<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 2000
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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KINDER MORGAN ENERGY PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE
(State or other jurisdiction 4619
of 1321 76-0380342
incorporation or (Primary Standard Industrial (I.R.S. Employer
organization) Classification Code Number) Identification No.)
</TABLE>
<TABLE>
<S> <C>
JOSEPH LISTENGART
1301 MCKINNEY STREET, SUITE 3400 1301 MCKINNEY STREET, SUITE 3400
HOUSTON, TEXAS 77010 HOUSTON, TEXAS 77010
(713) 844-9500 (713) 844-9500
(Address, including zip code, and telephone (Address, including zip code, and telephone
number, including area code, of registrant's number, including area code, of registrant's
principal executive offices) agent for service of process)
</TABLE>
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Copy to:
GARY W. ORLOFF
BRACEWELL & PATTERSON, L.L.P.
SOUTH TOWER PENNZOIL PLACE, SUITE 2900
711 LOUISIANA STREET
HOUSTON, TEXAS 77002-2781
PHONE: (713) 221-1306
FAX: (713) 221-2166
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company or there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Floating Rate Senior Notes due
2002........................ $200,000,000 100% $200,000,000 $52,800
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8% Senior Notes due 2005...... $200,000,000 100% $200,000,000 $52,800
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Total......................... $105,600
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
---------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 19, 2000.
$400,000,000
LOGO
OFFER TO EXCHANGE
FLOATING RATE EXCHANGE SENIOR NOTES DUE 2002
FOR ANY AND ALL OUTSTANDING FLOATING RATE SENIOR NOTES DUE 2002
AND
OFFER TO EXCHANGE
8% EXCHANGE SENIOR NOTES DUE 2005
FOR ANY AND ALL OUTSTANDING 8% SENIOR NOTES DUE 2005
---------------------
This prospectus, and accompanying Letters of Transmittal, relate to our
proposed exchange offers. In one exchange offer, we are offering to exchange up
to $200,000,000 aggregate principal amount of new floating rate senior notes due
2002, which we call the Floating Rate Exchange Notes, which will be freely
transferable, for any and all outstanding floating rate senior notes due 2002,
which we call the Original Floating Rate Notes, issued in a private offering on
March 22, 2000 and which have certain transfer restrictions. In the other
exchange offer, we are offering to exchange up to $200,000,000 aggregate
principal amount of new 8% senior notes due 2005, which we call the 8% Exchange
Notes, which will be freely transferable, for any and all outstanding 8% senior
notes due 2005, which we call the Original 8% Notes, also issued in a private
offering on March 22, 2000 and which have certain transfer restrictions.
In this prospectus we sometimes refer to the Original Floating Rate Notes
and the Original 8% Notes collectively as the Original Notes, the Floating Rate
Exchange Notes and the 8% Exchange Notes collectively as the Exchange Notes and
the Exchange Notes and the Original Notes collectively as the Notes.
- Each Exchange Offer expires at 5:00 p.m., New York City time, on
, 2000, unless extended.
- The terms of each series of Exchange Notes are substantially identical to
the terms of the Original Notes of the same series, except that the
Exchange Notes will be freely transferable and issued free of any
covenants regarding exchange and registration rights.
- All Original Notes of each series that are validly tendered and not
validly withdrawn will be exchanged.
- Tenders of Original Notes of each series may be withdrawn at any time
prior to expiration of the Exchange Offer relating to that series of
Original Notes.
- We will not receive any proceeds from the Exchange Offers.
- The exchange of Original Notes for Exchange Notes of the same series will
not be a taxable event for United States federal income tax purposes.
- Holders of Original Notes do not have any appraisal or dissenters' rights
in connection with the Exchange Offers.
- Original Notes not exchanged in the Exchange Offers will remain
outstanding and be entitled to the benefits of the Indenture, but except
under certain circumstances, will have no further exchange or registration
rights under the registration rights agreement discussed in this
prospectus.
---------------------
PLEASE SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF FACTORS
YOU SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFERS.
---------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the Exchange Notes or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
We may amend or supplement this prospectus from time to time by filing
amendments or supplements as required. You should read this entire prospectus,
the accompanying Letters of Transmittal and related documents and any amendments
or supplements to this prospectus carefully before making your investment
decision.
---------------------
The date of this prospectus is , 2000.
<PAGE> 3
TABLE OF CONTENTS
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PAGE
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Summary..................................................... 3
Risk Factors................................................ 12
The Exchange Offers......................................... 16
Use of Proceeds............................................. 28
Unaudited Pro Forma Combined Statements of Income........... 29
Consolidated Ratios of Earnings to Fixed Charges............ 31
Description of Notes........................................ 32
Certain Federal Income Tax Considerations................... 46
Validity of the Exchange Notes.............................. 51
Experts..................................................... 51
Where You Can Find More Information......................... 52
Information Regarding Forward-Looking Statements............ 53
Annex A-Letter of Transmittal for Floating Rate Notes....... A-1
Annex B-Letter of Transmittal for 8% Notes.................. B-1
</TABLE>
---------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS LEGAL TO
SELL THE NOTES. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT COVER OF THOSE DOCUMENTS. OUR BUSINESS, FINANCIAL CONDITION, RESULTS
OF OPERATIONS AND PROSPECTUS MAY HAVE CHANGED SINCE THOSE DATES.
2
<PAGE> 4
SUMMARY
This summary highlights information appearing in other sections of this
prospectus. It may not contain all of the information that is important to you.
This prospectus includes or incorporates by reference information about the
notes, the exchange offers, our business and our financial and operating data.
Before making an investment decision, we encourage you to read the entire
prospectus carefully, including:
- the "Risk Factors" section; and
- the financial statements and the footnotes to those statements, which are
incorporated by reference in this prospectus.
KINDER MORGAN ENERGY PARTNERS, L.P.
We are a Delaware limited partnership formed in August 1992. We are the
largest publicly-traded pipeline master limited partnership in the United States
and have the second largest products pipeline system based on volumes delivered.
Our operations are grouped into four reportable business segments. These
segments and their major assets are as follows:
- Pacific operations, consisting of:
- approximately 3,300 miles of pipelines which transport over one
million barrels per day of refined petroleum products to some of the
faster growing population centers in the United States, including
Los Angeles, San Diego and Orange County, California; the San
Francisco Bay area; Las Vegas, Nevada and Tucson and Phoenix,
Arizona;
- 13 truck-loading terminals with an aggregate usable tankage capacity
of approximately 8.2 million barrels; and
- a 50% interest in the Colton Processing Facility, a petroleum
pipeline transmix processing facility located in Colton, California;
- Mid-Continent operations, consisting of products pipelines and joint
venture projects including:
- the North System, a 1,600 mile pipeline that transports natural gas
liquids and refined petroleum products between south central Kansas
and the Chicago area and various intermediate points, including
eight terminals;
- a 51% interest in Plantation Pipe Line Company, which owns and
operates a 3,100 mile refined petroleum products pipeline system
throughout the southeastern United States;
- a 20% limited partner interest in Shell CO(2) Company, Ltd. which
transports, markets and produces carbon dioxide for use in enhanced
oil recovery operations in the continental United States; on March
9, 2000, we announced a definitive agreement to acquire the
remaining 80% interest in Shell CO(2) Company;
- the Cypress Pipeline, which transports natural gas liquids from Mont
Belvieu, Texas to a major petrochemical producer in Lake Charles,
Louisiana;
- transmix operations, which include the processing and marketing of
petroleum pipeline transmix along the Atlantic Coast via two
transmix processing plants;
- a 50% interest in the Heartland Pipeline Company, which ships
refined petroleum products in the Midwest; and
- the Painter Gas Processing Plant, a natural gas processing plant,
fractionator and natural gas liquids terminal with truck and rail
loading facilities; the Painter Plant is
3
<PAGE> 5
leased to BP Amoco under a long-term arrangement;
- Natural gas operations, consisting of assets acquired in late 1999,
including:
- Kinder Morgan Interstate Gas Transmission LLC, which owns a 6,700
mile natural gas pipeline, including the Pony Express pipeline
facilities, that extends from northwestern Wyoming east into
Nebraska and Missouri and south through Colorado and Kansas;
- a 66 2/3% interest in Trailblazer Pipeline Company, which transmits
natural gas from Colorado through southeastern Wyoming to Beatrice,
Nebraska; and
- a 49% interest in Red Cedar Gathering Company, which gathers natural
gas in La Plata County, Colorado and owns and operates a carbon
dioxide processing plant;
and
- Bulk terminals, consisting of over 20 owned or operated bulk terminal
facilities, including:
- coal terminals located in Cora, Illinois; Paducah, Kentucky; Newport
News, Virginia; Mount Vernon, Indiana; and Los Angeles, California;
- petroleum coke terminals located on the lower Mississippi River and
along the west coast of the United States; and
- other bulk terminals handling alumina, cement, salt, soda ash,
fertilizer and other dry bulk materials.
BUSINESS STRATEGY
Management's objective is to operate Kinder Morgan Energy Partners as a
low-cost, growth-oriented master limited partnership by:
- reducing operating expenses;
- better utilizing and expanding our asset base; and
- making selective, strategic acquisitions that will increase unitholder
distributions. Management has announced that we intend to spend
approximately $1 billion for acquisitions annually.
Kinder Morgan Energy Partners primarily transports and/or handles products
for a fee and largely is not engaged in the purchase and resale of commodity
products. As a result, Kinder Morgan Energy Partners does not face significant
risks relating directly to shifts in commodity prices.
Pacific Operations. We plan to continue to expand our presence in the
rapidly growing refined products market in the western United States through
incremental expansions of the Pacific operations and through acquisitions that
increase unitholder distributions. In May 1999, we completed an expansion of our
southern California products pipeline system. The expansion involved
construction of 13 miles of 16-inch diameter pipeline from Carson, California to
Norwalk, California, and increased the capacity of the West Line Southern
California products pipeline system from 340,000 barrels per day to 520,000
barrels per day, an increase of over 50%.
Mid-Continent Operations. Because the North system serves a relatively
mature market, we intend to focus on increasing throughput within the system by
remaining a reliable, cost-effective provider of transportation services and by
continuing to increase the range of products transported and services offered.
Management believes favorable demographics in the southeastern United States
will serve as a platform for increased use and expansion of Plantation's
pipeline system, which serves major metropolitan areas including Birmingham,
Alabama; Atlanta, Georgia; Charlotte, North Carolina; and the Washington, D.C.
area.
4
<PAGE> 6
For the Shell CO(2) Company, our Permian Basin strategy is to offer
customers "one-stop shopping" for carbon dioxide supply, transportation and
technical support service. Outside the Permian Basin, Shell CO(2) Company
intends to compete aggressively for new supply and transportation projects.
Management believes these projects will arise as other U.S. oil producing basins
mature and make the transition from primary production to enhanced recovery
methods. The acquisition of the transmix operations, in September 1999,
strengthened our existing transmix processing business and added fee-based
services related to our core refined products pipeline business.
Natural Gas Operations. Kinder Morgan Interstate Gas Transmission also
serves a stable, mature market, and thus we are focused on reducing costs and
securing throughput for this pipeline. New measurement systems and other
improvements will aid in managing expenses. We will explore expansion and
storage opportunities to increase utilization levels. Shippers have expressed
interest in expanding the Trailblazer Pipeline Company pipeline, which we will
pursue if we can obtain commitments for the additional capacity. Red Cedar
Gathering Company, a partnership with the Southern Ute Indian Tribe, is pursuing
gathering and processing opportunities on tribal land.
Bulk Terminals. We are dedicated to growing our bulk terminal business and
have a target of investing $100 to $200 million annually in our bulk terminals
business. We will make investments to expand and improve existing facilities,
particularly those facilities that handle low-sulfur western coal. We will also
consider making selective acquisitions that increase unitholder distributions.
Additionally, we plan to design, construct and operate new facilities for
current and prospective customers. Management believes we can use newly acquired
or developed facilities to leverage our operational expertise and customer
relationships.
The address of our principal executive offices is 1301 McKinney Street,
Suite 3400, Houston, Texas 77010 and our telephone number at this address is
(713) 844-9500. Our limited partner interests trade under the New York Stock
Exchange symbol "KMP."
5
<PAGE> 7
RECENT DEVELOPMENTS
TRANSFERRED ASSETS
Effective December 31, 1999, Kinder Morgan, Inc. transferred over $700
million of assets to us for $330 million and the issuance of 9.81 million of our
common units representing limited partner interests. We financed a portion of
the $330 million through Kinder Morgan, Inc. which has been repaid. We agreed as
part of the asset transfer to fund the $330 million through debt incurred by us
and to not take certain actions with respect to the debt that could cause
adverse tax consequences to Kinder Morgan, Inc. Assets included in the transfer
were Kinder Morgan Interstate Gas Transmission LLC, formerly K N Interstate Gas
Transmission Co., an additional 33 1/3% interest in Trailblazer Pipeline Company
and a 49% interest in Red Cedar Gathering Company.
MILWAUKEE AND DAKOTA BULK TERMINALS
On February 7, 2000, we announced our acquisition of all of the shares of
the capital stock of Milwaukee Bulk Terminals, Inc. and Dakota Bulk Terminal,
Inc., both Wisconsin corporations, for 574,172 units. The effective date of the
acquisitions was January 1, 2000, and going forward from that date, we will
include the activities of these two terminals as part of our bulk terminals
business segment.
SHELL CO(2) COMPANY
On March 9, 2000, we announced we had reached a definitive agreement to
increase our interest in Shell CO(2) Company to 100% by acquiring a 78% limited
partner interest and a 2% general partner interest from affiliates of Shell
Exploration & Production Company. Previously, we owned a 20% limited partner
interest in Shell CO(2) Company. The transaction price was $185.5 million. The
closing occurred on April 5, 2000 and we changed the name of Shell CO(2) Company
to Kinder Morgan CO(2) Company. Kinder Morgan CO(2) Company is the largest
transporter and marketer of carbon dioxide in the United States, currently
delivering approximately 400 million cubic feet per day. Carbon dioxide flooding
is a proven technology for increasing the production of oil reserves.
THE EXCHANGE OFFERS
Registration Rights
Agreement................ We sold $200 million in aggregate principal amount
of Original Floating Rate Notes and $200 million in
aggregate principal amount of Original 8% Notes to
qualified institutional buyers as defined in Rule
144A under the Securities Act through Goldman,
Sachs & Co., Merrill Lynch & Co., Banc of America
Securities LLC and First Union Securities, Inc., as
initial purchasers. The initial purchasers and we
entered into a registration rights agreement dated
as of March 22, 2000 which grants the holders of
the Original Notes certain exchange and
registration rights. The Exchange Offers made
hereby are intended to satisfy such exchange
rights.
The Exchange Offers........ $1,000 principal amount of Floating Rate Exchange
Notes in exchange for each $1,000 principal amount
of Original Floating Rate Notes and $1,000
principal amount of 8% Exchange Notes in exchange
for each $1,000 principal amount of 8% Original
Notes. As of the date hereof, $400 million
aggregate principal amount of the Original Notes
are outstanding. We will issue each series of
Exchange Notes to holders on the earliest
practicable date following the applicable
Expiration Date.
6
<PAGE> 8
Resales of the Exchange
Notes.................... Based on an interpretation by the staff of the SEC
set forth in no-action letters issued to third
parties, we believe that, except as described
below, the Exchange Notes issued pursuant to the
Exchange Offers may be offered for resale, resold
and otherwise transferred by a holder thereof,
other than any such holder that is an "affiliate"
of ours within the meaning of Rule 405 under the
Securities Act, without compliance with the
registration and prospectus delivery provisions of
the Securities Act, provided that such Exchange
Notes are acquired in the ordinary course of such
holder's business and that such holder has no
arrangement or understanding with any person to
participate in the distribution of such Exchange
Notes.
Each broker-dealer that receives Exchange Notes
pursuant to an Exchange Offer in exchange for
Original Notes of that series that such
broker-dealer acquired for its own account as a
result of market-making activities or other trading
activities, other than Original Notes acquired
directly from us or our affiliates, must
acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act.
If we receive certain notices in the Letter of
Transmittal, this Prospectus, as it may be amended
or supplemented from time to time, may be used for
the period described below by a broker-dealer in
connection with resales of Exchange Notes received
in exchange for Original Notes where such Original
Notes were acquired by such broker-dealer as a
result of market-making activities or other trading
activities and not acquired directly from us. We
have agreed that, if we receive certain notices in
the Letter of Transmittal, for a period of 180 days
after the date on which the Registration Statement
becomes effective, we will make this Prospectus
available to any such broker-dealer for use in
connection with any such resale.
Each Letter of Transmittal requires broker-dealers
tendering Original Notes in an Exchange Offer to
indicate whether such broker-dealer acquired the
Original Notes for its own account as a result of
market-making activities or other trading
activities, other than Original Notes acquired
directly from us or any of our affiliates. If no
broker-dealer indicates that the Original Notes
were so acquired, we have no obligation under the
registration rights agreement to maintain the
effectiveness of the Registration Statement past
the consummation of the Exchange Offer or to allow
the use of this Prospectus for such resales. See
"The Exchange Offers -- Registration Rights" and
"-- Resale of the Exchange Notes; Plan of
Distribution."
Expiration Date............ Each Exchange Offer expires at 5:00 p.m., New York
City time, on , 2000, unless we extend
an Exchange Offer in our sole discretion, in which
case the term "Expiration Date"
7
<PAGE> 9
means the latest date and time to which that
Exchange Offer is extended.
Conditions to the Exchange
Offers..................... Each Exchange Offer is subject to certain
conditions which we may waive. See "The Exchange
Offers -- Conditions to the Exchange Offers."
Procedures for Tendering
the Original Notes......... Each holder of Original Notes wishing to accept an
Exchange Offer must complete, sign and date the
accompanying applicable Letter of Transmittal in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver such
Letter of Transmittal together with the Original
Notes and any other required documentation to the
exchange agent identified below under "Exchange
Agent" at the address set forth herein. By
executing the Letter of Transmittal, a holder will
make certain representations to us. See "The
Exchange Offers -- Registration Rights" and
"-- Procedures for Tendering Original Notes."
Special Procedures for
Beneficial Owners........ Any beneficial owner whose Original Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and
who wishes to tender should contact the registered
holder promptly and instruct the registered holder
to tender on such beneficial owner's behalf. See
"The Exchange Offers -- Procedures for Tendering
Original Notes."
Guaranteed Delivery
Procedures............... Holders of Original Notes who wish to tender their
Original Notes when those securities are not
immediately available or who cannot deliver their
Original Notes, the applicable Letter of
Transmittal or any other documents required by that
Letter of Transmittal to the exchange agent prior
to the Expiration Date must tender their Original
Notes according to the guaranteed delivery
procedures set forth in "The Exchange
Offers -- Procedures for Tendering Original
Notes -- Guaranteed Delivery."
Withdrawal Rights.......... Tenders of Original Notes pursuant to an Exchange
Offer may be withdrawn at any time prior to the
applicable Expiration Date.
Acceptance of Original
Notes and Delivery of
Exchange Notes........... We will accept for exchange any and all Original
Notes that are properly tendered in the applicable
Exchange Offer, and not withdrawn, prior to that
Exchange Offer's Expiration Date. The Exchange
Notes issued pursuant to an Exchange Offer will be
issued on the earliest practicable date following
our acceptance for exchange of Original Notes of
that series. See "The Exchange Offers -- Terms of
the Exchange Offers."
Exchange Agent............. First Union National Bank is serving as exchange
agent in connection with each Exchange Offer.
8
<PAGE> 10
Federal Income Tax
Considerations........... We have received an opinion of counsel advising
that the exchange of Original Notes for Exchange
Notes of the same series pursuant to an Exchange
Offer will not be treated as a taxable exchange for
federal income tax purposes. See "Certain Federal
Income Tax Considerations."
SUMMARY OF RISK FACTORS
- - Pending Federal Energy Regulatory Commission and California Public Utilities
Commission proceedings seek substantial refunds and reductions in tariff rates
on some of our pipelines.
- - We generally do not own the land on which our pipelines are constructed and we
are subject to the possibility of increased costs for the loss of land use.
- - Environmental regulation significantly affects our business.
- - Competition could ultimately lead to lower levels of profits and lower our
cash flow.
- - Our rapid growth may cause difficulties integrating new operations.
- - Our debt securities are subordinated to SFPP, L.P.'s debt.
- - Our debt instruments may limit our financial flexibility.
- - Restrictions on our ability to prepay SFPP, L.P.'s debt may limit our
financial flexibility.
- - There is no public market for the Notes and you cannot be sure an active
trading market for the Notes will develop.
- - The market value of your Original Notes may be lower if you do not exchange
your Original Notes or fail to properly tender your Original Notes for
exchange.
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<PAGE> 11
SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA
Our summary historical consolidated income statement and balance sheet data
shown below are derived from our financial statements and the notes to the
financial statements.
Our summary historical consolidated financial data should be read:
- with the understanding that the current management of Kinder Morgan G.P.,
Inc. was elected after the acquisition of Enron Liquids Pipeline Company,
the predecessor to Kinder Morgan G.P., Inc., in February 1997 and was
unable to influence our activities prior to that date;
- together with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in our Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, incorporated in
this prospectus by reference; and
- together with our financial statements and their notes included in our
Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
incorporated in this prospectus by reference.
Net income per unit before extraordinary charge is adjusted for the
two-for-one split of units on October 1, 1997. Net income before extraordinary
charge per unit was computed by dividing the net income before extraordinary
charge allocated to holders of units by the weighted average number of units
outstanding during the period. The Pacific operations' volumes reflect Kinder
Morgan Energy Partners' acquisition of its Pacific operations on March 6, 1998.
The Mid-Continent operations' volumes include only the volumes for the North
system and the Cypress pipeline. The bulk terminals' transport volumes represent
the volumes:
- of the Cora terminal, excluding ship or pay volumes of 252 thousands tons
for 1996;
- of the Grand Rivers terminal from September 1997;
- of Kinder Morgan Bulk Terminals, Inc. from July 1, 1998; and
- of the Pier IX and Shipyard River terminals from December 18, 1998.
The financial data for the year ended December 31, 1999, includes the
results of operations for:
- our increase to a 51% interest in Plantation Pipe Line Company from June
16, 1999;
- Mid-Continent's transmix operations from September 10, 1999; and
- our initial 33 1/3% interest in Trailblazer Pipeline Company from
November 30, 1999.
The financial data for the year ended December 31, 1999, includes the
balance sheet data, but not the results of operations since these assets were
acquired effective as of December 31, 1999, for:
- Kinder Morgan Interstate Gas Transmission LLC;
- our additional 33 1/3% interest in Trailblazer Pipeline Company; and
- our 49% interest in Red Cedar Gathering Company.
The financial data for the year ended December 31, 1998, includes the
results of operations for:
- the Pacific operations from March 6, 1998;
- Kinder Morgan Bulk Terminals, Inc. from July 1, 1998; and
- our 24% interest in Plantation Pipe Line Company from September 15, 1998.
10
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SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA
<TABLE>
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YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER UNIT AND OPERATING DATA)
<S> <C> <C> <C> <C> <C>
INCOME AND CASH FLOW DATA:
Revenues...................................... $ 428,749 $ 322,617 $ 73,932 $ 71,250 $ 64,304
Cost of product sold.......................... 16,241 5,860 7,154 7,874 8,020
Operating expense............................. 111,275 77,162 17,982 22,347 15,928
Fuel and power................................ 31,745 22,385 5,636 4,916 3,934
Depreciation and amortization................. 46,469 36,557 10,067 9,908 9,548
General and administrative.................... 35,612 39,984 8,862 9,132 8,739
---------- ---------- -------- -------- --------
Operating income.............................. 187,407 140,669 24,231 17,073 18,135
Earnings from equity investments.............. 42,918 25,732 5,724 5,675 5,755
Amortization of excess cost of equity
investments................................. (4,254) (764) -- -- --
Interest expense.............................. (54,336) (40,856) (12,605) (12,634) (12,455)
Interest income and other, net................ 22,988 (5,992) (353) 3,129 1,311
Income tax (provision) benefit................ (9,826) (1,572) 740 (1,343) (1,432)
---------- ---------- -------- -------- --------
Net income before extraordinary charge........ 184,897 117,217 17,737 11,900 11,314
Extraordinary charge.......................... (2,595) (13,611) -- -- --
---------- ---------- -------- -------- --------
Net income.................................... $ 182,302 $ 103,606 $ 17,737 $ 11,900 $ 11,314
========== ========== ======== ======== ========
Net income per unit before extraordinary
charge...................................... $ 2.63 $ 2.09 $ 1.02 $ 0.90 $ 0.85
========== ========== ======== ======== ========
Net income per unit........................... $ 2.57 $ 1.75 $ 1.02 $ 0.90 $ 0.85
========== ========== ======== ======== ========
Per unit cash distribution paid............... $ 2.78 $ 2.39 $ 1.63 $ 1.26 $ 1.26
========== ========== ======== ======== ========
Additions to property, plant and equipment.... $ 82,725 $ 38,407 $ 6,884 $ 8,575 $ 7,826
BALANCE SHEET DATA (AT PERIOD END):
Net property, plant and equipment............. $2,578,313 $1,763,386 $244,967 $235,994 $236,854
Total assets.................................. $3,228,738 $2,152,272 $312,906 $303,603 $303,664
Long-term debt, including current portion..... $1,198,301 $ 611,571 $146,824 $160,211 $156,938
Partners' capital............................. $1,774,798 $1,360,663 $150,224 $118,344 $123,116
OPERATING DATA:
Pacific operations -
Mainline delivery volumes (thousands of
barrels)................................ 375,663 307,997 -- -- --
Other delivery volumes (thousands of
barrels)................................ 10,025 17,957 -- -- --
Mid-Continent operations -
Delivery volumes (thousands of barrels)... 50,124 44,783 46,309 46,601 41,613
Bulk terminals -
Transport volumes (thousands of tons)..... 39,190 24,016 9,087 6,090 6,486
</TABLE>
11
<PAGE> 13
RISK FACTORS
You should carefully consider the risks described below in addition to
other information contained or incorporated by reference in this prospectus.
Realization of any of the following risks could have a material adverse effect
on our business, financial condition, cash flows and results of operations.
PENDING FEDERAL ENERGY REGULATORY COMMISSION AND CALIFORNIA PUBLIC UTILITIES
COMMISSION PROCEEDINGS SEEK SUBSTANTIAL REFUNDS AND REDUCTIONS IN TARIFF RATES
ON SOME OF OUR PIPELINES.
Some shippers on our pipelines have filed complaints with the Federal
Energy Regulatory Commission and California Public Utilities Commission that
seek substantial refunds and reductions in the tariff rates on our Pacific
operations. Adverse decisions regarding these complaints could negatively impact
our cash flow. Additional challenges to tariff rates could be filed with the
Federal Energy Regulatory Commission and California Public Utilities Commission
in the future.
The complaints filed before the Federal Energy Regulatory Commission allege
that pipeline tariff rates:
- for the West line, serving southern California and Arizona, are not
entitled to "grandfathered" status under the Energy Policy Act because
"changed circumstances" may have occurred pursuant to the Energy Policy
Act; and
- for the East line, serving New Mexico and Arizona, are unjust and
unreasonable.
An initial decision by the Federal Energy Regulatory Commission administrative
law judge was issued on September 25, 1997. The initial decision determined that
the Pacific operations' West line rates were grandfathered under the Energy
Policy Act. The initial decision also included rulings that were generally
adverse to the Pacific operations regarding certain cost of service issues for
the East line.
On January 13, 1999, the Federal Energy Regulatory Commission issued an
opinion that affirmed, in major respects, the initial decision, but also
modified parts of the decision that were adverse to us. We believe the effect of
the opinion will be less than the amount that we have accrued as a reserve. Some
of the complainants have appealed the Federal Energy Regulatory Commission's
decision to the United States Court of Appeals for the District of Columbia
Circuit.
During the pendency of the above-referenced complaint proceeding, some
shippers filed complaints that predominantly attack the pipeline tariff rates of
the Pacific operations, contending that the rates are not just and reasonable
under the Interstate Commerce Act and should not be entitled to "grandfathered"
status under the Energy Policy Act. These complaints cover rates for service on
the pipeline systems serving:
- southern California and Arizona;
- northern California and Nevada; and
- Oregon.
The complaints seek substantial reparations for alleged overcharges during the
years in question and request prospective rate reduction on each of the
challenged facilities. These complaints were suspended pending final disposition
of the Federal Energy Regulatory Commission's January 13, 1999, decision, but
are expected to proceed to hearing at some point in the future. In January 2000,
several of the shippers amended and restated their complaints challenging the
tariff rates of the Pacific operations. We are vigorously defending the amended
and restated complaints as we have defended the previous round of complaints.
The complaints filed before the California Public Utilities Commission
challenge the rates charged for intrastate transportation of refined petroleum
through the Pacific operations' pipeline system in California. On August 6,
1998, the California Public Utilities Commission issued its decision dismissing
the complainants' challenge to SFPP, L.P.'s intrastate rates. On June 24, 1999,
the California Public Utilities Commission granted
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<PAGE> 14
limited rehearing of its August 1998 decision for the purpose of:
- addressing the proper ratemaking treatment for partnership tax expenses;
- the calculation of environmental costs; and
- the public utility status of SFPP, L.P.'s Sepulveda line and its Watson
Station gathering enhancement facilities.
In pursuing these rehearing issues, the complainants seek prospective rate
reductions aggregating approximately $10 million per year.
WE GENERALLY DO NOT OWN THE LAND ON WHICH OUR PIPELINES ARE CONSTRUCTED AND WE
ARE SUBJECT TO THE POSSIBILITY OF INCREASED COSTS FOR THE LOSS OF LAND USE.
We generally do not own the land on which our pipelines are constructed.
Instead, we obtain the right to construct and operate the pipelines on other
people's land for a period of time. If we were to lose these rights, our
business could be affected negatively.
Southern Pacific Transportation Company has allowed us to construct and
operate a significant portion of our Pacific operations' pipeline under their
railroad tracks. Southern Pacific Transportation Company and its predecessors
were given the right to construct their railroad tracks under federal statutes
enacted in 1871 and 1875. The 1871 statute was thought to be an outright grant
of ownership that would continue until the land ceased to be used for railroad
purposes. Two United States Circuit Courts, however, ruled in 1979 and 1980 that
railroad rights-of-way granted under laws similar to the 1871 statute provide
only the right to use the surface of the land for railroad purposes without any
right to the underground portion. If a court were to rule that the 1871 statute
does not permit the use of the underground portion for the operation of a
pipeline, we may be required to obtain permission from the land owners in order
to continue to maintain the pipelines. Although no assurance can be given, we
believe we could obtain that permission over time at a cost that would not
negatively affect us.
Whether we have the power of eminent domain for our pipelines varies from
state to state depending upon the type of pipeline - petroleum liquids, natural
gas or carbon dioxide - and the laws of the particular state. Our inability to
exercise the power of eminent domain could negatively affect our business if we
were to lose the right to use or occupy the property on which our pipelines are
located.
ENVIRONMENTAL REGULATION SIGNIFICANTLY AFFECTS OUR BUSINESS.
Our business operations are subject to federal, state and local laws and
regulations relating to environmental protection. If an accidental leak or spill
of liquid petroleum products occurs from our pipelines or at our storage
facilities, we may have to pay a significant amount to clean up the leak or
spill. The resulting costs and liabilities could negatively affect our level of
cash flow. Although we cannot predict the impact of Environmental Protection
Agency standards or future environmental measures, our costs could increase
significantly if environmental laws and regulations become stricter. Since the
costs of environmental regulation are already significant, additional regulation
could negatively affect our business.
COMPETITION COULD ULTIMATELY LEAD TO LOWER LEVELS OF PROFITS AND LOWER OUR CASH
FLOW.
Competition could ultimately lead to lower levels of profits and lower our
cash flow. Propane competes with electricity, fuel, oil and natural gas in the
residential and commercial heating market. In the engine fuel market, propane
competes with gasoline and diesel fuel. Butanes and natural gasoline used in
motor gasoline blending and isobutane used in premium fuel production compete
with alternative products. Natural gas liquids used as feed stocks for
refineries and petrochemical plants compete with alternative feed stocks. The
availability and prices of alternative energy sources and feed stocks
significantly affect demand for natural gas liquids.
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<PAGE> 15
Pipelines are generally the lowest cost method for intermediate and
long-haul overland product movement. Accordingly, the most significant
competitors to our pipelines are:
- proprietary pipelines owned and operated by major oil companies in the
areas where our pipelines deliver products;
- refineries within the market areas served by our pipelines; and
- trucks.
Additional pipelines may be constructed in the future to serve specific
markets now served by our pipelines. Trucks competitively deliver products in
certain markets. Recently, major oil companies have increased the usage of
trucks, resulting in minor but notable reductions in product volumes delivered
to certain shorter-haul destinations, primarily Orange County and Colton,
California served by the South and West lines of the Pacific operations.
We cannot predict with certainty whether this trend towards increased
short-haul trucking will continue in the future. Demand for terminaling services
varies widely throughout the pipeline system. Certain major petroleum companies
and independent terminal operators directly compete with us at several terminal
locations. At those locations, pricing, service capabilities and available tank
capacity control market share.
Our ability to compete also depends upon general market conditions, which
may change. We conduct our operations without the benefit of exclusive
franchises from government entities. We provide common carrier transportation
services through our pipelines at posted tariffs and almost always without
long-term contracts for transportation service with customers. Demand for
transportation services for refined petroleum products is primarily a function
of:
- total and per capita fuel consumption;
- prevailing economic and demographic conditions;
- alternate modes of transportation;
- alternate product sources; and
- price.
OUR RAPID GROWTH MAY CAUSE DIFFICULTIES INTEGRATING NEW OPERATIONS.
Part of our business strategy includes acquiring additional businesses that
will allow us to increase distributions to unitholders. During the period from
December 31, 1996 to December 31, 1999, we made several acquisitions that
increased our asset base and our net income over ten times. We believe that we
can profitably combine the operations of acquired businesses with our existing
operations. However, unexpected costs or challenges may arise whenever
businesses with different operations and management are combined. Successful
business combinations require management and other personnel to devote
significant amounts of time to integrating the acquired business with existing
operations. These efforts may temporarily distract their attention from
day-to-day business, the development or acquisition of new properties and other
business opportunities. In addition, the management of the acquired business
often will not join our management team. The change in management may make it
more difficult to integrate an acquired business with our existing operations.
OUR DEBT SECURITIES ARE SUBORDINATED TO SFPP, L.P.'S DEBT.
Since SFPP, L.P. cannot guarantee the Notes, the Notes will be effectively
subordinated to all debt of SFPP, L.P. If SFPP, L.P. defaults on its debt, the
holders of the Notes would not receive any money from SFPP, L.P. until SFPP,
L.P. repaid its debt in full. SFPP, L.P. is the operating partnership that owns
our Pacific operations. See "Description of Notes."
OUR DEBT INSTRUMENTS MAY LIMIT OUR FINANCIAL FLEXIBILITY.
The instruments governing our debt contain restrictive covenants that may
prevent us from engaging in certain beneficial transactions. The agreements
governing our debt generally require us to comply with
14
<PAGE> 16
various affirmative and negative covenants, including the maintenance of certain
financial ratios and restrictions on:
- incurring additional debt;
- entering into mergers, consolidations and sales of assets; and
- granting liens.
The instruments governing any additional debt incurred to refinance our
debt may also contain similar restrictions.
RESTRICTIONS ON OUR ABILITY TO PREPAY SFPP, L.P.'S DEBT MAY LIMIT OUR FINANCIAL
FLEXIBILITY.
SFPP, L.P. is subject to restrictions with respect to its debt that may
limit our flexibility in structuring or refinancing existing or future debt.
These restrictions include the following:
- before December 15, 2002, we may prepay SFPP, L.P.'s first mortgage notes
with a make-whole prepayment premium; and
- we agreed as part of the acquisition of the Pacific operations to not
take certain actions with respect to $190 million of SFPP, L.P.'s first
mortgage notes that would cause adverse tax consequences for the prior
general partner of SFPP, L.P.
THERE IS NO PUBLIC MARKET FOR THE NOTES AND YOU CANNOT BE SURE AN ACTIVE TRADING
MARKET FOR THE NOTES WILL DEVELOP.
The Original Notes have not been registered under the Securities Act, and
may not be resold by purchasers thereof unless the Original Notes are
subsequently registered or an exemption from the registration requirements of
the Securities Act is available. There can be no assurance, even following
registration or exchange of the Original Notes for Exchange Notes, that an
active trading market for the Original Notes or the Exchange Notes will exist.
At the time of the private placement of the Original Notes, the initial
purchasers advised us that they intended to make a market in the Original Notes
and, if issued, the Exchange Notes. However, the initial purchasers are not
obligated to make a market in the Original Notes or the Exchange Notes, and any
such market-making may be discontinued at any time at the sole discretion of the
initial purchasers. No assurance can be given as to the liquidity of or trading
market for the Original Notes or the Exchange Notes.
The liquidity of any market for the Notes will depend upon the number of
holders of the Notes, our performance, the market for similar securities, the
interest of securities dealers in making a market in the Notes and other
factors.
THE MARKET VALUE OF YOUR ORIGINAL NOTES MAY BE LOWER IF YOU DO NOT EXCHANGE YOUR
ORIGINAL NOTES OR FAIL TO PROPERLY TENDER YOUR ORIGINAL NOTES FOR EXCHANGE.
CONSEQUENCES OF FAILURE TO EXCHANGE. To the extent that Original Notes are
tendered and accepted for exchange pursuant to the Exchange Offers, the trading
market for Original Notes that remain outstanding may be significantly more
limited, which might adversely affect the liquidity of the Original Notes not
tendered for exchange. The extent of the market and the availability of price
quotations for Original Notes would depend upon a number of factors, including
the number of holders of Original Notes of each series remaining at such time
and the interest in maintaining a market in such Original Notes on the part of
securities firms. An issue of securities with a smaller outstanding market value
available for trading (the "float") may command a lower price than would a
comparable issue of securities with a greater float. Therefore, the market price
for Original Notes of a series that are not exchanged in the Exchange Offers may
be affected adversely to the extent that the amount of Original Notes exchanged
pursuant to the Exchange Offers reduces the float. The reduced float also may
tend to make the trading price of the Original Notes of a series that are not
exchanged more volatile.
CONSEQUENCES OF FAILURE TO PROPERLY TENDER. Issuance of the Exchange Notes
in exchange for the Original Notes pursuant to the Exchange Offers will be made
following
15
<PAGE> 17
the prior satisfaction, or waiver, of the conditions set forth in "The Exchange
Offers -- Conditions to the Exchange Offers" and only after timely receipt by
the exchange agent of such Original Notes, a properly completed and duly
executed Letter of Transmittal and all other required documents. Therefore,
holders of Original Notes desiring to tender such Original Notes in exchange for
Exchange Notes should allow sufficient time to ensure timely delivery of all
required documentation. Neither we, the exchange agent nor any other person is
under any duty to give notification of defects or irregularities with respect to
the tenders of Original Notes for exchange. Original Notes that may be tendered
in the Exchange Offers but which are not validly tendered will, following the
consummation of the Exchange Offers, remain outstanding and will continue to be
subject to the same transfer restrictions currently applicable to such Original
Notes.
THE EXCHANGE OFFERS
REGISTRATION RIGHTS
At the closing of the offering of the Original Notes, we entered into the
registration rights agreement with the initial purchasers pursuant to which we
agreed, for the benefit of the holders of the Original Notes, at our cost,
- within 90 days after the date of the original issuance of the Original
Notes, to file an exchange offer registration statement with the SEC with
respect to the Exchange Offers for the Exchange Notes, and
- to use our reasonable efforts to cause the exchange offer registration
statement to be declared effective under the Securities Act within 180
days after the date of original issuance of the Original Notes.
Upon the exchange offer registration statement being declared effective, we
agreed to offer the Exchange Notes in exchange for surrender of the Original
Notes. We agreed to keep the Exchange Offer open for not less than 30 days (or
longer if required by applicable law) after the date notice of the Exchange
Offers is mailed to the holders of the Original Notes.
For each Original Note surrendered to us pursuant to its Exchange Offer,
the holder of such Original Note will receive an Exchange Note of the same
series having a principal amount equal to that of the surrendered Original Note.
Interest on each Exchange Note will accrue from the last interest payment date
on which interest was paid on the Original Note surrendered in exchange therefor
or, if no interest has been paid on such Original Note, from the date of its
original issue. The registration rights agreement also provides an agreement to
include in the prospectus for the Exchange Offers certain information necessary
to allow a broker-dealer who holds Original Notes that were acquired for its own
account as a result of market-making activities or other ordinary course trading
activities (other than Original Notes acquired directly from us or one of our
affiliates) to exchange such Original Notes pursuant to the Exchange Offers and
to satisfy the prospectus delivery requirements in connection with resales of
Exchange Notes received by such broker-dealer in the Exchange Offers. We agreed
to maintain the effectiveness of the registration statement for these purposes
for 90 days after the consummation of the Exchange Offers.
The preceding agreement is needed because any broker-dealer who acquires
Original Notes for its own account as a result of market-making activities or
other trading activities is required to deliver a prospectus meeting the
requirements of the Securities Act. This prospectus covers the offer and sale of
the Exchange Notes pursuant to the Exchange Offers made hereby and the resale of
Exchange Notes received in an Exchange Offer by any broker-dealer who held
Original Notes of the same series acquired for its own account as a result of
market-making activities or other trading activities other than
16
<PAGE> 18
Original Notes acquired directly from us or one of our affiliates.
Under existing interpretations of the staff of the SEC contained in several
no-action letters to third parties, the Exchange Notes would in general be
freely tradeable after the Exchange Offers without further registration under
the Securities Act. However, any purchaser of Original Notes who is an
"affiliate" of ours or who intends to participate in an Exchange Offer for the
purpose of distributing the related Exchange Notes (1) will not be able to rely
on the interpretation of the staff of the SEC, (2) will not be able to tender
its Original Notes in the applicable Exchange Offer and (3) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Original Notes unless such sale or
transfer is made pursuant to an exemption from such requirements.
Each holder of the Original Notes (other than certain specified holders)
who wishes to exchange Original Notes for Exchange Notes of the same series in
an Exchange Offer will be required to make certain representations, including
that (1) it is not an affiliate of ours, (2) any Exchange Notes to be received
by it were acquired in the ordinary course of its business and (3) at the time
of commencement of the Exchange Offer, it has no arrangement with any person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Notes.
In the event that any changes in law or the applicable interpretations of
the staff of the SEC do not permit us to effect the Exchange Offers, or if for
any other reason the Exchange Offers are not consummated within 180 days of the
date of issuance and sale of the Original Notes, or the Exchange Offers are not
available to any initial purchasers based upon an opinion of counsel,we will, at
our cost,
- as promptly as practicable, file a shelf registration statement (which
may be an amendment of the registration statement of which this
prospectus is a part) covering resales of the Original Notes,
- use all reasonable efforts to cause the shelf registration statement to
be declared effective under the Securities Act, and
- use all reasonable efforts to keep effective the shelf registration
statement until two years after its effective date, or, if Rule 144(k)
under the Securities Act is amended to provide a shorter restricted
period, such shorter period, or until all Original Notes have been sold.
We will, in the event of the filing of a shelf registration statement, (1)
provide to each holder of the Original Notes copies of the prospectus which is a
part of the shelf registration statement, (2) notify each such holder when the
shelf registration statement for the Original Notes has become effective, and
(3) take certain other actions as are required to permit unrestricted resales of
the Original Notes. A holder of Original Notes that sells such Original Notes
pursuant to the shelf registration statement generally will be required to be
named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the registration rights agreement which are
applicable to such holder, including certain indemnification obligations. In
addition, each holder of the Original Notes will be required to deliver
information to be used in connection with the shelf registration statement and
to provide comments on the shelf registration statement within the time periods
set forth in the registration rights agreement in order to have their Original
Notes included in the shelf registration statement and to benefit from the
provisions regarding additional interest set forth in the following paragraph.
We will pay additional interest on the Original Notes upon the occurrence
of any of the following events:
- if the exchange offer registration statement or shelf registration
statement is not filed within 90 days following the date of original
issuance
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<PAGE> 19
of the Original Notes, then commencing on the 91st day after the date of
original issuance of the Original Notes, additional interest shall accrue
on the Original Notes over and above the otherwise applicable interest
rate at a rate of .25% per year;
- if an exchange offer registration statement or a shelf registration
statement is filed and is not declared effective within 180 days
following the date of original issuance of the Original Notes, then
commencing on the 181st day after the date of original issuance of the
Original Notes, additional interest shall accrue on the Original Notes
over and above the otherwise applicable interest rate at a rate of .25%
per year; or
- if either:
(A) we have not issued Exchange Notes for all Original Notes validly
tendered in accordance with the terms of the Exchange Offer on or
prior to 45 business days after the date on which the exchange
offer registration statement was declared effective; or
(B) the shelf registration statement has been declared effective but
such shelf registration statement ceases to be effective at any
time:
(1) prior to the expiration of the second anniversary of the
closing date, or, if Rule 144(k) is amended to provide a
shorter restrictive period, such shorter period, and
(2) while any registrable securities are outstanding, then
additional interest shall accrue on the Original Notes over
and above the otherwise applicable interest rate at a rate of
.25% per year commencing on the 46th business day after such
effective date, in the case of (A) above, or the day such
shelf registration statement ceases to be effective, in the
case of (B) above.
The foregoing circumstances under which we may be required to pay
additional interest are not cumulative. In no event will the additional interest
rate on the Original Notes exceed .25% per year. Further, any additional
interest will cease to accrue when all of the events described above have been
cured or upon the expiration of the second anniversary of the date of original
issuance of the Original Notes, or, if Rule 144(k) is amended to provide a
shorter restrictive period, the shorter period. For purposes of clarifying the
foregoing provisions, the registration rights agreement states that additional
interest shall not accrue at any time that there are no registrable securities
outstanding. The receipt of additional interest will be the sole monetary remedy
available to a holder if we fail to meet these obligations.
This summary of certain provisions of the registration rights agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the registration rights
agreement, a copy of which is filed as an exhibit to the registration statement
of which this prospectus is a part.
Except as set forth above, after consummation of an Exchange Offer, holders
of Original Notes which are the subject of an Exchange Offer have no
registration or exchange rights under the registration rights agreement. See
"-- Consequences of Failure to Exchange," and "-- Resale of the Exchange Notes;
Plan of Distribution."
CONSEQUENCES OF FAILURE TO EXCHANGE
The Original Notes which are not exchanged for Exchange Notes of the same
series pursuant to an Exchange Offer and are not included in a resale prospectus
which, if required, will be filed as part of an amendment to the registration
statement of which this prospectus is a part, will remain
18
<PAGE> 20
restricted securities and subject to restrictions on transfer. Accordingly, such
Original Notes may only be resold
(1) to us, upon redemption thereof or otherwise,
(2) so long as the Original Notes are eligible for resale pursuant to
Rule 144A, to a person whom the seller reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the Securities
Act, purchasing for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
other transfer is being made in reliance on Rule 144A,
(3) in an offshore transaction in accordance with Regulation S under
the Securities Act,
(4) pursuant to an exemption from registration in accordance with Rule
144, if available, under the Securities Act,
(5) in reliance on another exemption from the registration
requirements of the Securities Act, or
(6) pursuant to an effective registration statement under the
Securities Act.
