005 and that ONEOK VESCO Holdings, L.L.C. ("VESCO
Holdings"), a
wholly-owned subsidiary of ONEOK, holds 10.1765% of the outstanding
equity
interests in VESCO. The Parties further acknowledge that VESCO
Holdings has
contributed approximately $2,500,000 to VESCO as the pro rata
amount that
VESCO's partnership committee required the partners in VESCO to
contribute for
the repair costs for such facilities. In addition to such prior
contribution,
ONEOK shall pay or reimburse Northern Border for its pro rata share
of any
additional amounts the VESCO partnership committee requires the
partners in
VESCO to contribute to VESCO with respect to such hurricane damage
occurring in
2005. As a result, the Parties acknowledge and agree that ONEOK
shall receive
and retain all proceeds of any casualty loss insurance that may
relate to such
facilities for the period prior to the Closing. With respect to any
"business
interruption" or similar insurance coverage that may relate to the
interest of
ONEOK or its Affiliates in VESCO, ONEOK or its Affiliates (other
than the
Entities) shall retain or be paid that portion of any such
insurance proceeds
that may be paid covering the period prior to Closing, and the
Entities shall
retain or be paid that portion of any such insurance proceeds
covering the
period on or after Closing. To the extent either Party receives any
insurance
proceeds that are payable to the other Party as set forth in this
Section 6.14,
then such proceeds shall be promptly paid to such other Party.
SECTION 7. CONDITIONS TO CLOSING
7.1 CONDITIONS TO THE OBLIGATIONS OF ONEOK. The obligation of ONEOK
to
consummate this Agreement and the transactions contemplated hereby
is subject to
the fulfillment, prior to or at the Closing, of the following
conditions
precedent unless waived by ONEOK in its sole discretion:
(a) Accuracy of Representations and Warranties.
(i) All representations and warranties made by the NBP
Partnerships (other than those set forth in Section 3.9 (SEC
Filings)) herein
and in any Related Agreement shall be true and correct when made
and on and as
of the Closing, except for representations and warranties that are
made as of a
specific date or time, which shall be true and correct only as of
such specific
date or time, except for such failures of such representations and
warranties to
be true and correct (without giving effect to any limitation or
qualification as
to Northern Border Material Adverse Effect or "materiality"
(including the word
"material") set forth therein) as would not, individually or in the
aggregate,
have a material adverse effect on the ability of the NBP
Partnerships to perform
their obligations hereunder and consummate the transactions
contemplated hereby
on the Closing Date;
(ii) The representations and warranties made by Northern
Border in Section 3.9 (SEC Filings) shall be true and correct in
all material
respects when made and on and as of the Closing, with the same
force and effect
as if made on and as of the Closing, except for
32
<PAGE>
representations and warranties that are made as of a specific date
or time,
which shall be true and correct in all material respects only as of
such
specific date or time.
(b) Compliance with Covenants. The NBP Partnerships shall have
performed in all material respects all obligations and agreements,
and complied
in all material respects with all covenants, contained in this
Agreement and any
Related Agreements to be performed or complied with by it prior to
or on the
Closing.
(c) No Material Change. Since the date hereof, there shall not
have occurred any event, development or circumstance that,
individually or in
the aggregate, has had or would reasonably be expected to have a
Northern Border
Material Adverse Effect.
(d) Certificate from Officers. The NBP Partnerships shall have
delivered to ONEOK a certificate of Northern Border's Chief
Financial and
Accounting Officer dated as of the Closing to the effect that the
statements set
forth in paragraphs (a), (b) and (c) above in this Section 7.1 are
true and
correct.
(e) No Injunction. At the time of Closing there shall be no
effective injunction, writ or preliminary restraining order or any
Governmental
Order of any nature issued by a Governmental Authority of competent
jurisdiction
to the effect that the transactions contemplated by this Agreement
may not be
consummated as herein provided, and no proceeding or lawsuit shall
have been
commenced by any Governmental Authority or other Person for the
purpose of
obtaining any such injunction, writ or preliminary restraining
order.
(f) Hart-Scott-Rodino. All required filings under the HSR Act
shall have been completed and all applicable time limitations under
such Act
shall have expired without a request for further information by the
relevant
Governmental Authorities under such Act, or in the event of such a
request for
further information, the expiration of all applicable time
limitations under the
Act shall have occurred without the objection of such federal
authorities.
(g) Governmental Approvals. The consent of (i) Kansas
Corporation
Commission for transfer of Certificates of Convenience and
Necessity and
transfer of tariffs related to Mid-Continent Marketing Center ("KCC
Consent")
and (ii) Oklahoma Corporation Commission for the sale of ONEOK
Gas
Transportation, L.L.C. ("OCC Consent"), shall have been
obtained.
