SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report February 16, 1999
KINDER MORGAN ENERGY PARTNERS, L.P.
KINDER MORGAN OPERATING L.P. "A"
KINDER MORGAN OPERATING L.P. "B"
KINDER MORGAN OPERATING L.P. "C"
KINDER MORGAN OPERATING L.P. "D"
KINDER MORGAN NATURAL GAS LIQUIDS CORPORATION
KINDER MORGAN CO2, LLC
KINDER MORGAN BULK TERMINALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-11234 76-0380342
Delaware 333-66931-01 76-0380015
Delaware 333-66931-02 76-0414819
Delaware 333-66931-03 76-0547319
Delaware 333-66931-04 76-0561780
Delaware 333-66931-05 76-0256928
Delaware 333-66931-06 76-0563308
Louisiana 333-66931-07 72-1073113
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number) Identification Number)
1301 McKinney Street, Ste. 3450, Houston, Texas 77010
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: 713-844-9500
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Item 5. Other Events
On January 29, 1999, Kinder Morgan Energy Partners, L.P. sold
$250,000,000 aggregate principal amount of its 6.30% Senior Notes due February
1, 2009 pursuant to an underwritten public offering.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(c) Exhibits
1.1 Underwriting Agreement dated as of January 26, 1999 between Kinder
Morgan Energy Partners, L.P. and Goldman, Sachs & Co., A.G. Edwards & Sons,
Inc., NationsBanc Montgomery Securities LLC, Prudential Securities Incorporated
and Salomon Smith Barney, Inc.
4.1 Indenture dated as of January 29, 1999 between Kinder Morgan Energy
Partners, L.P., certain Guarantors named therein and U.S. Trust Company of
Texas, N.A.
4.2 First Supplemental Indenture dated as of January 29, 1999 between
Kinder Morgan Energy Partners, L.P., certain Guarantors named therein and the
U.S. Trust Company of Texas, N.A., including form of senior notes.
5.1 Opinion of Morrison & Hecker, L.L.P.
12.1 Computation of Pro Forma Ratio of Earnings to Fixed Charges
23.1 Consent of Morrison & Hecker, L.L.P. (included in Exhibit 5.1).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
KINDER MORGAN ENERGY PARTNERS, L.P.
(A Delaware Limited Partnership)
By: KINDER MORGAN G.P., INC.
as General Partner
By: /s/ David G. Dehaemers, Jr.
---------------------------
David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
KINDER MORGAN OPERATING L.P. "A"
(A Delaware Limited Partnership)
By: KINDER MORGAN G.P., INC.
as General Partner
By: /s/ David G. Dehaemers, Jr.
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David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
KINDER MORGAN OPERATING L.P. "B"
(A Delaware Limited Partnership)
By: KINDER MORGAN G.P., INC.
as General Partner
By: /s/ David G. Dehaemers, Jr.
---------------------------
David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
KINDER MORGAN OPERATING L.P. "C"
(A Delaware Limited Partnership)
By: KINDER MORGAN G.P., INC.
as General Partner
By: /s/ David G. Dehaemers, Jr.
---------------------------
David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
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KINDER MORGAN OPERATING L.P. "D"
(A Delaware Limited Partnership)
By: KINDER MORGAN G.P., INC.
as General Partner
By: /s/ David G. Dehaemers, Jr.
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David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
KINDER MORGAN NATURAL GAS LIQUIDS
CORPORATION
(A Delaware Corporation)
By: /s/ David G. Dehaemers, Jr.
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David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
KINDER MORGAN CO2, LLC
(A Delaware Limited Liability Company)
By: KINDER MORGAN OPERATING L.P. "A"
as sole Member
By: KINDER MORGAN G.P., INC.
as General Partner
By: /s/ David G. Dehaemers, Jr.
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David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
KINDER MORGAN BULK TERMINALS, INC.
(A Louisiana Corporation)
By: /s/ David G. Dehaemers, Jr.
---------------------------
David G. Dehaemers, Jr.
Vice President, CFO, Treasurer
and Assistant Secretary
Date: February 16, 1999
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Kinder Morgan Energy Partners, L.P.
Debt Securities
Underwriting Agreement
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January 26, 1999
Goldman, Sachs & Co.
A.G. Edwards & Sons, Inc.
NationsBanc Montgomery Securities LLC
Prudential Securities Incorporated
Salomon Smith Barney Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
From time to time Kinder Morgan Energy Partners, L.P. a Delaware limited
partnership (the "Partnership"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The Partnership, Kinder Morgan Operating L.P. "A," a Delaware limited
partnership ("OLP-A"), Kinder Morgan Operating L.P. "B," a Delaware limited
partnership ("OLP-B"), Kinder Morgan Operating L.P. "C," a Delaware limited
partnership ("OLP-C"), Kinder Morgan Operating L.P. "D," a Delaware limited
partnership ("OLP-D" and, together with OLP-A, OLP-B and OLP-C, the "Operating
Partnerships"), SFPP, L.P., a Delaware limited partnership ("SFPP"), Kinder
Morgan Bulk Terminals, Inc., a Louisiana corporation ("KMBT"), Kinder Morgan
Natural Gas Liquids Corporation, a Delaware corporation ("KMNGL Corp."), Kinder
Morgan CO2, LLC, a Delaware limited liability company ("KM-LLC"), and Kinder
Morgan G.P., Inc., a Delaware corporation (the "General Partner"), in its
individual capacity and in its capacity as the general partner of the
Partnership and each of the Operating Partnerships, are collectively referred to
herein as the "Kinder Morgan Entities."
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The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Partnership to sell any of the
Securities or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Partnership to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. Each of the Kinder Morgan Entities represents and warrants to, and
agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-66931 (01-07))
(the "Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto (each in
the form heretofore delivered or to be delivered to the Representatives,
excluding exhibits to the Initial Registration Statement, but including all
documents incorporated by reference in the prospectus contained therein to the
Representatives for each of the other Underwriters) have been declared effective
by the Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Act"), which became effective upon filing, no other document with respect to
the Initial Registration Statement or document incorporated by reference therein
has heretofore been filed or transmitted for filing with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of
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the Initial Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) under the Act, is hereinafter called
a "Preliminary Prospectus"; the various parts of the Initial Registration
Statement, any post-effective amendment thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents incorporated
by reference in the prospectus contained in the Initial Registration Statement
at the time such part of the Initial Registration Statement became effective but
excluding Form T-1, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; the prospectus
relating to the Securities, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to the date of
this Agreement, being hereinafter called the "Prospectus"; any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment to
the Initial Registration Statement shall be deemed to refer to and include any
annual report of the Partnership filed pursuant to Sections 13(a) or 15(d) of
the Exchange Act after the effective date of the Initial Registration Statement
that is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to refer
to the Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof,
including any documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder 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, in light of the
circumstances under which they, were made not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the
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Partnership by an Underwriter of Designated Securities through the Goldman,
Sachs & Co. expressly for use in the Prospectus as amended or supplemented
relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and
the rules and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, 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; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Partnership by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Securities;
(d) None of the Kinder Morgan Entities has sustained since the date
of the latest audited financial statements included or incorporated by reference
in the Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the capitalization or
long-term debt of the Kinder Morgan Entities or any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the general affairs, management, financial position, unitholders' equity or
results of operations of the Kinder Morgan Entities, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(e) Each of the Kinder Morgan Entities has good and marketable title
(or indefeasible title in the State of Texas) in fee simple to all real property
and good and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by the Kinder Morgan Entities; and any real property
and buildings held under lease by a Kinder Morgan Entity is held under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not materially interfere with the use made and proposed to be made of such
property and buildings by the Kinder Morgan Entities;
(f) The Partnership is, and at each Time of Delivery will be, a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. The Partnership has, and at each Time of Delivery
will have, all necessary partnership power and authority to conduct the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. The Partnership is, and at each Time of Delivery will be, duly
licensed or qualified to do business and in good standing as a foreign limited
partnership in all jurisdictions
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in which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification necessary
(except where the failure to be so licensed or qualified will not have a
material adverse effect on the financial condition, results of operations or
business of the Kinder Morgan Entities, taken as a whole, or subject the
Partnership or the limited partners of the Partnership to any material liability
or disability). Complete and correct copies of the Certificate of Limited
Partnership of the Partnership, and all amendments thereto, and of the Agreement
of Limited Partnership of the Partnership, as amended and restated (the
"Partnership Agreement"), have been delivered to the Underwriters;
(g) Each of the Operating Partnerships is, and at the applicable Time
of Delivery will be, a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Delaware. Each of the Operating
Partnerships has, and at the applicable Time of Delivery will have, all
necessary partnership power and authority to conduct the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. Each of
the Operating Partnerships is, and at the applicable Time of Delivery will be,
duly licensed or qualified to do business and in good standing as a foreign
limited partnership in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary (except where the failure to be so licensed
or qualified will not have a material adverse effect on the financial condition,
results of operations or business of the Kinder Morgan Entities, taken as a
whole, or subject the Partnership or the limited partners of the Partnership to
any material liability or disability). Complete and correct copies of the
Certificate of Limited Partnership of each of the Operating Partnerships, and
all amendments thereto, and of the Agreement of Limited Partnership of OLP-A, as
amended and restated (the "OLP-A Agreement"), the Agreement of Limited
Partnership of OLP-B, as amended and restated (the "OLP-B Agreement"), the
Agreement of Limited Partnership of OLP-C, as amended and restated (the "OLP-C
Agreement"), and the Agreement of Limited Partnership of OLP-D, as amended and
restated (the "OLP-D Agreement" and, together with the OLP-A Agreement, the
OLP-B Agreement and the OLP-C Agreement, the "Operating Partnership
Agreements"), have been delivered to the Underwriters;
(h) SFPP is, and at the applicable Time of Delivery will be, a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. SFPP has, and at the applicable Time of Delivery
will have, all necessary partnership power and authority to conduct the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. SFPP is, and at the applicable Time of Delivery will be, duly
licensed or qualified to do business and in good standing as a foreign limited
partnership in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary (except where the failure to be so licensed or
qualified will not have a material adverse effect on the financial condition,
results of operations or business of the Kinder Morgan Entities, taken as a
whole, or subject the Partnership or the limited partners of the Partnership to
any material liability or disability). Complete and correct copies of the
Certificate of Limited Partnership of SFPP and of the
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Agreement of Limited Partnership of SFPP, as amended and restated (the "SFPP
Agreement"), and all amendments thereto have been delivered to the Underwriters;
(i) Each of the General Partner and KMNGL Corp., is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. KMBT is a corporation duly organized, validly existing and in
good standing under the laws of the State of Louisiana. KM-LLC is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware. Each of the General Partner, KMNGL Corp., KMBT
and KM-LLC has, and at the applicable Time of Delivery will have, all necessary
corporate or limited liability company power and authority, as the case may be,
to conduct all the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. Each of the General Partner, KMNGL
Corp., KMBT and KM-LLC is, and at the applicable Time of Delivery will be, duly
licensed or qualified to do business and in good standing as a foreign
corporation or foreign limited liability company, as the case may be, in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary (except where the failure to be so licensed or qualified
will not have a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership or the limited partners of the Partnership to any
material liability or disability). Complete and correct copies of the
certificate of incorporation and of the by-laws of the General Partner, KMNGL
Corp. and KMBT. and the limited liability agreement of KM-LLC and all amendments
to such documents have been delivered to the Underwriters;
(j) To the knowledge of the Kinder Morgan Entities, each of
Heartland Partnership ("Heartland") and Mont Belvieu Associates ("Mont Belvieu")
is, and at the applicable Time of Delivery will be, a general partnership duly
formed and validly existing under the laws of the State of Texas and Shell CO2
Company Ltd. ("Shell CO2") is, and at the applicable Time of Delivery will be, a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. To the knowledge of the Kinder Morgan Entities,
each of Heartland, Mont Belvieu and Shell CO2 has, and at the applicable Time of
Delivery will have, all necessary partnership power and authority, to conduct
the activities conducted by it, to own or lease all the assets owned or leased
by it and to conduct its business as described in the Registration Statement and
the Prospectus, except as would not have a material adverse effect on the
financial condition, results of operations or business of such entities. To the
knowledge of the Kinder Morgan Entities, each of Heartland, Mont Belvieu and
Shell CO2 is, and at the applicable Time of Delivery will be, duly licensed or
qualified to do business and in good standing as a foreign partnership in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary (except where the failure to be so licensed or qualified
will not have a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership to any material liability or disability);
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(k) The only subsidiaries (as such term is defined in the rules and
regulations of the Commission under the Act and the Exchange Act) of the
Partnership or other entities in which the Partnership, any of the Operating
Partnerships or SFPP has an equity ownership interest of 50% or more and which
owns assets or conduct business are those listed on Schedule III hereto;
(l) Richard D. Kinder, Morgan Associates, Inc., First Union
Corporation and certain employees of First Union Corporation and its affiliates
are the sole stockholders of Kinder Morgan, Inc., a Delaware corporation
("KMI"). KMI owns, and at the applicable Time of Delivery will own, all of the
issued and outstanding shares of capital stock of the General Partner; such
shares of capital stock are duly authorized, validly issued, fully paid and
nonassessable;
(m) The General Partner is the sole general partner of the Partnership
with a 1% general partner interest in the Partnership; such general partner
interest is duly authorized by the Partnership Agreement and was validly issued
to the General Partner; and, the General Partner owns such general partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or as described in the Registration Statement or the
Prospectus);
(n) The General Partner is the sole general partner of each of the
Operating Partnerships with a 1.0101% general partner interest in each of the
Operating Partnerships; such general partner interests are duly authorized by
the respective Operating Partnership Agreement, and were validly issued to the
General Partner; and the General Partner owns such general partner interests
free and clear of all liens, encumbrances, security interests, equities, charges
or claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or as
described in the Registration Statement or the Prospectus);
(o) The Partnership is the sole limited partner of each of the
Operating Partnerships with a 98.9899% limited partner interest in each of the
Operating Partnerships; such limited partner interests, in each of such
Partnerships, are duly authorized by the respective Operating Partnership
Agreement, and were validly issued to the Partnership and are fully paid and
nonassessable (except as nonassessability may be affected by certain provisions
of the Delaware Revised Limited Partnership Act (the "Delaware Act")); and the
Partnership owns such limited partner interests free and clear of all liens,
encumbrances, security interests, equities, charges or claims (except for such
liens, encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the Registration
Statement or the Prospectus, including the security interest securing certain
debt of the Partnership and OLP-B);
(p) OLP-A owns, and at the applicable Time of Delivery will own, all
of the issued and outstanding capital stock of KMNGL Corp. and all of the issued
and outstanding member interests of KM-LLC; all of such capital stock and such
member interests are duly authorized, validly issued, fully paid and
nonassessable; OLP-C owns all of the issued and
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outstanding capital stock of KMBT; all of such capital stock is duly authorized,
validly issued, fully paid and nonassessable. OLP-A owns all of such capital
stock of KMNGL, OLP-A owns the sole member interest of KM-LLC, and OLP-C owns
all of such captial stock of KMBT, in each case free and clear of all liens,
encumbrances, security interests, equities, charges or claims (except for such
liens, encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the Registration
Statement or the Prospectus);
(q) OLP-D is the sole general partner of SFPP with a 99.5% general
partner interest; such general partner interest is duly authorized by the SFPP
Agreement, and was validly issued to OLP-D; and OLP-D owns such general partner
interest free and clear of all liens, encumbrances, security interests,
equities, charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or in the
aggregate, material or as described in the Registration Statement or the
Prospectus); Santa Fe Pacific Pipelines, Inc. (the "SF Limited Partner") is the
sole limited partner of SFPP with a 0.5% non-voting, limited partner interest;
such limited partner interest is duly authorized by the SFPP Agreement, and
validly issued to the SF Limited Partner and fully paid and nonassessable
(except as nonassessability may be affected by certain provisions of the
Delaware Act);
(r) OLP-A is a general partner of Heartland with a 50% general partner
interest in Heartland, KMNGL Corp. is a general partner of Mont Belvieu with a
50% general partner interest in Mont Belvieu, and KM-LLC is a limited partner of
Shell CO2, with a 20% limited partner interest in Shell CO2; such general
partner interests and such limited partner interests are duly authorized by the
respective partnership agreement of Heartland, Mont Belvieu and Shell CO2, and
were validly issued by each of Heartland, Mont Belvieu and Shell CO2,
respectively, and in the case of such limited partner interests is fully paid
and nonassessable (except as such nonassessability may be affected by certain
provisions of the Delaware Act); and, OLP-A and KMNGL Corp. own such general
partner interests in Heartland and Mont Belvieu, respectively, and KM-LLC owns
such limited partner interest, free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the Registration
Statement or the Prospectus);
(s) Each of the Kinder Morgan Entities has all necessary partnership,
corporate or limited liability company power and authority, as the case may be,
to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by each of the Kinder Morgan Entities and constitutes a valid and
binding agreement with respect to each of such entities and is enforceable
against each of them in accordance with the terms hereof;
(t) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, such Designated Securities
will have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Partnership entitled to
the benefits provided by the applicable Indenture, which will be substantially
in the form filed as an exhibit to the Registration Statement; the applicable
Indenture has been duly authorized and duly qualified under the Trust Indenture
Act and, at the
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Time of Delivery for such Designated Securities (as defined in Section 4
hereof), the applicable Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; and the applicable Indenture conforms, and the Designated Securities
will conform, to the descriptions thereof contained in the Prospectus as amended
or supplemented with respect to such Designated Securities;
(u) The issue and sale of the Securities and the compliance by the
Partnership with all of the provisions of the Securities, the applicable
Indenture, this Agreement and any Pricing Agreement, and the consummation of the
transactions herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Partnership is a party or by which the Partnership is
bound or to which any of the property or assets of the Partnership is subject,
nor will such action result in any violation of the provisions of the
Partnership Agreement of the Partnership or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Partnership or any of its properties, except where such occurrence will not
prevent the consummation of the transactions contemplated herein and will not
have a material adverse effect on the financial condition, results of operations
or business of the Kinder Morgan Entities, taken as a whole, or subject the
Partnership to any material liability or disability; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Securities
or the consummation by the Partnership of the transactions contemplated by this
Agreement or any Pricing Agreement or the applicable Indenture, except such as
have been, or will have been prior to the Time of Delivery, obtained under the
Act and the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(v) None of the Kinder Morgan Entities is (a) in violation of its
Certificate of Incorporation, By-laws, Partnership Agreement or other
organizational documents, as the case may be, or (b) in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound, except for such violations and defaults as (i)
would not have a material adverse effect on the financial condition, results of
operations or business of the Kinder Morgan Entities, taken as a whole, or
subject the Partnership to any material liability or disability and (ii) in the
case of such violations, have been disclosed in writing to Goldman, Sachs & Co.
prior to the execution of this Agreement;
(w) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes", insofar as they
purport to constitute a summary of the terms of the Securities, and under the
captions "Plan of Distribution" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
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<PAGE>
are accurate, complete and fair; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Partnership by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(x) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which any of the Kinder Morgan
Entities is a party or of which any property of any Kinder Morgan Entity is the
subject which, if determined adversely to the respective Kinder Morgan Entity,
would individually or in the aggregate have a material adverse effect on the
financial condition, results of operations or business of the Kinder Morgan
Entities, taken as a whole, or subject the Partnership to any material liability
or disability; and, to the knowledge of the Kinder Morgan Entities, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(y) None of the Kinder Morgan Entities is, nor at each Time of
Delivery will be, (i) 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, or (ii) an "investment
company," a person "controlled by" an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended;
(z) Arthur Andersen LLP and PricewaterhouseCoopers LLP, who have
certified certain financial statements of the Kinder Morgan Entities, and in the
case of PricewaterhouseCoopers LLP, who has also certified certain financial
statements of Santa Fe Pacific Pipeline Partners, L.P. ("Santa Fe"), are each
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(aa) The Partnership has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations of the
Partnership or any of its subsidiaries will be affected by the Year 2000
Problem. As a result of such review, the Partnership does not believe that the
Year 2000 Problem will have a material adverse effect on the financial
condition, results of operation or business of the Kinder Entities, taken as a
whole, or result in any material loss or interference with their business or
operations. The "Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical systems of
any kind will not, in the case of dates or time periods occurring after December
31, 1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000;
(bb) The financial statements and schedules included or incorporated
by reference in the Registration Statement or the Prospectus present fairly the
consolidated financial condition of the Partnership, the General Partner and
Santa Fe as of the respective dates thereof and the consolidated results of
operations and cash flows of the Partnership and Santa Fe for the respective
periods covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Prospectus. No other financial statements
or schedules of the
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Partnership, the General Partner and Santa Fe are required by the Act, the
Exchange Act or the rules and regulations of the Commission under such acts to
be included in the Registration Statement or the Prospectus. The statements
included in the Registration Statement with respect to the Accountants pursuant
to Rule 509 of Regulation S-K of the Rules and Regulations are true and correct
in all material respects;
(cc) The pro forma financial statements included in or incorporated by
reference in the Registration Statement and the Prospectus, including the
presentation of the acquisition of SFPP contained in such pro forma financial
statements, comply as to form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the rules and
regulations of the Commission under such acts, have been prepared on a basis
consistent with the historical consolidated financial statements of the
Partnership and Santa Fe and give effect to the assumptions used in the
preparation thereof on a reasonable basis and in good faith.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Partnership, shall be delivered by or on behalf of the Partnership to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Partnership to the
Representatives at least forty-eight hours in advance or at such other place and
time and date as the Representatives and the Partnership may agree upon in
writing, such time and date being herein called the "Time of Delivery" for such
Securities.