In all of the situations discussed above, the resale must be in accordance
with any applicable securities laws of any state of the United States and
subject to certain requirements of the registrar or co-registrar being met,
including receipt by the registrar or co-registrar of a certification and, in
the case of (3), (4) and (5) above, an opinion of counsel reasonably acceptable
to us and the registrar.
To the extent Original Notes are tendered and accepted in the Exchange
Offers, the principal amount of outstanding Original Notes will decrease with a
resulting decrease in the liquidity in the market therefor. Accordingly, the
liquidity of the market of the Original Notes could be adversely affected. See
"Risk Factors -- Consequences to Non-Tendering Holders of Original Notes."
TERMS OF THE EXCHANGE OFFERS
Upon the terms and subject to the conditions set forth in this prospectus
and in the respective Letters of Transmittal, copies of which are attached to
this prospectus as Annex A and Annex B, respectively, we will accept any and all
Original Notes validly tendered and not withdrawn prior to the applicable
Expiration Date. We will issue $1,000 principal amount of Floating Rate Exchange
Notes in exchange for each $1,000 principal amount of Original Floating Rate
Notes accepted in the Exchange Offer, and we will issue $1,000 principal amount
of 8% Exchange Notes in exchange for each $1,000 principal amount of Original 8%
Notes accepted in the Exchange Offer. Holders may tender some or all of their
Original Notes pursuant to the respective Exchange Offer. However, Original
Notes may be tendered only in integral multiples of $1,000 principal amount.
The form and terms of the Floating Rate Exchange Notes and the 8% Exchange
Notes are the same as the form and terms of the Original Floating Rate Notes and
the Original 8% Notes, respectively, except that
- the Exchange Notes will have been registered under the Securities Act and
will not bear legends restricting their transfer pursuant to the
Securities Act, and
- except as otherwise described above, holders of the Exchange Notes will
not be entitled to the rights of holders of Original Notes under the
registration rights agreement.
The Exchange Notes will evidence the same debt as the Original Notes which
they replace, and will be issued under, and be entitled to the benefits of, the
Indenture which governs all of the Notes.
Solely for reasons of administration and for no other purpose, we have
fixed the close of business on , 2000 as the record date for the
Exchange Offers for purposes of determining the persons to whom this prospectus
and the Letter of Transmittal designated for such Notes will be mailed
initially. Only a registered holder of
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<PAGE> 21
Original Notes or such holder's legal representative or attorney-in-fact as
reflected on the records of the trustee under the Indenture may participate in
an Exchange Offer. There will be no fixed record date for determining registered
holders of the Original Notes entitled to participate in the relevant Exchange
Offer.
Holders of the Original Notes do not have any appraisal or dissenters'
rights under Delaware law or the indenture in connection with the Exchange
Offers. We intend to conduct the Exchange Offers in accordance with the
applicable requirements of the Exchange Act and the rules and regulations of the
SEC thereunder.
We shall be deemed to have accepted validly tendered Original Notes when,
as and if we have given oral or written notice thereof to the exchange agent.
The exchange agent will act as agent for the tendering holders of the Original
Notes for the purposes of receiving the Exchange Notes. The Exchange Notes
delivered pursuant to the Exchange Offers will be issued on the earliest
practicable date following the acceptance for exchange of Original Notes by us.
If any tendered Original Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Original Notes will be returned,
without expense, to the tendering holder thereof as promptly as practicable
after the applicable Expiration Date.
Holders who tender Original Notes in the Exchange Offers will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal designated for such Original Notes, transfer taxes
with respect to the exchange of the Original Notes pursuant to the Exchange
Offers. We will pay all charges and expenses, other than certain applicable
taxes, in connection with the Exchange Offers. See " -- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" with respect to each Exchange Offer, shall mean
5:00 p.m., New York City time, on , 2000, unless we, in our sole
discretion, extend the Exchange Offer, in which case the term "Expiration Date"
shall mean the latest date and time to which that Exchange Offer is extended.
In order to extend an Exchange Offer, we will notify the exchange agent of
any extension by oral or written notice and will make a public announcement
thereof, each prior to 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date of that Exchange Offer.
We reserve the right, in our sole discretion,
(1) to delay accepting any Original Notes,
(2) to extend either or both Exchange Offers,
(3) if any of the conditions set forth below under " -- Conditions to
the Exchange Offers" have not been satisfied, to terminate either or both
Exchange Offers, or
(4) to amend the terms of an Exchange Offer in any manner.
We may effect any such delay, extension or termination by giving oral or
written notice thereof to the exchange agent.
Except as specified in the second paragraph under this heading, any such
delay in acceptance, extension, termination or amendment will be followed as
promptly as practicable by a public announcement thereof. If an Exchange Offer
is amended in a manner determined by us to constitute a material change, we will
promptly disclose such amendment by means of a prospectus supplement that will
be distributed to the registered holders of the Original Notes. That Exchange
Offer will then be extended for a period of five to 10 business days, as
required by law, depending upon the significance of the amendment and the manner
of disclosure to the registered holders, if the Exchange Offer would otherwise
expire during such five to 10 business day period.
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<PAGE> 22
Without limiting the manner in which we may choose to make a public
announcement of any delay, extension, termination or amendment of these Exchange
Offers, we shall not have an obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
thereof to the Dow Jones News Service.
PROCEDURES FOR TENDERING ORIGINAL NOTES
TENDERS OF ORIGINAL NOTES. The tender by a holder of Original Notes
pursuant to any of the procedures set forth below will constitute the tendering
holder's acceptance of the terms and conditions of the Exchange Offer applicable
to such Notes. Our acceptance for exchange of Original Notes tendered pursuant
to any of the procedures described below will constitute a binding agreement
between such tendering holder and us in accordance with the terms and subject to
the conditions of the Exchange Offer applicable to such Original Notes. Only
holders are authorized to tender their Original Notes. The procedures by which
Original Notes may be tendered by beneficial owners that are not holders will
depend upon the manner in which the Original Notes are held.
DTC has authorized DTC participants that are beneficial owners of Original
Notes through DTC to tender their Original Notes as if they were holders. To
effect a tender, DTC participants should either (1) complete and sign the
applicable Letter of Transmittal or a facsimile thereof, have the signature
thereon guaranteed if required by Instruction 1 of the Letter of Transmittal,
and mail or deliver the Letter of Transmittal or such facsimile pursuant to the
procedures for book-entry transfer set forth below under "-- Book-Entry Delivery
Procedures," or (2) transmit their acceptance to DTC through the DTC Automated
Tender Offer Program ("ATOP"), for which the transaction will be eligible, and
follow the procedures for book-entry transfer, set forth below under
"-- Book-Entry Delivery Procedures."
TENDER OF ORIGINAL NOTES HELD IN PHYSICAL FORM. To tender effectively
Original Notes held in physical form pursuant to an Exchange Offer,
- a properly completed Letter of Transmittal applicable to such Notes (or a
facsimile thereof) duly executed by the holder thereof, and any other
documents required by the Letter of Transmittal, must be received by the
exchange agent at one of its addresses set forth below, and tendered
Original Notes must be received by the exchange agent at such address (or
delivery effected through the deposit of Original Notes into the exchange
agent's account with DTC and making book-entry delivery as set forth
below) on or prior to the Expiration Date of that Exchange Offer, or
- the tendering holder must comply with the guaranteed delivery procedures
set forth below.
LETTERS OF TRANSMITTAL OR ORIGINAL NOTES SHOULD BE SENT ONLY TO THE
EXCHANGE AGENT AND SHOULD NOT BE SENT TO US.
TENDER OF ORIGINAL NOTES HELD THROUGH A CUSTODIAN. To tender effectively
Original Notes that are held of record by a custodian bank, depository, broker,
trust company or other nominee, the beneficial owner thereof must instruct such
holder to tender the Original Notes on the beneficial owner's behalf. A letter
of instructions from the record owner to the beneficial owner may be included in
the materials provided along with this prospectus which may be used by the
beneficial owner in this process to instruct the registered holder of such
owner's Original Notes to effect the tender.
TENDER OF ORIGINAL NOTES HELD THROUGH DTC. To tender effectively Original
Notes that are held through DTC, DTC participants should either
- properly complete and duly execute the Letter of Transmittal applicable
to such Notes (or a facsimile thereof), and any other documents required
by the Letter of Transmittal, and mail or deliver the Letter of
Transmittal or such facsimile
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<PAGE> 23
pursuant to the procedures for book-entry transfer set forth below, or
- transmit their acceptance through ATOP, for which the transaction will be
eligible, and DTC will then edit and verify the acceptance and send an
Agent's Message to the exchange agent for its acceptance.
Delivery of tendering Original Notes held through DTC must be made to the
exchange agent pursuant to the book-entry delivery procedures set forth below or
the tendering DTC participant must comply with the guaranteed delivery
procedures set forth below.
THE METHOD OF DELIVERY OF ORIGINAL NOTES AND LETTERS OF TRANSMITTAL, ANY
REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING
DELIVERY THROUGH DTC AND ANY ACCEPTANCE OR AGENT'S MESSAGE TRANSMITTED THROUGH
ATOP, IS AT THE ELECTION AND RISK OF THE PERSON TENDERING ORIGINAL NOTES AND
DELIVERING LETTERS OF TRANSMITTAL. EXCEPT AS OTHERWISE PROVIDED IN THE LETTER OF
TRANSMITTAL, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE
PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE APPLICABLE EXPIRATION DATE TO
PERMIT DELIVERY TO THE EXCHANGE AGENT PRIOR TO SUCH DATE.
Except as provided below, unless the Original Notes being tendered are
deposited with the exchange agent on or prior to the applicable Expiration Date
(accompanied by a properly completed and duly executed Letter of Transmittal or
a properly transmitted Agent's Message), we may, at our option, reject such
tender. Exchange of Exchange Notes for Original Notes of the same series will be
made only against deposit of the tendered Original Notes and delivery of all
other required documents.
BOOK-ENTRY DELIVERY PROCEDURES. The exchange agent will establish accounts
with respect to the Original Notes at DTC for purposes of the Exchange Offers
within two business days after the date of this prospectus, and any financial
institution that is a participant in DTC may make book-entry delivery of the
Original Notes by causing DTC to transfer such Original Notes into the exchange
agent's account in accordance with DTC's procedures for such transfer. However,
although delivery of Original Notes may be effected through book-entry at DTC,
the applicable Letter of Transmittal (or facsimile thereof), with any required
signature guarantees or an Agent's Message in connection with a book-entry
transfer, and any other required documents, must, in any case, be transmitted to
and received by the exchange agent at one or more of its addresses set forth in
this prospectus on or prior to the applicable Expiration Date, or compliance
must be made with the guaranteed delivery procedures described below. Delivery
of documents to DTC does not constitute delivery to the exchange agent. The
confirmation of a book-entry transfer into the exchange agent's account at DTC
as described above is referred to herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the exchange agent and forming a part of the Book-Entry
Confirmation, which states that DTC has received an express acknowledgment from
each participant in DTC tendering the Original Notes and that such participant
has received the applicable Letter of Transmittal and agrees to be bound by the
terms of the Letter of Transmittal and we may enforce such agreement against
such participant.
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a recognized member of the Medallion Signature Guarantee Program
or by any other "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 promulgated under the Exchange Act (each of the foregoing, an
"Eligible Institution"), unless the Original Notes tendered thereby are tendered
(1) by a registered holder of Original Notes (or by a participant in DTC whose
name appears on a DTC security position listing as the owner of such Original
Notes) who has not completed either the box entitled "Special Issuance
Instructions" or "Special Delivery
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<PAGE> 24
Instructions" on the Letter of Transmittal, or (2) for the account of an
Eligible Institution. See Instruction 1 of the Letters of Transmittal. If the
Original Notes are registered in the name of a person other than the signer of
the Letter of Transmittal or if Original Notes not accepted for exchange or not
tendered are to be returned to a person other than the registered holder, then
the signatures on the Letter of Transmittal accompanying the tendered Original
Notes must be guaranteed by an Eligible Institution as described above. See
Instructions 1 and 5 of the Letters of Transmittal.
GUARANTEED DELIVERY. If a holder desires to tender Original Notes pursuant
to an Exchange Offer and time will not permit the applicable Letter of
Transmittal, certificates representing such Original Notes and all other
required documents to reach the exchange agent, or the procedures for book-entry
transfer cannot be completed, on or prior to the Expiration Date of that
Exchange Offer, such Original Notes may nevertheless be tendered if all the
following conditions are satisfied:
(1) the tender is made by or through an Eligible Institution;
(2) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by us herewith, or an
Agent's Message with respect to guaranteed delivery that is
accepted by us, is received by the exchange agent on or prior to
the Expiration Date, as provided below; and
(3) the certificates for the tendered Original Notes, in proper form
for transfer (or a Book-Entry Confirmation of the transfer of such
Original Notes into the exchange agent's account at DTC as
described above), together with the applicable Letter of
Transmittal (or facsimile thereof), property completed and duly
executed, with any required signature guarantees and any other
documents required by the Letter of Transmittal or a properly
transmitted Agent's Message, are received by the exchange agent
within two business days after the date of execution of the Notice
of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be sent by hand delivery, telegram,
facsimile transmission or mail to the exchange agent and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, delivery of Exchange Notes by
the exchange agent for Original Notes of the same series tendered and accepted
for exchange pursuant to an Exchange Offer will, in all cases, be made only
after timely receipt by the exchange agent of such Original Notes (or Book-Entry
Confirmation of the transfer of such Original Notes into the exchange agent's
account at DTC as described above), and the applicable Letter of Transmittal (or
facsimile thereof) with respect to such Original Notes, properly completed and
duly executed, with any required signature guarantees and any other documents
required by the Letter of Transmittal, or a properly transmitted Agent's
Message.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of tendered
Original Notes will be determined by us in our sole discretion, which
determination will be final and binding. We reserve the absolute right to reject
any and all Original Notes not properly tendered or any Original Notes our
acceptance of which, in the opinion of our counsel, would be unlawful.
We also reserve the right to waive any defects, irregularities or
conditions of tender as to particular Original Notes. The interpretation of the
terms and conditions of our Exchange Offers (including the instructions in the
Letters of Transmittal) by us will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Original
Notes
23
<PAGE> 25
must be cured within such time as we shall determine.
Although we intend to notify holders of defects or irregularities with
respect to tenders of Original Notes through the exchange agent, neither we, the
exchange agent nor any other person is under any duty to give such notice, nor
shall they incur any liability for failure to give such notification. Tenders of
Original Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived.
Any Original Notes received by the exchange agent that are not validly
tendered and as to which the defects or irregularities have not been cured or
waived, or if Original Notes are submitted in a principal amount greater than
the principal amount of Original Notes being tendered by such tendering holder,
such unaccepted or non-exchanged Original Notes will either be
(1) returned by the exchange agent to the tendering holders, or
(2) in the case of Original Notes tendered by book-entry transfer into
the exchange agent's account at the Book-Entry Transfer Facility pursuant
to the book-entry transfer procedures described below, credited to an
account maintained with such Book-Entry Transfer Facility.
By tendering, each registered holder will represent to us that, among other
things,
(1) the Exchange Notes to be acquired by the holder and any beneficial
owner(s) of the Original Notes in connection with the applicable Exchange
Offer are being acquired by the holder and any beneficial owner(s) in the
ordinary course of business of the holder and any beneficial owner(s),
(2) the holder and each beneficial owner are not participating, do not
intend to participate, and have no arrangement or understanding with any
person to participate, in a distribution of the Exchange Notes,
(3) the holder and each beneficial owner acknowledge and agree that
(x) any person participating in the Exchange Offer for the purpose of
distributing the Exchange Notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction with respect to the Exchange Notes acquired by
such person and cannot rely on the position of the Staff of the SEC set
forth in no-action letters that are discussed herein under "-- Resale of
the Exchange Notes; Plan of Distribution," and (y) any broker-dealer that
receives Exchange Notes for its own account in exchange for Original Notes
of the same series pursuant to the Exchange Offer must delivery a
prospectus in connection with any resale of such Exchange Notes, but by so
acknowledging, the holder shall not be deemed to admit that, by delivering
a prospectus, it is an "underwriter" within the meaning of the Securities
Act,
(4) neither the holder nor any beneficial owner is an "affiliate," as
defined under Rule 405 of the Securities Act, of ours except as otherwise
disclosed to us in writing, and
(5) the holder and each beneficial owner understands, that a secondary
resale transaction described in clause (3) above should be covered by an
effective registration statement containing the selling securityholder
information required by Item 507 of Regulation S-K of the SEC.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Original Notes of the same series, where such Original Notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. See "-- Resale of the
Exchange Notes; Plan of Distribution."
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Original Notes pursuant to
an Exchange Offer may be withdrawn, unless therefore accepted for exchange as
provided
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<PAGE> 26
in the applicable Exchange Offer, at any time prior to the Expiration Date of
that Exchange Offer.
To be effective, a written or facsimile transmission notice of withdrawal
must be received by the exchange agent at its address set forth herein prior to
the Expiration Date of that Exchange Offer. Any such notice of withdrawal must
- specify the name of the person having deposited the Original Notes to be
withdrawn,
- identify the Original Notes to be withdrawn, including the certificate
number or numbers of the particular certificates evidencing the Original
Notes (unless such Original Notes were tendered by book-entry transfer),
and aggregate principal amount of such Original Notes, and
- be signed by the holder in the same manner as the original signature on
the Letter of Transmittal (including any required signature guarantees)
or be accompanied by documents of transfer sufficient to have the trustee
under the Indenture register the transfer of the Original Notes into the
name of the person withdrawing such Original Notes.
If Original Notes have been delivered pursuant to the procedures for
book-entry transfer set forth in "-- Procedures for Tendering Original
Notes -- Book-Entry Delivery Procedures," any notice of withdrawal must specify
the name and number of the account at the appropriate book-entry transfer
facility to be credited with such withdrawn Original Notes and must otherwise
comply with such book-entry transfer facility's procedures.
If the Original Notes to be withdrawn have been delivered or otherwise
identified to the exchange agent, a signed notice of withdrawal meeting the
requirements discussed above is effective immediately upon written or facsimile
notice of withdrawal even if physical release is not yet effected. A withdrawal
of Original Notes can only be accomplished in accordance with these procedures.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by us in our sole discretion, which
determination shall be final and binding on all parties. No withdrawal of
Original Notes will be deemed to have been properly made until all defects or
irregularities have been cured or expressly waived. Neither we, the exchange
agent nor any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or revocation, nor shall
we or they incur any liability for failure to give any such notification. Any
Original Notes so withdrawn will be deemed not to have been validly tendered for
purposes of that Exchange Offer and no Exchange Notes will be issued with
respect thereto unless the Original Notes so withdrawn are retendered. Properly
withdrawn Original Notes may be retendered by following one of the procedures
described above under "-- Procedures for Tendering Original Notes" at any time
prior to the Expiration Date of that Exchange Offer.
Any Original Notes which have been tendered but which are not accepted for
exchange due to the rejection of the tender due to uncured defects or the prior
termination of the applicable Exchange Offer, or which have been validly
withdrawn, will be returned to the holder thereof unless otherwise provided in
the applicable Letter of Transmittal, as soon as practicable following the
Expiration Date of that Exchange Offer or, if so requested in the notice of
withdrawal, promptly after receipt by us of notice of withdrawal without cost to
such holder.
CONDITIONS TO THE EXCHANGE OFFERS
Neither Exchange Offer shall be subject to any conditions, other than that
(1) the SEC has issued an order or orders declaring the Indenture
governing the Notes qualified under the Trust Indenture Act of 1939,
(2) the Exchange Offer, or the making of any exchange by a holder,
does not violate applicable law or any
25
<PAGE> 27
applicable interpretation of the staff of the SEC,
(3) no action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency with respect to that
Exchange Offer, which, in our judgment, might impair our ability to proceed
with that Exchange Offer,
(4) there shall not have been adopted or enacted any law, statute,
rule or regulation which, in our judgment, would materially impair our
ability to proceed with the Exchange Offer, or
(5) there shall not have occurred any material change in the financial
markets in the United States or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which on the financial
markets of the United States, in our judgment, would materially impair our
ability to proceed with the Exchange Offer.
If we determine in our sole discretion that any of the conditions to an
Exchange Offer are not satisfied, we may
(1) refuse to accept any Original Notes and return all tendered
Original Notes to the tendering holders,
(2) extend the Exchange Offer and retain all Original Notes tendered
prior to the Expiration Date applicable to that Exchange Offer, subject,
however, to the rights of holders to withdraw such Original Notes
(see"-- Withdrawal of Original Tenders"), or
(3) waive such unsatisfied conditions with respect to the Exchange
Offer and accept all validly tendered Original Notes which have not been
withdrawn.
If such waiver constitutes a material change to the applicable Exchange
Offer, we will promptly disclose such waiver by means of a prospectus supplement
that will be distributed to the registered holders, and will extend that
Exchange Offer for a period of five to 10 business days, depending upon the
significance of the waiver and the manner of disclosure to the registered
holders, if the Exchange Offer would otherwise expire during such five to 10
business day period.
EXCHANGE AGENT
First Union National Bank, the trustee under the indenture governing the
Notes, has been appointed as exchange agent for the Exchange Offers. Questions
and requests for assistance, requests for additional copies of this prospectus
or of the Letters of Transmittal and requests for Notices of Guaranteed Delivery
and other documents should be directed to the exchange agent addressed as
follows:
By Mail:
First Union National Bank
First Union Customer Information Center
Corporate Trust Operations -- NC1153
1525 West W.T. Harris Boulevard -- 3C3
Charlotte, NC 28288
Attention: Mike Klotz
By Facsimile:
(704) 590-7628
Confirm by
Telephone:
(704) 590-7408
By Hand:
First Union National Bank
First Union Customer Information Center
Corporate Trust Operations -- NC1153
1525 West W.T. Harris Boulevard -- 3C3
Charlotte, NC 28262-1153
Attention: Mike Klotz
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, additional solicitation may be made by
telegraph, telecopy, telephone or in person by officers and regular employees of
the partnership, the general partner and its affiliates.
No dealer-manager has been retained in connection with the Exchange Offers
and no payments will be made to brokers, dealers or others soliciting acceptance
of the Exchange Offers. However, reasonable and customary fees will be paid to
the exchange agent for its
26
<PAGE> 28
services and it will be reimbursed for its reasonable out-of-pocket expenses in
connection therewith.
We estimate that our out of pocket expenses for the Exchange Offers will be
approximately $ . Such expenses include fees and expenses of the
exchange agent and the trustee under the indenture, accounting and legal fees
and printing costs, among others.
We will pay all transfer taxes, if any, applicable to the exchange of the
Original Notes pursuant to the Exchange Offers. If, however, a transfer tax is
imposed for any reason other than the exchange of the Original Notes pursuant to
the applicable Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the carrying value of the Original
Notes of the same series and no gain or loss for accounting purposes will be
recognized. The expenses of the Exchange Offers will be amortized over the term
of the applicable Exchange Notes.
RESALE OF THE EXCHANGE NOTES; PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to an Exchange Offer must acknowledge that it will deliver a prospectus
in connection with any resale of Exchange Notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Original
Notes of the same series where such Original Notes were acquired as a result of
market-making activities or other trading activities. We have agreed that, for a
period of 90 days after the Expiration Date of an Exchange Offer, we will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until , 2000
(90 days after the date of this prospectus), all dealers effecting transactions
in the Exchange Notes, whether or not participating in this distribution, may be
required to deliver a prospectus. This requirement is in addition to the
obligation of dealers to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
We will not receive any proceeds from any sale of Exchange Notes by broker-
dealers. Exchange Notes received by broker-dealers for their own account
pursuant to an Exchange Offer may be sold from time to time in one or more
transactions
(1) in the over-the-counter market,
(2) in negotiated transactions,
(3) through the writing of options on the Exchange Notes or a
combination of such methods of resale,
(4) at market prices prevailing at the time of resale,
(5) at prices related to such prevailing market prices, or
(6) at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Notes.
Any broker-dealer that resells Exchange Notes that were received by it for
its own account pursuant to an Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commission on concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letters of Transmittal state that, by acknowledging that it will
deliver
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<PAGE> 29
a prospectus and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date of an Exchange Offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. We have agreed to pay all expenses incident to the
Exchange Offers (including the expenses of one counsel for the holders of the
Notes approved in writing by the holders of a majority in aggregate principal
amount of the Notes) other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the Notes (including any
broker-dealers) required to use this prospectus in connection with their resale
of Exchange Notes as described above against certain liabilities, including
liabilities under the Securities Act.
USE OF PROCEEDS
The Exchange Offers are intended to satisfy our obligations under the
registration rights agreement. We will not receive any cash proceeds from the
issuance of the Exchange Notes offered by this prospectus. In consideration for
issuing the Exchange Notes as contemplated in this prospectus, we will receive
in exchange Original Notes of the same series in like principal amount, the form
and terms of which are the same as the form and terms of the Exchange Notes,
except as otherwise described herein under "The Exchange Offers -- Terms of the
Exchange Offers." The Original Notes surrendered in exchange for the Exchange
Notes of the same series will be retired and canceled and cannot be reissued.
Accordingly, issuance of the Exchange Notes will not result in any increase in
our indebtedness.
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<PAGE> 30
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
The following unaudited pro forma combined statements of income have been
prepared from our historical financial statements to give effect to:
- our acquisition from Kinder Morgan, Inc. effective as of December 31,
1999, of Kinder Morgan Interstate Gas Transmission LLC, a 33 1/3%
interest in Trailblazer Pipeline Company and a 49% interest in Red Cedar
Gathering Company in exchange for 9,810,000 common units and $330 million
in cash; and
- our acquisition from Columbia Gulf Transmission Company on November 30,
1999, of a 33 1/3% interest in Trailblazer Pipeline Company for $37.6
million in cash.
The unaudited pro forma combined statements of income reflect adjustments
as if the above acquisitions had occurred on January 1, 1999. The pro forma
adjustments reflected in the accompanying unaudited pro forma combined
statements of income were prepared using the purchase method of accounting. The
pro forma adjustments are based on preliminary estimates, contractual
obligations and certain assumptions that we believe are reasonable under the
circumstances.
The column entitled "Kinder Morgan Energy Partners Historical" includes
earnings from equity investments from our 33 1/3% interest in Trailblazer
Pipeline Company acquired on November 30, 1999.
The column entitled "Acquired Assets Historical" consists of the historical
results of operations of Kinder Morgan Interstate Gas Transmission LLC, a
33 1/3% equity interest in Trailblazer Pipeline Company and a 49% equity
interest in Red Cedar Gathering Company for the year ended December 31, 1999.
The Trailblazer consolidating adjustments consist of the adjustments
required to consolidate the results of operations of Trailblazer.
The pro forma adjustments to operating expenses and general and
administrative expenses reflect reductions that are contractually guaranteed
under the terms of an agreement whereby Kinder Morgan, Inc. will continue to
operate, on our behalf, Kinder Morgan Interstate Gas Transmission LLC.
The pro forma adjustments to depreciation and amortization reflect:
- the reductions in estimated depreciation expense as a result of the
reduced cost of property, plant and equipment; and
- an adjustment to include a full year of depreciation for Kinder Morgan
Interstate Gas Transmission LLC, because Kinder Morgan Interstate Gas
Transmission LLC was accounted for as a discontinued operation by Kinder
Morgan, Inc. for a portion of 1999.
The pro forma adjustments to the amortization of excess cost of equity
investments reflect the amortization of the excess cost of our investment in Red
Cedar Gathering Company over our share of the book value of the underlying net
assets of Red Cedar Gathering Company.
The pro forma adjustment to interest, net reflects the reversal of Kinder
Morgan Interstate Gas Transmission LLC's historical interest expense and the
incremental interest expense on the additional $367.6 million in debt incurred
with respect to the acquisitions at a rate of 6.17%, our average borrowing rate
for 1999.
The pro forma adjustments to minority interest, general partner's interest
in net income and limited partners' net income give effect to the allocation of
pro forma net income to the general partner and the limited partners resulting
from the utilization of partnership sharing ratios.
The general partner's interest in net income includes incentive
distributions the general partner would have received based on total
distributions. These incentive distributions are greater under the pro forma
statements due to our announced $0.05 increase in per unit quarterly
distributions resulting from cash flow attributable to all of the acquired
interests and
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<PAGE> 31
the issuance of the 9,810,000 common units to Kinder Morgan, Inc. as
consideration for the acquired interests.
The pro forma adjustment to income tax benefit (expense) reflects the
reversal of Kinder Morgan Interstate Gas Transmission LLC's historical income
tax expense.
Merger-related and severance costs in the column entitled "Acquired Assets
Historical" are non-recurring, allocated expenses related to the acquisition by
K N Energy, Inc. of Kinder Morgan, Inc. These non-recurring expenses have been
reversed in the column entitled "Pro Forma Adjustments" as they are unrelated to
the financial performance of the acquired assets and unrelated to the transfer
of the acquired assets from Kinder Morgan, Inc. to Kinder Morgan Energy
Partners.
The unaudited pro forma combined statements of income do not purport to
present the results of operations of Kinder Morgan Energy Partners had the
assumed acquisitions and assumed events occurred on the dates specified, nor are
they necessarily indicative of the results of operations that may be achieved in
the future. The unaudited pro forma combined statements of income do not give
effect to any operating efficiencies or cost savings that may be realized as a
result of the acquisitions, primarily related to reduction of duplicative
operating, general and administrative expenses, other than those cost savings
which are contractually guaranteed.
The unaudited pro forma combined statements of income should be read in
conjunction with the historical financial statements, including the related
notes which are included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, incorporated by reference.
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
KINDER MORGAN
ENERGY ACQUIRED TRAILBLAZER
PARTNERS ASSETS CONSOLIDATING PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED ADJUSTMENTS COMBINED
------------- ---------- ------------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues........................................ $428,749 $113,207 $33,711 $575,667 $ -- $575,667
Costs and expenses
Operating expenses............................. 143,107 37,333 2,827 183,267 (12,514) 170,753
Depreciation and amortization.................. 46,469 16,985 16,973 80,427 (4,710) 75,717
General and administrative..................... 35,612 9,566 -- 45,178 (3,516) 41,662
Taxes, other than income taxes................. 16,154 4,608 879 21,641 -- 21,641
Merger-related and severance costs............. -- 3,054 -- 3,054 (3,054) --
-------- -------- ------- -------- -------- --------
241,342 71,546 20,679 333,567 (23,794) 309,773
Operating income................................ 187,407 41,661 13,032 242,100 23,794 265,894
Other income (expense)
Earnings from equity investments............... 42,918 16,280 (3,666) 55,532 -- 55,532
Amortization of excess cost of equity
investments.................................. (4,254) -- 24 (4,230) (1,110) (5,340)
Interest, net.................................. (52,605) (27,119) (2,882) (82,606) 4,631 (77,975)
Other, net..................................... 14,085 (248) -- 13,837 -- 13,837
Gain on sale of equity interest and special
charges...................................... 10,063 -- -- 10,063 -- 10,063
Minority interest.............................. (2,891) -- (3,383) (6,274) (616) (6,890)
-------- -------- ------- -------- -------- --------
Income before income taxes and extraordinary
charge......................................... 194,723 30,574 3,125 228,422 26,699 255,121
Income tax benefit (expense).................... (9,826) (5,948) -- (15,774) 5,948 (9,826)
-------- -------- ------- -------- -------- --------
Income before extraordinary charge.............. 184,897 24,626 3,125 212,648 32,647 245,295
Extraordinary charge on early extinguishment of
debt........................................... (2,595) -- -- (2,595) -- (2,595)
-------- -------- ------- -------- -------- --------
Net income...................................... $182,302 $ 24,626 $ 3,125 $210,053 $ 32,647 $242,700
======== ======== ======= ======== ======== ========
Calculation of limited partners' interest in
income before extraordinary item:
Income before extraordinary charge.............. $184,897 60,398 245,295
Less: general partner's interest in net
income......................................... (56,273) (22,793) (79,066)
-------- -------- --------
Limited partners' net income before
extraordinary item............................. 128,624 37,605 166,229
Less: extraordinary charge on early
extinguishment of debt......................... (2,595) -- (2,595)
-------- -------- --------
Limited partners' net income.................... $126,029 37,605 163,634
======== ======== ========
Net income per unit before extraordinary
charge......................................... $ 2.63 0.20 2.83
======== ========
Extraordinary charge per unit................... $ (0.06) 0.01 (0.05)
======== ========
Net income per unit............................. $ 2.57 0.21 2.78
======== ========
Declared distribution per unit.................. $ 2.85 0.20 3.05
======== ========
Number of units used in computation............. 48,974 9,810 58,784
======== ========
</TABLE>
30
<PAGE> 32
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The historical ratios of earnings to fixed charges of Kinder Morgan Energy
Partners and our consolidated subsidiaries for the periods indicated is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- --------------------------------
1999 1998 1997 1996 1995
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
4.39 3.67 2.67 2.15 2.05
</TABLE>
The pro forma ratio of earnings to fixed charges assuming we made the
acquisitions detailed in the pro forma financial statements discussed earlier in
this prospectus on January 1, 1999, for the period indicated is as follows:
<TABLE>
<CAPTION>
PRO FORMA
FOR THE
YEAR ENDED
DECEMBER 31,
1999
------------
<S> <C> <C>
4.13
</TABLE>
In both cases, earnings represent:
- - income before income taxes, extraordinary items, equity income and minority
interest; plus
- - fixed charges, excluding capitalized interest and distributed income of equity
investees.
In both cases, fixed charges include:
- - interest, including capitalized interest; plus
- - amortization of debt issuance costs.
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<PAGE> 33
DESCRIPTION OF THE NOTES
GENERAL
The Notes are to be issued under an indenture dated March 22, 2000. The
indenture is a contract between us and First Union National Bank, which acts as
trustee. The indenture will not be qualified under the Trust Indenture Act of
1939, except upon effectiveness of a registration statement for the Exchange
Offers. By its terms, however, the indenture incorporates certain provisions of
the Trust Indenture Act and, upon consummation of the Exchange Offers, the
indenture will be subject to and governed by the Trust Indenture Act. References
to the Notes include the Exchange Notes unless the context otherwise requires.
Additionally, we refer to the Original Floating Rate Notes and the Floating Rate
Exchange Notes collectively as the Floating Rate Notes and the Original 8% Notes
and the 8% Exchange Notes collectively as the 8% Notes. The indenture and the
Notes contain the full legal text of the matters described in this section. The
Indenture and the Notes are governed by New York law.
The following description of the material provisions of the Notes and the
indenture is a summary only. Because this section is a summary, it does not
describe every aspect of those documents. We urge you to read the indenture
because it, and not this summary, defines your rights as holders of the Notes.
In the summary we have included references to selected sections of the indenture
so that you can locate these provisions. We have filed a copy of the indenture
as an exhibit to the registration statement of which this prospectus is a part.
PRINCIPAL AND MATURITY
The Notes are unsecured obligations of Kinder Morgan Energy Partners. The
Floating Rate Notes are limited to $200,000,000 aggregate principal amount and
the 8% Notes are limited to $200,000,000 aggregate principal amount. The
Floating Rate Notes mature on March 22 of their year of maturity. The 8% Notes
mature on March 15 of their year of maturity, unless sooner redeemed. The Notes
are not entitled to the benefits of a sinking fund.
All of the Notes are held initially in the form of one or more global
notes. See "-- Legal Ownership -- Global Notes" for a general description of the
global notes.
FIXED RATE INTEREST
The 8% Notes bear interest from March 22, 2000, payable semi-annually in
arrears on March 15 and September 15 of each year. We refer to each of those
days as a fixed rate interest payment date. Interest payments shall commence on
September 15, 2000, to noteholders in whose name the 8% Notes are registered at
the close of business on the 15th day preceding the respective fixed rate
interest payment date.
Interest on the 8% Notes is computed on the basis of a 360-day year
comprised of twelve 30-day months.
FLOATING RATE INTEREST
The Floating Rate Notes bear interest from March 22, 2000 at a floating
rate determined in the manner provided below, payable quarterly on March 22,
June 22, September 22 and December 22 of each year. We refer to each of those
days as a floating rate interest payment date. Interest payments shall commence
on June 22, 2000, to noteholders in whose name the Floating Rate Notes are
registered at the close of business on the 15th day preceding the respective
floating rate interest payment date.
The per annum interest rate on the Floating Rate Notes, which we call the
floating interest rate, in effect for each day of an interest period, as defined
below, will be equal to the three-month LIBOR rate, as defined below, plus 50
basis points (0.5%). The floating interest rate for each interest period will be
set on the 22nd day of the months of March, June, September and December of each
year, commencing March 22, 2000. We refer to each of those days as an interest
reset date. The applicable floating interest rate shall apply until the
principal on the Floating Rate Notes is paid or
32
<PAGE> 34
made available for payment, with that date called the principal payment date. If
any interest reset date and floating rate interest payment date would otherwise
be a day that is not a LIBOR business day, as defined below, such interest reset
date and floating rate interest payment date shall be the next succeeding LIBOR
business day. LIBOR business day refers to any day that is not a Saturday or
Sunday and that, in The City of New York or The City of London, is not a day on
which banking institutions are generally authorized or obligated by law to
close. Interest period refers to the period from and including an interest reset
date until, but excluding, the next succeeding interest reset date. The last
interest period is from and including the interest reset date immediately
preceding the maturity date or the principal payment date, as the case may be,
until, but not including, the maturity date or the principal payment date, as
the case may be. If the principal payment date or the maturity date is not a
LIBOR business day, then the principal amount of the Floating Rate Notes plus
accrued and unpaid interest shall be paid on the next succeeding LIBOR business
day and no interest shall accrue for the maturity date, the principal payment
date or any day after.
The three-month LIBOR rate refers to the rate determined in accordance with
the following provisions:
- On the interest determination date, which will be the second London
business day preceding each interest reset date, First Union National
Bank, as the calculation agent, will determine the three-month LIBOR rate
which shall be the rate for deposits in the London interbank market in
U.S. dollars having a three-month maturity commencing on the second
London business day immediately following such interest determination
date which appears on the Telerate Page 3750 as of 11:00 a.m., London
time, on such interest determination date. Telerate Page 3750 refers to
the display on Page 3750 of the Dow Jones Telerate Service, or such other
page as may replace that page on that service for the purpose of
displaying London interbank offered rates of major banks for U.S. dollar
deposits. If the three-month LIBOR rate on such interest determination
date does not appear on the Telerate Page 3750, the three-month LIBOR
rate will be determined as described in the clause below. London business
day means any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market.
- With respect to an interest determination date for which the three-month
LIBOR rate does not appear on the Telerate Page 3750 as specified in the
clause above, the calculation agent will request the principal London
offices of each of four major banks in the London interbank market, as
selected by the calculation agent, to provide the calculation agent with
its offered quotation for deposits in U.S. dollars having a three-month
maturity commencing on the second London business day immediately
following such interest determination date to prime banks in the London
interbank market at approximately 11:00 a.m., London time, on the
interest determination date and in a principal amount that is
representative for a single transaction in that market at such time. If
at least two quotations are provided, the three-month LIBOR rate on the
interest determination date will be the arithmetic mean, rounded upwards,
if necessary, to the nearest one hundred-thousandth of a percentage
point, with 5 or more one-millionths of one percentage point rounded
upwards, of the quotations. If fewer than two quotations are provided,
the three-month LIBOR rate determined on the interest determination date
will be the arithmetic mean, rounded upwards, if necessary, to the
nearest one hundred-thousandth of a percentage point, with 5 or more
one-millionths of one percentage point rounded upwards, of the rates
quoted at approximately
33
<PAGE> 35
11:00 a.m., New York City time, on the interest determination date for
loans in U.S. dollars to leading European banks, having a three-month
maturity commencing on the second London business day immediately
following the interest determination date and in a principal amount that
is representative for a single transaction in that market at such time by
three major banks in New York City selected by the calculation agent.
However, if the banks selected by the calculation agent are not quoting
as mentioned in the immediately preceding sentence, the three-month LIBOR
rate with respect to the interest determination date will be the
three-month LIBOR rate in effect on the interest determination date.
The amount of interest for each day that a Floating Rate Note is
outstanding will be calculated by dividing the floating interest rate in effect
for such day by 360 and multiplying the result by the principal amount of that
Floating Rate Note. The amount of interest to be paid on such Floating Rate Note
for any interest period will be calculated by adding the daily interest amounts
for each day in such interest period.
The floating interest rate will in no event be higher than the maximum rate
permitted by New York law or the law of the United States.
The floating interest rate and amount of interest to be paid on the
Floating Rate Notes for each interest period will be determined by the
calculation agent. All calculations made by the calculation agent shall, in the
absence of manifest error, be conclusive for all purposes and binding on Kinder
Morgan Energy Partners and the holders of the Floating Rate Notes. So long as
the three-month LIBOR rate is required to be determined with respect to the
Floating Rate Notes, there will at all times be a calculation agent. In the
event that the calculation agent shall be unable or unwilling to act, or that
the calculation agent shall fail duly to establish the three-month LIBOR rate
for any interest period, or that Kinder Morgan Energy Partners proposes to
remove the calculation agent, Kinder Morgan Energy Partners shall appoint
another person which is a bank, trust company, investment banking firm or other
financial institution to act as the calculation agent.
RANKING
The Notes will rank equally with all of our other unsecured and
unsubordinated indebtedness from time to time outstanding. Holders of the Notes
will generally have a junior position to claims of creditors and preferred
stockholders of our subsidiaries who do not become guarantors, if applicable.
SFPP, L.P., the subsidiary that owns our Pacific operations, currently has debt
agreements that prohibit it from becoming a guarantor of any of our debt. As a
result, SFPP, L.P. will not become a guarantor, and you will be subordinated to
any creditors of SFPP, L.P. On December 31, 1999, SFPP, L.P. had approximately
$355 million of outstanding debt. The indenture does not limit our ability to
incur additional indebtedness.
OPTIONAL REDEMPTION
FLOATING RATE NOTES. The Floating Rate Notes will not be redeemable prior
to maturity.
FIXED RATE NOTES. The 8% Notes will be redeemable, at our option, 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 8% Notes to be redeemed at the
holder's address appearing in the 8% Note register, at a price equal to 100% of
the principal amount of the 8% Notes 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, plus a make-whole premium, if any. In no event will the
redemption price ever be less than 100% of the principal amount of the 8% Notes
plus accrued interest to the redemption date.
The amount of the make-whole premium on any 8% Note, or portion of an 8%
Note, to
34
<PAGE> 36
be redeemed will be equal to the excess, if any, of:
(1) the sum of the present values, calculated as of the redemption
date, of:
- each interest payment that, but for the redemption, would have
been payable on the 8% Note, or portion of an 8% Note, 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
- the principal amount that, but for the redemption, would have
been payable at the stated maturity of the 8% Note, or portion
of a 8% Note, being redeemed;
over
(2) the principal amount of the 8% Note, or portion of an 8% Note,
being redeemed.
The present value of interest and principal payments referred to in clause
(1) above will be determined in accordance with generally accepted principles of
financial analysis. The 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, as defined below, plus 0.25%.
The make-whole premium will be calculated by an independent investment
banking institution of national standing appointed by us. It could be one of the
initial purchasers. If we fail to make that appointment at least 30 business
days prior to the redemption date, or if the institution so appointed is
unwilling or unable to make the calculation, Goldman, Sachs & Co. will make the
calculation. If Goldman Sachs is unwilling or unable to make the calculation, an
independent investment banking institution of national standing appointed by the
trustee will make the calculation.
For purposes of determining the make-whole premium, Treasury Yield refers
to 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 8% Notes, calculated to the nearest 1/12
of a year, which we call 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, which we call 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 that 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 0.01%, with any figure of 0.005% or
more 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 banking institution.
If less than all of the 8% Notes are to be redeemed, the trustee will
select the 8% Notes to be redeemed by a method that the trustee deems fair and
appropriate. The trustee may select for redemption 8% Notes and portions of 8%
Notes in amounts of $1,000 or whole multiples of $1,000.
35
<PAGE> 37
SAME DAY SETTLEMENT
The Original Notes trade in, and the Exchange Notes will trade in, The
Depository Trust Company's settlement system until maturity. As a result, The
Depository Trust Company will require secondary trading activity in the Notes to
be settled in immediately available funds. So long as the Notes continue to
trade in The Depository Trust Company's settlement system, all payments of
principal and interest on the global notes will be made by us in immediately
available funds.
IMPORTANT COVENANTS
LIMITATIONS ON LIENS
The indenture provides that we will not, nor will we permit any subsidiary
to, create, assume, incur or suffer to exist any lien upon any Principal
Property, as defined below, or upon any shares of capital stock of any
subsidiary owning or leasing any Principal Property, whether owned or leased on
the date of the indenture or thereafter acquired, to secure any of our debt or
debt of any other person, other than the Notes issued under the indenture,
without making effective provision for all of the Notes outstanding under the
indenture to be secured equally and ratably with, or prior to, that debt so long
as that debt is so secured.
Principal Property means, whether owned or leased on the date of the
indenture or thereafter acquired:
- any pipeline assets of ours or any subsidiary, including any related
facilities employed in the transportation, distribution, storage or
marketing of refined petroleum products, natural gas liquids, coal and
carbon dioxide, that are located in the United States of America or any
territory or political subdivision thereof; and
- any processing or manufacturing plant or terminal owned or leased by
us 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:
(1) any of those assets consisting of inventories, furniture, office
fixtures and equipment, including data processing equipment, vehicles and
equipment used on, or with, vehicles; and
(2) any of those assets, plant or terminal which, in the opinion of
the board of directors of Kinder Morgan G.P., Inc., our general partner, is
not material in relation to our activities or with our subsidiaries, taken
as a whole.
There is excluded from this restriction:
(1) Permitted Liens, as defined below;
(2) any lien upon any property or assets created at the time of
acquisition of that property or assets by us or any subsidiary or within
one year after the time to secure all or a portion of the purchase price
for that property or assets or debt incurred to finance the purchase price,
whether that debt was incurred prior to, at the time of or within one year
after the date of the 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 the construction, development, repair or improvements or the
commencement of full operations thereof, whichever is later, to provide
funds for that purpose;
(4) any lien upon any property or assets existing thereon at the time
of the acquisition thereof by us or any subsidiary; provided, however, that
the lien only encumbers the property or assets so acquired;
(5) any lien upon any property or assets of an entity existing thereon
at the time that entity becomes a subsidiary by acquisition, merger or
otherwise; provided, however, that the lien only
36
<PAGE> 38
encumbers the property or assets of that entity at the time it becomes a
subsidiary;
(6) any lien upon any property or assets of ours or any subsidiary in
existence on the date the notes are first issued or provided for pursuant
to agreements existing on that date;
(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 we or the applicable subsidiary have not exhausted our 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) above;
provided, however, that any 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 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 ours and our subsidiaries, including any
premium, incurred in connection with any 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 ours or any
subsidiary.
