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SIXTH
SUPPLEMENTAL INDENTURE
between
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
Issuer
and
THE
BANK OF NEW YORK TRUST COMPANY, N.A
Trustee
Dated
as of June 12, 2008
Table
of Contents
ARTICLE
I
DEFINITIONS
SECTION 1.1
Definition of
Terms...............................................................................................................................................................................................................................................................3
ARTICLE
II
GENERAL
TERMS AND CONDITIONS OF THE SENIOR NOTES
SECTION 2.1
Designation and Principal Amount of the Senior
Notes..............................................................................................................................................................................................10
SECTION 2.2 Maturity
of the Senior
Notes............................................................................................................................................................................................................................................10
SECTION 2.3 Interest
on the Senior
Notes.............................................................................................................................................................................................................................................10
SECTION 2.4 Form of
the Senior
Notes...................................................................................................................................................................................................................................................10
SECTION 2.5
Redemption of the Senior
Notes.......................................................................................................................................................................................................................................10
ARTICLE
III
COVENANTS
SECTION 3.1
Limitation on Restricted
Payments..................................................................................................................................................................................................................................11
SECTION 3.2 Limitation on
Liens.............................................................................................................................................................................................................................................................12
SECTION 3.3 Restriction
on
Sale-Leasebacks........................................................................................................................................................................................................................................14
SECTION 3.4 Financial
Information..........................................................................................................................................................................................................................................................15
SECTION 3.5 Applicability
of
Covenants................................................................................................................................................................................................................................................16
ARTICLE
IV
DEFAULT
SECTION 4.1
General..................................................................................................................................................................................................................................................................................16
SECTION 4.2
Additional Event of
Default..............................................................................................................................................................................................................................................16
ARTICLE
V
DEFEASANCE
SECTION 5.1
General..................................................................................................................................................................................................................................................................................
16
SECTION 5.2 Covenant
Defeasance.........................................................................................................................................................................................................................................................16
ARTICLE
VI
FORM
OF SENIOR NOTES
SECTION 6.1 Form of
Senior
Notes..........................................................................................................................................................................................................................................................17
ARTICLE
VII
ISSUANCE
OF SENIOR NOTES
SECTION 7.1 Original
Issue of Senior
Notes..........................................................................................................................................................................................................................................25
SECTION 7.2
Additional Senior
Notes....................................................................................................................................................................................................................................................25
ARTICLE
VIII
MISCELLANEOUS
SECTION 8.1 Consent,
Amendment and
Waiver...................................................................................................................................................................................................................................25
SECTION 8.2
Ratification of
Indenture....................................................................................................................................................................................................................................................26
SECTION 8.3 Trustee
Not Responsible for
Recitals..............................................................................................................................................................................................................................26
SECTION 8.4
Governing
Law....................................................................................................................................................................................................................................................................26
SECTION 8.5
Separability..........................................................................................................................................................................................................................................................................26
SECTION 8.6
Counterparts........................................................................................................................................................................................................................................................................26
SIXTH
SUPPLEMENTAL INDENTURE, dated as of June 12, 2008 (the
“Sixth Supplemental Indenture”), between Panhandle
Eastern Pipe Line Company, LP (formerly known as Panhandle
Eastern Pipe Line Company, LLC and Panhandle Eastern Pipe Line
Company), a Delaware limited partnership (the
“Issuer”), and The Bank of New York Trust Company,
N.A. (as successor to J.P. Morgan Trust Company, National
Association), as trustee (the “Trustee”) under the
indenture, dated as of March 29, 1999, among the Issuer, CMS
Panhandle Holding Company, a Michigan corporation, and NBD
Bank, as trustee (the “Base Indenture” and, as so
supplemented, the “Indenture”).