5. Each of the Kinder Morgan Entities agrees with each of the Underwriters
of any Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating to the
applicable Designated Securities or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Securities and prior to the Time of
Delivery for such Securities which shall be disapproved by the Representatives
for such Securities promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the
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Partnership with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Securities, and during such same
period to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of such
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any such stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such qualification, to
promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for offering
and sale under the securities laws of such jurisdictions as the Representatives
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of such Securities, provided that in connection
therewith the Partnership shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of each Pricing Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus for the applicable
Designed Securities in New York City as amended or supplemented in such
quantities as the Representatives may reasonably request, and, if the delivery
of a prospectus is required at any time in connection with the offering or sale
of the Securities and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or 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 when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify the Representatives and upon
their request to file such document and to prepare and furnish without charge to
each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Partnership and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the
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<PAGE>
rules and regulations of the Commission thereunder (including, at the option
of the Partnership, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the later of (i)
the termination of trading restrictions under Regulation M under the Exchange
Act for such Designated Securities, as notified to the Partnership by the
Representatives and (ii) the Time of Delivery for such Designated Securities,
not to offer, sell, contract to sell or otherwise dispose of any debt securities
of the Partnership which mature more than one year after such Time of Delivery
and which are substantially similar to such Designated Securities, without the
prior written consent of the Representatives; and
(f) If the Partnership elects to rely upon Rule 462(b), the
Partnership shall file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date
of the applicable Pricing Agreement, and the Partnership shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act.
6. The Kinder Morgan Entities covenant and agree with the several
Underwriters that the Kinder Morgan Entities will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Partnership's counsel
and accountants in connection with the registration of the Securities under the
Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing this Agreement, any Pricing Agreement, any Indenture, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) any filing fees and expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, but not including the fees and disbursements of counsel for
the Underwriters in connection with such qualification; (iv) any fees charged by
securities rating services for rating the Securities; (v) any filing fees
incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of any Trustee and any
agent of any Trustee and the fees and disbursements of counsel for any Trustee
in connection with any Indenture and the Securities; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of each of the Kinder Morgan
Entities in or incorporated by reference in the Pricing Agreement
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<PAGE>
relating to such Designated Securities are, at and as of the Time of Delivery
for such Designated Securities, true and correct, the condition that each of the
Kinder Morgan Entities shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Partnership has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of the applicable Pricing Agreement; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Andrews & Kurth L.L.P., counsel for the Underwriters, shall have
furnished to the Representatives such written opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated the Time of Delivery
for such Designated Securities, with respect to the matters covered in
paragraphs (i) (insofar as it relates to the due formation and good standing of
the Partnership in Delaware and the Partnership's power and authority to conduct
its business as described in the Registration Statement and the Prospectus, as
amended or supplemented), (xii) (insofar as it relates to the statements set
forth in the Prospectus under the caption "Underwriting"), (xv), (xvi), (xvii),
and (xviii) (insofar as it relates to the Registration Statement and the
Prospectus) of subsection (c) below and a letter substantially similar to the
letter required to be delivered by Morrison & Hecker L.L.P. pursuant to
subsection (c) below as well as such other related matters as the
Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Morrison & Hecker L.L.P., counsel for the Kinder Morgan Entities
and Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P., with respect to
certain Louisiana law, shall have furnished to the Representatives their written
opinion (a draft of such opinion is attached as Annex II(b) hereto), dated the
Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the collective effect that:
(i) Each of the Kinder Morgan Entities has been duly formed
and is validly existing and in good standing under the laws of its
jurisdiction of incorporation and each Kinder Morgan Entity has the
partnership or corporate power and authority, as the case may be, to
conduct its business as described in the Registration Statement and the
Prospectus, as amended or supplemented. To the knowledge of such counsel,
each of the Kinder Morgan Entities is duly qualified to do business and is
in good standing as a foreign corporation or foreign limited partnership,
as the case may be, in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary, except in the case
where the failure to be so qualified cannot reasonably be expected to have
a material adverse
14
<PAGE>
effect on the financial condition, results of operations or business of
the Kinder Morgan Entities, taken as a whole, or subject the Partnership
or the limited partners of the Partnership to any material liability or
disability;
(ii) The General Partner is the sole general partner of the
Partnership with a 1% general partner interest in the Partnership; such
general partner interest is duly authorized by the Partnership Agreement
and was validly issued to the General Partner; and, to the knowledge of
such counsel, the General Partner owns such general partner interest free
and clear of all liens, encumbrances, security interests, equities, charges
or claims (except for such liens, encumbrances, security interests,
equities, charges or claims as are not, individually or in the aggregate,
material or as described in the Registration Statement or the Prospectus,
as amended or supplemented);
(iii) The General Partner is the sole general partner of each of the
Operating Partnerships with a 1.0101% general partner interest in each of
the Operating Partnerships; such general partner interests are duly
authorized by the respective Operating Partnership Agreements and were
validly issued to the General Partner; and to the knowledge of such
counsel, the General Partner owns such general partner interests free and
clear of all liens, encumbrances, security interests, equities, charges or
claims (except for such liens, encumbrances, security interests, equities,
charges or claims as are not, individually or in the aggregate, material or
as described in the Registration Statement or the Prospectus, as amended or
supplemented, and except as provided in the Operating Partnership
Agreements);
(iv) OLP-D is the sole general partner of SFPP with a 99.5% general
partner interest in SFPP; such general partner interest is duly authorized
by the SFPP Agreement and was validly issued to OLP-D; and to the knowledge
of such counsel, OLP-D owns such general partner interest free and clear of
all liens, encumbrances, security interests, equities, charges or claims as
are not, individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus, as amended or supplemented, or
the OLP-D Agreement); the SF Limited Partner is the sole limited partner of
SFPP with a 0.5% non-voting, limited partner interest in SFPP; and such
limited partner interest is duly authorized by the SFPP Agreement and was
validly issued to the SF Limited Partner;
(v) The Partnership is the sole limited partner of each of the
Operating Partnerships with a 98.9899% limited partner interest in each of
the Operating Partnerships; such limited partnership interests, in the case
of each of the Operating Partnerships, are duly authorized by the
respective Operating Partnership Agreements, were validly issued to the
Partnership and are fully paid and non-assessable (except as
nonassessability may be affected by certain provisions of the Delaware
Act); and, to the knowledge of such counsel, the Partnership owns such
limited partner interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims (i) as are
not, individually or in the aggregate, material or (ii) as described in the
Registration Statement or the Prospectus, as amended or supplemented.
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(vi) Based solely on such counsel's review of the applicable stock
transfer records, OLP-A is the record owner of all of the issued and
outstanding capital stock of KMNGL Corp. and is the sole member of KM-LLC;
all of such capital stock and such member interest are duly authorized,
validly issued, fully paid and nonassessable. OLP-C is the record owner of
all of the issued and outstanding capital stock of KMBT. To the knowledge
of such counsel, OLP-A owns all of such capital stock of KMNGL, OLP-A owns
the sole member interest of KM-LLC, and OLP-C owns all of such capital
stock of KMBT, in each case free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus).
(vii) OLP-A is a general partner of Heartland with a 50% general
partner interest in Heartland, KMNGL Corp. is a general partner of Mont
Belvieu with a 50% general partner interest in Mont Belvieu, and KM-LLC is
a limited partner of Shell CO2, with a 20% limited partner interest in
Shell CO2; such general partner interests and such limited partner interest
are duly authorized by the respective partnership agreements of Heartland,
Mont Belvieu and Shell CO2, and were validly issued by each of Heartland,
Mont Belvieu and Shell CO2, respectively, and in the case of such limited
partner interest, is fully paid and nonassessable (except as such
nonassessability may be affected by certain provisions of the Delaware
Act); and, OLP-A and KMNGL Corp. own such general partner interests in
Heartland and Mont Belvieu, respectively, and KM-LLC owns such limited
partner interest in Shell CO2, free and clear of all liens, encumbrances,
security interests, equities, charges or claims (except for such liens,
encumbrances, security interests, equities, charges or claims as are not,
individually or in the aggregate, material or as described in the
Registration Statement or the Prospectus);
(viii) No consent, approval, authorization, order, registration or
qualification of or with any federal, Delaware or New York court or
governmental agency or body is required under Federal or New York law or
the Delaware Act for the issue and sale of the Securities being delivered
at such Time of Delivery or the consummation by the Partnership of the
transactions contemplated by this Agreement, the Pricing Agreement, the
Securities or the Indenture, except such as have been obtained under the
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
or the Trust Indenture Act or by the Bylaws and rules of the National
Association of Securities Dealers, Inc. in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(ix) To the knowledge of such counsel, any instrument, document,
lease, license or other agreement required to be described or referred to
in the Registration Statement or the Prospectus, as amended or
supplemented, has been described or referred to therein and any such
instrument, document, lease, license or other agreement required to be
filed as an exhibit to the Registration Statement has been filed
16
<PAGE>
as an exhibit thereto or has been incorporated as an exhibit by reference
in the Registration Statement;
(x) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Kinder Morgan Entities or any of its subsidiaries is a
party or of which any property of the Kinder Morgan Entities or any of its
subsidiaries is the subject which, if determined adversely to the Kinder
Morgan Entities or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, unitholders' equity or results of
operations of the Kinder Morgan Entities and their subsidiaries; and, to
the best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xi) The issue and sale of the Designated Securities being delivered
at such Time of Delivery and the compliance by the Kinder Morgan Entities
with all of the provisions of this Agreement and the consummation of the
transactions herein contemplated will not (a) result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument filed as an exhibit to the Registration Statement
or filed as an exhibit to any document incorporated by reference in the
Registration Statement, (b) result in any violation of the provisions of
the Certificate of Incorporation, by-laws or other formation document, as
applicable, of any of the Kinder Morgan Entities, Mont Belvieu, Heartland
or Shell CO2, (c) breach or otherwise violate an existing obligation of any
of the Kinder Morgan Entities under any court or administrative order,
judgment or decree of which such counsel has knowledge, or (d) violate any
applicable provisions of the federal laws of the United States, the laws of
the State of New York (or in the case of KMBT, the State of Louisiana), or
the Delaware Act;
(xii) (A) The statements set forth in the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1997 under the caption "Item
1: Business-Regulation" and (B) the statements set forth in the Prospectus
under the captions "Description of Notes," "Description of Debt
Securities," "Material Federal Income Tax Considerations," and under the
captions "Underwriting" and "Plan of Distribution," insofar as they purport
to constitute a summary of the terms of the Designated Securities or
describe the provisions of federal law, New York law and the Delaware Act
and documents referred to therein, in each case, are accurate summaries and
fairly and correctly present in all material respects the information
called for with respect to such matters; provided, however, that such
counsel's opinion need not cover any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Partnership by an Underwriter through Goldman, Sachs & Co., expressly
for use therein;
(xiii) None of the Kinder Morgan Entities is (a) 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, or (b) an
17
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"Investment Company" or an entity "controlled" by an "Investment Company,"
as such terms are defined in the Investment Company Act;
(xiv) The Registration Statement was declared effective under the
Act by the Commission and to the knowledge of such counsel no order
suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or is pending,
threatened or contemplated. Any required filing of the Prospectus relating
to the sale of the Designated Securities pursuant to Rule 424(b) under the
Act has been made in the manner and within the time period required by such
rule;
(xv) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered by
the Partnership and the Kinder Morgan Entities;
(xvi) The Designated Securities have been duly authorized by the
Partnership and each of the Guarantors, and when authenticated and issued
in accordance with the terms of the Indenture and paid for by the
Underwriters in accordance with the terms of the Pricing Agreement will
constitute valid and legally binding obligations of the Partnership and the
Guarantors entitled to the benefits provided by the Indenture; and the
Designated Securities and the Indenture conform to the descriptions thereof
in the Prospectus as amended or supplemented;
(xvii) The Indenture has been duly authorized, executed and
delivered by the Partnership and each of the Guarantors and constitutes a
valid and legally binding instrument of the Partnership and each of the
Guarantors, enforceable against the Partnership and each of the Guarantors
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Indenture has been duly qualified under the Trust Indenture Act;
(xviii) The Registration Statement and the Prospectus (including any
documents incorporated by reference in the Prospectus, when such documents
became effective or were filed with the Commission), as amended or
supplemented, comply in all material respects as to form with the
requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder (other than the financial
statements and related schedules and other financial data contained
therein, as to which such counsel need express no opinion).
Such counsel shall also deliver a letter to the effect that they have
participated in conferences with officers and other representatives of the
Partnership, representatives of the Partnership's accountants, representatives
of the Underwriters and counsel for the Underwriters, at which conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing on and does not assume any
responsibility for and shall not be deemed to have independently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the
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<PAGE>
Prospectus, except for those referred to in the opinion in subsection (xii) of
this Section 7(c), and relying as to facts necessary to the determination as to
materiality, to the extent such counsel may do so in the exercise of its
professional responsibility, upon statements of the officers and other
representatives of the Partnership, on the basis of the foregoing, no facts have
come to such counsel's attention that lead it to believe that, as of its
effective date, the Registration Statement or any further amendment thereto made
by the Partnership prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data contained therein, as
to which such counsel need not comment) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; or that, as of its
date, the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Partnership prior to such Time of Delivery (other
than the financial statements and related schedules and other financial data
contained therein, as to which such counsel need not comment) contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Partnership to such Time of Delivery (other than the financial statements and
related schedules and other financial data contained therein, as to which such
counsel need express no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
such counsel have no reason to believe that any documents incorporated by
reference in the Prospectus, when such documents became effective or were so
filed, as the case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, 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 when such documents were so filed, not
misleading; and they do not know of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or incorporated by
reference or described as required.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than federal law, New York law
and the Delaware Act.
(d) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement with
respect to such Designated Securities and at each Time of Delivery for such
Designated Securities, the independent accountants of the Partnership who have
certified the financial statements of the Partnership and its subsidiaries
included or incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter, dated the latest of the effective
date of the Registration Statement, the date of the most recent report filed
with the Commission containing financial statements and
20
<PAGE>
incorporated by reference in the Registration Statement or the date of the
Pricing Agreement, and a letter dated such Time of Delivery, respectively, to
the effect set forth in Annex II hereto, and with respect to such letter dated
such Time of Delivery, as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the Representatives
(the executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of letter to
be delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(e) (i) None of the Kinder Morgan Entities shall have sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Securities any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the Designated
Securities, and (ii) since the respective dates as of which information is given
in the Prospectus as amended prior to the date of the Pricing Agreement relating
to the Designated Securities there shall not have been any change in the capital
stock or long-term debt of the Partnership (or any of the other Kinder Morgan
Entities) or any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position, unitholders'
equity or results of operations of the Partnership (or any of the other Kinder
Morgan Entities), otherwise than as set forth or contemplated in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the Designated
Securities, the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented relating to the
Designated Securities;
(f) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded any of the Kinder Morgan Entities debt securities or preferred stock by
any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Partnership's debt securities or preferred stock;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Partnership's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal or New
York or Texas State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it
20
<PAGE>
impracticable or inadvisable to proceed with the public offering or the delivery
of the Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(h) The Partnership shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of the Pricing Agreement relating to
the Designated Securities; and
(i) The Kinder Morgan Entities shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery for the Designated
Securities a certificate or certificates of officers of the General Partner
satisfactory to the Representatives as to the accuracy of the representations
and warranties of the Kinder Morgan Entities herein at and as of such Time of
Delivery, as to the performance by the Kinder Morgan Entities of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (a) and (e) of this Section and as to
such other matters as the Representatives may reasonably request.
8. (a) Each of the Kinder Morgan Entities will indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Designated
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Kinder Morgan Entities shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Designated Securities, or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Partnership by any Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Kinder
Morgan Entities against any losses, claims, damages or liabilities to which the
Kinder Morgan Entities may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state
21
<PAGE>
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Partnership by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Kinder Morgan
Entities for any legal or other expenses reasonably incurred by the Kinder
Morgan Entities in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action 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) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Partnership on the one hand and the
Underwriters of the Designated Securities on the other from the offering of the
Designated Securities to which such loss, claim, damage or liability (or action
in respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under
22
<PAGE>
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Partnership on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Partnership on the one hand and such Underwriters on
the other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Partnership bear
to the total underwriting discounts and commissions received by such
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Partnership on the one hand or such Underwriters on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Kinder Morgan
Entities and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection (d) 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 subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of 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 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations with respect to such Designated Securities and not joint.
(e) The obligations of the Kinder Morgan Entities under this Section 8
shall be in addition to any liability which the Kinder Morgan Entities may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
General Partner and to each person, if any, who controls the Kinder Morgan
Entities within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or
23
<PAGE>
another party or other parties to purchase such Designated Securities on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such
Designated Securities, then the Partnership shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Designated
Securities on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Partnership that they have so arranged
for the purchase of such Designated Securities, or the Partnership notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Partnership shall have the right to
postpone the Time of Delivery for such Designated Securities for a period of not
more than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Partnership
agrees to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the Representatives may
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to the Pricing Agreement with respect to
such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Partnership as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Partnership shall have the right to require
each non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Partnership as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Partnership shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Designated Securities of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to such
Designated Securities shall thereupon terminate, without liability on the part
of any non-defaulting Underwriter or the Partnership, except for the expenses to
be borne by the Partnership and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
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<PAGE>
10. The respective indemnities, agreements, representations, warranties
and other statements of the Kinder Morgan Entities and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, any of
the Kinder Morgan Entities, or any officer or director or controlling person of
the Kinder Morgan Entities, and shall survive delivery of and payment for the
Designated Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, or if the Underwriters elect not to purchase the Designated Securities
hereunder solely because one or more of the conditions in section 7(b), 7(g)(i),
7(g)(iii) or 7(g)(iv) have not been satisfied, the Kinder Morgan Entities shall
not then be under any liability to any Underwriter with respect to the
Designated Securities covered by such Pricing Agreement except as provided in
Sections 6 and 8 hereof; but, if for any other reason Designated Securities are
not delivered by or on behalf of the Partnership as provided herein, the Kinder
Morgan Entities will reimburse the Underwriters through the Representatives for
all out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Securities, but the Kinder Morgan Entities shall then be under no further
liability to any Underwriter with respect to such Designated Securities except
as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to any of the Kinder Morgan Entities shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Partnership set forth in the Registration Statement: Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Partnership by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, each of the Kinder Morgan
Entities and, to the extent provided in Sections 8 and 10 hereof, the officers
and directors of the General Partner and each person who controls the any of the
Kinder Morgan Entities or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement.
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<PAGE>
No purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us one for the Kinder Morgan Entities and for each of the
Representatives plus one for each counsel counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters and each of the Kinder Morgan Entities. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Partnership for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
KINDER MORGAN ENERGY PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
26
<PAGE>
KINDER MORGAN OPERATING L.P. "A"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN OPERATING L.P. "B"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN OPERATING L.P. "C"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN OPERATING L.P. "D"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
27
<PAGE>
KINDER MORGAN G.P., INC.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
SFPP, L.P.
By: Kinder Morgan Operating L.P., "D"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
KINDER MORGAN BULK TERMINALS, INC.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman
KINDER MORGAN NATURAL GAS LIQUIDS
CORPORATION
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman
28
<PAGE>
KINDER MORGAN CO2, L.L.C.
By: Kinder Morgan Operating L.P., "A"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
----------------------------------------
Richard D. Kinder
Chairman of the Board and Chief
Executive Officer
Accepted as of the date hereof:
Goldman Sachs & Co.
A.G. Edwards & Sons, Inc.
NationsBanc Montgomery Securities LLC
Prudential Securities Incorporated
Salomon Smith Barney Inc.
By: /s/ (Goldman, Sachs & Co.)
----------------------------------
(Goldman, Sachs & Co.)
29
<PAGE>
ANNEX I
Pricing Agreement
-----------------
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
---------
Ladies and Gentlemen:
Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes, subject to the terms and conditions stated herein and
in the Underwriting Agreement, dated January 26, 1999 (the "Underwriting
Agreement"), among the Partnership and the other Kinder Morgan Entities (as
defined in the Underwriting Agreement) on the one hand and Goldman, Sachs & Co.
[and (names of Co-Representatives named therein)] on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated Securities"). Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement,
unless such representation or warranty is as of a specified date or is updated
on schedules to this Pricing Agreement. Each reference to the Representatives
herein and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters of the Designated Securities pursuant to
Section 12 of the Underwriting Agreement and the address of the Representatives
referred to in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Partnership agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Partnership, at the time
and place and at the purchase price to the Underwriters set forth in
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<PAGE>
Schedule II hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Partnership and each of the Representatives plus one
for each counsel counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Partnership. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is or will be pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Partnership for examination upon request, but without warranty
on the part of the Representatives as to the authority of the signers thereof.
Very truly yours,
KINDER MORGAN ENERGY PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.
By:
----------------------------------------
KINDER MORGAN OPERATING L.P. "A"
By: Kinder Morgan G.P., Inc.
By:
----------------------------------------
31
<PAGE>
KINDER MORGAN OPERATING L.P. "B"
By: Kinder Morgan G.P., Inc.
By:
----------------------------------------
KINDER MORGAN OPERATING L.P. "C"
By: Kinder Morgan G.P., Inc.
By:
----------------------------------------
KINDER MORGAN OPERATING L.P. "D"
By: Kinder Morgan G.P., Inc.
By:
----------------------------------------
KINDER MORGAN G.P., INC.
By:
----------------------------------------
32
<PAGE>
SFPP, L.P.
By: Kinder Morgan Operating L.P., "D"
By: Kinder Morgan G.P., Inc.
By:
----------------------------------------
KINDER MORGAN BULK TERMINALS, INC.
