UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D. C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): May 21, 2009
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
(Exact
name of registrant as specified in its charter)
|
Delaware
|
1-2921
|
44-0382470
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
5444
Westheimer Road
Houston,
Texas
(Address
of principal executive offices)
|
77056-5306
(Zip
Code)
|
Registrant's
telephone number, including area code: (713) 989-7000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
[
]
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
[
]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
|
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
IEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On May
21, 2009, Panhandle Eastern Pipe Line Company, LP (“Panhandle”) entered into an
Underwriting Agreement (the “Underwriting Agreement”) with Wachovia Capital
Markets, LLC and RBC Capital Markets Corporation, as representatives of the
underwriters named in the Underwriting Agreement, for the sale of $150 million
aggregate principal amount of Panhandle’s 8.125% senior notes due 2019 (the
“Notes”). The Notes were registered by Panhandle pursuant to the
registration statement on Form S-3 (File No. 333-137998), as amended by
post-effective amendment no. 1, under Rule 413(b) under the Securities Act of
1933, as amended (the “Act”). The Notes are unsecured. The Underwriting
Agreement contains customary representations, warranties, agreements and
indemnification obligations including for liabilities under
the Act. Subject to customary conditions to closing, the
transactions contemplated by the Underwriting Agreement will be consummated on
June 2, 2009.
The
foregoing description of the Underwriting Agreement is qualified in its entirety
by reference to such Underwriting Agreement, a copy of which is filed herewith
as Exhibit 1.1 and is incorporated herein by reference.
The terms
of the Notes are governed by the Indenture, dated as of March 29, 1999 (the
“Indenture”), between Panhandle and The Bank of New York Mellon Trust
Company, N.A., as trustee (the “Trustee”), as supplemented by the Seventh
Supplemental Indenture, to be dated June 2, 2009 (the “Supplemental
Indenture”). The form of Supplemental Indenture with respect to the
Notes (including the form of note) is filed herewith as Exhibit 4.1 and is
incorporated herein by reference.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d)
Exhibits.
Exhibit
No. Description
|
|
Underwriting
Agreement, dated as of May 21, 2009, among Wachovia Capital Markets, LLC
and RBC Capital Markets Corporation, as representatives of the several
underwriters named therein
Form
of Seventh Supplemental Indenture, to be dated as of June 2, 2009, between
Panhandle and The Bank of New York Mellon Trust Company, N.A.
Opinion
of Locke Lord Bissell & Liddell LLP
Consent
of Locke Lord Bissell & Liddell LLP (contained in the opinion of
counsel filed as Exhibit 5.1 hereto).
|
This 8-K
includes forward-looking statements. Although Panhandle believes that its
expectations are based on reasonable assumptions, it can give no assurance that
such assumptions will materialize. Important factors that could cause actual
results to differ materially from those in the forward-looking statements herein
are enumerated in Panhandle's Forms 10-K and 10-Q as filed with the Securities
and Exchange Commission. Panhandle assumes no obligation to publicly update or
revise any forward-looking statements made herein or any other forward-looking
statements made by Panhandle, whether as a result of new information, future
events, or otherwise.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
|
|||
|
(Registrant)
|
|||
|
Date:
May 28, 2008
|
By:
|
/s/
Robert M. Kerrigan, III
|
|
|
Robert
M. Kerrigan, III
|
|||
|
Vice
President and Secretary
|
|||
|
|
|
EXHIBIT
INDEX
|
|
Underwriting
Agreement, dated as of May 21, 2009, among Wachovia Capital Markets, LLC
and RBC Capital Markets Corporation, as representatives of the several
underwriters named therein
Form
of Seventh Supplemental Indenture, to be dated as of June 2, 2009, between
Panhandle and The Bank of New York Mellon Trust Company, N.A.
Opinion
of Locke Lord Bissell & Liddell LLP
Consent
of Locke Lord Bissell & Liddell LLP (contained in the opinion of
counsel filed as Exhibit 5.1 hereto).
|
Panhandle
Eastern Pipe Line Company, LP
UNDERWRITING
AGREEMENT
May 21,
2009
|
|
Wachovia
Capital Markets, LLC
|
|
|
301
South College Street
|
|
|
Charlotte,
NC 28288-0613
|
|
|
RBC
Capital Markets Corporation
|
|
|
Three
World Financial Centre
|
|
|
200
Vesey Street
|
|
|
New
York, NY 10281
|
|
|
As
Representatives of the several
|
|
|
Underwriters
listed in Exhibit A
|
|
|
hereto
|
Ladies
and Gentlemen:
Panhandle
Eastern Pipe Line Company, LP, a Delaware limited partnership (the “Company”), proposes
to sell to the several underwriters named in Exhibit A attached hereto
(collectively, the “Underwriters,” which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Wachovia Capital Markets, LLC and RBC Capital
Markets Corporation are acting as representatives (in such capacity, the “Representatives”),
$150,000,000 aggregate principal amount of its 8.125% Senior Notes due 2019 (the
“Securities”),
to be issued under an indenture (the “Base Indenture”)
dated as of March 29, 1999 between the Company and The Bank of New York Mellon
Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National
Association, Bank One Trust Company, National Association, and NBD Bank), as
trustee (the “Trustee”), as amended
and supplemented by the seventh supplemental indenture (the “Seventh Supplemental
Indenture”) to be dated as of June 2, 2009 between the Company and the
Trustee (the Base Indenture, as so amended and supplemented, the “Indenture”).
SECTION
1. Representations and
Warranties.
(a) Representations and Warranties by
the Company. The Company represents and warrants to each Underwriter as
of the date hereof, as of the Applicable Time, as of the Closing Date referred
to in Section 2(c) hereof, and agrees with each Underwriter, as
follows:
(1) Compliance with Registration
Requirements. The Securities have been duly registered under
the 1933 Act pursuant to the Registration Statement. The Initial
Registration Statement is an “automatic shelf registration statement” as defined
under Rule 405 of the 1933 Act that has been filed with the Commission not
earlier than three years prior to the date hereof. The Company has
not received from the Commission any notice pursuant to Rule 401(g)(2) of the
1933 Act objecting to use of the automatic shelf registration statement form and
the Company has not otherwise ceased to be eligible to use the automatic shelf
registration statement form. The Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or, to the knowledge of the
Company or Southern Union Company (the “Parent”) are
contemplated by the Commission, and any request on the part of the Commission
for additional information has been complied with.
At the
respective times, the Registration Statement and any post-effective amendments
thereto became or become effective and at the Closing Date, the Registration
Statement and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will 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. Neither the Final
Prospectus nor any amendments or supplements thereto, as of its date, at the
Closing Date, and at any time when a prospectus is required by applicable law to
be delivered in connection with sales of Securities, included or will include an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Each
preliminary prospectus and prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act in connection with the offering of
the Securities (including, without limitation, the Final Prospectus and the
Statutory Prospectus), complied when so filed in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and each preliminary
prospectus and prospectus (including, without limitation, the Final Prospectus
and the Statutory Prospectus) and any amendments or supplements thereto
delivered to the Underwriters for use in connection with the offering of the
Securities was identical to the electronically transmitted copy thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
As of the
Applicable Time, neither (a) any Issuer General Use Free Writing
Prospectuses issued at or prior to the Applicable Time, the Statutory Prospectus
as of the Applicable Time and the information included on Exhibit F hereto,
all considered together (collectively, the “General Disclosure
Package”), nor (b) any individual Issuer Limited Use Free Writing
Prospectus, when considered together with the General Disclosure Package,
included or will include any untrue statement of a material fact or omitted or
will omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
Each
Issuer Free Writing Prospectus, as of its date and at all subsequent times
through the completion of the public offering and sale of the Securities, did
not, does not and will not include any information that conflicted, conflicts or
will conflict with the information contained in the Registration Statement or
the Statutory Prospectus or the Final Prospectus and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or
modified.
2
The
representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement, the Statutory Prospectus, the
Final Prospectus or any Issuer Free Writing Prospectus made in reliance upon and
in conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in the Registration
Statement, the Statutory Prospectus, the Final Prospectus or such Issuer Free
Writing Prospectus, as the case may be.
At the
time of filing the Initial Registration Statement, at the time of the most
recent amendment thereto for the purposes of complying with Section 10(a)(3) of
the 1933 Act (whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or
form of prospectus), at the time the Company or any person acting on its behalf
(within the meaning, for this clause only, of Rule 163(c) of the 1933 Act) made
any offer relating to the Securities in reliance on the exemption of Rule 163 of
the 1933 Act and at the date hereof, the Parent was and is a “well known
seasoned issuer” as defined in Rule 405 of the 1933 Act.
At the
time of filing the Registration Statement and any post-effective amendments
thereto and at the date hereof, the Company was not and is not an “ineligible issuer” as
defined in Rule 405, in each case without taking into account any
determination made by the Commission pursuant to clause 2 of the definition of
such term in Rule 405.
The
Company and the Parent meet the requirements to incorporate documents by
reference into the Registration Statement under the 1933 Act. The
documents incorporated by reference in the Registration Statement, the Final
Prospectus and the General Disclosure Package at the time they were or hereafter
are filed with the Commission complied and will comply in all material respects
with the requirements of the 1934 Act and the 1934 Act Regulations, and, when
read together with the other information in the Registration Statement, Final
Prospectus and the General Disclosure Package, at the time the Final Prospectus
and the General Disclosure Package were filed, as applicable, and at the Closing
Date, did not and will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(2) Independent
Accountants. The accounting firm who certified the financial
statements and supporting schedules included in the Registration Statement, the
Final Prospectus and the General Disclosure Package is an independent registered
public accounting firm with respect to the Company and its subsidiaries within
the meaning of the 1933 Act and the applicable rules and regulations thereunder
adopted by the SEC (Regulation S-X) and the Public Company Accounting Oversight
Board (United States) (PCAOB).
3
(3) Financial
Statements. The Company’s financial statements, together with
the related schedules and notes, included or incorporated by reference in the
Registration Statement, the Final Prospectus and the General Disclosure Package
present fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statements of operations, statement
of partners’ capital and comprehensive income, statement of cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally accepted
accounting principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included or incorporated by reference in the Registration
Statement, the Final Prospectus and the General Disclosure Package present
fairly in accordance with GAAP the information required to be stated
therein. The capitalization table, the selected financial information
and the summary financial information included or incorporated by reference in
the Registration Statement, the Final Prospectus and the General Disclosure
Package present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements or unaudited
financial statements, as the case may be, included or incorporated by reference
in the Registration Statement, the Final Prospectus and the General Disclosure
Package.
(4) No Material Adverse Change
in Business. Except as disclosed in the General Disclosure
Package and the Final Prospectus, since the end of the period covered by the
financial statements of the Company included or incorporated by reference in the
Final Prospectus and the General Disclosure Package, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse
Effect”), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) except in the ordinary course of business and
consistent with past practice, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its partnership
interests.
(5) Good Standing of the
Company. The Company has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware and has full limited partnership power and authority to own, lease
and operate its properties and to conduct its business as currently conducted
and as described in the Final Prospectus and the General Disclosure Package and
to enter into and perform its obligations under this Agreement and the
Indenture; and the Company is duly qualified as a foreign limited partnership to
transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
to be in good standing would not result in a Material Adverse
Effect. The Company’s conversions from a corporation to a limited
liability company on June 16, 2003 and then to a limited partnership on June 29,
2004 were validly authorized and completed under the laws of the State of
Delaware, and the conversions did not and will not, whether with or without the
giving of notice or passage of time or both, cause or result in a default under
any agreement or instrument to which the Company or any of its subsidiaries is a
party or by which any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject, except for such
defaults as would not singly or in the aggregate have a Material Adverse
Effect.
4
(6) Material
Subsidiaries. Exhibit B sets forth a true and correct list of
each “significant
subsidiary” of the Company, as such term is defined in Rule 1.02 of
Regulation S-X (the “Material
Subsidiaries”).
(7) Good Standing of Material
Subsidiaries. Each Material Subsidiary of the Company has been
duly organized and is validly existing in good standing under the laws of the
jurisdiction of its organization, has the requisite power (corporate or
otherwise) and authority to own, lease and operate its properties and to conduct
its business as described in the Final Prospectus and the General Disclosure
Package and is duly qualified to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; all of the issued and outstanding limited liability
company interests, capital stock or similar interests (as the case may be) of
each Material Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding limited liability company
interests, shares of capital stock or similar interests (as the case may be) of
the Material Subsidiaries was issued in violation of any preemptive or similar
rights of any securityholder of such Material Subsidiary. The other
subsidiaries of the Company other than Material Subsidiaries, considered in the
aggregate as a single subsidiary, do not constitute a “significant
subsidiary” as defined in Rule 1.02 of Regulation S-X.
(8) Capitalization. All
of the limited partnership interests of the Company are owned of record and
beneficially by Southern Union Panhandle, LLC, a Delaware limited liability
company, which in turn is wholly owned by the Parent. No person other
than Southern Union Panhandle, LLC and the Parent owns of record or beneficially
any equity interests or rights to acquire equity interests in the
Company. All limited partnership interests of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; none
of the outstanding partnership interests of the Company were issued in violation
of the preemptive or other similar rights of any securityholder of the
Company.
(9) Authorization of
Agreement. This Agreement has been duly authorized, executed
and delivered by the Company, and the Company has full right, power and
authority to perform its obligations hereunder.
5
(10) Authorization and
Qualification of the Indenture. The Seventh Supplemental
Indenture has been duly authorized by the Company and, when the Seventh
Supplemental Indenture is executed and delivered by the Company and the Trustee,
will constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors’ rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law). The Base Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(11) Authorization of the
Securities. The Securities have been duly authorized by the
Company for issuance and sale pursuant to this Agreement. The
Securities, when authenticated, issued and delivered in the manner provided for
in the Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will be in the form contemplated by, and entitled to the benefits of,
the Indenture.
(12) Description of the
Securities and the Indenture. The Securities and the Indenture
conform in all material respects to the respective statements relating thereto
contained in the Final Prospectus and the General Disclosure Package and will be
in substantially the respective forms last delivered to the Underwriters prior
to the date of this Agreement.