WHEREAS,
CMS Panhandle Holding Company and the Issuer executed and
delivered the Base Indenture to NBD Bank to provide for the
future issuance of CMS Panhandle Holding Company’s
unsecured debt securities guaranteed by the Issuer, to be
issued from time to time in one or more series as might be
determined by CMS Panhandle Holding Company under the
Indenture, in an unlimited aggregate principal amount which
may be authenticated and delivered as provided in the Base
Indenture;
WHEREAS,
the Issuer, CMS Panhandle Holding Company, and NBD Bank
executed the First Supplemental Indenture, dated as of March
29, 1999, under which CMS Panhandle Holding Company issued a
series of Debt Securities in three tranches known as its
6.125% Senior Notes due 2004, 6.500% Senior Notes due 2009 and
7.000% Senior Notes due 2029 in aggregate principal amounts of
$300,000,000, $200,000,000 and $300,000,000,
respectively;
WHEREAS,
Panhandle Eastern Pipe Line Company became the Issuer as
provided for in the Base Indenture as a result of the merger
of CMS Panhandle Holding Company into Panhandle Eastern Pipe
Line Company, effective June 15, 1999, and Bank One Trust
Company, National Association became the Trustee provided for
in the Base Indenture as a result of the merger of NBD Bank
into Bank One Trust Company, National
Association;
WHEREAS,
the Issuer and the Trustee executed the Second Supplemental
Indenture, dated as of March 27, 2000, under which the Issuer
issued a series of Debt Securities known as its 8.25% Senior
Notes due 2010, Series A, in the principal amount of
$100,000,000 (the “2010 A Senior Notes”), and a
series of senior notes to be issued in exchange for the 2010 A
Senior Notes, known as the Issuer’s “8.25% Senior
Notes Due 2010, Series B,” in the principal amount of
$100,000,000;
WHEREAS,
in June, 2003, Southern Union Panhandle, LLC, a wholly-owned
subsidiary of Southern Union Company (“Southern
Union”), acquired all of the outstanding capital stock
of the Issuer, after which Southern Union caused Panhandle
Eastern Pipe Line Company to convert to a Delaware limited
liability company;
WHEREAS,
the Issuer and the Trustee executed the Third Supplemental
Indenture, dated as of August 18, 2003, to provide for the
establishment of two new series of its Debt Securities: (i)
the 4.80% Senior Notes due 2008 in the initial principal
amount of $300,000,000, consisting of two tranches, the first
tranche of 4.80% Senior Notes due 2008 known as “4.80%
Senior Notes due 2008, Series A” (the “4.80%
Series A Notes”), and the second tranche of 4.80% Senior
Notes due 2008 to be issued in exchange for the 4.80% Series A
Notes, known as “4.80% Senior Notes due 2008, Series
B”; and (ii) the 6.05% Senior Notes due 2013 in the
initial
principal
amount of $250,000,000, consisting of two tranches, the first
tranche of 6.05% Senior Notes due 2013 known as “6.05% Senior
Notes due 2013, Series A” (the “6.05% Series A
Notes”), and the second tranche of 6.05% Senior Notes due
2013 to be issued in exchange for the 6.05% Series A Notes, known
as the “6.05% Senior Notes due 2013, Series
B”;
WHEREAS,
J.P. Morgan Trust Company, National Association became the
Trustee provided for in the Base Indenture as a result of the
assumption of certain assets of Bank One Trust Company,
National Association by a merger subsidiary which later merged
with and into J.P. Morgan Trust Company, National
Association;
WHEREAS,
the Issuer and Trustee executed the Fourth Supplemental
Indenture, dated as of March 12, 2004, under which
the Issuer issued two new series of its Debt Securities: (i)
the 2.75% Senior Notes due 2007, Series A, in the initial
principal amount of $200,000,000 (the “Series A
Notes”), and (ii) the second series, to be issued in
exchange for the Series A Notes, known as the “2.75%
Senior Notes due 2007, Series B”;
WHEREAS,
in June 2004, the Issuer converted from a Delaware limited
liability company to a Delaware limited
partnership;
WHEREAS,
in October 2006, The Bank of New York Trust Company, N.A.
became the Trustee provided for in the Base Indenture as a
result of the sale by The Bank of New York Company, Inc. of
its retail and regional middle market banking business to JP
Morgan Chase & Co. in exchange for, among other things,
the acquisition of J.P. Morgan Trust Company, National
Association;
WHEREAS,
the Issuer and Trustee executed the Fifth Supplemental
Indenture, dated as of October 26, 2007, under which the
Issuer issued a new series of its Debt Securities known as the
6.20% Senior Notes due 2017, in the principal amount of
$300,000,000.