By:
----------------------------------------
KINDER MORGAN NATURAL GAS LIQUIDS
CORPORATION
By:
----------------------------------------
KINDER MORGAN CO2, L.L.C.
By: Kinder Morgan Operating L.P., "A"
By: Kinder Morgan G.P., Inc.
By:
----------------------------------------
33
<PAGE>
Accepted as of the date hereof:
Goldman, Sachs & Co.
[Name(s) of Co-Representative(s)]
By:
----------------------------------------
(Goldman, Sachs & Co.)
34
<PAGE>
SCHEDULE I
-------------------------
Principal Amount of
Designated Securities to
Underwriter be Purchased
- --------------------------------------------------------------------------------
$
Goldman, Sachs & Co..........................
A.G. Edwards & Sons, Inc.....................
NationsBanc Montgomery Securities LLC........
Prudential Securities Incorporated...........
Salomon Smith Barney Inc..................... -------------------------
Total....................................... $
=========================
35
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Senior] [Subordinated] [Floating Rate] [Zero Coupon] [Notes] due
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from _________ to _________ [including accrued amortization
[, if any,] from _________ to _________]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued interest
from _________to _________ [and accrued amortization[, if any,] from _________
to _________]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The Depository
Trust Company or its designated custodian] [the Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated custodian,
to be made available for checking by the Representatives at least twenty-four
hours prior to the Time of Delivery at the office of DTC.]
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
_________ a.m. (New York City time), _________, 199__
Indenture:
[Senior] [Subordinated] Indenture dated _________, 199__, among the
Partnership[, certain guarantors] and _________, as Trustee
36
<PAGE>
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates, commencing ....................., 199..]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Partnership, in the
amount of [$ ] or an integral multiple thereof, [on or after _________,at the
following redemption prices (expressed in percentages of principal amount). If
[redeemed on or before _________, __%, and if] redeemed during the 12-month
period beginning _________,
Year Redemption Price
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at the election of
the Partnership, at a redemption price equal to the principal amount thereof,
plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire [$_________] principal amount of Designated Securities on _________ in
each of the years _________ through _________ at 100% of their principal amount
plus accrued interest[, together with [cumulative] [noncumulative] redemptions
at the option of the Partnership to retire an additional [$_________] principal
amount of Designated Securities in the years _________ through _________ at 100%
of their principal amount plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
37
<PAGE>
Extendable provisions:
Designated Securities are repayable on _________, ______ [insert date and
years], at the option of the holder, at their principal amount with accrued
interest. The initial annual interest rate will be %, and thereafter the annual
interest rate will be adjusted on _________, _________and _________ to a rate
not less than ___% of the effective annual interest rate on U.S. Treasury
obligations with _________-year maturities as of the [insert date 15 days prior
to maturity date] prior to such [insert maturity date].]
[If Designated Securities are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be ___% through _________ [and
thereafter will be adjusted [monthly] [on each _________, _________, and
_________ ] [to an annual rate of ___% above the average rate for _________-year
[month][securities][certificates of deposit] issued by __________________ and
__________________ [insert names of banks].] [and the annual interest rate
[thereafter] [from _________ through _________] will be the interest yield
equivalent of the weekly average per annum market discount rate for
_________-month Treasury bills plus ___% of Interest Differential (the excess,
if any, of (i) the then current weekly average per annum secondary market yield
for-month certificates of deposit over (ii) the then current interest yield
equivalent of the weekly average per annum market discount rate for
_________-month Treasury bills); [from _________ and thereafter the rate will be
the then current interest yield equivalent plus ___% of Interest Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities:
Additional Closing Conditions:
Paragraph 7(g) of the Underwriting Agreement should be modified in the
event that the Securities are denominated in, indexed to, or principal or
interest are paid in, a currency other than the U.S. dollar, more than one
currency or in a composite currency. The country or countries issuing such
currency should be added to the banking moratorium and hostilities clauses and
the following additional clause should be added to the paragraph (the entire
paragraph should be restated, as amended):
"; ( ) the imposition of the proposal of exchange controls by any
governmental authority in [insert the country or countries issuing such
currency, currencies or composite currency]".
38
<PAGE>
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]* :
- -----------------------
* A description of particular tax, accounting or other unusual features (such as
the addition of event risk provisions) of the Designated Securities should be
set forth, or referenced to an attached and accompanying description, if
necessary, to ensure agreement as to the terms of the Designated Securities to
be purchased and sold. Such a description might appropriately be in the form in
which such features will be described in the Prospectus Supplement for the
offering.
39
<PAGE>
SCHEDULE III
List of subsidiaries (as such term is defined in the rules and regulations
of the Commission under the Act and the Exchange Act) of the Partnership or
other entities in which the Partnership, any of the Operating Partnerships or
SFPP, L.P. has an equity ownership interest of at least 50% and which owns
assets or conducts business:
Heartland Partnership
Mont Belvieu Associates
Kinder Morgan CO2, LLC
Kinder Morgan Natural Gas Liquids Corporation
Kinder Morgan Bulk Terminals, Inc.
Kinder Morgan Operating L.P. "A"
Kinder Morgan Operating L.P. "B"
Kinder Morgan Operating L.P. "C"
Kinder Morgan Operating L.P. "D"
River Consulting, Inc.
SFPP, L.P.
Western Plant Services, Inc.
1
<PAGE>
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Partnership and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable pro forma financial information) examined by them and included
or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have performed the procedures specified by the American Institute of
Certified Public Accountants for a review of the consolidated interim
financial statements, selected financial data, pro forma financial
information, and/or condensed financial statements derived from audited
financial statements of the Partnership for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
[separately] furnished to the representative or representatives of the
Underwriters (the "Representatives") such term to include an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives [and are attached hereto];
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Partnership's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which [have been separately furnished to the Representatives][are
attached hereto]; and on the basis of specified procedures including
inquiries of officials of the Partnership who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (v)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Partnership for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Partnership's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where applicable)
in
2
<PAGE>
the audited consolidated financial statements for five such fiscal years
which were included or incorporated by reference in the Partnership's
Annual Reports on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Partnership and its subsidiaries, inspection of
the minute books of the Partnership and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Partnership and
its subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Partnership's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Partnership's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the Partnership's Annual Report on Form 10-K for the most
recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Partnership's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply
3
<PAGE>
as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
partners' capital (other than issuances of capital stock upon exercise
of options and unit appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Partnership and its
subsidiaries, or any decreases in consolidated net current assets or
unitholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
unit amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vi) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (v) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Partnership and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Partnership and its subsidiaries and have found them to be in agreement.
4
<PAGE>
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
5
=============================================================================
KINDER MORGAN
ENERGY PARTNERS, L.P.
Issuer
THE GUARANTORS NAMED HEREIN
as Guarantors
and
U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
---------
INDENTURE
Dated as of January 29, 1999
---------
SENIOR DEBT SECURITIES
---------
=============================================================================
<PAGE>
KINDER MORGAN ENERGY PARTNERS, L.P.
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
TRUST INDENTURE ACT OF 1939:
Trust Indenture
Act Section Indenture Section
=============== =================
ss.310(a)(1)................................... 609
(a)(2)................................... 609
(a)(3)................................... Not Applicable
(a)(4)................................... Not Applicable
(b)...................................... 608; 610
ss.311(a)...................................... 613
(b)...................................... 613
ss.312(a)...................................... 701; 702
(b)...................................... 702
(c)...................................... 702
ss.313(a)...................................... 703
(b)...................................... 703
(c)...................................... 703
(d)...................................... 703
ss.314(a)...................................... 704
(a)(4)................................... 1004
(b)...................................... Not Applicable
(c)(1)................................... 102
(c)(2)................................... 102
(c)(3)................................... Not Applicable
(d)...................................... Not Applicable
(e)...................................... 102
ss.315(a)...................................... 601, 603
(b)...................................... 602
(c)...................................... 601
(d)...................................... 601
(e)...................................... 514
ss.316(a)...................................... 101
(a)(1)(A)................................ 502; 512
(a)(1)(B)................................ 513
(a)(2)................................... Not Applicable
(b)...................................... 508
(c)...................................... 104
ss.317(a)(1)................................... 503
(a)(2)................................... 504
(b)...................................... 1003
ss.318(a)...................................... 107
- ---------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
i
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions...............................................1
SECTION 102. Compliance Certificates and Opinions.....................10
SECTION 103. Form of Documents Delivered to Trustee...................11
SECTION 104. Acts of Holders; Record Dates............................11
SECTION 105. Notices, Etc., to Trustee and Partnership................13
SECTION 106. Notice to Holders; Waiver................................13
SECTION 107. Conflict with Trust Indenture Act........................14
SECTION 108. Effect of Headings and Table of Contents.................14
SECTION 109. Successors and Assigns...................................14
SECTION 110. Separability Clause......................................14
SECTION 111. Benefits of Indenture....................................14
SECTION 112. Governing Law............................................14
SECTION 113. Legal Holidays...........................................14
SECTION 114. Language of Notices, Etc.................................15
SECTION 115. Non-Recourse to the General Partner; No Personal Liability
of Officers, Directors, Employees or Partners............15
ARTICLE II
SECURITY FORMS
SECTION 201. Forms Generally..........................................15
SECTION 202. Form of Face of Security.................................16
SECTION 203. Form of Reverse of Security..............................18
SECTION 204. Global Securities........................................23
SECTION 205. Form of Trustee's Certificate and Authorization..........24
ARTICLE III
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.....................25
SECTION 302. Denominations............................................28
SECTION 303. Execution, Authentication, Delivery and Dating...........28
SECTION 304. Temporary Securities.....................................30
SECTION 305. Registration, Registration of Transfer and Exchange......31
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.........32
SECTION 307. Payment of Interest; Interest Rights Preserved...........33
SECTION 308. Persons Deemed Owners....................................34
SECTION 309. Cancellation.............................................35
SECTION 310. Computation of Interest..................................35
SECTION 311. CUSIP Numbers............................................35
ii
<PAGE>
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture..................36
SECTION 402. Application of Trust Money...............................37
ARTICLE V
REMEDIES
SECTION 501. Events of Default........................................37
SECTION 502. Acceleration of Maturity; Rescission and Annulment.......38
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee...............................................39
SECTION 504. Trustee May File Proofs of Claim.........................40
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities...............................................40
SECTION 506. Application of Money Collected...........................40
SECTION 507. Limitation on Suits......................................41
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.....................................41
SECTION 509. Restoration of Rights and Remedies.......................42
SECTION 510. Rights and Remedies Cumulative...........................42
SECTION 511. Delay or Omission Not Waiver.............................42
SECTION 512. Control by Holders.......................................42
SECTION 513. Waiver of Past Defaults..................................43
SECTION 514. Undertaking for Costs....................................43
SECTION 515. Waiver of Usury, Stay or Extension Laws..................43
ARTICLE VI
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities......................44
SECTION 602. Notice of Defaults.......................................45
SECTION 603. Certain Rights of Trustee................................45
SECTION 604. Not Responsible for Recitals or Issuance of Securities...46
SECTION 605. May Hold Securities......................................46
SECTION 606. Money Held in Trust......................................47
SECTION 607. Compensation and Reimbursement...........................47
SECTION 608. Disqualification; Conflicting Interests..................47
SECTION 609. Corporate Trustee Required; Eligibility..................48
SECTION 610. Resignation and Removal; Appointment of Successor........48
SECTION 611. Acceptance of Appointment by Successor...................49
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business..............................................50
SECTION 613. Preferential Collection of Claims Against Partnership....51
SECTION 614. Appointment of Authenticating Agent......................51
iii
<PAGE>
ARTICLE VII
HOLDERS'LISTS AND REPORTS BY TRUSTEE AND PARTNERSHIP
SECTION 701. Partnership to Furnish Trustee Names and Addresses
of Holders...............................................52
SECTION 702. Preservation of Information; Communications to Holders...53
SECTION 703. Reports by Trustee.......................................53
SECTION 704. Reports by Partnership...................................53
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Partnership and Guarantors May Consolidate, Etc., Only
on Certain Terms.........................................54
SECTION 802. Successor Substituted....................................55
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.......55
SECTION 902. Supplemental Indentures with Consent of Holders..........56
SECTION 903. Execution of Supplemental Indentures.....................57
SECTION 904. Effect of Supplemental Indentures........................57
SECTION 905. Conformity with Trust Indenture Act......................57
SECTION 906. Reference in Securities to Supplemental Indentures.......57
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest...............58
SECTION 1002. Maintenance of Office or Agency..........................58
SECTION 1003. Money for Securities Payments to Be Held in Trust........58
SECTION 1004. Statement by Officers as to Default......................59
SECTION 1005. Existence................................................60
SECTION 1006. Limitations on Liens.....................................60
SECTION 1007. Restriction of Sale-Leaseback Transaction................61
SECTION 1008. Waiver of Certain Covenants..............................62
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.................................62
SECTION 1102. Election to Redeem; Notice to Trustee....................63
SECTION 1103. Selection by Trustee of Securities to be Redeemed........63
SECTION 1104. Notice of Redemption.....................................63
SECTION 1105. Deposit of Redemption Price..............................64
SECTION 1106. Securities Payable on Redemption Date....................64
SECTION 1107. Securities Redeemed in Part..............................65
iv
<PAGE>
ARTICLE XII
SINKING FUNDS
SECTION 1201. Applicability of Article.................................65
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities....65
SECTION 1203. Redemption of Securities for Sinking Fund................66
ARTICLE XIII
DEFEASANCE
SECTION 1301. Applicability of Article.................................66
SECTION 1302. Legal Defeasance.........................................66
SECTION 1303. Covenant Defeasance......................................68
SECTION 1304. Application by Trustee of Funds Deposited for Payment
of Securities............................................69
SECTION 1305. Repayment to Partnership.................................70
SECTION 1306. Reinstatement............................................70
ARTICLE XIV
GUARANTEES OF SECURITIES
SECTION 1401. Unconditional Guarantees.................................70
SECTION 1402. Limitation of Guarantor's Liability......................72
SECTION 1403. Contribution.............................................72
SECTION 1404. Execution and Delivery of Guarantees.....................73
SECTION 1405. Addition of Guarantors...................................73
SECTION 1406. Release of Guarantee.....................................74
SECTION 1407. Consent to Jurisdiction and Service of Process...........74
SECTION 1408. Waiver of Immunity.......................................74
SECTION 1409. Judgment Currency........................................75
v
<PAGE>
INDENTURE dated as of January 29, 1999, between KINDER MORGAN ENERGY
PARTNERS, L.P., a Delaware limited partnership (the "Partnership"), having its
principal office at 1301 Mckinney Street, Suite 3450, Houston Texas, 77010, the
Guarantors named herein and U.S. TRUST COMPANY OF TEXAS, N.A., a national
banking corporation, as Trustee (the "Trustee").
RECITALS OF THE PARTNERSHIP
The Partnership has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (the "Securities"), to be
issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Partnership and the Guarantors, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act that
are required to be a part of this Indenture and, to the extent applicable, shall
be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly, or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted in the United States at the date of such computation;
<PAGE>
(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(5) the words "Article" and "Section" refer to an Article and Section,
respectively, of this Indenture.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Adjusted Net Assets" of a Guarantor at any date means the amount by which
the fair value of the property of such Guarantor at such date exceeds the total
amount of liabilities, including, without limitation, the probable amount of
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date) of such Guarantor at such date,
but excluding liabilities under the Guarantee of such Guarantor.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Indebtedness", when used with respect to any to any
Sale-Leaseback Transaction, means, as at the time of determination, the present
value (discounted at the rate set forth or implicit in the terms of the lease
included in such transaction) of the total obligations of the lessee for rental
payments (other than amounts required to be paid on account of property taxes,
maintenance, repairs, insurance, assessments, utilities, operating and labor
costs and other items that do not constitute payments for property rights)
during the remaining term of the lease included in such Sale-Leaseback
Transaction (including any period for which such lease has been extended). In
the case of any lease that is terminable by the lessee upon the payment of a
penalty or other termination payment, such amount shall be the lesser of the
amount determined assuming termination upon the first date such lease may be
terminated (in which case the amount shall also include the amount of the
penalty or termination payment, but no rent shall be considered as required to
be paid under such lease subsequent to the first date upon which it may be so
terminated) or the amount determined assuming no such termination.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place.
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"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors or the protection of creditors.
"Boarid of Directors" means the board of directors of the General Partner,
or the executive or any other committee of that board duly authorized to act in
respect thereof. If the Partnership shall change its form of entity to other
than a limited partnership, the references to officers or the Board of Directors
of the General Partner shall mean the officers or the Board of Directors (or
other comparable governing body) of the Partnership.
"Board Resolution" means a copy of a resolution certified by the Corporate
Secretary of the General Partner, the principal financial officer of the General
Partner or any other authorized officer of the General Partner or a person duly
authorized by any of them, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or other
location, means, except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law, executive
order or regulation to close.
"Capital Interests" means any and all shares, interests, participations,
rights or other equivalents (however designated) of capital stock, including,
without limitation, with respect to partnerships, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument 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.
"Consolidated Net Tangible Assets" means, at any date of determination, the
total amount of assets after deducting therefrom (x) 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 (y) 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
Partnership and its consolidated subsidiaries for the Partnership's most
recently completed fiscal quarter, prepared in accordance with generally
accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which at the date hereof is 2001 Ross Avenue, Suite 2700, Dallas, Texas
75201-2936.
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"corporation" includes corporations, associations, limited liability
companies, joint-stock companies and business trusts.
"covenant defeasance" has the meaning specified in Section 1303.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Debt" means any obligation created or assumed by any Person for the
repayment of money borrowed, any purchase money obligation created or assumed by
such Person and any guarantee of the foregoing.
"Default" means, with respect to a series of Securities, any event which
is, or after notice or lapse of time or both would become, an Event of Default
with respect to Securities of such series.
"Defaulted Interest" has the meaning specified in Section 307.
"defeasance" has the meaning specified in Section 1302.
"Definitive Security" means a Security other than a Global Security or a
temporary Security.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301, until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter shall mean or include each Person which is then a Depositary
hereunder, and if at any time there is more than one such Person, shall be a
collective reference to such Persons.
"Dollar" or "$" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any statute successor thereto.
"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.
"General Partner" means Kinder Morgan G.P., Inc., a Delaware
corporation.
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"Global Security" means a Security in global form that evidences all or
part of the Securities of any series and is registered in the name of, the
Depositary for such Securities or a nominee thereof.
"Guarantor" means (i) each Subsidiary of the Partnership executing this
Indenture, (ii) each Subsidiary of the Partnership that becomes a guarantor of
the Securities pursuant to Section 1405, (iii) each Subsidiary of the
Partnership that executes a supplemental indenture in which such Subsidiary
agrees to be bound by Article XIV and (iv) any Subsidiary of the Partnership
that is a successor corporation of any Subsidiary of the Partnership referred to
in clauses (i) through (iii). The term "Guarantor" shall not include any
Subsidiary of the Partnership referred to in clauses (i) through (iv) that shall
have been released from its obligations under Article XIV pursuant to Section
1406.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument, and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" also shall include the terms of particular series of Securities
established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Issue Date" means with respect to any series of Debt Securities issued
under either Indenture the date on which Debt Securities of that series are
initially issued under that Indenture.
"Lien" means, as to any entity, any mortgage, lien, pledge, security
interest or other encumbrance in or on, or adverse interest or title of any
vendor, lessor, lender or other secured party to or of the entity under
conditional sale or other title retention agreement or capital lease with
respect to, any property or asset of the entity, but excluding agreements to
refrain from granting Liens.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of DefauIlt" means a written notice of the kind specified in
Section 501(3).
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"Officers' Certificate" of a Person means a certificate signed by the
Chairman of the Board, the Vice Chairman, the President or a Vice President, and
by the Treasurer or the Secretary, of the Person, or if such Person is a
partnership, of its general partner, and delivered to the Trustee. One of the
officers or such other Persons (as applicable) signing an Officers' Certificate
given pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Person, or if such Person is a partnership, of its
general partner.
"Opinion of Counsel" means a written opinion of legal counsel, who may be
an employee of or counsel for the Partnership or a Guarantor, which opinion
shall comply with the provisions of Sections 102 and 103. Such counsel shall be
acceptable to the Trustee, whose acceptance shall not be unreasonably withheld.
"Original Issue Discount Security" means any Security which provides for an
amount less than the stated principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Partnership) in trust or set aside and segregated in trust by
the Partnership (if the Partnership shall act as its own Paying Agent) for the
Holders of such Securities; provided, however, that, if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor has been made;
(iii)Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to
it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Partnership; and
(iv) Securities, except to the extent provided in Sections 1302 and
1303, with respect to which the Partnership has effected defeasance or covenant
defeasance as provided in Article XIII;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof on such date pursuant to Section 502, (B) the principal amount of a
Security denominated in one or
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more currencies or currency units other than U.S. dollars shall be the U.S.
dollar equivalent of such currencies or currency units, determined in the manner
provided as contemplated by Section 301 on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent (as so determined) on the date of original
issuance of such Security, of the amount determined as provided in Clause (A)
above) of such Security, and (C) Securities owned by the Partnership or any
other obligor upon the Securities or any Affiliate of the Partnership or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned as described in Clause (C) above which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Partnership or any other obligor upon
the Securities or any Affiliate of the Partnership or of such other obligor.
"Pari Passu Debt" means any Debt of the Partnership, whether outstanding on
the Issue Date or thereafter created, incurred or assumed, unless, in the case
of any particular Debt, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such Debt
shall be subordinated in right of payment to the Securities.
"Partnership" means the Person named as the "Partnership" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Partnership" shall mean such successor Person.
