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Exhibit 3(b)
AGREEMENT OF LIMITED PARTNERSHIP OF
PANHANDLE EASTERN PIPE LINE COMPANY, LP
This
Agreement of Limited Partnership of Panhandle Eastern Pipe Line
Company, LP (the "Agreement") is made and
entered into effective as of the 29th
day of June, 2004, by and among Southern
Union Panhandle LLC, a Delaware limited
liability company, as General Partner, and
Southern Union Company, a Delaware
corporation, as Limited Partner.
RECITALS
WHEREAS,
the General Partner, as the sole member of the Predecessor LLC,
has duly approved the conversion of the
Predecessor LLC to a limited
partnership, pursuant to Section 17-217(h)
of the Act;
WHEREAS,
the General Partner has heretofore formed the Partnership by
filing a Certificate of Conversion from a
Limited Liability Company to a Limited
Partnership and a Certificate of Limited
Partnership with the office of the
Secretary of State of the State of
Delaware; and
WHEREAS, the
parties hereto desire to provide for the governance of the
Partnership and to set forth in detail
their respective rights and duties
relating to the Partnership;
NOW, THEREFORE,
in consideration of the mutual promises and obligations
contained herein, the parties, intending to
be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section
1.1 Definitions. Unless the context otherwise requires, the
terms
defined in this Article I shall, for the
purposes of this Agreement, have the
meanings herein specified.
"Act"
means the Delaware Revised Uniform Limited Partnership Act, 6
Del.
Code Ann. Tit. 6 Sections 17-101, et seq.,
as amended from time to time.
"Affiliate" means, with respect to any Person, any other Person
that
directly or indirectly through one or more
intermediaries controls, is
controlled by or is under common control
with, the Person in question. As used
herein, the term "control" means the
possession, direct or indirect, of the
power to direct or cause the direction of
the management and policies of a
Person, whether through ownership of voting
securities, by contract or
otherwise.
"Agreement" means this Agreement of Limited Partnership of
Panhandle
Eastern Pipe Line Company, LP, as it may be
amended, supplemented or restated
from time to time.
"Available
Cash" means, with respect to any Quarter ending prior to the
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Liquidation Date, (a) the sum of (i) all
cash and cash equivalents of the
Partnership Group on hand at the end of
such Quarter, and (ii) all additional
cash and cash equivalents of the
Partnership Group on hand on the date of
determination of Available Cash with
respect to such Quarter resulting from
Working Capital Borrowings made subsequent
to the end of such Quarter, less (b)
the amount of any cash reserves that is
necessary or appropriate in the
reasonable discretion of the General
Partner to (i) provide for the proper
conduct of the business of the Partnership
Group (including reserves for future
capital expenditures and for anticipated
future credit needs of the Partnership
Group) subsequent to such Quarter or (ii)
comply with applicable law or any loan
agreement, security agreement, mortgage,
debt instrument or other agreement or
obligation to which any Group Member is a
party or by which it is bound or its
assets are subject; provided, however, that
disbursements made by a Group Member
or cash reserves established, increased or
reduced after the end of such Quarter
but on or before the date of determination
of Available Cash with respect to
such Quarter shall be deemed to have been
made, established, increased or
reduced, for purposes of determining
Available Cash, within such Quarter if the
General Partner so determines.
"Bankruptcy"
means, with respect to any Partner, (i) the filing by a
Partner of a voluntary petition seeking
liquidation, reorganization, arrangement
or readjustment, in any form, of its debts
under Title II of the United States
Code (or corresponding provisions of future
laws) or any other federal or state
insolvency law, or the filing by a Partner
of an answer consenting to or
acquiescing in any such petition, (ii) the
making by a Partner of any assignment
for the benefit of its creditors or the
admission by a Partner in writing of its
inability to pay its debts as they mature,
(iii) the filing of an involuntary
petition under Title 11 of the United
States Code (or corresponding provisions
of future laws), an application for the
appointment of a receiver for the assets
of a Partner, or an involuntary petition
seeking liquidation, reorganization,
arrangement or readjustment of its debts
under any other federal or state
insolvency law, provided that the same
shall not have been vacated, set aside or
stayed within a 60-day period after the
occurrence of such event, or (iv) the
entry against it of a final and
nonappealable order for relief under any
bankruptcy, insolvency or similar law now
or hereafter in effect. With respect
to a General Partner, the foregoing
definition of "Bankruptcy" is intended to
replace and shall supersede and replace the
definition of "Bankruptcy" set forth
in the Act.