6
(13) Absence of Defaults and
Conflicts. Neither the Company nor any of its subsidiaries is
in violation of its certificate of formation, limited partnership agreement,
charter, by-laws or similar organizational instruments (as the case may be) or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any of them
may be bound, or to which any of the property or assets of the Company or any of
its subsidiaries is subject except for such defaults as would not singly or in
the aggregate have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Securities and any other
agreement or instrument entered into or issued or to be entered into or issued
by the Company in connection with the transactions contemplated hereby or
thereby or in the Final Prospectus and the General Disclosure Package, and the
consummation of the transactions contemplated hereby, thereby and in the Final
Prospectus and the General Disclosure Package (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the Securities as
described in the Final Prospectus under the caption “Use of Proceeds”) and
compliance by the Company with its obligations hereunder and thereunder have
been duly authorized by all necessary limited partnership action and do not and
will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any obligation, agreement, covenant or condition
contained in (i) any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument evidencing or
governing indebtedness for borrowed money, to which the Company or any of its
subsidiaries is a party or by which any of them may be bound, or to which any of
the property or assets of the Company or any of its subsidiaries is subject or
(ii) any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument other than those referred to in
clause (i) above to which the Company or any of its subsidiaries is a party or
by which any of them may be bound, or to which any of the property or assets of
the Company or any of its subsidiaries is subject except (in the case of this
clause (ii)) for such conflicts, breaches or defaults or Repayment Events or
liens, charges or encumbrances that would not singly or in the aggregate result
in a Material Adverse Effect, nor will such action result in any violation of
the provisions of the certificate of formation, limited partnership agreement,
charter, by-laws or similar organizational instruments (as the case may be) of
the Company or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations, except for such exceptions as would not singly or in the aggregate
have a Material Adverse Effect. As used herein, a “Repayment Event”
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries.
(14) Absence of Labor
Dispute. No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any of its subsidiaries’ principal suppliers,
manufacturers, customers or contractors, which, in either case, would result in
a Material Adverse Effect.
7
(15) Absence of
Proceedings. Except as disclosed in the General Disclosure
Package and the Final Prospectus, there is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries which
might result in a Material Adverse Effect, or which might materially and
adversely affect the properties or assets of the Company or any of its
subsidiaries or the consummation of the transactions contemplated by this
Agreement, the Indenture or the Final Prospectus and the General Disclosure
Package or the performance by the Company of its obligations under this
Agreement or the Indenture. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is a
party or of which any of their respective property or assets is the subject
which are not described in the Final Prospectus and the General Disclosure
Package, including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(16) Absence of
Manipulation. Neither the Company nor any affiliate of the
Company has taken, nor will the Company or any affiliate take, directly or
indirectly, any action which is designed to or which has constituted or which
would be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.
(17) Possession of Intellectual
Property. The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(18) Absence of Further
Requirements. No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
for the performance by the Company of its obligations hereunder, in connection
with the offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement or the Indenture
or for the due execution, delivery or performance of this Agreement or the
Indenture by the Company, except for such consents, approvals, authorizations,
orders and registrations or qualifications as may be required under applicable
state securities laws in connection with the purchase and distribution of the
Securities by the Underwriters.
8
(19) Possession of Licenses and
Permits. The Company and its subsidiaries possess such
permits, licenses, approvals, consents and other authorizations (collectively,
“Governmental
Licenses”) issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
them, except where the failure so to possess would not, singly or in the
aggregate, result in a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not singly or in the
aggregate have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not singly or in the aggregate have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(20) Title to
Property. The Company and its subsidiaries have good and valid
title to all real property owned by the Company and its subsidiaries and good
title to all other properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the Final
Prospectus and General Disclosure Package (b) do not, singly or in the
aggregate, materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company or any
of its subsidiaries or (c) could not reasonably be expected, singly or in the
aggregate, to have a Material Adverse Effect; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Final Prospectus and General
Disclosure Package, are in full force and effect, and neither the Company nor
any of its subsidiaries has any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or any subsidiary thereof to the
continued possession of the leased or subleased premises under any such lease or
sublease, except for such claims that could not reasonably be expected singly or
in the aggregate to have a Material Adverse Effect.
9
(21) Environmental
Laws. Except as described in the Final Prospectus and General
Disclosure Package and except for such matters as would not, singly or in the
aggregate, have a Material Adverse Effect, (A) neither the Company nor any of
its subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials or mold (collectively, “Hazardous Materials”)
or to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”),
(B) the Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or any of its
subsidiaries, (D) there are no events or circumstances that would reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or Environmental Laws, (E) there has been no spill,
discharge, leak, emission, injection, escape, dumping or release of Hazardous
Materials onto property now or previously owned or leased by the Company or any
of its subsidiaries, or at any location at which Hazardous Materials generated
by the Company or any of its subsidiaries have come to rest, or into the
environment surrounding such property, of Hazardous Materials due to or caused
by the Company or any of its subsidiaries, or with respect to which the Company
or any of its subsidiaries have received notice or have knowledge of the
Company’s or any of its subsidiaries’ actual or potential liability, (F) neither
the Company nor any of its subsidiaries has any liability of any nature
whatsoever, including any retained or assumed contractual liability, pertaining
to any Environmental Laws, and (G) no facility owned or operated by the Company
or any of its subsidiaries is currently, or was at any time, listed on the
National Priorities List promulgated under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. §§ 9601, et seq., or any
comparable state list.
(22) Investment Company
Act. The Company is not required, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Final Prospectus and General Disclosure
Package will not be required, to register as an “investment company” under the
Investment Company Act of 1940, as amended (the “1940
Act”).
10
(23) Disclosure Controls and
Procedures. The Company has established disclosure controls
and procedures to ensure that information required to be disclosed by the
Company, including consolidated entities, in reports filed or submitted under
the 1934 Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms. The Company’s
disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports it files or submits under the 1934 Act
is accumulated and communicated to management, including the Company’s Chief
Operating Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.
(24) No Material Weakness in
Internal Controls. Except as disclosed in the General
Disclosure Package and the Final Prospectus, or in any document incorporated by
reference therein, since the end of the Company’s most recent audited fiscal
year, there has been (i) no material weakness in the Company’s internal control
over financial reporting (whether or not remediated) and (ii) no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
(25) Public Utility Holding
Company Act. Neither the Company nor any of its subsidiaries
is a “holding company” or a “subsidiary company” of a holding company or an
“affiliate” thereof within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(26) Compliance with
ERISA. Except as would not reasonably be expected to have a
Material Adverse Affect, each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), that
is maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption; and for each such plan that
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code
has been incurred, whether or not waived, and no liability has been incurred
under Title IV of ERISA that has not been satisfied.
(27) Insurance. The
Company and its subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, including business
interruption insurance, as appropriate and customary in the industry in which
the Company operates, which insurance is in amounts and insures against such
losses and risks as are adequate to protect the Company and its subsidiaries and
their respective businesses; and neither the Company nor any of its subsidiaries
has (i) received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order
to continue such insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage at reasonable cost from similar insurers as may be
necessary to continue its business.
11
(28) No Unlawful
Payments. Neither the Company nor any of its subsidiaries nor,
to the best knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(29) No Restrictions on
Subsidiaries. No subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other instrument to
which it is a party or is subject, from paying any dividends to the Company,
from making any other distribution on such subsidiary’s capital stock, equity
interests or similar interests, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such
subsidiary’s properties or assets to the Company or any other subsidiary of the
Company.
(30) No Broker’s
Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Underwriter for a brokerage commission, finder’s fee
or like payment in connection with the offering and sale of the
Securities.
(31) No Registration
Rights. No person has the right to require the Company or any
of its subsidiaries to register any securities other than the Securities for
sale under the 1933 Act by reason of the issuance and sale of the
Securities.
(32) Forward-Looking
Statements. No forward-looking statement (within the meaning
of Section 27A of the 1933 Act and Section 21E of the Exchange Act) contained in
the Final Prospectus and General Disclosure Package has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.
(33) Statistical and Market
Data. Nothing has come to the attention of the Company that
has caused the Company to believe that the statistical and market-related data
included in the Final Prospectus and General Disclosure Package is not based on
or derived from sources that are reliable and accurate in all material
respects.
(34) Compliance with
Sarbanes-Oxley Act. The Company and the Company’s directors,
managers or officers, in their capacities as such, are in compliance in all
material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications; there is and has been no failure on the part of the Company or
any of the Company’s directors, managers or officers, in their capacities as
such, to comply with any provision of the Sarbanes-Oxley Act, including Section
402 related to loans and Sections 302 and 906 related to
certifications.
12
(35) Officer’s
Certificates. Any certificate signed by any officer of the
Company, the Parent or any of its subsidiaries delivered to the Representatives
or to counsel for the Underwriters shall be deemed a representation and warranty
by the Company, the Parent or any of its subsidiaries, respectively, to each
Underwriter as to the matters covered thereby.
SECTION
2. Sale and Delivery to
Underwriters; Closing.
(a) Securities. The
Company agrees to issue and sell the Securities to the several Underwriters as
provided in this Agreement, and each Underwriter, on the basis of the
representations, warranties and agreements set forth herein and subject to the
conditions set forth herein, agrees, severally and not jointly, to purchase from
the Company the respective principal amount of Securities set forth opposite
such Underwriter’s name in Exhibit A hereto at a price equal to 99.350% of the
principal amount thereof plus accrued interest, if any, from June 2, 2009 to the
Closing Date (as defined below). The Company will not be obligated to
deliver any of the Securities except upon payment for all the Securities to be
purchased as provided herein.
(b) The
Company understands that the Underwriters intend to make a public offering of
the Securities as soon after the effectiveness of this Agreement as in the
judgment of the Representative is advisable, and initially to offer the
Securities on the terms set forth in the Final Prospectus. The
Company acknowledges and agrees that the Underwriters may offer and sell
Securities to or through any affiliate of an Underwriter and that any such
affiliate may offer and sell Securities purchased by it to or through any
Underwriter.
(c) Payment. Payment of the
purchase price for, and delivery of certificates for, the Securities shall be
made at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New
York, NY 10017, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Eastern time) on June 2,
2009 (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called “Closing
Date”).
Payment
shall be made to the Company by wire transfer of immediately available funds to
a single bank account designated by the Company, in each case against delivery
to the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Securities which it has agreed to purchase. Wachovia
Capital Markets, LLC, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Securities, to be purchased by any Underwriter whose funds have
not been received by the Closing Date, but such payment shall not relieve such
Underwriter from its obligations hereunder.
13
(d) Denominations;
Registration. Global notes representing the Securities shall
be in such denominations and registered in such names as the Representatives may
request in writing at least one full business day before the Closing Date
(collectively, the “Global Note”), with
any transfer taxes payable in connection with the sale of the Securities duly
paid by the Company. The Global Note will be made available for
examination and packaging by the Representatives in The City of New York not
later than noon (Eastern time) on the business day prior to the Closing
Date.
SECTION
3. Covenants of the
Company. The Company covenants with each Underwriter as
follows:
(a) Compliance with Securities
Regulations and Commission Requests. The Company, subject to
Section 3(b), will comply with the requirements of Rule 430A, 430B or
430C (the “Rule 430
Information”) under the 1933 Act and will notify the Representatives
immediately, and confirm the notice in writing, (i) when the Registration
Statement or any post-effective amendment to the Registration Statement shall
become effective hereafter, or any supplement to the Final Prospectus or any
amended prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Final Prospectus, or any document incorporated by reference therein or any
Issuer Free Writing Prospectus or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes, or of any examination
pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement
and (v) if the Company becomes the subject of a proceeding under Section 8A of
the 1933 Act in connection with the offering of the Securities. The
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Filing of
Amendments. For so long as any Securities remain unsold by the
Underwriters, the Company will give the Representatives notice of its intention
to file or prepare any amendment to the Registration Statement or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Final Prospectus, whether
pursuant to the 1933 Act or otherwise, or (without limitation to the provisions
of Section 16 of this Agreement), any Issuer Free Writing Prospectus or any
amendment or supplement thereto and will furnish the Representatives with copies
of any such documents within a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall
object.
(c) Delivery of Registration Statements.
The Company has furnished or will deliver to the Representatives and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
by reference therein) and signed copies of all consents and certificates of
experts. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
14
(d) Delivery of Prospectuses. The
Company has delivered to each Underwriter, without charge, as many copies of
each preliminary prospectus and any Issuer Free Writing Prospectuses prepared
prior to the date of this Agreement as such Underwriter reasonably requested,
and the Company hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Company will furnish to each Underwriter,
without charge, such number of copies of the documents constituting the General
Disclosure Package, any Issuer Free Writing Prospectuses prepared on or after
the date of this Agreement and the Final Prospectus (and any amendments or
supplements thereto) as such Underwriter may reasonably request. The
Statutory Prospectus, each Issuer Free Writing Prospectus and the Final
Prospectus and any amendments or supplements thereto furnished to the
Underwriters is or will be, as the case may be, identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities
Laws. The Company will comply with the 1933 Act and the 1933 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Final Prospectus. If at
any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities (including, without limitation, pursuant
to Rule 172), any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the Final
Prospectus in order that the Final Prospectus will not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Final Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to
Section 3(b) hereof, such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Final Prospectus comply with such requirements, and the Company will furnish to
the Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request. If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free Writing Prospectus
conflicted, conflicts or would conflict with the information contained in the
Registration Statement or included, includes or would include an untrue
statement of a material fact or omitted, omits or would omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances, prevailing at that subsequent time, not misleading, the Company
will promptly notify the Representatives and the Company will, subject to
Section 3(b) hereof, promptly amend or supplement such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or
omission.
15
(f) Blue Sky Qualifications. The
Company will use its best efforts, in cooperation with the Underwriters, to
qualify the Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions (domestic or foreign) as the
Representatives may designate and to maintain such qualifications in effect for
a period of not less than one year from the date of this Agreement; provided,
however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the date of
this Agreement.
(g) Rule 158. The Company
will timely file such reports pursuant to the 1934 Act as are necessary in order
to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
(h) Use of
Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the General
Disclosure Package and the Final Prospectus under “Use of
Proceeds.”
(i) Clear
Market. During the period from the date hereof through and
including the business day following the Closing Date, the Company will not,
without the prior written consent of the Representatives, offer, sell, contract
to sell or otherwise dispose of any debt securities issued or guaranteed by the
Company and having a tenor of more than one year.
(j) No
Stabilization. The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the
Securities.
(k) Reporting Requirements. The
Company, during the period when the Final Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, will file all documents required to be filed
with the Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
(l) Preparation of Prospectus.
Immediately following the execution of this Agreement, the Company will,
subject to Section 3(b) hereof, prepare the Final Prospectus containing the
Rule 430 Information and other selling terms of the Securities, the plan of
distribution thereof and such other information as may be required by the 1933
Act or the 1933 Act Regulations or as the Representatives and the Company may
deem appropriate, and will file the Final Prospectus with the Commission in the
manner and within the time period required by Rule 424(b) (without reliance
on Rule 424(b)(8)). Any Final Prospectus delivered pursuant to
Rule 173(d) shall be identical to the electronically transmitted copy
thereof filed with the Commission pursuant to Rule 424(b).
16
(m) Pricing Term
Sheet. The Company will prepare a pricing term sheet
containing only a description of the Securities, in a form approved by the
Representatives and contained in Exhibit F hereto, and will file such term sheet
pursuant to Rule 433(d) under the 1933 Act within the time required by such rule
(such term sheet, the “Pricing Term Sheet”).