"Partnership Request" or "Partnership Order" means a written request or
order signed in the name of the Partnership by the Chairman of the Board, the
Vice Chairman, the President or a Vice President of the General Partner, and by
the Treasurer or Secretary of the General Partner, and delivered to the Trustee,
or if the Partnership shall change its form of entity to other than a limited
partnership, by Persons or officers, members, agents and the like positions
comparable to those of the foregoing nature, as applicable.
"Paying Agent" means any Person authorized by the Partnership to pay the
principal of or any premium or interest on any Securities on behalf of the
Partnership.
"Periodic Offering" means an offering of Securities of a series from time
to time, the specific terms of which Securities, including, without limitation,
the rate or rates of interest or formula for determining the rate or rates of
interest thereon, if any, the Stated Maturity or Stated Maturities thereof, the
original issue date or dates thereof, the redemption provisions, if any, with
respect thereto, and any other terms specified as contemplated by Section 301
with respect thereto, are to be determined by the Partnership upon the issuance
of such Securities.
"Permitted Liens" means (i) Liens upon rights-of-way for pipeline purposes;
(ii) any statutory or governmental Lien or Lien arising by operation of law, or
any mechanics', repairmen's, materialmen's, suppliers', carriers', landlords',
warehousemen's 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
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construction, development, improvement or repair; (iii) the right reserved to,
or vested in, any municipality or public authority by the terms of any right,
power, franchise, grant, license, permit or by any provision of law, to purchase
or recapture or to designate a purchaser of, any property; (iv) Liens of 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 Partnership or any Subsidiary in good faith; (v) Liens of, or to
secure performance of, leases, other than capital 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 Partnership or any 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
in favor of the Partnership or any Subsidiary; (x) any Lien in favor of the
United States of America or any state thereof, or any department, agency or
instrumentality or political subdivision of the United States of America or any
state thereof, to secure partial, progress, advance, or other payments pursuant
to any contract or statute, or any Debt incurred by the Partnership or any
Subsidiary for the purpose of financing all or any part of the purchase price
of, or the cost of constructing, developing, repairing or improving, the
property or assets subject to such Lien; or (xi) any Lien securing industrial
development, pollution control or similar revenue bonds; (xii) any Lien securing
Debt of the Partnership or any Subsidiary, all or a portion of the net proceeds
of which are used, substantially concurrent with the funding thereof (and for
purposes of determining such "substantial concurrence," taking into
consideration, among other things, required notices to be given to Holders of
outstanding securities under this Indenture (including the Securities) in
connection with such refunding, refinancing or repurchase, and the required
corresponding durations thereof), to refinance, refund or repurchase all
outstanding securities under this Indenture (including the Securities),
including the amount of all accrued interest thereon and reasonable fees and
expenses and premium, if any, incurred by the Partnership or any Subsidiary in
connection therewith; (xiii) Liens in favor of any Person to secure obligations
under the provisions of any letters of credit, bank guarantees, bonds or surety
obligations required or requested by any governmental authority in connection
with any contract or statute; or (xiv) any Lien upon or deposits of any assets
to secure performance of bids, trade contracts, leases or statutory obligations.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, other
entity, unincorporated organization or government, or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means, unless otherwise specifically provided for with respect to such series as
contemplated by Section 301, the office or agency of the Partnership in The City
of New York and such other place or places where, subject to the provisions of
Section 1002, the principal of and any premium and interest on the Securities of
that series are payable as specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same Debt as that evidenced by such
particular Security; and,
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for the purposes of this definition, any Security authenticated and delivered
under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same Debt as the mutilated,
destroyed, lost or stolen Security.
"Principal Property" means, whether owned or leased on the date of this
Indenture or thereafter acquired, (i) any pipeline assets of the Partnership or
any Subsidiary, including any related facilities employed in the transportation,
distribution, storage or marketing of refined petroleum products, natural gas
liquids and carbon dioxide, that are located in the United States of America or
any territory or political subdivision thereof, and (ii) any processing or
manufacturing plant or terminal owned or leased by the Partnership or any
Subsidiary that is located in the United States or any territory or political
subdivision thereof, except, in the case of either of the foregoing clauses (i)
or (ii), (A) any such assets consisting of inventories, furniture, office
fixtures and equipment (including data processing equipment), vehicles and
equipment used on, or useful with, vehicles, and (B) any such assets, plant or
terminal which, in the opinion of the Board of Directors, is not material in
relation to the activities of the Partnership or of the Partnership and its
Subsidiaries, taken as a whole.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Sale-Leaseback Transaction" means the sale or transfer by the Partnership
or any Subsidiary of any Principal Property to a Person (other than the
Partnership or a Subsidiary) and the taking back by the Partnership or any
Subsidiary, as the case may be, of a lease of such Principal Property.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
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"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof or, in the case of a partnership, more than 50% of the partners' Capital
Interests (considering all partners' Capital Interests as a single class), is at
the time owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of such Person or a combination thereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as otherwise provided
in Section 905; provided, however, that if the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean each Trustee with respect to Securities of that series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, each of which are not callable or redeemable at the option of the
issuer thereof.
"Vice President", when used with respect to the Partnership, means any vice
president of the General Partner, or when used with respect to the Trustee,
means any vice president of the Trustee.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Partnership or any Guarantor to the
Trustee to take or refrain from taking any action under any provision of this
Indenture, the Partnership shall furnish to the Trustee an Officers' Certificate
in form and substance reasonably satisfactory to the Trustee stating that, in
the opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
complied with, and an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel, all
such conditions precedent have been complied with. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to be given
by officers of the General Partner or any Guarantor, or an Opinion of Counsel,
if to be given by counsel, and shall comply with the requirements of the Trust
Indenture Act and any other requirements set forth in this Indenture.
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Every Officers' Certificate or Opinion of Counsel (except for certificates
provided for in Section 1004) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Partnership or the General
Partner may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Partnership or
the General Partner stating that the information with respect to such factual
matters is in the possession of the Partnership or the General Partner, unless
such counsel knows that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed (either physically or
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by means of a facsimile or an electronic transmission, provided that such
electronic transmission is transmitted through the facilities of a Depositary)
by such Holders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered (either physically or by means of a
facsimile or an electronic transmission, provided that such electronic
transmission is transmitted through the facilities of a Depositary) to the
Trustee and, where it is hereby expressly required, to the Partnership. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive in
favor of the Trustee and the Partnership, if made in the manner provided in this
Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership, principal amount and serial numbers of Securities held by
any Person, and the date of commencement of such Person's holding the same,
shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other action of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Partnership
in reliance thereon, whether or not notation of such action is made upon such
Security.
Without limiting the foregoing, a Holder entitled hereunder to give or take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
The Partnership may set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities of such series, but the Partnership shall have no
obligation to do so. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Securities of the relevant series on such
record date (or their duly
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appointed agents), and only such Persons, shall be entitled to give or take the
relevant action, whether or not such Holders remain Holders after such record
date.
SECTION 105. Notices, Etc., to Trustee and Partnership.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Partnership shall be
sufficient for every purpose hereunder if made in writing and actually received
by the Trustee at its Corporate Trust Office, Attention: Corporate Trustee
Administration, or at any other address previously furnished in writing by the
Trustee, or
(2) the Partnership by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Partnership addressed to it at 1301 Mckinney Street, Suite 3450, Houston Texas,
77010, to the attention of the Corporate Secretary, or at any other address
previously furnished in writing to the Trustee by the Partnership.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid (if international mail, by
air mail), to each Holder affected by such event, at his address as it appears
in the Security Register, not later than the latest date (if any), and not
earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
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SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Partnership shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
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SECTION 114. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent, waiver or
Act required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
SECTION 115. Non-Recourse to the General Partner; No Personal Liability of
Officers, Directors, Employees or Partners.
Obligations of the Partnership, or any Guarantor, as such, under this
Indenture and the Securities hereunder are non-recourse to the General Partner,
and its respective Affiliates (other than the Partnership and the Guarantors),
and payable only out of cash flow and assets of the Partnership and the
Guarantors. The Trustee, and each Holder of a Security by its acceptance
thereof, will be deemed to have agreed in this Indenture that (1) neither the
General Partner nor its assets (nor any of its respective Affiliates other than
the Partnership or the Guarantors, nor their respective assets) shall be liable
for any of the obligations of the Partnership or the Guarantors under this
Indenture or such Securities, and (2) no director, officer, employee,
stockholder or unitholder, as such, of the Partnership, the Guarantors, the
Trustee, the General Partner or any Affiliate of any of the foregoing entities
shall have any personal liability in respect of the obligations of the
Partnership or the Guarantors under this Indenture or such Securities by reason
of his, her or its status.
ARTICLE II
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or automated quotation system on
which the Securities of such series may be listed or traded or Depositary
therefor or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities. If
the form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by an authorized officer or other authorized Person on behalf of the
Partnership and delivered to the Trustee at or prior to the delivery of the
Partnership Order contemplated by Section 303 for the authentication and
delivery of such Securities. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form by the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form.
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The Definitive Securities shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
[Insert any legend required by the United States Internal Revenue Code and
the regulations thereunder.]
[If a Global Security,--insert legend required by Section 204 of the
Indenture] [If applicable, insert--UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE PARTNERSHIP OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
KINDER MORGAN ENERGY PARTNERS, L. P.
[TITLE OF SECURITY]
NO. U.S.$
[CUSIP No. ]
KINDER MORGAN ENERGY PARTNERS, L. P., a Delaware limited partnership
(herein called the "Partnership", which term includes any successor Person under
the Indenture hereinafter referred to), for value received, hereby promises to
pay to , or registered assigns, the principal sum of United
States Dollars on [if the Security is to bear interest prior to Maturity,
insert--, and to pay interest thereon from , or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on and in each year, commencing ,
at the rate of % per annum, until the principal hereof is paid or made
available for payment [if applicable, insert--, and at the rate of % per
annum on any overdue principal and premium and on any overdue installment of
interest]. [If applicable, insert -- The amount of interest payable for any
period shall be computed on the basis of twelve 30-day months and a 360-day
year. The amount of interest payable for any partial period shall be computed on
the basis of a 360-day year of twelve 30-day months and the days elapsed in any
partial month. In the event that any date on which interest is payable on this
Security is not a Business Day, then a
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payment of the 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) with the same force and effect as if made on the date
the payment was originally payable. A "Business Day" shall mean, when used with
respect to any Place of Payment, each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in that Place of Payment
are authorized or obligated by law, executive order or regulation to close.] The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the or (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice of which shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange or automated quotation system on
which the Securities of this series may be listed or traded, and upon such
notice as may be required by such exchange or automated quotation system, all
as more fully provided in such Indenture].
[If the Security is not to bear interest prior to Maturity, insert--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of % per annum, which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of % per annum, which shall accrue from the date
of such demand for payment to the date payment of such interest has been made
or duly provided for, and such interest shall also be payable on demand.]
[If a Global Security, insert--Payment of the principal of [(and premium,
if any)] and [if applicable, insert--any such] interest on this Security will be
made by transfer of immediately available funds to a bank account in
designated by the Holder in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [state other currency].]
[If a Definitive Security, insert--Payment of the principal of [(and
premium, if any)] and [if applicable, insert--any such] interest on this
Security will be made at the office or agency of the Partnership maintained for
that purpose in , [in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts][state other currency] [or subject to any laws or
regulations applicable thereto and to the right of the Partnership (as provided
in the Indenture) to rescind the designation of any such Paying Agent, at the
[main] offices of in and in
, or at such other offices or agencies as the Partnership may
designate, by [United
17
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States Dollar] [state other currency] check drawn on, or transfer to a [United
States Dollar] account maintained by the payee with, a bank in The City of New
York [ ] (so long as the applicable Paying Agent has received proper
transfer instructions in writing at least [ ] days prior to the payment
date)] [if applicable, insert--; provided, however, that payment of interest may
be made at the option of the Partnership by [United States Dollar] [state other
currency] check mailed to the addresses of the Persons entitled thereto as such
addresses shall appear in the Security Register] [or by transfer to a [United
States Dollar] [state other currency] account maintained by the payee with a
bank in The City of New York [state other Place of Payment] (so long as the
applicable Paying Agent has received proper transfer instructions in writing by
the Record Date prior to the applicable Interest Payment Date)].]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly
executed.
Dated:
KINDER MORGAN ENERGY
PARTNERS, L. P.,
By: Kinder Morgan G.P., Inc.,
Its General Partner
By:_____________________________________
Name:
Title:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Partnership (the "Securities"), issued and to be issued in one or more series
under an Indenture dated as of January 29, 1999 (the "Indenture"), among the
Partnership, the Guarantors named therein, and U.S. Trust Company of Texas,
N.A., as Trustee (the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, obligations, duties and immunities thereunder of the Partnership, the
Guarantors, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or
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more series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest, if any, at different
rates, may be subject to different redemption provisions, if any, may be subject
to different sinking, purchase or analogous funds, if any, may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided or permitted. This Security is one of the series designated
on the face hereof [if applicable, insert--, limited in aggregate principal
amount to U.S.$ ].
[If applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, [if
applicable, insert--(1) on in any year commencing with the year and
ending with the year through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at
any time [if applicable, insert--on or after , ], as a whole or in
part, at the election of the Partnership, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [if applicable,
insert--on or before , %, and if redeemed] during the 12-month period
beginning of the years indicated,
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption [if applicable, insert--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, (1) on
in any year commencing with the year and ending with the year
through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below, and (2) at any time [if applicable, insert--on or after ], as a
whole or in part, at the election of the Partnership, at the Redemption
Prices for redemption otherwise than through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below:
If redeemed during the 12-month period beginning of the years indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Sinking Than Through Operation
Year Fund of the Sinking Fund
---- ---- -------------------
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and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert--The sinking fund for this series provides for the
redemption on in each year beginning with the year and ending with the
year of [if applicable,--not less than $ ("mandatory sinking fund") and
not more than] $ aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Partnership otherwise
than through [if applicable,--mandatory] sinking fund payments may be credited
against subsequent [if applicable,--mandatory] sinking fund payments otherwise
required to be made [if applicable,--in the inverse order in which they become
due].]
[If the Security is subject to redemption in part of any kind, insert--In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert--The Securities of this series are not redeemable
prior to Stated Maturity.]
[If the Security is not an Original Issue Discount Security, insert--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert--If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to--insert formula for determining the
amount. Upon payment (1) of the amount of principal so declared due and payable,
and (2) of interest on any overdue principal and overdue interest, all of the
Partnership's and the Guarantors' obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this series shall
terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership or the Guarantors and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Partnership,
the Guarantors and the Trustee with the consent of not less than the Holders of
a majority in aggregate principal amount of the Outstanding Securities of all
series to be affected (voting as one class). The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all affected series
20
<PAGE>
(voting as one class), on behalf of the Holders of all Securities of such
series, to waive compliance by the Partnership and the Guarantors with certain
provisions of the Indenture. The Indenture permits, with certain exceptions as
therein provided, the Holders of a majority in principal amount of Securities of
any series then Outstanding to waive past defaults under the Indenture with
respect to such series and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or [any premium or] interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Partnership, which
is absolute and unconditional, to pay the principal of and [any premium and]
interest on this Security at the times, place(s) and rate, and in the coin or
currency, herein prescribed.
[If a Global Security, insert--This Global Security or portion hereof may
not be exchanged for Definitive Securities of this series except in the limited
circumstances provided in the Indenture.
The holders of beneficial interests in this Global Security will not be
entitled to receive physical delivery of Definitive Securities except as
described in the Indenture and will not be considered the Holders thereof for
any purpose under the Indenture.]
[If a Definitive Security, insert--As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Partnership in [if
applicable, insert -- any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert-- The City of New
York [, or, subject to any laws or regulations applicable thereto and to the
right of the Partnership (limited as provided in the Indenture) to rescind the
designation of any such transfer agent, at the [main] offices of in
and in or at such other offices or agencies as the
Partnership may designate]], duly endorsed by, or accompanied by a written
21
<PAGE>
instrument of transfer in form satisfactory to the Partnership and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities 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.]
The Securities of this series are issuable only in registered form without
coupons in denominations of U.S.$ [state other currency] and any
integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
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 Partnership may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Partnership, the Trustee and any agent of the Partnership or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Partnership, the Trustee nor any such agent shall be affected by notice to the
contrary.
Obligations of the Partnership and the Guarantors under the Indenture and
the Securities thereunder, including this Security, are non-recourse to Kinder
Morgan G.P., Inc. (the "General Partner") and its Affiliates (other than the
Partnership and the Guarantors), and payable only out of cash flow and assets of
the Partnership and the Guarantors. The Trustee, and each Holder of a Security
by its acceptance hereof, will be deemed to have agreed in the Indenture that
(1) neither the General Partner nor its assets (nor any of its Affiliates other
than the Partnership or the Guarantors, nor their respective assets) shall be
liable for any of the obligations of the Partnership or the Guarantors under the
Indenture or such Securities, including this Security, and (2) no director,
officer, employee, stockholder or unitholder, as such, of the Partnership, the
Guarantors, the Trustee, the General Partner or any Affiliate of any of the
foregoing entities shall have any personal liability in respect of the
obligations of the Partnership or the Guarantors under the Indenture or such
Securities by reason of his, her or its status.
The Indenture contains provisions that relieve the Partnership and the
Guarantors from the obligation to comply with certain restrictive covenants in
the Indenture and for satisfaction and discharge at any time of the entire
indebtedness upon compliance by the Partnership and the Guarantors with certain
conditions set forth in the Indenture.
[The obligations of the Partnership pursuant to the Indenture and the
Securities, including the repurchase obligations under the Indenture, will be
unconditionally guaranteed, on a senior unsecured basis, by each Guarantor.]
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
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All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
[If a Definitive Security, insert as a separate page--
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please Print or
Typewrite Name and Address of Assignee) the within instrument of KINDER MORGAN
ENERGY PARTNERS, L. P. and does hereby irrevocably constitute and appoint
________________________ Attorney to transfer said instrument on the books of
the within-named Partnership, with full power of substitution in the premises.
Please Insert Social Security or
Other Identifying Number of Assignee:
____________________________________ _______________________________________
Dated:______________________________ _____________________________(Signature)
Signature Guarantee:___________________________________________________________
(Participant in a Recognized Signature
Guaranty Medallion Program)
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.]
SECTION 204. Global Securities.
Every Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED
TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME
OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO
SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND
DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN
LIEU OF, THIS SECURITY SHALL
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BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
If Securities of a series are issuable in whole or in part in the form of
one or more Global Securities, as contemplated by Section 301, then,
notwithstanding Clause (9) of Section 301 and the provisions of Section 302, any
Global Security shall represent such of the Outstanding Securities of such
series as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Outstanding Securities represented thereby may
from time to time be reduced or increased, as the case may be, to reflect
exchanges. Any endorsement of a Global Security to reflect the amount, or any
reduction or increase in the amount, of Outstanding Securities represented
thereby shall be made in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in a Partnership Order. Subject to
the provisions of Sections 303, 304 and 305, the Trustee shall deliver and
redeliver any Global Security in the manner and upon instructions given by the
Person or Persons specified therein or in the applicable Partnership Order. Any
instructions by the Partnership with respect to endorsement or delivery or
redelivery of a Global Security shall be in a Partnership Order (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel).
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Partnership and the Partnership delivers to the Trustee the Global
Security together with a Partnership Order (which need not comply with Section
102 and need not be accompanied by an Opinion of Counsel) with regard to the
reduction or increase, as the case may be, in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 303.
SECTION 205. Form of Trustee's Certificate and Authorization.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
U.S. TRUST COMPANY OF TEXAS, N.A.,
As Trustee
By:__________________________________________
Authorized Signatory
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ARTICLE III
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution (and, subject to Section 303,
to the extent established pursuant to rather than set forth in a Board
Resolution, in an Officers' Certificate or Partnership Order setting forth, or
determining the manner of, such establishment) or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series,
(1) the form and title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the series pursuant
to Section 304, 305, 306, 906 or 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the Securities will be issued and on
which the principal of, and premium, if any, on the Securities of the series
is payable or the method of determination thereof;
(5) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method of
determination thereof, the date or dates from which such interest shall accrue,
or the method of determination thereof, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for any interest
payable on any Interest Payment Date;
(6) the place or places where, subject to the provisions of Section
1002, the principal of and any premium and interest on Securities of the series
shall be payable, Securities of the series may be surrendered for registration
of transfer, Securities of the series may be surrendered for exchange and
notices, and demands to or upon the Partnership in respect of the Securities
of the series and this Indenture may be served;
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(7 the period or periods, if any, within which, the price or prices
at which and the terms and conditions upon which Securities of the series may
be redeemed, in whole or in part, at the option of the Partnership or otherwise;
(8) the obligation, if any, of the Partnership to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
upon the happening of a specified event or at the option of a Holder thereof and
the period or periods within which, the price or prices at which and the terms
and conditions upon which Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(10) whether payment of principal of and premium, if any, and
interest, if any, on the Securities of the series shall be without deduction for
taxes, assessments or governmental charges paid by Holders of the series;
(11) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the series
shall be denominated, payable, redeemable or purchasable if other than the
currency of the United States of America and the manner of determining the
equivalent thereof in the currency of the United States of America for purposes
of the definition of "Outstanding" in Section 101;
(12) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference to an
index, the manner in which such amounts shall be determined;
(13) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Partnership or a Holder
thereof, in one or more currencies or currency units other than that or those in
which the Securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and interest
on Securities of such series as to which such election is made shall be payable,
and the periods within which and the terms and conditions upon which such
election is to be made;
(14) the right, if any, of the Partnership to defer payments of
interest by extending the interest payment periods and specify the duration
of such extension, the Interest Payment Dates on which such interest shall be
payable and whether and under what circumstances additional interest on amounts
deferred shall be payable;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the method of determination thereof;
(16) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities (and
whether in temporary or
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permanent global form) and, in such case, the Depositary or Depositaries for
such Global Security or Global Securities and any circumstances other than those
set forth in Section 305 in which any such Global Security may be transferred
to, and registered and exchanged for Securities registered in the name of, a
Person other than the Depositary for such Global Security or a nominee thereof
and in which any such transfer may be registered;
(17) any deletions from, modifications of or additions to the Events
of Default set forth in Section 501 or the covenants of the Partnership set
forth in Article X pertaining to the Securities of the series;
(18) if and the terms and conditions upon which any Securities of the
series may be converted into or exchanged for securities, which may include,
without limitation, capital stock, of any class or series of the Partnership or
any other issuer;
(19) if other than as provided in Sections 1302 and 1303, the terms
and conditions upon which and the manner in which such series of Securities may
be defeased or discharged;
(20) if other than the Trustee, the identity of the Security Registrar
and any Paying Agent;
(21) any restrictions or other provisions with respect to the transfer
or exchange of the Securities; and
(22) any other terms of the Securities of the series (which terms
shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution or Officers' Certificate referred to above or in any such
indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred to above with
respect to Securities of any series filed with the Trustee on or before the
initial issuance of the Securities of such series shall be incorporated herein
by reference with respect to Securities of such series and shall thereafter be
deemed to be a part of the Indenture for all purposes relating to Securities of
such series as fully as if such Board Resolution or Officers' Certificate were
set forth herein in full.