"Book-Tax
Disparity" means with respect to any item of property, as of
the
date of any determination, the difference
between the book value of such
property in accordance with Section 4.3(a)
and the adjusted basis thereof for
federal income tax purposes as of such
date.
"Capital
Account" means, with respect to any Partner, the account
maintained for such Partner in accordance
with the provisions of Section 4.3.
"Certificate of Limited Partnership" means the Certificate of
Limited
Partnership of the Partnership filed with
the Secretary of State of the State of
Delaware, as such Certificate of Limited
Partnership may be amended,
supplemented or restated from time to
time.
"Code"
means the Internal Revenue Code of 1986, as amended from time
to
time, or any corresponding federal tax
statute enacted after the date of this
Agreement. A reference to a
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pecific section (Section) of the Code
refers not only to such specific section
but also to any corresponding provision of
any federal tax statute enacted after
the date of this Agreement, as such
specific section or such corresponding
provision is in effect on the date of
applications of the provisions of this
Agreement containing such reference.
"Covered
Person" has the meaning set forth in Section 10.1.
"Disabling
Conduct" shall mean conduct that constitutes fraud, willful
misconduct, bad faith or gross
negligence.
"General
Partner" means Southern Union Panhandle LLC and its successors
and permitted assigns as General Partner of
the Partnership.
"Group
Member" means a member of the Partnership Group.
"Indemnified Person" has the meaning set forth in Section 10.2.
"Limited
Partner" means Southern Union Company and its successors and
permitted assigns as Limited Partner of the
Partnership.
"Liquidating Trustee" means a Person or Persons who may be approved
by the
Limited Partner, as set forth in Section
11.4.
"Liquidation Date" means the date on which the event which gives
rise to
the dissolution of the Partnership
occurs.
"Partners"
means the General Partner and the Limited Partner.
"Partnership" means
Panhandle Eastern Pipe Line Company, LP, a Delaware
limited partnership, and any successors
thereto.
"Partnership Group" means the Partnership and each of its
Subsidiaries,
treated as a single consolidated
entity.
"Partnership Interest" means the percentage interest in the
Partnership
held by each Partner.
"Person"
means an individual or a corporation, limited liability
company,
partnership (general or limited), joint
venture, trust, unincorporated
organization, association, government
agency or political subdivision thereof or
other entity.
"Predecessor LLC" has the meaning set forth in Section 4.1.
"Quarter"
means, unless the context requires otherwise, a fiscal quarter
of the Partnership.
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"Subsidiary" means, with respect to any Person, (a) a corporation
of which
more than 50% of the voting power of shares
entitled (without regard to the
occurrence of any contingency) to vote in
the election of directors or other
governing body of such corporation is
owned, directly or indirectly, at the date
of determination, by such Person, by one or
more Subsidiaries of such Person or
a combination thereof, (b) a partnership
(whether general or limited) in which
such Person or a Subsidiary of such Person
is, at the date of determination, a
general or limited partner of such
partnership, but only if more than 50% of the
partnership interests of such partnership
(considering all of the partnership
interests of the partnership as a single
class) is owned, directly or
indirectly, at the date of determination,
by such Person, by one or more
Subsidiaries of such Person, or a
combination thereof, or (c) any other Person
(other than a corporation or a partnership)
in which such Person, one or more
Subsidiaries of such Person, or a
combination thereof, directly or indirectly,
at the date of determination, has (i) at
least a majority ownership interest or
(ii) the power to elect or direct the
election of a majority of the directors or
other governing body of such Person.
"Tax
Matters Partner" has the meaning set forth in Section 9.5.
"Working
Capital Borrowings" means borrowings exclusively for working
capital purposes made pursuant to a credit
facility or other arrangement
requiring all such borrowings thereunder to
be reduced to a relatively small
amount each year for an economically
meaningful period of time.
ARTICLE II
ORGANIZATION
Section
2.1. Formation. The Partnership was previously formed as a
limited
partnership pursuant to the provisions of
the Act. This Agreement shall become
effective on the date of this Agreement.
Except as expressly provided to the
contrary in this Agreement, the rights,
duties (including fiduciary duties),
liabilities and obligations of the Partners
and the administration, dissolution
and termination of the Partnership shall be
governed by the Act. All Partnership
Interests shall constitute personal
property of the owner thereof for all
purposes and a Partner has no interest in
specific Partnership property.
