This excerpt taken from the TCLP 8-K filed Feb 23, 2007.
(i) Deadline To Go Effective. As soon as practicable following the Closing, but in any event within 30 days of the Closing Date, the Partnership shall prepare and file a shelf registration statement on Form S-3 under the Securities Act to permit the resale of the Registrable Securities from time to time, including as permitted by Rule 415 under the Securities Act (or any similar provision then in force) under the Act with respect to all of the Registrable Securities (the Registration Statement). The Partnership shall use its commercially reasonable efforts to cause the Registration Statement to become effective no later than 90 days following the date the Registration Statement is filed. The Partnership will use its commercially reasonable efforts to cause the Registration Statement filed pursuant to this Section 2.1 to be continuously effective under the Securities Act until the earlier of (i) the date as of which all such Registrable Securities are sold by the Purchasers, (ii) the date when such Registrable Securities become eligible for resale under Rule 144(k) (or any similar provision then in force) under the Securities Act, or two years from the date the Registration Statement is declared effective by the Commission (the Effectiveness Period). The Registration Statement, when declared effective (including the documents incorporated therein by reference), shall comply as to form with all applicable requirements of the Securities Act and the Exchange Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(ii) Failure To Go Effective. If the Registration Statement required by Section 2.1 of this Agreement is not declared effective within 120 days after the Closing Date, then each Purchaser that is not a TransCanada Purchaser shall be entitled to a payment with respect to the Units of each such Purchaser, as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period for the first 60 days following the 120th day after the Closing Date, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-day period for each subsequent 60 days, up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-day period (the Liquidated Damages). The maximum aggregate Liquidated Damages shall not exceed 10% of the gross proceeds from the sale of the Units pursuant to the Purchase Agreement to Purchasers that are not TransCanada Purchasers. The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within ten Business Days of the end of each such 30-day period. Any Liquidated Damages shall be paid to each eligible Purchaser in cash or immediately available funds; provided, however, if the Partnership certifies that it is unable to pay Liquidated Damages in cash
or immediately available funds because such payment would result in a breach under any of the Partnerships or the Partnerships Subsidiaries credit facilities or other indebtedness filed as exhibits to the Partnership SEC Documents, then the Partnership may pay the Liquidated Damages in kind in the form of the issuance of additional Common Units. Upon any issuance of Common Units as Liquidated Damages, the Partnership shall promptly prepare and file an amendment to the Registration Statement prior to its effectiveness adding such Common Units to such Registration Statement as additional Registrable Securities. The determination of the number of Common Units to be issued as Liquidated Damages shall be equal to the amount of Liquidated Damages divided by the volume weighted average closing price of the Common Units on The Nasdaq Global Select Market for the ten trading days immediately preceding the date on which the Liquidated Damages payment is due, less a discount of 2%. The payment of Liquidated Damages to a Purchaser shall cease at such time as the Units of such Purchaser become eligible for resale under Rule 144(k) under the Securities Act. As soon as practicable following the date that the Registration Statement becomes effective, but in any event within two Business Days of such date, the Partnership shall provide the Purchasers with written notice of the effectiveness of the Registration Statement.
(iii) Waiver of Liquidated Damages. If the Partnership is unable to cause a Registration Statement to go effective within 120 days following the Closing Date as a result of an acquisition, merger, reorganization, disposition or other similar transaction, then the Partnership may request a waiver of the Liquidated Damages, which may be granted or withheld by the consent of the Holders of a majority of the Units that are not held by TransCanada Purchasers, taken as a whole, in their sole discretion. A Purchasers rights (and any transferees rights pursuant to Section 2.10 of this Agreement) under this Section 2.1 shall terminate upon the earlier of (i) when all such Registrable Securities are sold by such Purchaser or transferee, as applicable, and (ii) when such Registrable Securities become eligible for resale under Rule 144(k) (or any similar provision then in force) under the Securities Act.
(b) Delay Rights. Notwithstanding anything to the contrary contained herein, the Partnership may, upon written notice to any Selling Holder whose Registrable Securities are included in the Registration Statement, suspend such Selling Holders use of any prospectus which is a part of the Registration Statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to the Registration Statement but may settle any such existing sales) if (i) the Partnership is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and the Partnership determines in good faith that the Partnerships ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in the Registration Statement or (ii) the Partnership has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of the Partnership, would materially adversely affect the Partnership; provided, however, in no event shall the Purchasers be suspended for a period that exceeds an aggregate of 30 days in any 90-day period or 90 days in any 365-day period. Upon disclosure of such information or the termination of the condition described above, the Partnership shall provide prompt notice to the Selling Holders whose Registrable Securities are included in the Registration Statement, shall promptly terminate any suspension of sales it has