All Securities of any one series need not be issued at the same time and,
unless otherwise provided, a series may be reopened, without the consent of the
Holders, for increases in the aggregate principal amount of such series of
Securities and issuances of additional Securities of such series or for the
establishment of additional terms with respect to the Securities of such series.
If any of the terms of the series are established by action taken by or
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by an authorized
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officer or other authorized person of the General Partner on behalf of the
Partnership and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth, or providing the manner for determining,
the terms of the series.
With respect to Securities of a series subject to a Periodic Offering, such
Board Resolution or Officers' Certificate may provide general terms for
Securities of such series and provide either that the specific terms of
particular Securities of such series shall be specified in a Partnership Order,
or that such terms shall be determined by the Partnership, or one or more of the
Partnership's agents designated in an Officers' Certificate, in accordance with
a Partnership Order.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such specified denomination with respect to
the Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Partnership by the
Chairman of the Board, Vice Chairman, Chief Executive Officer, Chief Financial
Officer, President or any Vice President of the General Partner and need not be
attested. The signature of any of these officers on the Securities may be manual
or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the General Partner shall bind the
Partnership, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Partnership may deliver Securities of any series executed by the
Partnership to the Trustee for authentication, together with a Partnership Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Partnership Order shall authenticate and deliver such
Securities; provided, however, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Partnership or its duly authorized agents, thereafter promptly confirmed in
writing) acceptable to the Trustee as may be specified by or pursuant to a
Partnership Order delivered to the Trustee prior to the time of the first
authentication of Securities of such series. If the form or terms of the
Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, in
addition to any Officers' Certificate and Opinion of Counsel required to be
furnished to the Trustee pursuant to
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Section 102, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(1) The form and terms (or the manner of determining the terms) of
such Securities have been established by or pursuant to Board Resolution as
permitted by Section 201, that such form or forms have been established in
conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been, or in the case of
Securities of a series offered in a Periodic Offering, will be, established by
or pursuant to a Board Resolution as permitted by Section 301, that such terms
have been, or in the case of Securities of a series offered in a Periodic
Offering, will be, established in conformity with the provisions of this
Indenture, subject, in the case of Securities of a series offered in a Periodic
Offering, to any conditions specified in such Opinion of Counsel (which
conditions are reasonably acceptable to the Trustee); and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Partnership in the manner and subject to any
conditions specified in such Opinion of Counsel, which conditions are reasonably
acceptable to the Trustee, will constitute valid and legally binding obligations
of the Partnership enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles and entitled to the benefits of this
Indenture, equally and ratably with all other Securities, if any, of such Series
Outstanding; and
(4) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all conditions
precedent to the execution of the supplemental indenture with respect to that
series of Securities have been complied with, the Partnership has the power to
execute and deliver any such supplemental indenture and has taken all necessary
action for those purposes and any such supplemental indenture has been executed
and delivered and constitutes the legal, valid and binding obligation of the
Partnership enforceable in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws and legal principles affecting creditors'
rights generally from time to time in effect and to general equitable
principles, whether applied in an action at law or in equity).
If such form or forms or terms have been so established, the Trustee shall
not be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Partnership Order and Opinion of Counsel
or Board Resolution or supplemental indenture otherwise required
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pursuant to such preceding paragraph at or prior to the time of authentication
of each Security of such series if such documents are delivered at or prior to
the authentication upon original issuance of the first Security of such series
to be issued.
With respect to Securities of a series not to be originally issued at one
time, the Trustee may rely upon the Opinion of Counsel and the other documents
delivered pursuant to Sections 201 and 301 and this Section, as applicable, in
connection with the first authentication of Securities of such series and any
subsequent request by the Partnership to the Trustee to authenticate Securities
of such series upon original issuance shall constitute a representation and
warranty by the Partnership that as of the date of such request, the statements
made in the Officers' Certificate shall be true and correct as if made on such
date.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Partnership, and the Partnership shall deliver such Security to the Trustee for
cancellation as provided in Section 309 for all purposes of this Indenture, such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of Definitive Securities of any series, the
Partnership may execute, and upon receipt of the documents required by Section
303, together with a Partnership Order, the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Partnership will
cause Definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of Definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for Definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Partnership maintained pursuant to Section
1002 for the purpose of exchanges of Securities of such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Partnership shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more Definitive Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount and tenor. Until so exchanged the temporary Securities of any
series shall in all respects
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be entitled to the same benefits under this Indenture as Definitive Securities
of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Partnership shall cause to be kept at an office or agency of the
Security Registrar in The City of New York a register (the register maintained
in such office or in any other office or agency of the Partnership in a Place of
Payment being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Partnership
shall provide for the registration of Securities and of transfers of Securities.
The Partnership shall, prior to the issuance of any Securities hereunder,
appoint the Trustee as the initial "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided and its
corporate trust office which, at the date hereof, is located at 770 Broadway,
13th Floor, New York, New York, 10003, as the initial office or agency in The
City of New York where the Security Register will be maintained. The Partnership
may at any time replace such Security Registrar, change such office or agency or
act as its own Security Registrar. The Partnership will give prompt written
notice to the Trustee of any change of the Security Registrar or of the location
of such office or agency. At all reasonable times the Security Register shall be
available for inspection by the Trustee.
Upon surrender for registration of transfer of any Security of any series
at the office or agency of the Partnership maintained pursuant to Section 1002
for such purpose, the Partnership shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series (except a Global
Security) may be exchanged for other Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Partnership shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Partnership, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Partnership or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Partnership and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Partnership may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or
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exchange of Securities, other than exchanges pursuant to Section 304 or 1107 not
involving any transfer.
Neither the Trustee nor the Partnership shall be required (1) to issue,
register the transfer of or exchange Securities of any series (or of any series
and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of mailing of a notice of redemption
of Securities of that series selected for redemption under Section 1103 and
ending at the close of business on the day of such mailing, or (2) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding any other provision in this Indenture and except as
otherwise specified as contemplated by Section 301, no Global Security may be
transferred to, or registered or exchanged for Securities registered in the name
of, any Person other than the Depositary for such Global Security or any nominee
thereof, and no such transfer may be registered, except as provided in this
paragraph. Every Security authenticated and delivered upon registration or
transfer of, or in exchange for or in lieu of, a Global Security shall be a
Global Security, except as provided in this paragraph. If (1) (A) the Depositary
for a Global Security notifies the Partnership that it is unwilling or unable to
continue as Depositary for such Global Security or ceases to be a clearing
agency registered under the Exchange Act, and (B) a successor Depositary is not
appointed by the Partnership within 90 days, (2) an Event of Default has
occurred and is continuing with respect to the Securities of such series and the
Security Registrar has received a request from the Depositary to issue
certificated securities in lieu of all or a portion of the Global Securities of
such series (in which case the Partnership shall deliver certificated securities
within 30 days of such request) or (3) the Partnership determines in its sole
discretion that Securities of a series issued in global form shall no longer be
represented by a Global Security, then such Global Security may be exchanged by
such Depositary for Definitive Securities of the same series, of any authorized
denomination and of a like aggregate principal amount and tenor, registered in
the names of, and the transfer of such Global Security or portion thereof may be
registered to, such Persons as such Depositary shall direct.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, together with such
security or indemnity as may be required by the Partnership or the Trustee to
save each of them and any agent of either of them harmless, the Partnership
shall execute and upon its request the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously Outstanding.
If there shall be delivered to the Partnership and the Trustee (1) evidence
to their satisfaction of the destruction, loss or theft of any Security and (2)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Partnership or the Trustee that such Security has been acquired by a bona fide
purchaser, the Partnership shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not
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contemporaneously Outstanding. If, after the delivery of such new Security, a
bona fide purchaser of the original Security in lieu of which such new Security
was issued presents for payment or registration such original Security, the
Trustee shall be entitled to recover such new Security from the party to whom it
was delivered or any party taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Partnership and
the Trustee in connection therewith.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Partnership in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Partnership
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in exchange for
any mutilated Security or in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of the
Partnership, whether or not the mutilated, destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Partnership, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Partnership may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Partnership shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Security
of such series and the date of the proposed payment, and at the same time the
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Partnership shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Partnership of such Special Record Date and,
in the name and at the expense of the Partnership, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor
to be mailed, first-class postage prepaid, to each Holder of Securities of such
series at his address as it appears in the Security Register, not less than 10
days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Partnership may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange or automated quotation system on
which such Securities may be listed or traded, and upon such notice as may be
required by such exchange, if, after notice given by the Partnership to the
Trustee of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security, shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
For each series of Securities, the Partnership shall, prior to 10:30 a.m.
(New York City time) on each payment date for principal and premium, if any, and
interest, if any, deposit with the Trustee money in immediately available funds
sufficient to make cash payments due on the applicable payment date.
SECTION 308. Persons Deemed Owners.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, prior to due presentment of a Security for
registration of transfer, the Partnership, the Trustee and any agent of the
Partnership or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and any premium and (subject to Sections 305 and 307) any interest
on such Security and for all other purposes whatsoever, whether or not such
Security is overdue, and neither the Partnership, the Trustee nor any agent of
the Partnership or the Trustee shall be affected by notice to the contrary.
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No holder of any beneficial interestI in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Partnership,
the Trustee and any agent of the Partnership or the Trustee as the owner of such
Global Security for all purposes whatsoever. None of the Partnership, the
Trustee nor any agent of the Partnership or the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Partnership may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Partnership may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Partnership has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of in accordance with its
customary procedures, and the Trustee shall thereafter deliver to the
Partnership a certificate with respect to such disposition.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months and interest on the
Securities of each series for any partial period shall be computed on the basis
of a 360-day year of twelve 30-day months and the number of days elapsed in any
partial month.
SECTION 311. CUSIP Numbers.
The Partnership in issuing the Securities may use "CUSIP" numbers (in
addition to the other identification numbers printed on the Securities), and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such "CUSIP" numbers either
as printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Securities, and any such redemption shall not be affected by any defect in
or omission of such "CUSIP" numbers. The Partnership will promptly notify the
Trustee of any change in the "CUSIP" numbers.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Partnership Request cease to be of further effect
with respect to Securities of any series (except as to any surviving rights of
registration of transfer or exchange of such Securities herein expressly
provided for), and the Trustee, at the expense of the Partnership, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to such Securities, when
(1) either
(A) all such Securities theretofore authenticated and delivered
(other than (i) such Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, and (ii) such
Securities for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Partnership and thereafter repaid to the
Partnership or discharged from such trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable,
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii)are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Partnership,
and the Partnership in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
this purpose an amount of money in the currency or currency units in which such
Securities are payable sufficient to pay and discharge the entire indebtedness
on such Securities not theretofore delivered to the Trustee for cancellation,
for principal and any premium and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Partnership has paid or caused to be paid all other sums
payable hereunder by the Partnership with respect to such Securities; and
(3) the Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the
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satisfaction and discharge of this Indenture with respect to such Securities
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to Securities of any series, (x) the obligations of the Partnership and
the Guarantors to the Trustee under Section 607, the obligations of the
Guarantors under Section 1401, the obligations of the Trustee to any
Authenticating Agent under Section 614 and the right of the Trustee to resign
under Section 610 shall survive, and (y) if money shall have been deposited with
the Trustee pursuant to subclause (B) of Clause (1) of this Section, the
obligations of the Partnership and/or the Trustee under Sections 402, 606, 701
and 1002 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Partnership acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE V
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the performance, or breach, of any term, covenant
or warranty of the Partnership or any Guarantor in this Indenture (other than
a term, covenant or warranty a default in whose performance or whose breach
is elsewhere in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of series of Securities other
than that series) or the Guarantees, and continuance of such default or breach
for a period of 60 days after there has been given, by registered or certified
mail, to the Partnership or such Guarantor by the Trustee or to the Partnership
or such Guarantor and the Trustee by the
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Holders of at least 25% in principal amount of the Outstanding Securities of
that series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(4) the Partnership pursuant to or within the meaning of any
Bankruptcy Law (A) commences a voluntary case, (B) consents to the entry of any
order for relief against it in an involuntary case, (C) consents to the
appointment of a Custodian of it or for all or substantially all of its
property, or (D) makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (A) is for relief against the Partnership in an
involuntary case, (B) appoints a Custodian of the Partnership or for all or
substantially all of its property, or (C) orders the liquidation of the
Partnership; and the order or decree remains unstayed and in effect for 90
days; or
(6) any other Event of Default provided as contemplated by Section
301 with respect to Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of (or, if any of the Securities
of that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof),
and accrued but unpaid interest, if any, on all of the Securities of that series
to be due and payable immediately, by a notice in writing to the Partnership
(and to the Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Partnership and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Partnership has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities
of that series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed therefor
in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefor in such
Securities, and
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(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series which
have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Partnership covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Partnership will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Partnership fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Partnership, any Guarantor, or any other obligor upon such
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Partnership, any Guarantor, or
any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
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SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Partnership, any
Guarantor, or any other obligor upon the Securities, their property or their
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money or property collected or to be applied by the Trustee pursuant to
this Article shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money or property on
account of principal or any premium or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the
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amounts due and payable on such Securities for principal and any premium and
interest, respectively; and
THIRD: The balance, if any, to the Partnership.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered and, if requested, provided
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer and, if requested, provision of security or indemnity has failed to
institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Sections 305 and
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
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SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then in every such case, subject to any determination in such
proceeding, the Partnership, the Guarantors, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series shall 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
Securities of such series; provided, however, that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall determine that the
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proceeding so directed would involve the Trustee in personal liability or would
otherwise be contrary to applicable law.
SECTION 513. Waiver of Past Defaults.
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all the Securities of
such series waive any past default hereunder with respect to such series and its
consequences, except
(1) a continuing default in the payment of the principal of or any
premium or interest on any Security of such series, or
(2) a default in respect of a covenant or provision hereof which
under Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, however, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Trustee,
in any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of any
series to which the suit relates, or in any suit instituted by any Holder for
the enforcement of the payment of the principal of (or premium, if any) or
interest on any Security on or after the respective Stated Maturities expressed
by such Security (or, in the case of redemption or repayment, on or after the
Redemption Date).
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Partnership covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Partnership (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE VI
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with
respect to any series of Securities,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture with respect to the
Securities of such series, and no implied covenants or obligations shall read
into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may,
with respect to Securities of such series, conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series such rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(c) No provisions of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders or a majority in principal amount of the Outstanding
Securities of any series relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to the
Securities of such series; and
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(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 602. Notice of Defaults.
If a Default occurs and is continuing with respect to the Securities of any
series, the Trustee shall, within 90 days after it occurs, transmit, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of all uncured or unwaived Defaults known to it; provided, however, that,
except in the case of a Default in payment on the Securities of any series, the
Trustee shall be protected in withholding the notice if and so long as the board
of directors, the executive committee or a trust committee of directors or
responsible officers of the Trustee determine in good faith that withholding
such notice is in the interests of Holders of Securities of such series;
provided, further, however, that, in the case of any default or breach of the
character specified in Section 501(3) with respect to the Securities of such
series, no such notice to Holders shall be given until at least 60 days after
the occurrence thereof.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely on and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(2) any request, direction, order or demand of the Partnership
mentioned herein shall be sufficiently evidenced by a Partnership Request or
Partnership Order (or in the case of a Periodic Offering, as agreed in
procedures set forth in a Partnership Order pursuant to Section 303) and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in
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respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may, without obligation to do so, make such
further inquiry or investigation into such facts or matters as it may see fit;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee may request that the Partnership deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized
to sign an Officers' Certificate, including any person specified as so
authorized in any such certificate previously delivered and not superseded.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Partnership, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. Neither the Trustee nor any Authenticating
Agent makes any representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee or any Authenticating Agent shall
not be accountable for the use or application by the Partnership of Securities
or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Partnership, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Partnership with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
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SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Partnership.
SECTION 607. Compensation and Reimbursement.
The Partnership and the Guarantors jointly and severally agree:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
The obligations of the Partnership and the Guarantors under this Section to
compensate the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Without limiting any rights available to the Trustee under applicable law,
when the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 501(4) or Section 501(5), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any applicable Bankruptcy Law.
The provisions of this Section shall survive the satisfaction and discharge
of this Indenture and the defeasance of the Securities.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
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SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one or more Trustees hereunder with respect to
the Securities of each series, at least one of which shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus required by the Trust Indenture Act. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of a supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611. The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice thereof to the
Partnership and the Guarantors. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to the Securities of such series.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Partnership. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of removal, the removed Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Partnership, any Guarantor, or by any Holder who
has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Partnership, any
Guarantor, or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (A) the Partnership, acting
pursuant to the authority of a Board Resolution, may remove the Trustee with
respect to all Securities, or (B) subject to Section 514, any Holder who has
been a bona fide Holder of a
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Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Partnership, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Partnership, the Guarantors, and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611,
become the successor Trustee with respect to the Securities of such series and
to that extent supersede the successor Trustee appointed by the Partnership. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Partnership or the Holders and accepted appointment in
the manner required by Section 611, any Holder who has been a bona fide Holder
of a Security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Securities of
such series.
The Partnership shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(1) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Partnership, the Guarantors, and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Partnership, any Guarantor, or the successor Trustee,
such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(2) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Partnership, each Guarantor, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall
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execute and deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (A) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (B) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (C) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees as co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates, but, on request of
the Partnership, any Guarantor, or any successor Trustee, such retiring Trustee
shall, upon payment of its charges, duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(3) Upon request of any such successor Trustee, the Partnership
and the Guarantors shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in paragraph (1) or (2) of this Section, as the
case may be.
(4) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
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SECTION 613. Preferential Collection of Claims Against Partnership.
If and when the Trustee shall be or become a creditor of the Partnership,
any Guarantor, or any other obligor upon the Securities, the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Partnership, any such Guarantor, or any such other obligor.
SECTION 614. Appointment of Authenticating Agent.
The Trustee (upon notice to the Partnership and the Guarantors) may appoint
an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue (in accordance
with procedures acceptable to the Trustee) and upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Partnership and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of such Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or such Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee, to the Partnership, and to the Guarantors. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent, to the Partnership, and to
the Guarantors. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor
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Authenticating Agent which shall be acceptable to the Partnership. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
Except with respect to an Authenticating Agent appointed at the request of
the Partnership, the Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
U.S. TRUST COMPANY OF TEXAS, N.A.,
As Trustee
Date: _________________ By:_________________________________________
As Authenticating Agent
By:_________________________________________
Authorized Signatory
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND PARTNERSHIP
SECTION 701. Partnership to Furnish Trustee Names and Addresses of Holders.
The Partnership will furnish or cause to be furnished to the Trustee
(1) semi-annually, ot later than each Interest Payment Date in
each year, a list for each series of Securities, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities of
such series as of the preceding Regular Record Date, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Partnership of any such request, a list
of similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
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provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
The rights of the Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Partnership and the Trustee that neither the Partnership nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to the names and addresses of Holders made pursuant
to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
As promptly as practicable after each May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to July 15 in each
year, the Trustee shall mail to each Holder a brief report dated as of May 15
that complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b). Prior to delivery to the Holders, the Trustee shall deliver to
the Partnership a copy of any report it delivers to Holders pursuant to this
Section 703.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Partnership. The
Partnership will notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704. Reports by Partnership.
The Partnership shall:
(1) file with the Trustee, within 15 days after the Partnership
is required to file the same with the Commission copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Partnership may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Partnership is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee and the
Commission (unless the Commission will not accept such a filing), in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act in respect of a security
listed
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and registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Partnership with the condition and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Partnership pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Partnership and Guarantors May Consolidate, Etc., Only on Certain
Terms.