(n) Registration Statement Renewal
Deadline. If immediately prior to the third anniversary (the
“Renewal Deadline”) of the initial effective date of the Initial Registration
Statement, any of the Securities remain unsold by the Underwriters, the Parent
will prior to the Renewal Deadline file, if it has not already done so and is
eligible to do so, a new automatic shelf registration statement relating to the
Securities, in a form satisfactory to the Representatives. If the
Parent is no longer eligible to file an automatic shelf registration statement,
the Parent will prior to the Renewal Deadline, if it has not already done so,
file a new shelf registration statement relating to the Securities, in a form
satisfactory to the Representatives, and will use its best efforts to cause such
registration statement to be declared effective within 60 days after the Renewal
Deadline. The Company and the Parent will take all other action
necessary or appropriate to permit the public offering and sale of the
Securities to continue as contemplated in the expired registration statement
relating to the Securities. References herein to the Registration
Statement shall include such new automatic shelf registration statement or such
new shelf registration statement, as the case may be.
(o) Notice of Inability to Use Automatic
Shelf Registration Statement Form. If at any time when
Securities remain unsold by the Underwriters the Parent or the Company receives
from the Commission a notice pursuant to Rule 401(g)(2) or otherwise ceases to
be eligible to use the automatic shelf registration statement form, the Parent
will (i) promptly notify the Representatives, (ii) promptly file a new
registration statement or post-effective amendment on the proper form relating
to the Securities, in a form satisfactory to the Representatives, (iii) use its
best efforts to cause such registration statement or post-effective amendment to
be declared effective and (iv) promptly notify the Representatives of such
effectiveness. The Company will take all other action necessary or
appropriate to permit the public offering and sale of the Securities to continue
as contemplated in the registration statement that was the subject of the Rule
401(g)(2) notice or for which the Company has otherwise become
ineligible. References herein to the Registration Statement shall
include such new registration statement or post-effective amendment, as the case
may be.
(p) Filing Fees. The
Company agrees to pay the required Commission filing fees relating to the
Securities within the time required by Rule 456(b)(1) of the 1933 Act without
regard to the proviso therein and otherwise in accordance with Rules 456(b) and
457(r) of the 1933 Act.
17
SECTION
4. Payment of
Expenses.
(a) Expenses. The
Company will pay all expenses incident to the performance of its obligations
including (i) the preparation, printing and filing of the Post-Effective
Amendment (including financial statements and any schedules or exhibits and any
document incorporated therein by reference) as originally filed and of each
amendment thereto, (ii) the word processing, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the Global Note for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the
fees and disbursements of the counsel, accountants and other advisors to the
Company, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters
in connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (vii) the costs and
expenses of the Company relating to investor presentations on any “road show”
undertaken in connection with the marketing of the Securities including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of aircraft and
other transportation chartered in connection with the road show and
(viii) any fees payable in connection with the rating of the Securities and
(ix) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Issuer Free Writing Prospectus, the documents
constituting the General Disclosure Package and the Final Prospectus and any
amendments or supplements thereto.
(b) Termination of
Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or
Section 9(a)(i), (a)(iii) (but only with respect to the Company’s or the
Parent’s Securities) or (a)(v) hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
SECTION
5. Conditions of Underwriters’
Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy of the representations and warranties of
the Company contained in this Agreement or in certificates of any officer of the
Company or any subsidiary of the Company delivered pursuant to the provisions
hereof, to the performance by the Company of its respective covenants and other
obligations hereunder, and to the following further conditions:
18
(a) Effectiveness of Registration
Statement. The Registration Statement has become effective and at the
Closing Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or, to the knowledge of the Company, threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. The preliminary prospectus and the Final Prospectus
shall have been filed with the Commission in the manner and within the time
period required by Rule 424(b) (without reliance upon Rule 424(b)(8)), and prior
to Closing Date, the Company shall have provided evidence satisfactory to the
Representatives of such timely filing.
(b) Representations and
Warranties. The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and on and as of
the Closing Date; and the statements of the Company and its officers made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date.
(c) No
Downgrade. Subsequent to the earlier of (A) the Applicable
Time and (B) the execution and delivery of this Agreement, (i) no downgrading
shall have occurred in the rating accorded the Securities or any other debt
securities or preferred stock of or guaranteed by the Company or any of its
subsidiaries by any “nationally recognized statistical rating organization”, as
such term is defined by the Commission for purposes of Rule 436(g)(2) under the
1933 Act and (ii) no such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect to, its
rating of the Securities or of any other debt securities or preferred stock of
or guaranteed by the Company or any of its subsidiaries (other than an
announcement with positive implications of a possible upgrading).
(d) No Material Adverse
Change. No event or condition of a type described in Section
1(a)(4) hereof shall have occurred or shall exist, which event or condition is
not described in the General Disclosure Package (excluding any amendment or
supplement thereto) and the Final Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement, the General Disclosure Package and the Final
Prospectus.
(e) Opinion and 10b-5 Statement of
Counsel for Company. On the Closing Date, the Representative shall have
received the favorable opinion and 10b-5 statement, dated as of the Closing
Date, of Locke Lord Bissell & Liddell LLP, counsel for the Company (“Company Counsel”), in
form and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters,
to the effect set forth in Exhibit C hereto.
19
(f) Opinion and 10b-5 Statement of
Counsel for Underwriters. On the Closing Date, the Representatives shall
have received the favorable opinion and 10b-5 statement, dated as of the Closing
Date, of Davis Polk & Wardwell, counsel for the Underwriters, together with
signed or reproduced copies of such documents for each of the other
Underwriters, with respect to such matters as the Representatives may reasonably
request, to the effect set forth in Exhibit D hereto.
(g) Officers’ Certificate. On the
Closing Date, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Final Prospectus and
the General Disclosure Package (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement), any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and, on
the Closing Date, the Representatives shall have received a certificate of the
Chairman, the President, the Chief Executive Officer or an Executive Vice
President or Senior Vice President of the Company and of the Chief Financial
Officer or Chief Accounting Officer of the Company, dated as of Closing Date, to
the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties of the Company in this Agreement
are true and correct with the same force and effect as though expressly made at
and as of the Closing Date, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date under or pursuant to this Agreement, and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to their knowledge, are contemplated by the
Commission.
(h) Parent’s Officers’ Certificate.
At Closing Date, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Final
Prospectus and the General Disclosure Package (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and, at the Closing Date, the Representatives shall have received a
certificate of the Chief Financial Officer or Chief Accounting Officer of the
Parent, dated as of Closing Date, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties of
the Company in this Agreement are true and correct with the same force and
effect as though expressly made at and as of Closing Date, (iii) confirming
that the Registration Statement, including the documents incorporated by
reference, and the financial statements and certain financial information
together with the related schedules and notes contained therein at the time they
were or hereafter are filed with the Commission complied and will comply in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations and at the time the Final Prospectus and the General Disclosure
Package were issued and at the Closing Date, did not and will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or, to
their knowledge, are contemplated by the Commission.
20
(i) Accountant’s Comfort Letter.
At the time of the execution of this Agreement, the Representatives shall
have received from PricewaterhouseCoopers
LLP a letter, dated the date of this Agreement and in form and substance
satisfactory to the Representatives, together with signed or reproduced copies
of such letter for each of the other Underwriters, containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial
information of the Company contained in the General Disclosure Package and the
Final Prospectus.
(j) Bring-down Comfort Letter. On
the Closing Date, the Representatives shall have received from
PricewaterhouseCoopers LLP a letter, dated as of Closing Date and in form and
substance satisfactory to the Representatives, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (i) of
this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Date.
(k) Additional Documents. On the
Closing Date, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, contained in this Agreement; and all
proceedings taken by the Company in connection with the issuance and sale of the
Securities as herein contemplated and in connection with the other transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.
(l) Termination of Agreement. If
any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof and except that
Sections 1, 6, 7, 8 and 13 hereof shall survive any such termination and
remain in full force and effect.
SECTION
6. Indemnification.
(a) Indemnification by the
Company. The Company agrees to indemnify and hold harmless
each Underwriter, its affiliate, as such term is defined in Rule 501(b) under
the 1933 Act (each, an “Affiliate”), its directors, officers, employees and
agents, and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
21
(i) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or arising
out of any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus, any Issuer Free Writing Prospectus, the
Statutory Prospectus or the Final Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iii) against
any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above,
provided, however, that this
indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto), or in any preliminary prospectus, any Issuer Free Writing
Prospectus, the Statutory Prospectus or the Final Prospectus (or any amendment
or supplement thereto).
(b) Indemnification by the
Underwriters. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its limited
partner, general partner and their respective members and directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a)
(1) of this Section 6, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), or any preliminary
prospectus, any Issuer Free Writing Prospectus, the Statutory Prospectus or the
Final Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus, any Issuer
Free Writing Prospectus, the Statutory Prospectus or the Final Prospectus (or
any amendment or supplement thereto).
22
(c) Actions against Parties;
Notification. Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity
agreement. Counsel to the indemnified parties pursuant to Section
6(a) shall be selected by the Representatives and, counsel to the indemnified
parties pursuant to Section 6(b) shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement Without Consent if
Failure to Reimburse. If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement.
SECTION
7. Contribution. If
the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Securities pursuant to this Agreement
or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
23
The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth on the cover of the Final Prospectus, bear to the aggregate
initial public offering price of the Securities as set forth on such
cover.
The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The
Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding
the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
For
purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and each Underwriter’s Affiliates and selling
agents shall have the same rights to contribution as such Underwriter, and each
director of the general partner of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters’ respective obligations to contribute
pursuant to this Section 7 are several in proportion to the amount of
Securities set forth opposite their respective names in Exhibit A hereto
and not joint.
24
SECTION
8. Representations, Warranties and Agreements
to Survive Delivery. All representations, warranties and
agreements contained in this Agreement or in certificates of officers of the
Company or any of its subsidiaries submitted in relation to the offering covered
by this Agreement shall remain operative and in full force and effect, (a)
regardless of any investigation made (i) by or on behalf of any Underwriter or
its Affiliates or selling agents, any person controlling any Underwriter, its
officers, directors, employees or agents or (ii) by or on behalf of the Company,
any person controlling the Company, its directors and each of its officers who
signed the Registration Statement and (b) shall survive delivery of the
Securities to the Underwriters.
SECTION
9. Termination of
Agreement.
(a) Termination; General. The
Representatives may terminate this Agreement, by notice to the Company, at any
time on or prior to the Closing Date (i) if there has been, since the time
of execution of this Agreement or since the respective dates as of which
information is given in the Final Prospectus and the General Disclosure Package,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company or the Parent has been
suspended or materially limited by the Commission or the NYSE, or if trading
generally on the American Stock Exchange or the NYSE or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the FINRA
or any other governmental authority, or a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States or in Europe, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities or (v) if there shall have occurred,
since the time of execution of this Agreement, any downgrading in the rating of
any debt securities of the Company or by any “nationally recognized statistical
rating organization” (as defined by the Commission for purposes of Rule 436
under the 1933 Act) or any public announcement that any such organization has
under surveillance or review its ratings on any such debt securities, (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or any announcement by
any such organization that the Company has been placed on negative
outlook.
(b) Liabilities. If this
Agreement is terminated pursuant to this Section 9, such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 1, 6, 7, 8 and 13
hereof shall survive such termination and remain in full force and
effect.
25
SECTION
10. Default by One or More of
the Underwriters. If one or more of the Underwriters shall
fail at the Closing Date to purchase the Securities which it or they are
obligated to purchase under this Agreement (the “Defaulted
Securities”), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the
number of Defaulted Securities does not exceed 10% of the number of Securities
to be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters; or
(b) if the
number of Defaulted Securities exceeds 10% of the number of Securities to be
purchased on such date, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action
taken pursuant to this Section 10 shall relieve any defaulting Underwriter
from liability in respect of its default.
In the
event of any such default which does not result in a termination of this
Agreement, the Representatives or the Company shall have the right to postpone
the Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Final Prospectus or in any
other documents or arrangements. As used herein, the term
“Underwriter” includes any person substituted for an Underwriter under this
Section 10.
SECTION
11. Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to
the Representatives at Wachovia Capital Markets, LLC, 301 South College Street,
Charlotte, NC 28288-0613, Attention of Transaction Management Group and RBC
Capital Markets Corporation, Three World Financial Centre, 200 Vesey Street,
8th
Floor, New York, NY 10281, Attention of Debt Capital Markets Origination;
notices to the Company shall be directed to it at Panhandle Eastern Pipe Line
Company, LP, 5444 Westheimer Road, Houston, Texas 77056-5306, Attention of
General Counsel.
SECTION
12. Parties. This
Agreement shall inure to the benefit of and be binding upon the Underwriters,
the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters, the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
26
SECTION
13. GOVERNING LAW AND
TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF
DAY REFER TO NEW YORK CITY TIME.
SECTION
14. Effect of
Headings. The Section and Exhibit headings herein are for
convenience only and shall not affect the construction hereof.
SECTION
15. Definitions. As
used in this Agreement, the following terms have the respective meanings set
forth below:
“Applicable Time”
means 1:40 PM (New York time) on May 21, 2009 or such other date or time as
agreed by the Company and the Representatives.
“Commission” means the
Securities and Exchange Commission.
“EDGAR” means the
Commission’s Electronic Data Gathering, Analysis and Retrieval
System.
“Final Prospectus”
means the Statutory Prospectus that discloses the public offering price, other
Rule 430 Information and other final terms of the Securities and otherwise
satisfies Section 10(a) of the 1933 Act.
“FINRA” means the
Financial Industry Regulatory Authority.
“GAAP” means generally
accepted accounting principles.
“Initial Registration
Statement” means the Parent’s registration statement on Form S-3
(Registration No. 333-137998), as amended (if applicable), at the time it became
effective, including the Rule 430 Information and the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933
Act.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433, relating to the Securities
(including, without limitation, any “road show” that is a “written
communication” within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission and any issuer free writing prospectus
that is exempt from filing pursuant to Rule 433(d)(5)(i) because it
contains a description of the Securities or of the offering that does not
reflect the final terms), in each case in the form furnished to the Underwriters
for use in connection with the offering of the Securities (and not as the form
of Issuer Free Writing Prospectus filed with the Commission pursuant to Rule
433).
“Issuer General Use Free
Writing Prospectus” means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as evidenced by it
being listed in Exhibit E hereto.
27
“Issuer Limited Use Free
Writing Prospectus” means any Issuer Free Writing Prospectus that is not
an Issuer General Use Free Writing Prospectus.
“Lien” means any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
“NYSE” means the New
York Stock Exchange.
“Post-Effective
Amendment” means the Post-Effective Amendment No. 1 to the Initial
Registration Statement filed by the Parent and the Company with the Commission
on October 23, 2007.
“Preliminary
Prospectus” means any prospectus (including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act) used
in connection with the offering of the Securities that was used before the
Initial Registration Statement became effective, or that was used after such
effectiveness and prior to the execution and delivery of this Agreement, or that
omitted the Rule 430 Information or that was captioned “Subject to
Completion”.