Notwithstanding the foregoing, under the indenture, we may, and may permit
any subsidiary to, create, assume, incur, or suffer to exist any lien upon any
Principal Property to secure debt of ours or any person, other than the Notes,
that is not excepted by clauses (1) through (9) above, without securing the
Notes issued under the indenture; provided that the aggregate principal amount
of all debt then outstanding secured by the lien and all similar liens, together
with all Attributable Indebtedness, as defined below, from Sale-Leaseback
Transactions (excluding Sale-Leaseback Transactions permitted by clauses (1)
through (4), inclusive, of the first paragraph of the restriction on sale-
leasebacks covenant described below) does not exceed 10% of Consolidated Net
Tangible Assets, as defined below. (Section 1006)
Permitted Liens means:
(1) liens upon rights-of-way for pipeline purposes;
(2) 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
construction, development, improvement or repair;
(3) 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;
(4) 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 us or any subsidiary in good faith;
(5) liens of, or to secure performance of, leases, other than capital
leases;
(6) 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;
(7) any lien upon property or assets acquired or sold by us or any
subsidiary
37
<PAGE> 39
resulting from the exercise of any rights arising out of defaults on
receivables;
(8) 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;
(9) any lien in favor of us or any subsidiary;
(10) any lien in favor of the United States of America or any state of
the United States, or any department, agency or instrumentality or
political subdivision of the United States of America or any state of the
United States, to secure partial, progress, advance, or other payments
pursuant to any contract or statute, or any debt incurred by us 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 the lien;
(11) any lien securing industrial development, pollution control or
similar revenue bonds;
(12) any lien securing debt of ours 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 "substantial
concurrence," taking into consideration, among other things, required
notices to be given to holders of outstanding notes under the indenture in
connection with the refunding, refinancing or repurchase, and the required
corresponding durations thereof), to refinance, refund or repurchase all
outstanding notes under the indenture, including the amount of all accrued
interest thereon and reasonable fees and expenses and premium, if any,
incurred by us or any subsidiary in connection therewith;
(13) 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
(14) any lien upon or deposits of any assets to secure performance of
bids, trade contracts, leases or statutory obligations.
Consolidated Net Tangible Assets means, at any date of determination, the
total amount of assets after deducting:
- all current liabilities, excluding:
- any current liabilities that by their terms are extendable or
renewable at the option of the obligor to a time more than 12 months
after the time as of which the amount is being computed; and
- current maturities of long-term debt; and
- the value, net of any applicable reserves, of all goodwill, trade names,
trademarks, patents and other like intangible assets,
all as set forth, or on a pro forma basis as would be set forth, on our
consolidated balance sheet for our most recently completed fiscal quarter,
prepared in accordance with generally accepted accounting principles.
RESTRICTION ON SALE-LEASEBACKS
The indenture provides that we will not, and will not permit any of our
subsidiaries to, engage in the sale or transfer by us or any subsidiary of any
Principal Property to a person, other than us or a subsidiary, and the taking
back by us or any subsidiary, as the case may be, of a lease of the Principal
Property, which we call a Sale-Leaseback Transaction, unless:
(1) the 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
38
<PAGE> 40
improvement, or commencement of full operations on the 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) we or a 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 the Sale-Leaseback
Transaction without equally and ratably securing the Notes; or
(4) we or a subsidiary, within a one-year period after the
Sale-Leaseback Transaction, applies or causes to be applied an amount not
less than the Attributable Indebtedness from the Sale-Leaseback Transaction
to:
- the prepayment, repayment, redemption, reduction or retirement of any of
our debt or debt of any subsidiary that is not subordinated to the Notes;
or
- the expenditure or expenditures for Principal Property used or to be used
in the ordinary course of our business or the business of our
subsidiaries.
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 the transaction, of the total obligations of the lessee for rental
payments during the remaining term of the lease included in the Sale-Leaseback
Transaction, including any period for which the lease has been extended;
provided that the rental payments shall include 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. In the case of any lease that is terminable by the
lessee upon the payment of a penalty or other termination payment, the amount
shall be the lesser of the amount determined assuming termination upon the first
date the 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 the lease subsequent to the first date
upon which it may be so terminated, or the amount determined assuming no
termination.
Notwithstanding the foregoing, the indenture provides that we may, and may
permit any subsidiary to, effect any Sale-Leaseback Transaction that is not
excepted by clauses (1) through (4), inclusive, of the first paragraph above,
provided that the Attributable Indebtedness from the Sale-Leaseback Transaction,
together with the aggregate principal amount of outstanding debt, other than the
Notes, secured by liens upon Principal Properties not excepted by clauses (1)
through (9), inclusive, of the first paragraph of the limitation on liens
covenant described above, do not exceed 10% of the Consolidated Net Tangible
Assets. (Section 1007)
POTENTIAL GUARANTY OF NOTES BY SUBSIDIARIES
We are a holding company that conducts all of our operations through our
subsidiaries. Initially, none of our subsidiaries will guarantee the Notes.
However, the indenture will require our subsidiaries which become guarantors or
co-obligors of our Funded Debt, as defined below, to fully and unconditionally
guarantee, as "guarantors," our payment obligations on the Notes. In particular,
the indenture will require those subsidiaries who become guarantors or borrowers
under our bank credit agreement to equally guarantee the Notes.
In the indenture, the term subsidiary means, with respect to any person:
- any entity of which more than 50% of the total voting power of the equity
interests entitled, without regard to the occurrence of any contingency,
to vote in the election of directors, managers or trustees thereof; or
- any partnership of which more than 50% of the partners' equity interests,
considering all partners' equity
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interests as a single class, is at the time owned or controlled, directly
or indirectly, by that person or one or more of the other subsidiaries of
that person or combination thereof.
Funded Debt means all debt:
- maturing one year or more from the date of its creation;
- 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 to the debt, to a date one year or more from the date of its
creation; or
- under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of one year or more.
ADDITION AND RELEASE OF GUARANTEES
The indenture provides that if any of our subsidiaries is a guarantor or
obligor of any of our Funded Debt at any time on or subsequent to the date on
which the Notes are originally issued, including, without limitation, following
any release of the subsidiary from its guarantee as described below, then we
will cause the Notes to be equally and ratably guaranteed by that subsidiary.
Under the terms of the indenture, a guarantor may be released from its guarantee
if the guarantor is not a guarantor or obligor of any of our Funded Debt,
provided that no default or Event of Default under the indenture has occurred or
is continuing. (Sections 1401 and 1402)
Each of the guarantees would be an unsecured obligation of a guarantor and
would rank equally with that guarantor's guarantee, if any, under our bank
credit agreement and existing and future unsecured debt that is not expressly
subordinated to its guarantee.
Each guarantor would be obligated under its guarantee only up to an amount
that would not constitute a fraudulent conveyance or fraudulent transfer under
federal, state or foreign law.
NOTES EFFECTIVELY SUBORDINATED TO DEBT OF NON-GUARANTOR SUBSIDIARIES
Holders of Notes will effectively have a junior position to claims of
creditors and preferred stockholders of our subsidiaries who are not guarantors.
SFPP, L.P., the subsidiary that owns our Pacific operations, currently has debt
agreements that prohibit it from being a guarantor of any of our debt. As a
result, SFPP, L.P. will not become a guarantor. As of December 31, 1999, SFPP,
L.P. had approximately $355 million of outstanding debt. This debt of SFPP, L.P.
and any future debt it incurs effectively will be senior to the Notes.
CONSOLIDATION, MERGER OR ASSET SALE
The indenture generally allows us to consolidate or merge with a domestic
partnership or corporation. It also allows us to sell, lease or transfer all or
substantially all of our property and assets to a domestic partnership or
corporation. If this happens, the remaining or acquiring partnership or
corporation must assume all of our responsibilities and liabilities under the
indenture, including the payment of all amounts due on the notes and performance
of the covenants in the indenture.
However, we will consolidate or merge only with or into any other
partnership or corporation or sell, lease or transfer all or substantially all
of our assets according to the terms and conditions of the indenture, which
include the following requirements:
- the remaining or acquiring partnership or corporation is organized under
the laws of the United States, any state or the District of Columbia;
- the remaining or acquiring partnership or corporation assumes our
obligations under the indenture; and
- immediately after giving effect to the transaction no Event of Default,
as defined below, exists.
The remaining or acquiring partnership or corporation will be substituted
for us in the indenture with the same effect as if it had been an original party
to the indenture.
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Thereafter, the successor may exercise our rights and powers under the
indenture, in our name or in its own name. If we sell or transfer all or
substantially all of our assets, we will be released from all our liabilities
and obligations under any indenture and under the Notes. If we lease all or
substantially all of our assets, we will not be released from our obligations
under the indenture. (Sections 801 and 802)
If, at any time, any of our subsidiaries are required to guaranty the
Notes, the restriction on our ability to consolidate or merge and to sell, lease
or transfer all or substantially all of our property and assets also will apply
to that subsidiary.
MODIFICATION OF THE INDENTURE
Under the indenture, generally we and the trustee may modify our rights and
obligations, any guarantors' rights and obligations and the rights of the
holders with the consent of the holders of a majority in aggregate principal
amount of the outstanding Notes of each series affected by the modification. No
modification of the principal or interest payment terms, and no modification
reducing the percentage required for modifications, is effective against any
holder without its consent. In addition, we and the trustee may amend the
indenture without the consent of any holder of the Notes to make certain
technical changes, such as:
- correcting errors;
- providing for a successor trustee; or
- qualifying the indenture under the Trust Indenture Act. (Sections 901 and
902)
EVENTS OF DEFAULT AND REMEDIES
In the indenture, Event of Default will mean any of the following:
- failure to pay the principal of or any premium on any Note when due;
- failure to pay interest on any Note for 30 days;
- failure to perform any other covenant in the indenture that continues for
60 days after being given written notice; or
- our bankruptcy, insolvency or reorganization. (Section 501)
An Event of Default for either series of Notes does not necessarily
constitute an Event of Default for the other series of Notes. The trustee may
withhold notice to the holders of Notes of any default, except in the payment of
principal or interest, if it considers such withholding of notice to be in the
best interests of the holders. (Section 602)
If an Event of Default for either series of Notes occurs and continues, the
trustee or the holders of at least 25% in aggregate principal amount of the
Notes of the series may declare the entire principal of all the Notes of that
series to be due and payable immediately. If this happens, subject to some
conditions, the holders of a majority of the aggregate principal amount of the
Notes of that series can void the declaration. (Section 502)
Other than its duties in case of a default, the trustee is not obligated to
exercise any of its rights or powers under the indenture at the request, order
or direction of any holders, unless the holders offer the trustee reasonable
indemnity. (Section 601) If the holders provide this reasonable indemnity, the
holders of a majority in principal amount of any series of Notes may direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee, or exercising any power conferred upon the trustee, for any series
of Notes. (Section 512)
MINIMUM DENOMINATIONS
The Notes will be issued in registered form in amounts of $1,000 each or
multiples of $1,000.
NO PERSONAL LIABILITY OF KINDER MORGAN G.P., INC.
Kinder Morgan G.P., Inc., our general partner, and its directors, officers,
employees and shareholders will not have any liability for our obligations under
the indenture or the
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Notes. Each holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
DISCHARGING OUR OBLIGATIONS
We and the guarantors, if any, may choose either to discharge our
obligations on the 8% Notes in a legal defeasance, or to release ourselves from
our covenant restrictions on the 8% Notes in a covenant defeasance. We may do so
at any time on the 91st day after we deposit with the trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the 8% Notes. If we
choose this legal defeasance option, the holders of the 8% Notes will not be
entitled to the benefits of the indenture except for registration of transfer
and exchange of 8% Notes, replacement of lost, stolen or mutilated 8% Notes,
conversion or exchange of 8% Notes and receipt of principal and interest on the
original stated due dates or specified redemption dates. (Section 1302)
We may discharge our obligations under the indenture or release ourselves
from covenant restrictions only if we meet certain requirements. Among other
things, we must deliver an opinion of our legal counsel that the discharge will
not result in holders having to recognize taxable income or loss or subject them
to different tax treatment. In the case of legal defeasance, this opinion must
be based on either an IRS letter ruling or change in federal tax law. We may not
have a default on the 8% Notes discharged on the date of deposit. The discharge
may not violate any of our agreements. The discharge may not result in our
becoming an investment company in violation of the Investment Company Act of
1940.
THE TRUSTEE
First Union National Bank, 1001 Fannin, Suite 2255, Houston, Texas 77002
will initially act as trustee under the indenture. First Union National Bank is
an affiliate of First Union Securities, Inc., one of the initial purchasers of
the Original Notes.
The trustee may resign or be removed by us with respect to the Notes and a
successor trustee may be appointed to act with respect to the Notes. The holders
of a majority in aggregate principal amount of the Notes of each series may
remove the trustee. (Section 610)
LIMITATIONS ON TRUSTEE IF IT IS A CREDITOR OF KINDER MORGAN ENERGY PARTNERS
The indenture contains certain limitations on the right of the trustee, in
the event that it becomes our creditor, to obtain payment of claims in some
cases, or to realize on property received in respect of any such claim, as
security or otherwise. (Section 613)
ANNUAL TRUSTEE REPORT TO HOLDERS OF NOTES
The trustee is required to submit an annual report to the holders of the
Notes regarding, among other things, the trustee's eligibility to so serve, the
priority of the trustee's claims regarding certain advances made by it, and any
action taken by the trustee materially affecting the Notes.
CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE
The indenture provides that, in addition to other certificates or opinions
that may be specifically required by other provisions of the indenture, every
application by us for action by the trustee shall be accompanied by a
certificate of our officers and an opinion of counsel, who may be our counsel,
stating that, in the opinion of the signers, we have complied with all
applicable conditions precedent to the action. (Section 102)
LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT HOLDERS
Investors who hold Notes in accounts at banks, brokers and other financial
institutions will generally not be recognized by us as legal holders of Notes.
This is called holding in street name. These intermediary banks, brokers and
other financial institutions pass along principal, interest and other payments
on the Notes, either because they agree to do so in their customer agreements or
because
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they are legally required to. If you hold Notes in street name, you should check
with your own institution to find out:
- how it handles securities payments and notices;
- whether it imposes fees or charges;
- how it would handle voting if required; and
- how it would pursue rights under the Notes if there were a default or
other event triggering the need for holders to act to protect their
interests.
DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, extend only to persons who are
registered as holders of Notes. As described above, we do not have any
obligations to you if you hold Notes in street name or other indirect means
because the Notes are issued in the form of global Notes as described below. For
example, once we make a payment to the registered holder, we have no further
responsibility for the payment, even if that holder is legally required to pass
the payment along to you as a street name customer but does not do so.
GLOBAL NOTES
A global note is a special type of indirectly held note. Because we will
issue the Notes only in the form of global notes, the ultimate beneficial owners
can only be indirect holders. We do this by requiring that the global notes be
registered in the name of a financial institution we select and by requiring
that the Notes included in the global notes not be transferred to the name of
any other direct holder unless the special circumstances described below occur.
The financial institution that acts as the sole direct holder of the global note
is called the depositary. Any person wishing to own a Note must do so indirectly
by virtue of an account with a bank, broker or other financial institution that
in turn has an account with the depositary.
SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL NOTES. As an indirect holder, an
investor's rights relating to the global notes will be governed by the account
rules of the investor's bank, broker or other financial institution and of the
depositary, as well as general laws relating to securities transfers. We do not
recognize this type of investor as a holder of Notes and instead deal only with
the depositary that holds the global notes.
If you are an investor, you should be aware that:
- you cannot get Notes registered in your own name;
- you cannot receive physical certificates for your interest in the Notes;
- you will be a street name holder and must look to your own bank, broker
or other financial institution for payments on the Notes and protection
of your legal rights relating to the Notes; see "Street Name and Other
Indirect Holders;"
- you may not be able to sell or pledge interests in the Notes to some
insurance companies and other institutions that are required by law to
own their securities in the form of physical certificates; and
- the depositary's policies will govern payments, transfers, exchange and
other matters relating to your interest in the global notes. We and the
trustee have no responsibility for any aspect of the depositary's actions
or for its records of ownership interest in the global notes. We and the
trustee also do not supervise the depositary in any way.
SPECIAL SITUATIONS WHEN GLOBAL NOTES WILL BE TERMINATED. In a few special
situations described in the next paragraph, the global notes will terminate and
interests in them will be exchanged for physical certificates representing
Notes. After that exchange, the choice of whether to hold Notes directly or in
street name will be up to you. You must consult your own bank, broker or other
financial institution to find out how to have your interests in the Notes
transferred to your own name, so that you will be a direct
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holder. The rights of street name investors and direct holders in the Notes have
been previously described in the subsections entitled "-- Street Name and Other
Indirect Holders" and "-- Direct Holders."
The special situations for termination of the global notes are:
- when the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary;
- when we notify the trustee that we wish to terminate the global notes;
and
- when an event of default on the Notes has occurred and has not been
cured, disregarding for this purpose any requirement of notice or that
the default exist for a specified period of time.
ADDITIONAL MECHANICS
GLOBAL NOTES
Each of the Original Notes offered and sold to qualified institutional
buyers pursuant to Rule 144A were issued in the form of one or more registered
notes in global form, without interest coupons, which we call the Rule 144A
Global Notes. The Rule 144A Global Notes were deposited on the date of initial
issuance of the Original Notes with, or on behalf of, The Depository Trust
Company or will remain in the custody of the trustee pursuant to the FAST
Balance Certificate Agreement between The Depository Trust Company and the
trustee, and registered in the name of Cede & Co., as nominee of The Depository
Trust Company. Interests in the Rule 144A Global Notes will be available for
purchase only by qualified institutional buyers.
The Depository Trust Company has advised us that it is a limited-purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to
Section 17A of the Exchange Act. The Depository Trust Company was created to
hold securities of persons who have accounts with The Depository Trust Company,
otherwise known as participants, and to facilitate the clearance and settlement
of securities transactions among its participants in securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of certificates. These participants
include securities brokers and dealers, banks, trust companies and other
clearing corporations. Indirect access to The Depository Trust Company's
book-entry system also is available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly. The Depository Trust Company is
owned by a number of its participants, and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. The rules applicable to The Depository Trust Company and its
participants are on file with the SEC.
Any Notes offered and sold in offshore transactions following the initial
offering of the Original Notes to Non-U.S. Persons in reliance on Regulation S
will be issued in the form of one or more registered notes in global form,
without interest coupons, which we call the Regulation S Global Notes. Each
Regulation S Global Note will be deposited upon issuance with, or on behalf of,
a custodian for The Depository Trust Company in the manner described in the
preceding paragraph for credit to the respective accounts of the purchasers, or
to other accounts as they may direct, at Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System, or Clearstream
Banking, as applicable; provided that prior to the 41st day after the later of
the commencement of the offering of the Original Notes and the date of initial
issuance of the Original Notes, which we call the restricted period, beneficial
interests in the Regulation S Global Notes may be held only in or through
accounts maintained at The Depository Trust Company by Euroclear or Clearstream
unless exchanged for interests in the Rule 144A Global Notes.
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You may hold your interests in the applicable Regulation S Global Note
directly through Euroclear or Clearstream, if you are a participant in those
systems, or indirectly through organizations which are participants in such
systems. After the expiration of the restricted period, but not earlier, you may
also hold your interests through organizations other than Euroclear or
Clearstream that are participants in The Depository Trust Company system.
Euroclear and Clearstream will hold the interests in the applicable Regulation S
Global Notes on behalf of their participants through customers' securities
accounts in their names on the books of their depositaries. These depositaries,
in turn, will hold such interests in the applicable Regulation S Global Note in
customers' securities accounts in the depositaries' names on the books of The
Depository Trust Company.
EXCHANGES AMONG THE GLOBAL NOTES
Prior to the expiration of the restricted period, transfers by an owner of
a beneficial interest in a Regulation S Global Note to a transferee who takes
delivery of such interest through a Rule 144A Global Note will be made only in
accordance with the following procedures. The trustee must receive a written
certification from the transferor of the beneficial interest in the form
provided in the indenture to the effect that the transfer is being made to a
person who the transferor reasonably believes is a qualified institutional buyer
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A. (Section 305)
Transfers by an owner of a beneficial interest in a Rule 144A Global Note
to a transferee who takes delivery of the interest through a Regulation S Global
Note, whether before or after the expiration of the restricted period, will be
made only after the trustee receives a certification form from the transferor of
the beneficial interest in the form provided in the indenture to the effect that
the transfer is being made in accordance with Regulation S or, if available,
Rule 144 under the Securities Act and that, if the transfer is being made prior
to the expiration of the restricted period, the interests transferred will be
held immediately thereafter through Euroclear or Clearstream. (Section 305)
FORM, EXCHANGE AND TRANSFER OF PHYSICAL NOTES
The following discussion only applies if the global notes are terminated as
described above under "-- Legal Ownership -- Global Notes -- Special Situations
When Global Notes Will Be Terminated" and the Notes are issued in the form of
physical certificates.
The Notes will be issued:
- only in registered form;
- without interest coupons; and
- in denominations that are even multiples of $1,000. (Section 302)
You may have your Notes divided into more Notes of smaller denominations or
combined into fewer Notes of larger denominations, as long as the total
principal amount is not changed. (Section 305) This is called an exchange.
You may exchange or transfer Notes at the office of the trustee. The
trustee acts as our agent for registering Notes in the names of holders and
transferring Notes. We may change this appointment to another entity or perform
these functions ourselves. The entity performing the role of maintaining the
list of registered holders is called the security registrar. It will also
perform transfers. (Section 305)
You will not be required to pay a service charge to transfer or exchange
the notes, but you may be required to pay for any tax or other governmental
charge associated with the exchange or transfer. The transfer or exchange will
only be made if the security registrar is satisfied with your proof of
ownership. (Section 305)
We may cancel the designation of any particular transfer agent. We may also
approve a change in the office through which any transfer agent acts. (Section
1002)
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes certain material United States federal
income tax consequences relevant to the purchase, ownership and disposition of
the Notes and reflects the opinion provided by Bracewell & Patterson, L.L.P.,
our counsel as to these matters. This discussion is for general information only
and does not address all aspects of federal income taxation that may be relevant
to particular investors in light of their personal investment circumstances, nor
does it address the federal income tax consequences which may be relevant to
certain types of investors subject to special treatment under the federal income
tax laws (for example, certain financial institutions, insurance companies,
tax-exempt entities, broker-dealers, and taxpayers subject to the alternative
minimum tax). In addition, this discussion does not discuss any aspects of
state, local, or foreign tax laws. This discussion is applicable only to
purchasers that acquired the Notes under the offering at the initial offering
price and does not address the tax consequences to subsequent purchasers of the
Notes. This discussion assumes that investors will hold their Notes as "capital
assets" (generally, property held for investment), within the meaning of Section
1221 of the Internal Revenue Code, and not as part of an integrated investment
(for example, a hedge, straddle or conversion transaction).
No ruling from the Internal Revenue Service (the "IRS") will be requested
with respect to any of the matters discussed herein. There can be no assurance
that the IRS will not take different positions concerning the matters discussed
below and that such positions would not be sustained. BECAUSE INDIVIDUAL
CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF NOTES SHOULD CONSULT HIS OR HER OWN TAX
ADVISOR WITH RESPECT TO HIS OR HER PARTICULAR TAX SITUATION AND AS TO ANY
FEDERAL, FOREIGN, STATE, LOCAL OR OTHER TAX CONSIDERATIONS (INCLUDING ANY
POSSIBLE CHANGES IN TAX LAW) AFFECTING THE PURCHASE, OWNERSHIP AND DISPOSITION
OF THE NOTES.
This discussion is based on the provisions of the Internal Revenue Code,
existing and proposed Treasury regulations promulgated thereunder, judicial
authority interpreting the Internal Revenue Code, and current administrative
rulings and pronouncements of the IRS now in effect, all of which are subject to
change at any time by legislative, judicial or administrative action. Any such
changes may be retroactively applied in a manner that could result in federal
income tax consequences different from those discussed below and could adversely
affect a holder of Notes.
EXCHANGE OF ORIGINAL NOTES FOR EXCHANGE NOTES
The exchange of Original Notes for Exchange Notes of the same series should
not constitute a significant modification of the terms of the Original Notes,
and, accordingly, will not be treated as a taxable exchange for United States
federal income tax purposes. Consequently, no gain or loss will be recognized by
holders of Original Notes upon receipt of the Exchange Notes of the same series.
A holder will have the same adjusted basis in an Exchange Note as the holder had
in the Original Note exchanged therefor. In addition, a holder's holding period
for an Exchange Note will include the holding period for the Original Note
exchanged therefor.
The remaining summary of federal income considerations relates to owning
and disposing of Exchange Notes, and also applies to holders of Original Notes
who do not accept the Exchange Offer.
UNITED STATES FEDERAL INCOME TAXATION OF UNITED STATES HOLDERS
As used herein, the term "United States Holder" means a holder of a Note
that is for United States federal income tax purposes (1) an individual citizen
or resident of the United States, (2) a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, (3) an estate the income of which is subject to United
States federal income taxation regardless of source,
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or (4) a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who have the
authority to control all substantial decisions of the trust.
STATED INTEREST. Stated interest on the Notes generally will be taxable to
a United States Holder as ordinary income from domestic sources at the time it
is paid or accrued in accordance with the United States Holder's method of
accounting for tax purposes.
AMORTIZABLE BOND PREMIUM. If a United States Holder purchases a Note for an
amount that is greater than the sum of all payments payable on the Note after
the purchase date, other than qualified stated interest, such United States
Holder will be considered to have purchased such Note at a premium. A United
States Holder may elect to amortize such bond premium over the remaining term of
such Note (or if it results in a smaller amount of amortizable bond premium,
until an earlier call date, and in such case by reference to the amount payable
on that date).
If bond premium is amortized, the amount of interest on the Note included
in the United States Holder's income for each accrual period ending on an
interest payment date or on the stated maturity of the Note, as the case may be,
will be reduced by a portion of the bond premium allocable to such accrual
period based on the Note's yield to maturity (or earlier call date, if reference
to such call date produces a smaller amount of amortizable bond premium). If the
amortizable bond premium allocable to such accrual period exceeds the amount of
interest allocable to such accrual period, such excess would be allowed as a
deduction for such accrual period, but only to the extent of the United States
Holder's prior inclusion in income of interest payments on the Note. Any excess
above such prior interest inclusions is generally carried forward to the next
accrual period. A United States Holder who elects to amortize bond premium must
reduce such United States Holder's tax basis in the Notes as described under
" -- Disposition of Notes." If such an election to amortize bond premium is not
made, a United States Holder must include the full amount of each interest
payment on the Note in income in accordance with its regular method of
accounting and will receive a tax benefit from the bond premium only in
computing such United States Holder's gain or loss upon disposition of the Note.
An election to amortize bond premium will apply to all taxable debt
obligations then held or subsequently acquired by the electing United States
Holder on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the IRS. A United States
Holder should consult with such United States Holder's tax advisor with respect
to the general applicability of the amortizable bond premium rules of the
Internal Revenue Code to such United States Holder, and whether such United
States Holder should make an election under these rules.
MARKET DISCOUNT. If a United States Holder purchases a Note for an amount
that is less than its stated redemption price at maturity (i.e., the sum of all
payments on the Note other than stated interest payments), the amount of the
difference will be treated as "market discount" for federal income tax purposes,
unless such difference is less than a de minimis amount as specified by the
Internal Revenue Code. Under the market discount rules, a United States Holder
will be required to treat any principal payment on, or any gain on the sale,
exchange, retirement or other disposition of a Note as ordinary income to the
extent of the market discount which has not previously been included in income
and is treated as having accrued on such Note at the time of such payment or
disposition. In addition, the United States Holder may be required to defer,
until maturity of the Note or its earlier disposition in a taxable transaction,
the deduction of all or a portion of the interest expense on any indebtedness
incurred or maintained to purchase or carry such Note.
The Notes provide for optional redemption and (in the case of a Change in
Control) mandatory offers to purchase, in whole or in part, prior to maturity.
If the Notes were redeemed, a United States Holder
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generally would be required to include in gross income as ordinary income the
portion of the gain recognized on the redemption attributable to accrued market
discount, if any.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Notes, unless the
United States Holder elects to accrue market discount on a constant interest
method. A United States Holder of a Note may elect to include market discount in
income currently as it accrues (under either a ratable or constant interest
method). This election to include currently, once made, applies to all market
discount obligations acquired in or after the first taxable year to which the
election applies and may not be revoked without the consent of the IRS. If a
United States Holder of Notes makes such an election, the foregoing rules with
respect to the recognition of ordinary income on sales and other dispositions of
instruments, and with respect to the deferral of interest deductions incurred or
maintained to purchase or carry such Notes, would not apply.
DISPOSITION OF NOTES. Upon the sale, exchange, retirement, redemption or
other disposition of a Note, a United States Holder will recognize taxable gain
or loss equal to the difference between (1) the amount of cash and the fair
market value of property received in exchange therefor (except to the extent
such amount is attributable to accrued but unpaid interest, which amount will
generally be taxable as ordinary income) and (2) the United States Holder's
adjusted tax basis in the Note. A United States Holder's adjusted tax basis in a
Note will generally equal the United States Holder's purchase price for such
Note, increased by any market discount previously included in income by the
United States Holder and decreased by any principal payments received by the
United States Holder, and any amortizable bond premium deducted over the term of
the Note. Any gain or loss recognized on the sale, exchange, retirement or other
disposition of a Note will generally be capital gain or loss (except to the
extent of any accrued market discount). Capital gains of individuals derived in
respect of capital assets held for more than one year are eligible for reduced
rates of taxation which may vary depending upon the holding period of such
capital assets. The deduction of capital losses is subject to certain
limitations. A United States Holder should consult such United States Holder's
tax advisor regarding the treatment of capital gains or losses.
BACKUP WITHHOLDING. Certain non-corporate United States Holders of Notes
may be subject to backup withholding at the rate of 31% with respect to interest
payments on the Notes and cash payments received in certain circumstances upon
the disposition of such Notes. Generally, backup withholding is applied only
when the taxpayer (1) fails to furnish or certify its correct taxpayer
identification number to the payor in the manner required, (2) is notified by
the IRS that is has failed to report payments of interest and dividends
properly, or (3) under certain circumstances, fails to certify that it has not
been notified by the IRS that it is subject to backup withholding for failure to
report interest and dividend payments. Any amounts withheld under the backup
withholding rules will be allowed as a refund or credit against a United States
Holder's United States federal income tax liability, provided that such United
States Holder furnished the required information to the IRS.
Treasury regulations, generally effective for payments made after December
31, 2000 (the "New Withholding Regulations"), modify certain of the
certification requirements for backup withholding. It is possible that Kinder
Morgan Energy Partners, L.P. and other withholding agents may request a new
withholding exemption from United States Holders in order to qualify for
continued exemption from backup withholding under the New Withholding
Regulations.
UNITED STATES FEDERAL INCOME TAXATION OF NON-UNITED STATES HOLDERS
This section discusses certain special rules applicable to a holder of
Notes that is a Non-United States Holder. For purposes of this discussion, a
"Non-United States Holder" means a holder of Notes that is not (1) an
48
<PAGE> 50
individual citizen or resident of the United States, (2) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, (3) an estate the income of
which is subject to United States federal income taxation regardless of source,
or (4) a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who have the
authority to control all substantial decisions of the trust.
For purposes of the following summary, interest and gain on the sale,
exchange or other disposition of the Notes will be considered "United States
trade or business income" if such income or gain is (1) effectively connected
with the conduct of a trade or business in the United States, or (2) in the case
of a treaty resident, attributable to a permanent establishment (or, in the case
of an individual, to a fixed base) in the United States.
RECEIPT OF STATED INTEREST BY NON-UNITED STATES HOLDER.
A Non-United States Holder that is not subject to United States federal
income tax as a result of any direct or indirect connection to the United States
other than its ownership of the Notes will not be subject to United States
federal income or withholding tax in respect of interest income on the Notes if
(1) the interest is not United States trade or business income, (2) the
Non-United States Holder provides an appropriate statement on IRS Form W-8 or
Form W-8BEN, together will all appropriate attachments, signed under penalties
of perjury, identifying the Non-United States Holder and stating, among other
things, that the Non-United States Holder is not a United States person for
United States federal income tax purposes, and (3) the Non-United States Holder
is not a "10-percent shareholder" or a "related controlled foreign corporation"
with respect to Kinder Morgan Energy Partners, L.P. as specifically defined for
United States federal income tax purposes.
If a Note is held through a securities clearing organization or certain
other financial institutions, the organization or institution may provide a
signed statement to eliminate withholding tax. However, in such case, the signed
statement must be accompanied by a copy of the IRS Form W-8 or Form W-8BEN or
the substitute form provided by the beneficial owner to the organization or
institution. For interest paid with respect to a Note after December 31, 2000, a
Non-United States Holder that is treated as a partnership for United States
federal income tax purposes generally will be required to provide an IRS Form
W-8IMY and to attach an appropriate certification by each beneficial owner of
the Non-United States Holder (including, in certain cases, such beneficial
owner's beneficial owners). Prospective investors, including foreign
partnerships and their partners, should consult their tax advisors regarding
these possible additional reporting requirements.
The New Withholding Regulations revise (substantially in certain respects)
the certification procedures discussed above for payments made after December
31, 2000. It is possible that Kinder Morgan Energy Partners, L.P. and other
withholding agents may request new certifications or statements from Non-United
States Holders in order to qualify for continued exemption from withholding
under the New Withholding Regulations. Each Non-United States Holder should
consult its own tax advisor regarding the application to such holder of the New
Withholding Regulations.
To the extent these conditions are not met, a 30% withholding tax will
apply to interest income on the Notes, unless an income tax treaty reduces or
eliminates such tax or unless the interest is United States trade or business
income with respect to such Non-United States Holder and the Non-United States
Holder provides an appropriate statement to that effect. In the latter case,
such Non-United States Holder generally will be subject to United States federal
income tax with respect to all income from the Notes at regular rates applicable
to United States taxpayers. Additionally, in such event, Non-United States
Holders that are corporations could be subject to a branch profits tax on such
income.
49
<PAGE> 51
GAIN ON DISPOSITION OF NOTES. In general, a Non-United States Holder will
not be subject to United States federal income tax on any amount received (other
than amounts in respect of accrued but unpaid interest) upon retirement or
disposition of a Note unless such Non-United States Holder is an individual
present in the United States for 183 days or more in the taxable year of the
retirement or disposition and certain other requirements are met, or unless the
gain is United States trade or business income. In the latter event, Non-United
States Holders generally will be subject to United States federal income tax
with respect to such gain at regular rates applicable to United States
taxpayers. Additionally, in such event, Non-United States Holders that are
corporations could be subject to a branch profits tax on such gain.
INFORMATION REPORTING AND BACKUP WITHHOLDING. Under certain circumstances,
the Internal Revenue Code requires "information reporting" annually to the IRS
and to each holder of Notes, and "backup withholding" at a rate of 31% with
respect to certain payments made on or with respect to the Notes. Backup
withholding generally does not apply with respect to certain holders of Notes,
including corporations.
A Non-United States Holder that provides an IRS Form W-8 or Form W-8BEN,
together will all appropriate attachments, signed under penalties of perjury,
identifying the Non-United States Holder and stating that the Non-United States
Holder is not a United States person for United States federal income tax
purposes, will not be subject to IRS reporting requirements and United States
backup withholding. With respect to interest paid after December 31, 2000, IRS
Forms W-8BEN will generally be required from the beneficial owners of interests
in a Non-United States Holder that is treated as a partnership for United States
federal income tax purposes.
The payment of proceeds on the disposition of a Note to or through the
United States office of a broker generally will be subject to information
reporting and backup withholding at a rate of 31% unless the Non-United States
Holder either certifies its status as a Non-United States Holder under penalties
of perjury on IRS Form W-8 or Form W-8BEN (as described above) or otherwise
establishes an exemption. The payment of the proceeds on the disposition of a
Note by a Non-United States Holder to or through a non-United States office of a
non-United States broker will not be subject to backup withholding or
information reporting unless the non-United States broker is a "United States
related person" (as defined below). The payment of proceeds on the disposition
of a Note by a Non-United States Holder to or through a non-United States office
of a United States broker or a United States related person generally will not
be subject to backup withholding but will be subject to information reporting
unless the Non-United States Holder certifies its status as a Non-United States
Holder under penalties of perjury or the broker has certain documentary evidence
in its files as to the Non-United States Holder's foreign status and the broker
has no actual knowledge to the contrary.
For this purpose, a "United States related person" is (1) a "controlled
foreign corporation" as specifically defined for United States federal income
tax purposes, (2) a foreign person 50% or more of whose gross income from all
sources for the three-year period ending with the close of its taxable year
preceding the payment (or for such part of the period that the broker has been
in existence) is derived from activities that are effectively connected with the
conduct of a United States trade or business, or (3) for payments made after
December 31, 2000, a foreign partnership if at any time during its tax year one
or more of its partners are United States persons who, in the aggregate, hold
more than 50% of the income or capital interest of the partnership or if, at any
time during its taxable year, the partnership is engaged in the conduct of a
United States trade or business.
Backup withholding is not an additional tax and may be refunded (or
credited against the Non-United States Holder's United States federal income tax
liability, if any), provided that certain required information is furnished.
50
<PAGE> 52
The information reporting requirements may apply regardless of whether
withholding is required. Copies of the information returns reporting such
interest and withholding also may be made available to the tax authorities in
the country in which a Non-United States Holder is a resident under the
provisions of an applicable income tax treaty or agreement.
The New Withholding Regulations revise (substantially in certain respects)
the procedures that withholding agents and payees must follow to comply with, or
the establish an exemption from, these information reporting and backup
withholding provisions for payments made after December 31, 2000. It is possible
that Kinder Morgan Energy Partners, L.P. and other withholding agents may
request a new withholding exemption from Non-United States Holders in order to
qualify for continued exemption from backup withholding under the New
Withholding Regulations. Each Non-United States Holder should consult its own
tax advisor regarding the application to such holder of the New Withholding
Regulations.
VALIDITY OF THE EXCHANGE NOTES
The validity of the Exchange Notes being offered hereby will be passed upon
for us by Bracewell & Patterson, L.L.P., Houston, Texas.
EXPERTS
The historical financial statements incorporated by reference in this
registration statement have been audited by various independent accountants. The
organizations and periods covered by these audits are indicated in the
individual accountants' independent auditors' reports. Such financial statements
have been so included in reliance on the reports of the various independent
accountants given on the authority of such firms as experts in auditing and
accounting.
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<PAGE> 53
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. The SEC allows us to incorporate by reference
information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information as well as the information included in this
prospectus. We incorporate by reference the following documents:
- Our annual report on Form 10-K for the year ended December 31, 1999;
- Our current report on Form 8-K filed on March 31, 2000;
- Our current report on Form 8-K/A filed on March 28, 2000;
- All documents filed with the SEC under Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act between the date of this prospectus and the
completion of the Exchange Offers.
You may read and copy any document we file at the SEC's public reference
rooms located at:
- 450 Fifth Street, N.W.
Washington, D.C. 20549
- Seven World Trade Center
New York, New York 10048
- Northwest Atrium Center
500 West Madison Street
Chicago, Illinois 60661
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms and their copy charges. Our SEC filings are also available to
the public on the SEC's Web site at http://www.sec.gov and through the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, on which our limited
partner interests are listed.
You may request a copy of any document incorporated by reference in this
prospectus (in most cases, without exhibits), without charge, by request
directed to us at the following address and telephone number:
Kinder Morgan Energy Partners, L.P.
Investor Relations Department
1301 McKinney, Suite 3400
Houston, Texas 77010
(713) 844-9500
52
<PAGE> 54
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in this prospectus by
reference include forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. These forward-looking
statements are identified as any statement that does not relate strictly to
historical or current facts. They use words such as "anticipate," "believe,"
"intend," "plan," "projection," "forecast," "strategy," "position," "continue,"
"estimate," "expect," "may," "will," or the negative of those terms or other
variations of them or by comparable terminology. In particular, statements,
express or implied, concerning future operating results or the ability to
generate sales, income or cash flow are forward-looking statements.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. The future results of our operations may
differ materially from those expressed in these forward-looking statements. Many
of the factors that will determine these results are beyond our ability to
control or predict. Specific factors which could cause actual results to differ
from those in the forward-looking statements, include:
- price trends and overall demand for natural gas liquids, refined
petroleum products, carbon dioxide, natural gas, coal and other bulk
materials in the United States. Economic activity, weather, alternative
energy sources, conservation and technological advances may affect price
trends and demand;
- changes in our tariff rates implemented by the Federal Energy Regulatory
Commission or the California Public Utilities Commission;
- our ability to integrate any acquired operations into our existing
operations;
- any difficulties or delays experienced by railroads in delivering
products to the bulk terminals;
- our ability to successfully identify and close strategic acquisitions and
make cost saving changes in operations;
- shut-downs or cutbacks at major refineries, petrochemical plants,
utilities, military bases or other businesses that use our services;
- the condition of the capital markets and equity markets in the United
States; and
- the political and economic stability of the oil producing nations of the
world.
You should not put undue reliance on any forward-looking statements.
See Items 1 and 2 "Business and Properties - Risk Factors" in our Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, for a more
detailed description of these and other factors that may affect the
forward-looking statements. When considering forward-looking statements, one
should keep in mind the risk factors described under "Risk Factors" in this
prospectus. We disclaim any obligation to update the above list or to announce
publicly the result of any revisions to any of the forward-looking statements to
reflect future events or developments.
In addition, our classification as a partnership for federal income tax
purposes means that we do not generally pay federal income taxes on our net
income. We do, however, pay taxes on the net income of subsidiaries that are
corporations. We are relying on a legal opinion from our counsel, and not a
ruling from the Internal Revenue Service, as to our proper classification for
federal income tax purposes. See Items 1 and 2 "Business and Properties - Tax
Treatment of Publicly Traded Partnerships Under the Internal Revenue Code" of
our Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
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<PAGE> 55
ANNEX A
KINDER MORGAN ENERGY PARTNERS, L.P.
LETTER OF TRANSMITTAL
FOR FLOATING RATE NOTES
<PAGE> 56
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
FLOATING RATE SENIOR NOTES DUE 2002
OF
KINDER MORGAN ENERGY PARTNERS, L.P.
PURSUANT TO THE PROSPECTUS DATED , 2000
THIS OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000
UNLESS EXTENDED BY THE PARTNERSHIP IN ITS SOLE DISCRETION (THE "EXPIRATION
DATE"). TENDERS OF NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION
DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
FIRST UNION NATIONAL BANK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand:
First Union National Bank (704) 590-7628 First Union National Bank
First Union Customer Information Center First Union Customer Information Center
Corporate Trust Operations -- NC1153 Confirm by Telephone: Corporate Trust Operations -- NC1153
1525 West W.T. Harris Boulevard -- 3C3 (704) 590-7408 1525 West W.T. Harris Boulevard -- 3C3
Charlotte, NC 28288 Charlotte, NC 28262-1153
Attention: Mike Klotz Attention: Mike Klotz
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN
AS LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES PURSUANT TO THE
EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR ORIGINAL NOTES TO
THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
This Letter of Transmittal is to be used by holders ("Holders") of Floating
Rate Senior Notes due 2002 (the "Original Notes") of Kinder Morgan Energy
Partners, L.P. (the "Partnership") to receive Floating Rate Exchange Notes (the
"Exchange Notes") if: (i) certificates representing Original Notes are to be
physically delivered to the Exchange Agent herewith by such Holders; (ii) tender
of Original Notes is to be made by book-entry transfer to the Exchange Agent's
account at The Depository Trust Company ("DTC") pursuant to the procedures set
forth under the caption "The Exchange Offers -- Procedures for Tendering
Original Notes -- Book-Entry Delivery Procedures" in the Prospectus dated
, 2000 (the "Prospectus"); or (iii) tender of Original Notes is to be
made according to the guaranteed delivery procedures set forth under the caption
"The Exchange Offers -- Procedures for Tendering Original Notes -- Guaranteed
Delivery" in the Prospectus, and, in each case, instructions are not being
transmitted through the DTC Automated Tender Offer Program ("ATOP"). The
undersigned hereby acknowledges receipt of the Prospectus. All capitalized terms
used herein and not defined shall have the meanings ascribed to them in the
Prospectus.
Holders of Original Notes that are tendering by book-entry transfer to the
Exchange Agent's account at DTC can execute the tender through ATOP, for which
the transaction will be eligible.
A-1
<PAGE> 57
DTC participants that are accepting the exchange offer as set forth in the
Prospectus and this Letter of Transmittal (together, the "Exchange Offer") must
transmit their acceptance to DTC which will edit and verify the acceptance and
execute a book-entry delivery to the Exchange Agent's account at DTC. DTC will
then send an Agent's Message to the Exchange Agent for its acceptance. Delivery
of the Agent's Message by DTC will satisfy the terms of the Offer as to
execution and delivery of a Letter of Transmittal by the participant identified
in the Agent's Message. DTC participants may also accept the Exchange Offer by
submitting a notice of guaranteed delivery through ATOP.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
If a Holder desires to tender Original Notes pursuant to the Exchange Offer
and time will not permit this Letter of Transmittal, certificates representing
such Original Notes and all other required documents to reach the Exchange
Agent, or the procedures for book-entry transfer cannot be completed, on or
prior to the Expiration Date, then such Holder must tender such Original Notes
according to the guaranteed delivery procedures set forth under the caption "The
Exchange Offers -- Procedures for Tendering Original Notes -- Guaranteed
Delivery" in the Prospectus. See Instruction 2.
The undersigned should complete, execute and deliver this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer.
- --------------------------------------------------------------------------------
TENDER OF ORIGINAL NOTES
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
-----------------------------------------
Account Number:
--------------------------------------------------------
Transaction Code Number:
-----------------------------------------------
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
---------------------------------------
Window Ticker Number (if any):
-----------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------
Name of Eligible Institution that Guaranteed Delivery:
-----------------
- --------------------------------------------------------------------------------
A-2
<PAGE> 58
List below the Original Notes to which this Letter of Transmittal relates.
The name(s) and address(es) of the registered Holder(s) should be printed, if
not already printed below, exactly as they appear on the Original Notes tendered
hereby. The Original Notes and the principal amount of Original Notes that the
undersigned wishes to tender would be indicated in the appropriate boxes. If the
space provided is inadequate, list the certificate number(s) and principal
amount(s) on a separately executed schedule and affix the schedule to this
Letter of Transmittal.
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES
- -----------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S) AGGREGATE PRINCIPAL
(PLEASE FILL IN IF BLANK) SEE CERTIFICATE AMOUNT PRINCIPAL AMOUNT
INSTRUCTION 3. NUMBER(S)* REPRESENTED** TENDERED**
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL
AMOUNT OF ORIGINAL NOTES
- -----------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
** Unless otherwise specified, the entire aggregate principal amount represented by the Original Notes described above will
be deemed to be tendered. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
A-3
<PAGE> 59
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Kinder Morgan Energy Partners (the
"Partnership"), upon the terms and subject to the conditions set forth in its
Prospectus dated , 2000 (the "Prospectus"), receipt of which is hereby
acknowledged, and in accordance with this Letter of Transmittal (which together
constitute the "Exchange Offer"), the principal amount of Original Notes
indicated in the foregoing table entitled "Description of Original Notes" under
the column heading "Principal Amount Tendered." The undersigned represents that
it is duly authorized to tender all of the Original Notes tendered hereby which
it holds for the account of beneficial owners of such Original Notes
("Beneficial Owner(s)") and to make the representations and statements set forth
herein on behalf of such Beneficial Owner(s).