WHEREAS,
the Issuer desires to issue a new series of Debt Securities
known as the 7.000 % Senior
Notes due 2018, in the principal amount of $400,000,000
(the “Senior Notes”), the form and substance of
such Senior Notes and the terms, provisions and conditions
thereof to be set forth as provided in the Base Indenture and
this Sixth Supplemental Indenture,
WHEREAS,
there is no limit on the amount of Additional Senior Notes (as
defined below) that may be issued after the initial issuance
of the Initial Senior Notes (as defined below), provided that at
the time of issuance of any Additional Senior Notes, no Event
of Default shall have occurred and be continuing;
WHEREAS,
on June 5, 2008, the Issuer registered the Senior Notes under
the Securities Act pursuant to the Registration Statement on
Form S-3 (Registration No. 333-137998), as amended by
Post-Effective Amendment No. 1;
WHEREAS,
the Issuer wishes to amend and add certain provisions to the
Base Indenture for the benefit of the holders of the Senior
Notes; and
WHEREAS,
the Issuer has requested that the Trustee execute and deliver
this Sixth Supplemental Indenture, and all requirements
necessary to make this Sixth Supplemental
Indenture
a valid instrument, in accordance with its terms, and to make the
Senior Notes, when executed by the Issuer and authenticated and
delivered by the Trustee, the valid obligations of the Issuer, have
been performed, and the execution and delivery of this Sixth
Supplemental Indenture has been duly authorized in all
respects:
NOW
THEREFORE, in consideration of the purchase and acceptance of
the Senior Notes to be issued hereunder by the holders
thereof, and for the purpose of setting forth, as provided in
the Indenture, the form and substance of the Senior Notes and
the terms, provisions and conditions thereof, the Issuer
covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION
1.1
Definition of Terms .
Unless
the context otherwise requires:
(a) a
term defined in the Base Indenture has the same meaning when
used in this Sixth Supplemental Indenture;
(b) a
term defined anywhere in this Sixth Supplemental Indenture has
the same meaning throughout;
(c) the
singular includes the plural and vice versa;
(d) a
reference to a Section or Article is to a Section or
Article of this Sixth Supplemental Indenture;
(e) headings
are for convenience of reference only and do not affect
interpretation;
(f) the
following terms have the meanings given to them in this
Section 1.01(f):
“Additional
Senior Notes” means any additional Senior Notes (other
than Initial Senior Notes) issued from time to time under this
Sixth Supplemental Indenture in accordance with Section 2.04
of the Base Indenture, as a part of the same series as the
Initial Senior Notes; provided , that
no Additional Senior Notes may be issued during the
continuance of an Event of Default.
“Adjusted
Consolidated Net Income” means, for any period, the net
income of the Issuer and its Consolidated Subsidiaries, plus
(i) depreciation and amortization expense of the Issuer and
its Consolidated Subsidiaries, (ii) income taxes and deferred
taxes of the Issuer and its Consolidated Subsidiaries and
(iii) other non-cash charges, in each case, determined on a
consolidated basis in accordance with generally accepted
accounting principles; provided ,
however , that
there shall not be included in such Adjusted Consolidated Net
Income any net income of any Person if such Person is not a
Subsidiary, except that (A) the Issuer’s equity in the
net income of any such Person for such period shall be
included in such Adjusted Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person
during such period to the Issuer or a Consolidated Subsidiary
of the Issuer as a dividend or other distribution and (B) the
Issuer’s equity in a net loss of any such Person for
such period shall be included in determining such Adjusted
Consolidated Net Income.
“Capital
Stock” means any and all shares, interests, rights to
purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate
stock, partnership interests or limited liability company
interests, including any Preferred Stock or letter stock;
provided that
Hybrid Preferred Securities are not considered Capital Stock
for purposes of this definition.
“Comparable
Treasury Issue” means the United States Treasury
security or securities selected by an Independent Investment
Banker as having an actual or interpolated maturity comparable
to the remaining term of the Senior Notes to be redeemed that
would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of
corporate debt securities of a comparable maturity to the
remaining term of such Senior Notes.
“Comparable
Treasury Price” means, with respect to any redemption
date, (A) the average of the Reference Treasury Dealer
Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations,
or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such
quotations.
“Consolidated
Debt” means the total Debt of the Issuer and its
Consolidated Subsidiaries, as set forth on the consolidated
balance sheet of the Issuer and its Consolidated Subsidiaries
for the Issuer’s most recently completed fiscal quarter,
prepared in accordance with generally accepted accounting
principles.
“Consolidated
Interest Expense” means, for any period, the total
interest expense in respect of Consolidated Debt of the Issuer
and its Consolidated Subsidiaries, including, without
duplication, (i) interest expense attributable to capital
leases, (ii) amortization of debt discount, (iii) capitalized
interest, (iv) cash and noncash interest payments, (v)
commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance
financing, (vi) net costs under Interest Rate Protection
Agreements (including amortization of discount), and (vii)
interest expense in respect of obligations of other Persons
that constitutes Debt of the Issuer or any of its Consolidated
Subsidiaries, provided ,
however , that
Consolidated Interest Expense shall exclude any costs
otherwise included in interest expense recognized on early
retirement of debt.