Neither the Partnership nor any Guarantor shall consolidate with or merge
into any other Person or sell, lease or transfer its properties and assets as,
or substantially as, an entirety to, any Person, unless:
(1) (A) in the case of a merger, the Partnership or such
Guarantor, as the case may be, is the surviving entity, or (B) the Person
formed by such consolidation or into which the Partnership or such Guarantor
is merged or the Person which acquires by sale or transfer, or which leases, the
properties and assets of the Partnership or such Guarantor as, or substantially
as, an entirety must expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all of the obligations of the Partnership or such Guarantor, as the
case may be, under this Indenture and the Securities;
(2) the surviving entity or successor Person is a Person
organized and existing under the laws of the U.S., any State thereof or the
District of Columbia;
(3) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(4) the Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, transfer or lease and the supplemental indenture required in
connection with such transaction comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
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SECTION 802. Successor Substituted.
Upon any consolidation of the Partnership or any Guarantor with, or merger
of the Partnership or any Guarantor into, any other Person or any sale, transfer
or lease of the properties and assets of the Partnership or any Guarantor as, or
substantially as, an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Partnership or such
Guarantor is merged or to which such sale, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Partnership or such Guarantor under this Indenture with the same effect as
if such successor Person had been named originally as the Partnership or such
Guarantor herein, and thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants under this Indenture
and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities, the Partnership, the
Guarantors and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to secure any of such Securities;
(2) to evidence the succession of another Person to the
Partnership or any Guarantor under this Indenture and the Securities and the
assumption by such successor Person of the obligations of the Partnership or
such Guarantor hereunder;
(3) reflect the release of any Guarantor from its Guarantee,
or the addition of any Subsidiary of the Partnership as a Guarantor, in the
manner provided by this Indenture;
(4) to add covenants and Events of Default for the benefit of
the Holders of all or any series of such Securities or to surrender any right
or power conferred by this Indenture upon the Partnership or a Guarantor;
(5) to add to, change or eliminate any of the provisions
of this Indenture, provided that any such addition, change or elimination shall
become effective only after there are no such Securities of any series entitled
to the benefit of such provision outstanding;
(6) to establish the forms or terms of the Securities of any
series issued hereunder;
(7) to cure any ambiguity or correct any inconsistency in this
Indenture;
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(8) to evidence the acceptance of appointment by a successor
Trustee with respect to one or more series of Securities or otherwise;
(9) to qualify this Indenture under the Trust Indenture Act;
(10) to provide for uncertificated securities in addition to
certificated securities;
(11) to supplement any provisions of this Indenture necessary to
permit or facilitate the defeasance and discharge of any series of Securities,
provided that such action does not adversely affect the interests of the
Holders of Securities of such series or any other series; and
(12) to comply with the rules or regulations of any securities
exchange or automated quotation system on which any of the Securities may
be listed or traded.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of all Outstanding Securities affected by such supplemental
indenture (voting as one class), the Partnership, the Guarantors and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture, or modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided that the
Partnership, the Guarantors and the Trustee may not, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest, if any, on, any Security, or reduce the
principal amount thereof or premium, if any, on or the rate of interest thereon
or alter the method of computation of interest;
(2) reduce the percentage in principal amount of Securities
required for any such supplemental indenture or for any waiver provided for
in this Indenture;
(3) change the Partnership's obligation to maintain an office or
agency for payment of Securities and the other matters specified herein;
(4) impair the right to institute suit for the enforcement of
any payment of principal of, premium, if any, or interest on, any Security; or
(5) modify any of the provisions of this Indenture relating to
the execution of supplemental indentures with the consent of Holders of
Securities which are discussed in this Section or modify any provisions
relating to the waiver by Holders of Securities of past defaults and
covenants, except to increase any required percentage or to provide that other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby.
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A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Partnership shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee, the Guarantors and the Partnership, to any such
supplemental indenture may be prepared and executed by the Partnership and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
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ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Partnership covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Partnership will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Partnership in respect of the Securities of that series and this
Indenture may be served. The Partnership will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Partnership shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Partnership hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Partnership may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Partnership of its obligation to maintain an
office or agency in each Place of Payment for Securities of any series for such
purposes. The Partnership will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Except as otherwise specified with respect to a series of Securities as
contemplated by Section 301, the Partnership hereby initially designates as the
Place of Payment for each series of Securities The City of New York, and
initially appoints the Trustee Paying Agent at its corporate trust office
located at 770 Broadway, 13th Floor, New York, New York 10003 as the
Partnership's office or agency for each such purpose in such city.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Partnership or any of its Subsidiaries shall at any time act as
Paying Agent with respect to any series of Securities, it will, on or before
each due date of the principal of or any premium or interest on any of the
Securities of that series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and any premium
and interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
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Whenever the Partnership shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Partnership will promptly notify the Trustee of its action or
failure so to act.
The Partnership will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) hold all sums held by it for
the payment of the principal of (and premium, if any) or interest, if any, on
Securities of that series in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided; (2) give the Trustee notice of any default by the
Partnership or any Guarantor (or any other obligor upon the Securities of that
series) in the making of any payment of principal (and premium, if any) or
interest, if any, on the Securities of that series; and (3) during the
continuance of any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Partnership may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Partnership Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Partnership, any Guarantor or such Paying Agent, such sums
to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Partnership, such Guarantor or such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for the
payment of the principal of or any premium or interest on any Security of any
series and remaining unclaimed for two years after such principal, premium or
interest has become due and payable shall be paid to the state which escheat
laws control and the Trustee or any Paying Agent shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the state which escheat laws control for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Partnership as trustee thereof, shall thereupon
cease.
SECTION 1004. Statement by Officers as to Default.
The Partnership will deliver to the Trustee, within 150 days after the end
of each fiscal year of the Partnership ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signer thereof the Partnership or any Guarantor is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Partnership or any Guarantor shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
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SECTION 1005. Existence.
Subject to Article VIII, the Partnership will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Partnership shall not be required to preserve any such right or franchise if it
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Partnership.
SECTION 1006. Limitations on Liens.
The Partnership will not, nor will it permit any Subsidiary to, create,
assume, incur or suffer to exist any Lien upon any Principal Property, or upon
any shares of capital stock of any Subsidiary owning or leasing any Principal
Property, whether owned or leased on the date of this Indenture or thereafter
acquired, to secure any Debt of the Partnership or any other Person (other than
the Securities issued hereunder), without in any such case making effective
provision whereby all of the Securities Outstanding hereunder shall be secured
equally and ratably with, or prior to, such Debt so long as such Debt shall be
so secured. This restriction shall not apply to:
(1) Permitted Liens;
(2) any Lien upon any property or assets created at the time of
acquisition of such property or assets by the Partnership or any Subsidiary or
within one year 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 one year after
the date of such acquisition;
(3) any Lien upon any property or assets to secure all or part
of the cost of construction, development, repair or improvements thereon or to
secure Debt incurred prior to, at the time of, or within one year after
completion of such construction, development, repair or improvements or the
commencement of full operations thereof (whichever is later), to provide funds
for any such purpose;
(4) any Lien upon any property or assets existing thereon at the
time of the acquisition thereof by the Partnership or any Subsidiary (whether or
not the obligations secured thereby are assumed by the Partnership or any
Subsidiary); provided, however, that such Lien only encumbers the property or
assets so acquired;
(5) any Lien upon any property or assets of a Person existing
thereon at the time such Person becomes a Subsidiary by acquisition, merger or
otherwise; provided, however, that such Lien only encumbers the property or
assets of such Person at the time such Person becomes a Subsidiary;
(6) any Lien upon any property or assets of the Partnership
or any Subsidiary in existence on the Issue Date or provided for pursuant to
agreements existing on the Issue Date;
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(7) Liens imposed by law or order as a result of any proceeding
before any court or regulatory body that is being contested in good faith, and
Liens which secure a judgment or other court-ordered award or settlement as to
which the Partnership or the applicable Subsidiary, as the case may be, has not
exhausted its appellate rights;
(8) any extension, renewal, refinancing, refunding or
replacement (or successive extensions, renewals, refinancing, refunding or
replacements) of Liens, in whole or in part, referred to in Clauses (1) through
(7), inclusive, of this Section; provided, however, that any such extension,
renewal, refinancing, refunding or replacement Lien shall be limited to the
property or assets covered by the Lien extended, renewed, refinanced, refunded
or replaced and that the obligations secured by any such extension, renewal,
refinancing, refunding or replacement Lien shall be in an amount not greater
than the amount of the obligations secured by the Lien extended, renewed,
refinanced, refunded or replaced and any expenses of the Partnership and its
Subsidiaries (including any premium) incurred in connection with such extension,
renewal, refinancing, refunding or replacement; or
(9) any Lien resulting from the deposit of moneys or evidence of
indebtedness in trust for the purpose of defeasing Debt of the Partnership or
any Subsidiary.
Notwithstanding the foregoing provisions of this Section, the Partnership
may, and may permit any Subsidiary to, create, assume, incur or suffer to exist
any Lien upon any Principal Property to secure Debt of the Partnership or any
Person (other than the Securities) that is not excepted by Clauses (1) through
(9), inclusive, of this Section without securing the Securities issued
hereunder, provided that the aggregate principal amount of all Debt then
outstanding secured by such Lien and all similar Liens, together with all
Attributable Indebtedness from Sale-Leaseback Transactions (excluding
Sale-Leaseback Transactions permitted by Clauses (1) through (4), inclusive, of
Section 1007), does not exceed 10% of Consolidated Net Tangible Assets.
SECTION 1007. Restriction of Sale-Leaseback Transaction.
The Partnership will not, and will not permit any Subsidiary to, engage in
a Sale-Leaseback Transaction, unless:
(1) such Sale-Leaseback Transaction occurs within one year from
the date of completion of the acquisition of the Principal Property subject
thereto or the date of the completion of construction, development or
substantial repair or improvement, or commencement of full operations on such
Principal Property, whichever is later;
(2) the Sale-Leaseback Transaction involves a lease for a
period, including renewals, of not more than three years;
(3) the Partnership or such Subsidiary would be entitled to
incur Debt secured by a Lien on the Principal Property subject thereto in a
principal amount equal to or exceeding the Attributable Indebtedness from
such Sale-Leaseback Transaction without equally and ratably securing the
Securities; or
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(4) the Partnership or such Subsidiary, within a one-year period
after such Sale-Leaseback Transaction, applies or causes to be applied an amount
not less than the Attributable Indebtedness from such Sale-Leaseback Transaction
to (A) the prepayment, repayment, redemption, reduction or retirement of Pari
Passu Debt of the Partnership or any Subsidiary, or (B) the expenditure
or expenditures for Principal Property used or to be used in the ordinary course
of business of the Partnership or its Subsidiaries.
Notwithstanding the foregoing provisions of this Section, the Partnership
may, and may permit any Subsidiary to, effect any Sale-Leaseback Transaction
that is not excepted by Clauses (1) through (4), inclusive, of this Section,
provided that the Attributable Indebtedness from such Sale-Leaseback
Transaction, together with the aggregate principal amount of then outstanding
Debt (other than the Securities) secured by Liens upon Principal Properties not
excepted by Clauses (1) through (9), inclusive, of Section 1006, do not exceed
10% of the Consolidated Net Tangible Assets.
SECTION 1008. Waiver of Certain Covenants.
The Partnership may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1005, 1006 or 1007 with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of all affected series (voting as one class) shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Partnership and the Guarantors and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
A waiver which changes or eliminates any term, provision or condition of
this Indenture which has expressly been included solely for the benefit of one
or more particular series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such term, provision or
condition, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
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SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Partnership to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the
Partnership of less than all the Securities of any series, the Partnership
shall, not less than 35 nor more than 60 days prior to the Redemption Date fixed
by the Partnership (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities (1) prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, or (2) pursuant to an election
of the Partnership which is subject to a condition specified in the terms of
such Securities, the Partnership shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed),
the particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, on a pro rata basis or by any
other method which the Trustee deems fair and appropriate and which complies
with any securities exchange or other applicable requirements for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Partnership in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail (if international
mail, by air mail), postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
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(3) if less than all the Outstanding Securities of any series
and of a specified tenor are to be redeemed, the identification (and, in the
case of partial redemption of any Securities, the principal amounts) of the
particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest thereon
will cease to accrue on and after said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed shall be given by the
Partnership or, at the Partnership's request, by the Trustee in the name and at
the expense of the Partnership.
SECTION 1105. Deposit of Redemption Price.
On or prior to 10:30 a.m. New York City Time on any Redemption Date, the
Partnership shall deposit with the Trustee or with a Paying Agent (or, if the
Partnership is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Partnership shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Partnership at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 301, installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
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SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Partnership or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Partnership and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Partnership shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like
tenor, of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Partnership (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption), and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Partnership pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities (unless a shorter period shall be satisfactory to the
Trustee), the Partnership will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202 and stating the basis for such credit and that such Securities have
not been previously so credited, and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Partnership in the manner provided in Section 1104. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Sections 1106 and 1107.
ARTICLE XIII
DEFEASANCE
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to each series of
Securities except as otherwise specified as contemplated by Section 301 for
Securities of such series.
SECTION 1302. Legal Defeasance.
In addition to discharge of the Indenture pursuant to Section 401, the
Partnership shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series on the 91st day after the date of the
deposit referred to in Clause (1) below, and the provisions of this Indenture
with respect to the Securities of such series shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of Securities
of such series and the Partnership's right of optional redemption, if any, (ii)
substitution of mutilated, destroyed, lost or stolen Securities, (iii) rights of
Holders of Securities to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor or on the specified
redemption dates therefor (but not upon acceleration), and remaining rights of
the holders to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, and the
Partnership's and Guarantors' obligations in connection therewith (including,
but not limited to, Section 607), (v) the rights, if any, to convert or exchange
the Securities of such series, (vi) the rights of the Holders of Securities of
such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, and (vii) the obligations of the
Partnership under Section 1002), and the Trustee, at the expense of the
Partnership, shall, upon a Partnership Request, execute proper instruments
acknowledging the same, if the conditions set forth below are satisfied
(hereinafter, "defeasance"):
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(1) The Partnership has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust, for the purposes of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of the Securities of such series (A) cash
in an amount, or (B) in the case of any series of Securities the payments on
which may only be made in legal coin or currency of the United States, U.S.
Government Obligations, maturing as to principal and interest at such times
and in such amounts as will insure the availability of cash, or (C) a
combination thereof, certified to be sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (i) the principal and
interest and premium, if any, on all Securities of such series on each date that
such principal, interest or premium, if any, is due and payable or on any
Redemption Date established pursuant to Clause (3) below, and (ii) any
mandatory sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of the Indenture and the Securities of such
series;
(2) The Partnership has delivered to the Trustee an Opinion of
Counsel based on the fact that (A) the Partnership has received from, or there
has been published by, the Internal Revenue Service a ruling, or (B) since
the date hereof, there has been a change in the applicable federal income tax
law, in either case to the effect that, and such opinion shall confirm that, the
Holders of the Securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred;
(3) If the Securities are to be redeemed prior to Stated
Maturity (other than from mandatory sinking fund payments or analogous
payments), notice of such redemption shall have been duly given pursuant to this
Indenture or
provision therefor satisfactory to the Trustee shall have been made;
(4) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default shall have occurred and be
continuing on the date of such deposit;
(5) Such defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of the Trust Indenture Act (assuming all
Securities are in default within the meaning of such Act);
(6) Such defeasance shall not result in a breach or violation
of, or constitute a default under, any other agreement or instrument to which
the Partnership is a party or by which it is bound;
(7) Such defeasance shall not result in the trust arising from
such deposit constituting an investment company within the meaning of the
Investment Company Act of 1940, as amended, unless such trust shall be
registered under such Act or exempt from registration thereunder; and
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(8) The Partnership has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this provision
have been complied with.
For this purpose, such defeasance means that the Partnership, the Guarantors,
and any other obligor upon the Securities of such series shall be deemed to have
paid and discharged the entire debt represented by the Securities of such
series, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 1304 and the rights and obligations referred to in Clauses
(i) through (vii), inclusive, of the first paragraph of this Section, and to
have satisfied all its other obligations under the Securities of such series and
this Indenture insofar as the Securities of such series are concerned.
SECTION 1303. Covenant Defeasance.
The Partnership and any other obligor, including the Guarantors, shall be
released on the 91st day after the date of the deposit referred to in Clause (1)
below from its obligations under Sections 704, 801, 1005, 1006 and 1007 with
respect to the Securities of any series on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"), and the
Securities of such series shall thereafter be deemed to be not "Outstanding" for
the purposes of any request, demand, authorization, direction, notice, waiver,
consent or declaration or other action or Act of Holders (and the consequences
of any thereof) in connection with such covenants, but shall continue to be
deemed Outstanding for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to the Securities of such series,
the Partnership and the Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section, whether directly or indirectly by reason of any reference elsewhere
herein to such Section or by reason of any reference in such Section to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 501, but,
except as specified above, the remainder of this Indenture and the Securities of
such series shall be unaffected thereby. The following shall be the conditions
to application of this Section 1303:
(1) The Partnership has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such series, (A) cash in an
amount, or (B) in the case of any series of Securities the payments on which may
only be made in legal coin or currency of the United States, U.S.
Government Obligations, maturing as to principal and interest at such times and
in such amounts as will insure the availability of cash, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (i) the principal and interest and premium,
if any, on all Securities of such series on each date that such principal,
interest or premium, if any, is due and payable or on any Redemption Date
established pursuant to Clause (2) below, and (ii) any mandatory sinking fund
payments on the day on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series;
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(2) If the Securities are to be redeemed prior to Stated Maturity
(other than from mandatory sinking fund payments or analogous payments), notice
of such redemption shall have been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee shall have been made;
(3) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default shall have occurred and be continuing
on the date of such deposit;
(4) The Partnership has delivered to the Trustee an Opinion of
Counsel which shall confirm that the Holders of the Securities of such series
will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit and covenant defeasance and will be subject to federal
income tax on the same amount and in the same manner and at the same time as
would have been the case if such deposit and covenant defeasance had not
occurred;
(5) Such covenant defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of the Trust Indenture Act (assuming all
Securities are in default within the meaning of such Act);
(6) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or instrument
to which the Partnership is a party or by which it is bound;
(7) Such covenant defeasance shall not result in the trust arising
from such deposit constituting an investment company within the meaning of the
Investment Company Act of 1940, as amended, unless such trust shall be
registered under such Act or exempt from registration thereunder; and
(8) The Partnership has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel stating that all conditions precedent
provided for relating to the covenant defeasance contemplated by this provision
have been complied with.
SECTION 1304. Application by Trustee of Funds Deposited for Payment of
Securities.
Subject to the provisions of the last paragraph of Section 1003, all
moneys or U.S. Government Obligations deposited with the Trustee pursuant to
Section 1302 or 1303 (and all funds earned on such moneys or U.S. Government
Obligations) shall be held in trust and applied by it to the payment, either
directly or through any Paying Agent (including the Partnership acting as its
own Paying Agent), to the Holders of the particular Securities of such series
for the payment or redemption of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest;
but such money need not be segregated from other funds except to the extent
required by law. Subject to Sections 1302 and 1303, the Trustee shall promptly
pay to the Partnership upon Partnership Order any moneys held by it at any time,
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification delivered to the Trustee, are
in excess of the amounts required to effect the defeasance with respect to the
Outstanding Securities in question.
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SECTION 1305. Repayment to Partnership.
The Trustee and any Paying Agent promptly shall pay or return to the
Partnership upon Partnership Request any money and U.S. Government Obligations
held by them at any time that are not required for the payment of the principal
of and any interest on the Securities of any series for which money or U.S.
Government Obligations have been deposited pursuant to Section 1302 or 1303,
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification delivered to the Trustee, are
in excess of the amounts required to effect the defeasance with respect to the
Outstanding Securities in question.
The provisions of the last paragraph of Section 1003 shall apply to any
money held by the Trustee or any Paying Agent under this Article that remains
unclaimed for two years after the Maturity of any series of Securities for which
money or U.S. Government Obligations have been deposited pursuant to Section
1302 or 1303.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money or U. S.
Government Obligations in accordance with this Article by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
obligations of the Partnership and any Guarantors under this Indenture and the
Securities of the applicable series shall be revived and reinstated as though no
deposit had occurred pursuant to this Indenture until such time as the Trustee
or the Paying Agent is permitted to apply all such money or U. S. Government
Obligations in accordance with this Article; provided, however, that if the
Partnership or any Guarantor has made any payment of principal of or interest on
any Securities of such series because of the reinstatement of its obligations,
the Partnership or such Guarantor shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or the Paying Agent.
ARTICLE XIV
GUARANTEES OF SECURITIES
SECTION 1401. Unconditional Guarantees.
(1) For value received, the Guarantors, jointly and severally,
hereby fully, unconditionally and absolutely guarantee (the "Guarantees") to the
Holders and to the Trustee the due and punctual payment of the principal of, and
premium, if any, and interest on the Securities and all other amounts due and
payable under this Indenture and the Securities by the Partnership, when and as
such principal, premium, if any, and interest shall become due and payable,
whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise, according to the terms of the Securities and this
Indenture.
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(2) Failing payment when due of any amount guaranteed pursuant to
the Guarantees, for whatever reason, each Guarantor will be obligated to pay the
same immediately. Each Guarantee hereunder is intended to be a general,
unsecured, senior obligation of each Guarantor and will rank pari passu in right
of payment with all Debt of each such Guarantor that is not, by its terms,
expressly subordinated in right of payment to the Guarantee of such Guarantor.
Each of the Guarantors hereby agrees that its obligations hereunder shall be
full, unconditional and absolute, irrespective of the validity, regularity or
enforceability of the Securities, the Guarantees or this Indenture, the absence
of any action to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, any release of any
other Guarantor, the recovery of any judgment against the Partnership, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each of the
Guarantors hereby agrees that in the event of a default in payment of the
principal of, or premium, if any, or interest on the Securities, whether at the
stated maturity or by declaration of acceleration, call for redemption or
otherwise, legal proceedings may be instituted by the Trustee on behalf of the
Holders or, subject to Section 507, by the Holders, on the terms and conditions
set forth in this Indenture, directly against each of the Guarantors to enforce
the Guarantees without first proceeding against the Partnership.