Section 2.2. Name. The
name of the Partnership shall be "Panhandle Eastern
Pipe Line Company, LP". The Partnership's
business may be conducted under any
other name or names deemed necessary or
appropriate by the General Partner. The
words "Limited Partnership", "LP", or
"Ltd." or similar words or letters shall
be included in the Partnership's name where
necessary or appropriate by the
General Partner in its sole discretion. The
General Partner in its discretion
may change the name of the Partnership at
any time and from time to time and
shall notify the Limited Partner of such
change in the next regular
communication to the Limited Partner.
Section
2.3. Principal Place of Business. The principal place of
business
of the Partnership shall be located at 5444
Westheimer, Houston, TX 77056. The
General Partner may hereafter change the
principal place of business of the
Partnership to such other place or places
as
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the General Partner may determine from time
to time in its sole discretion. The
General Partner shall give notice of any
such change to the Limited Partner. The
Partnership may maintain such other offices
at such other places as the General
Partner deems advisable.
Section
2.4. Registered Agent; Registered Office. Unless and until
changed
by the General Partner, the address of the
registered office of the Partnership
in the State of Delaware shall be located
at Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware, 19801,
and the registered agent for service
of process on the Partnership in the State
of Delaware at such registered office
shall be The Corporation Trust Company.
Section
2.5. Purpose and Business. The Partnership is formed for the
object and purpose of, and the nature of
the business to be conducted and
promoted by the Partnership is, engaging in
any lawful act or activity for which
limited partnerships may be formed under
the Act and engaging in any and all
activities necessary or incidental to the
foregoing.
Section
2.6. Powers. The Partnership shall be empowered to do any and
all
acts and things necessary, appropriate,
proper, advisable, incidental to or
convenient for the furtherance and
accomplishment of the purposes and business
described in Section 2.5 and for the
protection and benefit of the Partnership.
Section
2.7. Term. The term of the Partnership commenced on the dated
the
Certificate of Limited Partnership was
filed in the office of the Secretary of
State of the State of Delaware and, unless
the Partnership is earlier terminated
pursuant to any provision of this
Agreement, shall continue until December 31,
2099, upon which date the Partnership shall
automatically terminate; provided,
however, that with the written approval of
the Partners, the term of the
Partnership may be extended.
Section
2.8. Title to Partnership Assets. Title to Partnership assets,
whether real, personal or mixed and whether
tangible or intangible, shall be
deemed to be owned by the Partnership as an
entity, and no Partner or Assignee,
individually or collectively, shall have
any ownership interest in such
Partnership assets or any portion
thereof.
ARTICLE III
NAMES AND ADDRESSES OF PARTNERS
Section
3.1. General Partner. The name and mailing address of the
General
Partner is Southern Union Panhandle LLC,
One PEI
Center, Wilkes-Barre, Pennsylvania
18711.
Section
3.2. Limited Partner. The name and mailing address of the
Limited
Partner is Southern Union Company, One
PEI
Center, Wilkes-Barre, Pennsylvania
18711.
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ARTICLE IV
INITIAL CONTRIBUTION AND ISSUANCE OF
PARTNERSHIP INTERESTS
Section
4.1. No Contributions. As the Partnership has been formed by
converting an existing Delaware limited
liability company, Panhandle Eastern
Pipe Line Company, LLC (the "Predecessor
LLC"), to a Delaware limited
partnership, pursuant to the laws of the
State of Delaware, the Partners will
not make any initial contributions to the
Partnership, as provided in Sections
17-301(d) and 17-401(a) of the Act. No
Partner shall be required to make any
further contributions to the capital of the
Partnership or to restore at any
time any deficit in such Partner's Capital
Account.
Section
4.2. Partnership Interests.
(a) The General Partner shall have a one percent (1%)
Partnership
Interest.
(b) The Limited Partner shall have a ninety-nine percent (99%)
Partnership Interest.
Section
4.3. Capital Accounts.
(a) The Partnership shall maintain for each Partner owning a
Partnership Interest a separate Capital
Account with respect to such Partnership
Interest in accordance with the rules of
Treasury Regulation Section
1.704-1(b)(2)(iv), as applied by the
General Partner in its reasonable
discretion.