Subject to, and effective upon, the acceptance for purchase of the
principal amount of Original Notes tendered herewith in accordance with the
terms and subject to the conditions of the Exchange Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Partnership,
all right, title and interest in and to all of the Original Notes tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent the true and lawful agent and attorney-in-fact of the undersigned (with
full knowledge that the Exchange Agent also acts as the agent of the
Partnership) with respect to such Original Notes, with full powers of
substitution and revocation (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to (i) present such Original Notes
and all evidences of transfer and authenticity to, or transfer ownership of,
such Original Notes on the account books maintained by DTC to, or upon the order
of, the Partnership, (ii) present such Original Notes for transfer of ownership
on the books of the Partnership, and (iii) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Original Notes, all in
accordance with the terms and conditions of the Exchange Offer as described in
the Prospectus.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that:
(1) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being
acquired by the undersigned and any Beneficial Owner(s) in the ordinary
course of business of the undersigned and any Beneficial Owner(s),
(2) the undersigned and each Beneficial Owner are not participating,
do not intend to participate, and have no arrangement or understanding with
any person to participate, in the distribution of the Exchange Notes,
(3) except as indicated below, neither the undersigned nor any
Beneficial Owner is an "affiliate," as defined in Rule 405 under the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act"), of the Partnership, and
(4) the undersigned and each Beneficial Owner acknowledge and agree
that (x) any person participating in the Exchange Offer with the intention
or for the purpose of distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale of the Exchange Notes acquired by such
person with a registration statement containing the selling securityholder
information required by Item 507 of Regulation S-K of the Securities and
Exchange Commission (the "SEC") and cannot rely on the interpretation of
the Staff of the SEC set forth in the no-action letters that are noted in
the section of the Prospectus entitled "The Exchange Offers -- Registration
Rights" and (y) any broker-dealer that pursuant to the Exchange Offer
receives Exchange Notes for its own account in exchange for Original Notes
which it
A-4
<PAGE> 60
acquired for its own account as a result of market-making activities or
other trading activities must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resale of such Exchange Notes.
If the undersigned is a broker-dealer that will receive Exchange Notes for
its own account in exchange for Original Notes that were acquired as the result
of market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
By so acknowledging and by delivering a prospectus, a broker-dealer shall not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
The undersigned understands that tenders of Original Notes may be withdrawn
by written notice of withdrawal received by the Exchange Agent at any time prior
to the Expiration Date in accordance with the Prospectus. In the event of a
termination of the Exchange Offer, the Original Notes tendered pursuant to the
Exchange Offer will be returned to the tendering Holders promptly (or, in the
case of Original Notes tendered by book-entry transfer, such Original Notes will
be credited to the account maintained at DTC from which such Original Notes were
delivered). If the Partnership makes a material change in the terms of the
Exchange Offer or the information concerning the Exchange Offer or waives a
material condition of such Exchange Offer, the Partnership will disseminate
additional Exchange Offer materials and extend such Exchange Offer, if and to
the extent required by law.
The undersigned understands that the tender of Original Notes pursuant to
any of the procedures set forth in the Prospectus and in the instructions hereto
will constitute the undersigned's acceptance of the terms and conditions of the
Exchange Offer. The Partnership's acceptance for exchange of Original Notes
tendered pursuant to any of the procedures described in the Prospectus will
constitute a binding agreement between the undersigned and the Partnership in
accordance with the terms and subject to the conditions of the Exchange Offer.
For purposes of the Exchange Offer, the undersigned understands that validly
tendered Original Notes (or defectively tendered Original Notes with respect to
which the Partnership has, or has caused to be, waived such defect) will be
deemed to have been accepted by the Partnership if, as and when the Partnership
gives oral or written notice thereof to the Exchange Agent.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Original Notes
tendered hereby, and that when such tendered Original Notes are accepted for
purchase by the Partnership, the Partnership will acquire good title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim or right. The undersigned and each Beneficial Owner
will, upon request, execute and deliver any additional documents deemed by the
Exchange Agent or by the Partnership to be necessary or desirable to complete
the sale, assignment and transfer of the Original Notes tendered hereby.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall not be affected by, and shall survive the death or incapacity
of the undersigned and any Beneficial Owner(s), and any obligation of the
undersigned or any Beneficial Owner(s) hereunder shall be binding upon the
heirs, executors, administrators, trustees in bankruptcy, personal and legal
representatives, successors and assigns of the undersigned and such Beneficial
Owner(s).
The undersigned understands that the delivery and surrender of any Original
Notes is not effective, and the risk of loss of the Original Notes does not pass
to the Exchange Agent or the Partnership, until receipt by the Exchange Agent of
this Letter of Transmittal, or a manually signed facsimile hereof, properly
completed and duly executed, together with all accompanying evidences of
authority and any other required documents in form satisfactory to the
Partnership. All questions as to form of all documents and the validity
(including time of receipt) and acceptance of tenders and withdrawals of
Original Notes will be determined by the Partnership, in its sole discretion,
which determination shall be final and binding.
A-5
<PAGE> 61
Unless otherwise indicated herein under "Special Issuance Instructions,"
the undersigned hereby requests that any Original Notes representing principal
amounts not tendered or not accepted for exchange be issued in the name(s) of
the undersigned (and in the case of Original Notes tendered by book-entry
transfer, by credit to the account of DTC), and Exchange Notes issued in
exchange for Original Notes pursuant to the Exchange Offer be issued to the
undersigned. Similarly, unless otherwise indicated herein under "Special
Delivery Instructions," the undersigned hereby requests that any Original Notes
representing principal amounts not tendered or not accepted for exchange and
Exchange Notes issued in exchange for Original Notes pursuant to the Exchange
Offer be delivered to the undersigned at the address shown below the
undersigned's signature(s). In the event that the "Special Issuance
Instructions" box or the "Special Delivery Instructions" box is, or both are,
completed, the undersigned hereby requests that any Original Notes representing
principal amounts not tendered or not accepted for purchase be issued in the
name(s) of, certificates for such Original Notes be delivered to, and Exchange
Notes issued in exchange for Original Notes pursuant to the Exchange Offer be
issued in the name(s) of, and be delivered to, the person(s) at the address(es)
so indicated, as applicable. The undersigned recognizes that the Partnership has
no obligation pursuant to the "Special Issuance Instructions" box or "Special
Delivery Instructions" box to transfer any Original Notes from the name of the
registered Holder(s) thereof if the Partnership does not accept for exchange any
of the principal amount of such Original Notes so tendered.
[ ] CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU HOLD ORIGINAL NOTES
IS AN AFFILIATE OF THE PARTNERSHIP.
[ ] CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU HOLD ORIGINAL NOTES
TENDERED HEREBY IS A BROKER-DEALER WHO ACQUIRED SUCH NOTES DIRECTLY FROM THE
PARTNERSHIP OR AN AFFILIATE OF THE PARTNERSHIP.
[ ] CHECK HERE AND COMPLETE THE LINES BELOW IF YOU OR ANY BENEFICIAL OWNER FOR
WHOM YOU HOLD ORIGINAL NOTES TENDERED HEREBY IS A BROKER-DEALER WHO ACQUIRED
SUCH NOTES IN MARKET-MAKING OR OTHER TRADING ACTIVITIES. IF THIS BOX IS
CHECKED, THE PARTNERSHIP WILL SEND 10 ADDITIONAL COPIES OF THE PROSPECTUS
AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO TO YOU OR SUCH
BENEFICIAL OWNER AT THE ADDRESS SPECIFIED IN THE FOLLOWING LINES.
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-6
<PAGE> 62
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Original Notes in a principal amount not
tendered or not accepted for exchange are to be issued in the name of, or
Exchange Notes are to be issued in the name of, someone other than the
person(s) whose signature(s) appear(s) within this Letter of Transmittal
or issued to an address different from that shown in the box entitled
"Description of Original Notes" within this Letter of Transmittal.
Issue: [ ] Original Notes
[ ] Exchange Notes
(check as applicable)
Name
------------------------------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------------------------------
(PLEASE PRINT)
----------------------------------------------------------------------
(ZIP CODE)
----------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Original Notes in a principal amount not
tendered or not accepted for exchange or Exchange Notes are to be sent to
someone other than the person(s) whose signature(s) appear(s) within this
Letter of Transmittal or to an address different from that shown in the
box entitled "Description of Original Notes" within this Letter of
Transmittal.
Issue: [ ] Original Notes
[ ] Exchange Notes
(check as applicable)
Name
------------------------------------------------------------------------
(PLEASE PRINT)
Address
---------------------------------------------------------------------
(PLEASE PRINT)
----------------------------------------------------------------------
(ZIP CODE)
----------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
- --------------------------------------------------------------------------------
A-7
<PAGE> 63
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF ORIGINAL NOTES
REGARDLESS OF WHETHER ORIGINAL NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the registered Holder(s) exactly as
name(s) appear(s) on certificate(s) for Original Notes or, if tendered by a
participant in DTC exactly as such participant's name appears on a security
position listing as owner of Original Notes, or by the person(s) authorized to
become registered Holder(s) by endorsements and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please set forth full title and see Instruction 5.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Registered Holder(s) or Authorized Signatory
(See guarantee requirement below)
Dated: -------------------------------------------------------------------------
Name(s): -----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (Full Title):
-------------------------------------------------------------
Address:------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Including Zip Code)
Area Code and Telephone Number: ------------------------------------------------
Tax Identification or Social Security Number:
----------------------------------------
(Complete Accompanying Substitute Form W-9)
SIGNATURE GUARANTEE
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature------------------------------------------------------------
Name of Firm -------------------------------------------------------------------
[PLACE SEAL HERE]
- --------------------------------------------------------------------------------
A-8
<PAGE> 64
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Signature Guarantees. Signatures of this Letter of Transmittal must be
guaranteed by a recognized member of the Medallion Signature Guarantee Program
or by any other "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 promulgated under the Exchange Act (each of the foregoing, an
"Eligible Institution"), unless the Original Notes tendered hereby are tendered
(i) by a registered Holder of Original Notes (or by a participant in DTC whose
name appears on a security position listing as the owner of such Original Notes)
that has not completed either the box entitled "Special Issuance Instructions"
or the box entitled "Special Delivery Instructions" on this Letter of
Transmittal, or (ii) for the account of an Eligible Institution. If the Original
Notes are registered in the name of a person other than the signer of this
Letter of Transmittal, if Original Notes not accepted for exchange or not
tendered are to be returned to a person other than the registered Holder or if
Exchange Notes are to be issued in the name of or sent to a person other than
the registered Holder, then the signatures on this Letter of Transmittal
accompanying the tendered Original Notes must be guaranteed by an Eligible
Institution as described above. See Instruction 5.
2. Delivery of Letter of Transmittal and Original Notes. This Letter of
Transmittal is to be completed by Holders if (i) certificates representing
Original Notes are to be physically delivered to the Exchange Agent herewith by
such Holders; (ii) tender of Original Notes is to be made by book-entry transfer
to the Exchange Agent's account at DTC pursuant to the procedures set forth
under the caption "The Exchange Offers -- Procedures for Tendering Original
Notes -- Book-Entry Delivery Procedures" in the Prospectus; or (iii) tender of
Original Notes is to be made according to the guaranteed delivery procedures set
forth under the caption "The Exchange Offers -- Procedures for Tendering
Original Notes -- Guaranteed Delivery" in the Prospectus. All physically
delivered Original Notes, or a confirmation of a book-entry transfer into the
Exchange Agent's account at DTC of all Original Notes delivered electronically,
as well as a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof), any required signature guarantees and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at one of its addresses set forth on the cover page hereto on or
prior to the Expiration Date, or the tendering Holder must comply with the
guaranteed delivery procedures set forth below. DELIVERY OF DOCUMENTS TO DTC
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
If a Holder desires to tender Original Notes pursuant to the Exchange Offer
and time will not permit this Letter of Transmittal, certificates representing
such Original Notes and all other required documents to reach the Exchange
Agent, or the procedures for book-entry transfer cannot be completed, on or
prior to the Expiration Date, such Holder must tender such Original Notes
pursuant to the guaranteed delivery procedures set forth under the caption "The
Exchange Offers -- Procedures for Tendering Original Notes -- Guaranteed
Delivery" in the Prospectus. Pursuant to such procedures, (i) such tender must
be made by or through an Eligible Institution; (ii) a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form provided
by the Partnership, or an Agent's Message with respect to guaranteed delivery
that is accepted by the Partnership, must be received by the Exchange Agent,
either by hand delivery, mail, telegram, or facsimile transmission, on or prior
to the Expiration Date; and (iii) the certificates for all tendered Original
Notes, in proper form for transfer (or confirmation of a book-entry transfer or
all Original Notes delivered electronically into the Exchange Agent's account at
DTC pursuant to the procedures for such transfer set forth in the Prospectus),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, or in the case of a book-entry transfer, a properly
transmitted Agent's Message, must be received by the Exchange Agent within two
business days after the date of the execution of the Notice of Guaranteed
Delivery.
A-9
<PAGE> 65
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE ORIGINAL NOTES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY
ACCEPTANCE OR AGENT'S MESSAGE DELIVERED THROUGH ATOP, IS AT THE ELECTION AND
RISK OF THE TENDERING HOLDER AND, EXCEPT AS OTHERWISE PROVIDED IN THIS
INSTRUCTION 2, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE
PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT
DELIVERY TO THE EXCHANGE AGENT PRIOR TO SUCH DATE.
No alternative, conditional or contingent tenders will be accepted. All
tendering Holders, by execution of this Letter of Transmittal (or a facsimile
thereof), waive any right to receive any notice of the acceptance of their
Original Notes for exchange.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the principal amount represented by Original Notes
should be listed on separate signed schedule attached hereto.
4. Partial Tenders. (Not applicable to Holders who tender by book-entry
transfer). If Holders wish to tender less than the entire principal amount
evidenced by an Original Note submitted, such Holders must fill in the principal
amount that is to be tendered in the column entitled "Principal Amount
Tendered." The minimum permitted tender is $1,000 in principal amount of
Original Notes. All other tenders must be in integral multiples of $1,000 in
principal amount. In the case of a partial tender of Original Notes, as soon as
practicable after the Expiration Date, new certificates for the remainder of the
Original Notes that were evidenced by such Holder's old certificates will be
sent to such Holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal. The entire principal amount that is represented by
Original Notes delivered to the Exchange Agent will be deemed to have been
tendered, unless otherwise indicated.
5. Signatures on Letter of Transmittal, Instruments of Transfer and
Endorsements. If this Letter of Transmittal is signed by the registered
Holder(s) of the Original Notes tendered hereby, the signatures must correspond
with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever. If this Letter of Transmittal
is signed by a participant in DTC whose name is shown as the owner of the
Original Notes tendered hereby, the signature must correspond with the name
shown on the security position listing as the owner of the Original Notes.
If any of the Original Notes tendered hereby are registered in the name of
two or more Holders, all such Holders must sign this Letter of Transmittal. If
any of the Original Notes tendered hereby are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any Original Note or instrument of
transfer is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing, and proper evidence satisfactory to the Partnership of such person's
authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered Holder(s) of
the Original Notes listed herein and transmitted hereby, no endorsements of
Original Notes or separate instruments of transfer are required unless Exchange
Notes are to be issued, or Original Notes not tendered or exchanged are to be
issued, to a person other than the registered Holder(s), in which case
signatures on such Original Notes or instruments of transfer must be guaranteed
by an Eligible Institution.
A-10
<PAGE> 66
IF THIS LETTER OF TRANSMITTAL IS SIGNED OTHER THAN BY THE REGISTERED
HOLDER(S) OF THE ORIGINAL NOTES LISTED HEREIN, THE ORIGINAL NOTES MUST BE
ENDORSED OR ACCOMPANIED BY APPROPRIATE INSTRUMENTS OF TRANSFER, IN EITHER CASE
SIGNED EXACTLY AS THE NAME(S) OF THE REGISTERED HOLDER(S) APPEAR ON THE ORIGINAL
NOTES AND SIGNATURES ON SUCH ORIGINAL NOTES OR INSTRUMENTS OF TRANSFER ARE
REQUIRED AND MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION, UNLESS THE SIGNATURE
IS THAT OF AN ELIGIBLE INSTITUTION.
6. Special Issuance and Delivery Instructions. If certificates for Exchange
Notes or unexchanged or untendered Original Notes are to be issued in the name
of a person other than the signer of this Letter of Transmittal, or if Exchange
Notes or such Original Notes are to be sent to someone other than the signer of
this Letter of Transmittal or to an address other than that shown herein, the
appropriate boxes on this Letter of Transmittal should be completed. All
Original Notes tendered by book-entry transfer and not accepted for payment will
be returned by crediting the account at DTC designated herein as the account for
which such Original Notes were delivered.
7. Transfer Taxes. Except as set forth in this Instruction 7, the
Partnership will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of Original Notes to it, or to its order, pursuant to the
Exchange Offer. If Exchange Notes, or Original Notes not tendered or exchanged
are to be registered in the name of any persons other than the registered
owners, or if tendered Original Notes are registered in the name of any persons
other than the persons signing this Letter of Transmittal, the amount of any
transfer taxes (whether imposed on the registered Holder or such other person)
payable on account of the transfer to such other person must be paid to the
Partnership or the Exchange Agent (unless satisfactory evidence of the payment
of such taxes or exemption therefrom is submitted) before the Exchange Notes
will be issued.
8. Waiver of Conditions. The conditions of the Exchange Offer may be
amended or waived by the Partnership, in whole or in part, at any time and from
time to time in the Partnership's sole discretion, in the case of any Original
Notes tendered.
9. Substitute Form W-9. Each tendering owner of a Note (or other payee) is
required to provide the Exchange Agent with a correct taxpayer identification
number ("TIN"), generally the owner's social security or federal employer
identification number, and with certain other information, on Substitute Form
W-9, which is provided hereafter under "Important Tax Information," and to
certify that the owner (or other payee) is not subject to backup withholding.
Failure to provide the information on the Substitute Form W-9 may subject the
tendering owner (or other payee) to a $50 penalty imposed by the Internal
Revenue Service and 31% federal income tax withholding. The box in Part 3 of the
Substitute Form W-9 may be checked if the tendering owner (or other payee) has
not been issued a TIN and has applied for a TIN or intends to apply for a TIN in
the near future. If the box in Part 3 is checked and the Exchange Agent is not
provided with a TIN by the time of payment, the Exchange Agent will withhold 31%
until a TIN is provided to the Exchange Agent.
10. Broker-dealers Participating in the Exchange Offer. If no broker-dealer
checks the last box on page 7 of this Letter of Transmittal, the Partnership has
no obligation under the Registration Rights Agreement to allow the use of the
Prospectus for resales of the Exchange Notes by broker-dealers or to maintain
the effectiveness of the Registration Statement of which the Prospectus is a
part after the consummation of the Exchange Offer.
11. Requests for Assistance or Additional Copies. Any questions or requests
for assistance or additional copies of the Prospectus, this Letter of
Transmittal or the Notice of Guaranteed Delivery may be directed to the Exchange
Agent at the telephone numbers and location listed above. A Holder or owner may
also contact such Holder's or owner's broker, dealer, commercial bank or trust
company or nominee for assistance concerning the Exchange Offer.
A-11
<PAGE> 67
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH CERTIFICATES REPRESENTING THE ORIGINAL NOTES AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE EXCHANGE
AGENT ON OR PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, an owner of Original Notes whose tendered
Original Notes are accepted for exchange is required to provide the Exchange
Agent with such owner's current TIN on Substitute Form W-9 below. If such owner
is an individual, the TIN is his or her social security number. If the Exchange
Agent is not provided with the correct TIN, the owner or other recipient of
Exchange Notes may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, any interest on Exchange Notes paid to such owner or other
recipient may be subject to 31% backup withholding tax.
Certain owners of Notes (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that owner must submit to the Exchange Agent a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Exchange Agent. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding the owner is required to notify the Exchange
Agent of the owner's current TIN (or the TIN of any other payee) by completing
the following form, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such owner is awaiting a TIN), and that (i) the owner has not
been notified by the Internal Revenue Service that the owner is subject to
backup withholding as a result of failure to report all interest or dividends or
(ii) the Internal Revenue Service has notified the owner that the owner is no
longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the owner of the Original
Notes. If the Original Notes are registered in more than one name or are not
registered in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9", for
additional guidance on which number to report.
A-12
<PAGE> 68
<TABLE>
<C> <S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME:
- -------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number(s)
FORM W-9 BOX AT THE RIGHT AND CERTIFY BY SIGNING or
AND DATING BELOW. Employer Identification Number(s)
------------------------------
-----------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART 2 -- Certifications -- Under penalties of perjury, I certify that:
INTERNAL REVENUE SERVICE (1) The number shown on this form is my correct taxpayer identification number (or I
am waiting for a number to be issued to me) and
PAYER'S REQUEST FOR (2) I am not subject to backup withholding because: (a) I am exempt from backup
TAXPAYER IDENTIFICATION withholding, or (b) I have not been notified by the Internal Revenue Service
NUMBER ("TIN") ("IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding because
of under-reporting interest or dividends on your tax return.
-----------------------------------------------------------------------------------------
Signature ----------------------------- PART 3 --
Awaiting TIN [ ]
Date -----------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31%.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable cash payments made to me will be withheld until I provide a
taxpayer identification number.
Signature Date
- ------------------------------------------------- -------------------------
A-13
<PAGE> 69
ANNEX B
KINDER MORGAN ENERGY PARTNERS, L.P.
LETTER OF TRANSMITTAL
FOR 8% NOTES
<PAGE> 70
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
8% SENIOR NOTES DUE 2005
OF
KINDER MORGAN ENERGY PARTNERS, L.P.
PURSUANT TO THE PROSPECTUS DATED , 2000
THIS OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000
UNLESS EXTENDED BY THE PARTNERSHIP IN ITS SOLE DISCRETION (THE "EXPIRATION
DATE"). TENDERS OF NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION
DATE.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
FIRST UNION NATIONAL BANK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand:
First Union National Bank (704) 590-7628 First Union National Bank First Union
First Union Customer Information Customer Information Center
Center Confirm by Telephone: Corporate Trust Operations -- NC1153
Corporate Trust Operations -- NC1153 (704) 590-7408 1525 West W.T. Harris Boulevard -- 3C3
1525 West W.T. Harris Boulevard -- 3C3 Charlotte, NC 28262-1153
Charlotte, NC 28288 Attention: Mike Klotz
Attention: Mike Klotz
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN
AS LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES PURSUANT TO THE
EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR ORIGINAL NOTES TO
THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
This Letter of Transmittal is to be used by holders ("Holders") of 8%
Senior Notes due 2005 (the "Original Notes") of Kinder Morgan Energy Partners,
L.P. (the "Partnership") to receive 8% Exchange Notes (the "Exchange Notes") if:
(i) certificates representing Original Notes are to be physically delivered to
the Exchange Agent herewith by such Holders; (ii) tender of Original Notes is to
be made by book-entry transfer to the Exchange Agent's account at The Depository
Trust Company ("DTC") pursuant to the procedures set forth under the caption
"The Exchange Offers -- Procedures for Tendering Original Notes -- Book-Entry
Delivery Procedures" in the Prospectus dated , 2000 (the
"Prospectus"); or (iii) tender of Original Notes is to be made according to the
guaranteed delivery procedures set forth under the caption "The Exchange
Offers -- Procedures for Tendering Original Notes -- Guaranteed Delivery" in the
Prospectus, and, in each case, instructions are not being transmitted through
the DTC Automated Tender Offer Program ("ATOP"). The undersigned hereby
acknowledges receipt of the Prospectus. All capitalized terms used herein and
not defined shall have the meanings ascribed to them in the Prospectus.
Holders of Original Notes that are tendering by book-entry transfer to the
Exchange Agent's account at DTC can execute the tender through ATOP, for which
the transaction will be eligible. DTC participants that are accepting the
exchange offer as set forth in the Prospectus and this Letter of Transmittal
(together, the "Exchange Offer") must transmit their acceptance to DTC which
will edit and verify the acceptance and
B-1
<PAGE> 71
execute a book-entry delivery to the Exchange Agent's account at DTC. DTC will
then send an Agent's Message to the Exchange Agent for its acceptance. Delivery
of the Agent's Message by DTC will satisfy the terms of the Offer as to
execution and delivery of a Letter of Transmittal by the participant identified
in the Agent's Message. DTC participants may also accept the Exchange Offer by
submitting a notice of guaranteed delivery through ATOP.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
If a Holder desires to tender Original Notes pursuant to the Exchange Offer
and time will not permit this Letter of Transmittal, certificates representing
such Original Notes and all other required documents to reach the Exchange
Agent, or the procedures for book-entry transfer cannot be completed, on or
prior to the Expiration Date, then such Holder must tender such Original Notes
according to the guaranteed delivery procedures set forth under the caption "The
Exchange Offers -- Procedures for Tendering Original Notes -- Guaranteed
Delivery" in the Prospectus. See Instruction 2.
The undersigned should complete, execute and deliver this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer.
- --------------------------------------------------------------------------------
TENDER OF ORIGINAL NOTES
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
-----------------------------------------
Account Number:
--------------------------------------------------------
Transaction Code Number:
-----------------------------------------------
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
----------------------------------------
Window Ticker Number (if any):
------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------
Name of Eligible Institution that Guaranteed Delivery:
------------------
- --------------------------------------------------------------------------------
B-2
<PAGE> 72
List below the Original Notes to which this Letter of Transmittal relates.
The name(s) and address(es) of the registered Holder(s) should be printed, if
not already printed below, exactly as they appear on the Original Notes tendered
hereby. The Original Notes and the principal amount of Original Notes that the
undersigned wishes to tender would be indicated in the appropriate boxes. If the
space provided is inadequate, list the certificate number(s) and principal
amount(s) on a separately executed schedule and affix the schedule to this
Letter of Transmittal.
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES
- -----------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S) AGGREGATE PRINCIPAL
(PLEASE FILL IN IF BLANK) SEE CERTIFICATE AMOUNT PRINCIPAL AMOUNT
INSTRUCTION 3. NUMBER(S)* REPRESENTED** TENDERED**
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL
AMOUNT OF ORIGINAL NOTES
- -----------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
** Unless otherwise specified, the entire aggregate principal amount represented by the Original Notes described above will
be deemed to be tendered. See Instruction 4.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-3
<PAGE> 73
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Kinder Morgan Energy Partners (the
"Partnership"), upon the terms and subject to the conditions set forth in its
Prospectus dated , 2000 (the "Prospectus"), receipt of which is hereby
acknowledged, and in accordance with this Letter of Transmittal (which together
constitute the "Exchange Offer"), the principal amount of Original Notes
indicated in the foregoing table entitled "Description of Original Notes" under
the column heading "Principal Amount Tendered." The undersigned represents that
it is duly authorized to tender all of the Original Notes tendered hereby which
it holds for the account of beneficial owners of such Original Notes
("Beneficial Owner(s)") and to make the representations and statements set forth
herein on behalf of such Beneficial Owner(s).
Subject to, and effective upon, the acceptance for purchase of the
principal amount of Original Notes tendered herewith in accordance with the
terms and subject to the conditions of the Exchange Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Partnership,
all right, title and interest in and to all of the Original Notes tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent the true and lawful agent and attorney-in-fact of the undersigned (with
full knowledge that the Exchange Agent also acts as the agent of the
Partnership) with respect to such Original Notes, with full powers of
substitution and revocation (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to (i) present such Original Notes
and all evidences of transfer and authenticity to, or transfer ownership of,
such Original Notes on the account books maintained by DTC to, or upon the order
of, the Partnership, (ii) present such Original Notes for transfer of ownership
on the books of the Partnership, and (iii) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Original Notes, all in
accordance with the terms and conditions of the Exchange Offer as described in
the Prospectus.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that:
(1) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being
acquired by the undersigned and any Beneficial Owner(s) in the ordinary
course of business of the undersigned and any Beneficial Owner(s),
(2) the undersigned and each Beneficial Owner are not participating,
do not intend to participate, and have no arrangement or understanding with
any person to participate, in the distribution of the Exchange Notes,
(3) except as indicated below, neither the undersigned nor any
Beneficial Owner is an "affiliate," as defined in Rule 405 under the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act"), of the Partnership, and
(4) the undersigned and each Beneficial Owner acknowledge and agree
that (x) any person participating in the Exchange Offer with the intention
or for the purpose of distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale of the Exchange Notes acquired by such
person with a registration statement containing the selling securityholder
information required by Item 507 of Regulation S-K of the Securities and
Exchange Commission (the "SEC") and cannot rely on the interpretation of
the Staff of the SEC set forth in the no-action letters that are noted in
the section of the Prospectus entitled "The Exchange Offers -- Registration
Rights" and (y) any broker-dealer that pursuant to the Exchange Offer
receives Exchange Notes for its own account in exchange for Original Notes
which it acquired for its own account as a result of market-making
activities or other trading activities must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of
such Exchange Notes.
B-4
<PAGE> 74
If the undersigned is a broker-dealer that will receive Exchange Notes for
its own account in exchange for Original Notes that were acquired as the result
of market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
By so acknowledging and by delivering a prospectus, a broker-dealer shall not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
The undersigned understands that tenders of Original Notes may be withdrawn
by written notice of withdrawal received by the Exchange Agent at any time prior
to the Expiration Date in accordance with the Prospectus. In the event of a
termination of the Exchange Offer, the Original Notes tendered pursuant to the
Exchange Offer will be returned to the tendering Holders promptly (or, in the
case of Original Notes tendered by book-entry transfer, such Original Notes will
be credited to the account maintained at DTC from which such Original Notes were
delivered). If the Partnership makes a material change in the terms of the
Exchange Offer or the information concerning the Exchange Offer or waives a
material condition of such Exchange Offer, the Partnership will disseminate
additional Exchange Offer materials and extend such Exchange Offer, if and to
the extent required by law.
The undersigned understands that the tender of Original Notes pursuant to
any of the procedures set forth in the Prospectus and in the instructions hereto
will constitute the undersigned's acceptance of the terms and conditions of the
Exchange Offer. The Partnership's acceptance for exchange of Original Notes
tendered pursuant to any of the procedures described in the Prospectus will
constitute a binding agreement between the undersigned and the Partnership in
accordance with the terms and subject to the conditions of the Exchange Offer.
For purposes of the Exchange Offer, the undersigned understands that validly
tendered Original Notes (or defectively tendered Original Notes with respect to
which the Partnership has, or has caused to be, waived such defect) will be
deemed to have been accepted by the Partnership if, as and when the Partnership
gives oral or written notice thereof to the Exchange Agent.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Original Notes
tendered hereby, and that when such tendered Original Notes are accepted for
purchase by the Partnership, the Partnership will acquire good title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim or right. The undersigned and each Beneficial Owner
will, upon request, execute and deliver any additional documents deemed by the
Exchange Agent or by the Partnership to be necessary or desirable to complete
the sale, assignment and transfer of the Original Notes tendered hereby.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall not be affected by, and shall survive the death or incapacity
of the undersigned and any Beneficial Owner(s), and any obligation of the
undersigned or any Beneficial Owner(s) hereunder shall be binding upon the
heirs, executors, administrators, trustees in bankruptcy, personal and legal
representatives, successors and assigns of the undersigned and such Beneficial
Owner(s).
The undersigned understands that the delivery and surrender of any Original
Notes is not effective, and the risk of loss of the Original Notes does not pass
to the Exchange Agent or the Partnership, until receipt by the Exchange Agent of
this Letter of Transmittal, or a manually signed facsimile hereof, properly
completed and duly executed, together with all accompanying evidences of
authority and any other required documents in form satisfactory to the
Partnership. All questions as to form of all documents and the validity
(including time of receipt) and acceptance of tenders and withdrawals of
Original Notes will be determined by the Partnership, in its sole discretion,
which determination shall be final and binding.
Unless otherwise indicated herein under "Special Issuance Instructions,"
the undersigned hereby requests that any Original Notes representing principal
amounts not tendered or not accepted for exchange be issued in the name(s) of
the undersigned (and in the case of Original Notes tendered by book-entry
transfer, by credit to the account of DTC), and Exchange Notes issued in
exchange for Original Notes pursuant to the Exchange Offer be issued to the
undersigned. Similarly, unless otherwise indicated herein under "Special
Delivery Instructions," the undersigned hereby requests that any Original Notes
representing principal amounts not tendered or not accepted for exchange and
Exchange Notes issued in exchange for Original Notes pursuant to the Exchange
Offer be delivered to the undersigned at the address
B-5
<PAGE> 75
shown below the undersigned's signature(s). In the event that the "Special
Issuance Instructions" box or the "Special Delivery Instructions" box is, or
both are, completed, the undersigned hereby requests that any Original Notes
representing principal amounts not tendered or not accepted for purchase be
issued in the name(s) of, certificates for such Original Notes be delivered to,
and Exchange Notes issued in exchange for Original Notes pursuant to the
Exchange Offer be issued in the name(s) of, and be delivered to, the person(s)
at the address(es) so indicated, as applicable. The undersigned recognizes that
the Partnership has no obligation pursuant to the "Special Issuance
Instructions" box or "Special Delivery Instructions" box to transfer any
Original Notes from the name of the registered Holder(s) thereof if the
Partnership does not accept for exchange any of the principal amount of such
Original Notes so tendered.
[ ] CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU HOLD ORIGINAL NOTES
IS AN AFFILIATE OF THE PARTNERSHIP.
[ ] CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU HOLD ORIGINAL NOTES
TENDERED HEREBY IS A BROKER-DEALER WHO ACQUIRED SUCH NOTES DIRECTLY FROM THE
PARTNERSHIP OR AN AFFILIATE OF THE PARTNERSHIP.
[ ] CHECK HERE AND COMPLETE THE LINES BELOW IF YOU OR ANY BENEFICIAL OWNER FOR
WHOM YOU HOLD ORIGINAL NOTES TENDERED HEREBY IS A BROKER-DEALER WHO ACQUIRED
SUCH NOTES IN MARKET-MAKING OR OTHER TRADING ACTIVITIES. IF THIS BOX IS
CHECKED, THE PARTNERSHIP WILL SEND 10 ADDITIONAL COPIES OF THE PROSPECTUS
AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO TO YOU OR SUCH
BENEFICIAL OWNER AT THE ADDRESS SPECIFIED IN THE FOLLOWING LINES.
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
B-6
<PAGE> 76
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Original Notes in a principal amount not
tendered or not accepted for exchange are to be issued in the name of, or
Exchange Notes are to be issued in the name of, someone other than the
person(s) whose signature(s) appear(s) within this Letter of Transmittal
or issued to an address different from that shown in the box entitled
"Description of Original Notes" within this Letter of Transmittal.
Issue: [ ] Original Notes
[ ] Exchange Notes
(check as applicable)
Name
------------------------------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------------------------------
(PLEASE PRINT)
----------------------------------------------------------------------
(ZIP CODE)
----------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Original Notes in a principal amount not
tendered or not accepted for exchange or Exchange Notes are to be sent to
someone other than the person(s) whose signature(s) appear(s) within this
Letter of Transmittal or to an address different from that shown in the
box entitled "Description of Original Notes" within this Letter of
Transmittal.
Issue: [ ] Original Notes
[ ] Exchange Notes
(check as applicable)
Name
------------------------------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------------------------------
(PLEASE PRINT)
----------------------------------------------------------------------
(ZIP CODE)
----------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 HEREIN)
- --------------------------------------------------------------------------------
B-7
<PAGE> 77
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF ORIGINAL NOTES
REGARDLESS OF WHETHER ORIGINAL NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the registered Holder(s) exactly as
name(s) appear(s) on certificate(s) for Original Notes or, if tendered by a
participant in DTC exactly as such participant's name appears on a security
position listing as owner of Original Notes, or by the person(s) authorized to
become registered Holder(s) by endorsements and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please set forth full title and see Instruction 5.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Registered Holder(s) or Authorized Signatory
(See guarantee requirement below)
Dated:
-------------------------------------------------------------------------
Name(s):
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (Full Title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Including Zip Code)
Area Code and Telephone Number:
------------------------------------------------
Tax Identification or Social Security Number:
-----------------------------------
(Complete Accompanying Substitute Form W-9)
SIGNATURE GUARANTEE
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
------------------------------------------------------------
Name of Firm
-------------------------------------------------------------------
[PLACE SEAL HERE]
- --------------------------------------------------------------------------------
B-8
<PAGE> 78
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Signature Guarantees. Signatures of this Letter of Transmittal must be
guaranteed by a recognized member of the Medallion Signature Guarantee Program
or by any other "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 promulgated under the Exchange Act (each of the foregoing, an
"Eligible Institution"), unless the Original Notes tendered hereby are tendered
(i) by a registered Holder of Original Notes (or by a participant in DTC whose
name appears on a security position listing as the owner of such Original Notes)
that has not completed either the box entitled "Special Issuance Instructions"
or the box entitled "Special Delivery Instructions" on this Letter of
Transmittal, or (ii) for the account of an Eligible Institution. If the Original
Notes are registered in the name of a person other than the signer of this
Letter of Transmittal, if Original Notes not accepted for exchange or not
tendered are to be returned to a person other than the registered Holder or if
Exchange Notes are to be issued in the name of or sent to a person other than
the registered Holder, then the signatures on this Letter of Transmittal
accompanying the tendered Original Notes must be guaranteed by an Eligible
Institution as described above. See Instruction 5.
2. Delivery of Letter of Transmittal and Original Notes. This Letter of
Transmittal is to be completed by Holders if (i) certificates representing
Original Notes are to be physically delivered to the Exchange Agent herewith by
such Holders; (ii) tender of Original Notes is to be made by book-entry transfer
to the Exchange Agent's account at DTC pursuant to the procedures set forth
under the caption "The Exchange Offers -- Procedures for Tendering Original
Notes -- Book-Entry Delivery Procedures" in the Prospectus; or (iii) tender of
Original Notes is to be made according to the guaranteed delivery procedures set
forth under the caption "The Exchange Offers -- Procedures for Tendering
Original Notes -- Guaranteed Delivery" in the Prospectus. All physically
delivered Original Notes, or a confirmation of a book-entry transfer into the
Exchange Agent's account at DTC of all Original Notes delivered electronically,
as well as a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof), any required signature guarantees and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at one of its addresses set forth on the cover page hereto on or
prior to the Expiration Date, or the tendering Holder must comply with the
guaranteed delivery procedures set forth below. DELIVERY OF DOCUMENTS TO DTC
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
If a Holder desires to tender Original Notes pursuant to the Exchange Offer
and time will not permit this Letter of Transmittal, certificates representing
such Original Notes and all other required documents to reach the Exchange
Agent, or the procedures for book-entry transfer cannot be completed, on or
prior to the Expiration Date, such Holder must tender such Original Notes
pursuant to the guaranteed delivery procedures set forth under the caption "The
Exchange Offers -- Procedures for Tendering Original Notes -- Guaranteed
Delivery" in the Prospectus. Pursuant to such procedures, (i) such tender must
be made by or through an Eligible Institution; (ii) a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form provided
by the Partnership, or an Agent's Message with respect to guaranteed delivery
that is accepted by the Partnership, must be received by the Exchange Agent,
either by hand delivery, mail, telegram, or facsimile transmission, on or prior
to the Expiration Date; and (iii) the certificates for all tendered Original
Notes, in proper form for transfer (or confirmation of a book-entry transfer or
all Original Notes delivered electronically into the Exchange Agent's account at
DTC pursuant to the procedures for such transfer set forth in the Prospectus),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by this
Letter of Transmittal, or in the case of a book-entry transfer, a properly
transmitted Agent's Message, must be received by the Exchange Agent within two
business days after the date of the execution of the Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE ORIGINAL NOTES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY
ACCEPTANCE OR AGENT'S MESSAGE DELIVERED THROUGH ATOP, IS AT THE ELECTION AND
RISK OF THE TENDERING HOLDER AND, EXCEPT AS OTHERWISE PROVIDED IN THIS
INSTRUCTION 2, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE
PROPERLY INSURED, REGISTERED MAIL WITH RETURN
B-9
<PAGE> 79
RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE
EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT PRIOR TO SUCH DATE.
No alternative, conditional or contingent tenders will be accepted. All
tendering Holders, by execution of this Letter of Transmittal (or a facsimile
thereof), waive any right to receive any notice of the acceptance of their
Original Notes for exchange.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the principal amount represented by Original Notes
should be listed on separate signed schedule attached hereto.
4. Partial Tenders. (Not applicable to Holders who tender by book-entry
transfer). If Holders wish to tender less than the entire principal amount
evidenced by an Original Note submitted, such Holders must fill in the principal
amount that is to be tendered in the column entitled "Principal Amount
Tendered." The minimum permitted tender is $1,000 in principal amount of
Original Notes. All other tenders must be in integral multiples of $1,000 in
principal amount. In the case of a partial tender of Original Notes, as soon as
practicable after the Expiration Date, new certificates for the remainder of the
Original Notes that were evidenced by such Holder's old certificates will be
sent to such Holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal. The entire principal amount that is represented by
Original Notes delivered to the Exchange Agent will be deemed to have been
tendered, unless otherwise indicated.
5. Signatures on Letter of Transmittal, Instruments of Transfer and
Endorsements. If this Letter of Transmittal is signed by the registered
Holder(s) of the Original Notes tendered hereby, the signatures must correspond
with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever. If this Letter of Transmittal
is signed by a participant in DTC whose name is shown as the owner of the
Original Notes tendered hereby, the signature must correspond with the name
shown on the security position listing as the owner of the Original Notes.
If any of the Original Notes tendered hereby are registered in the name of
two or more Holders, all such Holders must sign this Letter of Transmittal. If
any of the Original Notes tendered hereby are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any Original Note or instrument of
transfer is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing, and proper evidence satisfactory to the Partnership of such person's
authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered Holder(s) of
the Original Notes listed herein and transmitted hereby, no endorsements of
Original Notes or separate instruments of transfer are required unless Exchange
Notes are to be issued, or Original Notes not tendered or exchanged are to be
issued, to a person other than the registered Holder(s), in which case
signatures on such Original Notes or instruments of transfer must be guaranteed
by an Eligible Institution.
IF THIS LETTER OF TRANSMITTAL IS SIGNED OTHER THAN BY THE REGISTERED
HOLDER(S) OF THE ORIGINAL NOTES LISTED HEREIN, THE ORIGINAL NOTES MUST BE
ENDORSED OR ACCOMPANIED BY APPROPRIATE INSTRUMENTS OF TRANSFER, IN EITHER CASE
SIGNED EXACTLY AS THE NAME(S) OF THE REGISTERED HOLDER(S) APPEAR ON THE ORIGINAL
NOTES AND SIGNATURES ON SUCH ORIGINAL NOTES OR INSTRUMENTS OF TRANSFER ARE
REQUIRED AND MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION, UNLESS THE SIGNATURE
IS THAT OF AN ELIGIBLE INSTITUTION.
6. Special Issuance and Delivery Instructions. If certificates for Exchange
Notes or unexchanged or untendered Original Notes are to be issued in the name
of a person other than the signer of this Letter of Transmittal, or if Exchange
Notes or such Original Notes are to be sent to someone other than the signer of
this Letter of Transmittal or to an address other than that shown herein, the
appropriate boxes on this Letter of Transmittal should be completed. All
Original Notes tendered by book-entry transfer and not accepted for payment will
be returned by crediting the account at DTC designated herein as the account for
which such Original Notes were delivered.
B-10
<PAGE> 80
7. Transfer Taxes. Except as set forth in this Instruction 7, the
Partnership will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of Original Notes to it, or to its order, pursuant to the
Exchange Offer. If Exchange Notes, or Original Notes not tendered or exchanged
are to be registered in the name of any persons other than the registered
owners, or if tendered Original Notes are registered in the name of any persons
other than the persons signing this Letter of Transmittal, the amount of any
transfer taxes (whether imposed on the registered Holder or such other person)
payable on account of the transfer to such other person must be paid to the
Partnership or the Exchange Agent (unless satisfactory evidence of the payment
of such taxes or exemption therefrom is submitted) before the Exchange Notes
will be issued.
8. Waiver of Conditions. The conditions of the Exchange Offer may be
amended or waived by the Partnership, in whole or in part, at any time and from
time to time in the Partnership's sole discretion, in the case of any Original
Notes tendered.
9. Substitute Form W-9. Each tendering owner of a Note (or other payee) is
required to provide the Exchange Agent with a correct taxpayer identification
number ("TIN"), generally the owner's social security or federal employer
identification number, and with certain other information, on Substitute Form
W-9, which is provided hereafter under "Important Tax Information," and to
certify that the owner (or other payee) is not subject to backup withholding.
Failure to provide the information on the Substitute Form W-9 may subject the
tendering owner (or other payee) to a $50 penalty imposed by the Internal
Revenue Service and 31% federal income tax withholding. The box in Part 3 of the
Substitute Form W-9 may be checked if the tendering owner (or other payee) has
not been issued a TIN and has applied for a TIN or intends to apply for a TIN in
the near future. If the box in Part 3 is checked and the Exchange Agent is not
provided with a TIN by the time of payment, the Exchange Agent will withhold 31%
until a TIN is provided to the Exchange Agent.
10. Broker-dealers Participating in the Exchange Offer. If no broker-dealer
checks the last box on page 7 of this Letter of Transmittal, the Partnership has
no obligation under the Registration Rights Agreement to allow the use of the
Prospectus for resales of the Exchange Notes by broker-dealers or to maintain
the effectiveness of the Registration Statement of which the Prospectus is a
part after the consummation of the Exchange Offer.
11. Requests for Assistance or Additional Copies. Any questions or requests
for assistance or additional copies of the Prospectus, this Letter of
Transmittal or the Notice of Guaranteed Delivery may be directed to the Exchange
Agent at the telephone numbers and location listed above. A Holder or owner may
also contact such Holder's or owner's broker, dealer, commercial bank or trust
company or nominee for assistance concerning the Exchange Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH CERTIFICATES REPRESENTING THE ORIGINAL NOTES AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED BY THE EXCHANGE
AGENT ON OR PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, an owner of Original Notes whose tendered
Original Notes are accepted for exchange is required to provide the Exchange
Agent with such owner's current TIN on Substitute Form W-9 below. If such owner
is an individual, the TIN is his or her social security number. If the Exchange
Agent is not provided with the correct TIN, the owner or other recipient of
Exchange Notes may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, any interest on Exchange Notes paid to such owner or other
recipient may be subject to 31% backup withholding tax.
Certain owners of Notes (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that owner must submit to the Exchange Agent a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Exchange Agent. See the enclosed
B-11
<PAGE> 81
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional instructions.
Backup withholding is not an additional tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding the owner is required to notify the Exchange
Agent of the owner's current TIN (or the TIN of any other payee) by completing
the following form, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such owner is awaiting a TIN), and that (i) the owner has not
been notified by the Internal Revenue Service that the owner is subject to
backup withholding as a result of failure to report all interest or dividends or
(ii) the Internal Revenue Service has notified the owner that the owner is no
longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the owner of the Original
Notes. If the Original Notes are registered in more than one name or are not
registered in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9", for
additional guidance on which number to report.