“Registration
Statement” means the Initial Registration Statement, together with the
Post-Effective Amendment.
“Rule 164,” “Rule 172,” “Rule 424(b),” “Rule 430A” and “Rule 433” refer
to such rules under the 1933 Act.
“Sarbanes-Oxley Act”
means the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated
thereunder or implementing the provisions thereof.
“Statutory Prospectus”
as of any time means the prospectus supplement or preliminary prospectus
supplement, as the case may be, relating to the Securities, together with the
prospectus that is included in the Initial Registration Statement immediately
prior to that time, in the form furnished to the Underwriters for use in
connection with the offering of the Securities, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act.
“Trust Indenture Act”
means the Trust Indenture Act of 1939, as amended.
“1933 Act” means the
Securities Act of 1933, as amended.
28
“1933 Act Regulations”
means the rules and regulations of the Commission under the 1933
Act.
“1934 Act” means the
Securities Exchange Act of 1934, as amended.
“1934 Act Regulations”
means the rules and regulations of the Commission under the 1934
Act.
“1940 Act” means the
Investment Company Act of 1940, as amended.
All
references in this Agreement to financial statements and schedules and other
information that is “contained,” “included” or “stated” in the Registration
Statement, any preliminary prospectus, the Statutory Prospectus or the Final
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information that
is incorporated by reference in the Registration Statement, any preliminary
prospectus, the Statutory Prospectus or the Final Prospectus, as the case may
be, pursuant to Item 12 of Form S-3 under the 1933 Act.
All
references in this Agreement to the Registration Statement, any preliminary
prospectus, the Statutory Prospectus, the Final Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to EDGAR; and all references to any Issuer Free
Writing Prospectus that is required to be filed with the Commission pursuant to
Rule 433 shall be deemed to include the copy thereof filed with the Commission
pursuant to EDGAR.
SECTION
16. Permitted Free Writing
Prospectuses. The Company represents, warrants and agrees
that, unless it obtains the prior consent of the Representatives, and each
Underwriter, severally and not jointly, represents and agrees that, unless it
obtains the prior consent of the Company and the Representatives, it has not
made and will not make any offer relating to the Securities that would
constitute an “issuer free writing prospectus,” as defined in Rule 433, or
that would otherwise constitute a “free writing prospectus,” as defined in
Rule 405, required to be filed with the Commission. Any such
free writing prospectus consented to by the Representatives or by the Company
and the Representatives, as the case may be, is hereinafter referred to as a
“Permitted Free
Writing Prospectus.” The Company represents and warrants that
it has treated and agrees that it will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433,
and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing
with the Commission where required, legending and record keeping. For
the purposes of clarity, nothing in this Section 16 shall restrict the
Company from making any filings required under the 1934 Act or 1934 Act
Regulations. Notwithstanding the foregoing, the Underwriters may use
a term sheet substantially in the form of Exhibit F hereto without the consent
of the Company.
29
SECTION
17. Absence of Fiduciary
Relationship. The Company acknowledges and agrees
that:
(a) Each of
the Underwriters is acting solely as an underwriter in connection with the
public offering of the Securities and no fiduciary, advisory or agency
relationship between the Company on the one hand, and any of the Underwriters,
on the other hand, has been or will be created in respect of any of the
transactions contemplated by this Agreement, irrespective of whether or not any
of the Underwriters have advised or is advising the Company on other matters and
none of the Underwriters has any obligation to the Company with respect to the
transactions contemplated by this Agreement except the obligations expressly set
forth in this Agreement;
(b) the
public offering price of the Securities and the price to be paid by the
Underwriters for the Securities set forth in this Agreement were established by
the Company following discussions and arms-length negotiations with the
Representatives;
(c) it is
capable of evaluating and understanding, and understands and accepts, the terms,
risks and conditions of the transactions contemplated by this
Agreement;
(d) in
connection with each transaction contemplated by this Agreement and the process
leading to such transactions, each Underwriter is and has been acting solely as
principal and not as fiduciary, advisor or agent of the Company or any of its
respective affiliates, partners, creditors or employees or any other
party;
(e) none of
the Underwriters has provided any legal, accounting, regulatory or tax advice
with respect to the transactions contemplated by this Agreement and it has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate;
(f) it is
aware that the Underwriters and their respective affiliates are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and that none of the Underwriters has any obligation to disclose
such interests and transactions to the Company by virtue of any fiduciary,
advisory or agency relationship; and
(g) it
waives, to the fullest extent permitted by law, any claims it may have against
any of the Underwriters for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that none of the Underwriters shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to it in respect of
such a fiduciary duty claim or to any person asserting a fiduciary duty claim on
its behalf or in right of it or the Company or any partners,
employees or creditors of the Company.
SECTION
18. General
Provision. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
[Signature
Page Follows]
30
If the
foregoing is in accordance with your understanding of our agreement, please sign
and return to the Company a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement between the Underwriters
and the Company in accordance with its terms.
Very
truly yours,
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
By: /s/ Richard N.
Marshall
Name:
Richard N. Marshall
Title: Senior Vice
President and
Chief Financial
Officer
CONFIRMED
AND ACCEPTED, as of the date first above written:
WACHOVIA
CAPITAL MARKETS, LLC
By: _ /s/ Carolyn C.
Hurley_________________
Authorized
Signatory
RBC
CAPITAL MARKETS CORPORATION
By:
_/s/ Paul
Lynch_______________________
Name:
Paul Lynch
Title:
Director – Head of U.S. Syndicate
For
themselves and on behalf of the
several
Underwriters listed
in
Exhibit A hereto.
EXHIBIT
A
|
Name of
Underwriter
|
Principal
Amount
|
|
Wachovia
Capital Markets, LLC
|
90,000,000
|
|
RBC
Capital Markets Corporation
|
60,000,000
|
|
Total.................................................................................................................................................................................................
|
150,000,000
|
A-1
EXHIBIT
B
MATERIAL
SUBSIDIARIES OF THE COMPANY
Material
Subsidiaries
List of
Subsidiaries
|
1.
|
Pan
Gas Storage LLC
|
|
2.
|
Trunkline
Gas Company, LLC
|
|
3.
|
Trunkline
LNG Company, LLC
|
|
4.
|
Trunkline
LNG Holdings LLC
|
|
5.
|
Sea
Robin Pipeline Company, LLC
|
B-1
EXHIBIT
C
FORM OF
OPINION & 10B-5 STATEMENT OF COMPANY COUNSEL
Draft
June 2,
2009
Wachovia Capital Markets, LLC
301 South College Street
Charlotte, NC 28288-0613
|
|
RBC
Capital Markets Corporation
|
|
|
Three
World Financial Centre
|
|
|
200
Vesey Street
|
New York, NY 10281
As
Representatives of the Several Underwriters
Ladies
and Gentlemen:
We have
acted as counsel for Panhandle Eastern Pipe Line Company, LP, a Delaware limited
partnership (the “Company”), in
connection with the sale by the Company of $150,000,000 aggregate principal
amount of the Company’s 8.125% Senior Notes due 2019 (the “Securities”) to the
underwriters named in Exhibit A (the “Underwriters”) to
that certain Underwriting Agreement, dated as of May 21, 2009 (the “Underwriting Agreement”), among
the Company and Wachovia Capital Markets, LLC and RBC Capital Markets
Corporation. The Securities are to be issued pursuant to an indenture (the
“Base
Indenture”), dated as of March 29, 1999, between the Company and The Bank
of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust
Company, National Association, Bank One Trust Company, National Association, and
NBD Bank), as trustee (the “Trustee”), as amended
and supplemented by the seventh supplemental indenture (the “Seventh Supplemental
Indenture” and, together with the Base Indenture, the “Indenture”) dated as
of June 2, 2009, between the Company and the Trustee. Capitalized terms used
herein but not defined herein shall have the meanings ascribed to them in the
Underwriting Agreement.
In connection with the preparation of
this letter, we have, among other things, participated in the preparation
of:
(a) the
Company’s preliminary prospectus supplement dated May 21, 2009, covering the
offering of the Securities through the Underwriters, together with the base
prospectus (the “Base
Prospectus”) dated October 23, 2007 (together with the documents
incorporated by reference therein, the “Preliminary
Prospectus”) and the pricing term sheet dated May 21, 2009 (the “Pricing Term Sheet”
and, together with the Preliminary Prospectus, the “General Disclosure
Package”);
C-1
(b) the
Company’s prospectus supplement dated May 21, 2009, covering the offering of the
Securities through the Underwriters, in the form which includes the initial
offering price and related terms of the Securities (together with the documents
incorporated by reference therein, the “Final
Prospectus”);
|
(c)
|
the
Seventh Supplemental Indenture; and
|
|
(d)
|
the
Underwriting Agreement.
|
We have
also reviewed:
|
(a)
|
the
Registration Statement on Form S-3 (No. 333-137998), filed by Southern
Union Company (the “Parent”) with
the Securities and Exchange Commission (the “Commission”) on
October 13, 2006 (the “Initial Registration
Statement”), as amended by Post-Effective Amendment No. 1 to the
Initial Registration Statement, including the Base Prospectus (together
with the documents incorporated by reference therein, the “Post-Effective
Amendment”) (the Initial Registration Statement and the
Post-Effective Amendment shall be referred to herein as the “Registration
Statement”);
|
|
(b)
|
a
copy of the executed Base
Indenture;
|
|
(c)
|
certified
copies of the Certificate of Limited Partnership of the Company and the
Agreement of Limited Partnership of the
Company;
|
|
(d)
|
a
certified copy of the unanimous written consent of the Board of Directors
of the Parent (the sole member of Southern Union Panhandle LLC (the “General
Partner”), which is the sole general partner of the Company) and
the unanimous written consent of the pricing committee
thereof;
|
|
(e)
|
certified
copies of the charter, certificate of incorporation, articles of
incorporation, certificate of formation, certificate of limited
partnership, bylaws, limited partnership agreement, operating agreement,
limited liability company agreement and other documents providing for the
formation, organization and governance of the Parent, the General Partner
and each of the Material Subsidiaries (all of such documents, together
with the Certificate of Limited Partnership of the Company and the
Agreement of Limited Partnership of the Company, the “Organizational
Documents”);
|
|
(f)
|
copies
of all certificates and other documents delivered today at the closing of
the purchase and sale of the Securities under the Underwriting Agreement;
and
|
|
(g)
|
such
other documents, certificates and information as described in the third
full paragraph on page 6 of this letter and as we have otherwise
considered necessary for purposes of this
letter.
|
C-2
Subject
to the assumptions, qualifications and limitations which are identified in this
letter, we advise you that:
(1) The
Company has been duly organized and is in good standing under the laws of the
State of Delaware and is qualified to do business and in good standing in all
other jurisdictions in which the Company has advised us that its ownership or
lease of property or the conduct of its business requires qualification as a
foreign limited partnership, and has all limited partnership power and authority
necessary to own or hold its properties and conduct its business as described in
the Registration Statement, the General Disclosure Package and the Final
Prospectus.
(2) Each
Material Subsidiary has been duly organized and is in good standing under the
laws of the jurisdiction of its organization and is qualified to do business and
in good standing in each other jurisdiction in which the Company has advised us
that such Material Subsidiary’s ownership or lease of property or the conduct of
its business requires qualification as a foreign entity.
(3) The
Indenture has been duly authorized, executed and delivered by the Company, the
Securities have been duly authorized and (assuming the Securities have been duly
authenticated by the Trustee in accordance with the Indenture and have been
delivered and paid for pursuant to the Underwriting Agreement on the date
hereof) the Securities have been duly executed, issued and delivered; and the
Indenture (assuming the due authorization, execution and delivery of the
Indenture by the Trustee) and the Securities (assuming the Securities have been
duly authenticated by the Trustee in accordance with the Indenture and have been
delivered and paid for pursuant to the Underwriting Agreement on the date
hereof) constitute valid and legally binding obligations of the Company,
enforceable against it in accordance with their terms (and the holders of the
Securities will be entitled to the benefits and security provided by the
Indenture), subject to bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium and
similar laws affecting enforcement of creditors’ rights generally and except as
enforcement thereof is subject to general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at
law).
(4) The
Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Final
Prospectus, will not be an “investment company,” as defined in the Investment
Company Act of 1940, as amended.
(5) No
consent, approval, authorization or order of, or filing with, any governmental
agency or body or any court is required for the consummation of the transactions
contemplated by the Underwriting Agreement in connection with the offering,
issuance and sale of the Securities by the Company, except for (i) the
registration of the Securities under the Securities Act of 1933, as amended (the
“Securities
Act”), which registration has been effected, and (ii) such consents,
approvals, authorizations, orders and filings as may be required under
applicable state securities laws in connection with the purchase and
distribution of the Securities by the Underwriters.
C-3
(6) The
execution and delivery by the Company of the Underwriting Agreement
and the Indenture, the issuance and sale of the Securities being delivered on
the date hereof, and the compliance by the Company with the terms of, and the
consummation of the transactions contemplated by, the Underwriting Agreement,
the Indenture and the Securities will not (i) conflict with, or result in a
breach or violation of, any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its Material
Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument listed as an exhibit in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2008 or in any report
subsequently filed by the Company pursuant to Section 13(a) or Section 15(d) of
the Exchange Act prior to the date hereof, (ii) result in any violation of the
Organizational Documents or (iii) result in the violation of any law, statute or
regulation (other than the blue sky laws of the various states as to which we
express no opinion) or, to our knowledge, any judgment or order of any court or
arbitrator or governmental authority except, in the case of clauses (i) and
(iii) above, for such conflicts, breaches, violations or defaults that would
not, individually or in the aggregate, have a Material Adverse
Effect.
(7) The
Registration Statement has become effective under the Securities Act, the
Preliminary Prospectus and the Final Prospectus have been filed with the
Commission pursuant to Rule 424(b), and the Pricing Term Sheet has been filed
with the Commission pursuant to Rule 433(d), in each case, within the time
required by such rule. No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and, to our
knowledge, no proceedings for that purpose have been instituted or are pending
or contemplated under the Securities Act; the statements in the Registration
Statement, the General Disclosure Package and the Final Prospectus under the
heading “Description of the Senior Notes,” to the extent that they constitute
summaries of the terms of the Securities and the Indenture, matters of law or
legal conclusions, fairly summarize the matters described therein in all
material respects; and, to our knowledge, (A) there are no current or pending
legal or governmental proceedings required to be described in the Registration
Statement, the General Disclosure Package or the Final Prospectus which are not
described therein, and (B) there are no contracts or documents of a character
required to be described in the Registration Statement, the General Disclosure
Package or the Final Prospectus or to be filed as exhibits to the Registration
Statement which are not described therein and filed therewith.
(8) The
Underwriting Agreement has been duly authorized, executed and delivered by the
Company.