(b) A transferee of a Partnership Interest shall succeed to a
pro
rata portion of the Capital Account of the
transferor relating the Partnership
Interest so transferred.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
Section
5.1. Allocations for Capital Accounts Purposes. For purposes of
maintaining the Capital Accounts, the
Partnership's items of income, gain, loss
and deduction (computed in accordance with
Section 4.3(a)) shall be allocated 1%
to the General Partner and 99% to the
Limited Partner.
Section
5.2. Allocations for Tax Purposes.
(a) Except as otherwise provided herein, for federal income tax
purposes, each item of income, gain, loss
and deduction shall be allocated among
the Partners in the same manner as its
correlative item of "book" income, gain,
loss or deduction is allocated pursuant to
Section 5.1.
(b) In an attempt to eliminate Book-Tax Disparities, items of
income, gain, loss, depreciation,
amortization and cost recovery deductions
shall be allocated for federal
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income tax purposes among the Partners in
such manner as shall reasonably be
determined by the General Partner
consistently with Treasury Regulation section
1.704-3.
(c) The General Partner may adopt such methods of allocation of
income, gain, loss, or deduction between a
transferor and a transferee of a
Partnership Interest as it determines
necessary, to the extent permitted or
required by Section 706 of the Code and the
regulations or rulings promulgated
thereunder.
Section 5.3. Distributions.
(a) At
such times and in such amounts as the General Partner
determines in its sole discretion,
Available Cash shall, subject to Section
17-607 of the Delaware Act, be distributed
pro rata in accordance with this
Article V by the Partnership to the
Partners in accordance with their respective
Partnership Interests. The immediately
preceding sentence shall not require any
distribution of cash if and to the extent
such distribution would be prohibited
by applicable law or by any loan agreement,
security agreement, mortgage, debt
instrument or other agreement or obligation
to which the Partnership is a party
or by which it is bound or its assets are
subject. All distributions required to
be made under this Agreement shall be made
subject to Section 17-607 of the Act.
(b) The General Partner shall have the discretion to treat
taxes
paid by the Partnership on behalf of, or
amounts withheld with respect to, all
or less than all of the Partners, as a
distribution of Available Cash to such
Partners.
ARTICLE VI
MANAGEMENT
Section
6.1. Management and Control of the Partnership.
(a) The General Partner shall conduct, direct and manage all
activities of the Partnership in a manner
that the General Partner determines is
in the best interest of the Partnership.
Except as otherwise expressly provided
in this Agreement, all management powers
over the business and affairs of the
Partnership shall be exclusively vested in
the General Partner, and the Limited
Partner shall not have any management power
over the business and affairs of the
Partnership.
(b) The General Partner, in its sole discretion and without the
approval of the Limited Partner, may
delegate to one or more other persons the
General Partner's rights and powers to
manage and control the business affairs
of the Partnership, including to agents,
officers and employees of the General
Partner or the Partnership. Such delegation
by the General Partner shall not
cause the General Partner to cease to be a
general partner of the Partnership or
cause the person to whom such rights and
powers have been delegated to be a
general partner of the Partnership. Nothing
contained in this Section 6.1(b)
shall be deemed to limit the power and
authority of the General Partner to
delegate granted by Section 17-403(c) of
the Act.
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Section
6.2. Powers of General Partner.
(a) In addition to the powers now or hereafter granted a
general
partner of a limited partnership under
applicable law or which are granted to
the General Partner under any other
provision of this Agreement, the General
Partner, subject to Section 6.4, shall have
full power and authority to do all
things and on such terms as it, in its sole
discretion, may deem necessary or
appropriate to conduct the business of the
Partnership, to exercise all powers
set forth in Section 2.6, including the
following:
(1) The making of any expenditures, the lending or borrowing
of money, the assumption or guarantee of,
or other contracting for, indebtedness
and other liabilities, the issuance of
evidences of indebtedness, including
indebtedness that is convertible into a
Partnership Interest, and the incurring
of any other obligations;
(2) The making of tax, regulatory and other filings, or
rendering of periodic or other reports to
governmental or other agencies having
jurisdiction over the business or assets of
the Partnership;
(3) The acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of
any or all of the assets of the
Partnership or the merger or other
combination of the Partnership with or into
another Person;
(4) The use of the assets of the Partnership (including cash
on hand) for any purpose consistent with
the terms of this Agreement, including
the financing of the conduct of the
operations of the Partnership Group; the
lending of funds to other Persons; the
repayment of obligations of the
Partnership Group and the making of capital
contributions to any memb