B-12
<PAGE> 82
<TABLE>
<C> <S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME:
- -------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number(s)
FORM W-9 BOX AT THE RIGHT AND CERTIFY BY SIGNING or
AND DATING BELOW. Employer Identification Number(s)
------------------------------
-----------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART 2 -- Certifications -- Under penalties of perjury, I certify that:
INTERNAL REVENUE SERVICE (1) The number shown on this form is my correct taxpayer identification number (or I
am waiting for a number to be issued to me) and
PAYER'S REQUEST FOR (2) I am not subject to backup withholding because: (a) I am exempt from backup
TAXPAYER IDENTIFICATION withholding, or (b) I have not been notified by the Internal Revenue Service
NUMBER ("TIN") ("IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding because
of under-reporting interest or dividends on your tax return.
-----------------------------------------------------------------------------------------
Signature ----------------------------- PART 3 --
Awaiting TIN [ ]
Date -----------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31%.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable cash payments made to me will be withheld until I provide a
taxpayer identification number.
Signature Date
----------------------------------------- -----------------------
B-13
<PAGE> 83
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Partnership Agreement for Kinder Morgan Energy Partners, L.P. ("Kinder
Morgan Energy Partners") provides that Kinder Morgan Energy Partners will
indemnify any person who is or was an officer or director of Kinder Morgan G.P.,
Inc. (the "KM General Partner") or any departing partner, to the fullest extent
permitted by law. In addition, Kinder Morgan Energy Partners may indemnify, to
the extent deemed advisable by the KM General Partner and to the fullest extent
permitted by law, any person who is or was serving at the request of the KM
General Partner or any affiliate of the KM General Partner or any departing
partner as an officer or director of the KM General Partner, a departing partner
or any of their Affiliates (as defined in Kinder Morgan Energy Partners
Partnership Agreement) ("Indemnitees") from and against any and all losses,
claims, damages, liabilities (joint or several), expenses (including, without
limitation, legal fees and expenses), judgement, fines, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
whether civil, criminal, administrative or investigative, in which any
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an officer or director or a person serving
at the request of Kinder Morgan Energy Partners in another entity in a similar
capacity, provided that in each case the Indemnitee acted in good faith and in a
manner which such Indemnitee believed to be in or not opposed to the best
interests of Kinder Morgan Energy Partners and, with respect to any criminal
proceeding, had no reasonable cause to believe its conduct was unlawful. Any
indemnification under these provisions will be only out of the assets of Kinder
Morgan Energy Partners and the KM General Partner shall not be personally liable
for, or have any obligation to contribute or loan funds or assets to Kinder
Morgan Energy Partners to enable it to effectuate such indemnification. Kinder
Morgan Energy Partners is authorized to purchase (or to reimburse the KM General
Partner or its affiliates for the cost of) insurance against liabilities
asserted against and expenses incurred by such person to indemnify such person
against such liabilities under the provisions described above.
Article XII(c) of the Certificate of Incorporation of the KM General
Partner (the "Corporation" therein), contains the following provisions relating
to indemnification of directors and officers:
"(c) Each director and each officer of the corporation (and such
holder's heirs, executors and administrators) shall be indemnified by the
corporation against expenses reasonably incurred by him in connection with
any claim made against him or any action, suit or proceeding to which he
may be made a party, by reason of such holder being or having been a
director or officer of the corporation (whether or not he continues to be a
director or officer of the corporation at the time of incurring such
expenses), except in cases where the claim made against him shall be
admitted by him to be just, and except in cases where such action, suit or
proceeding shall be settled prior to adjudication by payment of all or a
substantial portion of the amount claimed, and except in cases in which he
shall be adjudged in such action, suit or proceeding to be liable or to
have been derelict in the performance of such holder's duty as such
director or officer. Such right of indemnification shall not be exclusive
of other rights to which he may be entitled as a matter of law."
Richard D. Kinder, the Chairman of the Board of Directors and Chief
Executive Officer of the KM General Partner, and William V. Morgan, a Director
and Vice Chairman of the KM General Partner, are also officers and directors of
Kinder Morgan, Inc. and are entitled to similar indemnification from Kinder
Morgan, Inc. pursuant to Kinder Morgan, Inc.'s certificate of incorporation and
bylaws.
II-1
<PAGE> 84
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
4.1* -- Indenture dated March 22, 2000 between Kinder Morgan
Energy Partners and First Union National Bank, as
Trustee.
4.2* -- Form of Floating Rate Note and Form of 8% Note (contained
in the Indenture filed as Exhibit 4.1).
4.3* -- Registration Rights Agreement dated March 22, 2000 among
Kinder Morgan Energy Partners, Goldman, Sachs & Co.,
Merrill Lynch & Co., Banc of America Securities LLC and
First Union Securities, Inc.
5* -- Opinion of Bracewell & Patterson, L.L.P. as to the
legality of the notes being offered.
8* -- Opinion of Bracewell & Patterson, L.L.P. as to certain
federal income tax matters.
12* -- Calculation of Earnings to Fixed Charges.
23.1* -- Consent of Bracewell & Patterson, L.L.P. (included in
their opinions filed as Exhibit 5 and Exhibit 8 hereto).
23.2* -- Consent of PricewaterhouseCoopers LLP.
23.3* -- Consent of Arthur Andersen LLP.
24* -- Powers of attorney.
25* -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of First Union Bank.
27 -- Financial Data Schedule (filed as an exhibit to Kinder
Morgan Energy Partner's Annual Report on Form 10-K for
the year ended December 31, 1999 and incorporated herein
by reference).
</TABLE>
- ---------------
* Filed herewith.
(b) Financial Statement Schedules
No financial statement schedules are included herein. All other schedules
for which provision is made in the applicable accounting regulation of the
Commission are not required under the related instructions, are inapplicable, or
the information is included in the consolidated financial statements, and have
therefore been omitted.
(c) Reports, Opinions, and Appraisals
The following reports, opinions, and appraisals are included herein.
None
ITEM 22. UNDERTAKINGS.
(a) Regulation S-K, Item 512 Undertakings
II-2
<PAGE> 85
(1) The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(c) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(ii) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(iii) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) Registration on Form S-4 of Securities Offered for Resale.
(i) The undersigned hereby undertakes as follows: That prior to any
public reoffering of the securities registered hereunder through the use
of a prospectus which is a part of this registration statement, by any
person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes such reoffering prospectus will
contain the information called for by the applicable registration form
with respect to reofferings by person who may be deemed underwriters, in
addition to the information called for by the other Items of the
applicable form.
(ii) The registrant undertakes that every prospectus (a) that is
filed pursuant to the paragraph immediately preceding, or (b) that
purports to meet the requirements of section 10(a)(3) of the Act and is
used in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the registration statement
and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities
II-3
<PAGE> 86
offered therein, and the offering of new securities at the time shall be
deemed to be the initial bona fide offering thereof.
(4) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other that payment by the Company
of expenses incurred or paid by a director, officer or controlling person
of the Company in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4 of this Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding to
the request.
(c) The undersigned hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired therein, that was not the subject of and included in the
registration statement when it became effective.
II-4
<PAGE> 87
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement or amendment thereto to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Houston, State of Texas, on April 18, 2000.
KINDER MORGAN ENERGY PARTNERS, L.P.
(A Delaware Limited Partnership)
By: KINDER MORGAN G.P., INC.,
as General Partner
By: /s/ JOSEPH LISTENGART
----------------------------------
Joseph Listengart
Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the indicated capacities on April 18, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ RICHARD D. KINDER Director, Chairman of the Board and Chief
- ----------------------------------------------------- Executive Officer of Kinder Morgan G.P.,
Richard D. Kinder Inc. (Principal Executive Officer)
/s/ WILLIAM V. MORGAN* Director, Vice Chairman of the Board and
- ----------------------------------------------------- President of Kinder Morgan G.P., Inc.
William V. Morgan
/s/ GARY L. HULTQUIST* Director of Kinder Morgan G.P., Inc.
- -----------------------------------------------------
Gary L. Hultquist
/s/ EDWARD O. GAYLORD* Director of Kinder Morgan G.P., Inc.
- -----------------------------------------------------
Edward O. Gaylord
/s/ C. PARK SHAPER Vice President, Treasurer and Chief
- ----------------------------------------------------- Financial Officer of Kinder Morgan G.P.,
C. Park Shaper Inc. (Principal Financial Officer and
Principal Accounting Officer)
</TABLE>
*By: /s/ JOSEPH LISTENGART
-------------------------------
Joseph Listengart
(Attorney-in-fact
for persons indicated)
II-5
<PAGE> 88
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
4.1* -- Indenture dated March 22, 2000 between Kinder Morgan
Energy Partners and First Union National Bank, as
Trustee.
4.2* -- Form of Floating Rate Note and Form of 8% Note (contained
in the Indenture filed as Exhibit 4.1).
4.3* -- Registration Rights Agreement dated March 22, 2000 among
Kinder Morgan Energy Partners, Goldman, Sachs & Co.,
Merrill Lynch & Co., Banc of America Securities LLC and
First Union Securities, Inc.
5* -- Opinion of Bracewell & Patterson, L.L.P. as to the
legality of the notes being offered.
8* -- Opinion of Bracewell & Patterson, L.L.P. as to certain
federal income tax matters.
12* -- Calculation of Earnings to Fixed Charges.
23.1* -- Consent of Bracewell & Patterson, L.L.P. (included in
their opinions filed as Exhibit 5 and Exhibit 8 hereto).
23.2* -- Consent of PricewaterhouseCoopers LLP.
23.3* -- Consent of Arthur Andersen LLP.
24* -- Powers of attorney.
25* -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of First Union Bank.
27 -- Financial Data Schedule (filed as an exhibit to the
Kinder Morgan Energy Partners' Annual Report on Form 10-K
for the year ended December 31, 1999 and incorporated
herein by reference).
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.1
Conformed Copy
================================================================================
KINDER MORGAN
ENERGY PARTNERS, L.P.
ISSUER
AND
FIRST UNION NATIONAL BANK
TRUSTEE
------------------
INDENTURE
DATED AS OF MARCH 22, 2000
------------------
$200,000,000 FLOATING RATE SENIOR NOTES DUE 2002
$200,000,000 8% SENIOR NOTES DUE 2005
================================================================================
KINDER MORGAN ENERGY PARTNERS, L.P.
<PAGE> 2
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
----------- -----------------
<S> <C> <C>
Section 310(a)(1)............................................................. 609
(a)(2)............................................................. 609
(a)(3)............................................................. Not Applicable
(a)(4)............................................................. Not Applicable
(b)................................................................ 608; 610
Section 311(a)................................................................ 613
(b)................................................................ 613
Section 312(a)................................................................ 701; 702
(b)................................................................ 702
(c)................................................................ 702
Section 313(a)................................................................ 703
(b)................................................................ 703
(c)................................................................ 703
(d)................................................................ 703
Section 314(a)................................................................ 704
(a)(4)............................................................. 1004
(b)................................................................ Not Applicable
(c)(1)............................................................. 102
(c)(2)............................................................. 102
(c)(3)............................................................. Not Applicable
(d)................................................................ Not Applicable
(e)................................................................ 102
Section 315(a)................................................................ 601, 603
(b)................................................................ 602
(c)................................................................ 601
(d)................................................................ 601
(e)................................................................ 514
Section 316(a)................................................................ 101
(a)(1)(A).......................................................... 502; 512
(a)(1)(B).......................................................... 513
(a)(2)............................................................. Not Applicable
(b)................................................................ 508
(c)................................................................ 104
Section 317(a)(1)............................................................. 503
(a)(2)............................................................. 504
(b)................................................................ 1003
Section 318(a)................................................................ 107
</TABLE>
- ---------------------
NOTE: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
ii
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions..................................................................................1
SECTION 102. Compliance Certificates and Opinions........................................................15
SECTION 103. Form of Documents Delivered to Trustee......................................................16
SECTION 104. Acts of Holders; Record Dates...............................................................16
SECTION 105. Notices, Etc., to Trustee and Partnership...................................................18
SECTION 106. Notice to Holders; Waiver...................................................................18
SECTION 107. Conflict with Trust Indenture Act...........................................................19
SECTION 108. Effect of Headings and Table of Contents....................................................19
SECTION 109. Successors and Assigns......................................................................19
SECTION 110. Separability Clause.........................................................................19
SECTION 111. Benefits of Indenture.......................................................................19
SECTION 112. Governing Law...............................................................................19
SECTION 113. Legal Holidays..............................................................................19
SECTION 114. Language of Notices, Etc....................................................................20
ARTICLE II
SECURITY FORMS
SECTION 201. Forms Generally.............................................................................20
SECTION 202. Forms of Face of Securities.................................................................21
SECTION 203. Forms of Reverse of Securities..............................................................24
SECTION 204. Form of Legend for Global Securities........................................................33
SECTION 205. Form of Trustee's Certificate and Authorization.............................................34
ARTICLE III
THE SECURITIES
SECTION 301. Title and Terms.............................................................................34
SECTION 302. Denominations...............................................................................35
SECTION 303. Execution, Authentication, Delivery and Dating..............................................35
SECTION 304. Temporary Securities........................................................................36
SECTION 305. Registration, Registration of Transfer and Exchange.........................................37
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............................................41
SECTION 307. Payment of Interest; Interest Rights Preserved..............................................42
SECTION 308. Persons Deemed Owners.......................................................................43
</TABLE>
iii
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 309. Cancellation................................................................................44
SECTION 310. Computation of Interest.....................................................................44
SECTION 311. CUSIP Numbers...............................................................................44
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.....................................................45
SECTION 402. Application of Trust Money..................................................................46
ARTICLE V
REMEDIES
SECTION 501. Events of Default...........................................................................46
SECTION 502. Acceleration of Maturity; Rescission and Annulment..........................................47
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.............................48
SECTION 504. Trustee May File Proofs of Claim............................................................48
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.................................49
SECTION 506. Application of Money Collected..............................................................49
SECTION 507. Limitation on Suits.........................................................................49
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest....................................................................................50
SECTION 509. Restoration of Rights and Remedies..........................................................50
SECTION 510. Rights and Remedies Cumulative..............................................................51
SECTION 511. Delay or Omission Not Waiver................................................................51
SECTION 512. Control by Holders..........................................................................51
SECTION 513. Waiver of Past Defaults.....................................................................51
SECTION 514. Undertaking for Costs.......................................................................52
SECTION 515. Waiver of Usury, Stay or Extension Laws.....................................................52
ARTICLE VI
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.........................................................52
SECTION 602. Notice of Defaults..........................................................................54
SECTION 603. Certain Rights of Trustee...................................................................54
SECTION 604. Not Responsible for Recitals or Issuance of Securities......................................55
SECTION 605. May Hold Securities.........................................................................55
SECTION 606. Money Held in Trust.........................................................................55
SECTION 607. Compensation and Reimbursement..............................................................56
</TABLE>
iv
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 608. Disqualification; Conflicting Interests.....................................................56
SECTION 609. Corporate Trustee Required; Eligibility.....................................................57
SECTION 610. Resignation and Removal; Appointment of Successor...........................................57
SECTION 611. Acceptance of Appointment by Successor......................................................58
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.................................58
SECTION 613. Preferential Collection of Claims Against Partnership.......................................59
SECTION 614. Appointment of Authenticating Agent.........................................................59
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND PARTNERSHIP
SECTION 701. Partnership to Furnish Trustee Names and Addresses of Holders...............................61
SECTION 702. Preservation of Information; Communications to Holders......................................61
SECTION 703. Reports by Trustee..........................................................................61
SECTION 704. Reports by Partnership......................................................................62
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Partnership and Guarantors May Consolidate, Etc., Only on Certain Terms.....................62
SECTION 802. Successor Substituted.......................................................................63
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders..........................................63
SECTION 902. Supplemental Indentures with Consent of Holders.............................................64
SECTION 903. Execution of Supplemental Indentures........................................................65
SECTION 904. Effect of Supplemental Indentures...........................................................65
SECTION 905. Conformity with Trust Indenture Act.........................................................65
SECTION 906. Reference in Securities to Supplemental Indentures..........................................66
</TABLE>
v
<PAGE> 6
<TABLE>
<S> <C> <C>
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest..................................................66
SECTION 1002. Maintenance of Office or Agency.............................................................66
SECTION 1003. Money for Securities Payments to Be Held in Trust...........................................67
SECTION 1004. Statement by Officers as to Default.........................................................68
SECTION 1005. Existence...................................................................................68
SECTION 1006. Limitations on Liens........................................................................68
SECTION 1007. Restriction of Sale-Leaseback Transaction...................................................70
SECTION 1008. Waiver of Certain Covenants.................................................................70
SECTION 1009. Officers' Certificate as to Additional Interest.............................................71
ARTICLE XI
REDEMPTION OF FIXED RATE SECURITIES
SECTION 1101. Optional Redemption.........................................................................71
SECTION 1102. Election to Redeem; Notice to Trustee.......................................................72
SECTION 1103. Selection by Trustee of Fixed Rate Securities to be Redeemed................................72
SECTION 1104. Notice of Redemption........................................................................72
SECTION 1105. Deposit of Redemption Price.................................................................73
SECTION 1106. Fixed Rate Securities Payable on Redemption Date............................................73
SECTION 1107. Fixed Rate Securities Redeemed in Part......................................................73
ARTICLE XII
NON-RECOURSE
SECTION 1201. Non-Recourse to the General Partner; No Personal Liability of
Officers, Directors, Employees or Partners..................................................74
ARTICLE XIII
DEFEASANCE OF FIXED RATE SECURITIES
SECTION 1301. Applicability of Article....................................................................74
SECTION 1302. Legal Defeasance............................................................................74
SECTION 1303. Covenant Defeasance.........................................................................76
SECTION 1304. Application by Trustee of Funds Deposited for Payment of Fixed
Rate Securities.............................................................................77
SECTION 1305. Repayment to Partnership....................................................................78
SECTION 1306. Reinstatement...............................................................................78
</TABLE>
vi
<PAGE> 7
<TABLE>
<S> <C> <C>
ARTICLE XIV
GUARANTY OF SECURITIES
SECTION 1401. Requirement for Guaranty....................................................................78
SECTION 1402. Release of Guaranty.........................................................................79
ANNEX A Guaranty Provisions
ANNEX B Form of Regulation S Certificate
ANNEX C Form of Restricted Securities Certificate
ANNEX D Form of Unrestricted Securities Certificate
</TABLE>
vii
<PAGE> 8
INDENTURE dated as of March 22, 2000 between KINDER MORGAN ENERGY
PARTNERS, L.P., a Delaware limited partnership (the "Partnership"), having its
principal office at 1301 McKinney Street, Suite 3400, Houston Texas, 77010, the
and FIRST UNION NATIONAL BANK, a national banking association, as Trustee (the
"Trustee").
RECITALS OF THE PARTNERSHIP
The Partnership has duly authorized the creation of the Securities (as
hereinafter defined), substantially of the tenor and amount hereinafter set
forth, and to provide therefor the Partnership has duly authorized the execution
and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Partnership and authenticated and delivered hereunder and duly issued by the
Partnership, the valid obligations of the Partnership, and to make this
Indenture a valid agreement of the Partnership, in accordance with the terms of
this Securities and this Indenture, respectively, have been done.
Upon the issuance of the Exchange Securities or the effectiveness of a
registration statement filed in connection with the Exchange Offer, this
Indenture will be subject to the provisions of the Trust Indenture Act (as
hereinafter defined) that are required to be a part of this Indenture and shall,
to the extent applicable, be governed by such provisions. Prior thereto, the
provisions of said Trust Indenture Act will apply to this Indenture only to the
extent expressly provided herein.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities and of each 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;
<PAGE> 9
(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;
(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, and the word "Annex" refers to an
Annex to this Indenture.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Interest", which does not apply to the Exchange Securities,
has the meaning specified in the Forms of Reverse of Security in Section 203.
"Additional Interest Event", which does not apply to the Exchange
Securities, has the meaning specified in the Forms of Reverse of Security in
Section 203.
"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.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, or Euroclear and
Cedel, in each case to the extent applicable to such transaction and as in
effect from time to time.
"Attributable Indebtedness", when used with respect 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
2
<PAGE> 10
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 either or both Series.
"Authorized Agent" has the meaning specified in Section 105 of Annex A.
"Authorized Newspaper" means a newspaper, in the English language,
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in the Borough of
Manhattan, The City of New York.
"Bankruptcy Law" means Title 11, U.S. Code, as amended, or any similar
federal or state law for the relief of debtors or the protection of creditors.
"Board 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", means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law, executive order or regulation to close;
provided, that when used with respect to any Floating Rate Security, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in Dollar deposits in the London interbank market.
"Calculation Agent" has the meaning specified in the Form of Reverse of
Floating Rate Security in Section 203(a).
"Capital Interests" means, with respect to any Person, any and all
shares, interests, participations, rights or other equivalents (however
designated) of such Person's equity, including, without limitation (i) with
respect to partnerships, partnership interests (whether general or limited),
(ii) with respect to limited liability companies, member interests, and (iii)
any other interest or
3
<PAGE> 11
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such Person.
"Cedel" means CedelBank, S.A. (or any successor securities clearing
agency).
"Closing Date" has the meaning specified in the Registration Rights
Agreement.
"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 (i) all current liabilities
(excluding (A) any current liabilities that by their terms are extendable or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed, and (B) current
maturities of long-term debt), and (ii) the value (net of any applicable
reserves) of all goodwill, trade names, trademarks, patents and other like
intangible assets, all as set forth on the consolidated balance sheet of the
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 1001 Fannin, Suite 2255, Houston,
Texas 77002.
"corporation" includes corporations, associations, partnerships
(general or limited), 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.
"Daily Interest Amount" has the meaning specified in the Form of
Reverse of Floating Rate Security in Section 203(a).
"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.
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"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 a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Securities, 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 as at
the time of payment is legal tender for the payment of public and private debts.
"DTC" means the Depository Trust Company.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.
"Exchange Offer" has the meaning specified in the Registration Rights
Agreement.
"Exchange Securities" means the Floating Rate Exchange Securities and
the Fixed Rate Exchange Securities, which shall be substantially identical to
the Original Floating Rate Securities and the Original Fixed Rate Securities, as
the case may be, except that the Exchange Securities will have been registered
pursuant to an effective registration statement under the Securities Act, will
not be subject to transfer restrictions or registration rights and will not be
entitled to the benefit of provisions for Additional Interest.
"Fixed Rate Exchange Security" means any Security issued in exchange
for an Original Fixed Rate Security or Original Fixed Rate Securities pursuant
to the Exchange Offer or otherwise registered under the Securities Act and any
Fixed Rate Security with respect to which the next preceding Predecessor Fixed
Rate Security of such Fixed Rate Security was a Fixed Rate Exchange Security.
"Fixed Rate Securities" means the 8% Senior Notes due 2005 of the
Partnership, including the Original Fixed Rate Securities and the Fixed Rate
Exchange Securities.
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"Floating Interest Rate" has the meaning specified in the Form of
Reverse of Floating Rate Security in Section 203(a).
"Floating Rate Exchange Security" means any Security issued in exchange
for an Original Floating Rate Security or Original Floating Rate Securities
pursuant to the Exchange Offer or otherwise registered under the Securities Act
and any Floating Rate Security with respect to which the next preceding
Predecessor Floating Rate Security of such Floating Rate Security was a Floating
Rate Exchange Security.
"Floating Rate Securities" means the Floating Rate Senior Notes due
2002 of the Partnership, including the Original Floating Rate Securities and the
Floating Rate Exchange Securities.
"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.
"Funding Guarantor" has the meaning specified in Section 103 of Annex
A.
"General Partner" means Kinder Morgan G.P., Inc., a Delaware
corporation.
"Global Securities" means the Restricted Global Securities and the
Regulation S Global Securities.
"Global Security Legend" means a legend substantially in the form
specified in Section 204(c).
"Guarantor" means (i) each Subsidiary of the Partnership that becomes a
guarantor of the Securities pursuant to Section 1401, and (ii) any Subsidiary of
the Partnership that is a successor of any Subsidiary of the Partnership
referred to in clause (i). The term "Guarantor" shall not include any Subsidiary
of the Partnership referred to in clause (i) or (ii) that shall have been (or
whose predecessor shall have been) released from its obligations under a
Guaranty pursuant to Section 1402.
"Guaranty" means a guaranty of the Securities containing provisions
substantially in the form specified in Annex A , and such other provisions, not
inconsistent herewith, as are customary in guaranties, executed and delivered by
one or more Subsidiaries of the Partnership as required by Section 1401.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Independent Investment Banker" has the meaning specified in Section
1101.
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<PAGE> 14
"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.
"interest", when used herein with respect to the Fixed Rate Securities,
includes Additional Interest, if any.
"Interest Determination Date" has the meaning specified in the Form of
Reverse of Floating Rate Security in Section 203(a).
"Interest Payment Date" means the Stated Maturity of an installment of
interest on either Series of the Securities.
"Interest Period" has the meaning specified in the Form of Reverse of
Floating Rate Security in Section 203(a).
"Interest Reset Date" has the meaning specified in the Form of Reverse
of Floating Rate Security in Section 203(a).
"Judgment Currency" has the meaning specified in Section 107 of Annex
A.
"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.
"Make-Whole Premium" with respect to any Fixed Rate Security (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 any
such Security (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 Stated Maturity of the principal
of such Security (or portion thereof) being redeemed, over (ii) the principal
amount of such Security (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 (0.25%).
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"Maturity", when used with respect to a Security of either Series,
means the date on which the principal of the Securities of such Series becomes
due and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption (in the case of the Fixed
Rate Securities) or otherwise.
"Non-U.S. Guarantor" has the meaning specified in Section 105 of Annex
A.
"Notice of Default" means a written notice of the kind specified in
Section 501(3).
"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 or 1009 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 Fixed Rate Securities" means all Fixed Rate Securities other
than Fixed Rate Exchange Securities.
"Original Floating Rate Securities" means all Floating Rate Securities
other than Floating Rate Exchange Securities.
"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 (in the case of
the Fixed Rate Securities) 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 Holders of such Securities; provided, however, that, if such Fixed
Rate 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
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<PAGE> 16
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) Fixed Rate 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 Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, 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 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 Closing 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.
"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
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<PAGE> 17
appropriate proceedings and any undetermined Lien which is incidental to
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 or any state thereof, or any department, agency or instrumentality
or political subdivision of the United States 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,
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 either
Series, means the office or agency of the Partnership in The City of New York.
"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, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in
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<PAGE> 18
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 Payment Date" has the meaning specified in the Form of
Reverse of Floating Rate Security in Section 203(a).
"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 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.
"Purchase Agreement" means the Purchase Agreement, dated as of March
17, 2000, between the Partnership and Goldman, Sachs & Co., as representative of
the Purchasers, as the same shall be amended from time to time.
"Purchasers" means Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Banc of America Securities LLC and First Union Securities,
Inc.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date", when used with respect to any Fixed Rate 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 Fixed Rate Security
to be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Securities" means the Exchange Securities and all other
Securities sold or otherwise disposed of pursuant to an effective registration
statement under the Securities Act, together with their respective Successor
Securities.
"Registrable Securities" has the meaning specified in the Registration
Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 22, 2000 between the Partnership and Goldman, Sachs
& Co., as representative of the Purchasers, as the same shall be amended from
time to time.
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<PAGE> 19
"Regular Record Date" for the interest payable on any Interest Payment
Date means (i) in the case of the Floating Rate Securities, the March 8th, June
8th, September 8th or December 8th of each year (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date, or (ii) in the
case of the Fixed Rate Securities, the March 1st or September 1st of each year
(whether or not a Business Day)as the case may be, next preceding such Interest
Payment Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially in the
form specified in Annex B.
"Regulation S Global Securities" has the meaning specified in Section
201.
"Regulation S Legend" means a legend substantially in the form of the
legend specified in Section 204(b).
"Regulation S Securities" means any Securities sold by the Purchasers
in reliance on Regulation S and any Successor Securities thereto as long as such
Securities are required pursuant to Section 305(c) to bear any Regulation S
Legend.
"Restricted Global Securities" has the meaning specified in Section
201.
"Restricted Period" means the period of 41 consecutive days beginning
on and including the later of (i) the day on which Securities are first offered
to Persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the original issuance date of the Securities.
"Restricted Securities" means any Securities sold by the Purchasers in
reliance on Rule 144A and any Successor Securities thereto as long as such
Securities are required pursuant to Section 305(c) to bear any Restricted
Securities Legend.
"Restricted Securities Certificate" means a certificate substantially
in the form specified in Annex C.
"Restricted Securities Legend" means a legend substantially in the form
of the legend specified in Section 204(a).
"Rule 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
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<PAGE> 20
"Rule 144(k) Holding Period" has the meaning specified in the Forms of
Reverse of Security in Section 203.
"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" means the Floating Rate Securities and the Fixed Rate
Securities. For all purposes of this Indenture, the term "Securities" shall
include any Exchange Securities issued in exchange for Original Floating Rate
Securities and Original Fixed Rate Securities pursuant to this Indenture and,
for purposes of this Indenture, all Outstanding Original Floating Rate
Securities and Floating Rate Exchange Securities shall vote together as one
Series of Securities under this Indenture, and all Outstanding Original Fixed
Rate Securities and Fixed Rate Exchange Securities shall vote together as one
Series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933 or any statute
successor thereto, in each case as amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305(a).
"Series" means each of the respective series in which the Securities
are issuable, viz., the Floating Rate Securities and the Fixed Rate Securities.
"Shelf Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"spot rate of exchange" has the meaning specified in Section 107 of
Annex A.
"Stated Maturity", when used with respect to the principal of any
Security or any installment of interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
installment of interest is due and payable.
"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 the Capital Interests of such Person 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
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<PAGE> 21
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of such Person or a combination thereof.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, 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.
"Telerate Page 3750" has the meaning specified in the Form of Reverse
of Floating Rate Security in Section 203(a).
"Three-Month LIBOR Rate" has the meaning specified in the Form of
Reverse of Floating Rate Security in Section 203(a).
"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 Fixed Rate
Securities, 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 be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.
"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.
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"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 such successor Trustee.
"Unrestricted Securities Certificate" means a certificate substantially
in the form specified in Annex D.
"U.S." and "United States" each means the United States of America.
"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.
Every Officers' Certificate or Opinion of Counsel (except for
certificates provided for in Sections 1004 and 1009) 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
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(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, the
General Partner or a Guarantor 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, the General Partner or such Guarantor stating that
the information with respect to such factual matters is in the possession of the
Partnership, the General Partner or such Guarantor, 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 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 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)
16
<PAGE> 24
conclusive in favor of the Trustee and the Partnership, if made in the manner
provided in this Section.
Without limiting the generality of the foregoing, a Holder, including a
Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy or proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in this Indenture to
be made, given or taken by Holders, and a Depositary that is a Holder of a
Global Security may provide its proxy or proxies to the beneficial owners of
interests in any such Global Security.
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.
The Partnership may set any day as the record date for the purpose of
determining Holders of Outstanding Securities of either 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 (other than any such action provided or
permitted to be taken under Section 501, 502 or 512), but the Partnership shall
have no obligation to do so. Such record date shall be not earlier than the 30th
day prior to the first solicitation of any Holder to give or take any such
action and not later than the date of such first solicitation. With regard to
any record date set pursuant to this paragraph, Holders of Outstanding
Securities of the relevant Series on such record date (or their duly 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. The
Partnership shall notify the Trustee in writing of any such record date not
later than the date of the first solicitation of any Holder to give or take any
action.
17
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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 or any
Guarantor 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 or any Guarantor 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 3400, 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.
Notice to the Partnership shall constitute notice to each Guarantor, if any.
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 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
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
19
<PAGE> 27
for the period from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be.
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.
ARTICLE II
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each Series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, 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
securities laws, 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 of the Depositary therefor.
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.
Upon their original issuance, the Restricted Securities shall be issued
in the form of one or more Global Securities registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for DTC,
for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct). Such
Global Securities, together with their Successor Securities which are Global
Securities other than the Regulation S Global Securities, are collectively
herein called the "Restricted Global Securities".
Upon their original issuance, initial Regulation S Securities shall be
issued in the form of one or more Global Securities registered in the name of
DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian
for DTC, for credit by DTC to the respective accounts of beneficial owners of
the Securities represented thereby (or such other accounts as they may direct),
provided that upon such deposit all such Securities shall be credited to or
through accounts maintained at DTC by or on behalf of Euroclear or Cedel and in
accordance with Section 305(b)(iv). Such Global Securities, together with their
Successor Securities which are Global Securities other than the Restricted
Global Securities, are collectively herein called the "Regulation S Global
Securities".
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<PAGE> 28
SECTION 202. Forms of Face of Securities.
(a) Form of Face of Floating Rate Security.
KINDER MORGAN ENERGY PARTNERS, L.P.
FLOATING RATE SENIOR NOTE DUE 2002
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
______________________ Dollars on March 22, 2002, and to pay interest thereon
from March 22, 2000 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, on June 22, September 22, December
22 and March 22 in each year (or if any such date is not a Business Day, the
next succeeding Business Day), commencing June 22, 2000, at a rate per annum
equal to the Three-Month LIBOR Rate (as defined on the reverse hereof) from time
to time in effect plus 50 basis points (0.50%), until the principal hereof is
paid or made available for payment.
The interest so payable [(including Additional Interest, if any,
provided for on the reverse hereof)],(1) and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in said 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 June 8, September 8, December 8 or March 8
(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 will 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 whereof shall be given to Holders of Securities 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
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture. Payment of the
principal of 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, New
York, in such coin or currency of the United States as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Partnership payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register; and provided, further, however, that in case this Security is
held by a
- -----------------
(1)Omitted from Exchange Securities.
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<PAGE> 29
Depositary or its nominee, payments of principal and interest shall be made by
wire transfer of immediately available funds to an account designated by such
Depositary.
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:
(b) Form of Face of Fixed Rate Security.
KINDER MORGAN ENERGY PARTNERS, L.P.
8% SENIOR NOTE DUE 2005
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
______________________ Dollars on March 15, 2005, and to pay interest thereon
from March 22, 2000 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on March 15 and
September 15 in each year, commencing September 15, 2000, at the rate of 8% per
annum, until the principal hereof is paid or made available for payment.
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<PAGE> 30
The interest so payable [(including Additional Interest, if any,
provided for on the reverse hereof)],(2) and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in said 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 March 1 or September 1 (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 will 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
whereof shall be given to Holders of Securities 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 on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Payment of the principal
of 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, New York, in
such coin or currency of the United States as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Partnership payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register; and provided, further, however, that in case this Security is
held by a Depositary or its nominee, payments of principal, interest and
premium, if any, shall be made by wire transfer of immediately available funds
to an account designated by such Depositary.
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:
- -----------------
(2) Omitted from Exchange Securities.
23
<PAGE> 31
SECTION 203. Forms of Reverse of Securities.
(a) Form of Reverse of Floating Rate Security.
This Security is one of a duly authorized issue of securities of the
Partnership, limited in aggregate principal amount to $400,000,000, issued and
to be issued under an Indenture, dated as of March 22, 2000 (herein called the
"Indenture"), between the Partnership and First Union National Bank, as Trustee
(herein called 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, duties and immunities thereunder of the Partnership, the Trustee and
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. The Securities issued and to be issued
under the Indenture consist of two Series of Senior Notes ($200,000,000
aggregate original principal amount of Floating Rate Senior Notes due 2002, and
$200,000,000 aggregate original principal amount of 8% Senior Notes due 2005)
and are hereinafter called the "Securities". This Security is one of the Series
of Floating Rate Securities referred to in the Indenture.
The Floating Rate Securities will bear interest from March 22, 2000 at
a floating rate determined in the manner provided below, payable quarterly on
each Interest Payment Date commencing June 22, 2000, to Holders in whose name
the Floating Rate Securities are registered at the close of business on the
Regular Record Date for such Interest Payment Date.
The per annum interest rate on the Floating Rate Securities (the
"Floating Interest Rate") in effect for each day of an Interest Period (as
defined below) will be equal to the Three-Month LIBOR Rate plus 50 basis points
(0.50%). The Floating Interest Rate for each Interest Period will be set on the
22nd day of the months of March, June, September and December of each year,
commencing March 22, 2000 (each such date, an "Interest Reset Date"), until the
principal on the Floating Rate Securities is paid or made available for payment
(the "Principal Payment Date"). If any Interest Reset Date and Interest Payment
Date would otherwise be a day that is not a Business Day, such Interest Reset
Date and Interest Payment Date shall be the next succeeding Business Day.
"Interest Period" shall mean the period from and including an Interest
Reset Date to but excluding the next succeeding Interest Reset Date and, in the
case of the last such period, from and including the Interest Reset Date
immediately preceding the Principal Payment Date, as the case may be, to but not
including the Principal Payment Date. If the Principal Payment Date is not a
Business Day, then the principal amount of the Floating Rate Securities plus
accrued and unpaid interest thereon shall be paid on the next succeeding
Business Day and no interest shall accrue for the Principal Payment Date or any
day thereafter.
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<PAGE> 32
The "Three-Month LIBOR Rate" shall mean the rate determined in
accordance with the following provisions:
(i) On the second Business Day preceding each
Interest Reset Date (each such date, an "Interest Determination Date"),
First Union National Bank (it and each other Person so appointed by the
Partnership, the "Calculation Agent") will determine the Three-Month
LIBOR Rate which shall be the rate for deposits in the London interbank
market in Dollars having a three-month maturity commencing on the
second Business Day immediately following such Interest Determination
Date which appears on the Telerate Page 3750 as of 11:00 a.m., London
time, on such Interest Determination Date. "Telerate Page 3750" means
the display on Page 3750 of the Dow Jones Telerate Service (or such
other page as may replace that page on that service for the purpose of
displaying London interbank offered rates of major banks for Dollar
deposits). If the Three-Month LIBOR Rate on such Interest Determination
Date does not appear on the Telerate Page 3750, such Three-Month LIBOR
Rate will be determined as described in (ii) below.
(ii) With respect to an Interest Determination Date
for which the Three-Month LIBOR Rate does not appear on the Telerate
Page 3750 as specified in (i) above, the Calculation Agent will request
the principal London offices of each of four major banks in the London
interbank market, as selected by the Calculation Agent, to provide the
Calculation Agent with its offered quotation for deposits in Dollars
having a three-month maturity commencing on the second Business Day
immediately following such Interest Determination Date to prime banks
in the London interbank market at approximately 11:00 a.m., London
time, on such Interest Determination Date and in a principal amount
that is representative for a single transaction in that market at such
time. If at least two quotations are provided, the Three-Month LIBOR
Rate on such Interest Determination Date will be the arithmetic mean
(rounded upwards, if necessary, to the nearest one hundred-thousandth
of a percentage point, with 5 or more one-millionths of one percentage
point rounded upwards) of such quotations. If fewer than two quotations
are provided, the Three-Month LIBOR Rate determined on such Interest
Determination Date will be the arithmetic mean (rounded upwards, if
necessary, to the nearest one hundred-thousandth of a percentage point,
with 5 or more one-millionths of one percentage point rounded upwards)
of the rates quoted at approximately 11:00 a.m., New York City time, on
such Interest Determination Date for loans in Dollars to leading
European banks, having a three-month maturity commencing on the second
Business Day immediately following such Interest Determination Date and
in a principal amount that is representative for a single transaction
in that market at such time by three major banks in The City of New
York, selected by the Calculation Agent. However, if the banks so
selected by the Calculation Agent are not quoting as aforesaid, the
Three-Month LIBOR Rate with respect to such Interest Determination
Date will be the Three-Month LIBOR Rate in effect on such Interest
Determination Date.
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<PAGE> 33
The amount of interest for each day that a Floating Rate Security is
Outstanding (the "Daily Interest Amount") will be calculated by dividing the
Floating Interest Rate in effect for such day by 360 and multiplying the result
by the principal amount of such Floating Rate Security. The amount of interest
to be paid on such Floating Rate Security for any Interest Period will be
calculated by adding the Daily Interest Amounts for each day in such Interest
Period.
The Floating Interest Rate will in no event be higher than the maximum
rate permitted by the law of the State of New York, or, if higher, the law of
the United States of America.
The Floating Interest Rate and amount of interest to be paid on the
Floating Rate Securities for each Interest Period will be determined by the
Calculation Agent. All calculations made by the Calculation Agent shall, in the
absence of manifest error, be conclusive for all purposes and binding on the
Partnership and Holders of the Floating Rate Securities. So long as the
Three-Month LIBOR Rate is required to be determined with respect to the Floating
Rate Securities, there will at all times be a Calculation Agent. In the event
that any then acting Calculation Agent shall be unable or unwilling to act, or
that such Calculation Agent shall fail duly to establish the Three-Month LIBOR
Rate for any Interest Period, or that the Partnership proposes to remove such
Calculation Agent, the Partnership shall appoint another Person which is a bank,
trust company, investment banking firm or other financial institution to act as
the Calculation Agent.
[The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement. The Partnership agrees to pay additional interest
(the "Additional Interest"), as specified below, upon the occurrence of any of
the following events (each such event an "Additional Interest Event"): (i) if
the Exchange Registration Statement or Shelf Registration Statement is not filed
within 90 days following the Closing Date, then commencing on the 91st day after
the Closing Date, Additional Interest shall accrue on the Securities over and
above the otherwise applicable interest rate at a rate of 0.25% per annum, (ii)
if the Exchange Registration Statement or the Shelf Registration Statement is
filed and is not declared effective within 180 days following the Closing Date,
then commencing on the 181st day after the Closing Date, Additional Interest
shall accrue on the Securities over and above the otherwise applicable interest
rate at a rate of 0.25% per annum, or (iii) if either (A) the Partnership has
not exchanged Exchange Securities of either Series for all Securities of the
same Series validly tendered in accordance with the terms of the Exchange Offer
on or prior to 45 Business Days after the date on which the Exchange
Registration Statement was declared effective, or (B) the Shelf Registration
Statement has been declared effective but such Shelf Registration Statement
ceases to be effective at any time (I) prior to the second anniversary of the
Closing Date or, if Rule 144(k) is amended to provide a shorter restrictive
period, such shorter period (the "Rule 144(k) Holding Period") and (II) while
Registrable Securities are Outstanding, then Additional Interest shall accrue on
the Securities over and above the otherwise applicable interest rate at a rate
of 0.25% per annum commencing on the (x) 46th Business Day after such effective
date, in the case of (A) above, or (y) the day the Shelf Registration Statement
ceases to be effective, in the case of (B) above; provided, however, that the
rate at which Additional Interest accrues on the Securities shall never exceed
0.25% per annum; and provided further that Additional Interest shall cease to
accrue upon the earlier of (X) when all Additional Interest Events have been
cured or (Y) upon the expiration of the Rule 144(k) Holding Period. For purposes
of clarifying the foregoing provisions (i) the circumstances under which
Additional Interest is owed are not cumulative, (ii) in no event will
26
<PAGE> 34
the rate of Additional Interest exceed 0.25% per annum, and (iii) Additional
Interest shall not accrue at any time when there are no Registrable Securities
Outstanding.](3)
If an Event of Default shall occur and be continuing, the principal of
all the Securities of the Series of which this Security is one may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Securities of this Series are not redeemable prior to Maturity, and
the Partnership has no obligation to redeem or purchase any Floating Rate
Securities pursuant to any sinking fund or analogous requirement, or (except as
provided in the Indenture) upon the happening of a specified event, or at the
option of the Holder thereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership and the rights of Holders of the Securities of each Series under the
Indenture at any time by the Partnership and the Trustee with the consent of a
majority in aggregate principal amount of the Securities of such Series at the
time Outstanding. The Indenture also contains provisions permitting Holders of
specified percentages in aggregate principal amount of the Securities of each
Series at the time Outstanding, on behalf of Holders of all the Securities of
such Series, to waive compliance by the Partnership with certain provisions of
the Indenture and certain past defaults under the Indenture 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 set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of either Series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Securities of such Series,
Holders of not less than 25% in principal amount of the Outstanding Securities
of such Series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from Holders of a majority in principal amount
of the Outstanding Securities of such Series a direction inconsistent with such
request and shall have failed to institute such proceedings within 60 days;
provided, however, that such limitations do not apply to a suit instituted by
the Holder hereof for the enforcement of payment of the principal of or any
interest on this Security 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, without the consent of the Holder hereof, alter or
impair the obligation of the Partnership, which is absolute and unconditional,
to pay the principal of and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
- ------------
(3) Omitted from Exchange Securities.
27
<PAGE> 35
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Partnership in The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Partnership and the Security Registrar duly executed by, the Holder hereof or
its 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 are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof, unless otherwise
required by law. 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 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 be overdue, and neither the
Partnership, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
(b) Form of Reverse of Fixed Rate Security.
This Security is one of a duly authorized issue of securities of the
Partnership, limited in aggregate principal amount to $400,000,000, issued and
to be issued under an Indenture, dated as of March 22, 2000 (herein called the
"Indenture"), between the Partnership and First Union National Bank, as Trustee
(herein called 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, duties and immunities thereunder of the Partnership, the Trustee and
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. The Securities issued and to be issued
under the Indenture consist of two Series of Senior Notes ($200,000,000
aggregate original principal amount of Floating Rate Senior Notes due 2002, and
$200,000,000 aggregate original principal amount of 8% Senior Notes due 2005)
and are hereinafter called the "Securities". This Security is one of the Series
of Fixed Rate Securities referred to in the Indenture.
[The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement. The Partnership agrees to pay additional interest
(the "Additional Interest"), as specified below, upon the occurrence of any of
the following events (each such event an "Additional Interest Event"):
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<PAGE> 36
(i) if the Exchange Registration Statement or Shelf Registration Statement is
not filed within 90 days following the Closing Date, then commencing on the 91st
day after the Closing Date, Additional Interest shall accrue on the Securities
over and above the otherwise applicable interest rate at a rate of 0.25% per
annum, (ii) if the Exchange Registration Statement or the Shelf Registration
Statement is filed and is not declared effective within 180 days following the
Closing Date, then commencing on the 181st day after the Closing Date,
Additional Interest shall accrue on the Securities over and above the otherwise
applicable interest rate at a rate of 0.25% per annum, or (iii) if either (A)
the Partnership has not exchanged Exchange Securities of either Series for all
Securities of the same Series validly tendered in accordance with the terms of
the Exchange Offer on or prior to 45 Business Days after the date on which the
Exchange Registration Statement was declared effective, or (B) the Shelf
Registration Statement has been declared effective but such Shelf Registration
Statement ceases to be effective at any time (I) prior to the second anniversary
of the Closing Date or, if Rule 144(k) is amended to provide a shorter
restrictive period, such shorter period (the "Rule 144(k) Holding Period") and
(II) while Registrable Securities are Outstanding, then Additional Interest
shall accrue on the Securities over and above the otherwise applicable interest
rate at a rate of 0.25% per annum commencing on the (x) 46th Business Day after
such effective date, in the case of (A) above, or (y) the day the Shelf
Registration Statement ceases to be effective, in the case of (B) above;
provided, however, that the rate at which Additional Interest accrues on the
Securities shall never exceed 0.25% per annum; and provided further that
Additional Interest shall cease to accrue upon the earlier of (X) when all
Additional Interest Events have been cured or (Y) upon the expiration of the
Rule 144(k) Holding Period. For purposes of clarifying the foregoing provisions
(i) the circumstances under which Additional Interest is owed are not
cumulative, (ii) in no event will the rate of Additional Interest exceed 0.25%
per annum, and (iii) Additional Interest shall not accrue at any time when there
are no Registrable Securities Outstanding.](4)
If an Event of Default shall occur and be continuing, the principal of
all the Securities of the Series of which this Security is one may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Fixed Rate Securities 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 the Fixed
Rate Securities to be redeemed at the Holder's address appearing in the Security
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 30 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
- -----------
(4)Omitted from Exchange Securities.