(3) The obligations of each Guarantor under this Article XIV shall
be as aforesaid full, unconditional and absolute and shall not be impaired,
modified, released or limited by any occurrence or condition whatsoever,
including, without limitation, (A) any compromise, settlement, release, waiver,
renewal, extension, indulgence or modification of, or any change in, any of the
obligations and liabilities of the Partnership or any Guarantor contained in the
Securities or this Indenture, (B) any impairment, modification, release or
limitation of the liability of the Partnership, any Guarantor or any of their
estates in bankruptcy, or any remedy for the enforcement thereof, resulting from
the operation of any present or future provision of any applicable Bankruptcy
Law, as amended, or other statute or from the decision of any court, (C) the
assertion or exercise by the Partnership, any Guarantor or the Trustee of any
rights or remedies under the Securities or this Indenture or their delay in or
failure to assert or exercise any such rights or remedies, (D) the assignment or
the purported assignment of any property as security for the Securities,
including all or any part of the rights of the Partnership or any Guarantor
under this Indenture, (E) the extension of the time for payment by the
Partnership or any Guarantor of any payments or other sums or any part thereof
owing or payable under any of the terms and provisions of the Securities or this
Indenture or of the time for performance by the Partnership or any Guarantor of
any other obligations under or arising out of any such terms and provisions or
the extension or the renewal of any thereof, (F) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the
Partnership or any Guarantor set forth in this Indenture, (G) the voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all of the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting, the Partnership or any of the Guarantors or any of their
respective assets, or the disaffirmance of the Securities, the Guarantees or
this Indenture in any such proceeding, (H) the release or discharge of the
Partnership or any Guarantor from the performance or observance of any
agreement, covenant, term or condition contained in any of such instruments by
operation of
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law, (I) the unenforceability of the Securities, the Guarantees or this
Indenture or (J) any other circumstance which might otherwise constitute a legal
or equitable discharge of a surety or guarantor.
(4) The Guarantors each hereby (A) waive diligence, presentment,
demand of payment, filing of claims with a court in the event of the merger,
insolvency or bankruptcy of the Partnership or a Guarantor, and all demands
whatsoever, (B) acknowledges that any agreement, instrument or document
evidencing the Guarantees may be transferred and that the benefit of its
obligations hereunder shall extend to each holder of any agreement, instrument
or document evidencing the Guarantees without notice to them and (C) covenants
that its Guarantee will not be discharged except by complete performance of the
Guarantees. Each Guarantor further agrees that if at any time all or any part of
any payment theretofore applied by any person to any Guarantee is, or must be,
rescinded or returned for any reason whatsoever, including without limitation,
the insolvency, bankruptcy or reorganization of the Partnership or any
Guarantor, such Guarantee shall, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence notwithstanding
such application, and the Guarantees shall continue to be effective or be
reinstated, as the case may be, as though such application had not been made.
(5) Each Guarantor shall be subrogated to all rights of the Holders
and the Trustee against the Partnership in respect of any amounts paid by such
Guarantor pursuant to the provisions of this Indenture, provided, however, that
no Guarantor shall be entitled to enforce or to receive any payments arising out
of, or based upon, such right of subrogation until all of the Securities and the
Guarantees shall have been paid in full or discharged.
(6) A director, officer, employee or stockholder, as such, of any
Guarantor shall not have any liability for any obligations of such Guarantor
under this Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation.
SECTION 1402. Limitation of Guarantor's Liability.
Each Guarantor and by its acceptance hereof each Holder hereby confirms
that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any federal, state or foreign law. To effectuate the
foregoing intention, the Holders and each Guarantor hereby irrevocably agree
that the obligations of each Guarantor under its Guarantee shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to Section
1403, result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal, state
or foreign law.
SECTION 1403. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any
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Guarantor (a "Funding Guarantor") under its Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Guarantor (including the Funding
Guarantor) for all payments, damages and expenses incurred by the Funding
Guarantor in discharging the Partnership's obligations with respect to the
Securities or any other Guarantor's obligations with respect to its Guarantee.
SECTION 1404. Execution and Delivery of Guarantees.
To further evidence the Guarantees set forth in Section 1401, each
Guarantor hereby agrees that a notation relating to such Guarantees shall be
endorsed on each Security authenticated and delivered by the Trustee and
executed by either manual or facsimile signature of two officers of each
Guarantor.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 1401 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation relating to such Guarantee.
If an officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guarantee of such Security
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
SECTION 1405. Addition of Guarantors.
(1) If any Subsidiary of the Partnership guarantees any Funded Debt
of the Partnership other than the Securities at any time subsequent to the Issue
Date (including, without limitation, following any release of such Subsidiary
pursuant to Section 1406 from any Guarantee previously provided by it under this
Article XIV), then the Partnership shall (A) cause the Securities to be equally
and ratably guaranteed by such Subsidiary, but only to the extent that the
Securities are not already guaranteed by such Subsidiary on reasonably
comparable terms and (B) cause such Subsidiary to execute and deliver a
supplemental indenture evidencing its provision of a Guarantee in accordance
with clause (2) below.
(2) Any Person that was not a Guarantor on the Issue Date may become
a Guarantor by executing and delivering to the Trustee (A) a supplemental
indenture in form and substance satisfactory to the Trustee, which subjects such
Person to the provisions (including the representations and warranties) of this
Indenture as a Guarantor and (B) an Opinion of Counsel and Officers' Certificate
to the effect that such supplemental indenture has been duly authorized and
executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to such customary exceptions
concerning creditors' rights and equitable principles as may be acceptable to
the Trustee in its discretion and provided that no opinion need be rendered
concerning the enforceability of the Guarantee).
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SECTION 1406. Release of Guarantee.
Notwithstanding anything to the contrary in this Article XIV, in the event
that any Guarantor shall no longer be a guarantor of any Funded Debt of the
Partnership other than the Securities, and so long as no Default or Event of
Default shall have occurred or be continuing, such Guarantor, upon giving notice
to the Trustee to the foregoing effect, shall be deemed to be released from all
of its obligations under this Indenture and the Guarantee of such Guarantor
shall be of no further force or effect. Following the receipt by the Trustee of
any such notice, the Partnership shall cause this Indenture to be amended as
provided in Section 901; provided, however, that the failure to so amend this
Indenture shall not affect the validity of the termination of the Guarantee of
such Guarantor.
SECTION 1407. Consent to Jurisdiction and Service of Process.
Each Guarantor that is not organized under the laws of the United States
(including the States and the District of Columbia) (each a "Non-U.S.
Guarantor") hereby appoints the principal office of CT Corporation System in The
City of New York which, on the date hereof, is located at 1633 Broadway, New
York, New York 10019, as the authorized agent thereof (the "Authorized Agent")
upon whom process may be served in any action, suit or proceeding arising out of
or based on this Indenture or the Securities which may be instituted in the
Supreme Court of the State of New York or the United States District Court for
the Southern District of New York, in either case in The Borough of Manhattan,
The City of New York, by the Holder of any Security, and each Non-U.S. Guarantor
hereby waives any objection which it may now or hereafter have to the laying of
venue of any such proceeding and expressly and irrevocably accepts and submits,
for the benefit of the Holders from time to time of the Securities, to the
nonexclusive jurisdiction of any such court in respect of any such action, suit
or proceeding, for itself and with respect to its properties, revenues and
assets. Such appointment shall be irrevocable unless and until the appointment
of a successor authorized agent for such purpose, and such successor's
acceptance of such appointment, shall have occurred. Each Non-U.S. Guarantor
agrees to take any and all actions, including the filing of any and all
documents and instruments, that may be necessary to continue such appointment in
full force and effect as aforesaid. Service of process upon the Authorized Agent
with respect to any such action shall be deemed, in every respect, effective
service of process upon any such Non-U.S. Guarantor. Notwithstanding the
foregoing, any action against any Non-U.S. Guarantor arising out of or based on
any Security may also be instituted by the Holder of such Security in any court
in the jurisdiction of organization of such Non-U.S. Guarantor, and such
Non-U.S. Guarantor expressly accepts the jurisdiction of any such court in any
such action. The Partnership shall require the Authorized Agent to agree in
writing to accept the foregoing appointment as agent for service of process.
SECTION 1408. Waiver of Immunity.
To the extent that any Non-U.S. Guarantor or any of its properties, assets
or revenues may have or may hereafter become entitled to, or have attributed to
it, any right of immunity, on the grounds of sovereignty or otherwise, from any
legal action, suit or proceeding, from the giving of any relief in any thereof,
from set-off or counterclaim, from the jurisdiction of any
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court, from service of process, from attachment upon or prior to judgment, from
attachment in aid of execution of judgment, or from execution of judgment, or
other legal process or proceeding for the giving of any relief or for the
enforcement of any judgment, in any jurisdiction in which proceedings may at any
time be commenced, with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Indenture or the
Securities, such Non-U.S. Guarantor, to the maximum extent permitted by law,
hereby irrevocably and unconditionally waives, and agrees not to plead or claim,
any such immunity and consents to such relief and enforcement.
SECTION 1409. Judgment Currency.
Each Non-U.S. Guarantor agrees to indemnify the Trustee and each Holder
against any loss incurred by it as a result of any judgment or order being given
or made and expressed and paid in a currency (the "Judgment Currency") other
than United States dollars and as a result of any variation as between (A) the
rate of exchange at which the United States dollar amount is converted into the
Judgment Currency for the purpose of such judgment or order and (B) the spot
rate of exchange in The City of New York at which the Trustee or such Holder on
the date of payment of such judgment or order is able to purchase United States
dollars with the amount of the Judgment Currency actually received by the
Trustee or such Holder. The foregoing indemnity shall constitute a separate and
independent obligation of each Non-U.S. Guarantor and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, United States
dollars.
This instrument may be executed with counterpart signature pages or in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
KINDER MORGAN ENERGY PARTNERS, L. P.
By: Kinder Morgan G.P., Inc.,
Its General Partner
By: /s/ Richard D. Kinder
----------------------------------
Name: Richard D. Kinder
Title: Chairman
U.S. TRUST COMPANY OF TEXAS, N.A.
By: /s/ John C. Stohlmann
----------------------------------
Name: John C. Stohlmann
Title: Vice president
76
<PAGE>
FORM OF GUARANTEES
Each Guarantor (which term includes any successor person under the
Indenture), has fully, unconditionally and absolutely guaranteed, to the extent
set forth in the Indenture and subject to the provisions in the Indenture, the
due and punctual payment of the principal of, and premium, if any, and interest
on the Securities and all other amounts due and payable under the Indenture and
the Securities by the Partnership.
The obligations of the Guarantors to the Holders of Securities and to the
Trustee pursuant to the Guarantees and the Indenture are expressly set forth in
Article XIV of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Guarantees.
KINDER MORGAN OPERATING L.P. "A"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
-----------------------------------
Richard D. Kinder
Chairman
KINDER MORGAN OPERATING L.P. "B"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
-----------------------------------
Richard D. Kinder
Chairman
KINDER MORGAN OPERATING L.P. "C"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
-----------------------------------
Richard D. Kinder
Chairman
KINDER MORGAN OPERATING L.P. "D"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
-----------------------------------
Richard D. Kinder
Chairman
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KINDER MORGAN BULK TERMINALS, INC.
By: /s/ Richard D. Kinder
-----------------------------------
Richard D. Kinder
Chairman
KINDER MORGAN NATURAL GAS LIQUIDS CORPORATION
By: /s/ Richard D. Kinder
-----------------------------------
Richard D. Kinder
Chairman
KINDER MORGAN CO2, LLC
By: Kinder Morgan Operating L.P. "A"
By: Kinder Morgan G.P., Inc.
By: /s/ Richard D. Kinder
-----------------------------------
Richard D. Kinder
Chairman
KINDER MORGAN ENERGY PARTNERS, L. P.
Issuer
THE GUARANTORS NAMED HEREIN
as Guarantors
and
U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of January 29, 1999
6.30 % Senior Notes Due February 1, 2009
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of January 29, 1999 (herein
called the "First Supplemental Indenture"), between KINDER MORGAN ENERGY
PARTNERS, L. P., a Delaware limited partnership (herein called the
"Partnership"), having its principal office at 1301 McKinney Street, Suite 3450,
Houston, Texas 77010, the Guarantors named herein and U.S. TRUST COMPANY OF
TEXAS, N.A., a banking corporation duly organized and existing under the laws of
the State of New York, as trustee under the Indenture referred to below (herein
called the "Trustee").
RECITALS OF THE PARTNERSHIP
WHEREAS, the Partnership has heretofore executed and delivered to the
Trustee the Indenture, dated as of January 29, 1999 (herein called the
"Indenture"), providing for the issuance from time to time of one or more series
of the Partnership's unsecured senior debentures, notes or other evidences of
indebtedness (herein called the "Securities"); and
WHEREAS, Section 301 of the Indenture provides that various matters with
respect to any series of Securities issued under the Indenture may be
established in an indenture supplemental to the Indenture; and
WHEREAS, Section 901(6) of the Indenture provides that the Partnership,
the Guarantors and the Trustee may enter into indentures supplemental to the
Indenture for the purpose of establishing the form or terms of the Securities of
any series as permitted in Sections 201 and 301 of the Indenture; and
WHEREAS, the Partnership desires to create a series of the Securities in
an aggregate principal amount of up to $250,000,000, which series shall be
designated the 6.30% Senior Notes Due February 1, 2009 (the "Notes"), and all
action on the part of the Partnership necessary to authorize the issuance of the
Notes under the Indenture and this First Supplemental Indenture has been duly
taken; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Partnership and completed, authenticated and delivered by the Trustee as
provided in the Indenture and this First Supplemental Indenture, the valid and
binding obligations of the Partnership and to constitute these presents a valid
and binding supplemental indenture and agreement according to its terms, have
been done and performed;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
That in consideration of the premises and the issuance of the Notes, the
Partnership covenants and agrees with the Trustee, for the equal and
proportionate benefit of all holders of the Notes, as follows:
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<PAGE>
ARTICLE I
Relation to Indenture; Definitions
SECTION 1.01 This First Supplemental Indenture constitutes an integral part of
the Indenture.
SECTION 1.02 For all purposes of this First Supplemental Indenture:
(1) Capitalized terms used herein shall have the meanings
specified herein or in the Indenture, as the case may be;
(2) "Make-Whole Premium" with respect to any Note (or portion
thereof) to be redeemed will be equal to the excess, if any, of (i) the sum of
the present values, calculated as of the Redemption Date, of (a) each interest
payment that, but for such redemption, would have been payable on the Note (or
portion thereof) being redeemed on each Interest Payment Date occurring after
the Redemption Date (excluding any accrued interest for the period prior to the
Redemption Date) and (b) the principal amount that, but for such redemption,
would have been payable at the final maturity of the Note (or portion thereof)
being redeemed, over (ii) the principal amount of the Note (or portion thereof)
being redeemed. The present value of interest and principal payments referred to
in clause (i) will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
Redemption Date at a discount rate equal to the Treasury Yield plus 25 basis
points.
(3) "Treasury Yield" means a rate of interest per annum equal to
the weekly average yield to maturity of United States Treasury Notes that have a
constant maturity that corresponds to the remaining term to maturity of the
Notes, calculated to the nearest 1/12 of a year (the "Remaining Term"). The
Treasury Yield will be determined as of the third business day immediately
preceding the applicable Redemption Date. The weekly average yields of United
States Treasury Notes will be determined by reference to the most recent
statistical release published by the Federal Reserve Bank of New York and
designated "H.15(519) Selected Interest Rates" or any successor release (the
"H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly
average yield for United States Treasury Notes having a constant maturity that
is the same as the Remaining Term, then the Treasury Yield will be equal to such
weekly average yield. In all other cases, the Treasury Yield will be calculated
by interpolation, on a straight-line basis, between the weekly average yields on
the United States Treasury Notes that have a constant maturity closest to and
greater than the Remaining Term and the United States Treasury Notes that have a
constant maturity closest to and less than the Remaining Term (in each case as
set forth in the H.15 Statistical Release). Any weekly average yields so
calculated by interpolation will be rounded to the nearest 1/100th of 1%, with
any figure of 1/200% or above being rounded upward. If weekly average yields for
United States Treasury Notes are not available in the H.15 Statistical Release
or otherwise, then the Treasury Yield will
2
<PAGE>
be calculated by interpolation of comparable rates selected by the Independent
Investment Banker (as defined below).
(4) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of this
First Supplemental Indenture; and
(5) The terms "herein", "hereof", "hereunder" and other words of
similar import refer to this First Supplemental Indenture.
ARTICLE II
The Series of Securities
SECTION 2.01 The Title of the Securities.
There shall be a series of Securities designated the "6.30% Senior Notes
due February 1, 2009" (the "Notes"). The Notes shall be executed, authenticated
and delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of the Indenture and this First
Supplemental Indenture (including the form of Note set forth as Exhibit A
hereto).
SECTION 2.02 Limitation on Aggregate Principal Amount
The aggregate principal amount of the Notes shall be limited to
$250,000,000.
SECTION 2.03 Stated Maturity
The Stated Maturity of the Notes shall be February 1, 2009.
SECTION 2.04 Interest and Interest Rates
The rate of interest on each Note shall be 6.30% per annum (at the same
rate per annum on any overdue principal and premium and, to the extent lawful,
on any overdue installment of interest), accruing from January 29, 1999 and
interest shall be payable, semi-annually in arrears, on February 1 and August 1
of each year (each such date, an "Interest Payment Date"), commencing August 1,
1999 to the Persons in whose names the Notes are registered at the close of
business on the immediately preceding January 15 and July 15 respectively,
whether or not such day is a Business Day (each such date, a "Regular Record
Date"). The amount of interest payable for any period shall be computed on the
basis of twelve 30-day months and a 360-day year. The amount of interest payable
for any partial period shall be computed on the basis of a 360-day year of
twelve 30-day months and the days elapsed in any partial month. In the event
that any date on which interest is payable on a Note is not a Business Day, then
a payment of the 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) with the same force and effect as if made
on the date the payment was originally payable. The interest so payable, and
3
<PAGE>
punctually paid or duly provided for, on any Interest Payment Date will be paid
to the Person in whose name such Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and
shall either (i) be paid to the Person in whose name such Note (or one or more
Predecessor Securities) is registered at the close of business on the Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to Holders of the Notes not less than 10
days prior to such Special Record Date, or (ii) be paid at such time in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
traded, and upon such notice as may be required by such exchange or automated
quotation system, all as more fully provided in the Indenture.
SECTION 2.05 Place of Payment
The Place of Payment where the Notes may be presented or surrendered for
payment shall initially be the corporate trust office of the Trustee in The City
of New York.
SECTION 2.06 Place of Registration or Exchange; Notices and Demands With
Respect to the Notes
The place where the Holders of the Notes may present the Notes for
registration of transfer or exchange and may make notices and demands to or upon
the Partnership in respect of the Notes shall initially be the corporate trust
office of the Trustee in The City of New York.
SECTION 2.07 Global Securities
The Notes shall initially be issuable in the form of one or more Global
Securities. Such Global Securities shall be deposited with, or on behalf of, The
Depository Trust Company, New York, New York, which shall act as Depositary with
respect to the Notes. Such Global Securities shall bear the legends set forth in
the form of Note attached as Exhibit A hereto.
SECTION 2.08 Form of Notes
The Notes shall be substantially in the form attached as Exhibit A
hereto. The Notes shall be registered in such names, shall be in such amounts
and shall have such other specific terms contemplated in the form of Note
attached hereto as Exhibit A, as shall be communicated by the Partnership to the
Trustee in accordance with the administrative procedures, as in effect from time
to time, established to provide for the issuance of the Notes.
SECTION 2.09 Securities Registrar
The Trustee shall serve as the initial Securities Registrar.
4
<PAGE>
SECTION 2.10 Defeasance and Discharge; Covenant Defeasance
Article XIII of the Indenture, including without limitation, Sections
1302 and 1303 thereof, shall apply to the Notes.
SECTION 2.11 Optional Redemption
The Notes will be redeemable, at the option of the Partnership, at any
time in whole, or from time to time in part, upon not less than 30 and not more
than 60 days' notice mailed to each Holder of Notes to be redeemed at the
Holder's address appearing in the Note Register, on any date prior to maturity
at a price equal to (a) 100% of the principal amount thereof plus accrued
interest to the Redemption Date (subject to the right of holders of record on
the relevant Record Date to receive interest due on an Interest Payment Date
that is on or prior to the Redemption Date) and (b) a Make-Whole Premium, if any
(the "Redemption Price"). In no event will the Redemption Price ever be less
than 100% of the principal amount of the Notes plus accrued interest to the
Redemption Date. The Make-Whole Premium will be calculated by an independent
investment banking institution of national standing appointed by the
Partnership; provided, that if the Partnership fails to make such appointment at
least 45 business days prior to the Redemption Date, or if the institution so
appointed is unwilling or unable to make such calculation, such calculation will
be made by Goldman, Sachs & Co. or, if such firm is unwilling or unable to make
such calculation, by an independent investment banking institution of national
standing appointed by the Trustee (in any such case, an "Independent Investment
Banker").
If less than all of the Notes are to be redeemed, the Trustee will
select the Notes to be redeemed by such method as the Trustee shall deem fair
and appropriate. The Trustee may select for redemption Notes and portions of
Notes in amounts of $1,000 or whole multiples of $1,000.