**********
C-4
The
purpose of our professional engagement was not to establish factual matters, and
the preparation and/or review of the Registration Statement, the General
Disclosure Package and the Final Prospectus involved many determinations of a
wholly or partially non-legal character. We make no representation
that we have independently verified the accuracy, completeness or fairness of
the Registration Statement, the General Disclosure Package or the Final
Prospectus or that the actions taken in connection with the preparation and/or
review of the Registration Statement, the General Disclosure Package or the
Final Prospectus (including the actions described in the next paragraph) were
sufficient to cause the Registration Statement, the General Disclosure Package
or the Final Prospectus to be accurate, complete or fair. We are not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the Registration Statement, the General Disclosure Package or the
Final Prospectus except to the extent otherwise explicitly indicated in numbered
paragraph 7 above.
We can,
however, confirm that we have participated in conferences with representatives
of the Company, representatives of the Underwriters, counsel for the
Underwriters and representatives of the independent accountants for the Company
during which disclosures in the Registration Statement, the General Disclosure
Package and the Final Prospectus and related matters were
discussed. In addition, we have reviewed certain corporate records
furnished to us by the Company.
Based
upon our participation in conferences and our document review identified in the
preceding paragraph, our understanding of applicable law and the experience we
have gained in our practice thereunder, and, to the extent we have considered
reasonable and necessary, relying as to factual matters upon the statements of
officers and other representatives of the Company, we can advise that nothing
has come to our attention that has caused us to conclude that (i) the Registration
Statement (other than financial statements and related notes and other
accounting and financial data included or incorporated by reference in the
Registration Statement, as to which we express no opinion and give no advice) at
its effective date and at the date hereof contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein not misleading; (ii) the General
Disclosure Package (other than financial statements and related notes and other
accounting and financial data included or incorporated by reference in the
General Disclosure Package, as to which we express no opinion and give no
advice), as of the Applicable Time, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (iii) the Final Prospectus (other than financial
statements and related notes and other accounting and financial data included or
incorporated by reference in the Final Prospectus, as to which we express no
opinion and give no advice) at the date it bears and at the date hereof
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; and (iv)
subject to the foregoing, we also advise you that, in our opinion, each of the
Registration Statement, as of the effective date and the date hereof, and the
Final Prospectus, as of the date it bears and the date hereof, appeared or
appears on its face to be responsive in all material respects to the
requirements of Form S-3 (other than financial statements and related notes
and other accounting and financial data included or incorporated by reference in
the Registration Statement and the Final Prospectus, as to which we express no
opinion and give no advice). We note that the Registration Statement,
including the base prospectus dated October 13, 2006 (together with any
amendments or supplements thereto), incorporates by reference therein reports
and other information filed by the Parent in its capacity as a separate
registrant of securities under the Securities Act. Notwithstanding
anything to the contrary contained in this letter (including without limitation
the sentences above in this paragraph), the opinions and other statements
contained in this letter shall not cover, nor shall they be deemed to cover, the
reports and other information filed by the Parent as a registrant under the
Registration Statement and such reports and information filed by the Parent that
are incorporated by reference therein.
*********
C-5
Except as
otherwise specified in this letter, we have not undertaken any investigation to
determine the facts upon which the advice in this letter is based. We
have not undertaken any search of court records for the purposes of this
letter.
We have
assumed for purposes of this letter: each document we have reviewed
for purposes of this letter is accurate and complete (other than the
Registration Statement, the General Disclosure Package and the Final
Prospectus), each such document that is an original is authentic, each such
document that is a copy conforms to an authentic original, and all signatures on
each such document are genuine; that the Underwriting Agreement and every other
agreement we have examined for purposes of this letter constitutes a valid and
legally binding obligation of each party to that document and that each such
party has satisfied all legal requirements that are applicable to such party to
the extent necessary to entitle such party to enforce such agreement (except
that we make no such assumption with respect to the Company); that you have
acted in good faith and without notice of any fact which has caused you to reach
any conclusion contrary to any of the conclusions provided in this letter; and
that the constitutionality or validity of a relevant statute, rule, regulation
or agency is not at issue.
In
preparing this letter, we have relied without independent verification upon:
(i) factual
information contained in certificates obtained from governmental authorities;
(ii) factual
information represented to be true in the Underwriting Agreement and other
documents specifically identified at the beginning of this letter as having been
read, prepared or reviewed by us; (iii) factual
information provided to us by the Company or its representatives; and (iv) factual
information we have obtained from such other sources as we have deemed
reasonable. We have assumed that there has been no relevant change or
development between the dates as of which the information cited in the preceding
sentence was given and the date of this letter and that the information upon
which we have relied is accurate and does not omit disclosures necessary to
prevent such information from being misleading. For purposes of
numbered paragraphs 1 and 2, we have relied exclusively upon certificates issued
by governmental authorities in the relevant jurisdictions and such opinions are
not intended to provide any conclusion or assurance beyond that conveyed by
those certificates.
We
confirm that we do not have knowledge that has caused us to conclude that our
reliance and assumptions cited in the two immediately preceding paragraphs are
unwarranted. Whenever this letter provides advice about (or is based
upon) our knowledge of any particular information or about any information which
has or has not come to our attention, such advice is based entirely on the
actual knowledge at the time this letter is delivered on the date it bears by
the lawyers with our firm at that time who (i) have represented the Company in
connection with the offering of the Securities effected pursuant to the Final
Prospectus, and (ii) have spent time representing the Company on other
significant matters.
C-6
Our
advice on every legal issue addressed in this letter is based exclusively on the
internal laws of the State of New York, the General Corporation Law of the State
of Delaware, the Delaware Revised Uniform Limited Partnership Act, the Delaware
Limited Liability Company Act or the federal law of the United States, and
represents our opinion as to how that issue would be resolved were it to be
considered by the highest court in the jurisdiction which enacted such
law. The manner in which any particular issue relating to the
opinions would be treated in any actual court case would depend in part on facts
and circumstances particular to the case and would also depend on how the court
involved chose to exercise the wide discretionary authority generally available
to it. This letter is not intended to guarantee the outcome of any
legal dispute which may arise in the future. We express no opinion
with respect to any laws, regulations, statutes, governmental rules or
regulations or decisions which in our experience are not applicable generally to
transactions of the kind covered by the Underwriting Agreement or covered by
opinions typically delivered in connection with transactions of the kind covered
by the Underwriting Agreement. We are not qualified to practice law
in the State of Delaware and our opinions herein regarding Delaware law are
limited solely to our review of provisions of the General Corporation Law of the
State of Delaware, the Delaware Revised Uniform Limited Partnership Act and the
Delaware Limited Liability Company Act, which we consider normally applicable to
companies formed or organized in the State of Delaware involved in transactions
of the type contemplated by the Underwriting Agreement, without our having made
any special investigation as to the applicability of another statute, law,
rule or regulation. None of the opinions or other advice
contained in this letter considers or covers (i) any foreign
or state securities (or “blue sky”) laws or regulations, (ii) any
financial statements or supporting schedules (or any notes to any such
statements or schedules) or other accounting or financial information derived
therefrom set forth or incorporated by reference in (or omitted from) the
Registration Statement, the General Disclosure Package or the Final Prospectus
(including but not limited to any computation to determine whether the execution
and delivery by the Company of the Underwriting Agreement and the Indenture, the
issuance and sale of the Securities being delivered on the date hereof, and the
compliance by the Company with the terms of, and the consummation of the
transactions contemplated by, the Underwriting Agreement, the Indenture and the
Securities will not result in a breach or violation of any financial covenant or
similar provision of any contract of the Company), (iii) any rules
and regulations of the Financial Industry Regulatory Authority relating to the
compensation of underwriters and (iv) provisions
of the Underwriting Agreement which require indemnification or contribution,
including, without limitation, indemnification or contribution obligations which
arise out of the failure to comply with applicable state or federal securities
laws.
This
letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which we did not have knowledge at that time,
by reason of any change subsequent to that time in any law or other governmental
requirement or interpretation thereof covered by any of our opinions or advice,
or for any other reason.
This
letter is being provided to you pursuant to Section 5(e) of the Underwriting
Agreement and may not be relied upon by you for any other
purpose. Without our written consent: (i) no person
other than the Underwriters may rely on this letter for any purpose; (ii) this letter
may not be cited or quoted in any financial statement, prospectus, private
placement memorandum or other similar document; (iii) this letter
may not be cited or quoted in any other document or communication which might
encourage reliance upon this letter by any person or for any purpose excluded by
the restrictions in this paragraph; and (iv) copies of
this letter may not be furnished to anyone for purposes of encouraging such
reliance.
Very truly yours,
LOCKE
LORD BISSELL & LIDDELL LLP
C-7
EXHIBIT
D
FORM OF
OPINION & 10B-5 STATEMENT OF UNDERWRITERS COUNSEL
[To be
Provided by Davis Polk & Wardwell]
D-1
EXHIBIT E
ISSUER GENERAL USE FREE
WRITING PROSPECTUSES
|
1.
|
Pricing
Term Sheet dated May 21, 2009 and attached hereto as Exhibit
F.
|
E-1
EXHIBIT F
Filed
Pursuant to Rule 433
Registration
No. 333-137998
May 21,
2009
Panhandle
Eastern Pipe Line Company, LP
Pricing
Term Sheet
$150,000,000 8.125%
Senior Notes due 2019
The
following information supplements the Preliminary Prospectus Supplement dated
May 21, 2009, and is filed pursuant to Rule 433, under Registration No.
333-137998
|
Issuer:
|
Panhandle
Eastern Pipe Line Company, LP
|
|
Security
Type:
|
Senior
Unsecured Notes
|
|
Ratings
(Moody’s / S&P / Fitch):
|
Baa3(Stable)/
BBB-(Stable)/ BBB(Negative)
|
|
Pricing
Date:
|
May
21, 2009
|
|
Settlement
Date:
|
June
2, 2009
|
|
Maturity
Date:
|
June
1, 2019
|
|
Principal
Amount:
|
$150,000,000
|
|
Benchmark:
|
T
3.125% due May 15, 2019
|
|
Benchmark
Price/Yield:
|
98-26+
/ 3.263%
|
|
Re-offer
Spread to Benchmark:
|
+486.2
bps
|
|
Yield
to Maturity:
|
8.125%
|
|
Coupon:
|
8.125%
|
|
Public
Offering Price:
|
100%
|
|
Optional
Redemption:
|
T
+50 bps
|
|
Interest
Payment Dates:
|
June
1 and December 1, beginning December 1, 2009
|
|
CUSIP
/ ISIN:
|
698455
AC6/ US 698455AC64
|
|
T+7
Settlement Cycle
|
We
expect that delivery of the notes will be made against payment on or about
the settlement date specified above, which will be the seventh business
day following the pricing date (this settlement cycle being referred to as
“T+7”). Pursuant to Rule 15c6-1 under the Exchange Act, trades in the
secondary market generally are required to settle in three business days,
unless the parties to any such trade expressly agree otherwise.
Accordingly, purchasers of notes who wish to trade notes more than four
business days prior to the settlement date will be required to specify an
alternate settlement cycle at the time of such trade to prevent a failed
settlement.
|
|
Joint
Bookrunning Managers:
|
Wachovia
Capital Markets, LLC
RBC
Capital Markets Corporation
|
The
issuer and its parent, Southern Union Company, have filed a registration
statement (including a base prospectus), and the issuer has filed a prospectus
supplement, with the U.S. Securities and Exchange Commission (SEC) for the
offering to which this communication relates. Before you invest, you should read
the prospectus supplement for this offering, the issuer’s prospectus in that
registration statement and any other documents the issuer has filed with the SEC
for more complete information about the issuer and this offering. You may get
these documents for free by searching the SEC online data base (EDGAR) on the
SEC web site at http://www.sec.gov. Alternatively, the issuer, any underwriter
or any dealer participating in the offering will arrange to send you the
prospectus supplement and prospectus if you request it by calling Wachovia
Capital Markets, LLC toll free at 1-800-326-5897 or RBC Capital Markets
Corporation toll free at 1-866-375-6829.
F-1
SEVENTH
SUPPLEMENTAL INDENTURE
between
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
Issuer
and
THE BANK
OF NEW YORK MELLON TRUST COMPANY, N.A
Trustee
Dated as
of June 2, 2009
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
|
i
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
|
ii
THIS
SEVENTH SUPPLEMENTAL INDENTURE, dated as of June 2, 2009 (this “Seventh
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 Mellon 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 and Trustee executed the Sixth Supplemental Indenture, dated as of
June 12, 2008, under which the Issuer issued a new series of its Debt Securities
known as the 7.00% Senior Notes due 2018, in the principal amount of
$400,000,000.
WHEREAS,
the Issuer desires to issue a new series of Debt Securities known as the
8.125 % Senior
Notes due 2019, in the principal amount of $150,000,000 (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
Seventh Supplemental Indenture,
2
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 May 21, 2009, 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 Seventh
Supplemental Indenture, and all requirements necessary to make this Seventh
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 Seventh 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
Seventh Supplemental Indenture;
(b) a
term defined anywhere in this Seventh 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
Seventh 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):
3
“Additional
Senior Notes” means any additional Senior Notes (other than Initial Senior
Notes) issued from time to time under this Seventh 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.
4
“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).
5
“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 Wachovia Capital
Markets, LLC and RBC Capital Markets Corporation (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 $150,000,000 aggregate principal amount of
Senior Notes issued under this Seventh Supplemental Indenture.
6
“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;
7
(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.
8
“Reference
Treasury Dealer” means a Primary Treasury Dealer (as defined below) selected
by Wachovia Capital Markets, LLC and RBC Capital
Markets Corporation (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 Principal
Property.
“Rule
144A” means Rule 144A under the Securities Act.
“Sale-Leaseback
Transaction” means, with respect to the Issuer or any Restricted Subsidiary, the
sale or transfer by the Issuer or such Restricted Subsidiary of any Principal
Property to a Person (other than the Issuer or a Subsidiary of the Issuer) and
the taking back by the Issuer or such Restricted Subsidiary, as the case may be,
of a lease of such Principal Property. With respect to the Issuer,
“Sale-Leaseback Transaction” means the sale or transfer by the Issuer of any
assets or property to another Person and the taking back by the Issuer of a
lease of such assets or property.
“SEC”
means the Securities and Exchange Commission, as from time to time constituted,
created under the Securities Exchange Act of 1934, as amended, or, if at any
time after the execution of this Seventh Supplemental Indenture such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
“Securities
Act” means the Securities Act of 1933, as amended.
“Senior
Notes” has the meaning assigned to it in the recitals to this Seventh
Supplemental Indenture. The Initial Senior Notes and the Additional
Senior Notes shall be treated as a single class for all purposes under this
Seventh Supplemental Indenture, and unless the context otherwise requires, all
references to the Senior Notes shall include the Initial Senior Notes and any
Additional Senior Notes.
9
“Standard
& Poor’s” means Standard & Poor’s, a division of The McGraw-Hill
Companies, 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.