(h) Other Transactions. The transactions contemplated by the
Purchase and Sale Agreement by and between ONEOK, Northern Border
and NBILP,
dated concurrently with this Agreement (the "Northern Border
Purchase
Agreement"), the Purchase and Sale Agreement between TransCan
Northwest Border
Ltd and Northern Plains Natural Gas Company, LLC (the "GP Purchase
Agreement")
and the Partnership Interest Purchase and Sale Agreement by and
between NBILP
and TC PipeLines Intermediate Limited Partnership, dated February
__, 2006 (the
"TransCanada Agreement" and, together with the Northern Border
Purchase
Agreement and the GP Purchase Agreement, the "Other Transaction
Agreements"),
shall have been consummated on the Closing Date (the transactions
contemplated
by the GP Purchase Agreement shall be consummated immediately prior
to the
Closing and ONEOK or its Affiliates shall, immediately following
such
consummation, own 100% of the general partnership interests
33
<PAGE>
in Northern Border, the transactions contemplated by the Northern
Border
Purchase Agreement shall be consummated simultaneously with the
Closing and the
transactions contemplated by the TransCanada Agreement shall be
consummated
immediately following the Closing).
(i) Amendment to Credit Facility. An amendment to each of (A)
the
Credit Agreement dated as of September 17, 2004 by and among ONEOK,
Bank of
America, N.A., and the financial institutions therein named as
Lenders, as
amended, and (B) the Credit Agreement dated June 27, 2005 among
ONEOK, Inc., as
Borrower, Citibank, N.A., as Administrative Agent, and the Lenders
party
thereto, as amended, shall have been executed and delivered by the
parties
thereto in form and substance reasonably satisfactory to ONEOK that
permits
ONEOK to enter into and perform its obligations under this
Agreement.
(j) Delivery of Deliverables. Each of the deliveries set forth
in
Section 1.3(c) shall have been made.
(k) Bushton Consents. Written consents and agreements from the
trustees, owner participants, noteholders and other parties as may
reasonably be
necessary in connection with the transfer of ONEOK Bushton
Processing, Inc.
("OBPI") to Northern Border, and in connection with the conversion
of OBPI to a
limited liability company, shall have been obtained.
7.2 CONDITIONS TO THE OBLIGATIONS OF THE NBP PARTNERSHIPS. The
obligation of the NBP Partnerships to consummate this Agreement and
the
transactions contemplated hereby is subject to the fulfillment,
prior to or at
the Closing, of the following conditions precedent unless waived by
the NBP
Partnerships in writing in their sole discretion:
(a) Accuracy of Representations and Warranties. All
representations and warranties made by ONEOK herein and in any
Related Agreement
shall be true and correct when made and on and as of the Closing,
except for
representations and warranties that are made as of a specific date
or time,
which shall be true and correct only as of such specific date or
time except for
such failures of such representations and warranties to be true and
correct
(without giving effect to any limitation or qualification as to
"materiality"
(including the word "material") or "Material Adverse Effect" set
forth therein)
as would not, individually or in the aggregate, have a Material
Adverse Effect.
(b) Compliance with Covenants. ONEOK shall have performed in
all
material respects all obligations and agreements, and complied in
all material
respects with all covenants, contained in this Agreement and any
Related
Agreements to be performed or complied with by it prior to or on
the Closing.
(c) No Material Change. Since the date hereof, there shall not
have occurred any event, development or circumstance with respect
to ONEOK or
the Entities that, individually or in the aggregate, has had or
would reasonably
be expected to have a Material Adverse Effect or a material adverse
effect on
the ability of ONEOK to perform its obligations hereunder and
consummate the
transactions contemplated hereby on the Closing Date.
(d) Certificate from Officers. ONEOK shall have delivered to
Northern Border a certificate of ONEOK's Chief Financial Officer
dated as of the
Closing to the effect that
34
<PAGE>
the statements set forth in paragraphs (a), (b) and (c) above in
this Section
7.2 are true and correct.
(e) No Injunction. At the time of Closing there shall be no
effective injunction, writ or preliminary restraining order or any
Governmental
Order of any nature issued by a Governmental Authority of competent
jurisdiction
to the effect that the transactions contemplated by this Agreement
may not be
consummated as herein provided, and no proceeding or lawsuit shall
have been
commenced by any Governmental Authority or other Person for the
purpose of
obtaining any such injunction, writ or preliminary restraining
order.
(f) Hart-Scott-Rodino. All required filings under the HSR Act
shall have been completed and all applicable time limitat