SECTION 2.12 Sinking Fund Obligations
The Partnership has no obligation to redeem or purchase any Notes
pursuant to any sinking fund or analogous requirement or upon the happening of a
specified event or at the option of a Holder thereof.
ARTICLE III
Miscellaneous
SECTION 3.01 The recitals contained herein shall be taken as the
statements of the Partnership, and the Trustee assumes no responsibility for
their correctness.
The Trustee makes no representations as to the validity or sufficiency
of this First Supplemental Indenture or the proper authorization or the due
execution hereof by the Partnership.
5
<PAGE>
SECTION 3.02 Except as expressly supplemented and amended hereby, the
Indenture shall continue in full force and effect in accordance with the
provisions thereof, and the Indenture, as supplemented and amended hereby, is in
all respects hereby ratified and confirmed. This First Supplemental Indenture
and all its provisions shall be deemed a part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 3.03 This First Supplemental Indenture and the Notes shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 3.04 This instrument 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 but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
KINDER MORGAN ENERGY
PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.,
Its General Partner
By: /s/ David G. Dehaemers, Jr.
---------------------------
Name: David G. Dehaemers, Jr.
Title: Vice President and Chief Financial Officer
U.S. TRUST COMPANY OF TEXAS, N.A.,
As Trustee
By: /s/ John C. Stohlmann
---------------------
Name: John C. Stohlmann
Title: Vice President
6
<PAGE>
GUARANTEES
Each Guarantor (which term includes any successor person under the
Indenture), has fully, unconditionally and absolutely guaranteed, to the extent
set forth in the Indenture and this First Supplemental Indenture and subject to
the provisions in the Indenture and this First Supplemental Indenture, the due
and punctual payment of the principal of, and premium, if any, and interest on
the Notes and all other amounts due and payable under the Indenture, the First
Supplemental Indenture and the Notes by the Partnership.
The obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to the Guarantees and the Indenture are expressly set forth in
Article XIV of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Guarantees.
KINDER MORGAN OPERATING L.P. "A"
By: Kinder Morgan G.P., Inc.
By: /s/ David G. Dehaemers, Jr.
---------------------------
David G. Dehaemers, Jr.
Vice President
KINDER MORGAN OPERATING L.P. "B"
By: Kinder Morgan G.P., Inc.
By: /s/ David G. Dehaemers, Jr.
----------------------------
David G. Dehaemers, Jr.
Vice President
KINDER MORGAN OPERATING L.P. "C"
By: Kinder Morgan G.P., Inc.
By: /s/ David G. Dehaemers, Jr.
---------------------------
David G. Dehaemers, Jr.
Vice President
8
<PAGE>
KINDER MORGAN OPERATING L.P. "D"
By: Kinder Morgan G.P., Inc.
By: /s/ David G. Dehaemers, Jr.
--------------------------------
David G. Dehaemers, Jr.
Vice President
KINDER MORGAN BULK TERMINALS,
INC.
By: /s/ David G. Dehaemers, Jr.
-----------------------------
David G. Dehaemers, Jr.
Vice President
KINDER MORGAN NATURAL GAS
LIQUIDS CORPORATION
By: /s/ David G. Dehaemers, Jr.
-----------------------------
David G. Dehaemers, Jr.
Vice President
KINDER MORGAN CO2, LLC
By: Kinder Morgan Operating L.P. "A"
By: Kinder Morgan G.P., Inc.
By: /s/ David G. Dehaemers, Jr.
------------------------------
David G. Dehaemers, Jr.
Vice President
9
<PAGE>
[FORM OF FACE OF NOTE]
[If the Note is a Global Security, insert -- THIS NOTE IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT
BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR NOTES REGISTERED IN THE NAME
OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH
TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE. EVERY NOTE AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER
OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS NOTE SHALL BE A GLOBAL SECURITY
SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE PARTNERSHIP OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
KINDER MORGAN ENERGY PARTNERS, L. P.
6.30% SENIOR NOTES DUE FEBRUARY 1, 2009
NO. $
CUSIP No. 494550AA4
KINDER MORGAN ENERGY PARTNERS, L. P., a Delaware limited partnership
(herein called the "Partnership", which term includes any successor Person under
the Indenture hereinafter referred to), for value received, hereby promises to
pay to________, or registered assigns, the principal sum of _________ United
States Dollars on February 1, 2009, and to pay interest thereon from January 29,
1999, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on February 1 and August 1 in each
year, commencing August 1, 1999, at the rate of 6.30% per annum until Maturity,
and at the same rate per annum on any overdue principal and premium and, to the
extent lawful, on any
A-1
<PAGE>
overdue installment of interest. The amount of interest payable for any period
shall be computed on the basis of twelve 30-day months and a 360-day year. The
amount of interest payable for any partial period shall be computed on the basis
of a 360-day year of twelve 30-day months and the days elapsed in any partial
month. In the event that any date on which interest is payable on this Note is
not a Business Day, then a payment of the 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) with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean, when used with respect to any Place of Payment, each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in that Place of Payment are authorized or obligated by law,
executive order or regulation to close. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either (i) be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to Holders of Notes not less than 10
days prior to such Special Record Date, or (ii) be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
or automated quotation system on which the Notes may be listed or traded, and
upon such notice as may be required by such exchange or automated quotation
system, all as more fully provided in such Indenture.
[If the Note is a Global Security, insert -- Payment of the principal of
and premium, if any, and interest on this Note will be made by transfer of
immediately available funds to a bank account in The City of New York designated
by the Holder in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.]
[If a Definitive Security, insert--Payment of the principal of (and
premium, if any) and interest on this Security will be made at the office or
agency of the Partnership maintained for that purpose in The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts or at such other
offices or agencies as the Partnership may designate, by United States Dollar
check drawn on, or transfer to a United States Dollar account maintained by the
payee with, a bank in The City of New York (so long as the applicable Paying
Agent has received proper transfer instructions in writing at least five days
prior to the payment date); provided, however, that payment of interest may be
made at the option of the Partnership by United States Dollar check mailed to
the addresses of the Persons entitled thereto as such addresses shall appear in
the Security Register or by transfer to a United States Dollar account
maintained by the payee with a bank in The City of New York (so long as the
applicable Paying Agent has received proper transfer instructions in writing by
the Record Date prior to the applicable Interest Payment Date).]
A-2
<PAGE>
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Partnership has caused this instrument to be
duly executed.
Dated:
KINDER MORGAN ENERGY PARTNERS, L. P.
By: Kinder Morgan G.P., Inc.
Its General Partner
By: _______________________
Name:
Title:
Trustee's Certificate and Authorization
This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.
U.S. TRUST COMPANY OF TEXAS, N.A.
As Trustee
By:_________________________
Authorized Signatory
A-3
<PAGE>
[FORM OF REVERSE OF NOTE]
This Note is one of a duly authorized issue of Securities of the
Partnership (the "Notes"), issued and to be issued in one or more series under
an Indenture dated as of January 29, 1999 (the "Indenture"), among the
Partnership, the Guarantors named therein, and U.S. Trust Company of Texas,
N.A., as Trustee (the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, obligations, duties and immunities thereunder of the Partnership, the
Guarantors, the Trustee and the Holders of the Notes and of the terms upon which
the Notes are, and are to be, authenticated and delivered. As provided in the
Indenture, the Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest, if any, at different rates, may be subject
to different redemption provisions, if any, may be subject to different sinking,
purchase or analogous funds, if any, may be subject to different covenants and
Events of Default and may otherwise vary as in the Indenture provided or
permitted. This Note is one of a series of Securities designated on the face
hereof limited in aggregate principal amount to $200,000,000.
The Notes are redeemable, at the option of the Partnership, at any time
in whole or from time to time in part, upon not less than 30 and not more than
60 days' notice mailed to each holder of Notes to be redeemed at the holder's
address appearing in the Note Register, on any date prior to maturity at a price
equal to (a) 100% of the principal amount thereof plus accrued interest to the
Redemption Date (subject to the right of holders of record on the relevant
Record Date to receive interest due on an Interest Payment Date that is on or
prior to the Redemption Date) and (b) a Make-Whole Premium, if any.
"Make-Whole Premium" with respect to any Note (or portion thereof) to be
redeemed will be equal to the excess, if any, of (i) the sum of the present
values, calculated as of the Redemption Date, of (a) each interest payment that,
but for such redemption, would have been payable on the Note (or portion
thereof) being redeemed on each Interest Payment Date occurring after the
Redemption Date (excluding any accrued interest for the period prior to the
Redemption Date) and (b) the principal amount that, but for such redemption,
would have been payable at the final maturity of the Note (or portion thereof)
being redeemed, over (ii) the principal amount of the Note (or portion thereof)
being redeemed. The present value of interest and principal payments referred to
in clause (i) will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
Redemption Date at a discount rate equal to the Treasury Yield plus 25 basis
points.
"Treasury Yield" means a rate of interest per annum equal to the weekly
average yield to maturity of United States Treasury Notes that have a constant
maturity that corresponds to the remaining term to maturity of the Notes,
calculated to the nearest 1/12 of a year (the "Remaining Term"). The Treasury
Yield will be determined as of the third business day immediately
A-4
<PAGE>
preceding the applicable Redemption Date. The weekly average yields of United
States Treasury Notes will be determined by reference to the most recent
statistical release published by the Federal Reserve Bank of New York and
designated "H.15(519) Selected Interest Rates" or any successor release (the
"H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly
average yield for United States Treasury Notes having a constant maturity that
is the same as the Remaining Term, then the Treasury Yield will be equal to such
weekly average yield. In all other cases, the Treasury Yield will be calculated
by interpolation, on a straight-line basis, between the weekly average yields on
the United States Treasury Notes that have a constant maturity closest to and
greater than the Remaining Term and the United States Treasury Notes that have a
constant maturity closest to and less than the Remaining Term (in each case as
set forth in the H.15 Statistical Release). Any weekly average yields so
calculated by interpolation will be rounded to the nearest 1/100th of 1%, with
any figure of 1/200% or above being rounded upward. If weekly average yields for
United States Treasury Notes are not available in the H.15 Statistical Release
or otherwise, then the Treasury Yield will be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.
In the event of redemption of this Note in part only, a new Note or
Notes of like tenor for the unredeemed portion hereof will be issued in the name
of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership or the Guarantors and the rights of the Holders of the Notes to be
affected under the Indenture at any time by the Partnership, the Guarantors and
the Trustee with the consent of not less than the Holders of a majority in
aggregate principal amount of the Outstanding Securities of all series to be
affected (voting as one class). The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all affected series (voting as one class), on behalf
of the Holders of all Securities of such series, to waive compliance by the
Partnership and the Guarantors with certain provisions of the Indenture. The
Indenture permits, with certain exceptions as therein provided, the Holders of a
majority in principal amount of Notes then Outstanding to waive past defaults
under the Indenture with respect to the Notes and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to
A-5
<PAGE>
the Notes, the Holders of not less than 25% in principal amount of the Notes at
the time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Note for the enforcement of any payment of principal, premium, if any, or
interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Partnership, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place(s) and rate, and in the coin or
currency, herein prescribed.
[If the Note is a Global Security, insert -- This Global Note or portion
hereof may not be exchanged for Definitive Securities except in the limited
circumstances provided in the Indenture.
The holders of beneficial interests in this Global Note will not be
entitled to receive physical delivery of Definitive Securities except as
described in the Indenture and will not be considered the Holders thereof for
any purpose under the Indenture.]
[If the Note is a Definitive Security, insert -- As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Note is registerable in the Note Register, upon surrender of this Note for
registration of transfer at the office or agency of the Partnership in The City
of New York or at such other offices or agencies as the Partnership may
designate, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Partnership and the Note Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Notes and of like tenor, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.]
The 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, the Notes are
transferable and exchangeable at the office of the Registrar and any
co-registrar for a like aggregate principal amount of 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 Partnership may require payment of a sum sufficient to cover
any transfer tax or other similar governmental charge payable in connection with
certain transfers and exchanges.
Prior to due presentment of this Note for registration of transfer, the
Partnership, the Trustee and any agent of the Partnership or the Trustee may
treat the Person in whose name this
A-6
<PAGE>
Note is registered as the owner hereof for all purposes, whether or not this
Note is overdue, and neither the Partnership, the Trustee nor any such agent
shall be affected by notice to the contrary.
Obligations of the Partnership and the Guarantors under the Indenture
and the Securities thereunder, including this Note, are non-recourse to Kinder
Morgan G.P. Inc. (the "General Partner") and its Affiliates (other than the
Partnership and the Guarantors), and payable only out of cash flow and assets of
the Partnership and the Guarantors. The Trustee, and each Holder of a Note by
its acceptance hereof, will be deemed to have agreed in the Indenture that (1)
neither the General Partner nor its assets (nor any of its Affiliates other than
the Partnership or the Guarantors, nor their respective assets) shall be liable
for any of the obligations of the Partnership or the Guarantors under the
Indenture or such Securities, including this Note, and (2) no director, officer,
employee, stockholder or unitholder, as such, of the Partnership, the
Guarantors, the Trustee, the General Partner or any Affiliate of any of the
foregoing entities shall have any personal liability in respect of the
obligations of the Partnership or the Guarantors under the Indenture or such
Securities by reason of his, her or its status.
The Indenture contains provisions that relieve the Partnership and the
Guarantors from the obligation to comply with certain restrictive covenants in
the Indenture and for satisfaction and discharge at any time of the entire
indebtedness upon compliance by the Partnership and the Guarantors with certain
conditions set forth in the Indenture.
The obligations of the Partnership pursuant to the Indenture and the
Securities, including this Note and the repurchase obligations under the
Indenture, will be unconditionally guaranteed, on a senior unsecured basis, by
each Guarantor.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
[If the Note is a Definitive Security, insert as a separate page--
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please Print or
Typewrite Name and Address of Assignee) the within instrument of KINDER MORGAN
ENERGY PARTNERS, L. P. and does hereby irrevocably constitute and appoint
________________________ Attorney to transfer said instrument on the books of
the within-named Partnership with full power of substitution in the premises.
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<PAGE>
Please Insert Social Security or
Other Identifying Number of Assignee:
_______________________________________________________________________________
Dated: ______________________ ________________________________ (Signature)
Signature Guarantee:___________________________________________________________
(Participant in a Recognized Signature
Guaranty Medallion Program)
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.]
A-8
MORRISON & HECKER L.L.P.
Attorneys at Law
2600 Grand Avenue
Kansas City, Missouri 64108-4606
Telephone (816) 691-2600
Telefax (816) 474-4208
January 29, 1999
Kinder Morgan Energy Partners, L.P.
Kinder Morgan Operating L.P. "A"
Kinder Morgan Operating L.P. "B"
Kinder Morgan Operating L.P. "C"
Kinder Morgan Operating L.P. "D"
Kinder Morgan Natural Gas Liquids Corporation
Kinder Morgan CO2, LLC
Kinder Morgan Bulk Terminals, Inc.
1301 McKinney Street, Suite 3450
Houston, Texas 77010
Re: $250,000,000 6.30% Senior Notes Due 2009
Ladies and Gentlemen:
We have acted as counsel to Kinder Morgan Energy Partners, L.P., a
Delaware limited partnership (the "Partnership"), and Kinder Morgan Operating
L.P. "A", a Delaware limited partnership, Kinder Morgan Operating L.P. "B", a
Delaware limited partnership, Kinder Morgan Operating L.P. "C", a Delaware
limited partnership, Kinder Morgan Operating L.P. "D", a Delaware limited
partnership, Kinder Morgan Natural Gas Liquids Corporation, a Delaware
corporation, Kinder Morgan CO2, LLC, a Delaware limited liability company, and
Kinder Morgan Bulk Terminals, Inc., a Louisiana corporation (collectively, the
"Guarantors"), in connection with the proposed offering by the Partnership of an
aggregate of $250,000,000 principal amount of the Partnership's 6.30% Senior
Notes due February 1, 2009 (the "Notes") and the unconditional guarantee (the
"Guarantees") of the Notes by the Guarantors. The Notes will be issued pursuant
to the Indenture dated as of January 29, 1999 (the "Indenture") among the
Partnership, as obligor, the Guarantors, as guarantors, and U.S. Trust Company
of Texas, N.A., as trustee (the "Trustee"), supplemented by the First
Supplemental Indenture among the Partnership, the Guarantors and the Trustee
dated as of January 29, 1999 (the "First Supplemental Indenture"). In connection
with the proposed offering, the Partnership and the Guarantors have filed with
the Securities and Exchange Commission a registration statement on Form S-3 File
Nos. 333-66931, 333-66931-01, 333-66931-02, 333-66931-03, 333-66931-04,
333-66931-05, 333-66931-06, and 333-66931-07 under the Securities Act of 1933,
as amended (the "Securities Act"). Unless otherwise defined herein, capitalized
terms used in this opinion shall have the meanings set forth in the Indenture or
the Accord identified in the following paragraph.
Washington, D.C./Phoenix,Arizona/Overland Park,Kansas/Wichita,Kansas
<PAGE>
Kinder, Morgan Energy Partners, L.P.
January 29, 1999
Page 2
This Opinion Letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section of
Business law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this Opinion
Letter should be read in conjunction therewith. The opinions expressed herein
are given only with respect to the present status of the substantive laws of the
States of New York and Delaware. We express no opinion as to any matter arising
under the laws of any other jurisdiction.
In rendering the opinions set forth below, we have examined and relied
on the following: (1) the Indenture; (2) the First Supplemental Indenture, which
includes the form of the Notes; and (3) the Underwriting Agreement among the
Partnership, the Guarantors, Goldman Sachs & Co., A.G. Edwards & Sons, Inc.,
NationsBank, Montgomery Securities LLC, Prudential Securities Incorporated and
Solomon Smith Barney, Inc., each of which has been filed with the Securities and
Exchange Commission as an exhibit to a Form 8-K. In addition, we have examined
such other documents, materials and authorities as we have deemed necessary in
order to enable us to render our opinions set forth below.
Based on and subject to the foregoing and other qualifications set
forth below:
1. The Notes proposed to be issued by the Partnership have been duly
authorized for issuance and are valid and legally binding obligations of the
Partnership enforceable in accordance with their terms.
2. The Guarantees are enforceable in accordance with their terms as set
forth under the Indenture.
The General Qualifications apply to the opinions set forth above (the
Remedies Opinion). In addition to the General Qualifications, we express no
opinion as to the enforceability of any provisions contained in the Notes or the
Guaranties purporting to: (i) allow the acceleration of the maturity of any
indebtedness or the exercise of any other rights without notice to the person or
entity signatory thereto or bound thereby; (ii) restrict access to legal or
equitable remedies (including, without limitation, proper jurisdiction and
venue); (iii) establish evidentiary standards; (iv) waive the benefits of any
statute of limitation or any applicable bankruptcy, insolvency or usury law or
stay or extension law or waive any rights under any applicable statutes or rules
hereafter enacted or promulgated; or (v) preserve and maintain a guarantor's
liability despite the fact that the guaranteed debt is unenforceable due to
illegality. In addition, the enforceability of the rights to indemnification
contained in the Indenture may be limited by Federal or New York State laws or
the policies underlying such laws. We note that the Trust Indenture Act provides
that certain provision of the Trust Indenture Act are automatically included in
the Indenture unless expressly excluded. To the extent that the Indenture does
not expressly exclude or waive such provisions of the Trust Indenture Act, such
provisions may supersede or override similar provisions in the Indenture.
<PAGE>
Kinder, Morgan Energy Partners, L.P.
January 29, 1999
Page 3
We hereby consent to the filing of this letter as an Exhibit to the
Form 8-K and to the reference of this firm under the heading "Legal Matters" in
the Prospectus forming part of the Registration Statement. This consent is not
to be construed as an admission that we are a person whose consent is required
to be filed with the Registration Statement under the provisions of the Act.
This opinion is rendered solely for your benefit in connection with the above
matter and may not be relied upon in any manner by any other person or entity
without our express written consent.
Very truly yours,
MORRISON & HECKER L.L.P.
/s/ Morrison & Hecker L.L.P.
Computation of Pro Forma Ratio of Earnings to Fixed Charges
-------------------------------------------------------------------------
Nine Months
Year ended Ended
December 31, September 30,
-------------------------------------------------------------------------
1997 1998
-------------------------------------------------------------------------
Computation of Earnings
-------------------------------------------------------------------------
-------------------------------------------------------------------------
After tax net income 84,449 88,473
-------------------------------------------------------------------------
Tax expense/(benefit (740) 168
-------------------------------------------------------------------------
Pre-tax net income 83,709 88,641
-------------------------------------------------------------------------
Equity earnings in subsidiary (5,724) (16,417)
-------------------------------------------------------------------------
Interest expense 53,074 35,251
-------------------------------------------------------------------------
Net income before adjustments 131,059 107,475
-------------------------------------------------------------------------
Distributed equity earnings 9,588 12,248
-------------------------------------------------------------------------
Capitalized interest* -- (1153)
-------------------------------------------------------------------------
Net income after adjustments 140,647 118,570
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Fixed charges 53,074 35,251
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Interest expense 53,074 35,251
-------------------------------------------------------------------------
Capitalized interest* -- --
-------------------------------------------------------------------------
Amortized expenses related to debt** -- --
-------------------------------------------------------------------------
Estimated interest associated with rental -- --
payments
-------------------------------------------------------------------------
Preference security dividends of -- --
subsidiaries
-------------------------------------------------------------------------
Total Fixed Charges 53,074 35,251
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Pro forma ratio of earnings to fixed charges 2.65 3.36
-------------------------------------------------------------------------
* Immaterial
** Included in interest expense