“Subsidiary”
means, with respect to any Person, (i) any corporation at least a majority of
whose outstanding Voting Stock shall at the time be owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries, (ii) any limited liability company,
general partnership, joint venture or similar entity, at least a majority of
whose outstanding membership, partnership or similar interests shall at the time
be owned by such Person, or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries and (iii) any limited partnership of
which such Person or any of its Subsidiaries is a general partner.
“Total
Capital” means the sum of (i) Consolidated Debt and (ii) Capital Stock, Hybrid
Preferred Securities, premium on Capital Stock, capital surplus, capital in
excess of par value and retained earnings (however the foregoing may be
designated), less, to the extent not otherwise deducted, the cost of shares of
Capital Stock of the Issuer held in treasury, 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.
“Treasury
Rate” means, with respect to any redemption date, the rate per annum equal to
the semiannual equivalent yield to maturity or interpolated (on a day count
basis) of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
“Voting
Stock” means securities of any class or classes the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for corporate
directors or managers (in the case of a limited liability company) (or persons
performing similar functions).
(g) solely
for purposes of this Seventh Supplemental Indenture,
(1) the
defined term “Business Day” contained in Section 1.01 of the Base Indenture
shall be replaced in its entirety by the following new definition:
“Business
Day” means a day on which banking institutions in the Borough of Manhattan, New
York, New York are not authorized or required by law or regulation to close;
and
(2) the
defined term “Board of Directors” contained in Section 1.01 of the Base
Indenture shall be deemed to include the Board of Managers of a limited
liability company.
10
ARTICLE
II
GENERAL
TERMS AND CONDITIONS OF THE SENIOR NOTES
SECTION
2.1 Designation and Principal
Amount of the Senior Notes.
There is
hereby authorized a single series of Debt Securities designated as the “8.125%
Senior Notes due 2019”, the principal amount of which shall be as set forth in
any written order of the Issuer for the authentication and delivery of Senior
Notes pursuant to Section 2.4 of the Base Indenture; provided, however, that Additional
Senior Notes may be issued by the Issuer at any time subject to the terms and
conditions of the Base Indenture and this Seventh Supplemental Indenture, provided, that at the time of
such issuance no Default or Event of Default shall have occurred and be
continuing.
The
initial principal amount of the Senior Notes shall be $150,000,000.
SECTION
2.2 Maturity of the Senior
Notes.
The
Senior Notes will mature on June 1, 2019.
SECTION
2.3 Interest on the Senior
Notes.
Interest
shall accrue from the date set forth, and shall be payable on the Senior Notes
in the amount and as otherwise set forth, in the form of such Senior Note
appearing in Article VI of this Seventh Supplemental Indenture.
SECTION
2.4 Form of the Senior
Notes.
The form
of the Senior Notes shall be substantially in the form provided for in Article
VI. The terms of the Senior Notes form part of this Seventh
Supplemental Indenture. The Senior Notes shall be represented by one
or more Global Notes in definitive, registered form, without interest
coupons. The Senior Notes will be initially issued as Global Notes
registered in the name of Cede & Co. (as nominee for DTC, New York, New
York, which, together with its nominees and their successors, is hereby
designated the Depositary for the Senior Notes).
SECTION
2.5 Redemption of the Senior
Notes.
The
Senior Notes will be redeemable as a whole or in part, at the option of the
Issuer at any time, at a redemption price equal to the greater of (i) 100% of
the principal amount of such Senior Notes or (ii) the sum of the present values
of the remaining scheduled payments of principal and interest thereon (exclusive
of interest accrued to the date of redemption) discounted to the redemption date
on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 50 basis points, plus, in either case, accrued
and unpaid interest thereon to the date of redemption.
11
Notice of
any redemption will be mailed at least 30 days but not more than 60 days
before the redemption date by the Issuer or by the Trustee on the Issuer’s
behalf to each Holder of Senior Notes to be redeemed.
Unless
the Issuer defaults in payment of the redemption price, on and after the
applicable redemption date interest will cease to accrue on the Senior Notes or
portions thereof called for redemption.
ARTICLE
III
COVENANTS
SECTION
3.1 Limitation on Restricted
Payments.
(a) So long
as any of the Senior Notes are outstanding and during any time that such Senior
Notes are rated below Baa3 (or an equivalent rating) by Moody’s and below BBB-
(or an equivalent rating) by Standard & Poor’s, the Issuer will not, and
will not permit any of its Restricted Subsidiaries, directly or indirectly,
to:
(i) declare
or pay any dividend or make any distribution on the Capital Stock of the Issuer
to the direct or indirect holders of its Capital Stock (except dividends or
distributions payable solely in its Non-Convertible Capital Stock or in options,
warrants or other rights to purchase such Non-Convertible Capital Stock and
except dividends or distributions payable to the Issuer or a Subsidiary of the
Issuer);
(ii) purchase,
redeem or otherwise acquire or retire for value any Capital Stock of the Issuer;
or
(iii) make any
Loan to Southern Union or any of its Affiliates that is not a Subsidiary of the
Issuer;
(any such
dividend, distribution, purchase, redemption, other acquisition, retirement or
Loan described in (i) through (iii) above being hereinafter referred to as a
“Restricted Payment”), unless at the time the Issuer or such Restricted
Subsidiary makes such Restricted Payment and after giving effect
thereto:
(1) no Event
of Default, and no event that with the lapse of time or the giving of notice or
both would constitute an Event of Default, shall have occurred and be continuing
(or would result therefrom);
(2) the
Issuer’s Fixed Charge Coverage Ratio is greater than or equal to 2.2;
and
(3) the
Issuer’s Leverage Ratio is less than or equal to 55%.
12
Notwithstanding
the foregoing, the Issuer or any of its Restricted Subsidiaries may declare,
make or pay any Restricted Payment, if at the time the Issuer or such Restricted
Subsidiary makes such Restricted Payment and after giving effect
thereto:
(1) no
Event of Default, and no event that with the lapse of time or the giving of
notice or both would constitute an Event of Default, shall have occurred and be
continuing (or would result therefrom); and
(2) the
aggregate amount of such Restricted Payment and all other Restricted Payments
made since the original date of issuance of the Initial Senior Notes would not
exceed the sum of:
(A) $175
million;
(B) 75%
of Adjusted Consolidated Net Income accumulated since the original date of
issuance of the Initial Senior Notes to the end of the most recent fiscal
quarter ending at least 45 days prior to the date of such Restricted Payment;
and
(C) the
aggregate net cash proceeds received by the Issuer after the original date of
issuance of the Initial Senior Notes from capital contributions or the issuance
of Capital Stock of the Issuer to a Person who is not a Subsidiary of the
Issuer, or from the issuance to such a Person of options, warrants or other
rights to acquire such Capital Stock of the Issuer.
None of
the foregoing provisions will prohibit:
(i) dividends
or other distributions paid in respect of any class of Capital Stock issued by
the Issuer in connection with the acquisition of any business or assets by the
Issuer or a Restricted Subsidiary where the dividends or other distributions
with respect to such Capital Stock are payable solely from the net earnings of
such business or assets;
(ii) any
purchase or redemption of Capital Stock of the Issuer made by exchange for, or
out of the proceeds of the substantially concurrent sale of, Non-Convertible
Capital Stock of the Issuer; or
(iii) dividends
paid within 60 days after the date of declaration thereof if at such date of
declaration such dividends would have complied with this covenant.
13
SECTION
3.2 Limitation
on Liens.
(a) The
Issuer shall not, nor will it permit any Restricted Subsidiary to, create,
assume, incur or suffer to exist any Lien upon any Principal Property, whether
owned or leased on the date of the Indenture or thereafter acquired, to secure
any Debt of the Issuer or any other Person (other than the Senior Notes),
without in any such case making effective provision whereby all of the Senior
Notes outstanding shall be secured equally and ratably with, or prior to, such
Debt so long as such Debt shall be so secured. There is excluded from
this restriction:
(i) any Lien
upon any property or assets of the Issuer or any Restricted Subsidiary in
existence on the date of the Indenture or created pursuant to an “after-acquired
property” clause or similar term in existence on the date of the Indenture or
any mortgage, pledge agreement, security agreement or other similar instrument
in existence on the date of the Indenture;
(ii) any Lien
upon any property or assets created at the time of acquisition of such property
or assets by the Issuer or any Restricted Subsidiary or within 18 months after
such time to secure all or a portion of the purchase price for such property or
assets or Debt incurred to finance such purchase price, whether such Debt was
incurred prior to, at the time of or within 18 months of such
acquisition;
(iii) any Lien
upon any property or assets existing thereon at the time of the acquisition
thereof by the Issuer or any Restricted Subsidiary (whether or not the
obligations secured thereby are assumed by the Issuer or any Restricted
Subsidiary);
(iv) any Lien
upon any property or assets of a Person existing thereon at the time such Person
becomes a Restricted Subsidiary by acquisition, merger or otherwise (whether or
not such Lien was created in anticipation of such acquisition);
(v) any Lien
securing obligations assumed by the Issuer or any Restricted Subsidiary existing
at the time of the acquisition by the Issuer or any Restricted Subsidiary of the
property or assets subject to such Lien or at the time of the acquisition of the
Person which owns such property or assets;
(vi) any Lien
on property to secure all or part of the cost of construction or improvements
thereon or to secure Debt incurred prior to, at the time of, or within 18 months
after completion of such construction or making of such improvements, to provide
funds for any such purpose;
(vii) any Lien
in favor of the Issuer or any Restricted Subsidiary;
(viii) any Lien
created or assumed by the Issuer or any Restricted Subsidiary in connection with
the issuance of Debt the interest on which is excludable from gross income of
the holder of such Debt pursuant to the Internal Revenue Code of 1986, as
amended, or any successor statute, for the purpose of financing, in whole or in
part, the acquisition or construction of property or assets to be used by the
Issuer or any Subsidiary;
14
(ix) any Lien
upon property or assets of any foreign Restricted Subsidiary to secure Debt of
that foreign Restricted Subsidiary;
(x) Permitted
Liens;
(xi) any Lien
created by any program providing for the financing, sale or other disposition of
trade or other receivables classified as current assets in accordance with
United States generally accepted accounting principles entered into by the
Issuer or by a Subsidiary of the Issuer, provided that such program is
on terms customary for similar transactions, or any document executed by any
Subsidiary of the Issuer in connection therewith, provided that such Lien is
limited to the trade or other receivables in respect of which such program is
created or exists, and the proceeds thereof;
(xii) any Lien
upon any additions, improvements, replacements, repairs, fixtures, appurtenances
or component parts thereof attaching to or required to be attached to property
or assets pursuant to the terms of any mortgage, pledge agreement, security
agreement or other similar instrument, creating a Lien upon such property or
assets permitted by clauses (i) through (xi), inclusive, above; or
(xiii) any
extension, renewal, refinancing, refunding or replacement (or successive
extensions, renewals, refinancing, refundings or replacements) of any Lien, in
whole or in part, that is referred to in clauses (i) through (vi), inclusive,
above (and Liens related thereto referred to in clause (xii) above), or of any
Debt secured thereby; provided, however, that the principal
amount of Debt secured thereby shall not exceed the greater of the principal
amount of Debt so secured at the time of such extension, renewal, refinancing,
refunding or replacement and the original principal amount of Debt so secured
(plus in each case the aggregate amount of premiums, other payments, costs and
expenses paid or incurred in connection with such extension, renewal,
refinancing, refunding or replacement); provided further, however, that such extension,
renewal, refinancing, refunding or replacement shall be limited to all or a part
of the property (including improvements, alterations and repairs on such
property) subject to the encumbrance so extended, renewed, refinanced, refunded
or replaced (plus improvements, alterations and repairs on such
property).
Notwithstanding
the foregoing, the Issuer may, and may permit any Restricted Subsidiary to,
create, assume, incur, or suffer to exist any Lien upon any Principal Property
to secure Debt of the Issuer or any other Person (other than the Senior Notes)
that is not otherwise excepted by clauses (i) through (viii), inclusive, above
without securing the Senior Notes, provided that the aggregate
principal amount of all Debt then outstanding secured by such Lien and all
similar Liens, together with all net sale proceeds from Sale-Leaseback
Transactions (excluding Sale-Leaseback Transactions permitted by clauses (i)
through (iv), inclusive, of Section 3.3(a) of this Seventh Supplemental
Indenture) does not exceed the greater of 15% of Consolidated Net Tangible
Assets or 15% of Total Capital.
15
SECTION
3.3 Restriction on
Sale-Leasebacks.
(a) The
Issuer shall not, nor shall it permit any Restricted Subsidiary to, engage in a
Sale-Leaseback Transaction, unless:
(i) the
Sale-Leaseback Transaction occurs within 18 months from the date of acquisition
of the Principal Property subject thereto or the date of the completion of
construction or commencement of full operations on such Principal Property,
whichever is later;
(ii) the
Sale-Leaseback Transaction involves a lease for a period, including renewals, of
not more than four years;
(iii) the
Issuer or such Restricted Subsidiary would be entitled to incur Debt secured by
a Lien on the Principal Property subject thereto (pursuant to clauses (i)
through (xiii), inclusive, of the first paragraph of Section 3.2(a) of this
Seventh Supplemental Indenture) in a principal amount equal to or exceeding the
net sale proceeds from the Sale-Leaseback Transaction without securing the
Senior Notes; or
(iv) the
Issuer or such Restricted Subsidiary, within an 18-month period after such
Sale-Leaseback Transaction, applies or causes to be applied an amount not less
than the net sale proceeds from such Sale-Leaseback Transaction to (A) the
repayment, redemption or retirement of Funded Debt of the Issuer or any
Subsidiary of the Issuer, or (B) investment in another Principal Property or in
a Subsidiary of the Issuer which owns another Principal Property.
Notwithstanding
the foregoing, the Issuer may, and may permit any Restricted Subsidiary to,
effect any Sale-Leaseback Transaction that is not otherwise excepted by clauses
(i) through (iv), inclusive, above, provided that the net sale
proceeds from such Sale-Leaseback Transaction, together with the aggregate
principal amount of outstanding Debt (other than the Senior Notes) secured by
Liens upon any Principal Properties not excepted by clauses (i) through (xiii),
inclusive, of Section 3.2(a) of this Seventh Supplemental Indenture, do not
exceed the greater of 15% of Consolidated Net Tangible Assets or 15% of Total
Capital.
SECTION
3.4 Financial
Information.