29
<PAGE> 37
such calculation, by an independent investment banking institution of national
standing appointed by the Trustee (in any such case, an "Independent Investment
Banker").
The Partnership has no obligation to redeem or purchase any Fixed Rate
Securities pursuant to any sinking fund or analogous requirement, or (except as
provided in the Indenture) upon the happening of a specified event, or at the
option of a Holder thereof.
The Indenture contains provision for defeasance at any time of (1) the
entire indebtedness of this Security or (2) certain covenants contained therein,
in each case upon compliance with certain conditions set forth 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 and the rights of Holders of the Securities of each Series under the
Indenture at any time by the Partnership and the Trustee with the consent of a
majority in aggregate principal amount of the Securities of such Series at the
time Outstanding. The Indenture also contains provisions permitting Holders of
specified percentages in aggregate principal amount of the Securities of each
Series at the time Outstanding, on behalf of Holders of all the Securities of
such Series, to waive compliance by the Partnership with certain provisions of
the Indenture and certain past defaults under the Indenture 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 set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of either Series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Securities of such Series,
Holders of not less than 25% in principal amount of the Outstanding Securities
of such Series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from Holders of a majority in principal amount
of the Outstanding Securities of such Series a direction inconsistent with such
request and shall have failed to institute such proceedings within 60 days;
provided, however, that such limitations do not apply to a suit instituted by
the Holder hereof for the enforcement of payment of the principal of or any
interest on this Security 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, without the consent of the Holder hereof, alter or
impair the obligation of the Partnership, which is absolute and unconditional,
to pay the principal of and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Partnership in The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Partnership and the
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<PAGE> 38
Security Registrar duly executed by, the Holder hereof or its 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 are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof, unless otherwise
required by law. 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 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 be overdue, and neither the
Partnership, the Trustee nor any such agent shall be affected by notice to the
contrary.
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--
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers this Security
to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type transferee's name, address, zip code and
social security or taxpayer identification number above)
and irrevocably appoints __________________________ agent to transfer this
Security on the books of the Partnership. The agent may substitute another to
act for the agent.
Date:
---------------------
Your signature:
------------------------------------
NOTICE: The signature(s) on this
assignment must correspond in every
particular with the name(s) of the
registered owner(s) appearing on the
face of the Security.
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<PAGE> 39
------------------------------------
Signature
Signature Guaranteed by:
- --------------------------------------------
NOTICE: Signature must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Trustee, which
requirements will include membership or
participation in STAMP or such other
signature guaranty program as may be
determined by the Trustee in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
In connection with any transfer of this Security, the undersigned
confirms that such Security is being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Partnership; or
(2) [ ] pursuant to an effective registration
statement under the Securities Act of 1933;
or
(3) [ ] inside the United States to a "qualified
institutional buyer" (as defined in Rule
144A under the Securities Act of 1933) that
purchases for its own account or for the
account of a qualified institutional buyer
to whom notice is given that such transfer
is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933;
or
(4) [ ] outside the United States in an offshore
transaction within the meaning of Regulation
S under the Securities Act in compliance
with Rule 904 under the Securities Art of
1933; or
(5) [ ] pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
this Security in the name of any Person other than the registered Holder
thereof; provided, however, that if box (4) or (5) is checked, the Trustee may
require, prior to registering any such transfer of this Security, such legal
opinions, certifications and other information as the Partnership has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.
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<PAGE> 40
- --------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Security as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
------------------ -----------------------------------------------
NOTICE: To be executed by an executive officer
SECTION 204. Form of Legend for Global Securities.
(a) Each Restricted Security shall bear the following legend:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
(b) Each Regulation S Security shall bear the following
legend: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, OR DELIVERED IN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY UNITED STATES PERSON,
UNLESS THIS NOTE IS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.
(c) Each Global Security shall bear the following legend: 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
33
<PAGE> 41
THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY
REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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.
FIRST UNION NATIONAL BANK,
As Trustee
By:
-----------------------------
Authorized Signatory
ARTICLE III
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Floating Rate Securities which may be
authenticated and delivered under this Indenture is limited to $200,000,000
Original Floating Rate Securities and $200,000,000 Floating Rate Exchange
Securities, except for Floating Rate Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 304, 305, 306 or 906.
The Floating Rate Securities shall be known and designated as the
"Floating Rate Senior Notes due 2002" of the Partnership. Their Stated Maturity
in respect of principal shall be March 22,
34
<PAGE> 42
2002, and they shall bear interest at a rate per annum calculated as provided in
the Form of Reverse of Floating Rate Security in Section 203(a) hereof, from
March 22, 2000 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, as the case may be, payable quarterly on
each March 22, June 22, September 22 and December 22, commencing June 22, 2000,
until the principal thereof is paid or made available for payment.
The aggregate principal amount of Fixed Rate Securities which may be
authenticated and delivered under this Indenture is limited to $200,000,000
Original Fixed Rate Securities and $200,000,000 Fixed Rate Exchange Securities,
except for Fixed Rate Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 304, 305, 306 or 906.
The Fixed Rate Securities shall be known and designated as the "8%
Senior Notes due 2005" of the Partnership. Their Stated Maturity in respect of
principal shall be March 15, 2005, and they shall bear interest at the rate of
8% per annum, from March 22, 2000 or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, as the case may be,
payable semi-annually on each March 15 and September 15, commencing September
15, 2000, until the principal thereof is paid or made available for payment.
The principal of and interest on the Securities shall be payable at the
office or agency of the Partnership in The City of New York maintained for such
purpose and any other office or agency maintained by the Partnership for such
purpose; provided, however, that at the option of the Partnership payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
SECTION 302. Denominations.
The Securities of each Series shall be issuable only in registered form
without coupons and only denominations of $1,000 and any integral multiple
thereof, unless otherwise required by law.
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 either Series executed
by the Partnership to the Trustee or an Authenticating Agent for authentication,
together with a Partnership Order for the authentication and
35
<PAGE> 43
delivery of such Securities, and the Trustee in accordance with the Partnership
Order shall authenticate and deliver such Securities; provided, however, that
Floating Rate Exchange Securities shall be issuable only upon the valid
surrender for cancellation of Original Floating Rate Securities and Fixed Rate
Exchange Securities shall be issuable only upon the valid surrender for
cancellation of Original Fixed Rate Securities, in each case of a like aggregate
principal amount, in accordance with the Exchange Offer.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
any Guaranty 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 either 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 of like Series in lieu
of which they are issued.
If temporary Securities of either 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 either 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 either Series shall in all respects be entitled to the same
benefits under this Indenture as Definitive Securities of such Series and tenor.
36
<PAGE> 44
SECTION 305. Registration, Registration of Transfer and Exchange.
(a) Registration, Registration of Transfer and
Exchange, Generally.
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 40 Broad Street,
Suite 550, New York, New York 10004, 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 either
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 either 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; provided that no exchange
of Original Floating Rate Securities or of Original Fixed Rate Securities for
Exchange Securities of the same Series shall occur until a registration
statement for the issuance of the Exchange Securities shall have been declared
effective by the Commission and the Original Floating Rate Securities and the
Original Fixed Rate Securities to be exchanged for such Exchange Securities
shall be cancelled by the Trustee.
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 exchange of Securities, other
than exchanges pursuant to Section 304 or 1107 not involving any transfer.
37
<PAGE> 45
Neither the Trustee nor the Partnership shall be required (1) to issue,
register the transfer of or exchange Fixed Rate Securities during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of Fixed Rate Securities 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.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security shall constitute a
single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (A) such Depositary (i) has notified the Partnership that
it is unwilling or unable to continue as Depositary for such Global Security or
(ii) has ceased to be a clearing agency registered under the Exchange Act, and
in either (i) or (ii) of this clause (2) a successor Depositary is not appointed
by the Partnership within 90 days after the date of such notice from the
Depositary, (B) there shall have occurred and be continuing a Default or an
Event of Default, or (C) the Partnership by Partnership Order, elects to have
the Global Security registered in the name of a Person other than the Depositary
or its nominee.
(3) Subject to Clause (2) above, any exchange of a Global
Security for other Securities of the same Series may be made in whole or in
part, and all Securities issued in exchange for a Global Security or any portion
thereof shall be registered in such names as the Depositary for such Global
Security shall direct.
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof, whether pursuant to this Section, Section 304, 306 or
906 or otherwise, shall be authenticated and delivered in the form of, and shall
be, a Global Security, unless such Security is registered in the name of a
Person other than the Depositary for such Global Security or a nominee thereof.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 305(b) shall be made only in accordance with this Section
305(b).
(i) Restricted Global Security to Regulation S Global
Security. If the owner of a beneficial interest in a Restricted Global
Security wishes at any time to transfer such interest to a Person who
wishes to acquire the same in the form of a beneficial interest in the
Regulation S Global Security of the same Series, such transfer may be
effected only
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<PAGE> 46
in accordance with the provisions of this Clause (b)(i) and Clause
(b)(iv) below and subject to the Applicable Procedures. Upon receipt by
the Trustee, as Security Registrar, of (A) an order given by the
Depositary or its authorized representative directing that a beneficial
interest in the Regulation S Global Security in a specified principal
amount be credited to a specified Agent Member's account and that a
beneficial interest in the Restricted Global Security of the same
Series and in an equal principal amount be debited from another
specified Agent Member's account and (B) a Regulation S Certificate,
satisfactory to the Trustee and duly executed by the owner of such
beneficial interest in the Restricted Global Security or his attorney
duly authorized in writing, then the Trustee, as Security Registrar but
subject to Clause (b)(iv) below, shall reduce the principal amount of
the Restricted Global Security and increase the principal amount of the
Regulation S Global Security of the same Series by such specified
principal amount.
(ii) Regulation S Global Security to Restricted
Global Security. If the owner of a beneficial interest in a Regulation
S Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Security of the same Series, such
transfer may be effected only
in accordance with this Clause (b)(ii) and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of (A)
an order given by the Depositary or its authorized representative
directing that a beneficial interest in the Restricted Global Security
in a specified principal amount be credited to a specified Agent
Member's account and that a beneficial interest in the Regulation S
Global Security of the same Series and in an equal principal amount be
debited from another specified Agent Member's account and (B) if such
transfer is to occur during the Restricted Period, a Restricted
Securities Certificate, satisfactory to the Trustee and duly executed
by the owner of such beneficial interest in the Regulation S Global
Security or his attorney duly authorized in writing, then the Trustee,
as Security Registrar, shall reduce the principal amount of the
Restricted Global Security of the same Series by such specified
principal amount. If transfers under this Clause (b)(ii) occur after
the Restricted Period, no Restricted Securities Certificates will be
required.
(iii) Non-Global Security to Non-Global Security. A
Security that is not a Global Security may be transferred, in whole or
in part to a Person who takes delivery in the form of another Security
of the same Series that is not a Global Security as provided in Section
305(a), provided, that, if the Security to be transferred in whole or
in part is a Restricted Security, then the Trustee shall have received
a Restricted Securities Certificate, satisfactory to the Trustee and
duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the Transferee Holder shall take delivery in
the form of a Restricted Security (subject in every case to Section
305(c)).
(iv) Regulation S Global Security to be Held Through
Euroclear or Cedel During Restricted Period. The Partnership shall use
its reasonable efforts to cause the Depositary to ensure that during
the Restricted Period beneficial interests in a Regulation S Global
Security may be held only in or through accounts maintained at the
Depositary by Euroclear or Cedel (or by Agent Members acting for the
account thereof), and no Person shall be entitled to effect any
transfer or exchange that would result in any such interest being
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held otherwise than in or through such an account; provided, that this
Clause (b)(iv) shall not prohibit any transfer or exchange of such an
interest in accordance with Clause (b)(ii) above.
(v) Restricted Non-Global Security to Restricted
Global Security or Regulation S Global Security. If the Holder of a
Restricted Security (other than a Global Security) wishes at any time
to transfer all or any portion of such Security to a Person who wishes
to take delivery thereof in the form of a beneficial interest in the
Restricted Global Security of the same Series or the Regulation S
Global Security of the same Series, such transfer may be effected only
in accordance with the provisions of this Clause (b)(v) and Clause
(b)(iv) above and subject to the Applicable Procedures. Upon receipt by
the Trustee, as Security Registrar, of (A) such Security as provided in
Section 305(a) and instructions satisfactory to the Trustee directing
that a beneficial interest in such Restricted Global Security of the
same Series or such Regulation S Global Security of the same Series in
a specified principal amount not greater than the principal amount of
such Security be credited to a specified Agent Member's account and (B)
a Restricted Securities Certificate, if the specified account is to be
credited with a beneficial interest in such Restricted Global Security,
or a Regulation S Certificate, if the specified account is to be
credited with a beneficial interest in such Regulation S Global
Security of the same Series, in either case satisfactory to the Trustee
and duly executed by such Holder or his attorney duly authorized in
writing, then the Trustee, as Security Registrar, shall cancel such
Security (and issue a new Security in respect of any untransferred
portion thereof) and increase the principal amount of the Restricted
Global Security of the same Series or the Regulation S Global Security
of the same Series, as the case may be, by the specified principal
amount, both as provided in Section 305(a).
(c) Securities Act Legends. Restricted Securities and their
Successor Securities shall bear a Restricted Securities Legend, and the
Regulation S Securities and their Successor Securities shall bear a Regulation S
Legend, subject to the following:
(i) subject to the following Clauses of this Section
305(c), a Security or any portion thereof which is exchanged, upon
transfer or otherwise, for a Global Security of the same Series or any
portion thereof shall bear the Securities Act Legend borne by such
Global Security while represented thereby;
(ii) subject to the following Clauses of this Section
305(c), a new Security which is not a Global Security and is issued in
exchange for another Security of the same Series (including a Global
Security of the same Series or any portion thereof, upon transfer or
otherwise, shall bear the Securities Act Legend borne by such other
Security, provided that, if such new Security is required pursuant to
Section 305(b)(v) to be issued in the form of a Restricted Security, it
shall bear a Restricted Securities Legend and, if such new Security is
so required to be issued in the form of a Regulation S Security, it
shall bear a Regulation S Legend;
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(iii) Registered Securities shall not bear a
Securities Act Legend;
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Security which does not bear a Securities Act legend may be
issued in exchange for or in lieu of a Security of the same Series
(other than a Global Security) or any portion thereof which bears such
a legend if the Trustee has received an Unrestricted Securities
Certificate, satisfactory to the Trustee and duly executed by the
Holder of such legended Security or his attorney duly authorized in
writing, and after such date and receipt of such certificate, the
Trustee shall authenticate and deliver such a new Security in exchange
for or in lieu of such other Security as provided in this Article
Three.
(v) a new Security which does not bear a Securities
Act Legend may be issued in exchange for or in lieu of a Security of
the same Series (other than a Global Security) or any portion thereof
which bears such a legend if, in the Partnership's judgment, placing
such a legend upon such new Security is not necessary to ensure
compliance with the registration requirements of the Securities Act,
and the Trustee, at the written direction of the Partnership, shall
authenticate and deliver such a new Security as provided in this
Article Three; and
(vi) notwithstanding the foregoing provisions of this
Section 305(c), a Successor Security of a Security that does not bear a
particular form of Securities Act Legend shall not bear such form of
legend unless the Partnership has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the written direction of the
Partnership, shall authenticate and deliver a new Security bearing a
Restricted Securities Legend in exchange for such Successor Security as
provided in this Article Three.
Furthermore, any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in such Global Security shall be required to be reflected in
a book entry.
The Trustee shall retain copies of all letters, notices and other
written communications (if any) received concerning transfer or exchange, and
the Partnership shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of a reasonable written notice to the Trustee.
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.
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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 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 either 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.
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 either 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:
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(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
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 either Series in any other lawful manner not inconsistent
with the requirements of either 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.
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
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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.
No holder of any beneficial interest 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 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.
Interest on the Fixed Rate Securities shall be computed on the basis of
a 360-day year of twelve 30-day months and interest on the Securities of such
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.
Interest on the Floating Rate Securities shall be computed on the basis set
forth in the Form of Reverse of Floating Rate Security in Section 203(a).
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 either Series (except as to any surviving
rights of registration of transfer or exchange of 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 in respect of principal within one year (in the case of the
Fixed Rate Securities), or at the end of the then current Interest
Period (in the case of the Floating Rate Securities), or
(iii) in the case of the Fixed Rate Securities, 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 in Dollars 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 of the principal thereof, or, in the case of the Fixed Rate
Securities, the 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
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(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 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 either Series (x) the obligations of the Partnership to
the Trustee under Section 607, the obligations of each Guarantor under Section
101 of its Guaranty, 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
either 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 or
the applicable Guaranty, 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 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
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(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.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of either Series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or Holders of not less than 25% in principal amount of the Outstanding
Securities of that Series may declare the principal amount of 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 either 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, 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
(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.
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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
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 either Series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of Holders of the 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.
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 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
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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 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 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 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 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 either 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
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(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) 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 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, with respect to the Fixed Rate Securities, 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.
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 or any Guaranty 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 relevant Guarantor, the
Trustee and Holders shall be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee and
Holders shall continue as though no such proceeding had been instituted.
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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 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 Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by Holders, as the case may be.
SECTION 512. Control by Holders.
Subject to the provisions of Section 603, Holders of a majority in
aggregate principal amount of the Outstanding Securities of either 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 directions if the Trustee in
good faith shall determine that the proceeding so directed would involve the
Trustee in personal liability or would otherwise be contrary to applicable law.
SECTION 513. Waiver of Past Defaults.
Holders of a majority in aggregate principal amount of the Outstanding
Securities of either Series may on behalf of 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
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(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
either 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, with respect to the Fixed Rate Securities, 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.
ARTICLE VI
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default with
respect to either 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
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(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 either 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 either 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
(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.
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SECTION 602. Notice of Defaults.
If a Default occurs and is continuing with respect to the Securities of
either 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 either
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 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 30 days after
the occurrence of such Default.
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 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 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 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
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document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Partnership,
personally or by agent or attorney;
(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;
(8) the Trustee is not a party to the Registration Rights
Agreement and shall be entitled to rely on an Officers' Certificate as to
whether Additional Interest is owed on the Securities; and
(9) 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. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Partnership of the
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.
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.
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SECTION 607. Compensation and Reimbursement.
The Partnership agrees:
(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;
(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; and
(4) The Trustee shall have a claim prior to the Securities as
to all property and funds held by it hereunder for any amounts owing it or any
predecessor Trustee pursuant to this Section 607, except to funds held in trust
for the benefit of Holders of any Securities.
The obligations of the Partnership 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 607 and the obligations of the
Partnership thereunder, shall survive payment in full of the Securities, the
satisfaction and discharge of this Indenture and any defeasance of the Fixed
Rate 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 a single Trustee hereunder 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 by giving written notice thereof to
the Partnership. 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.
The Trustee may be removed at any time by Act of Holders of a majority
in principal amount of the Outstanding Securities of each 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, 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, 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, by a
Board Resolution, may remove the Trustee, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a 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 and the appointment of
a successor Trustee.
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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, the
Partnership, by a Board Resolution, shall promptly appoint a successor Trustee
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 shall be appointed by Act of Holders of a majority
in principal amount of the Outstanding Securities of each Series delivered to
the Partnership 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 and shall
supersede the successor Trustee appointed by the Partnership. If no successor
Trustee shall have been so appointed by the Partnership or 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.
The Partnership shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(1) Every such successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Partnership 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 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) Upon request of any such successor Trustee, the
Partnership 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) of this Section.
(3) 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
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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.
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) may appoint an
Authenticating Agent or Agents which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue 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, 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.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Partnership. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Partnership. 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 Authenticating
Agent which shall be acceptable to the Partnership and shall mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders as
their names and addresses appear in the Security Register. 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 either or both 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.
FIRST UNION NATIONAL BANK,
As Trustee
Date: By:
------------------ -------------------------------------
As Authenticating Agent
By:
-------------------------------------
Authorized Signatory
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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) not later than each Interest Payment Date in each year in
respect of each Series of Securities, a list for such Series of Securities, in
such form as the Trustee may reasonably require, of the names and addresses of
Holders of Securities of such Series as of the preceding Regular Record Date in
respect of the Securities of such Series, 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of 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 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.
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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 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 conditions 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.
The Partnership shall not, and shall not permit any Guarantor to,
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, or a
supplement to the applicable Guaranty, as the case may be, executed and
delivered to the Trustee, in form reasonably
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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, or the
applicable Guaranty, as the case may be;
(2) the surviving entity or successor Person is a Person
organized and existing under the laws of the United States, 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.
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 (and, in the case of a Guarantor, its Guaranty will provide that it shall)
succeed to, and be substituted for, and may exercise every right and power of,
the Partnership or such Guarantor under this Indenture and the Securities, or
the Guaranty of such Guarantor, as the case may be, with the same effect as if
such successor Person had been named originally as the Partnership or such
Guarantor herein or therein, 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, or such Guaranty, as the case may be.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities, the Partnership 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 the Securities;
(2) to evidence the succession of another Person to the
Partnership under this Indenture and the Securities and the assumption by such
successor Person of the obligations of the Partnership hereunder;
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(3) to reflect the addition of any Subsidiary of the
Partnership as a Guarantor, or to reflect the release of any Guarantor from its
Guaranty, in either case in the manner provided by Article XIV of this
Indenture;
(4) to add covenants and Events of Default for the benefit of
Holders of both or either Series of such Securities or to surrender any right or
power conferred by this Indenture upon the Partnership;
(5) to add to, change or eliminate any of the provisions of
this Indenture to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form;
(6) to cure any ambiguity or correct any inconsistency in this
Indenture;
(7) to evidence the acceptance of appointment by a successor
Trustee;
(8) to qualify this Indenture under the Trust Indenture Act;
(9) to supplement any provisions of this Indenture necessary
to permit or facilitate the defeasance and discharge of either Series of the
Securities, provided that such action does not adversely affect the interests of
Holders of Securities of such Series or the other Series; and
(10) 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 Holders of not less than a majority in aggregate
principal amount of each Series of Outstanding Securities affected by such
supplemental indenture, the Partnership 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 Holders of
Securities of such Series under this Indenture; provided that the Partnership
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 of any
installment of interest on, any Security, or reduce the principal amount thereof
or premium, if any, or the rate of interest thereon, or alter the method of
computation of interest;
(2) reduce the percentage in principal amount of each Series
of the 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;
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(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.
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 either or both particular Series of Securities, or which modifies
the rights of 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 Holders of Securities of the 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.
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SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of either 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 either Series so modified as to conform,
in the opinion of the Trustee 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.
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Partnership covenants and agrees for the benefit of Holders 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 such Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Partnership will maintain in the Place of Payment an office or
agency where the Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Partnership in respect of the Securities 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 in the City of New York where the Securities of either or
both 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 the Place of Payment 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.
The Partnership hereby permanently designates as the Place of Payment
for each Series of Securities The City of New York, and initially appoints the
Trustee as Paying Agent at its office located at 40 Broad Street, Suite 550, New
York, New York 10004, as the Partnership's office or agency for such purpose in
such city.
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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 either 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.
Whenever the Partnership shall have one or more Paying Agents for
either 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 either 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 and
remaining unclaimed for two years after such principal, premium or interest has
become due and payable shall be paid to the state whose escheat laws control,
and the Trustee or such 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 whose escheat laws control, 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; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
payment, may at the expense of the Partnership cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not
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be less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be paid to the state whose escheat laws control.
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
signers 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.
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 and those of each
Guarantor; provided, however, that neither the Partnership nor any Guarantor
shall be required to preserve any such right or franchise if the Partnership
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Partnership or such Guarantor.
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;
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(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 Closing Date or provided for pursuant to
agreements existing on the Closing Date;
(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.
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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
(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 either Series if before the time for such
compliance Holders of at least a majority in aggregate principal amount of the
Outstanding Securities such Series 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.
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A waiver which changes or eliminates any term, provision or condition
of this Indenture which has expressly been included solely for the benefit of a
particular Series of Securities, or which modifies the rights of 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 Holders of
Securities of the other Series.
SECTION 1009. Officers' Certificate as to Additional Interest.
The Partnership shall deliver an Officers' Certificate to the Trustee
within five Business Days after an Additional Interest Event occurs which
identifies such Additional Interest Event and states the date as of which
Additional Interest began accruing or will begin to accrue. Promptly upon (i) an
Additional Interest Event having been cured or (ii) the expiration of the Rule
144(k) Holding Period, the Partnership shall deliver to the Trustee an Officers'
Certificate which identifies such Additional Interest Event, states that it has
been cured or that the Rule 144(k) Holding Period has expired, as the case may
be, and states the date as of which Additional Interest ceased accruing or will
cease to accrue.
ARTICLE XI
REDEMPTION OF FIXED RATE SECURITIES
SECTION 1101. Optional Redemption.
The Fixed Rate Securities 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 the Fixed
Rate Securities to be redeemed at the Holder's address appearing in the Security
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 30 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").
The Partnership has no obligation to redeem or purchase any Securities
pursuant to any sinking fund or analogous requirement, or (except as provided in
Article V) upon the happening of a specified event, or at the option of a Holder
thereof.
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SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Partnership to redeem any Fixed Rate 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 such 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.
SECTION 1103. Selection by Trustee of Fixed Rate Securities to be Redeemed.
If less than all the Fixed Rate Securities 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
Fixed Rate Securities selected for redemption and, in the case of any such
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 the Fixed Rate Securities
shall relate, in the case of any such 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 the Fixed Rate
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,
(3) if less than all the Outstanding Securities of such Series
are to be redeemed, the identification (and, in the case of partial redemption
of any such Securities, the principal amounts) of the particular Securities to
be redeemed,
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(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, and
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
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 Fixed Rate Securities which are to be redeemed on
that date.
SECTION 1106. Fixed Rate Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Fixed Rate
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 installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to 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 Fixed Rate 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 such Security.
SECTION 1107. Fixed Rate Securities Redeemed in Part.
Any Fixed Rate 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 Fixed Rate Security or Securities,
of any authorized denomination as requested by such
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Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Fixed Rate Security so surrendered.
ARTICLE XII
NON-RECOURSE
SECTION 1201. 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, the Securities and any Guaranty 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, such Securities or any Guaranty, 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, such
Securities or any Guaranty by reason of his, her or its status. The agreements
set forth in this Section 1201 are part of the consideration for the issuance of
the Securities and any Guaranty.
ARTICLE XIII
DEFEASANCE OF FIXED RATE SECURITIES
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable only to the Fixed
Rate Securities.
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 Fixed Rate Securities 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 such Securities shall no longer be in effect (except as to (i) rights
of registration of transfer and exchange of such Securities and the
Partnership's right of optional redemption, (ii) substitution of mutilated,
destroyed, lost or stolen Securities, (iii) rights of Holders of such 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), (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 such Securities, (vi) the rights of
Holders of such Securities as beneficiaries
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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"):
(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 Holders of such Securities (A) cash in an amount, or
(B) 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 the principal and
interest and premium, if any, on all such Securities 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;
(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, of such
Securities 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 such Securities are to be redeemed prior to Stated
Maturity, 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 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
such 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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<PAGE> 83
(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 such
Securities, 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 such Securities, this Indenture
and the Guaranties insofar as such Securities 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 Fixed Rate Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"), and such
Securities 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 such Securities, 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 Holders of the Securities of such Series (A) cash in an
amount, or (B) 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 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;
(2) If such Securities are to be redeemed prior to Stated
Maturity, notice of such redemption shall have been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee shall have been
made;
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(3) No Event of Default or 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 Holders of such Securities 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 such 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 Fixed
Rate 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 Holders of such Securities 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 such Securities 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 either 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 Guarantor under this Indenture, the
applicable Guaranty 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 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
GUARANTY OF SECURITIES
SECTION 1401. Requirement for Guaranty.
(1) If any Subsidiary of the Partnership guarantees or becomes
a co-obligor in respect of any Funded Debt of the Partnership other than the
Securities at any time subsequent to the Closing Date (including, without
limitation, following any release of such Subsidiary pursuant to Section 1402
from any Guaranty 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 Guaranty in accordance with clause (2)
below.
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(2) Any Person may become a Guarantor by executing and
delivering to the Trustee (A) a Guaranty 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 Guaranty
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).
SECTION 1402. Release of Guaranty.
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
written notice to the Trustee to the foregoing effect, shall be deemed to be
released from all of its obligations in respect of the Securities and this
Indenture without further act or deed and the Guaranty 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 Guaranty of
such Guarantor.
* * *
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/ Joseph Listengart
--------------------------------------
Name: Joseph Listengart
Title: Vice President, General Counsel
and Secretary
FIRST UNION NATIONAL BANK
By: /s/ Kevin M. Dobrava
--------------------------------------
Name: Kevin M. Dobrava
Title: Vice President
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ANNEX A
"GUARANTY PROVISIONS"
SECTION 101. Unconditional Guaranties.
(1) For value received, the undersigned Guarantors, jointly
and severally, hereby fully, unconditionally and absolutely guarantee to 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 the 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 the
Indenture.
(2) Failing payment when due of any amount guaranteed pursuant
to the Guaranties, for whatever reason, each Guarantor will be obligated to pay
the same immediately. Each guaranty hereunder is intended to be a general,
unsecured, senior obligation of each undersigned 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 such guaranty of such
Guarantor. Each of the undersigned Guarantors hereby agrees that its obligations
hereunder shall be full, unconditional and absolute, irrespective of the
validity, regularity or enforceability of the Securities, this Guaranty or the
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 undersigned 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 Holders or, subject to Section 507 of the
Indenture, by Holders, on the terms and conditions set forth in the Indenture,
directly against each of the Guarantors to enforce this Guaranty without first
proceeding against the Partnership.
(3) The obligations of each undersigned Guarantor under this
Guaranty 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, the Indenture or any other Guaranty, (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, the Indenture or any other Guaranty 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
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under the Indenture or any other Guaranty, (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, the Indenture or any other Guaranty 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 the Indenture or any other Guaranty, (G) the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or substantially all
of the assets, marshaling 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, this Guaranty or the Indenture
or any other Guaranty 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 law, (I) the unenforceability of the Securities, this Guaranty, any
other Guaranty or the Indenture or (J) any other circumstance which might
otherwise constitute a legal or equitable discharge of a surety or guarantor.
(4) Each of the undersigned Guarantors hereby (A) waives
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 this Guaranty may be
transferred and that the benefit of its obligations hereunder shall extend to
each holder of any Securities without notice to them and (C) covenants that its
guaranty hereunder will not be discharged except by complete performance. Each
undersigned Guarantor further agrees that if at any time all or any part of any
payment hereunder theretofore applied by any Person is, or must be, rescinded or
returned for any reason whatsoever, including without limitation, the
insolvency, bankruptcy or reorganization of the Partnership or such Guarantor,
this Guaranty 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 this Guaranty shall continue to be effective or be reinstated,
as the case may be, as though such application had not been made.
(5) Each undersigned Guarantor shall be subrogated to all
rights of Holders and the Trustee against the Partnership in respect of any
amounts paid by such Guarantor pursuant to the provisions of the Indenture or
this Guaranty, 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 this Guaranty 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 the Indenture or this Guaranty, or for any claim based on, in respect of
or by reason of such obligations or their creation.
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SECTION 102. Limitation of Guarantor's Liability.
Each undersigned 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 this Guaranty not constitute a fraudulent transfer
or conveyance for purposes of any federal, state or foreign law. To effectuate
the foregoing intention, Holders and each Guarantor hereby irrevocably agree
that the obligations of each Guarantor under this Guaranty 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 this Guaranty or pursuant to Section
103, result in the obligations of such Guarantor under this Guaranty not
constituting a fraudulent conveyance or fraudulent transfer under federal, state
or foreign law.
SECTION 103. Contribution.
In order to provide for just and equitable contribution among all
Guarantors, the undersigned Guarantors agree, inter se, that in the event any
payment or distribution is made by any Guarantor (a "Funding Guarantor") under
its Guaranty, 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 Guaranty.
SECTION 104. Execution and Delivery of Guaranties.
To further evidence the guaranty set forth in Section 101, each
undersigned Guarantor hereby agrees that a notation relating to such guaranty
(in substantially the form hereinbelow set forth) shall be endorsed on each
Security authenticated and delivered by the Trustee and executed by either
manual or facsimile signature of two officers of the Guarantor.
Each of the undersigned Guarantors hereby agrees that its guaranty set
forth in Section 101 shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation relating to such guaranty.
If an officer of a Guarantor whose signature is on this Guaranty or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guaranty 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 Guaranty on behalf of the Guarantor.
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SECTION 105. Consent to Jurisdiction and Service of Process.
Each undersigned 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 the Indenture or this Guaranty 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-United States 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 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 106. 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 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 the Indenture or this
Guaranty 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.
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SECTION 107. 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 Dollars and as a result of any variation as between (A) the rate of
exchange at which the 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 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, Dollars.
SECTION 108. Definitions.
All capitalized terms used herein and not defined herein that are
defined in the Indenture are used herein as so defined.
"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 Guaranty of such Guarantor.
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FORM OF GUARANTY ENDORSEMENT
Each Guarantor (which term includes any successor Person under the
Guaranty, defined below), has fully, unconditionally and absolutely guaranteed,
to the extent set forth in the Indenture and in a certain Guaranty dated [ ]
(the "Guaranty"), and subject to the provisions in the Indenture and the
Guaranty, 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 Holders of Securities and to the
Trustee pursuant to the Guaranty and the Indenture are expressly set forth in
Article XIV of the Indenture and in the Guaranty, and reference is hereby made
to the Indenture and the Guaranty for the precise terms of such obligations.
[SIGNATURES]
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ANNEX B
FORM OF REGULATION S CERTIFICATE
REGULATION S CERTIFICATE
(For transfers pursuant to Sections 305(b)(i) and
(v) of the below-referenced Indenture)
First Union National Bank,
as Trustee
40 Broad Street, Suite 550
New York, NY 10004
Attention: Corporate Trust Administration
Re: [Floating Rate/8%] Senior Notes due [2002/2005] of Kinder
Morgan Energy Partners, L.P. (the "Securities")
Reference is made to the Indenture, dated as of March 22, 2000 (the
"Indenture"), between Kinder Morgan Energy Partners, L.P. (the "Partnership"),
and First Union National Bank, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), are used herein as therein so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
--------------------------------
CERTIFICATE No(s).
--------------------------
The Person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to
a Person (the "Transferee") who will take delivery in the form of a Regulation S
Security.
In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable securities
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<PAGE> 95
laws of the states of the United States and other jurisdictions. Accordingly,
the Owner hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an Affiliate of the Partnership or any such distributor or a
Person acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not
made to a Person in the United States;
(C) either:
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any Person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond market,
as regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any Person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any Affiliate
thereof;
(E) if the Owner is a dealer in securities or has
received a selling concession, fee or other remuneration in
respect of the Specified Securities, and the transfer is to
occur during the Restricted Period, then the requirements of
Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least one year (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Partnership or from an Affiliate
of the Partnership, whichever is later, and is being effected
in accordance with the applicable volume, manner of sale and
notice requirements of Rule 144; or
B-2
<PAGE> 96
(B) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Partnership or from an Affiliate
of the Partnership, whichever is later, and the Owner is not,
and during the preceding three months has not been, an
Affiliate of the Partnership.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Partnership, the Guarantors (if any) and the
Purchasers.
Dated:
-------------------------------------------
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
------------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership, limited liability company or
fiduciary, the title of the Person signing
on behalf of the Undersigned must be
stated.)
B-3
<PAGE> 97
ANNEX C
FORM OF RESTRICTED SECURITIES CERTIFICATE
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Sections 305(b)(ii), (iii)
and (v) of the below-referenced Indenture)
First Union National Bank,
as Trustee
40 Broad Street, Suite 550
New York, NY 10004
Attention: Corporate Trust Administration
Re: [Floating Rate/8%] Senior Notes due [2002/2005] of Kinder
Morgan Energy Partners, L.P. (the "Securities")
Reference is made to the Indenture, dated as of March 22, 2000 (the
"Indenture"), between Kinder Morgan Energy Partners, L.P. (the "Partnership"),
and First Union National Bank, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), are used herein as therein so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
--------------------------------
CERTIFICATE No(s).
--------------------------
The Person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to
a Person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 under the Securities Act and all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
C-1
<PAGE> 98
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to
a Person that the Owner and any Person acting on its behalf
reasonably believe is a "qualified institutional buyer" within
the meaning of Rule 144A, acquiring for its own account or for
the account of a qualified institutional buyer; and
(B) the Owner and any Person acting on its behalf
have taken reasonable steps to ensure that the Transferee is
aware that the Owner may be relying on Rule 144A in connection
with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least one year (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Partnership or from an Affiliate
of the Partnership, whichever is later, and is being effected
in accordance with the applicable volume, manner of sale and
notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the Specified Securities
were last acquired from the Partnership or from an Affiliate
of the Partnership, whichever is later, and the Owner is not,
and during the preceding three months has not been, an
Affiliate of the Partnership.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Partnership, the Guarantors (if any) and the
Purchasers.
Dated:
-------------------------------------------
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
------------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership, limited liability company or
fiduciary, the title of the Person signing
on behalf of the Undersigned must be
stated.)
C-2
<PAGE> 99
ANNEX D
FORM OF UNRESTRICTED SECURITIES CERTIFICATE
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to
Sections 305(c) of the below-referenced Indenture)
First Union National Bank,
as Trustee
40 Broad Street, Suite 550
New York, NY 10004
Attention: Corporate Trust Administration
Re: [Floating Rate/8%] Senior Notes due [2002/2005] of Kinder
Morgan Energy Partners, L.P. (the "Securities")
Reference is made to the Indenture, dated as of March 22, 2000 (the
"Indenture"), between Kinder Morgan Energy Partners, L.P. (the "Partnership"),
and First Union National Bank, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933,
as amended (the "Securities Act"), are used herein as therein so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
--------------------------------
CERTIFICATE No(s).
--------------------------
The Person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Securities Act Legend pursuant to Section 305(c) of the
Indenture. In connection with such exchange, the Owner hereby certifies that the
exchange is occurring after a holding period of at least two years (computed in
accordance with paragraph (d) of Rule 144) has elapsed since the Specified
Securities were last acquired from the Partnership or from an Affiliate of the
Partnership, whichever
D-1
<PAGE> 100
is later, and the Owner is not, and during the preceding three months has not
been, an Affiliate of the Partnership.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Partnership, the Guarantors (if any) and the
Purchasers.
Dated:
-------------------------------------------
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
------------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership, limited liability company or
fiduciary, the title of the Person signing
on behalf of the Undersigned must be
stated.)
D-2
<PAGE> 1
EXHIBIT 4.3
Conformed Copy
KINDER MORGAN ENERGY PARTNERS, L.P.
$200,000,000 FLOATING RATE SENIOR NOTES DUE 2002
$200,000,000 8% SENIOR NOTES DUE 2005
------------------------------------
REGISTRATION RIGHTS AGREEMENT
March 22, 2000
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated & Co.
Banc of America Securities LLC
First Union Securities, Inc.
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 to issue and sell to you (the "Purchasers") upon
the terms and subject to the conditions set forth in the Purchase Agreement (as
defined herein) an aggregate of $200,000,000 principal amount of its Floating
Rate Senior Notes due 2002 and an aggregate of $200,000,000 principal amount of
its 8% Senior Notes due 2005. As an inducement to the Purchasers to enter into
the Purchase Agreement and in satisfaction of a condition to the obligations of
the Purchasers thereunder, the Partnership agrees with the Purchasers for the
benefit of holders (as defined herein) from time to time of the Registrable
Securities (as defined herein) as follows:
SECTION 1. Certain Definitions.
For purposes of this Registration Rights Agreement, the following terms
shall have the following respective meanings:
"Additional Interest" shall have the meaning assigned thereto in
Section 2(c) hereof.
"Additional Interest Event" shall have the meaning assigned thereto in
Section 2(c) hereof.
<PAGE> 2
The term "broker-dealer" shall mean any broker or dealer registered
with the Commission under the Exchange Act.
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law, executive order or regulation to close.
"Closing Date" shall mean the date on which the Securities (as defined
herein) are initially issued.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"Conduct Rules" shall have the meaning assigned thereto in Section
3(c)(xix) hereof.
"Effective Time", in the case of (i) an Exchange Registration, shall
mean the time and date as of which the Commission declares the Exchange
Registration Statement effective or as of which the Exchange Registration
Statement otherwise becomes effective and (ii) a Shelf Registration, shall mean
the time and date as of which the Commission declares the Shelf Registration
Statement effective or as of which the Shelf Registration Statement otherwise
becomes effective.
"Electing Holder" shall mean any holder of Registrable Securities that
has returned a completed and signed Notice and Questionnaire to the Partnership
in accordance with Section 3(c)(ii) or 3(c)(iii) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934 , or any
successor statute thereto, in each case as amended from time to time.
"Exchange Offer" shall have the meaning assigned thereto in Section
2(a) hereof.
"Exchange Registration" shall have the meaning assigned thereto in
Section 3(b) hereof.
"Exchange Registration Statement" shall have the meaning assigned
thereto in Section 2(a) hereof.
"Exchange Securities" shall have the meaning assigned thereto in
Section 2(a) hereof.
"Exchange Series" shall have the meaning assigned thereto in Section
2(a) hereof.
"holder" shall mean each of the Purchasers and each other person who
acquires Registrable Securities from time to time (including any successors or
assigns), in each case for so long as such person owns any Registrable
Securities.
2
<PAGE> 3
"Indenture" shall mean the Indenture, dated as of March 22, 2000,
between the Partnership and First Union National Bank, as Trustee, as the same
shall be amended from time to time.
"NASD" shall have the meaning assigned thereto in Section 3(c)(xix)
hereof.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
"Partnership" shall mean Kinder Morgan Energy Partners, L.P., a
Delaware limited partnership.
"person" shall mean any individual, corporation, partnership (whether
general or limited), joint venture, limited liability company, association,
joint stock company, trust, other entity, unincorporated organization or
government or any agency or political subdivision thereof or governmental
agency.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of
March 17, 2000, between the Partnership and Goldman, Sachs & Co., as
representative of the Purchasers relating to the Securities, as the same shall
be amended from time to time.
"Purchasers" shall mean, collectively, Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and
First Union Securities, Inc.
"Registrable Securities" shall mean the Securities; provided, however,
that a Security shall cease to be a Registrable Security when (i) in the
circumstances contemplated by Section 2(a) hereof, the Security has been
exchanged for an Exchange Security in an Exchange Offer as contemplated in
Section 2(a) hereof (provided, that any Exchange Security that, pursuant to the
last two sentences of Section 2(a) hereof, is included in a prospectus for use
in connection with resales by broker-dealers shall be deemed to be a Registrable
Security until resale of such Registrable Security has been effected within the
90-day period referred to in Section 2(a) hereof); (ii) in the circumstances
contemplated by Section 2(b) hereof, a Shelf Registration Statement registering
such Security under the Securities Act has been declared or becomes effective
and such Security has been sold or otherwise transferred by the holder thereof
pursuant to and in a manner contemplated by such effective Shelf Registration
Statement; (iii) such Security is sold pursuant to Rule 144 under circumstances
in which any legend borne by such Security relating to restrictions on
transferability thereof, under the Securities Act or otherwise, is removed by
the Partnership or pursuant to the Indenture; (iv) such Security is eligible to
be sold pursuant to paragraph (k) of Rule 144 (or any similar provision then in
effect); or (v) such Security shall cease to be outstanding.
"Registration Expenses" shall have the meaning assigned thereto in
Section 4 hereof.
"Resale Period" shall have the meaning assigned thereto in Section 2(a)
hereof.
3
<PAGE> 4
"Restricted Holder" shall mean (i) a holder that is an affiliate of the
Partnership within the meaning of Rule 405, (ii) a holder who acquires Exchange
Securities outside the ordinary course of such holder's business, (iii) a holder
who has arrangements or understandings with any person to participate in the
Exchange Offer for the purpose of distributing Exchange Securities and (iv) a
holder that is a broker-dealer, but only with respect to Exchange Securities
received by such broker-dealer pursuant to the Exchange Offer in exchange for
Registrable Securities acquired by the broker-dealer directly from the
Partnership.
"Rule 144", "Rule 405" and "Rule 415" shall mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as the
same shall be amended from time to time.
"Rule 144(k) Holding Period" shall have the meaning assigned thereto in
Section 2(b) hereof.
"Securities" shall mean, collectively, the Floating Rate Senior Notes
due 2002 and the 8% Senior Notes due 2005 of the Partnership to be issued and
sold to the Purchasers.
"Securities Act" shall mean the Securities Act of 1933, or any
successor statute thereto, as the same shall be amended from time to time.
"Series" shall mean a series of the Securities or the Exchange
Securities, as the case may be.
"Series of Exchange Securities" shall have the meaning assigned thereto
in Section 2(a) hereof.
"Shelf Registration" shall have the meaning assigned thereto in Section
2(b) hereof.
"Shelf Registration Statement" shall have the meaning assigned thereto
in Section 2(b) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
any successor statute thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Registration Rights Agreement, and the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Registration Rights Agreement as
a whole and not to any particular Section or other subdivision.
4
<PAGE> 5
SECTION 2. Registration Under the Securities Act.
(a) Except as set forth in Section 2(b) below, the Partnership
agrees to use its reasonable efforts to file under the Securities Act, as soon
as practicable, but no later than 90 days after the Closing Date, a single
registration statement relating to an offer to exchange (such registration
statement, the "Exchange Registration Statement" and, such offer, the "Exchange
Offer") any and all of the Securities of each Series for a like aggregate
principal amount of debt securities issued by the Partnership, which debt
securities will be substantially identical to the Securities of such Series (and
will be entitled to the benefits of a trust indenture that will be substantially
identical to the Indenture or is the Indenture and that will be qualified under
the Trust Indenture Act), except that such new debt securities will have been
registered pursuant to an effective registration statement under the Securities
Act, will not be subject to transfer restrictions or registration rights and
will not be entitled to the benefit of provisions for the Additional Interest
contemplated in Section 2(c) below (such new debt securities hereinafter called
"Exchange Securities" and each Series thereof an "Exchange Series" or a "Series
of Exchange Securities"). The Partnership agrees to use its reasonable efforts
to cause the Exchange Registration Statement to become effective under the
Securities Act as soon as practicable, but no later than 180 days after the
Closing Date. The Exchange Offer will be registered under the Securities Act on
the appropriate form and will comply with all applicable tender offer rules and
regulations under the Exchange Act. The Partnership further agrees to use its
reasonable efforts to commence and complete the Exchange Offer promptly, but no
later than 45 Business Days after such Exchange Registration Statement has
become effective, to hold the Exchange Offer open for at least 30 days and to
exchange each Series of Exchange Securities for all Registrable Securities of
the same Series that have been properly tendered and not withdrawn on or prior
to the expiration of the Exchange Offer. The Exchange Offer shall be deemed to
have been completed upon the earlier to occur of (i) the Partnership having
exchanged Exchange Securities for all outstanding Registrable Securities of the
comparable Series that are properly tendered and not withdrawn pursuant to the
Exchange Offer and (ii) the Partnership having exchanged, pursuant to the
Exchange Offer, Exchange Securities for all Registrable Securities of the
comparable Series that have been properly tendered and not withdrawn before the
expiration of the Exchange Offer, which shall be on a date that is at least 30
days following the commencement of the Exchange Offer. The Partnership agrees
(x) to include in the Exchange Registration Statement a prospectus for use in
any resales by any holder of Exchange Securities that is a broker-dealer and (y)
to keep such Exchange Registration Statement effective for a period (the "Resale
Period") beginning when Exchange Securities are first issued in the Exchange
Offer and ending upon the earlier of the expiration of the 90th day after the
Exchange Offer has been completed or such time as such broker-dealers no longer
own any Registrable Securities. With respect to such Exchange Registration
Statement, such holders shall have the benefit of the rights of indemnification
and contribution set forth in Sections 5(a), (c), (d) and (e) hereof.