“Consolidated
Net Tangible Assets” means, at any date of
determination, the total amount of assets after deducting
therefrom (i) all current liabilities (excluding (A) any
current liabilities that by their terms are extendable or
renewable at the option of the obligor thereon to a time more
than 12 months after the time as of which the amount thereof
is being computed, and (B) current maturities of long-term
debt), and (ii) the value (net of any applicable reserves) of
all goodwill, trade names, trademarks, patents and other like
intangible assets, all as set forth on the consolidated
balance sheet of the Issuer and its Consolidated Subsidiaries
for the Issuer’s most recently completed fiscal quarter,
prepared in accordance with generally accepted accounting
principles. “Intangible assets” does
not include any value write-up of tangible assets in
connection with acquisition transactions accounted for on a
purchase method.
“Consolidated
Subsidiary” means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the
Issuer in accordance with generally accepted accounting
principles.
“DTC”
means The Depository Trust Company, or any successor
thereto.
“Debt”
means any obligation created or assumed by any Person for the
repayment of money borrowed and any purchase money obligation
created or assumed by such Person.
“Depositary”
means, with respect to the Global Notes, DTC.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Exchangeable
Stock” means any Capital Stock of a corporation or a
limited liability company that is exchangeable or convertible
into another security (other than Capital Stock of such
corporation, partnership or limited liability company that is
neither Exchangeable Stock nor Redeemable Stock).
“Fixed
Charge Coverage Ratio” means the ratio of Adjusted
Consolidated Net Income plus Consolidated Interest Expense to
Consolidated Interest Expense, for the four fiscal quarters of
the Issuer ending immediately prior to the date of
determination.
“Funded
Debt” means all Debt maturing one year or more from the
date of the creation thereof, all Debt directly or indirectly
renewable or extendable, at the option of the debtor, by its
terms or by the terms of any instrument or agreement relating
thereto, to a date one year or more from the date of the
creation thereof, and all Debt under a revolving credit or
similar agreement obligating the lender or lenders to extend
credit over a period of one year or more.
“Global
Note” means a Senior Note evidencing all or part of a
series of Senior Notes, issued to the Depositary or its
nominee with respect to such series of Senior Notes and
registered in the name of such Depositary or
nominee.
“Holder”
means a Person in whose name a Senior Note is
registered.
“Hybrid
Preferred Securities” means preferred securities issued
by a Hybrid Preferred Securities Subsidiary, where such
preferred securities have the following characteristics: (i)
such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of such
preferred securities to the Issuer in exchange for
subordinated debt issued by the Issuer; (ii) such preferred
securities contain terms providing for the deferral of
distributions corresponding to provisions providing for the
deferral of interest payments on such subordinated debt; and
(iii) the Issuer makes periodic interest payments on such
subordinated debt, which interest payments are in turn used by
the Hybrid Preferred Securities Subsidiary to make
corresponding payments to the holders of the Hybrid Preferred
Securities.
“Hybrid
Preferred Securities Subsidiary” means any business
trust or limited partnership (or similar entity) (i) all of
the common equity interest of which is owned (either directly
or indirectly through one or more wholly-owned Subsidiaries of
the Issuer) at all times by the Issuer, (ii) that has been
formed for the purpose of issuing Hybrid Preferred Securities
and (iii) substantially all of the assets of which consist at
all times solely of subordinated debt issued by the Issuer and
payments made from time to time on such subordinated
debt.
“Independent
Investment Banker” means any of Credit Suisse Securities
(USA) LLC, Banc of America Securities LLC and J.P. Morgan
Securities Inc. (and their respective successors) or, if no
such firm is willing and able to select the applicable
Comparable Treasury Issue or perform the other functions of
the Independent Investment Banker provided in the Indenture,
an independent investment banking institution of national
standing appointed by us and reasonably acceptable to the
Trustee.
“Initial
Senior Notes” means the initial $400,000,000 aggregate
principal amount of Senior Notes issued under this Sixth
Supplemental Indenture.
“Interest
Rate Protection Agreement” means any interest rate swap
agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect the Issuer or any
of its Subsidiaries against fluctuations in interest
rates.
“Leverage
Ratio” means 100% multiplied by the ratio of
Consolidated Debt to Total Capital at the end of the most
recent fiscal quarter preceding the date of
determination.
“Lien”
means any mortgage, pledge, security interest, charge, lien or
other encumbrance of any kind, whether or not filed, recorded
or perfected under applicable law.
“Loan”
means any direct or indirect advance (other than advances to
customers in the ordinary course of business that are recorded
as receivables on the balance sheet of the Person making such
advances), loan or other extension of credit (including by way
of guarantee or similar arrangement) to another Person or any
purchase of Debt issued by another Person, where such advance,
loan, extension of credit or Debt is subordinated in right of
payment to the senior creditors of the borrower.