Whether
or not required by the SEC’s rules and regulations, so long as any Senior Notes
are outstanding, the Issuer shall furnish to the Holders of the Senior Notes,
within the time periods specified in the SEC’s rules and
regulations:
|
|
(1)
|
all
quarterly and annual reports that would be required to be filed with the
SEC on Forms 10-Q and 10-K if the Issuer was required to file such
reports; and
|
|
|
(2)
|
all
current reports that would be required to be filed with the SEC on Form
8-K if the Issuer was required to file such
reports.
|
16
The
Issuer will prepare all such reports in all material respects in accordance with
all applicable rules and regulations. The Issuer will include in each
annual report on Form 10-K a report on its consolidated financial statements by
its certified independent public accountant. In addition, whether or not
required by the SEC, the Issuer shall file a copy of each of the reports
referred to in clauses (1) and (2) above with the SEC for public availability
within the time periods specified in the SEC’s applicable rules and regulations
(unless the SEC will not accept such a filing) and make that information
available to securities analysts and prospective investors upon
request.
The
Issuer is currently required under the Exchange Act to file reports with the
SEC. If the Issuer is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Issuer will nevertheless
continue filing the reports specified in the preceding paragraphs with the SEC
within the time periods specified above unless the SEC will not accept such a
filing. The Issuer agrees not to take any action for the purpose of
causing the SEC not to accept any such filings. If, notwithstanding
the foregoing, the SEC will not accept the Issuer’s filings for any reason, the
Issuer will post the reports referred to in this Section 3.4 on the website
www.panhandleenergy.com within the time periods that would apply if the Issuer
was required to file those reports with the SEC.
For so
long as any Senior Notes remain outstanding, at any time the Issuer is not
required to file the reports required by this Section 3.4 with the SEC, the
Issuer shall furnish at the Issuer’s cost to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities
Act.
SECTION
3.5 Applicability of
Covenants.
Unless
otherwise stated herein, the foregoing covenants contained in this
Article III shall only be in effect so long as any of the Senior Notes are
outstanding.
ARTICLE
IV
DEFAULT
SECTION
4.1 General.
All of
the events specified in paragraphs (1) through (6) in Section 6.01(a) of
the Base Indenture shall be “Events of Default” with respect to the Senior
Notes.
17
SECTION
4.2 Additional Event of
Default.
The
following event shall be an “Event of Default” with respect to the Senior Notes:
as a result of any action taken by the Issuer or its direct or indirect equity
holders, there is a change in the Issuer’s federal income tax status or a change
in the deemed issuer of the indebtedness evidenced by the Senior Notes for
federal income tax purposes, unless (i) Holders of more than 50% in
principal amount of the Senior Notes consent to such change or
(ii) (a) the Issuer certifies to the Trustee that it has received a
ruling from the Internal Revenue Service or (b) the Issuer delivers to the
Trustee an opinion of nationally recognized independent counsel reasonably
acceptable in form and substance to the Trustee, in either case to the effect
that the Holders of the Senior Notes will not recognize income, gain or loss for
federal income tax purposes as a result of the change and that such Holders will
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if the change had not
occurred.
ARTICLE
V
DEFEASANCE
SECTION
5.1 General.
All of
the provisions of Article XI of the Base Indenture shall be applicable to the
Senior Notes.
SECTION
5.2 Covenant
Defeasance.
With
respect to and pursuant to the terms of Section 11.02(b) of the Base
Indenture, the release of covenant obligations provided for therein shall, with
respect to the Senior Notes, also apply to Section 3.1, Section 3.2,
and Section 3.3 of this Seventh Supplemental Indenture.
ARTICLE
VI
FORM
OF SENIOR NOTES
SECTION
6.1 Form of Senior
Notes.
The
Senior Notes, and the Trustee’s Certificate of Authentication to be endorsed
thereon, are to be substantially in the following forms:
[FORM OF
FACE OF SENIOR NOTES DUE 2019]
This
Senior Note is a Global Note within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depositary or a nominee of the
Depositary. This Senior Note is exchangeable for Senior Notes
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture, and may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such a successor Depositary.
18
Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Unless
and until it is exchanged in whole or in part for Senior Notes in definitive
registered form in accordance with the provisions of the Indenture applicable to
such exchange, this certificate may not be transferred except as a whole by DTC
to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or
by DTC or any such nominee to a successor Depository or a nominee of such
successor Depository.
HOU:0060018/00004:1398571v1
19
CUSIP
No. 698455
AC6 $150,000,000
Panhandle
Eastern Pipe Line Company, LP
8.125%
SENIOR NOTE DUE 2019
PANHANDLE
EASTERN PIPE LINE COMPANY, LP, a Delaware limited partnership (the “Issuer”),
for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of One Hundred Fifty Million Dollars ($150,000,000)
on June 1, 2019 (“Maturity”) and to pay interest thereon from June 2, 2009 (the
“Original Issue Date”) or from the most recent interest payment date (each such
date, an “Interest Payment Date”) to which interest has been paid or duly
provided for, semi-annually in arrears on June 1st and
December 1st in
each year, commencing December 1, 2009, to the registered holders thereof on the
preceding May 15th and November 15th, respectively, and at Maturity at the rate
of 8.125% per annum, until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum. The amount of interest payable on any Interest Payment Date
shall be computed on the basis of a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on
this Senior Note is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the person in whose name this
Senior Note (or one or more Predecessor Securities, as defined in said
Indenture) is registered at the close of business on the regular record date for
such interest installment which shall be the close of business on the 15th day
of the calendar month in which such Interest Payment Date occurs. Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such regular record
date, and may be paid to the person in whose name this Senior Note (or one or
more Predecessor Securities) is registered at the close of business on a special
record date to be fixed by the Trustee (as defined below) for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of this series of Senior Notes not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Senior Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. The principal
of (and premium, if any) and the interest on this Senior Note shall be payable
at the office or agency of the Trustee maintained for that purpose in any coin
or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debts; provided, however, that payment of
interest may be made at the option of the Issuer by check mailed to the
registered holder at such address as shall appear in the Security
Register.
20
This
Senior Note shall not be entitled to any benefit under the Indenture hereinafter
referred to, be valid or become obligatory for any purpose until the Certificate
of Authentication hereon shall have been signed by or on behalf of the
Trustee.
The
provisions of this Senior Note are continued on the reverse side hereof and such
continued provisions shall for all purposes have the same effect as though fully
set forth at this place.
HOU:0060018/00004:1398571v1
21
IN
WITNESS WHEREOF, the Issuer has caused this instrument to be
executed.
Dated
June 2, 2009
PANHANDLE
EASTERN PIPE LINE COMPANY, LP
By:
________________________
Name: ______________________
Title: _______________________
Attest:
By: ______________________
Name: ___________________
Title: ____________________
HOU:0060018/00004:1398571v1
22
[FORM
CERTIFICATE OF AUTHENTICATION]
CERTIFICATE
OF AUTHENTICATION
This is
one of the Senior Notes of the series of Senior Notes described in the
within-mentioned Indenture.
THE BANK
OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By______________________
[Authorized
Signatory]
[FORM OF
REVERSE OF SENIOR NOTE]
REVERSE
OF SENIOR NOTE
This
Senior Note is one of a duly authorized series of Securities of the Issuer
(herein sometimes referred to as the “Senior Notes”), specified in the
Indenture, issued or to be issued in one or more series under and pursuant to an
indenture (the “Base Indenture”) dated as of March 29, 1999 among the Issuer,
CMS Panhandle Holding Company, a Michigan corporation (which has merged into the
Issuer), and NBD Bank, as trustee (predecessor to The Bank of New York Mellon
Trust Company, N.A.), further supplemented by the Seventh Supplemental Indenture
dated as of June 2, 2009 between the Issuer and The Bank of New York Mellon
Trust Company, N.A., as trustee (the “Trustee”) (the Base Indenture as so
supplemented, hereinafter being referred to as the “Indenture”), to which the
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the holders of the Senior
Notes. By the terms of the Indenture, the Senior Notes are issuable
in series which may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This series of Senior
Notes is not limited in aggregate principal amount, as specified in said Seventh
Supplemental Indenture.
The
Senior Notes are redeemable at the option of the Issuer at any time and from
time to time, in whole or in part, upon not less than 30 days nor more than 60
days notice to each holder of such Senior Notes, at a redemption price equal to
the greater of (i) 100% of the principal amount of such Senior Notes to be
redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to the
date of redemption) discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 50 basis points, plus, in either case, accrued and unpaid interest
thereon to the date of redemption. Unless there is a default in the
payment of the redemption price, on and after the applicable redemption date,
interest will cease to accrue on the Senior Notes or portions thereof called for
redemption.
23
“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.
“Independent
Investment Banker” means any of Wachovia Capital
Markets, LLC and RBC Capital Markets Corporation (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.
“Reference
Treasury Dealer” means a Primary Treasury Dealer (as defined below) selected by
Wachovia Capital Markets, LLC and RBC Capital
Markets Corporation (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.
“Treasury
Rate” means, with respect to any redemption date, the rate per annum equal to
the semiannual equivalent yield to maturity or interpolated (on a day count
basis) of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
The
Issuer may purchase the Senior Notes in the open market, by tender or
otherwise. Senior Notes so purchased may be held, resold or
surrendered to the Trustee for cancellation. If applicable, the
Issuer will comply with the requirements of Rule 14e-1 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and other securities laws
and regulations in connection with any such purchase.
No
sinking fund is provided for the Senior Notes.
24
If an
Event of Default with respect to this Senior Note shall occur and be continuing,
the principal of this Senior Note may be declared due and payable in the manner
and with the effect provided in the Indenture.
The
Indenture contains provisions for defeasance at any time of (i) the entire
indebtedness of this Senior Note or (ii) certain restrictive covenants and
certain other obligations with respect to this Senior Note, in each case upon
compliance with certain conditions set forth therein.
The
Indenture permits, with certain exceptions as therein provided, modifications
and amendments of the Indenture by the Issuer and the Trustee with the consent
of the holders of a majority in aggregate principal amount of the outstanding
Senior Notes.
The
Indenture provides that the holders of a majority in aggregate principal amount
of the outstanding Senior Notes may, on behalf of all holders of Senior Notes,
waive any past default under the Indenture with respect to any Senior Notes,
except a default (i) in the payment of principal of, or premium, if any, or any
interest on any Senior Note; or (ii) in respect of a covenant or provision of
the Indenture which cannot be modified or amended without the consent of the
holder of each outstanding Senior Note affected.
The
Indenture provides that, subject to the duty of the Trustee during default to
act with the required standard of care, the Trustee will be under no obligation
to exercise any of its rights or powers under the Indenture at the request or
direction of any of the holders, unless such holders shall have offered to the
Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee, the holders of a majority in aggregate principal
amount of the outstanding Senior Notes have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the
Senior Notes; provided,
however, that the
Trustee shall not be obligated to take any action unduly prejudicial to holders
not joining in such direction or involving the Trustee in personal
liability.
No
reference herein to the Indenture and no provision of this Senior Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and any premium and interest on this
Senior Note at the times, place and rate, and in the coin or currency, herein
prescribed.
As
provided in the Indenture and subject to certain limitations therein and herein
set forth, the transfer of this Senior Note is registrable in the Security
Register, upon surrender of this Senior Note for registration of transfer at the
office or agency of the Issuer in any place where the principal of and any
premium and interest on this Senior Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Security Registrar duly executed by, the holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Senior Notes
of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
25
The
Senior Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Senior Notes are exchangeable for a like aggregate principal amount of Senior
Notes and of like tenor of a different authorized denomination, as requested by
the holder surrendering the same.
No
service charge shall be made for any such registration of transfer or exchange,
but the Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The
Issuer shall not be required to (a) issue, exchange or register the transfer of
this Senior Note for a period of 15 days next preceding the mailing of the
notice of redemption of Senior Notes or (b) exchange or register the transfer of
any Senior Note or any portion thereof selected, called or being called for
redemption, except in the case of any Senior Note to be redeemed in part, the
portion thereof not so to be redeemed.
Prior to
due presentment of this Senior Note for registration of transfer, the Issuer,
the Trustee and any agent of the Issuer or the Trustee may treat the Person in
whose name this Senior Note is registered as the owner hereof for all purposes,
whether or not this Senior Note be overdue, and neither the Issuer, the Trustee
nor any such agent shall be affected by notice to the contrary.
No
recourse shall be had for the payment of the principal of or the interest on
this Senior Note, or for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Issuer or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
All terms
used in this Senior Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
CERTIFICATE
OF TRANSFER
FOR VALUE
RECEIVED, THE UNDERSIGNED HEREBY SELL(S), ASSIGN(S) AND TRANSFER(S)
UNTO
(Please
print or typewrite name and address including postal zip code, of
assignee)
26
(PLEASE
INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE)
the
within Senior Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
to
transfer said Senior Note on the books of the Issuer, with full power of
substitution in the premises.
Dated:___________________ ______________________]
[Name of Assignor]
ARTICLE
VII
ISSUANCE
OF SENIOR NOTES
SECTION
7.1 Original Issue of Senior
Notes.
Upon
execution of this Seventh Supplemental Indenture, the Senior Notes in the
initial principal amount of $150,000,000 may be executed by the
Issuer. Such Senior Notes may be delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Senior Notes to or upon the written order of the Issuer, signed by its Chairman,
President, Treasurer, Assistant Treasurer or any Vice President and its
Secretary or an Assistant Secretary, without any further action by the
Issuer.
SECTION
7.2 Additional Senior
Notes.
Upon
execution of this Seventh Supplemental Indenture, subject to Section 2.1
hereof, Additional Senior Notes may be executed by the Issuer. Such
Additional Senior Notes may be delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and deliver said Additional Senior
Notes to or upon the written order of the Issuer, signed by its Chairman,
President, Treasurer, Assistant Treasurer or any Vice President and its
Secretary or an Assistant Secretary, without any further action by the
Issuer.
ARTICLE
VIII
MISCELLANEOUS
SECTION
8.1 Consent, Amendment and
Waiver.
For
purposes of Article VI and Article IX of the Base Indenture, it is understood
that the covenants and Events of Default included in this Seventh Supplemental
Indenture have been included solely for the benefit of the holders of the Senior
Notes and therefore any consent, amendment or waiver thereof shall require the
consent of a majority in aggregate principal amount of the outstanding Senior
Notes voting as a separate class or the consent of the holders of each
outstanding Senior Note, as the case may be.
27
SECTION
8.2 Ratification of
Indenture.
The Base
Indenture, as supplemented by this Seventh Supplemental Indenture, is in all
respects ratified and confirmed, and this Seventh Supplemental Indenture shall
be deemed part of the Indenture in the manner and to the extent herein and
therein provided. The provisions of this Seventh Supplemental
Indenture shall supersede the provisions of the Indenture to the extent the
Indenture is inconsistent herewith.
SECTION
8.3 Trustee Not Responsible for
Recitals.
The
recitals herein contained are made by the Issuer and not by the Trustee, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee makes
no representation as to the validity or sufficiency of this Seventh Supplemental
Indenture.
SECTION
8.4 Governing
Law.
This
Seventh Supplemental Indenture and each Senior Note shall be deemed to be a
contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said
State.