(b) If (i) the Partnership determines that the Exchange
Registration Statement is not available or the Exchange Offer may not be
consummated because it would violate applicable law or the applicable
interpretations of the staff of the Commission, (ii) the Exchange
5
<PAGE> 6
Offer has not been completed within 180 days plus 45 Business Days following the
Closing Date or (iii) in the opinion of counsel for the Purchasers, under
applicable law or the applicable interpretations of the staff of the Commission,
the Purchasers are not entitled to tender Securities in the Exchange Offer or
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any offering or sale of Registrable
Securities, the Partnership shall, in lieu of conducting the Exchange Offer
contemplated by Section 2(a) hereof, use its reasonable efforts to file under
the Securities Act, as soon as practicable after the time such obligation to
file arises, a "shelf" registration statement providing for the registration of,
and the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities, pursuant to Rule 415 or any similar rule that may be
adopted by the Commission (such filing, the "Shelf Registration" and, such
registration statement, the "Shelf Registration Statement"). The Partnership
agrees to use its reasonable efforts to cause the Shelf Registration Statement
to become or be declared effective and to keep such Shelf Registration Statement
continuously effective for a period ending on the earlier of the second
anniversary of the Closing Date or, if Rule 144(k) is amended to provide a
shorter restrictive period, such shorter period (the "Rule 144(k) Holding
Period") or such time as there are no longer any Registrable Securities
outstanding; provided, however, that no holder shall be entitled to be named as
a selling securityholder in the Shelf Registration Statement or to use the
prospectus forming a part thereof for resales of Registrable Securities unless
such holder is an Electing Holder, and furnishes to the Partnership in writing,
within 20 days after receipt of a request therefor, such information with
respect to such Electing Holder required under Regulation S-K under the Act as
the Partnership may reasonably request for use in connection with any Shelf
Registration Statement or Prospectus or preliminary prospectus included therein.
No Electing Holder shall be entitled to Additional Interest pursuant to Section
2(c) hereof unless and until such Electing Holder shall have used its reasonable
efforts to provide all such reasonably requested information. Each Electing
Holder as to which any Shelf Registration Statement is being effected agrees to
furnish promptly to the Partnership all information required to be disclosed in
order to make the information previously furnished to the Partnership by such
Electing Holder not materially misleading. The Partnership further agrees to
supplement or make amendments to the Shelf Registration Statement, as and when
required by the rules, regulations or instructions applicable to the
registration form used by the Partnership for such Shelf Registration Statement
or by the Securities Act or rules and regulations thereunder for shelf
registration, and the Partnership agrees to furnish to each Electing Holder
copies of any such supplement or amendment promptly after its being used
following its filing with the Commission.
(c) The Partnership agrees to pay additional interest (the
"Additional Interest") upon the occurrence of any of the following events (each
such event, an "Additional Interest Event"):
(i) if the Exchange Registration Statement or Shelf
Registration Statement is not filed within 90 days following the
Closing Date, then commencing on the 91st day after the Closing Date,
Additional Interest shall accrue on the Securities over and above the
otherwise applicable interest rate at a rate of 0.25% per year; or
6
<PAGE> 7
(ii) if an Exchange Registration Statement or Shelf
Registration Statement is filed and is not declared effective within
180 days following the Closing Date, then commencing on the 181st day
after the Closing Date, Additional Interest shall accrue on the
Securities over and above the otherwise applicable interest rate at a
rate of 0.25% per year; or
(iii) if either (A) the Partnership has not exchanged
Exchange Securities of either Series for all Securities of the same
Series validly tendered in accordance with the terms of the Exchange
Offer on or prior to 45 Business Days after the date on which the
Exchange Registration Statement was declared effective, or (B) the
Shelf Registration Statement has been declared effective, but such
Shelf Registration Statement ceases to be effective at any time (I)
prior to the expiration of the Rule 144(k) Holding Period and (II)
while Registrable Securities are outstanding, then Additional Interest
shall accrue on the Securities over and above the otherwise applicable
interest rate at a rate of 0.25% per year commencing on the (x) 46th
Business Day after such effective date, in the case of (A) above, or
(y) the day the Shelf Registration Statement ceases to be effective, in
the case of (B) above;
provided, however, that the circumstances under which the Partnership may be
required to pay Additional Interest are not cumulative and the rate at which
Additional Interest accrues on the Securities shall never exceed 0.25% per year;
and, provided further, that Additional Interest on the Securities shall cease to
accrue upon the earlier of (i) when all Additional Interest Events have been
cured or (ii) upon the expiration of the Rule 144(k) Holding Period. For
purposes of clarifying the foregoing provisions, Additional Interest shall not
accrue at any time that there are no Registrable Securities outstanding.
All accrued Additional Interest shall be payable, in the manner
provided for the payment of interest in the Indenture and the Securities, on
each applicable Interest Payment Date (as defined in the Indenture).
(d) The Partnership shall take all actions reasonably
necessary to be taken by it to ensure that the transactions contemplated herein
are effected as so contemplated.
(e) Any reference herein to a registration statement as of any
time shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference herein to
any post-effective amendment to a registration statement as of any time shall be
deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time.
7
<PAGE> 8
SECTION 3. Registration Procedures.
If the Partnership files a registration statement pursuant to Section
2(a) or Section 2(b) hereof, the following provisions shall apply:
(a) At or before the Effective Time of the Exchange
Registration or the Shelf Registration, as the case may be, the Partnership
shall qualify the Indenture under the Trust Indenture Act.
(b) In connection with the Partnership's obligations with
respect to the registration of Exchange Securities as contemplated by Section
2(a) hereof (the "Exchange Registration"), if applicable, the Partnership shall,
as soon as practicable (or as otherwise specified):
(i) use its reasonable efforts to prepare and file
with the Commission, as soon as practicable, but no later than 90 days
after the Closing Date, an Exchange Registration Statement on any form
that may be utilized by the Partnership and that shall permit the
Exchange Offer and resales of Exchange Securities by broker-dealers
during the Resale Period to be effected as contemplated by Section 2(a)
hereof, and use its reasonable efforts to cause such Exchange
Registration Statement to become effective as soon as practicable
thereafter, but no later than 180 days following the Closing Date;
(ii) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Exchange
Registration Statement and the prospectus included therein as may be
necessary to effect and maintain the effectiveness of such Exchange
Registration Statement for the periods and purposes contemplated in
Section 2(a) hereof and as may be required by the applicable rules and
regulations of the Commission and the instructions applicable to the
form of such Exchange Registration Statement, and promptly provide each
broker-dealer holding Exchange Securities with such number of copies of
the prospectus included therein (as then amended or supplemented), in
conformity in all material respects with the requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder, as such broker-dealer
reasonably may request prior to the expiration of the Resale Period,
for use in connection with resales of Exchange Securities;
(iii) promptly notify each broker-dealer that has
requested or received copies of the prospectus included in such
registration statement and, if requested by such broker-dealer, confirm
such advice in writing, (A) when such Exchange Registration Statement
or the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with
respect to such Exchange Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any request by
the Commission for amendments or supplements to such Exchange
Registration Statement or prospectus or for additional information, (C)
of the
8
<PAGE> 9
issuance by the Commission of any stop order suspending the
effectiveness of such Exchange Registration Statement or the initiation
or threatening of any proceedings for that purpose, (D) of the receipt
by the Partnership of any notification with respect to the suspension
of the qualification of the Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, or (E) if at any time during the Resale Period when a
prospectus is required to be delivered under the Securities Act, that
such Exchange Registration Statement, prospectus, prospectus amendment
or supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the Securities Act
and the Trust Indenture Act and the rules and regulations of the
Commission thereunder or contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of
the circumstances then existing;
(iv) in the event that the Partnership would be
required, pursuant to Section 3(b)(iii)(E) above, to notify any
broker-dealers holding Exchange Securities, it will use its reasonable
efforts to prepare and furnish to each such holder a reasonable number
of copies of a prospectus supplemented or amended so that, as
thereafter delivered to purchasers of such Exchange Securities during
the Resale Period, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission
thereunder and shall not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing. Each broker-dealer agrees that upon
receipt of any notice from the Partnership pursuant to Section
3(b)(iii)(E) hereof, such broker-dealer shall forthwith discontinue the
disposition of Exchange Securities pursuant to the Exchange
Registration Statement applicable to such Exchange Securities until
such broker-dealer shall have received copies of such amended or
supplemented prospectus and, if so directed by the Partnership, such
broker-dealer shall deliver to the Partnership (at the Partnership's
expense) all copies of the prospectus covering such Exchange Securities
then in such broker-dealers' possession for the purpose of making
offers of Exchange Securities;
(v) use its reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such Exchange
Registration Statement or any post-effective amendment thereto at the
earliest practicable date;
(vi) use its reasonable efforts to (A) register or
qualify the Exchange Securities under the securities laws or blue sky
laws of such jurisdictions as any holder of Exchange Securities shall
reasonably request in writing no later than the commencement of the
Exchange Offer, (B) keep such registrations or qualifications in effect
and comply with such laws so as to permit the continuance of offers,
sales and dealings therein in such jurisdictions until the expiration
of the Resale Period and (C) take any and all other actions as may be
reasonably necessary to enable each broker-dealer holding Exchange
Securities to consummate the disposition thereof in such jurisdictions
under the securities laws or
9
<PAGE> 10
blue sky laws of such jurisdictions; provided, however, that the
Partnership shall not be required for any such purpose to (1) qualify
as a foreign partnership or as a dealer in securities in any
jurisdiction wherein it would not otherwise be required to qualify but
for the requirements of this Agreement, (2) consent to general service
of process in any such jurisdiction or subject itself to taxation in
any such jurisdiction if it is not already so subject or (3) make any
changes to its certificate of limited partnership or its agreement of
limited partnership or any agreement between it and its unitholders;
(vii) use its reasonable efforts to obtain the
consent or approval of each governmental agency or authority, whether
federal, state or local, that may be required to effect the Exchange
Registration, the Exchange Offer and the offering and sale of Exchange
Securities by broker-dealers during the Resale Period;
(viii) provide a CUSIP number for each series of
Exchange Securities, not later than the applicable Effective Time;
(ix) comply with all applicable rules and regulations
of the Commission, and make generally available to its securityholders
as soon as practicable, but no later than 18 months after the effective
date of such Exchange Registration Statement, an earnings statement of
the Partnership and its subsidiaries complying with Section 11(a) of
the Securities Act (including, at the option of the Partnership, Rule
158 thereunder).
As a condition to its participation in the Exchange Offer pursuant to
the terms of this Agreement, each Electing Holder shall furnish, upon the
request of the Partnership, prior to the consummation thereof, a written
representation to the Partnership (which may be contained in the letter of
transmittal contemplated by the Exchange Registration) to the effect that (A) it
is not an affiliate of the Partnership, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Securities to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Securities in its ordinary
course of business. In addition, although Electing Holders shall otherwise
cooperate in the Partnership's preparation for the Exchange Offer. Each Electing
Holder hereby acknowledges and agrees that any broker-dealer who purchases the
Securities from the Partnership to resell pursuant to Rule 144A or any other
available exemption under the Securities Act or any Electing Holder who is an
affiliate of the Partnership or who intends to use the Exchange Offer to
participate in a distribution of the Exchange Securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the date of
this Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the Commission's letter
to Shearman & Sterling dated July 2, 1993, and similar no-action letters, (2)
will not be entitled to tender Securities in the Exchange Offer, and (3) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Securities unless
such sale or transfer is made pursuant to any exemption from such requirements.
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<PAGE> 11
(c) In connection with the Partnership's obligations with
respect to the Shelf Registration, if applicable, the Partnership shall, as soon
as practicable (or as otherwise specified):
(i) use its reasonable efforts to prepare and file
with the Commission a Shelf Registration Statement on any form that may
be utilized by the Partnership and that shall register all of the
Registrable Securities for resale by the holders thereof in accordance
with such method or methods of disposition as may be specified by such
of the holders as, from time to time, may be Electing Holders and use
its reasonable efforts to cause such Shelf Registration Statement to
become effective;
(ii) not less than 30 days prior to the Effective
Time of the Shelf Registration Statement, mail the Notice and
Questionnaire to the holders of Registrable Securities; no holder shall
be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Time, and no holder shall be
entitled to use the prospectus forming a part thereof for resales of
Registrable Securities at any time, unless such holder has returned a
completed and signed Notice and Questionnaire to the Partnership by the
deadline for response set forth therein; provided, however, holders of
Registrable Securities shall have at least 20 days from the date on
which the Notice and Questionnaire is first mailed to such holders to
return a completed and signed Notice and Questionnaire to the
Partnership;
(iii) after the Effective Time of the Shelf
Registration Statement, upon the request of any holder of Registrable
Securities that is not then an Electing Holder, promptly send a Notice
and Questionnaire to such holder; provided, that the Partnership shall
not be required to take any action to name such holder as a selling
securityholder in the Shelf Registration Statement or to enable such
holder to use the prospectus forming a part thereof for resales of
Registrable Securities until such holder has returned a completed and
signed Notice and Questionnaire to the Partnership; and, provided
further, that the Partnership shall not be required to file an
amendment to such Shelf Registration Statement for the sole reason of
naming such holder as a selling securityholder in the Shelf
Registration Statement;
(iv) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Shelf Registration
Statement and the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such Shelf Registration
Statement for the period specified in Section 2(b) hereof and as may be
required by the applicable rules and regulations of the Commission and
the instructions applicable to the form of such Shelf Registration
Statement, and furnish to the Electing Holders copies of any such
supplement or amendment simultaneously with or prior to its being used
or filed with the Commission;
(v) comply with the provisions of the Securities Act
with respect to the disposition of all of the Registrable Securities
covered by such Shelf Registration
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<PAGE> 12
Statement in accordance with the intended methods of disposition by the
Electing Holders provided for in such Shelf Registration Statement;
(vi) provide (A) the Electing Holders, (B) the
underwriters (which term, for purposes of this Registration Rights
Agreement, shall include a person deemed to be an underwriter within
the meaning of Section 2(a)(11) of the Securities Act), if any,
thereof, (C) any sales or placement agent therefor, (D) counsel for any
such underwriter or agent and (E) not more than one counsel for all the
Electing Holders the opportunity to participate in the preparation of
such Shelf Registration Statement, each prospectus included therein or
filed with the Commission and each amendment or supplement thereto;
(vii) for a reasonable period prior to the filing of
such Shelf Registration Statement, and throughout the period specified
in Section 2(b) hereof, make available at reasonable times at the
Partnership's principal place of business or such other reasonable
place for inspection by the persons referred to in Section 3(c)(vi)
hereof who shall certify to the Partnership that they have a current
intention to sell the Registrable Securities pursuant to the Shelf
Registration such financial and other information and books and records
of the Partnership, and reasonably cause the officers, employees,
counsel and independent certified public accountants of the Partnership
to respond to such inquiries, as shall be reasonably necessary to
conduct a reasonable investigation within the meaning of Section 11 of
the Securities Act; provided, however, that each such party shall be
required to maintain in confidence and not to disclose to any other
person any information or records considered by the Partnership in good
faith as being confidential, until such time as (A) such information
becomes a matter of public record (whether by virtue of its inclusion
in such Shelf Registration Statement or otherwise), or (B) such person
shall be required so to disclose such information pursuant to a
subpoena or order of any court or other governmental agency or body
having jurisdiction over the matter (subject to the requirements of
such order, and only after such person shall have given the Partnership
prompt prior written notice of such requirement), or (C) such
information is required, as determined by the Partnership in good faith
and its counsel, to be set forth in such Shelf Registration Statement
or the prospectus included therein or in an amendment to such Shelf
Registration Statement or an amendment or supplement to such prospectus
in order that such Shelf Registration Statement, prospectus, amendment
or supplement, as the case may be, complies with applicable
requirements of the federal securities laws and the rules and
regulations of the Commission thereunder and does not contain an untrue
statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(viii) promptly notify each of the Electing Holders,
any sales or placement agent therefor and any underwriter thereof
(which notification may be made through any managing underwriter that
is a representative of such underwriter for such purpose) and, if
requested by such Holders, agents or underwriters, confirm such advice
in writing,
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<PAGE> 13
(A) when such Shelf Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to such Shelf Registration
Statement or any post-effective amendment, when the same has become
effective, (B) of any request by the Commission for amendments or
supplements to such Shelf Registration Statement or prospectus or for
additional information, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such Shelf Registration
Statement or the initiation or threatening of any proceedings for that
purpose, (D) of the receipt by the Partnership of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (E) if at any time
when a prospectus is required to be delivered under the Securities Act,
that such Shelf Registration Statement, prospectus, prospectus
amendment or supplement or post-effective amendment does not conform
in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder or contains an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(ix) use its reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such Shelf
Registration Statement or any post-effective amendment thereto at the
earliest practicable date;
(x) if requested by any managing underwriter or
underwriters, any placement or sales agent or any Electing Holder,
promptly incorporate in a prospectus supplement or post-effective
amendment such information as is required by the applicable rules and
regulations of the Commission and as such managing underwriter or
underwriters, such agent or such Electing Holder may reasonably propose
should be included therein relating to the terms of the sale of such
Registrable Securities, including information with respect to the
principal amount of Registrable Securities being sold by such Electing
Holder or agent or to any underwriters, the name and description of
such Electing Holder, agent or underwriter, the offering price of such
Registrable Securities and any discount, commission or other
compensation payable in respect thereof, the purchase price being paid
therefor by such underwriters and with respect to any other terms of
the offering of the Registrable Securities to be sold by such Electing
Holder or agent or to such underwriters; and make all required filings
of such prospectus supplement or post-effective amendment promptly
after notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;
(xi) furnish to each Electing Holder, each placement
or sales agent, if any, therefor, each underwriter, if any, thereof and
the respective counsel referred to in Section 3(c)(vi), a copy of such
Shelf Registration Statement, each such amendment and supplement
thereto (in each case including all exhibits thereto (in the case of an
Electing Holder of Registrable Securities, upon request) and documents
incorporated by reference
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<PAGE> 14
therein) and such number of copies of such Shelf Registration Statement
(excluding exhibits thereto and documents incorporated by reference
therein unless specifically so requested by such Electing Holder, agent
or underwriter, as the case may be) and of the prospectus included in
such Shelf Registration Statement (including each preliminary
prospectus and any summary prospectus), in conformity in all material
respects with the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission
thereunder, and such other documents as such Electing Holder, agent, if
any, and underwriter, if any, may reasonably request in order to
facilitate the offering and disposition of the Registrable Securities
owned by such Electing Holder, offered or sold by such agent or
underwritten by such underwriter and to permit such Electing Holder,
agent and underwriter to satisfy the prospectus delivery requirements
of the Securities Act; and the Partnership hereby consents to the use
of such prospectus (including such preliminary and summary prospectus)
and any amendment or supplement thereto by each such Electing Holder
and by any such agent and underwriter, in each case in the form most
recently provided to such person by the Partnership, in connection with
the offering and sale of the Registrable Securities covered by the
prospectus (including such preliminary and summary prospectus) or any
supplement or amendment thereto;
(xii) use reasonable efforts to (A) register or
qualify the Registrable Securities to be included in such Shelf
Registration Statement under such securities laws or blue sky laws of
such jurisdictions as any Electing Holder and each placement or sales
agent, if any, therefor and underwriter, if any, thereof shall
reasonably request in writing, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions
during the period the Shelf Registration is required to remain
effective under Section 2(b) above, and (C) take any and all other
actions as may be reasonably necessary to enable each such Electing
Holder, agent, if any, and underwriter, if any, to consummate the
disposition in such jurisdictions under the securities laws or blue sky
laws of such jurisdictions; provided, however, that the Partnership
shall not be required for any such purpose to (1) qualify as a foreign
partnership or as a dealer in securities in any jurisdiction wherein it
would not otherwise be required to qualify but for the requirements of
this Agreement, (2) consent to general service of process in any such
jurisdiction or subject itself to taxation in any such jurisdiction if
it is not already so subject, or (3) make any changes to its
certificate of limited partnership or its agreement of limited
partnership or any agreement between it and its unitholders;
(xiii) use its reasonable efforts to obtain the
consent or approval of each governmental agency or authority, whether
federal, state or local, that may be required to effect the Shelf
Registration or the offering or sale in connection therewith or to
enable the selling holder or holders to offer, or to consummate the
disposition of, their Registrable Securities;
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<PAGE> 15
(xiv) unless any Registrable Securities shall be in
book-entry only form, cooperate with the Electing Holders and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be
sold, which certificates, if so required by any securities exchange
upon which any Registrable Securities are listed, shall be penned,
lithographed or engraved, or produced by any combination of such
methods, on steel engraved borders, and which certificates shall not
bear any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters
may reasonably request at least two Business Days prior to any sale of
the Registrable Securities;
(xv) provide a CUSIP number for each series of
Registrable Securities, not later than the applicable Effective Time;
(xvi) in connection with an underwritten offering of
Registrable Securities, enter into one or more customary underwriting
agreements, engagement letters, agency agreements, "best efforts"
underwriting agreements or similar agreements, as appropriate,
including customary provisions relating to indemnification and
contribution, and take such other actions in connection therewith as
any Electing Holders aggregating at least a majority in aggregate
principal amount of the Registrable Securities at the time outstanding
(it being understood for purposes of this Agreement that all holders of
the Registrable Securities shall vote on this and any other matter as a
single class) shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(xvii) in connection with any underwritten offering
of Registrable Securities pursuant to a Shelf Registration, to the
extent requested by the underwriters thereof, (A) make such
representations and warranties to the Electing Holders and the
underwriters thereof in form, substance and scope as are customarily
made in primary underwritten offerings of debt securities and covering
matters including, but not limited to, those set forth in the Purchase
Agreement; (B) obtain an opinion of counsel to the Partnership in
customary form and covering such matters of the type customarily
covered by such an opinion in primary offerings of debt securities as
the underwriters thereof may reasonably request, addressed to such
underwriters thereof and dated the effective date of such Shelf
Registration Statement and the date of the closing under the
underwriting agreement relating thereto) covering the matters
customarily covered in opinions requested in primary underwritten
offerings of debt securities (it being agreed that the matters to be
covered by such opinion may be subject to customary qualifications and
exceptions and it being understood that opinions that are substantially
the same as those called for by the Purchase Agreement will be
satisfactory for these purposes); (C) obtain a "cold comfort" letter or
"cold comfort" letters from the independent certified public
accountants of the Partnership addressed to the underwriters thereof,
dated (i) the effective date of such Shelf Registration Statement and
(ii) the effective date of any prospectus supplement to the
15
<PAGE> 16
prospectus included in such Shelf Registration Statement or
post-effective amendment to such Shelf Registration Statement that
includes unaudited or audited financial statements as of a date or for
a period subsequent to that of the latest such statements included in
such prospectus (and, if such Shelf Registration Statement contemplates
an underwritten offering pursuant to any prospectus supplement to the
prospectus included in such Shelf Registration Statement or
post-effective amendment to such Shelf Registration Statement that
includes unaudited or audited financial statements as of a date or for
a period subsequent to that of the latest such statements included in
such prospectus, dated the date of the closing under the underwriting
agreement relating thereto), such letter or letters to be in customary
form and covering such matters of the type customarily covered by
letters of such type; (D) deliver such customary documents and
certificates, including officers' certificates, as may be reasonably
requested by the underwriters thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above and
the compliance with or satisfaction of any agreements or conditions
contained in the underwriting agreement or other agreement entered into
by the Partnership; and (E) undertake such obligations relating to
expense reimbursement, indemnification and contribution as are provided
in Section 5 hereof;
(xviii) notify in writing each holder of Registrable
Securities of any proposal of any amendment or waiver effected pursuant
to Section 8(h) hereof, each of which notices shall contain the text of
the amendment or waiver proposed or effected, as the case may be;
(xix) comply with all applicable rules and
regulations of the Commission, and make generally available to its
securityholders as soon as practicable, but in any event not later than
18 months after the effective date of such Shelf Registration
Statement, an earnings statement of the Partnership and its
subsidiaries complying with Section 11(a) of the Securities Act
(including, at the option of the Partnership, Rule 158 thereunder).
(d) In the event that the Partnership would be required,
pursuant to Section 3(c)(viii)(E) above, to notify the Electing Holders, the
placement or sales agent, if any, therefor and the managing underwriters, if
any, thereof, the Partnership shall without any unreasonable delay prepare and
furnish to each of the Electing Holders, to each placement or sales agent, if
any, and to each such underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to
purchasers of Registrable Securities, such prospectus shall conform in all
material respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission thereunder
and shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing. Each
Electing Holder agrees that upon receipt of any notice from the Partnership
pursuant to Section 3(c)(viii)(E) hereof, such Electing Holder shall forthwith
discontinue the disposition of Registrable Securities pursuant to the Shelf
Registration Statement applicable to such Registrable Securities until such
Electing Holder shall have received copies of
16
<PAGE> 17
such amended or supplemented prospectus, and if so directed by the Partnership,
such Electing Holder shall deliver to the Partnership (at the Partnership's
expense) all copies of the prospectus covering such Registrable Securities then
in such Electing Holder's possession for the purpose of making offers of the
Registrable Securities.
(e) In the event of a Shelf Registration, in addition to the
information required to be provided by each Electing Holder in its Notice and
Questionnaire, the Partnership may require such Electing Holder to furnish to
the Partnership such additional information regarding such Electing Holder and
such Electing Holder's intended method of distribution of Registrable Securities
as may be required in order to comply with the Securities Act. Each such
Electing Holder agrees to notify the Partnership as promptly as practicable of
any inaccuracy or change in information previously furnished by such Electing
Holder to the Partnership or of the occurrence of any event in either case as a
result of which any prospectus relating to such Shelf Registration contains or
would contain an untrue statement of a material fact regarding such Electing
Holder or such Electing Holder's intended method of disposition of such
Registrable Securities or omits to state any material fact regarding such
Electing Holder or such Electing Holder's intended method of disposition of such
Registrable Securities required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and promptly to furnish to the Partnership any additional information required
to correct and update any previously furnished information or required so that
such prospectus shall not contain, with respect to such Electing Holder or the
disposition of such Registrable Securities, 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 in light of the circumstances then
existing.
(f) Until the expiration of the Rule 144(k) Holding Period,
the Partnership will not, and will use its reasonable efforts to cause its
"affiliates" (as defined in Rule 144) not to, resell any of the Securities that
have been reacquired by any of them except pursuant to an effective registration
statement under the Securities Act.
SECTION 4. Registration Expenses.
The Partnership agrees to bear and to pay or cause to be paid promptly
all reasonable expenses incident to the Partnership's performance of or
compliance with this Registration Rights Agreement, including (a) all Commission
and any applicable NASD registration, filing and review fees and expenses,
including fees and disbursements of one counsel for the placement or sales agent
or underwriters as a group in connection with such NASD registration, filing and
review, (b) all fees and expenses in connection with the qualification of the
Securities for offering and sale under the state securities and blue sky laws
referred to in Section 3(c)(xii) hereof and determination of their eligibility
for investment under the laws of such jurisdictions as any managing underwriters
or the Electing Holders may reasonably designate, but not the fees and
disbursements of counsel for the Electing Holders or underwriters as a group in
connection with such qualification and determination, (c) all expenses relating
to the preparation, printing, production, distribution and reproduction of each
registration statement required to be filed
17
<PAGE> 18
hereunder, each prospectus included therein or prepared for distribution
pursuant hereto, each amendment or supplement to the foregoing, the expenses of
preparing the Securities for delivery and the expenses of printing or producing
any required underwriting agreements, agreements among underwriters, selling
agreements and blue sky or legal investment memoranda and all other documents in
connection with the offering, sale or delivery of Securities to be disposed of
(including certificates representing the Securities), (d) messenger, telephone
and delivery expenses incurred by the Partnership, its counsel and auditors
relating to the offering, sale or delivery of Securities and the preparation of
documents referred in clause (c) above, (e) fees and expenses of the Trustee
under the Indenture, any agent of the Trustee and any counsel for the Trustee
and of any collateral agent or custodian, (f) internal expenses (including all
salaries and expenses of the Partnership's officers and employees performing
legal or accounting duties), (g) fees, disbursements and expenses of counsel and
independent certified public accountants of the Partnership (including the
expenses of any opinions or "cold comfort" letters required by or incident to
such performance and compliance), (h) fees, disbursements and expenses of one
counsel for the Electing Holders retained in connection with a Shelf
Registration, as selected by the Electing Holders of at least a majority in
aggregate principal amount of the Registrable Securities held by Electing
Holders (which counsel shall be reasonably satisfactory to the Partnership), (i)
any fees charged by securities rating services for rating the Securities, and
(j) fees, expenses and disbursements of any other persons, including special
experts, retained by the Partnership in connection with such registration
(collectively, the "Registration Expenses"). To the extent that any Registration
Expenses are reasonably incurred, assumed or paid by any holder of Registrable
Securities or any placement or sales agent therefor or underwriter thereof, the
Partnership shall reimburse such person for the full amount of the Registration
Expenses so incurred, assumed or paid promptly after receipt of a request
therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency fees and commissions, transfer
taxes, if any, and underwriting discounts and commissions attributable to the
sale of such Registrable Securities and the fees and disbursements of any
counsel or other advisors or experts retained by such holders (severally or
jointly), other than the counsel and experts specifically referred to above.
SECTION 5. Indemnification.
(a) Indemnification by the Partnership. The Partnership will
indemnify and hold harmless each of the holders of Registrable Securities
included in an Exchange Registration Statement, each of the Electing Holders of
Registrable Securities included in a Shelf Registration Statement and each
person who participates as a placement or sales agent or as an underwriter in
any offering or sale of such Registrable Securities against any losses, claims,
damages or liabilities, joint or several, to which such holder, agent or
underwriter may become subject under the Securities 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 Exchange Registration Statement or Shelf
Registration Statement, as the case may be, under which such Registrable
Securities were registered under the Securities Act, or any preliminary, final
or summary prospectus contained therein or furnished by the
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<PAGE> 19
Partnership to any such holder, Electing Holder, agent or underwriter, 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 such holder, such Electing Holder, such agent and such underwriter for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Partnership shall not be liable to any
such person 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 such registration statement or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Partnership by such person expressly for use
therein; and, provided further, that the Partnership shall not be liable to any
such person, to the extent that any such losses, claims, damages or liabilities
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact or omission or alleged omission if either (A)(i) such person
was required by law to send or deliver, and failed to send or deliver, a copy of
the prospectus with or prior to delivery of written confirmation of the sale by
such person to the person asserting the claims from which such losses, claims,
damages or liabilities arise and (ii) the prospectus previously delivered by the
Partnership to such person would have corrected such untrue statement or alleged
untrue statement or omission or alleged omission, (B)(i) such untrue statement
or alleged untrue statement or omission or alleged omission is corrected in an
amendment to the prospectus and (ii) having been previously furnished by or on
behalf of the Partnership with copies of the prospectus as so amended or
supplemented, such person failed to send or deliver a copy of such amendment to
the prospectus with or prior to the delivery of written confirmation of the sale
of a Registrable Security to the person asserting the claim from which such
losses, claims, damages or liabilities arise or (C)(i) such person disposed of
Registrable Securities to the person asserting the claim from which such losses,
claims, damages or liabilities arise pursuant to an Exchange Registration
Statement or Shelf Registration Statement and sent or delivered, or was required
by law to send or deliver, a prospectus to such person in connection with such
disposition, (ii) such person received a suspension notice as provided in
Sections 3(b)(iii)(C) through (E) and 3(c)(vii)(C) through (E) hereof in writing
at least one Business Day prior to the date of such disposition and (iii) such
untrue statement or alleged untrue statement or omission or alleged omission was
the reason for such suspension notice.
(b) Indemnification by the Holders and any Agents and
Underwriters. In the case of a Shelf Registration pursuant to Section 2(b)
hereof, each Electing Holder and each underwriter who participates as an
underwriter in any offering or sale of Registrable Securities to the Registrable
Securities, severally and not jointly, will (i) indemnify and hold harmless the
Partnership, and all other holders of Registrable Securities, against any
losses, claims, damages or liabilities to which the Partnership or such other
holders of Registrable Securities may become subject, under the Securities 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 such registration
statement, or any preliminary, final or summary prospectus contained therein or
furnished by the Partnership to any such Electing Holder,
19
<PAGE> 20
agent or underwriter, 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, 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 reliance upon and in conformity with written information furnished to the
Partnership by such Electing Holder or underwriter expressly for use therein,
and (ii) reimburse the Partnership for any legal or other expenses reasonably
incurred by the Partnership in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that no
such Electing Holder shall be required to undertake liability to any person
under this Section 5(b) for any amounts in excess of the dollar amount of the
proceeds to be received by such Electing Holder from the sale of such Electing
Holder's Registrable Securities pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of written notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of or contemplated by this Section 5, notify such
indemnifying party in writing of the commencement of such action; but the
omission so to notify the indemnifying party shall not relieve it from any
liability that it may have to any indemnified party otherwise than under the
indemnification provisions of or contemplated by Section 5(a) or 5(b) hereof. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such 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 reasonably 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, such indemnifying party shall not be liable to such indemnified party
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) Contribution. If for any reason the indemnification
provisions contemplated by Section 5(a) or Section 5(b) are unavailable to or
insufficient to hold harmless an indemnified party 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
20
<PAGE> 21
thereof) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and the indemnified party in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 5(d) were determined by
pro rata allocation (even if the holders or any agents or underwriters or all of
them were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in this Section 5(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 shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5(d), no holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such holder from the sale of any Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) exceeds the
amount of any damages that such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and no underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The holders' and any underwriters' obligations in this
Section 5(d) to contribute shall be several in proportion to the principal
amount of Registrable Securities registered or underwritten, as the case may be,
by them and not joint.
(e) The obligations of the Partnership under this Section 5
shall be in addition to any liability that the Partnership may otherwise have
and shall extend, upon the same terms and conditions, to each person, if any,
who controls any Electing Holder, sales agent or underwriter participating in
the sale of Registered Securities within the meaning of the Securities Act; and
the obligations of the holders and any agents or underwriters contemplated by
this Section 5 shall be in addition to any liability that the respective holder,
agent or underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Partnership (including any
person who, with his consent, is named in any registration statement as about to
become a director of the Partnership) and to each person, if any, who controls
the Partnership within the meaning of the Securities Act.
21
<PAGE> 22
SECTION 6. Underwritten Offerings.
(a) Selection of Underwriters. If any of the Registrable
Securities covered by the Shelf Registration are to be sold pursuant to an
underwritten offering, the managing underwriter or underwriters thereof shall be
designated by Electing Holders holding at least a majority in aggregate
principal amount of the Registrable Securities to be included in such offering,
provided, that such designated managing underwriter or underwriters is or are
reasonably acceptable to the Partnership.
(b) Participation by Holders. Each holder of Registrable
Securities hereby agrees with each other such holder that no such holder may
participate in any underwritten offering hereunder unless such holder (i) agrees
to sell such holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
SECTION 7. Rule 144.
The Partnership covenants to the holders of Registrable Securities that
to the extent it shall be required to do so under the Exchange Act, the
Partnership shall timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including the reports under Section 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted
by the Commission under the Securities Act), all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Partnership shall
advise such holder in writing as to whether the Partnership has complied with
such requirements.
SECTION 8. Miscellaneous.
(a) No Inconsistent Agreements. The Partnership represents,
warrants, covenants and agrees that, except pursuant to the Partnership
Agreement relating to the Partnership and granted in connection with the
acquisition of certain assets, it has not granted, and shall not grant,
registration rights with respect to Registrable Securities or any other
securities that would be inconsistent with the terms contained in this
Registration Rights Agreement.
(b) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if the Partnership fails to perform any
of its obligations hereunder and that the Purchasers and the holders from time
to time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Purchasers and such holders,
22
<PAGE> 23
in addition to any other remedy to which they may be entitled at law or
in equity, shall be entitled to compel specific performance of the obligations
of the Partnership under this Registration Rights Agreement in accordance with
the terms and conditions of this Registration Rights Agreement, in any court of
the United States or any state thereof having jurisdiction; provided, that, in
the case of any terms of this Registration Rights Agreement for which Additional
Interest pursuant to Section 2(c) hereof is expressly provided as a remedy of a
violation of such terms, such Additional Interest shall be the sole monetary
damages for such violation.
(c) Notices. All notices, requests, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, if delivered personally or by
courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested), or telecopied (when
receipt is acknowledged) as follows: if to the Partnership, 1301 McKinney
Street, Suite 3450, Houston, Texas 77010, Attention: Park Shaper, telecopier
number (713) 844-3781 (with a copy to the General Counsel), and, if to a holder,
to the address of such holder set forth in the security register or other
records of the Partnership, or to such other address as the Partnership or any
such holder may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
(d) Parties in Interest. All the terms and provisions of this
Registration Rights Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the parties hereto and the holders from time to
time of the Registrable Securities and the respective successors and assigns of
the parties hereto and such holders; provided, however, that nothing herein
shall be deemed to permit any transfer of Registrable Securities in violation of
this Agreement, the Indenture or applicable law. In the event that any
transferee of any holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of
any kind, be deemed a beneficiary hereof for all purposes and such Registrable
Securities shall be held subject to all of the terms of this Registration Rights
Agreement, and by taking and holding such Registrable Securities such transferee
shall be entitled to receive the benefits of, and be conclusively deemed to have
agreed to be bound by all of the applicable terms and provisions of this
Registration Rights Agreement. If the Partnership shall so request, any such
successor, assign or transferee shall agree in writing to acquire and hold the
Registrable Securities subject to all of the applicable terms hereof.
(e) Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this
Registration Rights Agreement or made pursuant hereto shall remain in full force
and effect regardless of any investigation (or statement as to the results
thereof) made by or on behalf of any holder of Registrable Securities, any
director, officer or partner of such holder, any agent or underwriter or any
director, officer or partner thereof, or any controlling person of any of the
foregoing, and shall survive delivery of and payment for the Registrable
Securities pursuant to the Purchase Agreement and the transfer and registration
of Registrable Securities by such holder and the consummation of an Exchange
Offer.
23
<PAGE> 24
(f) Governing Law. This Registration Rights Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
(g) Headings. The descriptive headings of the several Sections
and paragraphs of this Registration Rights Agreement are inserted for
convenience only, do not constitute a part of this Registration Rights Agreement
and shall not affect in any way the meaning or interpretation of this
Registration Rights Agreement.
(h) Entire Agreement; Amendments. This Registration Rights
Agreement and the other writings referred to herein (including the Indenture and
the form of Securities) or delivered pursuant hereto that form a part hereof
contain the entire understanding of the parties with respect to its subject
matter. This Registration Rights Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Registration Rights Agreement may be amended and the observance of any term of
this Registration Rights Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a written
instrument duly executed by the Partnership and the holders of at least a
majority in aggregate principal amount of the Registrable Securities at the time
outstanding (except with respect to Section 2(c) hereof, which may be amended
only with the consent of each holder of Registrable Securities at the time
outstanding). Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 8(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or is
delivered to such holder.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
(j) Counterparts. This agreement may be executed by the
parties in counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.
24
<PAGE> 25
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, being one for the Partnership, one
for each Purchaser and one for each counsel, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
between each of the Purchasers and the Partnership.
Very truly yours,
KINDER MORGAN ENERGY
PARTNERS, L.P.
By: Kinder Morgan G.P., Inc.,
its general partner
By: /s/ Joseph Listengart
------------------------------
Name: Joseph Listengart
Title: Vice President, General
Counsel and Secretary
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED & CO.
BANC OF AMERICA SECURITIES LLC
FIRST UNION SECURITIES, INC.
By: Goldman, Sachs & Co.
By: /s/ Goldman, Sachs & Co.
--------------------------
Name:
Title:
Signature Page
<PAGE> 26
EXHIBIT A
KINDER MORGAN ENERGY PARTNERS, L.P.
INSTRUCTION TO DTC PARTICIPANTS
[DATE OF MAILING]
URGENT -- IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]*
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in the Floating Rate Senior Notes
due 2002 and the 8% Senior Notes due 2005 (the "Securities") of Kinder Morgan
Energy Partners, L.P. (the "Partnership") are held.
The Partnership is in the process of registering the Securities under
the Securities Act of 1933 for resale by the beneficial owners thereof. In order
to have their Securities included in the registration statement, beneficial
owners must complete and return the enclosed Notice of Registration Statement
and Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a copy
of the enclosed materials as soon as possible as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire by [Deadline For Response]. Please forward a copy
of the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact Kinder Morgan
Energy Partners, L.P., 1301 McKinney Street, Suite 3450, Houston, Texas 77010,
Attention: General Counsel.
- ---------------
* Not less than 20 calendar days from date of mailing.
A-1
<PAGE> 27
KINDER MORGAN ENERGY PARTNERS, L.P.
NOTICE OF REGISTRATION STATEMENT
AND
SELLING SECURITYHOLDER QUESTIONNAIRE
[DATE]
Reference is hereby made to the Registration Rights Agreement (the
"Registration Rights Agreement") between Kinder Morgan Energy Partners, L.P.
(the "Partnership"), and the Purchasers named therein. Pursuant to the
Registration Rights Agreement, the Partnership has filed with the United States
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (the "Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"),
of the Partnership's Floating Rate Senior Notes due 2002 and 8% Senior Notes due
2005 (the "Securities"). A copy of the Registration Rights Agreement is attached
hereto. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities (as defined below) is
entitled to have the Registrable Securities beneficially owned by it included in
the Shelf Registration Statement. In order to have Registrable Securities
included in the Shelf Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire (the "Notice and
Questionnaire") must be completed, executed and delivered to the Partnership's
counsel at the address set forth herein for receipt ON OR BEFORE [Deadline for
Response]. Beneficial owners of Registrable Securities who do not complete,
execute and return this Notice and Questionnaire by such date (i) will not be
named as selling securityholders in the Shelf Registration Statement and (ii)
may not use the prospectus forming a part thereof for resales of Registrable
Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related prospectus.
A-2
<PAGE> 28
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 6 of the Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Partnership and Trustee the Notice of Transfer set forth in Appendix A to
the prospectus and as Exhibit B to the Registration Rights Agreement. The
Selling Securityholder hereby provides the following information to the
Partnership and represents and warrants that such information is accurate and
complete:
A-3
<PAGE> 29
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
-------------------
(b) Full Legal Name of Registered Holder (if not the same as in
(a) above) of Registrable Securities Listed in Item (3) below:
-------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not
the same as (b) above) Through Which Registrable Securities
Listed in Item (3) below are Held:
-------------------------------------------------------------
(2) Address for Notices to Selling Securityholder:
---------------------------------------------
---------------------------------------------
---------------------------------------------
Telephone:
------------------------------
Fax:
------------------------------
Contact Person:
------------------------------
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned
does not beneficially own any Securities.
(a) Principal amount of Registrable Securities beneficially
owned: Title and CUSIP No(s). of such Registrable Securities:
-------------------------------------------------------------
-------------------------------------------------------------
(b) Principal amount of Securities other than Registrable
Securities beneficially owned: Title and CUSIP No(s). of such
other Securities:
--------------------------------------------
--------------------------------------------
(c) Principal amount of Registrable Securities that the
undersigned wishes to be included in the Shelf Registration
Statement:
---------------------------------------------------
---------------------------------------------------
A-4
<PAGE> 30
(d) Title and CUSIP No(s). of such Registrable Securities to be
included in the Shelf Registration Statement:
-------------------------------------------------------------
-------------------------------------------------------------
(4) Beneficial ownership of Other Securities of the Partnership:
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any other
securities of the Partnership, other than the Securities listed above
in Item (3).
State any exceptions here:
(5) Relationships with the Partnership:
Except as set forth below, neither the Selling Securityholder nor any
of its affiliates, officers, directors or principal equity holders (5%
or more) has held any position or office or has had any other material
relationship with the Partnership (or its predecessors or affiliates)
during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(3) only as follows (if at all): Such Registrable Securities may be
sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters, broker-dealers
or agents. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which
may involve crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Registered
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv)
through the writing of options. In connection with sales of the
Registrable Securities or otherwise, the Selling Securityholder may
enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the Registrable Securities in the course of
hedging the positions they assume. The Selling Securityholder may also
sell Registrable Securities short and deliver Registrable Securities to
close out such short positions, or loan or pledge Registrable
Securities to broker-dealers that in turn may sell such securities.
State any exceptions here:
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply,
with the provisions of the Exchange Act and the rules and regulations
thereunder, particularly Regulation M.
A-5
<PAGE> 31
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after
the date on which such information is provided to the Partnership, the
Selling Securityholder agrees to notify the transferee(s) at the time
of the transfer of its rights and obligations under this Notice and
Questionnaire and the Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through
(6) above and the inclusion of such information in the Shelf
Registration Statement and related prospectus. The Selling
Securityholder understands that such information will be relied upon by
the Partnership in connection with the preparation of the Shelf
Registration Statement and related prospectus.
In accordance with the Selling Securityholder's obligation under
Section 3(e) of the Registration Rights Agreement to provide such
information as may be required by law for inclusion in the Shelf
Registration Statement, the Selling Securityholder agrees to promptly
notify the Partnership of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date
hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail
or air courier guaranteeing overnight delivery as follows:
(i) To the Partnership: Park Shaper, Chief Financial Officer
Kinder Morgan Energy Partners, L.P.
1301 McKinney Street, Suite 3450
Houston, Texas 77010
(ii) With a copy to: David L. Ronn
Bracewell & Patterson L.L.P.
South Tower Pennzoil Place
711 Louisiana, Suite 2900
Houston, Texas 77002-2718
Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Partnership's counsel, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives and assigns of the
Partnership and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above). This Agreement shall be governed in all respects by the laws of the
State of New York.