“Moody’s”
means Moody’s Investors Service, Inc., and any successor
thereto which is a nationally recognized statistical rating
organization, or if such entity shall cease to rate the Senior
Notes or shall cease to exist and there shall be no such
successor thereto, any other nationally recognized statistical
rating organization selected by the Issuer which is acceptable
to the Trustee.
“Non-Convertible
Capital Stock” means, with respect to any corporation,
partnership or limited liability company, any non-convertible
Capital Stock of such corporation, partnership or limited
liability company and any Capital Stock of such corporation,
partnership or limited liability company convertible solely
into non-convertible Capital Stock other than Preferred Stock
of such corporation, partnership or limited liability company;
provided ,
however , that
Non-Convertible Capital Stock shall not include any Redeemable
Stock or Exchangeable Stock.
“Permitted
Liens” means:
(i) Liens
upon rights-of-way for pipeline purposes;
(ii) any
governmental Lien, mechanics’, materialmen’s,
carriers’ or similar Lien incurred in the ordinary
course of business which is not yet due or which is being
contested in good faith by appropriate proceedings and any
undetermined Lien which is incidental to
construction;
(iii) the
right reserved to, or vested in, any municipality or public
authority by the terms of any right, power, franchise, grant,
license, permit or by any provision of law, to purchase or
recapture or to designate a purchaser of, any
property;
(iv) Liens
for taxes and assessments which are (A) for the then current
year, (B) not at the time delinquent, or (C) delinquent but
the validity of which is being contested at the time by the
Issuer or any of its Subsidiaries in good faith;
(v) Liens
of, or to secure performance of, leases;
(vi) any
Lien upon, or deposits of, any assets in favor of any surety
company or clerk of court for the purpose of obtaining
indemnity or stay of judicial proceedings;
(vii) any
Lien upon property or assets acquired or sold by the Issuer or
any Restricted Subsidiary resulting from the exercise of any
rights arising out of defaults on receivables;
(viii) any
Lien incurred in the ordinary course of business in connection
with workmen’s compensation, unemployment insurance,
temporary disability, social security, retiree health or
similar laws or regulations or to secure obligations imposed
by statute or governmental regulations;
(ix) any
Lien upon any property or assets in accordance with customary
banking practice to secure any Debt incurred by the Issuer or
any Restricted Subsidiary in connection with the exporting of
goods to, or between, or the marketing of goods in, or the
importing of goods from, foreign countries; or
(x) any
Lien in favor of the United States of America or any state
thereof, or any other country, or any political subdivision of
any of the foregoing, to secure partial, progress, advance or
other payments pursuant to any contract or statute, or any
Lien securing industrial development, pollution control or
similar revenue bonds.
“Principal
Property” means any natural gas pipeline system, natural
gas gathering system or natural gas storage facility located
in the United States, except any such property that in the
opinion of the Board of Directors is not of material
importance to the business conducted by the Issuer and its
Consolidated Subsidiaries taken as a whole.
“Prospectus”
shall mean the prospectus included in the Registration
Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus
supplement, including any such prospectus supplement with
respect to the terms of the offering of any portion of the
Senior Notes covered by the Registration Statement, and by all
other amendments and supplements to a prospectus, including
post-effective amendments, and in each case including all
material incorporated by reference therein.
“Redeemable
Stock” means any Capital Stock that by its terms or
otherwise is required to be redeemed prior to the 90th day
before the stated maturity of any of the outstanding Senior
Notes of any series or is redeemable at the option of the
holder thereof at any time prior to the 90th day before the
stated maturity of any of the outstanding Senior Notes of
either series.
“Reference
Treasury Dealer” means each of Credit Suisse Securities
(USA) LLC, Banc of America Securities LLC and J.P. Morgan
Securities Inc. (in each case, or its affiliates and its
successors); if any of the Reference Treasury Dealers resign,
the respective successor dealer shall be (1) a primary U.S.
Government Securities dealer in the City of New York (a
“Primary Treasury Dealer”), and (2) any other
Primary Treasury Dealer selected by the Company.
“Reference
Treasury Dealer Quotations” means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Trustee, of the bid
and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted
in writing to the Trustee by such Reference Treasury Dealer at
3:30 p.m. New York time on the third Business Day
preceding such redemption date.
“Registration
Statement” means that certain Registration Statement
on Form S-3 (Registration no. 333-137998), as amended by
Post-Effective Amendment No.1, as filed with
the SEC by the Issuer and Southern Union.
“Restricted
Subsidiary” means any Subsidiary of the Issuer owning or
leasing any P
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