SECTION
8.5 Separability.
In case
any one or more of the provisions contained in this Seventh Supplemental
Indenture or in the Senior Notes shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Seventh
Supplemental Indenture or of the Senior Notes, but this Seventh Supplemental
Indenture and the Senior Notes shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein or
therein.
SECTION
8.6 Counterparts.
This
Seventh Supplemental Indenture may be executed in any number of counterparts
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
HOU:0060018/00004:1398571v1
28
IN
WITNESS WHEREOF, the parties hereto have caused this Seventh Supplemental
Indenture to be duly executed as of the day and year first above
written.
PANHANDLE
EASTERN PIPE LINE COMPANY, LP,
as
Issuer
By: _____________________
Name: Richard
N. Marshall
Title:
Senior Vice President and
Chief
Financial Officer
THE BANK
OF NEW YORK MELLON TRUST COMPANY,
as
Trustee
By: _____________________
Name:
Julie Hoffman-Ramos
Title:
Assistant Treasurer
HOU:0060018/00004:1398571v1
29
|
|
401
9th Street NW, Suite 400 South
Washington,
DC 20004
Telephone: 202-220-6900
Fax: 202-220-6945
www.lockelord.com
|
May 28,
2009
Panhandle
Eastern Pipe Line Company, LP
5444
Westheimer Road
Houston,
Texas 77056
Ladies
and Gentlemen:
We have
acted as counsel to Panhandle Eastern Pipe Line Company, LP, a Delaware limited
partnership (the “Company”), in connection with the offer and sale by the
Company of $150,000,000 principal amount of 8.125% senior notes due June 1, 2019
(the “Senior Notes”).
The
Senior Notes are to be issued under the Indenture, dated as of March 29, 1999
(the “Base Indenture”), between the Company and The Bank of New York Mellon
Trust Company, N.A. (as successor to The Bank of New York Trust Company, N.A.,
J.P. Morgan Trust Company, National Association, Bank One Trust Company,
National Association, and NBD Bank), as trustee (the “Trustee”), as amended and
supplemented by the seventh supplemental indenture thereto to be dated as of
June 2, 2009 (the “Seventh Supplemental Indenture”), between the Company and the
Trustee. The Base Indenture, as amended and supplemented by the
Seventh Supplemental Indenture, is referenced herein as the
“Indenture”).
The
Senior Notes are being sold pursuant to an Underwriting Agreement, dated May 21,
2009 (the “Underwriting Agreement”), among the Company, Wachovia Capital
Markets, LLC and RBC Capital Markets Corporation, as representatives of the
underwriters named therein (the “Underwriters”).
This
opinion is being furnished in accordance with the requirements of Item 601(b)(5)
of Regulation S-K under the Securities Act of 1933, as amended (the “Securities
Act”).
In
connection with this opinion, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the following:
(a) the
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3
(Registration No. 333-137998), including the base prospectus dated October 23,
2007 (the “Base Prospectus”), filed by the Company and Southern Union Company
(“Southern Union”) with the Securities and Exchange Commission (the
“Commission”) on October 23, 2007 (together with the documents incorporated by
reference therein, the “Post-Effective Amendment”), for the purpose of
registering the sale of the Senior Notes by the Company under the Securities
Act;
(b) the
Registration Statement on Form S-3 (No. 333-137998), including the related
prospectus, filed by Southern Union on October 13, 2006 (the “Initial
Registration Statement,” and together with the Post-Effective Amendment, the
“Registration Statement”);
(c) the
Company’s preliminary prospectus supplement dated May 21, 2009, covering the
offering of the Senior Notes through the Underwriters, in the form filed with
the Commission pursuant to Rule 424(b) of the general rules and regulations
promulgated under the Securities Act (the “Rules and Regulations”),
together with the Base Prospectus (together with the documents incorporated by
reference therein, the “Preliminary Prospectus”);
(d) the
Company’s prospectus supplement dated May 21, 2009, covering the offering of the
Senior Notes through the Underwriters, in the form filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations (together with the
documents incorporated by reference therein, the “Final
Prospectus”);
(e) the
term sheet relating to the Senior Notes filed with the Commission as a free
writing prospectus on May 21, 2009;
(f) the
Indenture;
(g) the
Underwriting Agreement;
(h) the
form of global note to be executed by the Company pursuant to the Indenture, in
the aggregate principal amount of $150,000,000, representing the Senior Notes to
be purchased and sold pursuant to the Underwriting Agreement;
(i) certified
copies of the Certificate of Limited Partnership of the Company and the
Agreement of Limited Partnership of the Company; and
(j) certified
copies of the unanimous written consents executed by the Board of Directors of
Southern Union (the sole member of Southern Union Panhandle LLC (the “General
Partner”), which is the sole general partner of the Company) and the unanimous
written consent executed by the pricing committee thereof.
We have
also examined the originals, or duplicates or certified or conformed copies, of
such records, agreements, instruments and other documents and have made such
other and further investigations as we have deemed relevant and necessary in
connection with the opinions expressed herein. As to questions of
fact material to this opinion, we have relied upon certificates of public
officials and of officers and representatives of the Company and Southern
Union.
In
rendering the opinion set forth below, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as duplicates or certified or conformed copies and
the authenticity of the originals of such latter documents. We have
also assumed the Indenture has been duly authorized, executed and delivered by
the Trustee and the Indenture is the valid and legally binding obligation of the
Trustee; the Trustee for the Indenture is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization; the Trustee
is duly qualified to engage in the activities contemplated by the Indenture; the
Trustee is in compliance, generally and with respect to acting as Trustee under
the Indenture, with all applicable laws and regulations; and the Trustee has the
requisite organizational and legal power and authority to perform its
obligations under the applicable Indenture.
Based
upon the foregoing, and subject to the additional qualifications and limitations
set forth below, we are of the opinion that:
1. When
the Company and the Trustee duly execute and deliver the Seventh Supplemental
Indenture that establishes the specific terms of the Senior Notes, and such
Senior Notes have been duly authenticated by the Trustee and duly executed and
delivered on behalf of the Company against payment therefor in accordance with
the terms and provisions of the Indenture as contemplated by the Registration
Statement, the Base Prospectus, the Preliminary Prospectus and the Final
Prospectus, and assuming that (a) the terms of the Senior Notes as executed and
delivered are as described in the Registration Statement, the Base Prospectus,
the Preliminary Prospectus and the Final Prospectus, and (b) the Senior Notes
are then issued and sold as contemplated in the Registration Statement, the Base
Prospectus, the Preliminary Prospectus and the Final Prospectus, the Senior
Notes will constitute valid and legally binding obligations of the
Company.
The
opinion set forth above is subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights and remedies of creditors; (ii) the
effect of general principles of equity, including without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefore may be brought,
(iii) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of, or contribution
to, a party with respect to a liability where such indemnification or
contribution is contrary to public policy; (iv) the unenforceability of any
waiver of rights or defenses with respect to stay, extension or usury laws; and
(v) the effect of acceleration of the Senior Notes on the collectibility of any
portion of the stated principal amount thereof that might be determined to
constitute unearned interest thereon.
The
opinion rendered herein is limited to the internal laws of the State of New
York, the General Corporation Law of the State of Delaware, the Delaware Limited
Liability Company Act and the Delaware Revised Uniform Limited Partnership Act
and the federal laws of the United States.
We
hereby consent to the filing of this opinion as an exhibit to a Current Report
on Form 8-K of the Company and further consent to the reference to our name
under the caption “Legal Matters” in the Final Prospectus. In giving
this consent, we do not admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act or under the Rules and
Regulations relating thereto. This opinion speaks as of its date, and
we undertake no (and hereby disclaim any) obligation to update this
opinion.
This
opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other
purpose or relied upon by or furnished to any other person without our prior
written consent.
|
|
Sincerely,
|
|
|
/s/
Locke Lord Bissell & Liddell
LLP
|
Locke
Lord Bissell & Liddell LLP
Atlanta,
Austin, Boston, Chicago, Dallas, Houston, London, Los Angeles, New Orleans, New
York, Sacramento, San Francisco, Washington DC
|
|
401
9th Street NW, Suite 400 South
Washington,
DC 20004
Telephone: 202-220-6900
Fax: 202-220-6945
www.lockelord.com
|
May 28,
2009
Panhandle
Eastern Pipe Line Company, LP
5444
Westheimer Road
Houston,
Texas 77056
Ladies
and Gentlemen:
We have
acted as counsel to Panhandle Eastern Pipe Line Company, LP, a Delaware limited
partnership (the “Company”), in connection with the offer and sale by the
Company of $150,000,000 principal amount of 8.125% senior notes due June 1, 2019
(the “Senior Notes”).
The
Senior Notes are to be issued under the Indenture, dated as of March 29, 1999
(the “Base Indenture”), between the Company and The Bank of New York Mellon
Trust Company, N.A. (as successor to The Bank of New York Trust Company, N.A.,
J.P. Morgan Trust Company, National Association, Bank One Trust Company,
National Association, and NBD Bank), as trustee (the “Trustee”), as amended and
supplemented by the seventh supplemental indenture thereto to be dated as of
June 2, 2009 (the “Seventh Supplemental Indenture”), between the Company and the
Trustee. The Base Indenture, as amended and supplemented by the
Seventh Supplemental Indenture, is referenced herein as the
“Indenture”).
The
Senior Notes are being sold pursuant to an Underwriting Agreement, dated May 21,
2009 (the “Underwriting Agreement”), among the Company, Wachovia Capital
Markets, LLC and RBC Capital Markets Corporation, as representatives of the
underwriters named therein (the “Underwriters”).
This
opinion is being furnished in accordance with the requirements of Item 601(b)(5)
of Regulation S-K under the Securities Act of 1933, as amended (the “Securities
Act”).
In
connection with this opinion, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the following:
(a) the
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3
(Registration No. 333-137998), including the base prospectus dated October 23,
2007 (the “Base Prospectus”), filed by the Company and Southern Union Company
(“Southern Union”) with the Securities and Exchange Commission (the
“Commission”) on October 23, 2007 (together with the documents incorporated by
reference therein, the “Post-Effective Amendment”), for the purpose of
registering the sale of the Senior Notes by the Company under the Securities
Act;
(b) the
Registration Statement on Form S-3 (No. 333-137998), including the related
prospectus, filed by Southern Union on October 13, 2006 (the “Initial
Registration Statement,” and together with the Post-Effective Amendment, the
“Registration Statement”);
(c) the
Company’s preliminary prospectus supplement dated May 21, 2009, covering the
offering of the Senior Notes through the Underwriters, in the form filed with
the Commission pursuant to Rule 424(b) of the general rules and regulations
promulgated under the Securities Act (the “Rules and Regulations”),
together with the Base Prospectus (together with the documents incorporated by
reference therein, the “Preliminary Prospectus”);
(d) the
Company’s prospectus supplement dated May 21, 2009, covering the offering of the
Senior Notes through the Underwriters, in the form filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations (together with the
documents incorporated by reference therein, the “Final
Prospectus”);
(e) the
term sheet relating to the Senior Notes filed with the Commission as a free
writing prospectus on May 21, 2009;
(f) the
Indenture;
(g) the
Underwriting Agreement;
(h) the
form of global note to be executed by the Company pursuant to the Indenture, in
the aggregate principal amount of $150,000,000, representing the Senior Notes to
be purchased and sold pursuant to the Underwriting Agreement;
(i) certified
copies of the Certificate of Limited Partnership of the Company and the
Agreement of Limited Partnership of the Company; and
(j) certified
copies of the unanimous written consents executed by the Board of Directors of
Southern Union (the sole member of Southern Union Panhandle LLC (the “General
Partner”), which is the sole general partner of the Company) and the unanimous
written consent executed by the pricing committee thereof.
We have
also examined the originals, or duplicates or certified or conformed copies, of
such records, agreements, instruments and other documents and have made such
other and further investigations as we have deemed relevant and necessary in
connection with the opinions expressed herein. As to questions of
fact material to this opinion, we have relied upon certificates of public
officials and of officers and representatives of the Company and Southern
Union.
In
rendering the opinion set forth below, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as duplicates or certified or conformed copies and
the authenticity of the originals of such latter documents. We have
also assumed the Indenture has been duly authorized, executed and delivered by
the Trustee and the Indenture is the valid and legally binding obligation of the
Trustee; the Trustee for the Indenture is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization; the Trustee
is duly qualified to engage in the activities contemplated by the Indenture; the
Trustee is in compliance, generally and with respect to acting as Trustee under
the Indenture, with all applicable laws and regulations; and the Trustee has the
requisite organizational and legal power and authority to perform its
obligations under the applicable Indenture.
Based
upon the foregoing, and subject to the additional qualifications and limitations
set forth below, we are of the opinion that:
1. When
the Company and the Trustee duly execute and deliver the Seventh Supplemental
Indenture that establishes the specific terms of the Senior Notes, and such
Senior Notes have been duly authenticated by the Trustee and duly executed and
delivered on behalf of the Company against payment therefor in accordance with
the terms and provisions of the Indenture as contemplated by the Registration
Statement, the Base Prospectus, the Preliminary Prospectus and the Final
Prospectus, and assuming that (a) the terms of the Senior Notes as executed and
delivered are as described in the Registration Statement, the Base Prospectus,
the Preliminary Prospectus and the Final Prospectus, and (b) the Senior Notes
are then issued and sold as contemplated in the Registration Statement, the Base
Prospectus, the Preliminary Prospectus and the Final Prospectus, the Senior
Notes will constitute valid and legally binding obligations of the
Company.
The
opinion set forth above is subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights and remedies of creditors; (ii) the
effect of general principles of equity, including without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefore may be brought,
(iii) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of, or contribution
to, a party with respect to a liability where such indemnification or
contribution is contrary to public policy; (iv) the unenforceability of any
waiver of rights or defenses with respect to stay, extension or usury laws; and
(v) the effect of acceleration of the Senior Notes on the collectibility of any
portion of the stated principal amount thereof that might be determined to
constitute unearned interest thereon.
The
opinion rendered herein is limited to the internal laws of the State of New
York, the General Corporation Law of the State of Delaware, the Delaware Limited
Liability Company Act and the Delaware Revised Uniform Limited Partnership Act
and the federal laws of the United States.
We
hereby consent to the filing of this opinion as an exhibit to a Current Report
on Form 8-K of the Company and further consent to the reference to our name
under the caption “Legal Matters” in the Final Prospectus. In giving
this consent, we do not admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act or under the Rules and
Regulations relating thereto. This opinion speaks as of its date, and
we undertake no (and hereby disclaim any) obligation to update this
opinion.
This
opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other
purpose or relied upon by or furnished to any other person without our prior
written consent.
|
|
Sincerely,
|
|
|
/s/
Locke Lord Bissell & Liddell
LLP
|
Locke
Lord Bissell & Liddell LLP
Atlanta,
Austin, Boston, Chicago, Dallas, Houston, London, Los Angeles, New Orleans, New
York, Sacramento, San Francisco, Washington DC