A-6
<PAGE> 32
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
-----------------
-----------------------------------------
Selling Securityholder
(Print/type full legal name of beneficial
owner of Registrable Securities)
By:
--------------------------------------
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE PARTNERSHIP'S COUNSEL AT:
- ----------------------------
A-7
<PAGE> 33
EXHIBIT B
NOTICE OF TRANSFER PURSUANT TO
REGISTRATION STATEMENT
Kinder Morgan Energy Partners, L.P.
c/o First Union National Bank
1001 Fannin, Suite 2255
Houston, Texas 77002
Attention: Trust Officer
Re: Kinder Morgan Energy Partners, L.P. (the "Partnership")
[Floating Rate Senior Notes due 2002]
[8% Senior Notes due 2005]
Dear Sirs:
Please be advised that ________________ has transferred
[$________________ aggregate principal amount of the above-referenced Floating
Rate Senior Notes due 2002] [and] [$____________ aggregate principal amount of
the above-referenced 8% Senior Notes due 2005] pursuant to an effective
Registration Statement on Form S-3 (File No. 333-________) filed by the
Partnership.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Securities is named as a "Selling Holder" in
the prospectus dated [date] or in supplements thereto, and that the aggregate
principal amount of the Securities transferred are the Securities listed in such
prospectus opposite such owner's name.
Dated:
----------------
Very truly yours,
---------------------------------------
(Name)
BY:
---------------------------------------
(Authorized Signature)
B-1
<PAGE> 1
EXHIBIT 5
April 17, 2000
Kinder Morgan Energy Partners, L.P.
1301 McKinney Street, Suite 3400
Houston, Texas 77010
Ladies and Gentlemen:
We have acted as counsel to Kinder Morgan Energy Partners, L.P. (the
"Partnership"), a Delaware limited partnership, in connection with the offers by
the Partnership to exchange $1,000 principal amount of its Floating Rate Senior
Exchange Notes due 2002 and its 8% Senior Exchange Notes due 2005 (collectively,
the "Exchange Notes") for each $1,000 principal amount, respectively, of its
Floating Rate Senior Notes due 2002 and its 8% Senior Notes due 2005
(collectively, the "Original Notes"), of which an aggregate of $200,000,000
principal amount of each series of Original Notes is outstanding (the "Exchange
Offers"). The Partnership has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-4 with respect to the
Exchange Offers (the "Registration Statement"), under the Securities Act of
1933, as amended (the "Securities Act").
We have examined originals or copies certified by officers of the Partnership of
(a) the Indenture, dated as of March 22, 2000 (the "Indenture"), by and between
the Partnership and First Union National Bank, as Trustee (the "Trustee"),
pursuant to which the Original Notes were issued and the Exchange Notes will be
issued, (a) the Certificate of Limited Partnership of the Partnership, (b) the
Second Amended and Restated Agreement of the Partnership dated January 14, 1998,
and Amendment No. 1 to the Second Amended and Restated Agreement of Limited
Partnership of the Partnership dated January 20, 2000, (c) certified copies of
certain resolutions adopted by the Board of Directors of Kinder Morgan G.P.,
Inc., the general partner of the Partnership ("KMGP"), and (e) such other
documents and records as we have deemed necessary and relevant for the purposes
hereof. In addition, we have relied on certificates of officers of KMGP and of
public officials and others as to certain matters of fact relating to this
opinion and have made such investigations of law as we have deemed necessary and
relevant as a basis hereof. In such examination, we have assumed the genuineness
of all signatures, the authenticity of all documents and records submitted to us
as copies, the conformity to authentic original documents and records of all
documents and records submitted to us as copies, and the truthfulness of all
statements of fact contained therein. We have also assumed the due execution and
delivery of the Indenture by a duly authorized officer of the Trustee.
<PAGE> 2
Kinder Morgan Energy Partners, L.P.
April 17, 2000
Page 2
Based on the foregoing, subject to the limitations, assumptions and
qualifications set forth herein, and having due regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. the Partnership is a limited partnership, validly existing and
in good standing under the laws of the State of Delaware; and
2. the Original Notes and the Exchange Notes have been validly
authorized and issued, and (subject to the Registration
Statement becoming effective, the Indenture being qualified
under the Trust Indenture Act of 1939 and any state securities
or Blue Sky laws being complied with) when (i) the Exchange
Notes have been duly executed by duly authorized officers of
KMGP, (ii) the Exchange Notes have been duly authenticated by
the Trustee under the Indenture, and (iii) the Original Notes
have been validly tendered and not withdrawn and have been
received and accepted by the Partnership, all in accordance
with the terms of the Exchange Offers as set forth in the
Registration Statement, the Exchange Notes issued in exchange
for the Original Notes of each series in accordance with the
terms of the Exchange Offer to which each series of Exchange
Notes relate will be validly issued and legally binding
obligations of the Partnership entitled to the benefits of the
Indenture.
We hereby consent to the filing of this opinion with the Commission as Exhibit 5
to the Registration Statement and to the references to our firm under the
heading "Validity of the Exchange Notes" in the Prospectus included in the
Registration Statement. By giving such consent, we do not admit that we are
experts with respect to any part of the Registration Statement, including this
Exhibit, within the meaning of the term "expert" as used in the Securities Act
or the rules and regulations thereunder.
Very truly yours,
/s/ Bracewell & Patterson, L.L.P.
<PAGE> 1
EXHIBIT 8
April 17, 2000
Kinder Morgan Energy Partners, L.P.
1301 McKinney Street, Suite 3400
Houston, Texas 77010
Ladies and Gentlemen:
We have acted as counsel to Kinder Morgan Energy Partners, L.P. (the
"Partnership"), a Delaware limited partnership, in connection with the offers by
the Partnership to exchange $1,000 principal amount of its Floating Rate Senior
Exchange Notes due 2002 and its 8% Senior Exchange Notes due 2005 (collectively,
the "Exchange Notes") for each $1,000 principal amount, respectively, of its
Floating Rate Senior Notes due 2002 and its 8% Senior Notes due 2005
(collectively, the "Original Notes"), of which an aggregate of $200,000,000
principal amount of each series of Original Notes is outstanding (the "Exchange
Offers"). The Exchange Notes and the Original Notes are referred to herein
collectively as the "Notes." The Partnership has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-4 with
respect to the Exchange Offers (the "Registration Statement"), under the
Securities Act of 1933, as amended (the "Securities Act").
We have examined originals or copies of the Registration Statement and such
other documents and records as we have deemed necessary and relevant for the
purposes hereof. In addition, we have relied on certificates of officers of
Kinder Morgan G.P., Inc., the general partner of the Partnership, and of public
officials and others as to certain matters of fact relating to this opinion and
have made such investigations of law as we have deemed necessary and relevant as
a basis hereof. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents and records submitted to us as
copies, the conformity to authentic original documents and records of all
documents and records submitted to us as copies, and the truthfulness of all
statements of fact contained therein.
On the basis of the foregoing and upon consideration of applicable law, we are
of the opinion that, subject to the qualifications stated therein, the
discussion as to the United States federal income tax matters set forth under
the caption "Certain Federal Income Tax Considerations" in the Prospectus
contained in the Registration Statement summarizes the material United States
federal income tax consequences relevant to the Exchange Offer and to the
purchase, ownership and disposition of the Notes.
<PAGE> 2
Kinder Morgan Energy Partners, L.P.
April 17, 2000
Page 2
We hereby consent to the filing of this opinion with the Commission as Exhibit 8
to the Registration Statement and to the references to our firm under the
heading "Certain Federal Income Tax Considerations" in the Prospectus included
in the Registration Statement. By giving such consent, we do not admit that we
are experts with respect to any part of the Registration Statement, including
this Exhibit, within the meaning of the term "expert" as used in the Securities
Act or the rules and regulations thereunder.
Very truly yours,
/s/ Bracewell & Patterson, L.L.P.
<PAGE> 1
EXHIBIT 12
Kinder Morgan Energy Partners, L.P.
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Proforma |
for the |
Year Ended | Historical
December 31, | Year Ended December 31,
---------------------------------------------------------------------------------
1999 | 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------
|
<S> <C> | <C> <C> <C> <C> <C>
Earnings $336,971 | $246,972 $155,331 $33,618 $27,114 $25,514
|
Fixed Charges $ 81,583 | $ 56,213 $ 42,355 $12,578 $12,634 $12,455
|
Ratio of Earnings to Fixed Charges 4.13 | 4.39 3.67 2.67 2.15 2.05
</TABLE>
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Kinder Morgan Energy Partners, L.P. of (1) our report
dated March 10, 2000 relating to the financial statements, which appears in
Kinder Morgan Energy Partners L.P.'s Annual Report on Form 10-K for the year
ended December 31, 1999; (2) our reports dated March 27, 2000 relating to the
financial statements of Trailblazer Pipeline Company and Kinder Morgan
Interstate Gas Transmission LLC, which appear in Kinder Morgan Energy Partners
L.P.'s Current Report on Form 8-K/A dated March 28, 2000; and (3) our report
dated March 30, 2000 relating to the balance sheet of Kinder Morgan G.P., Inc.,
which appears in Kinder Morgan Energy Partners L.P.'s Current Report on Form
8-K dated March 30, 2000. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Houston, Texas
April 18, 2000
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated March 24, 2000
on the financial statements of Red Cedar Gathering Company included in the
Current Report on Form 8-K/A of Kinder Morgan Energy Partners, L.P. dated March
28, 2000.
/s/ Arthur Andersen LLP
Denver, Colorado,
April 17, 2000.
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer or
director of Kinder Morgan G.P., Inc., a Delaware corporation, which is the
general partner of Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership (the "Partnership"), hereby constitutes and appoints Joseph
Listengart and C. Park Shaper, and each of them (with full power to each of them
to act alone), the undersigned's true and lawful attorney-in-fact and agent, for
the undersigned and on the undersigned's behalf and in the undersigned's name,
place and stead, in any and all capacities, to sign, execute and file with the
Securities and Exchange Commission the Partnership's Registration Statement on
Form S-4 (or other appropriate form), together with all amendments thereto, with
all exhibits and any and all documents required to be filed with respect thereto
with any regulatory authority, granting unto said attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 17th day of April, 2000.
/s/William V. Morgan
--------------------------------
William V. Morgan
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer or
director of Kinder Morgan G.P., Inc., a Delaware corporation, which is the
general partner of Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership (the "Partnership"), hereby constitutes and appoints Joseph
Listengart and C. Park Shaper, and each of them (with full power to each of them
to act alone), the undersigned's true and lawful attorney-in-fact and agent, for
the undersigned and on the undersigned's behalf and in the undersigned's name,
place and stead, in any and all capacities, to sign, execute and file with the
Securities and Exchange Commission the Partnership's Registration Statement on
Form S-4 (or other appropriate form), together with all amendments thereto, with
all exhibits and any and all documents required to be filed with respect thereto
with any regulatory authority, granting unto said attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 17th day of April, 2000.
/s/Gary L. Hultquist
--------------------------------
Gary L. Hultquist
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer or
director of Kinder Morgan G.P., Inc., a Delaware corporation, which is the
general partner of Kinder Morgan Energy Partners, L.P., a Delaware limited
partnership (the "Partnership"), hereby constitutes and appoints Joseph
Listengart and C. Park Shaper, and each of them (with full power to each of them
to act alone), the undersigned's true and lawful attorney-in-fact and agent, for
the undersigned and on the undersigned's behalf and in the undersigned's name,
place and stead, in any and all capacities, to sign, execute and file with the
Securities and Exchange Commission the Partnership's Registration Statement on
Form S-4 (or other appropriate form), together with all amendments thereto, with
all exhibits and any and all documents required to be filed with respect thereto
with any regulatory authority, granting unto said attorneys, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, may lawfully do or
cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 17th day of April, 2000.
/s/Edward O. Gaylord
--------------------------------
Edward O. Gaylord
<PAGE> 1
EXHIBIT 25
Registration No. 333-
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _____
First Union National Bank
(Exact name of trustee as specified in its charter)
United States of America
(Jurisdiction of incorporation or organization if not a U.S. national bank)
22-1147033
(I.R.S. Employer Identification Number)
One First Union
301 South College Street
Charlotte, North Carolina
(Address of principal executive offices)
28288
(Zip code)
Kevin M. Dobrava
First Union National Bank
Corporate Trust Department
1001 Fannin Street, Suite 2255
Houston, Texas 77002
(713) 346-2745
(Name, address and telephone number of agent for service)
Kinder Morgan Energy Partners, L.P.
(Exact name of each obligor as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
76-0380342
(I.R.S. Employer Identification No.)
1301 McKinney Street, Suite 3400
Houston, Texas
(713) 844-9500
(Address of principal executive offices)
77010
(Zip code)
Kinder Morgan Energy Partners, L.P.
Floating Rate Senior Notes Due 2002
And
8% Senior Notes due 2005
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. Furnish the following information as to the
trustee:
a. Name and address of each examining or supervising authority to which it is
subject.
<TABLE>
NAME ADDRESS
<S> <C>
Board of Governors of the Federal Washington, D.C.
Reserve System
Comptroller of the Currency Washington, D.C.
Federal Deposit Insurance Washington, D.C.
Corporation
</TABLE>
b. Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
Item 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the
trustee, describe each such affiliation.
The obligor is not an affiliate of the trustee. (See Note 1 on page 6.)
Item 3. VOTING SECURITIES OF THE TRUSTEE. Furnish the following information as
to each class of voting securities of the trustee:
As of March 9, 2000 (Insert date within 31 days).
<TABLE>
<CAPTION>
<S> <C>
COL. A COL. B
TITLE OF CLASS AMOUNT OUTSTANDING
Common Stock 987,700,000
(See Note 1 on page 6)
</TABLE>
Item 4. TRUSTEESHIPS UNDER OTHER INDENTURES. If the trustee is a trustee under
another indenture under which any other securities, or certificates of interest
or participation in any other securities, of the obligor are outstanding,
furnish the following information:
a. Title of the securities outstanding under each such other indenture.
Not Applicable.
b. A brief statement of the facts relied upon as a basis for the claim that no
conflicting interest within the meaning of Section 310(b)(1) of the Act arises
as a result of the trusteeship under any such other indenture, including a
statement as to how the indenture securities will rank as compared with the
securities issued under such other indenture.
Not Applicable.
Item 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS. If the trustee or any of the directors or executive officers of
the trustee is a director, officer, partner, employee, appointee, or
representative of the obligor of any underwriter for the obligor, identify each
such person having any such connection and state the nature of each such
connection.
Not Applicable - see answer to Item 13 and 14.
Item 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
Furnish the following information as to the voting securities of the trustee
owned
<PAGE> 3
beneficially by the obligor and each director, partner, and executive officer of
the obligor.
As of (Insert date within 31 days).
----------------
<TABLE>
<S> <C> <C> <C>
COL. D
COL. C PERCENTAGE OF VOTING
SECURITIES
COL. A COL. B AMOUNT OWNED REPRESENTED BY AMOUNT GIVEN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY IN COL. C
</TABLE>
Not Applicable.
Item 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS. Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter:
As of (Insert date within 31 days).
------------------
<TABLE>
<S> <C> <C> <C>
COL. D
COL. C PERCENTAGE OF VOTING
SECURITIES
COL. A COL. B AMOUNT OWNED REPRESENTED BY AMOUNT GIVEN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY IN COL. C
</TABLE>
Not Applicable - see answer to Item 13 and 14.
Item 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE. Furnish the
following information as to securities of the obligor owned beneficially or held
as collateral security for obligations in default by the trustee:
As of (Insert date within 31 days).
------------------
<TABLE>
<S> <C> <C> <C>
COL. C
AMOUNT OWNED COL.
COL. B BENEFICIALLY OR PERCENT OF CLASS
WHETHER THE SECURITIES HELD AS COLLATERAL REPRESENTED BY
COL. A ARE VOTING OR SECURITY FOR AMOUNT GIVEN
TITLE OF CLASS NONVOTING SECURITIES OBLIGATIONS IN DEFAULT IN COL. C
</TABLE>
Not Applicable.
Item 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE. If the trustee
owns beneficially or hold as collateral security for obligations in default any
securities of an underwriter for the obligor, furnish the following information
as to each class of securities of such underwriter any of which are so owned or
held by the trustee:
As of (Insert date within 31 days).
-----------------
<TABLE>
<S> <C> <C> <C>
COL. C COL. D
AMOUNT OWNED BENEFICIALLY PERCENT OF CLASS
COL. A COL. B OR HELD AS COLLATERAL REPRESENTED BY
TITLE OF ISSUER AMOUNT SECURITY FOR OBLIGATIONS AMOUNT GIVEN
AND TITLE OF CLASS OUTSTANDING IN DEFAULT BY TRUSTEE IN COL. C
</TABLE>
Not Applicable - see answer to Item 13 and 14.
<PAGE> 4
Item 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR. If the trustee owns beneficially
or holds as collateral security for obligations in default voting securities of
a person who, to the knowledge of the trustee (1) owns 10 percent or more of the
voting securities of the obligor or (2) is an affiliate, other than a
subsidiary, of the obligor, furnish the following information as to the voting
securities of such person:
As of (Insert date within 31 days).
------------------
<TABLE>
<S> <C> <C> <C>
COL. C COL. D
AMOUNT OWNED BENEFICIALLY PERCENT OF CLASS
COL. A COL. B OR HELD AS COLLATERAL REPRESENTED BY
TITLE OF ISSUER AMOUNT SECURITY FOR OBLIGATIONS AMOUNT GIVEN
AND TITLE OF CLASS OUTSTANDING IN DEFAULT BY TRUSTEE IN COL. C
</TABLE>
Not Applicable - see answer to Item 13 and 14.
Item 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR. If the
trustee owns beneficially or holds as collateral security for obligations in
default any securities of a person who, to the knowledge of the trustee, owns 50
percent or more of the voting securities of the obligor, furnish the following
information as to each class of securities of such person any of which are so
owned or held by the trustee:
As of (Insert date within 31 days).
------------------
<TABLE>
<S> <C> <C> <C>
COL. C COL. D
AMOUNT OWNED BENEFICIALLY PERCENT OF CLASS
COL. A COL. B OR HELD AS COLLATERAL REPRESENTED BY
TITLE OF ISSUER AMOUNT SECURITY FOR OBLIGATIONS AMOUNT GIVEN
AND TITLE OF CLASS OUTSTANDING IN DEFAULT BY TRUSTEE IN COL. C
</TABLE>
Not Applicable - See answer to Item 13 and 14.
Item 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE. Except as noted in the
instructions, if the obligor is indebted to the trustee, furnish the following
information:
As of March 13, 2000 (Insert date within 31 days).
------------------
<TABLE>
<CAPTION>
<S> <C> <C>
COL. A COL. B COL. C
NATURE OF INDEBTEDNESS AMOUNT OUTSTANDING DATE DUE
$200,000,000 Credit Agreement $10,985,000 July 26, 2000
$350,000,000 Credit Agreement $18,725,715 July 28, 2001
</TABLE>
Item 13 DEFAULTS BY THE OBLIGOR.
a. State whether there is or has been a default with respect to the securities
under this indenture. Explain the nature of any such default.
None.
b. If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
Not Applicable.
<PAGE> 5
Item 14. AFFILIATIONS WITH THE UNDERWRITERS. If any underwriter is an affiliate
of the trustee, describe each such affiliation.
First Union National Bank and First Union Securities, Inc. (One of the
Underwriters of the Notes being issued under the Indenture) are both
principal subsidiaries of First Union Corporation.
Item 15. FOREIGN TRUSTEE. Identify the order or rule pursuant to which the
foreign trustee is authorized to act as sole trustee under indentures qualified
or to be qualified under the Act.
Not Applicable.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this
statement of eligibility.
1. Articles of Association of First Union National Bank as now in
effect.*
2. Certificate of Authority of the trustee to commence business.*
3. Copy of the authorization of the trustee to exercise corporate
trust powers.*
4. Existing bylaws of the trustee.
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
- ------------------------
* Previously filed with the Securities and Exchange Commission as an
Exhibit to Form T-1 in connection with Registration Statement Number 333-47985
incorporated herein by reference.
NOTES:
Note 1: The trustee is a subsidiary of First Union Corporation, a bank
holding company; all of the voting securities of the trustee are held by First
Union Corporation. The voting securities of First Union Corporation are
described in Item 3.
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, First Union National Bank, a national banking association [state form
of organization] organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the city of
Houston, and State [or other jurisdiction] of Texas, on the 27th day of March ,
2000.
FIRST UNION NATIONAL BANK
(Trustee)
By: /s/ Kevin M. Dobrava
---------------------------------
Kevin M. Dobrava, Vice President
(Name and Title)
<PAGE> 7
EXHIBIT 6
First Union National Bank, pursuant to the requirements of Section 321(b)
of the Trust Indenture Act of 1939, as amended (the "Act") in connection with
the proposed issuance by Kinder Morgan Energy Partners, L.P.., of its debt
securities to be issued hereby consents that reports of examination by federal,
state, territorial, or district authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor, as contemplated
by Section 321(b) of the Act.
Dated: March 22, 2000
FIRST UNION NATIONAL BANK
By: /s/ Kevin M. Dobrava
-----------------------------------------
Kevin M. Dobrava,
Vice President
<PAGE> 8
EXHIBIT 4
BY-LAWS OF
FIRST UNION NATIONAL BANK
Charter No. 1
Effective May 18, 1998
<PAGE> 9
BY-LAWS OF
FIRST UNION NATIONAL BANK
ARTICLE I
Meetings of Shareholders
Section 1.1 Annual Meeting. The annual meeting of the shareholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held on the third Tuesday of April in
each year, commencing with the year 1998, except that the Board of Directors
may, from time to time and upon passage of a resolution specifically setting
forth its reasons, set such other date for such meeting during the month of
April as the Board of Directors may deem necessary or appropriate; provided,
however, that if an annual meeting would otherwise fall on a legal holiday, then
such annual meeting shall be held on the second business day following such
legal holiday. The holders of a majority of the outstanding shares entitled to
vote which are represented at any meeting of the shareholders may choose persons
to act as Chairman and as Secretary of the meeting.
Section 1.2 Special Meetings. Except as otherwise specifically provided by
statute, special meetings of the shareholders may be called for any purpose at
any time by the Board of Directors or by any three or more shareholders owning,
in the aggregate, not less than ten percent of the stock of the Association.
Every such special meeting, unless otherwise provided by law, shall be called by
mailing, postage prepaid, not less than ten days prior to the date fixed for
such meeting, to each shareholder at his address appearing on the books of the
Association, a notice stating the purpose of the meeting.
Section 1.3 Nominations for Directors. Nominations for election to the
Board of Directors may be made by the Board of Directors or by any stockholder
of any outstanding class of capital stock of the bank entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the bank, shall be made in writing and shall be delivered
or mailed to the President of the Bank and to the Comptroller of the Currency,
Washington, D. C., not less than 14 days nor more than 50 days prior to any
meeting of stockholders called for the election of directors, provided however,
that if less than 21 days' notice of such meeting is given to shareholders, such
nomination shall be mailed or delivered to the President of the Bank and to the
Comptroller of the Currency not later than the close of business on the seventh
day following the day on which the notice of meeting was mailed. Such
notification shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the bank that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the bank owned by the notifying
shareholder. Nominations not made in accordance herewith may, in his discretion,
be disregarded by the chairman of the meeting, and upon his instructions, the
vote tellers may disregard all votes cast for each such nominee.
Section 1.4 Judges of Election. The Board may at any time appoint from
among the shareholders three or more persons to serve as Judges of Election at
any meeting
9
<PAGE> 10
of shareholders; to act as judges and tellers with respect to all votes by
ballot at such meeting and to file with the Secretary of the meeting a
Certificate under their hands, certifying the result thereof.
Section 1.5 Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this Association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and shall be filed with the records of the meeting.
Section 1.6 Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
Directors
Section 2.1 Board of Directors. The Board of Directors (hereinafter
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law, all
corporate powers of the Association shall be vested in and may be exercised by
said Board.
Section 2.2 Number. The Board shall consist of not less than five nor more
than twenty-five directors, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full Board or by resolution of the shareholders at any meeting thereof;
provided, however, that a majority of the full Board of Directors may not
increase the number of directors to a number which, (1) exceeds by more than two
the number of directors last elected by shareholders where such number was
fifteen or less, and (2) to a number which exceeds by more than four the number
of directors last elected by shareholders where such number was sixteen or more,
but in no event shall the number of directors exceed twenty-five.
Section 2.3 Organization Meeting. The Secretary of the meeting upon
receiving the certificate of the judges, of the result of any election, shall
notify the directors-elect of their election and of the time at which they are
required to meet at the Main Office of the Association for the purpose of
organizing the new Board and electing and appointing officers of the Association
for the succeeding year. Such meeting shall be held as soon thereafter as
practicable. If, at the time fixed for such meeting, there shall not be a quorum
present, the directors present may adjourn the meeting from time to time, until
a quorum is obtained.
Section 2.4 Regular Meetings. Regular meetings of the Board of Directors
shall be held at such place and time as may be designated by resolution of the
Board of Directors. Upon adoption of such resolution, no further notice of such
meeting dates or the places or times thereof shall be required. Upon the failure
of the Board of Directors to adopt such a resolution, regular meetings of the
Board of Directors shall be held, without notice, on the third Tuesday in
February, April, June, August, October and December, commencing with the year
1997, at the main office or at such other place and time as may be designated by
the Board of Directors. When any regular meeting of the Board would otherwise
fall on a holiday, the meeting shall be held on the next business day unless the
Board shall designate some other day.
10
<PAGE> 11
Section 2.5 Special Meetings. Special meetings of the Board of Directors
may be called by the President of the Association, or at the request of three
(3) or more directors. Each member of the Board of Directors shall be given
notice stating the time and place, by telegram, letter, or in person, of each
such special meeting.
Section 2.6 Quorum. A majority of the directors shall constitute a quorum
at any meeting, except when otherwise provided by law; but a less number may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice.
Section 2.7 Vacancies. When any vacancy occurs among the directors, the
remaining members of the Board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose.
Section 2.8 Advisory Boards. The Board of Directors may appoint Advisory
Boards for each of the states in which the Association conducts operations. Each
such Advisory Board shall consist of as many persons as the Board of Directors
may determine. The duties of each Advisory Board shall be to consult and advise
with the Board of Directors and senior officers of the Association in such state
with regard to the best interests of the Association and to perform such other
duties as the Board of Directors may lawfully delegate. The senior officer in
such state, or such officers as directed by such senior officer, may appoint
advisory boards for geographic regions within such state and may consult with
the State Advisory Boards prior to such appointments.
ARTICLE III
Committees of the Board
Section 3.1 The Board of Directors, by resolution adopted by a majority of
the number of directors fixed by these By-Laws, may designate two or more
directors to constitute an Executive Committee and other committees, each of
which, to the extent authorized by law and provided in such resolution, shall
have and may exercise all of the authority of the Board of Directors and the
management of the Association. The designation of any committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility or liability imposed
upon it or any member of the Board of Directors by law. The Board of Directors
reserves to itself alone the power to act on (1) dissolution, merger or
consolidation, or disposition of substantially all corporate property, (2)
designation of committees or filling vacancies on the Board of Directors or on a
committee of the Board (except as hereinafter provided), (3) adoption, amendment
or repeal of By-laws, (4) amendment or repeal of any resolution of the Board
which by its terms is not so amendable or repealable, and (5) declaration of
dividends, issuance of stock, or recommendations to stockholders of any action
requiring stockholder approval.
The Board of Directors or the Chairman of the Board of Directors of the
Association may change the membership of any committee at any time, fill
vacancies therein, discharge any committee or member thereof either with or
without cause at any time, and change at any time the authority and
responsibility of any such committee.
A majority of the members of any committee of the Board of Directors may
fix such committee's rules of procedure. All action by any committee shall be
reported to the Board of Directors at a meeting succeeding such action, except
such actions as the Board may not
11
<PAGE> 12
require to be reported to it in the resolution creating any such committee. Any
action by any committee shall be subject to revision, alteration, and approval
by the Board of Directors, except to the extent otherwise provided in the
resolution creating such committee; provided, however, that no rights or acts of
third parties shall be affected by any such revision or alteration.
ARTICLE IV
Officers and Employees
Section 4.1 Officers. The officers of the Association may be a Chairman of
the Board, a Vice Chairman of the Board, one or more Chairmen or Vice Chairmen
(who shall not be required to be directors of the Association), a President, one
or more Vice Presidents, a Secretary, a Cashier or Treasurer, and such other
officers, including officers holding similar or equivalent titles to the above
in regions, divisions or functional units of the Association, as may be
appointed by the Board of Directors. The Chairman of the Board and the President
shall be members of the Board of Directors. Any two or more offices may be held
by one person, but no officer shall sign or execute any document in more than
one capacity.
Section 4.2 Election, Term of Office, and Qualification. Each officer shall
be chosen by the Board of Directors and shall hold office until the annual
meeting of the Board of Directors held next after his election or until his
successor shall have been duly chosen and qualified, or until his death, or
until he shall resign, or shall have been disqualified, or shall have been
removed from office.
Section 4.2(a) Officers Acting as Assistant Secretary. Notwithstanding
Section 1 of these By-laws, any Senior Vice President, Vice President, or
Assistant Vice President shall have, by virtue of his office, and by authority
of the By-laws, the authority from time to time to act as an Assistant Secretary
of the Bank, and to such extent, said officers are appointed to the office of
Assistant Secretary.
Section 4.3 Chief Executive Officer. The Board of Directors shall designate
one of its members to be the President of this Association, and the officer so
designated shall be an ex officio member of all committees of the Association
except the Examining Committee, and its Chief Executive Officer unless some
other officer is so designated by the Board of Directors.
Section 4.4 Duties of Officers. The duties of all officers shall be
prescribed by the Board of Directors. Nevertheless, the Board of Directors may
delegate to the Chief Executive Officer the authority to prescribe the duties of
other officers of the corporation not inconsistent with law, the charter, and
these By-laws, and to appoint other employees, prescribe their duties, and to
dismiss them. Notwithstanding such delegation of authority, any officer or
employee also may be dismissed at any time by the Board of Directors.
Section 4.5 Other Employees. The Board of Directors may appoint from time
to time such tellers, vault custodians, bookkeepers, and other clerks, agents,
and employees as it may deem advisable for the prompt and orderly transaction of
the business of the Association, define their duties, fix the salary to be paid
them, and dismiss them. Subject to the authority of the Board of Directors, the
Chief Executive Officer or any other officer of the Association authorized by
him, may appoint and dismiss all such tellers, vault custodians, bookkeepers and
other clerks, agents, and employees, prescribe their duties and the conditions
of their employment, and from time to time fix their compensation.
12
<PAGE> 13
Section 4.6 Removal and Resignation. Any officer or employee of the
Association may be removed either with or without cause by the Board of
Directors. Any employee other than an officer elected by the Board of Directors
may be dismissed in accordance with the provisions of the preceding Section 4.5.
Any officer may resign at any time by giving written notice to the Board of
Directors or to the Chief Executive Officer of the Association. Any such
resignation shall become effective upon its being accepted by the Board of
Directors, or the Chief Executive Officer.
ARTICLE V
Fiduciary Powers
Section 5.1 Capital Management Group. There shall be an area of this
Association known as the Capital Management Group which shall be responsible for
the exercise of the fiduciary powers of this Association. The Capital Management
Group shall consist of four service areas: Fiduciary Services, Retail Services,
Investments and Marketing. The Fiduciary Services unit shall consist of personal
trust, employee benefits, corporate trust and operations. The General Office for
the Fiduciary Services unit shall be located in Charlotte, N.C., with City Trust
Offices located in such cities within the State of North Carolina as designated
by the Board of Directors.
Section 5.2 Trust Officers. There shall be a General Trust Officer of this
Association whose duties shall be to manage, supervise and direct all the
activities of the Capital Management Group. Further, there shall be one or more
Senior Trust Officers designated to assist the General Trust Officer in the
performance of his duties. They shall do or cause to be done all things
necessary or proper in carrying out the business of the Capital Management Group
in accordance with provisions of applicable law and regulation.
Section 5.3 Capital Management/General Trust Committee. There shall be a
Capital Management/General Trust Committee composed of not less than four (4)
members of the Board of Directors or officers of this Association who shall be
appointed annually or from time to time by the Board of Directors of the
Association. The General Trust Officer shall serve as an ex-officio member of
the Committee. Each member shall serve until his successor is appointed. The
Board of Directors or the Chairman of the Board may change the membership of the
Capital Management/General Trust Committee at any time, fill vacancies therein,
or discharge any member thereof with or without cause at any time. The Committee
shall counsel and advise on all matters relating to the business or affairs of
the Capital Management Group and shall adopt overall policies for the conduct of
the business of the Capital Management Group including but not limited to:
general administration, investment policies, new business development, and
review for approval of major assignments of functional responsibilities. The
Committee shall meet at least quarterly or as called for by its Chairman or any
three (3) members of the Committee. A quorum shall consist of three (3) members.
In carrying out its responsibilities, the Capital Management/General Trust
Committee shall review the actions of all officers, employees and committees
utilized by this Association in connection with the activities of the Capital
Management Group and may assign the administration and performance of any
fiduciary powers or duties to any of such officers or employees or to the
Investment Policy Committee, Personal Trust Administration Committee, Account
Review Committee, Corporate and Institutional Accounts Committee, or any other
committees it shall designate. One of the methods to be used in the review
process will be the thorough scrutiny of the Report of Examination by the Office
of the Comptroller of the Currency and the reports of the Audit Division of
First Union Corporation, as they relate to the activities of the Capital
Management Group. These reviews shall be in addition to reviews of such reports
by the Audit Committee of the Board of Directors. The Chairman of the Capital
Management/ General Trust Committee
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<PAGE> 14
shall be appointed by the Chairman of the Board of Directors. He shall cause to
be recorded in appropriate minutes all actions taken by the Committee. The
minutes shall be signed by its Secretary and approved by its Chairman. Further,
the Committee shall summarize all actions taken by it and shall submit a report
of its proceedings to the Board of Directors at its next regularly scheduled
meeting following a meeting of the Capital Management/General Trust Committee.
As required by Section 9.7 of Regulation 9 of the Comptroller of the Currency,
the Board of Directors retains responsibility for the proper exercise of the
fiduciary powers of this Association.
The Fiduciary Services unit of the Capital Management Group will maintain a
list of securities approved for investment in fiduciary accounts and will from
time to time provide the Capital Management/General Trust Committee with current
information relative to such list and also with respect to transactions in other
securities not on such list. It is the policy of this Association that members
of the Capital Management/General Trust Committee should not buy, sell or trade
in securities which are on such approved list or in any other securities in
which the Fiduciary Services unit has taken, or intends to take, a position in
fiduciary accounts in any circumstances in which any such transaction could be
viewed as a possible conflict of interest or could constitute a violation of
applicable law or regulation. Accordingly, if any such securities are owned by
any member of the Capital Management/General Trust Committee at the time of
appointment to such Committee, the Capital Management Group shall be promptly so
informed in writing. If any member of the Capital Management/General Trust
Committee intends to buy, sell, or trade in any such securities while serving as
a member of the Committee, he should first notify the Capital Management Group
in order to make certain that any proposed transaction will not constitute a
violation of this policy or of applicable law or regulation.
Section 5.4 Investment Policy Committee. There shall be an Investment
Policy Committee composed of not less than seven (7) officers and/or employees
of this Association who shall be appointed annually or from time to time by the
Board of Directors. Each member shall serve until his successor is appointed.
Meetings shall be called by the Chairman or any two (2) members of the
Committee. A quorum shall consist of five (5) members. The Investment Policy
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All actions
taken by the Investment Policy Committee shall be recorded in appropriate
minutes, signed by the Secretary thereof, approved by its Chairman and submitted
to the Capital Management/General Trust Committee at its next ensuing regular
meeting for its review and approval.
Section 5.5 Personal Trust Administration Committee. There shall be a
Personal Trust Administration Committee composed of not less than five (5)
officers, who shall be appointed annually or from time to time by the Board of
Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any three (3) members of the Committee. A
quorum shall consist of three (3) members. The Personal Trust Administration
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All action
taken by the Personal Trust Administration Committee shall be recorded in
appropriate minutes signed by the Secretary thereof, approved by its Chairman,
and submitted to the Capital Management/General Trust Committee at its next
ensuing regular meeting for its review and approval.
Section 5.6 Account Review Committee. There shall be an Account Review
Committee composed of not less than four (4) officers and/or employees of this
Association, who shall be appointed annually or from time to time by the Board
of Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any two (2) members of the Committee. A
quorum shall consist of three (3) members. The Account Review Committee
14
<PAGE> 15
shall exercise such fiduciary powers and perform such duties as may be assigned
to it by the Capital Management/General Trust Committee. All actions taken by
the Account Review Committee shall be recorded in appropriate minutes, signed by
the Secretary thereof, approved by its Chairman and submitted to the Capital
Management/ General Trust Committee at its next ensuing regular meeting for its
review and approval.
Section 5.7 Corporate and Institutional Accounts Committee. There shall be
a Corporate and Institutional Accounts Committee composed of not less than five
(5) officers and/or employees of this Association, who shall be appointed
annually, or from time to time, by the Capital Management/General Trust
Committee and approved by the Board of Directors. Meetings may be called by the
Chairman or any two (2) members of the Committee. A quorum shall consist of
three (3) members. The Corporate and Institutional Accounts Committee shall
exercise such fiduciary powers and duties as may be assigned to it by the
General Trust Committee. All actions taken by the Corporate and Institutional
Accounts Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman and made available to the General
Trust Committee at its next ensuing regular meeting for its review and approval.
ARTICLE VI
Stock and Stock Certificates
Section 6.1 Transfers. Shares of stock shall be transferable on the books
of the Association, and a transfer book shall be kept in which all transfers of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to his shares, succeed to all rights and liabilities of the
prior holder of such shares.
Section 6.2 Stock Certificates. Certificates of stock shall bear the
signature of the Chairman, the Vice Chairman, the President, or a Vice President
(which may be engraved, printed, or impressed), and shall be signed manually or
by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant
Cashier, or any other officer appointed by the Board of Directors for that
purpose, to be known as an Authorized Officer, and the seal of the Association
shall be engraved thereon. Each certificate shall recite on its face that the
stock represented thereby is transferable only upon the books of the Association
properly endorsed.
ARTICLE VII
Corporate Seal
Section 7.1 The President, the Cashier, the Secretary, or any Assistant
Cashier, or Assistant Secretary, or other officer thereunto designated by the
Board of Directors shall have authority to affix the corporate seal to any
document requiring such seal, and to attest the same. Such seal shall be
substantially in the following form.
15
<PAGE> 16
ARTICLE VIII
Miscellaneous Provisions
Section 8.1 Fiscal Year. The fiscal year of the Association shall be the
calendar year.
Section 8.2 Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, notices,
applications, schedules, accounts, affidavits, bonds, undertakings, proxies, and
other instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted in behalf of the Association by the Chairman of the Board,
the Vice Chairman of the Board, any Chairman or Vice Chairman, the President,
any Vice President or Assistant Vice President, the Secretary or any Assistant
Secretary, the Cashier or Treasurer or any Assistant Cashier or Assistant
Treasurer, or any officer holding similar or equivalent titles to the above in
any regions, divisions or functional units of the Association, or, if in
connection with the exercise of fiduciary powers of the Association, by any of
said officers or by any Trust Officer or Assistant Trust Officer (or equivalent
titles); provided, however, that where required, any such instrument shall be
attested by one of said officers other than the officer executing such
instrument. Any such instruments may also be executed, acknowledged, verified,
delivered or accepted in behalf of the Association in such other manner and by
such other officers as the Board of Directors may from time to time direct. The
provisions of this Section 8.2 are supplementary to any other provision of these
By-laws.
Section 8.3 Records. The Articles of Association, the By-laws, and the
proceedings of all meetings of the shareholders, the Board of Directors,
standing committees of the Board, shall be recorded in appropriate minute books
provided for the purpose. The minutes of each meeting shall be signed by the
Secretary, Cashier, or other officer appointed to act as Secretary of the
meeting.
ARTICLE IX
By-laws
Section 9.1 Inspection. A copy of the By-laws, with all amendments thereto,
shall at all times be kept in a convenient place at the Head Office of the
Association, and shall be open for inspection to all shareholders, during
banking hours.
Section 9.2 Amendments. The By-laws may be amended, altered or repealed, at
any regular or special meeting of the Board of Directors, by a vote of a
majority of the whole number of Directors.
16
<PAGE> 17
Exhibit A
First Union National Bank
Article X
Emergency By-laws
In the event of an emergency declared by the President of the United States
or the person performing his functions, the officers and employees of this
Association will continue to conduct the affairs of the Association under such
guidance from the directors or the Executive Committee as may be available
except as to matters which by statute require specific approval of the Board of
Directors and subject to conformance with any applicable governmental directives
during the emergency.
OFFICERS PRO TEMPORE AND DISASTER
Section 1. The surviving members of the Board of Directors or the Executive
Committee shall have the power, in the absence or disability of any officer, or
upon the refusal of any officer to act, to delegate and prescribe such officer's
powers and duties to any other officer, or to any director, for the time being.
Section 2. In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of this
Association by its directors and officers as contemplated by these By-laws, any
two or more available members of the then incumbent Executive Committee shall
constitute a quorum of that Committee for the full conduct and management of the
affairs and business of the Association in accordance with the provisions of
Article II of these By-laws; and in addition, such Committee shall be empowered
to exercise all of the powers reserved to the General Trust Committee under
Section 5.3 of Article V hereof. In the event of the unavail- ability, at such
time, of a minimum of two members of the then incumbent Executive Committee, any
three available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Association in
accordance with the foregoing provisions of this section. This By-law shall be
subject to implementation by resolutions of the Board of Directors passed from
time to time for that purpose, and any provisions of these By-laws (other than
this section) and any resolutions which are contrary to the provisions of this
section or to the provisions of any such implementary resolutions shall be
suspended until it shall be determined by an interim Executive Committee acting
under this section that it shall be to the advantage of this Association to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-laws.
Officer Succession
BE IT RESOLVED, that if consequent upon war or warlike damage or disaster,
the Chief Executive Officer of this Association cannot be located by the then
acting Head Officer or is unable to assume or to continue normal executive
duties, then the authority and duties of the Chief Executive Officer shall,
without further action of the Board of Directors, be automatically assumed by
one of the following persons in the order designated:
Chairman
President
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Division Head/Area Administrator - Within this officer class, officers
shall take seniority on the basis of length of service in such office
or, in the event of equality, length of service as an officer of the
Association.
Any one of the above persons who in accordance with this resolution assumes
the authority and duties of the Chief Executive Officer shall continue to serve
until he resigns or until five-sixths of the other officers who are attached to
the then acting Head Office decide in writing he is unable to perform said
duties or until the elected Chief Executive Officer of this Association, or a
person higher on the above list, shall become available to perform the duties of
Chief Executive Officer of the Association.
BE IT FURTHER RESOLVED, that anyone dealing with this Association may
accept a certification by any three officers that a specified individual is
acting as Chief Executive Officer in accordance with this resolution; and that
anyone accepting such certification may continue to consider it in force until
notified in writing of a change, said notice of change to carry the signatures
of three officers of the Association.
Alternate Locations
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The offices of the Association at which its business shall be conducted
shall be the main office thereof in each city which is designated as a City
Office (and branches, if any), and any other legally authorized location which
may be leased or acquired by this Association to carry on its business. During
an emergency resulting in any authorized place of business of this Association
being unable to function, the business ordinarily conducted at such location
shall be relocated elsewhere in suitable quarters, in addition to or in lieu of
the locations heretofore mentioned, as may be designated by the Board of
Directors or by the Executive Committee or by such persons as are then, in
accordance with resolutions adopted from time to time by the Board of Directors
dealing with the exercise of authority in the time of such emergency, conducting
the affairs of this Association. Any temporarily relocated place of business of
this Association shall be returned to its legally authorized location as soon as
practicable and such temporary place of business shall then be discontinued.
Acting Head Offices
BE IT RESOLVED, that in case of and provided because of war or warlike
damage or disaster, the General Office of this Association, located in
Charlotte, North Carolina, is unable temporarily to continue its functions, the
Raleigh office, located in Raleigh, North Carolina, shall automatically and
without further action of this Board of Directors, become the "Acting Head
Office of this Association";
BE IT FURTHER RESOLVED, that if by reason of said war or warlike damage or
disaster, both the General Office of this Association and the said Raleigh
Office of this Association are unable to carry on their functions, then and in
such case, the Asheville Office of this Association, located in Asheville, North
Carolina, shall, without further action of this Board of Directors, become the
"Acting Head Office of this Association"; and if neither the Raleigh Office nor
the Asheville Office can carry on their functions, then the Greensboro Office of
this Association, located in Greensboro, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association"; and if neither the Raleigh Office, the Asheville Office, nor the
Greensboro Office can carry on their functions, then the Lumberton Office of
this Association, located in Lumberton, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association". The Head Office shall resume its functions at its legally
authorized location as soon as practicable.
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EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the First Union National Bank
at the close of business on December 31, 1999 published in response to call made
by Comptroller of the Currency, under title 12, United States Code, Section 161.
Charter Number 33869 Comptroller of the Currency Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS
Thousand of Dollars
-------------------
<S> <C>
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin ........... 10,364,000
Interest-bearing balances .................................... 755,000
Securities ..................................................... /////////
Held-to-maturity securities .................................. 1,635,000
Available-for-sale securities ................................ 49,595,000
Federal funds sold and securities purchased under agreements ... //////////
to resell .................................................... 2,151,000
Loans and lease financing receivables:
Loan and leases, net of unearned income ........................ 137,708,000
LESS: Allowance for loan and lease losses ...................... 1,741,000
LESS: Allocated transfer risk reserve .......................... 0
Loans and leases, net of unearned income, allowance, and
reserve ........................................................ 135,967,000
Assets held in trading accounts ................................ 8,688,000
Premises and fixed assets (including capitalized leases) ....... 3,184,000
Other real estate owned ........................................ 99,000
Investment in unconsolidated subsidiaries and associated ....... //////////
companies ...................................................... 248,000
Customer's liability to this bank on acceptances outstanding ... 995,000
Intangible assets .............................................. 5,027,000
Other assets ................................................... 10,564,000
Total assets ................................................... 229,272,000
LIABILITIES
Deposits:
In domestic offices ....................................... 133,606,000
Noninterest-bearing ..................................... 21,268,000
Interest-bearing ........................................ 112,338,000
In foreign offices, Edge and Agreement subsidiaries,
and IBFs .................................................. 11,028,000
Noninterest-bearing ..................................... 548,000
Interest-bearing ........................................ 10,480,000
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased .................................... 24,013,000
Securities sold under agreements to repurchase
Demand notes issued to the U.S. Treasury ....................... 4,569,000
Trading liabilities ............................................ 5,696,000
Other borrowed money: .......................................... /////////
With original maturity of one year or less ................ 14,068,000
With original maturity of more than one year .............. 7,282,000
Bank's liability on acceptances executed and outstanding ....... 995,000
Subordinated notes and debentures .............................. 4,269,000
Other liabilities .............................................. 6,611,000
Total liabilities .............................................. 212,137,000
Limited-life preferred stock and related surplus ............... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................. 161,000
Common Stock ................................................... 455,000
Surplus ........................................................ 13,306,000
Undivided profits and capital reserves ......................... 4,188,000
Net unrealized holding gains (losses) on available-for-sale .... /////////
securities .................................................... (971,000)
Cumulative foreign currency translation adjustments ............ (4,000)
Total equity capital ........................................... 17,135,000
Total liabilities, limited-life preferred stock and equity ..... /////////
capital ...................................................... 229,272,000
</TABLE>
20
